1
EXHIBIT 2.1
MERGER AGREEMENT
THIS MERGER AGREEMENT, dated as of January 3, 1997 (the "Agreement"), by
and among HARBINGER CORPORATION, a Georgia corporation ("Harbinger"), HARBINGER
ACQUISITION CORPORATION II, a Georgia corporation and a wholly owned subsidiary
of Harbinger ("Newco"), and SUPPLY TECH, INC., a Michigan corporation ("Supply
Tech").
WHEREAS, Harbinger and Newco each have approved this Agreement and the
merger (the "Merger"), pursuant to this Agreement, a certificate of merger in
the form attached as Exhibit 1.1 proposed to be filed in the State of Georgia
(the "Georgia Certificate of Merger") and a certificate of merger in the form
attached as Exhibit 1.2. proposed to be filed in the State of Michigan (the
"Michigan Certificate of Merger"), of Newco with and into Supply Tech on the
terms and conditions contained herein and in accordance with the Georgia
Business Corporation Code (the "GBCC") and the Michigan Business Corporation
Act ("MBCA");
WHEREAS, Harbinger, as the sole shareholder of Newco, has approved this
Agreement, the Merger and the transactions contemplated hereby pursuant to
action taken by unanimous written consent in accordance with the requirements
of the GBCC and the Articles of Incorporation and the Bylaws of Newco;
WHEREAS, the shareholders of Supply Tech have approved this Agreement and
the Merger pursuant to action taken by the unanimous written consent in
accordance with the requirements of the MBCA and the Articles of Incorporation
and the Bylaws of Supply Tech;
WHEREAS, the parties to this Agreement intend that the Merger qualify as a
"reorganization" within the meaning of Section 368 of the Internal Revenue Code
of 1986, as amended;
WHEREAS, concurrent with the consummation of the Merger, Harbinger has
acquired all of the issued and outstanding shares of Harbinger Acquisition
Corporation III ("Acquisition III") and Harbinger Acquisition Corporation IV
("Acquisition IV") from certain shareholders of Supply Tech, and Acquisition
III and Acquisition IV are the sole members of Supply Tech International, LLC;
and
WHEREAS, the parties intend that the Merger be accounted for as a
pooling-of-interests for financial reporting purposes.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements set forth herein, the parties agree as follows:
6
2
ARTICLE 1.
THE MERGER
Section 1.1. Surviving Corporation. Subject to the provisions of this
Agreement, the GBCC and the MBCA, at the Effective Time (as defined below),
Newco shall be merged with and into Supply Tech, and the separate corporate
existence of Newco shall cease. Supply Tech shall be the surviving corporation
in the Merger (sometimes called the "Surviving Corporation") and shall continue
its corporate existence under the laws of the State of Michigan. The Merger
shall have the effects set forth in Section 724 of the MBCA.
Section 1.2. Certificate of Incorporation. The Certificate of
Incorporation of Supply Tech shall be the Certificate of Incorporation of the
Surviving Corporation until thereafter duly amended in accordance with its
terms and the MBCA.
Section 1.3. Bylaws. The Bylaws of Supply Tech shall be the Bylaws of the
Surviving Corporation until thereafter duly amended in accordance with their
terms and the MBCA.
Section 1.4. Directors. The directors of the Surviving Corporation shall
consist of the individuals listed on Exhibit 1.4 hereto, such directors to hold
office from the Effective Time until their respective successors are duly
elected and qualified.
Section 1.5. Officers. The officers of the Surviving Corporation shall
consist of the individuals listed on Exhibit 1.5 hereto, such officers to hold
office from the Effective Time until their respective successors are duly
elected and qualified.
Section 1.6. Effective Time. If all of the conditions set forth in
Article 6 have been fulfilled or waived in accordance with the terms hereof and
this Agreement has not been terminated in accordance with Article 8, the
parties shall cause the Georgia Certificate of Merger and the Michigan
Certificate of Merger to be properly executed and filed on the Closing Date (as
defined below) with the Secretary of State of the States of Georgia and
Michigan, respectively. The Merger shall become effective as of the time of
filing of a properly executed Georgia Certificate of Merger and Michigan
Certificate of Merger. The date and time when the Merger becomes effective is
referred to as the effective time (the "Effective Time").
Section 1.7. Tax-Free Reorganization. The Merger is intended to be a
reorganization within the meaning of Section 368 of the Internal Revenue Code
of 1986, as amended (the "Code"), and this Agreement is intended to be a "plan
of reorganization" within the meaning of the regulations promulgated under
Section 368 of the Code.
7
3
ARTICLE 2
CONVERSION OF SHARES; TREATMENT OF OPTIONS
Section 2.1. Supply Tech Common Stock. As of the Effective Time, by
virtue of the Merger and without any action on the part of any holder:
(a) Subject to Section 2.2, each share of common stock, par value $0.01
per share, of Supply Tech ("Supply Tech Common Stock") issued and outstanding
immediately prior to the Effective Time (except for Dissenting Shares, as
defined below, shall be converted, without any further action, into the right
to receive such number of shares of common stock, par value $.0001 per share,
of Harbinger ("Harbinger Common Stock") as is equal to the Conversion Ratio (as
defined below).
(b) Each share of common stock, par value $.01 per share, of Newco that is
issued and outstanding immediately prior to the Effective Time shall be
converted into one share of common stock of the Surviving Corporation.
Section 2.2. Fractional Shares. No scrip or fractional shares of
Harbinger Common Stock shall be issued in the Merger. All fractional shares of
Harbinger Common Stock to which a holder of Supply Tech Common Stock (each a
"Supply Tech Stockholder") immediately prior to the Effective Time would
otherwise be entitled at the Effective Time shall be aggregated. If a
fractional share results from such aggregation, a Supply Tech Stockholder shall
be entitled, after the later of (a) the Effective Time or (b) the surrender of
such Supply Tech Stockholder's Certificate(s) that represent such shares of
Supply Tech Common Stock, to receive from Harbinger an amount in cash in lieu
of such fractional share, based on the Average Closing Price (as defined
below). For purposes of this Agreement, the "Average Closing Price" shall be
the arithmetic average of the closing price per share of Harbinger Common
Stock, as reported on the Nasdaq National Market, for each of the thirty
consecutive trading days ending on the second trading day immediately prior to
the Closing Date.
Section 2.3. Dissenting Shares. To the extent that dissenters' rights are
available under Section 765 of the MBCA, shares of Supply Tech Common Stock
that are issued and outstanding immediately prior to the Effective Time and
that have not been voted for adoption of the Merger and with respect to which
dissenters rights have been properly demanded in accordance with Section 765
of the MBCA ("Dissenting Shares") shall not be converted into the right to
receive the consideration provided for in Sections 2.1 and 2.2 at or after the
Effective Time unless and until the holder of such shares becomes ineligible
for such appraisal. If a holder of Dissenting Shares becomes ineligible to
assert dissenters rights, then, as of the Effective Time or the occurrence of
such event, whichever later occurs, such holder's Dissenting Shares shall cease
to be Dissenting Shares and shall be converted into and represent the right to
receive the consideration provided for in Sections 2.1 and 2.2. If any Supply
Tech Stockholder asserts the right to be paid for the fair value of such Supply
Tech Common Stock as described above, Supply Tech shall give Harbinger notice
thereof and Harbinger shall have the right to participate in all negotiations
and proceedings with respect to any such demands. Supply Tech shall not,
except with the prior written consent of Harbinger, voluntarily make any
payment with respect to, or settle or offer to settle, any such demand for
payment. Payment for Dissenting Shares shall be made as required by the MBCA.
Section 2.4. Exchange of Supply Tech Common Stock.
(a) On or prior to the Closing Date, Harbinger shall make available to
each record holder who, as of the Effective Time, was a holder of an
outstanding certificate or certificates which immediately prior to the
Effective Time represented shares of Supply Tech Common Stock (the
"Certificate" or "Certificates"), a form of letter of transmittal and
instructions for use in effecting the surrender of the Certificates for payment
therefor and conversion thereof. Delivery shall be effected, and risk of loss
and title to the Certificates shall pass, only upon proper delivery of the
Certificates to Harbinger and the form of letter of transmittal shall so
reflect. Upon surrender to Harbinger of a Certificate, together with a properly
completed and executed letter of transmittal, the holder of such Certificate is
entitled to receive in exchange therefor (i) one or more certificates as
requested by the holder (properly issued, executed and countersigned, as
appropriate) representing that number of whole fully paid and nonassessable
shares of Harbinger Common Stock to which such Supply Tech Stockholder shall
have become entitled pursuant to the provisions of Section 2.1 and (ii) as to
any
8
4
fractional share of Harbinger Common Stock, a check representing the cash
consideration to which such holder shall have become entitled pursuant to
Section 2.2. The Certificate so surrendered shall forthwith be canceled. No
interest will be paid or accrued on the cash payable upon the surrender of the
Certificates. From the Effective Time until surrender in accordance with the
provisions of this Section 2.4, each Certificate shall represent for all
purposes only the right to receive the consideration provided in Sections 2.1
and 2.2. All payments of respective shares of Harbinger Common Stock that are
made upon surrender of Certificates in accordance with the terms hereof shall be
deemed to have been made in full satisfaction of rights pertaining to the shares
of Supply Tech Common Stock evidenced by such Certificates.
In the case of any lost, mislaid, stolen or destroyed Certificate, the
holder thereof may be required, as a condition precedent to delivery to such
holder of the consideration described in Sections 2.1 and 2.2, to deliver to
Harbinger a reasonably satisfactory indemnity agreement as Harbinger may direct
as indemnity against any claim that may be made against Harbinger or the
Surviving Corporation with respect to the Certificate alleged to have been
lost, mislaid, stolen or destroyed.
(b) After the Effective Time, there shall be no transfers on the stock
transfer books of the Surviving Corporation of the shares of Supply Tech Common
Stock that were outstanding immediately prior to the Effective Time. If, after
the Effective Time, Certificates are presented to the Surviving Corporation for
transfer, they shall be canceled and exchanged for the consideration described
in Sections 2.1 and 2.2.
(c) Any shares of Harbinger Common Stock or cash due former Supply Tech
Stockholders pursuant to Sections 2.1 and 2.2 that remains unclaimed by such
former Supply Tech Stockholder for six months after the Effective Time shall be
held by Harbinger and any former holder of Supply Tech Common Stock who has not
complied with Section 2.4(a) shall thereafter look only to Harbinger for
issuance of the number of shares of Harbinger Common Stock and other
consideration to which such holder has become entitled pursuant to the
provisions of Sections 2.1 and 2.2; except that neither Harbinger nor any party
hereto shall be liable to a former Supply Tech Stockholder for any amount
required to be paid to a public official pursuant to any applicable abandoned
property, escheat or similar law.
(d) Harbinger shall pay all charges and expenses of any exchange agent
used to effect the exchange of shares pursuant to this Section 2.4.
Section 2.5. Conversion Amount and Adjustment Event.
(a) The "Conversion Ratio" shall be equal to such fraction as is obtained
by dividing the Harbinger Merger Shares by the Total Supply Tech Shares, and
such fraction shall be used for the purposes of this Agreement by calculating
the quotient (expressed to four decimal places) of such fraction. The
"Harbinger Merger Shares" shall be equal to One Million Five Hundred
Ninety-Nine Thousand. The "Total Supply Tech Shares" shall be equal to the sum
of (i) 8,757 (the number of shares of Supply Tech Common Stock outstanding on
the date of this Agreement), and (ii) a number equal to the number of whole
shares of Supply Tech Common Stock issuable upon exercise of all options and
warrants to purchase shares of Supply Tech Common Stock that are outstanding on
the date of this Agreement. In the event that the Average Closing price is
greater than $31.80 or less than $21.20, then the parties agree to negotiate in
good faith an adjustment to the Conversion Ratio for a period not to exceed
five days. If, following such five day period the parties are unable to agree
upon an adjusted Conversion Ratio, then this Agreement maybe terminated in
accordance with Article 8.
(b) If after the date hereof and prior to the Effective Time, Harbinger
shall have declared a stock split (including a reverse split) of Harbinger
Common Stock or a dividend payable in Harbinger Common Stock, or any other
distribution of Harbinger Common Stock to holders of Harbinger Common Stock
with respect to their Harbinger Common Stock (including such a distribution or
dividend made in connection with a recapitalization, reclassification, merger,
consolidation, reorganization or similar transaction), then the Conversion
Ratio shall be appropriately adjusted to reflect such stock split or dividend
or other distribution of securities.
9
5
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SUPPLY TECH
With such exceptions as are set forth in a letter (the "Supply Tech
Disclosure Letter") signed and delivered by Supply Tech to Harbinger prior to
the execution hereof, Supply Tech represents and warrants to Harbinger as
follows:
Section 3.1. Organization. Each of Supply Tech and the Supply Tech
Subsidiaries (as defined below) is a corporation, limited liability company or
Australian "unit trust" duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization, as
applicable, and has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its business as now being conducted.
Supply Tech and each of the Supply Tech Subsidiaries is duly qualified to
transact business, and is in good standing, as a foreign corporation or limited
liability company in each jurisdiction where the character of its activities
requires such qualification, except where the failure to so qualify would not
have a Supply Tech Material Adverse Effect (as defined below). A "Supply Tech
Material Adverse Effect" means any event, condition or change which materially
and adversely affects or could reasonably be expected to materially and
adversely affect the assets, liabilities, financial results of operations,
financial condition, business or prospects of Supply Tech or the Supply Tech
Subsidiaries. Supply Tech has made available to Harbinger accurate and complete
copies of the Certificate or Articles of Incorporation and Bylaws or other
governing documents, as currently in effect, of Supply Tech and each of the
Supply Tech Subsidiaries, and has made available to Harbinger the minute books
and stock records of each thereof. The Supply Tech Disclosure Letter contains
a true and correct list of the jurisdictions in which Supply Tech or any of the
Supply Tech Subsidiaries is qualified to do business as a foreign corporation
or limited liability company.
Section 3.2. Authorization. Supply Tech has full corporate power and
authority to execute and deliver this Agreement and to perform its obligations
under this Agreement and to consummate the Merger and the other transactions
contemplated hereby. As of the Closing, the execution and delivery of this
Agreement by Supply Tech and the performance by Supply Tech of its obligations
hereunder and the consummation of the Merger and the other transactions
provided for herein will have been duly and validly authorized by all necessary
corporate action on the part of Supply Tech. The Board of Directors of Supply
Tech has approved the execution, delivery and performance of this Agreement and
the consummation of the Merger and the other transactions contemplated hereby.
This Agreement has been duly executed and delivered by Supply Tech and
constitutes the legal, valid and binding agreement of Supply Tech, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
insolvency and other similar laws affecting the enforceability of creditors'
rights generally, general equitable principles and the discretion of courts in
granting equitable remedies.
Section 3.3. Absence of Restrictions and Conflicts. The execution,
delivery and performance of this Agreement, the consummation of the Merger and
the other transactions contemplated by this Agreement and the fulfillment of
and compliance with the terms and conditions of this Agreement do not and will
not, with the passing of time or the giving of notice or both, violate or
conflict with, constitute a breach of or default under, result in the loss of
any material benefit under, or permit the acceleration of any obligation under,
(i) any term or provision of the Articles or Certificate of Incorporation or
Bylaws of Supply Tech or any of the Supply Tech Subsidiaries, (ii) any Supply
Tech Material Contract, (iii) any judgment, decree or order of any court or
governmental authority or agency to which Supply Tech or any of the Supply Tech
Subsidiaries is a party or by which Supply Tech or any of the Supply Tech
Subsidiaries or any of their respective properties is bound, or (iv) any
statute, law, regulation or rule applicable to Supply Tech or any of the Supply
Tech Subsidiaries, so as to have in the case of subsections (ii) through (iv)
above, a Supply Tech Material Adverse Effect. Except for compliance with the
applicable requirements of the Securities Act of 1933, as amended (the
"Securities Act"), the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), applicable state securities laws and the filing and
recordation of the Georgia Certificate of Merger as required by the GBCC and
the Michigan Certificate of Merger as required by the MBCA, no consent,
approval, order or authorization of, or registration, declaration or filing
with, any governmental agency or public or regulatory unit, agency, body or
authority with respect to Supply Tech or any of the Supply Tech Subsidiaries is
required in connection with the execution, delivery or performance of this
Agreement by Supply Tech or the consummation of the transactions contemplated by
this Agreement by Supply Tech, the failure to obtain which would have a Supply
Tech Material Adverse Effect. Supply Tech makes no representation as to
compliance with the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act.
10
6
Section 3.4. Capitalization. The authorized capital stock of Supply Tech
consists of 500,000 shares of Supply Tech Common Stock. At the date of this
Agreement, there were 8,757 shares of Supply Tech Common Stock issued and
outstanding. At the date of this Agreement, there were no other shares of
capital stock authorized. Each share of Supply Tech Common Stock outstanding
at the date of this Agreement is duly authorized, validly issued, fully paid
and nonassessable and free of preemptive rights and is owned by the Supply Tech
stockholders as set forth in the Supply Tech Disclosure Letter and no such
shares have been issued in violation of any federal or state securities law.
Except as set forth in the Supply Tech Disclosure Letter, there are no shares
of capital stock of Supply Tech outstanding, and there are no subscriptions,
options, convertible securities, calls, puts, rights, warrants or other
agreements, claims or commitments of any nature whatsoever obligating Supply
Tech to purchase, redeem, issue, transfer, deliver or sell, or cause to be
purchased, redeemed, issued, transferred, delivered or sold, additional shares
of the capital stock or other securities of Supply Tech or obligating Supply
Tech to grant, extend or enter into any such agreement or commitment. No prior
offer, issue, redemption, call, purchase, sale, transfer, negotiation or other
transaction of any nature with respect to the capital stock or equity interests
of Supply Tech, or any corporation or organization which has been merged into
Supply Tech, has given or may give rise to any valid claim or action by any
person which is enforceable against Supply Tech, the Surviving Corporation or
any of their respective affiliates and, to the best knowledge of the Supply
Tech Executives (as hereinafter defined), no fact or circumstance exists which
could give rise to any such right, claim or action on behalf of any person.
Section 3.5. Subsidiaries. The Supply Tech Disclosure Letter sets forth a
true and complete list of all (i) corporations or other entities of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar
functions are, directly or indirectly, owned by Supply Tech, and (ii)
partnerships or limited liability companies in which Supply Tech or a Supply
Tech Subsidiary (as defined below) is (A) a general or limited partner or
member or other owner and (B) entitled to receive more than 50% of the assets
of any such partnership or such limited liability company on such partnership's
or limited liability company's dissolution (collectively, and together with
Acquisition III, Acquisition IV and Supply Tech International, LLC, the "Supply
Tech Subsidiaries"), the jurisdiction in which each Supply Tech Subsidiary is
incorporated or organized and all shares of capital stock or of the ownership
interests authorized, issued and outstanding of each Supply Tech Subsidiary.
As of the date of this Agreement, Harbinger has acquired all of the issued and
outstanding shares of Acquisition III and Acquisition IV, and Acquisition III
and IV are the sole members of Supply Tech International, LLC. The outstanding
shares of capital stock or other equity interest of each Supply Tech Subsidiary
have been duly authorized and are validly issued, fully paid and nonassessable.
All shares of capital stock or other equity interest of each Supply Tech
Subsidiary owned by Supply Tech or any Supply Tech Subsidiary are set forth in
the Supply Tech Disclosure Letter and are owned by Supply Tech, directly or
indirectly, free and clear of all liens, encumbrances, equities or claims. The
Supply Tech Disclosure Letter also sets forth a true and complete list of all
corporations, partnerships, limited liability companies, Australian unit trusts
and other entities in which Supply Tech or a Supply Tech Subsidiary owns an
equity interest having a value in excess of $10,000, other than the Supply Tech
Subsidiaries or any mutual funds or publicly traded companies. All shares of
capital stock or other equity interest of each such entity are set forth in the
Supply Tech Disclosure Letter and are owned by Supply Tech or a Supply Tech
Subsidiary, as applicable, free and clear of all liens, encumbrances, equities
or claims.
Section 3.6. Financial Statements. Supply Tech has made available to
Harbinger (i) the audited balance sheets of Supply Tech and its combined
subsidiaries (to the extent that any such subsidiary existed as of such date)
as of December 31, 1993, 1994 and 1995 and the related audited statements of
income and changes in stockholders' equity for the respective fiscal year(s)
then ended, including the notes thereto, examined by and accompanied by the
report of Xxxxxx, Xxxxx & Xxxx, independent public accountants ("Supply Tech
Accountants") (ii) the unaudited balance sheet of Supply Tech and the Supply
Tech Subsidiaries other than Acquisition III and Acquisition IV for periods
subsequent to December 31, 1995 that are listed in Exhibit 3.6. All of the
foregoing financial statements are collectively referred to as the "Supply Tech
Financial Statements" and the balance sheets as of the respective dates listed
on Exhibit 3.6 are referred to as the "1996 Balance Sheet". The Supply Tech
Financial Statements have been prepared from, and are in accordance with, the
books and records of Supply Tech and its combined subsidiaries and, as
applicable, present fairly the financial position, results of operations and
changes in stockholders' equity of Supply Tech and its combined subsidiaries as
of the dates and for the periods indicated, in each case in conformity with
generally accepted accounting principles ("GAAP"), consistently and reasonably
applied throughout the periods covered thereby. As of the Closing Date, Supply
Tech shall have no
11
7
liability or obligation of any nature whatsoever, whether accrued, absolute,
contingent or otherwise, other than (x) current liabilities and obligations that
arise or have arisen in the ordinary course of business which are recurring in
nature and not overdue on their terms, (y) liabilities and obligations reflected
in and adequately provided for on the 1996 Balance Sheet and (z) liabilities and
obligations arising in the ordinary course of business of Supply Tech which
alone or in the aggregate would not have a Supply Tech Material Adverse Effect.
The Supply Tech Disclosure Letter sets forth a true and complete list of all
loss contingencies (within the meaning of Statement of Financial Accounting
Standards No. 5) (a "Loss Contingency") of Supply Tech exceeding $10,000 in the
case of any single loss contingency or $100,000 in the case of all loss
contingencies. To the best knowledge of the Supply Tech Executives, the state
sales break-outs for the years 1992 through 1996 provided or to be provided to
Harbinger reasonably approximate actual sales by state of Supply Tech for such
periods.
12
8
Section 3.7. Absence of Certain Changes.
(a) Since December 31, 1995, there has not been (i) any change in the
assets, liabilities, results of operations, financial condition, business or
prospects of Supply Tech and the Supply Tech Subsidiaries, taken as a whole,
that has had a Supply Tech Material Adverse Effect, (ii) any damage,
destruction, loss or casualty to property or assets of Supply Tech or any of
the Supply Tech Subsidiaries, whether or not covered by insurance, which
property or assets are material to the operations or business of Supply Tech
and the Supply Tech Subsidiaries, taken as a whole, that has had a Supply Tech
Material Adverse Effect, (iii) any declaration, setting aside or payment of any
dividend or distribution (whether in cash, stock or property) in respect of the
capital stock of Supply Tech, any redemption or other acquisition by Supply
Tech of any of the capital stock of Supply Tech or any of the Supply Tech
Subsidiaries or any split, combination or reclassification of shares of capital
stock declared or made by Supply Tech or (iv) any agreement to do any of the
foregoing. Notwithstanding anything contained in this Agreement to the
contrary, Supply Tech makes no representations or warranties as to the future
income or profitability of Supply Tech.
(b) Since December 31, 1995 and other than as disclosed in the 1996
Balance Sheet, there have not been (i) any losses suffered which, in the
aggregate, have resulted in a Supply Tech Material Adverse Effect, (ii) except
as would not have a Supply Tech Material Adverse Effect, any assets mortgaged,
pledged or made subject to any lien, charge or other encumbrance, (iii) any
material liability or obligation (absolute, accrued or contingent) incurred or
any material bad debt, contingency or other reserve increase suffered, except,
in each such case, in the ordinary course of business and consistent with past
practice, (iv) any claims, liabilities or obligations (absolute, accrued or
contingent) paid, discharged or satisfied, other than the payment, discharge or
satisfaction, in the ordinary course of business and consistent with past
practice, of claims, liabilities and obligations reflected or reserved against
in the Supply Tech Financial Statements or incurred in the ordinary course of
business and consistent with past practice, (v) any material guaranteed checks,
notes or accounts receivable written off as uncollectible, except write-offs in
the ordinary course of business and consistent with past practice, (vi) any
write down (under Statement of Financial Accounting Standards No. 121 or
otherwise) of the value of any material asset or investment on Supply Tech's
books or records, except for depreciation and amortization taken in the
ordinary course of business and consistent with past practice, (vii) any
cancellation of any material debts or waiver of any material claims or rights
of substantial value, or sale, transfer or other disposition of any material
properties or assets (real, personal or mixed, tangible or intangible) of
substantial value, except, in each such case, in transactions in the ordinary
course of business and consistent with past practice, which, in the aggregate,
have resulted in a Supply Tech Material Adverse Effect, (viii) any single
capital expenditure or commitment in excess of $25,000 for additions to
property or equipment, or aggregate capital expenditures and commitments in
excess of $50,000 (on a consolidated basis) for additions to property or
equipment, (ix) any obligations to pay royalties or license fees in excess of
$25,000, (x) any Loss Contingency or Loss Contingencies of Supply Tech which,
in the aggregate, have resulted in a Supply Tech Material Adverse Effect, (xi)
any material transactions entered into other than in the ordinary course of
business, (xii) any agreements to do any of the foregoing, or (xiii) any other
events, developments or conditions (including any suit, action, claim,
proceeding or investigation) of any character that have had or are reasonably
likely to have a Supply Tech Material Adverse Effect.
Section 3.8. Legal Proceedings. There are no suits, actions, claims,
proceedings or investigations pending, or, to the best knowledge of the Supply
Tech Executives, threatened against, relating to or involving Supply Tech or
any of the Supply Tech Subsidiaries (or any of its officers or directors)
before any court, arbitrator or administrative or governmental body. The
Supply Tech Disclosure Letter lists all pending suits, actions, claims,
proceedings or investigations relating to or involving Supply Tech or any of
the Supply Tech Subsidiaries (or any of its officers or directors) before any
court, arbitrator or administrative or governmental body are adequately
provided for in the 1996 Balance Sheet if and to the extent such a provision is
required by generally accepted accounting principles. Neither Supply Tech nor
any of the Supply Tech Subsidiaries is subject to any judgment, decree,
injunction, rule or order of any court, and, to the best knowledge of the
Supply Tech Executives, neither Supply Tech nor any of the Supply Tech
Subsidiaries is subject to any governmental restriction applicable to Supply
Tech or any of the Supply Tech Subsidiaries, which is reasonably likely (i) to
have a Supply Tech Material Adverse Effect or (ii) to cause a material
limitation on Harbinger's ability to operate the business of Supply Tech and
the Supply Tech Subsidiaries after the Closing.
13
9
Section 3.9. Compliance with Law. Each of Supply Tech and the Supply Tech
Subsidiaries has all material authorizations, approvals, licenses and orders of
and from all governmental and regulatory officers and bodies necessary to carry
on its business as it is currently being conducted, to own or hold under lease
the properties and assets it owns or holds under lease and to perform all of
its obligations under the agreements to which it is a party, and each of Supply
Tech and the Supply Tech Subsidiaries has been and is in compliance with all
applicable laws, regulations and administrative orders of any country, state or
municipality or of any subdivision of any thereof to which its business and its
employment of labor or its use or occupancy of properties or any part thereof
are subject, the failure to obtain or the violation of which would have a
Supply Tech Material Adverse Effect.
Section 3.10. Material Contracts. The Supply Tech Disclosure Letter
contains a correct and complete list of the following (the "Supply Tech
Material Contracts"):
(a) all bonds, debentures, notes, mortgages, indentures or guarantees
securing indebtedness in excess of $10,000 individually to which Supply Tech or
any of the Supply Tech Subsidiaries is a party or by which any of their
properties or assets (real, personal or mixed, tangible or intangible) are
bound;
(b) all outstanding loans and credit commitments to Supply Tech or any of
the Supply Tech Subsidiaries covering indebtedness in excess of $10,000
individually;
(c) all contracts or agreements which limit or restrict in a substantial
manner (i) Supply Tech or the Supply Tech Subsidiaries or any of the Supply
Tech Executives from engaging in any business in any jurisdiction or (ii)
others from competing with Supply Tech or the Supply Tech Subsidiaries in any
jurisdiction, except for contracts between Supply Tech or a Supply Tech
Subsidiary and a current or former employee of Supply Tech or a Supply Tech
Subsidiary;
(d) all contracts or agreements requiring Supply Tech to register its
capital stock or securities under federal or state securities law;
(e) all agreements or documentation evidencing currently outstanding loans
or advances in excess of $10,000 individually made by Supply Tech or any of
the Supply Tech Subsidiaries to or on behalf of its clients, other than
accounts receivables incurred in the ordinary course of business; and
(f) all existing contracts and commitments (other than (i) those of the
type described in subparagraphs (a), (b), (c), (d) or (e) of this Section 3.10,
(ii) agreements, contracts or commitments pursuant to which Supply Tech or any
of the Supply Tech Subsidiaries provides goods or services to its clients,
(iii) the Supply Tech Benefit Plans and (iv) any leases with respect to real or
personal property) to which Supply Tech or any of the Supply Tech Subsidiaries
is a party or by which their properties or assets may be bound involving an
annual commitment or annual payment by any party thereto of more than $10,000
individually or which by its terms requires performance thereunder by Supply
Tech for more than two years following the Closing Date.
True and complete copies of all Supply Tech Material Contracts, including
all amendments thereto, have been made available to Harbinger. The Supply Tech
Material Contracts are valid and enforceable in accordance with their respective
terms with respect to Supply Tech and, to the knowledge of the Supply Tech
Executives, valid and enforceable in accordance with their respective terms with
respect to any other party thereto, in each case to the extent material to the
business and operations of Supply Tech and the Supply Tech Subsidiaries taken as
a whole and subject to applicable bankruptcy, insolvency and other similar laws
affecting the enforceability of creditors' rights generally, general equitable
principles and the discretion of courts in granting equitable remedies. Except
for events or occurrences, the consequences of which, individually or in the
aggregate, would not have a Supply Tech Material Adverse Effect, there is not
under any of the Supply Tech Material Contracts any existing breach, default or
event of default by Supply Tech or any of the Supply Tech Subsidiaries or event
that with notice or lapse of time or both would constitute a breach, default or
event of default by Supply Tech or any of the Supply Tech Subsidiaries, nor do
the Supply Tech Executives know of, and neither Supply Tech nor any of the
Supply Tech Subsidiaries has received notice of, or made a claim with respect
to, any breach or default by any other party thereto.
14
10
Section 3.11. Supply Tech Client Contracts. The Supply Tech Disclosure
Letter sets forth a true and complete list of all agreements, contracts or
commitments pursuant to which Supply Tech or any of the Supply Tech
Subsidiaries provides goods or services to its clients which (i) produced
annual payments in the year ending December 31, 1995 of at least $15,000 to
Supply Tech or a Supply Tech Subsidiary or (ii) which Supply Tech reasonably
expects to produce annual payments in excess of $15,000 in 1996 (the "Supply
Tech Client Contracts"). Except as set forth in the Supply Tech Disclosure
Letter, the execution, delivery and performance of this Agreement by Supply
Tech and the consummation of the transactions contemplated hereby will not,
with the passing of time or the giving of notice or both, violate or constitute
a default or give rise to a termination right under any Supply Tech Client
Contract. True and complete copies of all written Supply Tech Client
Contracts, including all amendments thereto, have been made available to
Harbinger. The Supply Tech Client Contracts are valid and enforceable in
accordance with their respective terms with respect to Supply Tech or the
Supply Tech Subsidiaries, as applicable, and, to the knowledge of the Supply
Tech Executives, are valid and enforceable in accordance with their respective
terms with respect to any other party thereto, in each case except as would not
have a Supply Tech Material Adverse Effect. Except for events or occurrences,
the consequences of which, individually or in the aggregate, would not have a
Supply Tech Material Adverse Effect, there is not under Supply Tech Client
Contracts any existing breach, default or event of default by Supply Tech or
any of the Supply Tech Subsidiaries, or event that solely as a result of notice
or lapse of time or both would constitute a breach, default or event of default
by Supply Tech or any of the Supply Tech Subsidiaries. To the best knowledge
of the Supply Tech Executives, neither Supply Tech nor any of the Supply Tech
Subsidiaries has received notice of, or made a claim with respect to, any
breach or default by any other party.
Section 3.12. Tax Returns; Taxes. Supply Tech is a small business
corporation and has maintained a valid election to be an S corporation under
Subchapter S of the Code, and the equivalent provisions of all applicable state
income tax statutes since January 1, 1995. Each of Supply Tech and the Supply
Tech Subsidiaries has duly filed all federal, state, local and foreign tax
returns required to be filed by it (including employment and withholding tax
returns) and has duly paid or made adequate provision for the payment of all
taxes which are due and payable pursuant to such returns or pursuant to any
assessment with respect to taxes in such jurisdictions, whether or not in
connection with such returns, except as set forth in the Supply Tech Disclosure
Letter. The liability for taxes reflected in the 1996 Balance Sheet is
sufficient for the payment of all unpaid taxes, whether or not disputed, that
are accrued or applicable for the period ended December 31, 1995 and for all
years and periods ended prior thereto. All deficiencies asserted as a result
of any examinations by the Internal Revenue Service or any other taxing
authority have been paid, fully settled or adequately provided for in the 1996
Balance Sheet. There are no pending claims asserted for taxes of Supply Tech or
any Supply Tech Subsidiary or outstanding agreements or waivers extending the
statutory period of limitation applicable to any tax return of Supply Tech or
any Supply Tech Subsidiary for any period. Supply Tech and each of the Supply
Tech Subsidiaries have made all estimated income tax deposits and all other
required tax payments or deposits and has complied for all prior periods in all
material respects with the tax withholding provisions of all applicable
federal, state, local and other laws. Supply Tech and each of the Supply Tech
Subsidiaries have made available to Harbinger true, complete and correct copies
of their federal and state income tax returns for the last three taxable years
and made available such other tax returns requested by Harbinger.
Section 3.13. Officers, Directors and Employees. The Supply Tech
Disclosure Letter contains a true and complete list of all of the officers and
directors of Supply Tech and each Supply Tech Subsidiary, specifying their
office and annual rate of compensation, and a true and complete list of all of
the employees of Supply Tech and each Supply Tech Subsidiary as of the date
hereof with whom Supply Tech or a Supply Tech Subsidiary, as applicable, has a
written employment agreement or, to the best knowledge of the Supply Tech
Executives, to whom Supply Tech or a Supply Tech Subsidiary, as applicable, has
made verbal commitments involving material terms which are binding on it and
that involve annual compensation to such employees individually of at least
$30,000 (including any estimated bonuses payable thereto). The employment
agreements listed in the Supply Tech Disclosure Letter (except for the
employment agreements marked on the Supply Tech Disclosure Letter as "NOT
3.13") are terminable by Supply Tech or the applicable Supply Tech Subsidiary
without financial penalty or continuing obligation on the part of Supply Tech
or the applicable Supply Tech Subsidiary except as would not result in a Supply
Tech Material Adverse Effect.
15
11
Section 3.14. Employee Benefit Plans.
(a) Definition of Benefit Plans. For purposes of this Section 3.14, the
term "Supply Tech Benefit Plan" means any plan, program, arrangement, fund,
policy, practice or contract which, through which or under which Supply Tech or
any Supply Tech ERISA Affiliate provides benefits or compensation to or on
behalf of employees or former employees of Supply Tech or any Supply Tech ERISA
Affiliate, whether formal or informal, whether or not written, including but not
limited to the following:
(1) Arrangements - any bonus, incentive compensation, stock
option, deferred compensation, commission, severance pay, golden
parachute or other compensation plan or rabbi trust ("Specified
Arrangements");
(2) ERISA Plans - any "employee benefit plan" (as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")), including, but not limited to, any
multiemployer plan (as defined in Section 3(37) and Section
4001(a)(3) of ERISA), defined benefit plan, profit sharing plan,
money purchase pension plan, 401(k) plan, savings or thrift plan, or
any plan, fund, program, arrangement or practice providing for
medical (including post-retirement medical), hospitalization,
accident, sickness, disability, or life insurance benefits ("ERISA
Plans"); and
(3) Other Employee Fringe Benefits - any stock purchase,
vacation, scholarship, sick days, day care, prepaid legal services,
dependent care or other fringe benefits plans, programs,
arrangements, contracts or practices ("Fringe Benefit Plans").
(b) Supply Tech ERISA Affiliate. For purposes of this Section 3.14, the
term "Supply Tech ERISA Affiliate" means each trade or business (whether or not
incorporated) which together with Supply Tech is treated as a single employer
under Section 414(b), (c), (m) or (o) of the Code.
(c) Identification of Benefits Plans. Except for Supply Tech Benefit
Plans which have been terminated and with respect to which neither Supply Tech
nor any Supply Tech ERISA Affiliate has any current financial, administrative or
other liability, obligation or responsibility, Supply Tech does not maintain,
nor has it at any time established or maintained, nor has it at any time been
obligated to make, or otherwise made, contributions to or under or otherwise
participated in any Supply Tech Benefit Plan.
(d) Compliance. Each Supply Tech Benefit Plan maintained by Supply
Tech or a Supply Tech ERISA Affiliate has been maintained, by its terms and in
operation, in all material respects in accordance with all applicable laws,
including (to the extent applicable) Code Section 4980B. Further, there has
been no failure to comply with applicable ERISA or other requirements concerning
the filing of reports, documents and notices with the Secretary of Labor and the
Secretary of Treasury or the furnishing of such documents to participants or
beneficiaries that could subject any Supply Tech Benefit Plan, Supply Tech or
any Supply Tech ERISA Affiliate to any material civil or criminal sanction.
(e) MEPPA Liability/Post-Retirement Medical Benefits. Neither Supply
Tech nor any Supply Tech ERISA Affiliate maintains, or has at anytime
established or maintained, or has at any time been obligated to make, or made,
contributions to or under any multiemployer plan (as defined in Section 3(37)
and Section 4001(a)(3) of ERISA). Supply Tech does not maintain, nor has at any
time established or maintained, nor has at any time been obligated to make, or
made, contributions to or under any plan which provides post-retirement medical
or health benefits with respect to employees of Supply Tech. There is no lien
upon any property of Supply Tech or any Supply Tech ERISA Affiliate outstanding
pursuant to Section 412(n) of the Code in favor of any Supply Tech Benefit Plan.
No assets of Supply Tech or any Supply Tech ERISA Affiliate have been provided
as security for any Supply Tech Benefit Plan pursuant to Section 401(a) (29) of
the Code.
(f) Documentation. Supply Tech has made available to Harbinger a true
and complete copy of the following documents, if applicable, with respect to
each Supply Tech Benefit Plan identified in Supply Tech Disclosure Letter: (1)
all documents, including any insurance contracts and trust agreements, setting
forth the terms of Supply Tech Benefit Plan, or if there are no such documents
evidencing Supply Tech Benefit Plan, a full description of Supply Tech
16
12
Benefit Plan, (2) the ERISA summary plan description and any other summary of
plan provisions provided to participants or beneficiaries for each such Supply
Tech Benefit Plan, (3) the annual reports filed for the most recent three plan
years and most recent financial statements or periodic accounting or related
plan assets with respect to each Supply Tech Benefit Plan, (4) the most recent
favorable determination, notification letter, opinion or ruling from the
Internal Revenue Service ("IRS") for each Supply Tech Benefit Plan, the assets
of which are held in trust, to the effect that such trust is exempt from federal
income tax, and any outstanding request for a determination letter and (5) each
opinion or ruling from the Department of Labor or the Pension Benefit Guaranty
Corporation ("PBGC") with respect to any such Supply Tech Benefit Plan.
(g) Qualified Status. Each Supply Tech Benefit Plan that is funded
through a trust or insurance contract has satisfied in all material respects, by
its terms and in its operation, all applicable requirements for an exemption
from federal income taxation under Section 501(a) of the Code. Except for the
plans identified as qualified plans in the Supply Tech Disclosure Letter (the
"Qualified Plans") neither Supply Tech nor any Supply Tech ERISA Affiliate
maintains or previously maintained a Supply Tech Benefit Plan which meets or was
intended to meet the requirements of Section 401(a) of the Code. Except as
would not have a Supply Tech Material Adverse Effect, any determination, opinion
or notification letter issued by the IRS to the effect that the Qualified Plans
qualify under Section 401(a) of the Code and that the related trust is exempt
from taxation under Section 501(a) of the Code remains in effect and has not
been revoked. Each of the Qualified Plans currently complies in form in all
material respects with the requirements under Section 401(a) of the Code, other
than changes required by statutes, regulations and rulings for which amendments
are not yet required. Each of the Qualified Plans has been administered
according to its terms (except for those terms which are inconsistent with the
changes required by statutes, regulations, and rulings for which changes are not
yet required to be made, in which case the Qualified Plans have been
administered in accordance with the provisions of those statutes, regulations
and rulings) and in accordance with the requirements of Section 401(a) of the
Code. The Qualified Plans have been tested for compliance with, and in all
material respects have satisfied the requirements of, Section 401(k)(3) and
401(m)(2) of the Code, if applicable, for each plan year within the time periods
permitted by law.
(h) Legal Actions. Except as would not have a Supply Tech Material
Adverse Effect, there are no actions, audits, suits or claims known to Supply
Tech which are pending or, to the knowledge of the Supply Tech Executives,
threatened against any Supply Tech Benefit Plan, any fiduciary of any of the
Supply Tech Benefit Plans with respect to the Supply Tech Benefit Plans or
against the assets of any of the Supply Tech Benefit Plans, except claims for
benefits made in the ordinary course of the operation of such plans.
(i) Funding. Supply Tech and each Supply Tech ERISA Affiliate has made
in all material respects full and timely payment of all amounts required to be
contributed under the terms of each Supply Tech Benefit Plan and applicable law
or required to be paid as expenses under such Supply Tech Benefit Plan and no
excise taxes are assessable as a result of any nondeductible or other
contributions made or not made to a Supply Tech Benefit Plan. The assets of all
Supply Tech Benefit Plans which are required under applicable laws to be held in
trust are in fact held in trust, and the assets of each such Supply Tech Benefit
Plan equal or exceed the liabilities of each such plan. The liabilities of each
other plan are in all material respects properly and accurately reported on the
financial statements and records of Supply Tech. The assets of each Supply Tech
Benefit Plan are reported at their fair market value on the books and records of
each plan.
(j) Liabilities. Neither Supply Tech nor any Supply Tech ERISA
Affiliate is subject to any material liability, tax or penalty whatsoever to any
person whomsoever as a result of Supply Tech's or any Supply Tech ERISA
Affiliate's engaging in a prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code, and Supply Tech has no knowledge of any circumstances
which reasonably might result in any material liability, tax or penalty
whatsoever as a result or a breach of fiduciary duty under ERISA.
(k) Excess Parachute Payments. No payment required to be made to any
employee associated with Supply Tech as a result of the transactions
contemplated hereby under any contract or otherwise will, if made, constitute an
"excess parachute payment" within the meaning of Section 280G of the Code.
(l) COBRA. Supply Tech and each Supply Tech ERISA Affiliate have
complied in all material respects with the continuation coverage requirements of
Section 1001 of the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended, and ERISA Sections 601 through 608.
17
13
(m) No Acceleration of Liability Under Benefit Plans. The consummation
of the transactions contemplated hereby will not accelerate or increase any
liability under any Supply Tech Benefit Plan because of an acceleration or
increase of any of the rights or benefits to which employees of Supply Tech or
any Supply Tech ERISA Affiliate may be entitled thereunder.
(n) Leased Employees. To the knowledge of the Supply Tech Executives,
Supply Tech has made no representations or warranties (whether written or oral,
express or implied) contractually or otherwise to any client or customer of
Supply Tech that Supply Tech employees rendering services to such client or
customer are not "leased employees" (within the meaning of Section 414(n) of the
Code) or that such employees would not be required to participate under any
pension benefit plan (within the meaning of Section 3(2) of ERISA) (a "Pension
Benefit Plan") of such client or customer of Supply Tech relating either to (a)
providing benefits to employees of Supply Tech under a Pension Benefit Plan of
Supply Tech or (b) making contributions to or reimbursing such client or
customer for any contributions made to a Pension Benefit Plan of such client or
customer on behalf of employees of Supply Tech.
(o) Defined Benefit Plans/Money Purchase Plans. Neither Supply Tech nor
any Supply Tech ERISA Affiliate maintains or contributes or has maintained or
contributed to an "employee benefit pension plan" within the meaning of Section
3(2) of ERISA that is or was subject to Title IV of ERISA or Section 412 of the
Code.
Section 3.15. Labor Relations. Each of Supply Tech and the Supply Tech
Subsidiaries is in compliance with all federal and state laws respecting
employment and employment practices, terms and conditions of employment, wages
and hours, and is not engaged in any unfair labor or unlawful employment
practice. Except as would not result in a Supply Tech Material Adverse Effect,
individually or in the aggregate, there is no (i) unlawful employment practice
discrimination charge involving Supply Tech or any Supply Tech Subsidiary
pending before the Equal Employment Opportunity Commission ("EEOC"), EEOC
recognized state "referral agency" or any other governmental agency; (ii) unfair
labor practice charge or complaint against Supply Tech or any Supply Tech
Subsidiary pending before the National Labor Relations Board ("NLRB"); (iii)
labor strike, dispute, slowdown or stoppage actually pending or, to the best
knowledge of the Supply Tech Executives, threatened against or involving or
affecting Supply Tech or any Supply Tech Subsidiary and no NLRB representation
question exists respecting any of its employees; (iv) grievance or arbitration
proceeding pending against Supply Tech or any Supply Tech Subsidiary and no
written claim therefor exists; or (v) collective bargaining agreement binding on
Supply Tech or any Supply Tech Subsidiary.
Section 3.16. Insurance. Each of Supply Tech and the Supply Tech
Subsidiaries has provided to Harbinger a true and complete list of its current
insurance coverages, including names of carriers, amounts of coverage and
premiums therefor. Supply Tech believes that each of Supply Tech and the Supply
Tech Subsidiaries has been and is insured with respect to its properties and the
conduct of its business in such amounts and against such risks as are reasonable
in relation to its business and will use its reasonable efforts to maintain such
insurance at least through the Effective Time. Supply Tech has made available
to Harbinger true and complete copies of all insurance policies covering each of
Supply Tech and the Supply Tech Subsidiaries, their properties, assets,
employees or operations.
Section 3.17. Title to Properties and Related Matters.
(a) Each of Supply Tech and the Supply Tech Subsidiaries has good and
valid title to or valid leasehold interests in its properties reflected in the
1996 Balance Sheet or acquired after the date thereof (other than properties
sold or otherwise disposed of in the ordinary course of business), and all of
such properties are held free and clear of all title defects, liens,
encumbrances and restrictions, except, with respect to all such properties, (a)
mortgages and liens securing debt reflected as liabilities on the 1996 Balance
Sheet and (b) (i) liens for current taxes and assessments not in default, (ii)
mechanics', carriers', workmen's, repairmen's, statutory or common law liens
either not delinquent or being contested in good faith, and (iii) liens,
mortgages, encumbrances, covenants, rights of way, building or use restrictions,
easements, exceptions, variances, reservations and other matters or limitations
of any kind, if any, which either individually or in the aggregate do not have a
Supply Tech Material Adverse Effect. Since December 31, 1995, neither Supply
Tech nor any Supply Tech Subsidiary has granted any security interests or other
liens upon or factored the accounts receivable of Supply Tech or any Supply Tech
Subsidiary.
18
14
(b) The Supply Tech Disclosure Letter sets forth a true and complete
list of all leases and agreements of Supply Tech or any Supply Tech Subsidiary
granting possession of or rights to real or personal property with a value of at
least $25,000, or in the case of real property, which provide for annual lease
payments in excess of $25,000 (the "Scheduled Leases"). All such Scheduled
Leases are in full force and effect and constitute the legal, valid, binding and
enforceable obligations of Supply Tech or a Supply Tech Subsidiary, as
applicable, and are legal, valid, binding and, to the knowledge of the Supply
Tech Executives, enforceable in accordance with their respective terms with
respect to each other party thereto, in each case to the extent material to the
business and operations of Supply Tech and the Supply Tech Subsidiaries taken as
a whole and subject in each case to applicable bankruptcy, insolvency and other
similar laws affecting the enforcement of creditors' rights generally, general
equitable principles and the discretion of courts in granting equitable
remedies. Except as would not have a Supply Tech Material Adverse Effect, each
of Supply Tech and the Supply Tech Subsidiaries has physical possession of all
equipment and other assets which are covered by Scheduled Leases. Except as
would not have a Supply Tech Material Adverse Effect, there are no existing
defaults of Supply Tech or any Supply Tech Subsidiary with respect to such
Scheduled Leases or, to the best knowledge of the Supply Tech Executives, of any
of the other parties thereto (or events or conditions which, with notice or
lapse of time, or both, would constitute a default).
Section 3.18. Environmental Matters. To the best knowledge of the Supply
Tech Executives, each of Supply Tech and the Supply Tech Subsidiaries is in
compliance in all material respects with all statutes, regulations and
ordinances relating to the protection of human health and the environment
including, without limitation, the Clean Water Act, 33 U.S.C. Section 1251 et
seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et
seq., the Clean Air Act, 42 U.S.C. Section 7401 et seq., the Toxic Substances
Control Act, 15 U.S.C. Section 2601 et seq., the Emergency Planning and
Community Right-to-Know Act, 42 U.S.C. Section 1001 et seq., the regulations
developed pursuant to these statutes and the corresponding state and local
statutes, ordinances and regulations. There has been no release by Supply Tech
or any Supply Tech Subsidiary or, to the actual knowledge of the Supply Tech
Executives, by any other person of a hazardous substance as that term is defined
in the Comprehensive Environmental Response, Compensation and Liability Act of
1980, 42 U.S.C. Section 9601(14), into the environment at any property owned or
leased by Supply Tech or any Supply Tech Subsidiary (the "Premises") including,
without limitation, any such release in the soil or groundwater underlying the
Premises. To the actual knowledge of and without any independent investigation
by the Supply Tech Executives, there is no asbestos, polychlorinated biphenyls
or underground storage tanks located on the Premises and there have been no
releases of asbestos, polychlorinated biphenyls or materials stored in
underground storage tanks, including, without limitation, petroleum or
petroleum-based materials. Except as would not have a Supply Tech Material
Adverse Effect, neither Supply Tech nor any Supply Tech Subsidiary has received
notice of any violation of any environmental statute or regulation nor has it
been advised of any claim or liability pursuant to any environmental statute or
regulation brought by any governmental agency or private party (in each case, an
"Environmental Notice").
Section 3.19. Patents, Trademarks, Trade Names. The Supply Tech
Disclosure Letter sets forth a true and complete list of (i) all patents (the
"Patents"), trademarks, trade names (including all federal and state
registration pertaining thereto) and copyrights owned by Supply Tech or any
Supply Tech Subsidiary (collectively, the "Proprietary Intellectual Property")
and (ii) all patents, trademarks, trade names, copyrights, technology and
processes used by Supply Tech or any Supply Tech Subsidiary in their businesses
which are material to their businesses and are used pursuant to a license or
other right granted by a third party (collectively, the "Licensed Intellectual
Property", and together with the Proprietary Intellectual Property referred to
as "Intellectual Property"). A true and complete list of all such licenses and
agreements with respect to Licensed Intellectual Property is set forth in the
Supply Tech Disclosure Letter. To the best knowledge of the Supply Tech
Executives, each of the federal, state and other governmental registrations with
any country pertaining to the Proprietary Intellectual Property is valid and in
full force and effect. Supply Tech or a Supply Tech Subsidiary owns, or has the
right to use pursuant to valid and effective agreements, all Intellectual
Property, and the consummation of the transactions contemplated hereby will not
materially adversely alter or impair any such rights. No claims are pending
against Supply Tech or a Supply Tech Subsidiary, and the Supply Tech Executives
are not aware of any factual basis for such a claim, by any person with respect
to the use of any Intellectual Property or challenging or questioning the
validity or effectiveness of any license or agreement relating to the same that
would be likely to result in a Supply Tech Material Adverse Effect; and the
current use by Supply Tech or a Supply Tech Subsidiary of the Intellectual
Property does not in any material respect infringe upon the rights of any third
party. The Supply Tech Disclosure Letter sets forth a list of all jurisdictions
in which Supply Tech or
19
15
a Supply Tech Subsidiary is operating under a trade name, and each jurisdiction
in which any such trade name is registered. All the Patents are currently in
compliance with formal legal requirements (including payment of filing,
examination and maintenance fees and proofs of working or use), and to the best
knowledge of the Supply Tech Executives, there is nothing which would render the
Patents invalid or unenforceable, and they are not subject to any maintenance
fees or taxes or actions falling due within ninety days after the date of
Closing. No Patent has been or is now involved in any interference, reissue,
reexamination or opposition proceeding, nor is Supply Tech aware of any
potentially interfering patent or patent application of any third party. To the
best knowledge of the Supply Tech Executives, no person or entity is presently
selling or marketing a product which is covered by the Patents, and the Patents
have not been challenged or threatened in any way.
Section 3.20. Supply Tech Computer Software and Hardware.
(a) The Supply Tech Disclosure Letter sets forth a true and complete
list of: (i) all software and associated documentation owned by Supply Tech
material to the business of Supply Tech, other than custom-developed software
developed for and assigned to a Supply Tech customer (the "Supply Tech
Proprietary Software"); (ii) all software (other than the Supply Tech
Proprietary Software and "shrink-wrap" software) used in connection with the
business of Supply Tech (the "Supply Tech Licensed Software" and together with
the Supply Tech Proprietary Software, the "Supply Tech Software"). Supply Tech
is in possession of all technical and descriptive materials to run its business
in accordance with its historical practices, except as would not have a Supply
Tech Material Adverse Effect. The Supply Tech Proprietary Software consists of:
(i) source and object code embodied in magnetic media; and (ii) all development
and procedural tools, documentation, and manuals necessary to maintain, enhance,
develop derivative works, support and service the Supply Tech Proprietary
Software, including licenses to use compilers, assemblers, libraries and other
aids.
(b) Supply Tech has a valid right, title and interest in and to all
intellectual property rights in the Supply Tech Proprietary Software, including
all copyrights (registered and unregistered), trade secrets, and proprietary and
confidential information rights therein. Supply Tech has developed the Supply
Tech Proprietary Software entirely through its own efforts for its own account
or has acquired prior to the date hereof valid right, title and interest in the
Supply Tech Proprietary Software and the Supply Tech Proprietary Software is
free and clear of all liens, claims and encumbrances. The use of the Supply Tech
Licensed Software and the use and distribution of the Supply Tech Proprietary
Software does not breach any terms of any contract between Supply Tech and any
third party. To the best knowledge of the Supply Tech Executives, Supply Tech
has been granted under the license agreements relating to the Supply Tech
Licensed Software (the "Supply Tech License Agreements") valid and subsisting
license rights with respect to all software comprising the Supply Tech Licensed
Software and such rights may be exercised in any jurisdiction in which Supply
Tech currently conducts its business or could reasonably be expected to conduct
its business in the future. Each of Supply Tech and the Supply Tech Subsidiaries
is in compliance with each of the terms and conditions of each of the Supply
Tech License Agreements except to the extent failure to so comply, individually
or in the aggregate, would not have a Supply Tech Material Adverse Effect. To
the best knowledge of the Supply Tech Executives, in the case of any
commercially available "shrink-wrap" software programs (such as Lotus 1-2-3),
Supply Tech has not made and is not using any unauthorized copies of any such
software programs and, to the best knowledge of the Supply Tech Executives, none
of the employees, agents or representatives of Supply Tech have made or are
using any such unauthorized copies, except as would not have a Supply Tech
Material Adverse Effect.
(c) The Supply Tech Proprietary Software and, to the actual knowledge
of the Supply Tech Executives, the Supply Tech Licensed Software does not
infringe the patent, copyright, or trade secret rights or any other intellectual
property right of any third party which may exist anywhere in the world.
(d) Neither Supply Tech nor any of the Supply Tech Subsidiaries has
granted rights in the Supply Tech Software to any third party except for rights
granted to value added resellers, distributors or customers in the ordinary
course of business pursuant to contracts with customers.
(e) To the best knowledge of the Supply Tech Executives, the Supply Tech
Software and the related computer hardware used by Supply Tech in its
operations (the "Supply Tech Hardware") are adequate in all material respects,
when taken together with the other assets, resources and personnel of Supply
Tech and the Supply Tech Subsidiaries, to run the business of Supply Tech and
the Supply Tech Subsidiaries in the same manner as such business
20
16
has operated since December 31, 1995, except as would not result in a Supply
Tech Material Adverse Effect. The Supply Tech Disclosure Letter contains a
summary description of any problems experienced by Supply Tech in the past
twelve months with respect to the Supply Tech Software or Supply Tech Hardware
and the provision of services to Supply Tech clients which have arisen outside
the ordinary course of business and would result in a Supply Tech Material
Adverse Effect.
Section 3.21. Transactions with Affiliates. No officer, director or
holder of 5% or more of the outstanding capital stock of Supply Tech or any
Supply Tech Subsidiary, or any person or affiliated group with whom any such
stockholder, officer or director has any direct or indirect relation by blood,
marriage or adoption, or any entity in which any such person, owns (other than
through a publicly held corporation whose stock is traded on a national
securities exchange or in the over-the-counter market and less than 1% of the
stock of which is beneficially owned by all such persons) any beneficial
interest in: (i) any contract, arrangement or understanding or any related
series of the same involving aggregate consideration in excess of $10,000 with,
or relating to, the business or operations of Supply Tech or any Supply Tech
Subsidiary; (ii) any loan, arrangement, understanding, agreement or contract or
any related series of the same for or relating to indebtedness of Supply Tech or
a Supply Tech Subsidiary in excess of $10,000 in the aggregate; or (iii) any
property or related group of properties with an aggregate value of at least
$10,000 (real, personal or mixed), tangible or intangible, used or currently
intended to be used in, the business or operations of Supply Tech or any Supply
Tech Subsidiary.
Section 3.22. Brokers, Finders and Investment Bankers. Neither Supply
Tech nor the Supply Tech Subsidiaries nor any of their officers, directors or
employees has employed any broker, finder or investment banker or incurred any
liability for any investment banking fees, financial advisory fees, brokerage
fees or finders' fees in connection with the transactions contemplated hereby.
Section 3.23. Disclosure. No representation, warranty or covenant made
by Supply Tech in this Agreement, the Supply Tech Disclosure Letter or the
Exhibits attached hereto contains an untrue statement of a material fact or
omits to state a material fact required to be stated herein or therein or
necessary to make the statements contained herein or therein not misleading.
21
17
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF HARBINGER AND NEWCO
With such exceptions as are set forth in a letter (the "Harbinger
Disclosure Letter") delivered by Harbinger to Supply Tech prior to the
execution hereof, Harbinger and Newco hereby represent and warrant to Supply
Tech as follows:
Section 4.1. Organization. Each of Harbinger and its subsidiaries is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has all requisite corporate power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted. Harbinger and each of its subsidiaries is duly
qualified to transact business, and is in good standing, as a foreign
corporation in each jurisdiction where the character of its activities requires
such qualification, except where the failure to so qualify would not have a
material adverse effect on the assets, liabilities, results of operations or
financial condition, business or prospects of Harbinger and its subsidiaries
taken as a whole (a "Harbinger Material Adverse Effect"). Harbinger has
delivered to Supply Tech accurate and complete copies of the Articles or
Certificate of Incorporation and Bylaws, as currently in effect, of Harbinger
and each of its subsidiaries, and has made available to Supply Tech the minute
books and stock records of each thereof. The Harbinger Disclosure Letter
contains a true and correct list of all of the jurisdictions in which Harbinger
or any of its subsidiaries is qualified to do business as a foreign corporation.
Section 4.2. Authorization. Each of Harbinger and Newco has full
corporate power and authority to execute and deliver this Agreement and to
perform its obligations under this Agreement and to consummate the Merger and
the other transactions contemplated hereby. As of the Closing, the execution
and delivery of this Agreement by Harbinger and Newco, the performance by each
of Harbinger and Newco of its respective obligations hereunder and the
consummation of the Merger and the other transactions provided for herein will
have been duly and validly authorized by all necessary corporate action on the
part of Harbinger and Newco. The Boards of Directors of Harbinger and Newco
have approved the execution, delivery and performance of this Agreement and the
consummation of the Merger and the other transactions provided for herein. This
Agreement has been duly executed and delivered by each of Harbinger and Newco
and constitutes the valid and binding agreement of each of Harbinger and Newco,
enforceable against each of Harbinger and Newco in accordance with its terms,
subject to applicable bankruptcy, insolvency and other similar laws affecting
the enforceability of creditors' rights generally, general equitable principles
and the discretion of courts in granting equitable remedies.
Section 4.3. Absence of Restrictions and Conflicts. The execution,
delivery and performance of this Agreement, the consummation of the Merger and
the other transactions contemplated by this Agreement, and the fulfillment of
and compliance with the terms and conditions of this Agreement do not and will
not, with the passing of time or the giving of notice or both, violate or
conflict with, constitute a breach of or default under, result in the loss of
any material benefit under, or permit the acceleration of any obligation under,
(i) any term or provision of the Articles or Certificate of Incorporation or
Bylaws of Harbinger or any of its subsidiaries, (ii) any Harbinger Material
Contract, (iii) any judgment, decree or order of any court or governmental
authority or agency to which Harbinger or any of its subsidiaries is a party or
by which Harbinger, any of its subsidiaries or any of their respective
properties is bound, or (iv) any statute, law, regulation or rule applicable to
Harbinger, or any of its subsidiaries, so as to have, in the case of subsections
(ii) through (iv) above, a Harbinger Material Adverse Effect. Except for
compliance with the applicable requirements of the Securities Act, the Exchange
Act, applicable state securities laws and filing and recordation of the Georgia
Certificate of Merger as required by the GBCC and the Michigan Certificate of
Merger as required by the MBCA, no consent, approval, order or authorization of,
or registration, declaration or filing with, any government agency or public or
regulatory unit, agency, body or authority with respect to Harbinger or any of
its subsidiaries is required in connection with the execution, delivery or
performance of this Agreement by Harbinger or Newco or the consummation of the
transactions contemplated by this Agreement by Harbinger or Newco, the failure
to obtain which would have a Harbinger Material Adverse Effect, including
without limitation any Notification and Report Forms and related material
required to be filed under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act.
22
18
Section 4.4. Capitalization of Harbinger. The authorized capital stock
of Harbinger consists of 120,000,000 shares of capital stock consisting of
100,000,000 shares of common stock, $.0001 par value and 20,000,000 shares of
preferred stock, $.0001 par value. At September 30, 1996, there were 10,837,251
shares of Harbinger Common Stock issued and outstanding and no shares of
preferred stock were issued or outstanding. All shares of Harbinger Common
Stock outstanding as of the date hereof are duly authorized, validly issued,
fully paid, nonassessable and free of pre-emptive rights. The shares of
Harbinger Common Stock to be issued in the Merger will be validly issued, fully
paid, nonassessable and free of pre-emptive rights. The shares of Harbinger
Common Stock issuable upon exercise of the Options have been duly authorized,
and when issued against payment therefor, will be validly issued, fully paid,
nonassessable and free from pre-emptive rights. Except as set forth in this
Section 4.4, there are no shares of capital stock of Harbinger outstanding, and
there are no subscriptions, options, convertible securities, calls, rights,
warrants or other agreements, claims or commitments of any nature whatsoever
obligating Harbinger or any of its subsidiaries to issue, transfer, deliver or
sell, or cause to be issued, transferred, delivered or sold, additional shares
of the capital stock or obligating Harbinger or any of its subsidiaries to
grant, extend or enter into any such agreement or commitment.
Section 4.5. Harbinger Commission Reports. Harbinger has made available
to Supply Tech (i) Harbinger's Annual Report on Form 10-K for the year ended
December 31, 1995, including all exhibits thereto and items incorporated therein
by reference, (ii) Harbinger's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1996, June 30, 1996 and September 30, 1996, including all
exhibits thereto and items incorporated therein by reference, (iii) the proxy
statement relating to Harbinger's Annual Meeting of Stockholders held on May 8,
1996 and (iv) all Current Reports on Form 8-K filed by Harbinger with the
Securities and Exchange Commission (the "Commission") since September 30, 1996,
including all exhibits thereto and items incorporated therein by reference
(items (i) through (iv) in this sentence being referred to collectively as the
"Harbinger Commission Reports"). As of their respective dates, the Harbinger
Commission Reports did not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. Since August 22, 1995, Harbinger has filed all forms,
reports and documents with the Commission required to be filed by it pursuant to
the Securities Act and the Exchange Act and the rules and regulations
promulgated thereunder, each of which complied as to form, at the time such
form, document or report was filed, in all material respects with the applicable
requirements of the Securities Act and the Exchange Act and the applicable rules
and regulations promulgated thereunder.
Section 4.6. Absence of Certain Changes. Since September 30, 1996,
there has not been (i) any change in the assets, liabilities, results of
operations, financial condition or, to the best knowledge of the Harbinger
Executives (as hereinafter defined), business or prospects of Harbinger and its
subsidiaries taken as a whole that has had a Harbinger Material Adverse Effect,
(ii) any damage, destruction, loss or casualty to property or assets of
Harbinger or any of its subsidiaries, whether or not covered by insurance that
has had a Harbinger Material Adverse Effect, (iii) any declaration, setting
aside or payment of any dividend or distribution (whether in cash, stock or
property) in respect of the capital stock of Harbinger or any redemption or
other acquisition of any of the capital stock of Harbinger or any of its
subsidiaries (except for the acquisition of Harbinger Common Stock in payment
of the purchase price and related taxes upon the exercise of stock options) or
any split, combination or reclassification of shares of capital stock declared
or made by Harbinger, or (iv) any agreement to do any of the foregoing.
Section 4.7. Compliance with Law. Each of Harbinger and its
subsidiaries has all material authorizations, approvals, licenses and orders of
and from all governmental and regulatory officers and bodies necessary to carry
on its business as it is currently being conducted, to own or hold under lease
the properties and assets it owns or holds under lease and to perform all of its
obligations under the agreements to which it is a party, and each of Harbinger
and its subsidiaries has been and is in compliance with all applicable laws,
regulations and administrative orders of any country, state, or municipality or
any subdivision of any thereof to which its business and its employment of labor
or its use or occupancy of properties or any part thereof are subject, the
failure to obtain or the violation of which would have a Harbinger Material
Adverse Effect.
Section 4.8. Tax Returns; Taxes. Harbinger has duly filed all federal,
state, local and foreign tax returns required to be filed by it and has duly
paid or made adequate provision for the payment of all taxes which are due and
payable pursuant to such returns or pursuant to any assessment with respect to
taxes in such
23
19
jurisdictions whether or not in connection with such returns. The liability for
taxes reflected on the Harbinger Balance Sheet is sufficient for the payment of
all unpaid taxes, whether or not disputed, that are accrued or applicable for
the period ended December 31, 1995 and for all years and periods ended prior
thereto. All deficiencies asserted as a result of any examinations by the
Internal Revenue Service or any other taxing authority have been paid, fully
settled or adequately provided for in the Harbinger Balance Sheet.
24
20
There are no pending claims asserted for taxes of Harbinger or any of its
subsidiaries or outstanding agreements or waivers extending the statutory
period of limitation applicable to any tax return of Harbinger or any of its
subsidiaries for any period. Harbinger and each of its subsidiaries have made
all estimated income tax deposits and all other required tax payments or
deposits and have complied for all prior periods in all material respects with
the tax withholding provisions of all applicable federal, state, local and
other laws.
Section 4.09. Labor Relations. Each of Harbinger and its subsidiaries is
in compliance in all material respects with all federal and state laws
respecting employment and employment practices, terms and conditions of
employment, wages and hours, and is not engaged in any unfair labor or unlawful
employment practice. Except as would not result in a Harbinger Material Adverse
Effect, individually or in the aggregate, there is no (i) unlawful employment
practice discrimination charge involving Harbinger or any of its subsidiaries
pending before the EEOC, EEOC recognized state "referral agency" or any other
governmental agency; (ii) unfair labor practice charge or complaint against
Harbinger or any of its subsidiaries pending before the NLRB; (iii) labor
strike, dispute, slowdown or stoppage actually pending or, to the best knowledge
of the Harbinger Executives, threatened against or involving or affecting
Harbinger or any of its subsidiaries and no NLRB representation question exists
respecting any of their respective employees; (iv) grievance or arbitration
proceeding pending against Harbinger or any of its subsidiaries and no written
claim therefor exists; and (v) collective bargaining agreement binding on
Harbinger or any of its subsidiaries.
Section 4.10. Environmental Matters. There has been no release of a
hazardous substance as that term is defined in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C. Section 9601(14) by
Harbinger or any of its subsidiaries into the environment at any property owned,
leased or used by Harbinger or any of its subsidiaries (the "Harbinger
Premises") including, without limitation, any release in the soil or ground
water underlying such Harbinger Premises, and, to the actual knowledge of the
Harbinger Executives without any inquiry of any nature whatsoever, there has
been no such release by any other party at any of the Harbinger Premises. Except
as would not result in a Harbinger Material Adverse Effect, neither Harbinger
nor any of its subsidiaries has received an Environmental Notice.
Section 4.11. Brokers, Finders and Investment Bankers. Neither Harbinger
nor any subsidiary of Harbinger, or any of their respective officers, directors
or employees, has employed any broker, finder or investment banker or incurred
any liability for any investment banking fees, financial advisory fees,
brokerage fees or finders' fees in connection with the transactions contemplated
hereby.
Section 4.12. Patents, Trademarks, Trade Names. To the best knowledge
of the Harbinger Executives, each of the federal, state and other governmental
registrations with any country pertaining to (i) all patents (the "Patents"),
trademarks, trade names (including all federal and state registration
pertaining thereto) and copyrights owned by Harbinger or any Harbinger
Subsidiary (collectively, the "Harbinger Proprietary Intellectual Property")
and (ii) all patents, trademarks, trade names, copyrights, technology and
processes used by Harbinger or any Harbinger Subsidiary in their businesses
which are material to their businesses and are used pursuant to a license or
other right granted by a third party (collectively, the "Harbinger Licensed
Intellectual Property", and together with the Harbinger Proprietary
Intellectual Property referred to as "Harbinger Intellectual Property"). is
valid and in full force and effect. Harbinger or a Harbinger Subsidiary owns,
or has the right to use pursuant to valid and effective agreements, all
Harbinger Intellectual Property, and the consummation of the transactions
contemplated hereby will not materially adversely alter or impair any such
rights. No claims are pending against Harbinger or a Harbinger Subsidiary by
any person with respect to the use of any Harbinger Intellectual Property or
challenging or questioning the validity or effectiveness of any license or
agreement relating to the same that would be likely to result in a Harbinger
Material Adverse Effect; and the current use by Harbinger or a Harbinger
Subsidiary of the Harbinger Intellectual Property does not in any material
respect infringe upon the rights of any third party. All the Patents are
currently in compliance with formal legal requirements (including payment of
filing, examination and maintenance fees and proofs of working or use), and to
the best knowledge of the Harbinger Executives, there is nothing which would
render the Patents invalid or unenforceable, and they are not subject to any
maintenance fees or taxes or actions falling due within ninety days after the
date of Closing. No Patent has been or is now involved in any interference,
reissue, reexamination or opposition proceeding, nor is Harbinger aware of any
potentially interfering patent or patent application of any third party. To
the best knowledge of the Harbinger Executives, no
25
21
person or entity is presently selling or marketing a product which is covered
by the Patents, and the Patents have not been challenged or threatened in any
way.
Section 4.13. Harbinger Computer Software and Hardware.
(a) Harbinger is in possession of all technical and descriptive materials
to run its business in accordance with its historical practices, except as
would not have a Harbinger Material Adverse Effect.
(b) Harbinger has a valid right, title and interest in and to all
intellectual property rights in (i) all software and associated documentation
owned by Harbinger material to the business of Harbinger, other than
custom-developed software developed for and assigned to a Harbinger customer
(the "Harbinger Proprietary Software"); (ii) all software (other than the
Harbinger Proprietary Software and "shrink-wrap" software) used in connection
with the business of Harbinger (the "Harbinger Licensed Software" and together
with the Harbinger Proprietary Software, the "Harbinger Software"), including
all copyrights (registered and unregistered), trade secrets, moral rights, and
proprietary and confidential information rights therein. The Harbinger
Proprietary Software consists of: (i) source and object code embodied in
magnetic media; and (ii) all development and procedural tools, documentation,
and manuals necessary to maintain, enhance, develop derivative works, support
and service the Harbinger Proprietary Software, including licenses to use
compilers, assemblers, libraries and other aids. Harbinger has developed the
Harbinger Proprietary Software entirely through its own efforts for its own
account and the Harbinger Proprietary Software is free and clear of all liens,
claims and encumbrances. The use of the Harbinger Licensed Software and the
use and distribution of the Harbinger Proprietary Software does not breach any
terms of any contract between Harbinger and any third party. To the best
knowledge of the Harbinger Executives, Harbinger has been granted under the
license agreements relating to the Harbinger Licensed Software (the "Harbinger
License Agreements") valid and subsisting license rights with respect to all
software comprising the Harbinger Licensed Software and such rights may be
exercised in any jursidiction in which Harbinger currently conducts its
business or reasonably expected to conducts its business in the future. Each of
Harbinger and the Harbinger Subsidiaries is in compliance with each of the
terms and conditions of each of the Harbinger License Agreements except to the
extent failure to so comply, individually or in the aggregate, would not have a
Harbinger Material Adverse Effect. To the best knowledge of the Harbinger
Executives, in the case of any commercially available "shrink-wrap" software
programs (such as Lotus 1-2-3), Harbinger has not made and is not using any
unauthorized copies of any such software programs and, to the best knowledge of
the Harbinger Executives, none of the employees, agents or representatives of
Harbinger have made or are using any such unauthorized copies, except as would
not have a Harbinger Material Adverse Effect.
(c) The Harbinger Proprietary Software and, to the actual knowledge of the
Harbinger Executives, the Harbinger Licensed Software does not infringe the
patent, copyright, or trade secret rights or any other intellectual property
right of any third party which may exist anywhere in the world.
(d) Neither Harbinger nor any of the Harbinger Subsidiaries has granted
rights in the Harbinger Software to any third party except for rights granted
to value added resellers, distributors or customers in the ordinary course of
business pursuant to contracts with customers.
(e) To the best knowledge of the Harbinger Executives, the Harbinger
Software and the related computer hardware used by Harbinger in its operations
(the "Harbinger Hardware") are adequate in all material respects, when taken
together with the other assets, resources and personnel of Harbinger and the
Harbinger Subsidiaries, to run the business of Harbinger and the Harbinger
Subsidiaries in the same manner as such business has operated since December
31, 1995, except as would not result in a Harbinger Material Adverse Effect.
Section 4.14. Legal Proceedings. There are no suits, actions, claims,
proceedings or investigations pending, or, to the best knowledge of the
Harbinger Executives, threatened against, relating to or involving Harbinger or
any of the Harbinger Subsidiaries (or any of its officers or directors) before
any court, arbitrator or administrative or governmental body (i) that could
reasonably be expected to materially and adversely effect the Harbinger
Intellectual Property or (ii) that has arisen since October 1, 1996 that would
result in a Harbinger Material Adverse Effect.
26
22
Section 4.15. Tax Treatment. Harbinger shall not knowingly take any
actions that would cause the transactions contemplated hereby to constitute a
taxable exchange with respect to the shareholders of Supply Tech.
Section 4.16. Disclosure. No representation, warranty or covenant made
by Harbinger in this Agreement, the Harbinger Disclosure Letter or the Exhibits
hereto contains any untrue statement of a material fact or omits to state a
material fact required to be stated herein or therein or necessary to make the
statements contained herein or therein not misleading.
ARTICLE 5
CERTAIN COVENANTS AND AGREEMENTS
Section 5.1. Conduct of Business by Supply Tech. From the date hereof
to the Effective Time, Supply Tech will, and will cause each of its subsidiaries
to, except as required in connection with the Merger and the other transactions
contemplated by this Agreement and except as otherwise disclosed in the Supply
Tech Disclosure Letter or consented to in writing by Harbinger:
(a) Carry on its businesses in the ordinary course in substantially the
same manner as heretofore conducted and not engage in any new line of business
or enter into any agreement, transaction or activity or make any commitment
except those in the ordinary course of business and not otherwise prohibited
under this Section 5.1;
(b) Neither change nor amend its Articles of Incorporation or Bylaws or
other governing documents;
(c) Not issue, sell or grant options, warrants or rights to purchase or
subscribe to, or enter into any arrangement or contract with respect to the
issuance or sale of any of the capital stock of Supply Tech or any subsidiary
or rights or obligations convertible into or exchangeable for any shares of the
capital stock of Supply Tech and not make any changes (by split-up,
combination, reorganization or otherwise) in the capital structure of Supply
Tech or any subsidiary; except, that Supply Tech shall be permitted to issue
shares of Supply Tech Common Stock upon exercise of Options outstanding on the
date of this Agreement that are exercised in accordance with their terms as the
same exist on the date of this Agreement.
(d) Not declare, pay or set aside for payment any dividend or other
distribution in respect of the capital stock or other equity securities of
Supply Tech and not redeem, purchase or otherwise acquire any shares of the
capital stock or other securities of Supply Tech or rights or obligations
convertible into or exchangeable for any shares of the capital stock or other
securities of Supply Tech or obligations convertible into such, or any options,
warrants or other rights to purchase or subscribe to any of the foregoing;
(e) Not acquire or enter into an agreement to acquire, by merger,
consolidation or purchase of stock or assets, or otherwise any business or
entity;
(f) Use its reasonable efforts to preserve intact the corporate existence,
goodwill and business organization of Supply Tech, to keep the officers and
employees of Supply Tech available to Harbinger and to preserve the
relationships of Supply Tech with customers, suppliers and others having
business relations with Supply Tech;
(g) Not (i) create, incur or assume any long-term debt (including
obligations in respect of capital leases which individually involve annual
payments in excess of $50,000) or, except in the ordinary course of business
under existing lines of credit, create, incur or assume any short-term debt for
borrowed money, (ii) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, continentally or otherwise) for the obligations
of any other person, except in the ordinary course of business and consistent
with past practice,
27
23
(iii) make any loans or advances to any other person, except in the ordinary
course of business and consistent with past practice, (iv) make any capital
contributions to, or investments in, any person, except in the ordinary course
of business and consistent with past practices with respect to investments, or
(v) make any capital expenditure, except in the ordinary course of business and
consistent with past practice;
(h) Not enter into, modify or extend in any manner the terms of any
employment, severance or similar agreements with officers and directors nor
grant any increase in the compensation of officers, directors or employees,
whether now or hereafter payable, including any such increase pursuant to any
option, bonus, stock purchase, pension, profit-sharing, deferred compensation,
retirement or other plan, arrangement, contract or commitment; except, that
Supply Tech shall be permitted to (i) hire employees who are not officers or
directors in the ordinary course of business consistent with past practices and
(ii) grant increases in cash compensation to employees who are not officers or
directors so long as such increases are granted in the ordinary course of
business and consistent with past practice;
(i) Perform in all material respects all of its obligations under all
Supply Tech Material Contracts (except those being contested in good faith) and
not enter into, assume or amend any contract or commitment that would be a
Supply Tech Material Contract other than contracts to provide services entered
into in the ordinary course of business;
(j) Use its reasonable efforts to maintain in full force and effect and in
the same amounts policies of insurance comparable in amount and scope of
coverage to that now maintained by Supply Tech;
(k) Use its reasonable efforts to continue to collect its accounts
receivable and pay its accounts payable in the ordinary course of business and
consistent with past practices;
(l) Deposit any proceeds received from the exercise of any Options,
warrants or other derivative securities of Supply Tech in a separate deposit
account established in the name of Supply Tech and maintain such cash proceeds
in such account through the Effective Time;
(m) Except as set forth in the Supply Tech Disclosure Letter, prepare and
file all federal, state, local and foreign returns for taxes and other tax
reports, filings and amendments thereto required to be filed by it, and allow
Harbinger, at its request, to review all such returns, reports, filings and
amendments at Supply Tech's offices prior to the filing thereof, which review
shall not interfere with the timely filing of such returns;
(n) Use its reasonable best efforts to cause each holder of an Option to
execute and deliver to Harbinger at or prior to the Closing Date an Option
Assumption Agreement with respect to all Options held by such holder;
(o) Obtain Noncompetition and Nonsolicitation Agreements (as defined
below) with the stockholders designated in the Supply Tech Disclosure Letter
(the "Specified Stockholders") and Employment Agreements (as defined below)
with the employees designated in the Supply Tech Disclosure Letter (the
"Specified Employees") on or prior to the Closing Date; and
(p) Not take any action the effect of which would be to cause the Merger
to be treated as a taxable transaction.
In connection with the continued operation of the business of Supply Tech
between the date of this Agreement and the Effective Time, Supply Tech shall
confer in good faith on a regular and frequent basis with one or more
representatives of Harbinger designated in writing to report operational
matters of materiality and the general status of ongoing operations. Supply
Tech acknowledges that Harbinger does not and will not waive any rights it may
have under this Agreement as a result of such consultations. All such
consultations shall be confirmed in writing by the parties participating in the
same.
28
24
Section 5.2. Conduct of Business by Harbinger. From the date hereof to
the Effective Time, Harbinger will, and will cause each of its subsidiaries to,
except as required in connection with the Merger and the other transactions
contemplated by this Agreement and except as otherwise disclosed in the
Harbinger Disclosure Letter or consented to in writing by Supply Tech:
(a) Carry on its businesses in the ordinary course in substantially the
same manner as heretofore conducted;
(b) Neither change nor amend its Articles or Certificate of Incorporation
or Bylaws;
(c) Other than pursuant to the exercise of employee stock options,
warrants and other convertible securities outstanding on the date hereof, or
pursuant to employee plans, not issue, sell or grant options, warrants or
rights to purchase or subscribe to, or enter into any arrangement or contract
with respect to the issuance or sale of any of the capital stock of Harbinger
or any of its subsidiaries or rights or obligations convertible into or
exchangeable for any shares of the capital stock of Harbinger or any of its
subsidiaries and not alter the terms of any presently outstanding options or
make any changes (by split-up, combination, reorganization or otherwise) in the
capital structure of Harbinger or any of its subsidiaries; provided, however,
that Harbinger shall be permitted hereunder to issue capital stock or
securities convertible into capital stock in transactions: (i) approved by the
Board of Directors of Harbinger; (ii) at a price or with a conversion price, as
applicable, at or above fair market value as determined in good faith by the
Board of Directors of Harbinger; and (iii) which would not in the good faith
determination of the Board of Directors of Harbinger unreasonably delay the
Effective Time;
(d) Not pay any cash dividends;
(e) Not take any action the effect of which would be to cause the Merger
to be treated as a taxable transaction; and
(f) Use its reasonable efforts to preserve intact the corporate existence,
goodwill and business organization of Harbinger and to preserve the
relationships of Harbinger with customers, suppliers and others having business
relations with Harbinger.
Section 5.3. Inspection and Access to Information.
(a) Between the date of this Agreement and the Effective Time, each party
hereto will provide each other party and its accountants, counsel and other
authorized representatives access, during reasonable business hours and under
reasonable circumstances to any and all of its premises, properties, contracts,
commitments, books, records and other information (including tax returns filed
and those in preparation) and will cause their respective officers to furnish
to the other party and its authorized representatives any and all financial,
technical and operating data and other information pertaining to its business,
as each other party shall from time to time reasonably request.
(b) All non-public information obtained by Harbinger or Supply Tech or any
of their representatives pursuant to this Agreement or in connection with the
matters contemplated hereby concerning the business, operations or affairs of
the other will be kept confidential and will not be used for any purpose other
than the consummation of the transactions contemplated hereby, or be disclosed
to any other person or entity, except for such disclosure to its employees,
agents and representatives who have a need to know the same and who have been
advised of the confidential nature of such information and who agree to abide
by the terms hereof and except for such disclosure as may be required by
applicable law, court order or governmental agency request. In the event this
Agreement is terminated in accordance with its terms, any non-public
information furnished by any party to any other party hereto will be promptly
returned.
29
25
Section 5.4. Supply Tech Stockholder Matters. Supply Tech shall submit
to its stockholders as soon as practicable after the date hereof a unanimous
written consent approving this Agreement and the transactions contemplated
hereby, through its Board of Directors, recommend to its stockholders approval
of this Agreement and the transactions contemplated hereby.
Section 5.5. The Nasdaq National Market Additional Shares Notification.
Harbinger shall exercise reasonable good faith efforts to file an additional
shares notification with The Nasdaq National Market to list the shares of
Harbinger Common Stock to be issued in connection with the Merger reasonably
promptly following the Effective Time.
30
26
Section 5.6. Supply Tech Affiliates.
(a) Supply Tech shall deliver to Harbinger a letter identifying all
persons who are, at the time the Merger is submitted to a vote to the
shareholders of Supply Tech, "affiliates" of Supply Tech for purposes of Rule
145 under the Securities Act. Supply Tech shall cause each person who is
identified as an "affiliate" in such letter to deliver to Harbinger on or prior
to the Effective Time a written statement, in form satisfactory to Harbinger
and Supply Tech, that such person will not offer to sell, transfer or otherwise
dispose of any of the shares of Harbinger Common Stock issued to such person
pursuant to the Merger, except (i) in accordance with the applicable provisions
of the Securities Act and the rules and regulations thereunder and (ii) until
such time as financial results covering at least thirty days of combined
operations of Harbinger and Supply Tech have been published within the meaning
of Section 201.01 of the Commission's Codification of Financial Reporting
Policies; provided, however, that each affiliate shall be permitted to make
sales to the extent permitted by applicable accounting rules and regulations
promulgated by the Commission. Harbinger shall be entitled to place legends on
any certificates of Harbinger Common Stock issued to such affiliates to
restrict transfer of such shares as set forth above.
(b) Harbinger shall take such action with respect to affiliates of
Harbinger as is reasonably appropriate under applicable accounting rules and
regulations promulgated by the Commission for the Merger to qualify as a
"pooling of interests" for accounting purposes.
Section 5.7. No Solicitation; Acquisition Proposals. From the date here
of until the Effective Time or until this Agreement is terminated or abandoned
as provided in Article 8, Supply Tech shall not directly or indirectly solicit
or initiate (including by way of furnishing any information) discussions with,
any corporation, partnership, person or other entity or group (other than
Harbinger, an affiliate of Harbinger or their authorized representatives
pursuant to this Agreement) concerning any proposal for a merger, sale of
substantial assets, sale of shares of stock or securities or other takeover or
business combination transaction (each, an "Acquisition Proposal") involving
Supply Tech, and Supply Tech will instruct its officers, directors, advisors
and other financial and legal representatives and consultants not to take any
action contrary to the foregoing provisions of this sentence. Supply Tech will
notify Harbinger promptly in writing if Supply Tech becomes aware that any
inquiries or proposals are received by, any information is requested from, or
any negotiations or discussions are sought to be initiated with Supply Tech
with respect to an Acquisition Proposal. Supply Tech shall immediately cease
any existing activities, discussions or negotiations with any third parties
which may have been conducted on or prior to the date hereof with respect to an
Acquisition Proposal and shall direct and use reasonable efforts to cause its
officers, advisors and representatives not to engage in any such activities,
discussions or negotiations.
Section 5.8. Reasonable Efforts; Further Assurances; Cooperation.
(a) Subject to the other provisions of this Agreement, the parties hereto
shall each use their reasonable, good faith efforts to perform their obligations
herein and to take, or cause to be taken or do, or cause to be done, all things
necessary, proper or advisable under applicable law to obtain all regulatory
approvals and satisfy all conditions to the obligations of the parties under
this Agreement and to cause the Merger and the other transactions contemplated
herein to be effected on or prior to January 31, 1997 in accordance with the
terms hereof and shall cooperate fully with each other and their respective
officers, directors, employees, agents, counsel, accountants and other designees
in connection with any steps required to be taken as a part of their respective
obligations under this Agreement, including without limitation:
(b) Supply Tech and Harbinger shall promptly make their respective filings
and submissions and shall take, or cause to be taken, all actions and do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to obtain any required approval of any other federal,
state or local governmental agency or regulatory body with jurisdiction over
the transactions contemplated by this Agreement.
(c) In the event any claim, action, suit, investigation or other proceeding
by any governmental body or other person is commenced which questions the
validity or legality of the Merger or any of the other transactions contemplated
hereby or seeks damages in connection therewith, the parties agree to cooperate
and use all reasonable efforts to defend against such claim, action, suit,
investigation or other proceeding and, if an
31
27
injunction or other order is issued in any such action, suit or other
proceeding, to use all reasonable efforts to have such injunction or other order
lifted, and to cooperate reasonably regarding any other impediment to the
consummation of the transactions contemplated by this Agreement.
(d) Each party shall give prompt written notice to the other of (i) the
occurrence, or failure to occur, of any event which occurrence or failure would
be likely to cause any representation or warranty of Supply Tech or Harbinger,
as the case may be, contained in this Agreement to be untrue or inaccurate in
any material respect at any time from the date hereof to the Effective Time or
that will or may result in the failure to satisfy any of the conditions
specified in Article 6 and (ii) any failure of Supply Tech or Harbinger, as the
case may be, to comply with or satisfy any covenant, condition or agreement to
be complied with or satisfied by it hereunder.
(e) Without the prior written consent of Harbinger, Supply Tech will not
terminate any employee if such termination would result in the payment of any
amounts pursuant to "change in control" provisions of any employment agreement
or arrangement.
Section 5.9. Public Announcements. The timing and content of all
announcements regarding any aspect of this Agreement or the Merger to the
financial community, government agencies, employees or the general public shall
be mutually agreed upon in advance (unless Harbinger or Supply Tech is advised
by counsel that any such announcement or other disclosure not mutually agreed
upon in advance is required to be made by law or applicable rule of The Nasdaq
National Market and then only after making a reasonable attempt to comply with
the provisions of this Section 5.9).
Section 5.10. Financial Statements and Commission Reports. Prior to the
Effective Time, each party hereto shall deliver to the other, as soon as
available but in no event later than 45 days after the end of each fiscal
quarter, a consolidated balance sheet as of the last day of such fiscal period
and the consolidated statements of income, stockholders' equity and cash flows
of such party and its subsidiaries for the fiscal period then ended prepared in
accordance with generally accepted accounting principles with such exceptions as
are noted on such financial statements, and in the case of Harbinger, the
requirements of Form 10-Q (or Form 10-K as the case may be) under the Exchange
Act. Prior to the Effective Time, Harbinger shall deliver to Supply Tech as
soon as available all forms, reports and other documents filed by Harbinger with
the Commission and shall otherwise keep Supply Tech apprised of any material
developments with respect to the business or financial condition of Harbinger.
Section 5.11. Supplements to Disclosure Letters. From time to time prior
to the Effective Time, Supply Tech and Harbinger will each promptly supplement
or amend the respective disclosure letters which they have delivered pursuant to
this Agreement with respect to any matter hereafter arising which, if existing
or occurring at the date of this Agreement, would have been required to be set
forth or described in any such disclosure letter or which is necessary to
correct any information in any such disclosure letter which has been rendered
inaccurate thereby. No supplement or amendment to any such disclosure letter
shall have any effect for the purpose of determining satisfaction of the
conditions set forth in Sections 6.2(a) or 6.3(a) of this Agreement.
Section 5.12. Pooling of Interests Accounting. From and after the date
hereof and until the Effective Time, neither Harbinger nor Supply Tech nor any
of their respective subsidiaries or other affiliates shall take, or fail to
take, any action (other than actions expressly contemplated by this Agreement)
that would jeopardize the treatment of Harbinger's acquisition of Supply Tech as
a "pooling of interests" for accounting purposes. Following the Effective Time,
Harbinger shall use its reasonable best efforts to conduct the combined business
of Harbinger and Supply Tech in a manner that would not jeopardize the
characterization of the Merger as a "pooling of interests" for accounting
purposes.
Section 5.13. Supply Tech Employee Benefits. Harbinger covenants that
the service of each employee of Supply Tech and each Supply Tech ERISA
Affiliate prior to the Closing Date shall be credited as service under the
Harbinger 401(k) Plan for all purposes (including without limitation,
eligibility and vesting) for those employees of Supply Tech and each Supply
Tech ERISA Affiliate that were participants in any 401(k) plan maintained by
Supply Tech or a Supply Tech ERISA Affiliate as of the Closing Date. Harbinger
further covenants
32
28
that the service of each employee of Supply Tech and each Supply Tech ERISA
Affiliate prior to the Closing Date shall be credited as service for Harbinger
for credit purposes under Harbinger's written vacation and compensation
policies. To the extent that any employee of Supply Tech prior to the Closing
Date is employed by Harbinger following the Closing Date, Harbinger further
covenants to provide to such employees such employee benefits that are no less
favorable than those provided to other employees of Harbinger similarly
situated.
Section 5.14. Additional Agreements. Within ninety (90) days following
the Closing Date, the Supply Tech Executives shall use their reasonable good
faith efforts to obtain with Harbinger's prior consent (which consent will not
be unreasonably withheld) signed agreements, and such other documents as may be
reasonably requested by Harbinger, (i) providing for the assignment of all
right, title, and interest to all work product and all intellectual property
rights therein created or developed according to the engagements set forth in
Exhibit 5.14; (ii) providing for the distribution and license of the software as
set forth in Exhibit 5.14; or (iii) providing for the acknowledgment of rights
granted to third parties as set forth in Exhibit 5.14 prior to the effective
date. The costs and expenses of obtaining such agreements and documents shall
be borne equally by Harbinger and the shareholders of Supply Tech.
ARTICLE 6
CONDITIONS TO CLOSING
Section 6.1. Conditions to Each Party's Obligations. The respective
obligations of each party to effect the Merger shall be subject to the
fulfillment at or prior to the Closing of each of the following conditions:
(a) Supply Tech Stockholder Approval. The Merger, this Agreement and the
transactions contemplated hereby shall have been approved at the stockholders'
meeting of Supply Tech duly called and held in accordance with the MBCA, the
Bylaws and the Articles of Incorporation of Supply Tech by the holders of a
majority of the outstanding shares of Supply Tech Common Stock.
(b) Injunction. At the Effective Time there shall be no effective
injunction, writ or preliminary restraining order or any order of any nature
issued by a court or governmental agency of competent jurisdiction to the
effect that the Merger may not be consummated as herein provided, no proceeding
or lawsuit shall have been commenced by any governmental or regulatory agency
for the purpose of obtaining any such injunction, writ or preliminary
restraining order and no written notice shall have been received from any such
agency indicating an intent to restrain, prevent, materially delay or
restructure the transactions contemplated by this Agreement.
(c) Tax Opinion. Supply Tech and Harbinger shall each have received a
written opinion of Xxxxxx, Xxxxxxx & Xxxxxx, L.L.P. and Xxxxxx, Xxxxxxx &
Xxxxxxx concerning certain federal income tax consequences of the Merger,
substantially in the forms attached as Exhibit 6.1(c)(i) and 6.1(c)(ii),
respectively.
(d) Pooling. Supply Tech and Harbinger shall have been advised in
writing, as of the Effective Time, by KPMG Peat Marwick, LLP, independent
public accountants, that, in accordance with generally accepted accounting
principles ("GAAP"), the Merger qualifies to be treated as a "pooling of
interests" for accounting purposes, and shall have been advised in writing, as
of the Effective Time, by Xxxxxx, Xxxxx & Xxxx, independent public
accountants, that based upon inquiries and their examination of the financial
statements of Supply Tech they are not aware of any conditions relating to
Supply Tech that would preclude the use of "pooling of interests" accounting in
connection with the Merger.
(e) The Nasdaq National Market Additional Shares Notification. The
Harbinger Common Stock to be issued pursuant to this Agreement shall have been
listed on the Nasdaq National Market.
(f) Indemnification Agreement. The Indemnification Agreement in the form
attached as Exhibit 6.1(f) (the "Indemnification Agreement") shall have been
duly executed and delivered by the parties thereto.
33
29
Section 6.2. Conditions to Obligations of Harbinger. The obligation of
Harbinger to effect the Merger shall be subject to the fulfillment at or prior
to the Closing of each of the following additional conditions:
(a) Representations and Warranties. The representations and warranties of
Supply Tech set forth in Article 3 of this Agreement shall be true and correct
as of the date of this Agreement and as of the Effective Time as though made on
and as of the Effective Time.
(b) Performance of Obligations of Supply Tech. Supply Tech shall have
performed in all material respects all covenants and agreements required to be
performed by it under this Agreement.
(c) Opinion of Supply Tech Counsel. Harbinger shall have received an
opinion of Xxxxxx, Xxxxxxx & Xxxxxxx, dated the Closing Date, in the form
attached as Exhibit 6.2(c).
(d) Authorization of Merger. All corporate action necessary by Supply
Tech to authorize the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby shall have been duly
and validly taken.
(e) Consents. All consents, authorizations, orders and approvals of (or
filings or registrations with) any governmental commission, board or other
regulatory body required in connection with the execution, delivery and
performance of this Agreement shall have been obtained or made, except for
filing of the Georgia Certificate of Merger, Michigan Certificate of Merger,
and any other documents required to be filed after the Effective Time and
except where the failure to have obtained or made any such consent,
authorization, order, approval, filing or registration would not have a
material adverse effect on the business of Harbinger and Supply Tech following
the Effective Time.
(f) Certificates. Supply Tech shall have furnished Harbinger with (i) a
certificate of its appropriate officers as to compliance with the conditions
set forth in Sections 6.2(a), (b) and (d) and (ii) the certificate attached as
Exhibit 6.2(f).
(g) Noncompetition and Nonsolicitation Agreement. Each of the Supply Tech
Executives, Xxxxxx Xxxx, Xxxxxxx Xxxxx and Endeavor Capital Management, LLC,
shall have executed and delivered a noncompetition and nonsolicitation
agreement with Harbinger that is in the form attached as Exhibit 6.2(g) (the
"Noncompetition and Nonsolicitation Agreements").
(h) Dissenters' Rights. No holders of the outstanding Supply Tech Common
Stock as of the Closing Date shall have elected to exercise appraisal rights
pursuant to the MBCA.
(i) Employment Agreements. Each of Xxx X. Xxxxx and A. Xxxx Xxxxxxx shall
have executed and delivered an employment agreement with Harbinger in the form
as attached as Exhibit 6.2(j) (the "Employment Agreements").
Section 6.3. Conditions to Obligations of Supply Tech. The obligation
of Supply Tech to effect the Merger shall be subject to the fulfillment at or
prior to the Closing of each of the following additional conditions:
(a) Representations and Warranties. The representations and warranties of
Harbinger set forth in Article 4 of this Agreement shall be true and correct as
of the date of this Agreement and as of the Effective Time as though made on
and as of the Effective Time.
(b) Performance of Obligations by Harbinger. Harbinger shall have
performed in all material respects all covenants and agreements required to be
performed by it under this Agreement.
(c) Opinion of Harbinger Counsel. Supply Tech shall have received an
opinion of Xxxxxx, Xxxxxxx & Xxxxxx, L.L.P. dated the Closing Date, in the form
as attached as Exhibit 6.3(c).
34
30
(d) Authorization of Merger. All corporate action necessary by Harbinger
to authorize the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby shall have been duly and
validly taken.
(e) Consents. All consents, authorizations, orders and approvals of (or
filings or registrations with) any governmental commission, board or other
regulatory body required in connection with the execution, delivery and
performance of this Agreement shall have been obtained or made, except for
filing of the Georgia Certificate of Merger, the Michigan Certificate of Merger
and any other documents required to be filed after the Effective Time and
except where the failure to have obtained or made any such consent,
authorization, order, approval, filing or registration would not have a
material adverse effect on the business of Harbinger and Supply Tech following
the Effective Time.
(f) Certificates. Harbinger shall have furnished Supply Tech with a
certificate of its appropriate officers as to compliance with the conditions
set forth in Sections 6.3(a), (b) and (d).
(g) Registration Rights Agreement. Harbinger shall have duly executed and
delivered the Registration Rights Agreement in the form attached as Exhibit
6.3(g) (the "Registration Rights Agreement").
(h) Noncompetition and Nonsolicitation Agreement. Harbinger shall have
executed and delivered the Noncompetition and Nonsolicitation Agreements with
the Specified Stockholders.
(i) Employment Agreements. Harbinger shall have executed and delivered
the Employment Agreements with the Xxx Xxxxx and Xxxx Xxxxxxx.
ARTICLE 7
CLOSING
The consummation of the transactions contemplated by this Agreement are
referred to as the "Closing." The "Closing Date" shall be the date on which
the Closing occurs. The Closing shall occur within three business days of the
satisfaction or waiver of the other conditions set forth in Article 6. The
Closing shall take place at the offices of Xxxxxx, Xxxxxxx & Xxxxxx, L.L.P.
1600 Atlanta Financial Center, Atlanta, Georgia, or at such other place as
Supply Tech and Harbinger may agree.
ARTICLE 8
TERMINATION
Section 8.1. Termination and Abandonment. This Agreement may be
terminated at any time prior to the Closing Date:
(a) by mutual agreement of the Boards of Directors of Supply Tech and
Harbinger;
(b) by Supply Tech, if the conditions set forth in Sections 6.1 and 6.3
are not complied with or performed and such noncompliance or nonperformance has
not been cured or eliminated (or by its nature cannot be cured or eliminated)
by Harbinger on or before January 31, 1997;
35
31
(c) by Harbinger, if the conditions set forth in Sections 6.1 and 6.2 are
not complied with or performed and such noncompliance or nonperformance has not
been cured or eliminated (or by its nature cannot be cured or eliminated) by
Supply Tech on or before January 31, 1997;
(d) by Supply Tech, if the Average Closing Price is less than $21.20 and
an adjustment to the Conversion Ratio has not been agreed to by the parties
within the five-day period contemplated by Section 2.6; and
(e) by Harbinger, if the Average Closing Price is greater than $31.80 and
an adjustment to the Conversion Ratio has not been agreed to by the parties
within the five-day period contemplated by Section 2.6.
Section 8.2. Specific Performance and Other Remedies. The parties
hereto each acknowledge that the rights of each party to consummate the
transactions contemplated hereby are special, unique and of extraordinary
character, and that, in the event that any party violates or fails or refuses to
perform any covenant or agreement made by it herein, the non-breaching party may
be without an adequate remedy at law. The parties each agree, therefore, that
in the event that either party violates or fails or refuses to perform any
covenant or agreement made by such party herein, the non-breaching party or
parties may, subject to the terms of this Agreement and in addition to any
remedies at law for damages or other relief, institute and prosecute an action
in any court of competent jurisdiction to enforce specific performance of such
covenant or agreement or seek any other equitable relief.
Section 8.3 Effect of Termination. In the event of termination of this
Agreement pursuant to this Article 8, this Agreement shall forthwith become void
and there shall be no liability on the part of any party or its respective
officers, directors or stockholders, except for obligations under Section
5.3(b), Section 5.9, Section 9.4, and this Section, all of which shall survive
the termination. Notwithstanding the foregoing, nothing contained herein shall
relieve any party from liability for any breach of any covenant or agreement in
this Agreement.
ARTICLE 9
MISCELLANEOUS PROVISIONS
Section 9.1. Notices. All notices, communications and deliveries
hereunder shall be made in writing signed by the party making the same, shall
specify the Section hereunder pursuant to which it is given or being made, and
shall be delivered personally or by telecopy transmission or sent by registered
or certified mail or by any express mail service (with postage and other fees
prepaid) as follows:
To Harbinger or Newco:
Harbinger Corporation
0000 Xxxxx Xxxx Xxxx.
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
36
32
with a copy to:
Xxxxxx, Xxxxxxx & Xxxxxx, L.L.P.
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxx Xxxxx, Esq.
Telecopy No.: (000) 000-0000
To Supply Tech:
Supply Tech, Inc.
0000 Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attn: Xxx Xxxxx
Telecopy No.: 000-000-0000
with a copy to:
Xxxxxx, Xxxxxxx & Xxxxxxx
000 Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attn: Xxxxx Xxxxxxxxx
Telecopy No.: 000-000-0000
or to such other representative or at such other address of a party as such
party hereto may furnish to the other parties in writing.
Section 9.2. Disclosure Letters and Exhibits. The Supply Tech
Disclosure Letter and the Harbinger Disclosure Letter and all Exhibits are
hereby incorporated into this Agreement and are hereby made a part hereof as if
set out in full in this Agreement.
Section 9.3. Assignment; Successors in Interest. No assignment or
transfer by Harbinger, Newco or Supply Tech of their respective rights and
obligations hereunder prior to the Closing shall be made except with the prior
written consent of the other parties hereto. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their permitted
successors and assigns, and any reference hereto shall also be a reference to a
permitted successor or assign.
Section 9.4. Investigations; Representations and Warranties. The
representations and warranties of Supply Tech set forth in this Agreement shall
survive until the first anniversary of the Closing Date except that the
representations and warranties contained in Section 3.4 shall survive until the
expiration of the statute of limitations applicable to each such representation
or warranty. The representations and warranties of Harbinger and Newco shall
survive the Closing Date until the first anniversary of the Closing Date, except
that the representations and warranties contained in Section 4.4 shall survive
until the expiration of the statute of limitations applicable to each such
representation or warranty. Notwithstanding anything to the contrary set forth
in this Section 9.4, this Section shall not limit or restrict (i) Supply Tech's
or Harbinger's remedy against the other or any other person for fraud, willful
misconduct, bad faith or any other intentional breach of any representation,
warranty or covenant contained herein or (ii) Harbinger's remedies against
Supply Tech or any other person with respect to the liabilities described on
Exhibit 9.4 until the expiration of the respective periods, if any, indicated
thereon. The covenants and agreements of each of Harbinger, Newco and Supply
Tech set forth in this Agreement and the exhibits to this Agreement shall
survive the Closing and shall remain in full force and effect until performed or
satisfied by the applicable party responsible for the same in this Agreement or
the exhibits to this Agreement. The respective representations and warranties
of Harbinger, Newco and Supply Tech contained herein or in any certificate, or
other document delivered by any party prior to Closing shall not be deemed
waived or otherwise affected by any investigation made by a party hereto.
37
33
Section 9.5. Number; Gender. Whenever the context so requires, the
singular number shall include the plural and the plural shall include the
singular, and the gender of any pronoun shall include the other gender.
Section 9.6. Captions. The titles, captions and table of contents
contained in this Agreement are inserted herein only as a matter of convenience
and for reference and in no way define, limit, extend or describe the scope of
this Agreement or the intent of any provision hereof. Unless otherwise
specified to the contrary, all references to Articles and Sections are
references to Articles and Sections of this Agreement and all references to
Exhibits are references to Exhibits to this Agreement and the Supply Tech
Disclosure Letter and the Harbinger Disclosure Letter.
Section 9.6. Controlling Law; Integration; Amendment.
(a) This Agreement shall be governed by and construed and enforced in
accordance with the internal laws of the State of Georgia without reference to
Georgia's choice of law rules and the parties hereto hereby agree that any
legal proceeding instituted with respect to this Agreement shall be brought in
Atlanta, Georgia and the parties hereby submit to personal jurisdiction therein
and agree that venue properly lies therein. This Agreement supersedes all
negotiations, agreements and understandings among the parties with respect to
the subject matter hereof and constitutes the entire agreement among the
parties hereto.
(b) This Agreement may not be amended, modified or supplemented except by
written agreement of the parties hereto.
Section 9.7. Supply Tech and Harbinger Knowledge. As used in this
Agreement, the terms "the best knowledge of the Supply Tech Executives," "known
to the Supply Tech Executives" or words of similar import used herein with
respect to Supply Tech shall mean the actual knowledge of any Supply Tech
Executive, together with the knowledge a reasonable business person would have
obtained after making reasonable inquiry and after exercising reasonable
diligence with respect to the matters at hand. The "Supply Tech Executives"
shall consist of Xxx X. Xxxxx, A. Xxxx Xxxxxxx, Xxx Xxxx and Xxxxxxx Xxxxx. As
used in this Agreement, the terms "the best knowledge of the Harbinger
Executives," "known to the Harbinger Executives" or words of similar import
used herein with respect to Harbinger shall mean the actual knowledge of any
Harbinger Executive, together with the knowledge a reasonable business person
would have obtained after making reasonable inquiry and after exercising
reasonable diligence with respect to the matters at hand. The "Harbinger
Executives" shall consist of Messrs. Xxxxx Xxxxx, Xxxxx Xxxxx, Xxxxx Xxxxx and
Xxxx Xxxx.
Section 9.8. Severability. Any provision hereof which is prohibited or
unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in
any jurisdiction will not invalidate or render unenforceable such provision in
any other jurisdiction. To the extent permitted by law, the parties hereto
waive any provision of law which renders any such provision prohibited or
unenforceable in any respect.
Section 9.9. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, and it shall not
be necessary in making proof of this Agreement or the terms hereof to produce or
account for more than one of such counterparts.
Section 9.10. Enforcement of Certain Rights. Nothing expressed or
implied in this Agreement is intended, or shall be construed, to confer upon or
give any person, firm or corporation other than the parties hereto, and their
successors or assigns, any rights, remedies, obligations or liabilities under or
by reason of this Agreement, or result in such person, firm or corporation being
deemed a third party beneficiary of this Agreement.
Section 9.11. Waiver. At any time prior to the Effective Time, the
parties hereto, by or pursuant to action taken by their respective Boards of
Directors, may, to the extent legally permitted: (i) extend the time for the
performance of any of the obligations or other acts of any other party; (ii)
waive any inaccuracies in the
38
34
representations or warranties of any other party contained in this Agreement or
in any document or certificate delivered pursuant hereto; (iii) waive
compliance or performance by any other party with any of the covenants,
agreements or obligations of such party contained herein; and (iv) waive the
satisfaction of any condition that is precedent to the performance by the
party so waiving of any of its obligations hereunder. 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. A waiver
by one party of the performance of any covenant, agreement, obligation,
condition, representation or warranty shall not be construed as a waiver of any
other covenant, agreement, obligation, condition, representation or warranty.
A waiver by any party of the performance of any act shall not constitute a
waiver of the performance of any other act or an identical act required to be
performed at a later time.
Section 9.12. Fees and Expenses. Harbinger shall pay its own fees, costs
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby, including, but not limited to, the fees, costs and expenses
of its financial advisors, accountants and counsel. Supply Tech shall pay its
own fees, costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby, but such fees, costs and expenses shall not
exceed, including, the reasonable fees and expenses of accountants and counsel
for Supply Tech in the aggregate the sum of $200,000. Any fees, costs and
expenses of Supply Tech in excess of such amount shall be paid by the Supply
Tech Stockholders.
Section 9.13. Further Assurances. The parties hereto agree to furnish
upon request to each other such further information, to execute and deliver to
each other such other documents, and to do such other acts and things, all as
the other party hereto may at any time reasonably request for the purpose of
carrying out the intent of this Agreement and the documents referred to herein.
39
35
LIST OF EXHIBITS
Exhibit 1.1 Georgia Certificate of Merger
Exhibit 1.2 Michigan Certificate of Merger
* Exhibit 1.4 Directors of Surviving Corporation
* Exhibit 1.5 Officers of Surviving Corporation
* Exhibit 5.14 Additional Agreements
* Exhibit 6.1(c) (i) Tax Opinion of Xxxxxx, Xxxxxxx & Xxxxxx L.L.P.
* Exhibit 6.1 (c) (ii) Tax Opinion of Xxxxxx, Xxxxxxx & Xxxxxxx
* Exhibit 6.1 (f) Indemnification Agreement
* Exhibit 6.2 (c) Opinion of Xxxxxx, Xxxxxxx & Xxxxxxx
* Exhibit 6.2 (g) Noncompete Agreement
* Exhibit 6.2 (i) Employment Agreement
* Exhibit 6.3 (c) Opinion of Xxxxxx, Xxxxxxx & Xxxxxx L.L.P.
Exhibit 6.3 (g) Registration Rights Agreement
* Exhibit 9.4 Specified Liabilities
* Denotes exhibits not filed with this 8-K. Harbinger Corporation agrees to
furnish supplementally a copy of the omitted schedules to the Securities and
Exchange Commission upon request.
40
36
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the date first above written.
HARBINGER CORPORATION
[Corporate Seal]
Attest: By: /s/ Xxxxx X. Xxxxx
--------------------------------------
Title: President, Group Operations
By: /s/ Xxxx X. Xxxx
-----------------
Title: Secretary
HARBINGER ACQUISITION CORPORATION II
[Corporate Seal]
Attest: By: /s/ Xxxxx X. Xxxxx
--------------------------------------
Title: President, Group Operations
By: /s/ Xxxx X. Xxxx
----------------
Title: Secretary
SUPPLY TECH, INC.
[Corporate Seal]
Attest: By: /s/ Xxx X. Xxxxx
--------------------------------------
Title: Chief Executive Officer
By: /s/ Xxxxx X. Xxxxxxxxx
----------------------
Title: Secretary
41
