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EXHIBIT 2.1
LIONBRIDGE TECHNOLOGIES, INC.,
DIAMOND ACQUISITION CORP.
AND
DATA DIMENSIONS, INC.
AGREEMENT AND PLAN OF REORGANIZATION
Dated as of March 8, 2001
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TABLE OF CONTENTS
ARTICLE I. THE MERGER..........................................................................1
1.1 The Merger...............................................................................1
1.2 Effects of the Merger....................................................................1
1.3 Closing..................................................................................2
1.4 Approval by the Stockholders of Diamond..................................................2
1.5 Approval by the Board of Directors of Parent.............................................2
ARTICLE II. CONVERSION AND EXCHANGE OF SHARES; DISSENTING SHARES...............................2
2.1 Conversion of Shares of Diamond Stock....................................................2
2.2 Dissenting Shares........................................................................3
2.3 Delivery of Evidence of Ownership........................................................3
2.4 No Further Ownership Rights in Diamond Stock.............................................4
2.5 No Fractional Shares.....................................................................4
2.6 Assumption of Stock Options..............................................................4
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF DIAMOND.........................................5
3.1 Organization, Standing and Power; Subsidiaries...........................................5
3.2 Capital Structure........................................................................6
3.3 Authority................................................................................7
3.4 Compliance with Laws and Other Instruments; Non-Contravention............................7
3.5 Technology and Intellectual Property Rights..............................................8
3.6 Diamond SEC Reports and Financial Statements............................................10
3.7 Taxes...................................................................................12
3.8 Absence of Certain Changes and Events...................................................13
3.9 Leases in Effect........................................................................15
3.10 Personal Property; Real Estate...........................................................15
3.11 Certain Transactions.....................................................................16
3.12 Litigation and Other Proceedings.........................................................16
3.13 No Defaults..............................................................................17
3.14 Major Contracts..........................................................................17
3.15 Material Reductions......................................................................18
3.16 Insurance and Banking Facilities.........................................................18
3.17 Employees................................................................................18
3.18 Employee Benefit Plans...................................................................19
3.19 Certain Agreements.......................................................................20
3.20 Guarantees and Suretyships...............................................................20
3.21 Brokers and Finders......................................................................20
3.22 Environmental Matters....................................................................20
3.23 Enforceability of Contracts, etc.........................................................20
3.24 Information Supplied.....................................................................21
3.25 Nasdaq National Market...................................................................21
3.26 Fairness Opinion.........................................................................21
3.27 Voting Requirements......................................................................21
3.28 State Takeover Statutes..................................................................22
3.29 No Indemnity Claim.......................................................................22
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB...........................22
4.1 Organization and Qualification..........................................................22
4.2 Capitalization..........................................................................22
4.3 Authority Relative to this Agreement....................................................23
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4.4 Non-Contravention.......................................................................23
4.5 Parent SEC Reports and Financial Statements.............................................23
4.6 Validity of Parent Merger Shares........................................................24
4.7 Consents and Approvals of Governmental Authorities......................................24
4.8 Litigation..............................................................................25
4.9 No Defaults.............................................................................25
4.10 Taxes....................................................................................25
4.11 Absence of Certain Changes and Events....................................................25
ARTICLE V. COVENANTS OF DIAMOND...............................................................26
5.1 Conduct of Business in Ordinary Course..................................................26
5.2 Dividends, Issuance of, or Changes in Securities........................................27
5.3 Governing Documents.....................................................................27
5.4 No Acquisitions.........................................................................27
5.5 No Dispositions.........................................................................27
5.6 Indebtedness............................................................................28
5.7 Compensation............................................................................28
5.8 Claims..................................................................................28
5.9 Access to Properties and Records........................................................28
5.10 Breach of Representations and Warranties.................................................28
5.11 Consents.................................................................................28
5.12 Tax Returns..............................................................................28
5.13 Exclusivity; Acquisition Proposals.......................................................28
5.14 Notice of Events.........................................................................29
5.15 Reasonable Best Efforts..................................................................29
5.16 Insurance................................................................................29
5.17 Confidentiality and Assignment of Inventions Agreements..................................29
5.18 Stock Option Grants......................................................................30
ARTICLE VI. COVENANTS OF PARENT...............................................................30
6.1 Breach of Representations and Warranties................................................30
6.2 Additional Information; Access..........................................................30
6.3 Consents................................................................................30
6.4 Reasonable Best Efforts.................................................................30
6.5 Nasdaq National Market Listing..........................................................30
6.6 Notice of Events........................................................................30
ARTICLE VII. ADDITIONAL AGREEMENTS............................................................31
7.1 Preparation of the Form S-4 and the Proxy Statement; Stockholders Meeting...............31
7.2 Legal Conditions to the Merger..........................................................32
7.3 Employee Benefits.......................................................................33
7.4 Expenses................................................................................33
7.5 Additional Agreements...................................................................33
7.6 Public Announcements....................................................................33
7.7 Confidentiality.........................................................................33
7.8 Diamond Voting Agreement................................................................34
7.9 Xxxx-Xxxxx-Xxxxxx Filing................................................................34
7.10 Parent Option............................................................................34
7.11 Indemnification of Directors and Officers................................................34
ARTICLE VIII. CONDITIONS PRECEDENT............................................................35
8.1 Conditions to Each Party's Obligation to Effect the Merger..............................35
8.2 Conditions of Obligations of Parent and Merger Sub......................................35
8.3 Conditions of Obligation of Diamond.....................................................37
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ARTICLE IX. TERMINATION.......................................................................38
9.1 Mutual Agreement..........................................................................38
9.2 Termination by Parent.....................................................................38
9.3 Termination by Diamond....................................................................39
9.4 Outside Date..............................................................................39
9.5 Termination Fee...........................................................................39
9.6 Effect of Termination.....................................................................40
ARTICLE X. MISCELLANEOUS......................................................................40
10.1 Entire Agreement.........................................................................40
10.2 Governing Law; Consent to Jurisdiction...................................................40
10.3 Notices..................................................................................40
10.4 Severability.............................................................................41
10.5 Survival of Representations and Warranties...............................................41
10.6 Assignment...............................................................................42
10.7 Counterparts.............................................................................42
10.8 Amendment................................................................................42
10.9 Extension, Waiver........................................................................42
10.10 Interpretation...........................................................................42
10.11 Transfer, Sales, Documentary, Stamp and Other Similar Taxes..............................42
EXHIBITS
EXHIBIT 1.1 -- Merger Documents
EXHIBIT 1.2 -- Certificate of Incorporation of Merger Sub
EXHIBIT 7.8 -- Diamond Voting Agreement
EXHIBIT 7.10 -- Parent Option
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AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION, dated as of March 8, 2001 (this
"Agreement"), by and among Lionbridge Technologies, Inc., a Delaware corporation
("Parent"); Diamond Acquisition Corp., a Delaware corporation and a wholly-owned
subsidiary of Parent ("Merger Sub"); and Data Dimensions, Inc., a Delaware
corporation ("Diamond").
Intending to be legally bound, and in consideration of the mutual
representations, warranties, covenants and agreements contained herein, Parent,
Merger Sub and Diamond agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. Subject to the terms and conditions hereof, and in
accordance with the Delaware General Corporation Law (the "DGCL"), Merger Sub
will be merged with and into Diamond (the "Merger"). A Certificate of Merger and
any other required documents (collectively, the "Merger Documents"),
substantially in the form attached as EXHIBIT 1.1, will be duly prepared,
executed and acknowledged by Diamond and Merger Sub and thereafter delivered to
the Secretary of State of Delaware for filing in accordance with the DGCL
contemporaneously with the Closing (as defined in Section 1.3). The Merger will
become effective at such time as the Merger Documents have been filed with the
Secretary of State of Delaware or such later time as may be set forth therein
(the "Effective Time"). Following the Merger, Diamond will continue as the
surviving corporation of the Merger (the "Surviving Corporation") under the laws
of the State of Delaware, and the separate corporate existence of Merger Sub
will cease.
1.2 Effects of the Merger. At and after the Effective Time, (i) the
Merger will have all of the effects provided by the Certificate of Merger and
applicable law, (ii) the Certificate of Incorporation of Merger Sub, as in
effect immediately prior to the Effective Time in the form attached hereto as
EXHIBIT 1.2, will be the Certificate of Incorporation of the Surviving
Corporation until thereafter amended as provided by law and such Certificate of
Incorporation of the Surviving Corporation; provided, however, that, at the
Effective Time, Article I of the Certificate of Incorporation of the Surviving
Corporation shall be amended to read: "The name of the corporation is "Diamond,
Inc.", (iii) the bylaws of Merger Sub will be the bylaws of the Surviving
Corporation until duly amended, (iv) the directors of Merger Sub will be the
directors of the Surviving Corporation, to hold office in accordance with the
bylaws of the Surviving Corporation, (v) the officers of Diamond will be the
officers of the Surviving Corporation, to hold office in accordance with the
bylaws of the Surviving Corporation and (vi) the issued and outstanding
certificates for the capital stock of Merger Sub will be the issued and
outstanding certificates initially representing all of the issued capital stock
of the Surviving Corporation. The Merger is intended to be a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), and this Agreement is intended to constitute a "plan of
reorganization" within the meaning of the regulations promulgated under Section
368 of the Code.
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1.3 Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") will take place as soon as practicable (but no more
than three (3) business days) after satisfaction or waiver of the last to be
fulfilled of the conditions set forth in Article VIII that by their terms are
not to occur at the Closing (the "Closing Date"), but in no event later than
June 30, 2001, at the offices of Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP in Boston,
Massachusetts, unless another date or place is agreed to in writing by Parent
and Diamond. If all of the conditions set forth in Article VIII hereof are
determined to be satisfied (or duly waived) at the Closing, concurrently with
the Closing the parties hereto will cause the Merger to be consummated by the
filing of the Merger Documents with the Secretary of State of Delaware. The
Closing will be deemed to have concluded at the Effective Time.
1.4 Approval by the Stockholders of Diamond. As promptly as practical
after the SEC has declared the Form S-4 (as defined below) effective, Diamond
will take all action necessary in accordance with applicable law, its Charter
Documents (as defined below) and any agreements to which it is a party to
solicit the approval of this Agreement, the Merger and all of the transactions
contemplated hereby by all stockholders of Diamond by means of a duly convened
meeting of stockholders. Diamond will use its best efforts to obtain such
stockholder approval. Diamond represents and warrants that its Board of
Directors has duly (i) approved this Agreement and the Merger in accordance with
the DGCL and (ii) resolved to recommend to the stockholders of Diamond that they
approve this Agreement, the Merger and all of the transactions contemplated
hereby.
1.5 Approval by the Board of Directors of Parent. Parent represents and
warrants that (i) its Board of Directors has duly approved this Agreement and
the Merger in accordance with the DGCL and (ii) the issuance of its shares in
connection with the Merger does not require the approval of its stockholders
under the DGCL or the rules of the Nasdaq Stock Market.
ARTICLE II
CONVERSION AND EXCHANGE OF SHARES; DISSENTING SHARES
2.1 Conversion of Shares of Diamond Stock.
(a) Subject, without limitation, to the provisions of Section 2.2
hereof, at the Effective Time, all of the shares of common stock, $0.001 par
value per share, of Diamond ("Diamond Common Stock" or "Diamond Stock") issued
and outstanding immediately prior to the Effective Time (excluding any Diamond
Stock held by Parent or Merger Sub or any other subsidiary of Parent, or by
Diamond or any subsidiary of Diamond, which shares ("Excluded Shares") will be
automatically canceled in the Merger without payment of any consideration
therefor, and excluding Dissenting Shares (as defined in Section 2.2 hereof))
will automatically, by virtue of the Merger and without any action on the part
of the holder thereof, be converted into shares of common stock, $0.01 par value
per share, of Parent ("Parent Common Stock") in accordance with Section 2.1(c),
and cash (rounded down to the nearest whole cent) in lieu of fractional shares,
if any, pursuant to Section 2.5 below. Shares of Diamond Stock that are actually
issued and outstanding immediately prior to the Effective Time, excluding the
Excluded Shares, are sometimes referred to herein as the "Outstanding Diamond
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Shares." All Diamond Options (as defined below) that are outstanding immediately
prior to the Effective Time and do not expire pursuant to their terms on or
before the Closing (each of which is specifically identified in Section 3.2 of
the Diamond Disclosure Schedule (as defined below)) and any Diamond Options
issued by Diamond immediately prior to the Closing at the request of Parent
pursuant to Section 5.18 of this Agreement are referred to herein as the
"Outstanding Diamond Options."
(b) The shares of Parent Common Stock to be issued in exchange
for the acquisition of all Outstanding Diamond Shares and the assumption of all
Outstanding Diamond Options are herein referred to as the "Parent Merger
Shares".
(c) The ratio at which one Outstanding Diamond Share will be
converted into shares of Parent Common Stock at the Effective Time is herein
called the "Conversion Ratio" and will be as set forth in the second sentence of
this Section 2.1(c). Subject to Section 2.2, at the Effective Time, each
Outstanding Diamond Share will be converted into the right to receive 0.190884
(which amount will be adjusted for any stock split, stock dividend or similar
event effected between the date of this Agreement and the Effective Date) of a
fully paid and non-assessable share of Parent Common Stock. Each holder of
Outstanding Diamond Shares will be entitled to receive that aggregate number of
shares of Parent Common Stock equal to the Conversion Ratio multiplied by the
number of Outstanding Diamond Shares held by such holder immediately prior to
the Effective Time, subject to Section 2.2 herein.
(d) At the Effective Time, each share of common stock, $0.01 par
value, of Merger Sub issued and outstanding immediately prior to the Effective
Time will, by virtue of the Merger and without any action on the part of the
holder hereof, be converted into one validly issued, fully paid and
non-assessable share of common stock, $0.01 par value per share, of the
Surviving Corporation. Following the Effective Time, each certificate evidencing
ownership of shares of Merger Sub common stock shall evidence ownership of such
shares of capital stock of the Surviving Corporation.
2.2 Dissenting Shares. Any holder of shares of Diamond Stock that are
outstanding on the record date for the determination of which holders will be
entitled to vote for or against the Merger who objects to the Merger and
complies with all provisions of the DGCL concerning the rights of holders to
dissent from the Merger and requests appraisal (such shares, "Dissenting
Shares") will be entitled to exercise dissenters' rights pursuant to Section 262
of the DGCL with respect to such Dissenting Shares provided that such holder
meets all of the requirements of the DGCL with respect to such Dissenting
Shares, and will not be entitled to receive Parent Merger Shares, unless
otherwise provided by the DGCL or agreed in writing by Parent. Diamond will,
after consultation with Parent, give such notices with respect to dissenters'
rights as may be required by the DGCL as soon as practicable.
2.3 Delivery of Evidence of Ownership. At the Closing, each holder of a
certificate or other documentation representing Outstanding Diamond Shares,
other than Dissenting Shares, will surrender such certificates or other
documentation to Parent, and, if not previously delivered, (i) a duly executed
Letter of Transmittal, in form reasonably satisfactory to Parent and Diamond
(collectively, the "Letters of Transmittal"), and (ii) such other duly executed
documentation as may be reasonably required by Parent to effect a transfer of
such shares, and upon such surrender and after the Effective Time, each
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such holder will be entitled to receive promptly from Parent or its transfer
agent certificates registered in the name of such holder representing the
applicable number of Parent Merger Shares, and the cash (calculated pursuant to
Section 2.5, which will be paid by check), to which such holder is entitled
pursuant to the provisions of this Agreement. The approval of this Agreement by
stockholders of Diamond will also constitute their approval of the terms and
provisions of the Letters of Transmittal. In the event any certificates or
instruments representing Outstanding Diamond Shares or Outstanding Diamond
Options shall have been lost, stolen or destroyed, upon the making and delivery
of an affidavit of that fact by the person claiming same to have been lost,
stolen or destroyed and the posting by such person of a bonding in such
reasonable amount as Parent may direct as indemnity against any claim that would
be made against Parent with respect to such certificate or instrument, Parent
will issue in exchange for such lost, stolen or destroyed certificate or
instrument the Parent Merger Shares and cash deliverable in respect thereof
pursuant to this Agreement.
2.4 No Further Ownership Rights in Diamond Stock. The Merger and its
approval by the stockholders of Diamond and the execution of this Agreement will
be deemed, at the Effective Time, to constitute full satisfaction and
termination of all rights and agreements pertaining to Diamond Stock pursuant to
the DGCL, by contract or otherwise. After the Effective Time, there will be no
transfers on the stock transfer books of Diamond of Diamond Stock or exercises
of any options, warrants or other rights to acquire Diamond Stock. Prior to or
upon Closing, Diamond will cause all options, warrants and other rights to
purchase or acquire Diamond Stock, other than Outstanding Diamond Options
assumed pursuant to Section 2.6 below, to either be exercised or canceled. Until
surrendered to Parent, each certificate for Diamond Stock will, after the
Effective Time, represent only the right to receive cash and Parent Merger
Shares into which the shares of Diamond Stock formerly represented thereby will
have been converted pursuant to this Agreement. Any dividends or other
distribution declared after the Effective Time with respect to Parent Common
Stock will be paid to the holder of any certificate for shares of Diamond Stock
when the holder thereof is entitled to receive a certificate for such holder's
Parent Merger Shares in accordance with this Agreement.
2.5 No Fractional Shares. No certificates or scrip for fractional shares
of Parent Common Stock will be issued, no Parent stock split or dividend will be
paid in respect of any fractional share interest, and no such fractional share
interest will entitle the owner thereof to vote or to any rights of or as a
stockholder of Parent. In lieu of such fractional shares, any holder of
Outstanding Diamond Shares who would otherwise be entitled to a fraction of a
share of Parent Common Stock (after aggregating all fractional shares of Parent
Common Stock to be received by such holder) will be paid the cash value of such
fraction, which will be equal to such fraction multiplied by the Parent Average
Closing Price. "Parent Average Closing PRICE" will be equal to the average
closing bid price of the Parent Common Stock as publicly reported by the Wall
Street Journal over the five Trading Days ending on the last Trading Day prior
to the date of this Agreement. "Trading Day" will mean days on which closing
prices for purchases and sales of Parent Common Stock are reported by the Nasdaq
National Market.
2.6 Assumption of Stock Options. At the Effective Time, Parent shall
assume each Outstanding Diamond Option and each holder thereof (each an "Option
Holder") shall thereby be entitled to acquire, by virtue of the Merger and
without any action on the part of the Option Holder, on substantially the same
terms (including the dates and extent of exercisability) and subject to the same
conditions, including vesting, as such Outstanding Diamond Option, the number of
shares of Parent Common Stock determined by multiplying the number of shares of
Diamond Common Stock for which
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such Outstanding Diamond Option is then exercisable in accordance with its terms
immediately prior to the Effective Time by the Conversion Ratio (rounded down to
the nearest whole share), at an exercise or conversion price per share of Parent
Common Stock (rounded up to the nearest whole cent) determined by dividing the
exercise price per share of Diamond Common Stock of such Outstanding Diamond
Option immediately prior to the Effective Time by the Conversion Ratio.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF DIAMOND
Except as set forth in the disclosure schedule of Diamond dated as of
the date hereof and delivered herewith to Parent (the "Diamond Disclosure
Schedule") which identifies the section and subsection to which each disclosure
therein relates, Diamond represents and warrants to Parent and Merger Sub as
follows:
3.1 Organization, Standing and Power; Subsidiaries.
(a) Diamond is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its businesses as now being conducted, and is duly qualified and in
good standing to do business in each jurisdiction in which it is required to be
qualified, except where the failure to be so qualified or licensed individually
or in the aggregate, would not have a material adverse effect on the Business
Condition (as defined below) of Diamond.
As used in this Agreement, "Business Condition" with respect to
any Person (as defined below) means the business, financial condition, results
of operations, assets or prospects (without giving effect to the consequences of
the transactions contemplated by this Agreement and other than changes in
general economic conditions) of such Person or Persons including its
Subsidiaries taken as a whole. In this Agreement, a "Subsidiary" of any Person
means a corporation, partnership, limited liability company, joint venture or
other entity of which such Person directly or indirectly owns or controls a
majority of the equity interests or voting securities or other interests that
are sufficient to elect a majority of the Board of Directors or other managers
of such corporation, partnership, limited liability company, joint venture or
other entity. In this Agreement, "Person" means any natural person, corporation,
partnership, limited liability company, joint venture or other entity.
All Subsidiaries of Diamond and their jurisdiction of
incorporation are completely and correctly listed in Section 3.1 of the Diamond
Disclosure Schedule. Each Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation. Diamond has delivered to Parent complete and correct copies of
the articles or certificate of incorporation, bylaws and/or other primary
charter and organizational documents ("Charter Documents") of Diamond and its
Subsidiaries, in each case, as amended to the date hereof. Diamond and each of
its Subsidiaries is in full compliance with its Charter Documents. The minute
books and stock records of Diamond and its Subsidiaries are complete and copies,
of which have been delivered to Parent, contain correct and complete records of
all material proceedings and actions taken
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at all meetings of, or effected by written consent of, the stockholders of
Diamond and its Subsidiaries and their Board of Directors. Section 3.1 of the
Diamond Disclosure Schedule contains a complete and correct list of the officers
and directors of Diamond and its Subsidiaries and any other Person who may be
deemed to be an affiliate of Diamond within the meaning of Rule 145 promulgated
under the Securities Act.
(b) Diamond has never owned, nor does it currently own, directly
or indirectly, any capital stock or other equity securities of any corporation
or have direct or indirect equity or ownership interest in any partnership,
limited liability company, joint venture or other entity other than its
Subsidiaries. All of the outstanding shares of capital stock of each Subsidiary
of Diamond are owned beneficially and of record by Diamond, one of its other
Subsidiaries, or any combination thereof, in each case free and clear of any
security interests, liens, charges, restrictions, claims, encumbrances or
assessments of any nature whatsoever ("Liens"); and there are no outstanding
subscriptions, warrants, options, convertible securities, or other rights
(contingent or other) pursuant to which any of the Subsidiaries is or may become
obligated to issue any shares of its capital stock to any Person other than
Diamond or one of the other Subsidiaries.
3.2 Capital Structure.
(a) The authorized capital stock of Diamond consists of (i)
20,000,000 shares of Diamond Common Stock, $0.001 par value per share, of which
13,560,972 shares are issued and outstanding as of the date of this Agreement
and (ii) 3,000,000 shares of Preferred Stock, $0.01 par value per share
("Diamond Preferred Stock"), of which no shares are issued and outstanding as of
the date of this Agreement and no shares of Diamond Common Stock are issued and
held as treasury shares by Diamond. The Diamond Disclosure Schedule also sets
forth any options, warrants, calls, conversion rights, commitments, agreements,
contracts, understandings, restrictions, arrangements or rights of any character
(each, an "Diamond Option") to which Diamond is a party or by which Diamond may
be bound obligating Diamond to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of Diamond Stock, or obligating Diamond to
grant, extend, or enter into any such option, warrant, call, conversion right,
conversion payment, commitment, agreement, contract, understanding, restriction,
arrangement or right. Diamond does not have any outstanding options, warrants,
calls, conversion rights, commitments, agreements, contracts, understandings,
restrictions, arrangements or rights of any character to which Diamond is a
party or by which Diamond may be bound obligating Diamond to issue, deliver or
sell, or cause to be issued, delivered or sold, additional shares of Diamond
Preferred Stock. As of the date of this Agreement, 2,073,343 shares of Diamond
Common Stock are subject to issuance pursuant to outstanding Diamond Options
under Diamond's 1997 Stock Option Plan. The Diamond Disclosure Schedule sets
forth the following information with respect to each Diamond Option outstanding
as of the date of this Agreement: (i) the name of the optionee; (ii) the number
of shares of Diamond Common Stock subject to such Diamond Option; (iii) whether
such Diamond Option is an incentive stock option or a non-qualified stock
option; (iv) the exercise price of such Diamond Option; (v) the date on which
such Diamond Option was granted or assumed; (vi) the date on which such Diamond
Option expires and (vi) whether the exercisability of such option will be
accelerated in any way by the transactions contemplated by this Agreement, and
indicates the extent of any such acceleration. Diamond has made available to
Parent an accurate and complete copy of the Diamond 1997 Stock Option Plan and
the standard forms of stock option agreements evidencing Diamond Options. Other
than the Parent Option (as defined below) and as set
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forth in the Diamond Disclosure Schedule, there are no Diamond Options
outstanding to purchase shares of Diamond Common Stock other than pursuant to
the Diamond 1997 Stock Option Plan.
(b) All outstanding shares of Diamond Common Stock are, and any
shares of Diamond Common Stock issued upon exercise of any Outstanding Diamond
Options will be, validly issued, fully paid, nonassessable and not subject to
any preemptive rights (other than those which have been duly waived), or to any
agreement to which Diamond is a party or by which Diamond may be bound. Diamond
does not have outstanding any bonds, debentures, notes or other indebtedness the
holders of which (i) have the right to vote (or convertible or exercisable into
securities having the right to vote) with holders of shares of Diamond Common
Stock on any matter ("Diamond Voting Debt") or (ii) are or will become entitled
to receive any payment as a result of the execution of this Agreement or the
completion of the transactions contemplated hereby.
3.3 Authority. The execution, delivery and performance of this Agreement
and all other agreements contemplated hereby by Diamond have been duly
authorized by all necessary action of the Board of Directors of Diamond, and if
the Closing shall occur, the Diamond Requisite Stockholder Approval (as defined
below) shall have been obtained. Certified copies of the resolutions adopted by
the Board of Directors of Diamond and its stockholders approving this Agreement,
all other agreements contemplated hereby and the Merger have been or will be
provided to Parent prior to the Closing. Diamond has duly and validly executed
and delivered this Agreement and has, or prior to Closing, will have duly and
validly executed and delivered all other agreements contemplated hereby, and
each of this Agreement and such other agreements constitutes or, upon execution
and delivery at or prior to the Closing, will constitute, a valid, binding and
enforceable obligation of Diamond in accordance with its terms.
3.4 Compliance with Laws and Other Instruments; Non-Contravention.
Diamond and its Subsidiaries hold, and at all times have held, all licenses,
permits and authorizations from all Governmental Entities (as defined below)
necessary for the lawful conduct of their respective businesses pursuant to all
applicable statutes, laws, ordinances, rules and regulations of all such
Governmental Entities having jurisdiction over it or any part of their
operations. There are no material violations or claimed violations known by
Diamond or any Subsidiary of any such license, permit or authorization or any
such statute, law, ordinance, rule or regulation. Assuming the receipt of all
Consents (as defined below), neither the execution, delivery or performance of
this Agreement and all other agreements contemplated hereby by Diamond, nor the
consummation of the Merger or any other transaction described herein, does or
will, after the giving of notice, or the lapse of time, or otherwise, conflict
with, result in a breach of, or constitute a default under, (i) the Charter
Documents of Diamond or any Subsidiary or (ii) any federal, foreign, state or
local court or administrative order or process, statute, law, ordinance, rule or
regulation, or any contract, agreement or commitment to which Diamond or any
Subsidiary is a party, or under which Diamond or any Subsidiary is obligated, or
by which Diamond or any Subsidiary or any of the rights, properties or assets of
Diamond or any Subsidiary are subject or bound; result in the creation of any
Lien upon, or otherwise adversely affect, any of the rights, properties or
assets of Diamond or any Subsidiary; terminate, amend or modify, or give any
party the right to terminate, amend, modify, abandon or refuse to perform or
comply with, any contract, agreement or commitment to which Diamond or any
Subsidiary is a party, or under which Diamond or any Subsidiary is obligated, or
by which Diamond or any Subsidiary or any of the rights, properties or assets of
Diamond or any Subsidiary are subject or bound; or accelerate, postpone or
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modify, or give any party the right to accelerate, postpone or modify, the time
within which, or the terms and conditions under which, any liabilities, duties
or obligations are to be satisfied or performed, or any rights or benefits are
to be received, under any contract, agreement or commitment to which Diamond or
any Subsidiary is a party, or under which Diamond or any Subsidiary may be
obligated, or by which Diamond or any Subsidiary or any of the rights,
properties or assets of Diamond or any Subsidiary are subject or bound other
than any of the foregoing listed in (ii) which would not have, individually or
in the aggregate, a material adverse effect on the Business Condition of Diamond
or any Subsidiary. Section 3.4 of the Diamond Disclosure Schedule sets forth
each agreement, contract or other instrument binding upon Diamond or any
Subsidiary requiring a notice or consent (by its terms or as a result of any
conflict or other contravention required to be disclosed in the Diamond
Disclosure Schedule pursuant to the preceding provisions of this Section 3.4) as
a result of the execution, delivery or performance of this Agreement and all
other agreements contemplated hereby by Diamond or the consummation of the
Merger or any other transaction described herein (each such notice or consent, a
"Consent"). No consent, approval, order, or authorization of or registration,
declaration, or filing with or exemption (also a "Consent") by, any court,
administrative agency or commission or other governmental authority or
instrumentality, whether domestic or foreign (each a "Governmental Entity") is
required by or with respect to Diamond or any Subsidiary in connection with the
execution, delivery or performance of this Agreement and all other agreements
contemplated hereby by Diamond or the consummation of the Merger or any other
transaction described herein, except for the filing by Diamond and Merger Sub of
the appropriate Merger Documents with the Secretary of State of Delaware.
3.5 Technology and Intellectual Property Rights.
(a) For the purposes of this Agreement, "Diamond Intellectual
Property" consists of the following intellectual property:
(i) all patents, trademarks, trade names, service marks,
trade dress, copyrights and any renewal rights therefor,
schematics, software, firmware, technology, manufacturing
processes, supplier lists, customer lists, trade secrets,
know-how, moral rights and applications and registrations for
any of the foregoing;
(ii) all documents, records and files relating to design,
end user documentation, manufacturing, quality control, sales,
marketing or customer support for all intellectual property
described herein;
(iii) all other tangible or intangible proprietary
information and materials; and
(iv) all license and other rights in any third party product
or any third party intellectual property described in (i)
through (iii) above;
that are owned or held by or on behalf of Diamond or any Subsidiary or that are
being, and/or have been, used, or are currently under development for use, in
the business of Diamond or any Subsidiary as it has been, is currently or is
currently planned to be conducted; provided, however, that Diamond Intellectual
Property will not include any commercially available third party software or
related intellectual property.
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(b) Section 3.5 of the Diamond Disclosure Schedule lists: (i) all
patents, copyright registrations, registered trademarks, registered service
marks, trade dress, any renewal rights for any of the foregoing, and any
applications and registrations for any of the foregoing, that are included in
Diamond Intellectual Property and owned by or on behalf of Diamond or any
Subsidiary; (ii) all hardware products and tools, software products and tools
and services that are currently published, offered, or under development by
Diamond or any Subsidiary; and (iii) all licenses, sublicenses and other
agreements to which Diamond or any Subsidiary is a party and pursuant to which
Diamond or any Subsidiary or any other person is authorized to use any Diamond
Intellectual Property or exercise any other right with regard thereto. The
disclosures described in (iii) hereof include the identities of the parties to
the relevant agreements, a description of the nature and subject matter thereof,
the term thereof and the applicable royalty or summary of any formula or
procedure for determining such royalty.
(c) Diamond Intellectual Property consists solely of items and
rights that are either: (i) owned solely by Diamond or any of its Subsidiaries;
(ii) in the public domain; or (iii) rightfully used and authorized for use by
Diamond or any Subsidiary and their successors pursuant to a valid license. All
Diamond Intellectual Property that consists of license or other rights to third
party property is separately set forth in Section 3.5 of the Diamond Disclosure
Schedule. Diamond and its Subsidiaries have all rights in Diamond Intellectual
Property necessary to carry out Diamond's or any Subsidiary's current, former
and planned future activities, including without limitation rights to make, use,
exclude others from using, reproduce, modify, adapt, create derivative works
based on, translate, distribute (directly and indirectly), transmit, display and
perform publicly, license, rent, lease, assign and sell Diamond Intellectual
Property in all geographic locations and fields of use, and to sublicense any or
all such rights to third parties, including the right to grant further
sublicenses.
(d) Diamond is not, nor as a result of the execution or delivery
of this Agreement and all other agreements contemplated hereby, or performance
of Diamond's obligations hereunder or the consummation of the Merger, will
Diamond be, in violation of any license, sublicense or other agreement relating
to any Diamond Intellectual Property to which Diamond or any Subsidiary is a
party or otherwise bound. Diamond is not obligated to provide any consideration
(whether financial or otherwise) to any third party, nor is any third party
otherwise entitled to any consideration, with respect to any exercise of rights
by Diamond or Surviving Corporation, as successor to Diamond, in Diamond
Intellectual Property.
(e) To the knowledge of Diamond or any of its Subsidiaries, the
use, reproduction, modification, distribution, licensing, sublicensing, sale, or
any other exercise of rights in any product, work, technology, service or
process as used, provided, or offered at any time, or as proposed for use,
reproduction, modification, distribution, licensing, sublicensing, sale, or any
other exercise of rights, by Diamond or any Subsidiary does not infringe any
copyright, patent, trade secret, trademark, service xxxx, trade name, firm name,
logo, trade dress, moral right, other intellectual property right, right of
privacy, or right in personal data of any Person. No claims (i) challenging the
validity, effectiveness, or ownership by Diamond or any Subsidiary of any
Diamond Intellectual Property, or (ii) to the effect that the use, reproduction,
modification, manufacturing, distribution, licensing, sublicensing, sale, or any
other exercise of rights in any product, work, technology, service, or process
as used, provided or offered at any time, or as proposed for use, reproduction,
modification, distribution, licensing,
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sublicensing, sale, or any other exercise of rights, by Diamond or any
Subsidiary infringes or will infringe on any intellectual property or other
proprietary or personal right of any Person have been asserted to Diamond or any
Subsidiary or, to the knowledge of Diamond and its Subsidiaries, are threatened
by any Person nor are there any valid grounds for any bona fide claim of any
such kind. There are no legal or governmental proceedings, including
interference, re-examination, reissue, opposition, nullity, or cancellation
proceedings pending that relate to any Diamond Intellectual Property, other than
review of pending applications for patent, and Diamond and its Subsidiaries are
not aware of any information indicating that such proceedings are threatened or
contemplated by any Governmental Entity or any other Person. All granted or
issued patents and all registered trademarks and copyright registrations owned
by Diamond or any Subsidiary are valid, enforceable and subsisting. To the
knowledge of Diamond and its Subsidiaries, there is no unauthorized use,
infringement, or misappropriation of any Diamond Intellectual Property by any
third party, employee or former employee.
(f) Section 3.5 of the Diamond Disclosure Schedule separately
lists all parties (other than employees) who have created any portion of, or
otherwise have any rights in or to, Diamond Intellectual Property. Diamond and
its Subsidiaries have secured from all parties who have created any portion of,
or otherwise have any rights in or to, Diamond Intellectual Property valid and
enforceable written assignments of any such work or other rights to or such
Subsidiaries and has provided true and complete copies of such assignments to
Parent.
(g) Diamond has obtained written agreements from all employees
and from third parties with whom Diamond, to its knowledge, has shared
confidential proprietary information (i) of Diamond or any Subsidiary or (ii)
received from others that Diamond is obligated to treat as confidential and to
obtain the written agreement of employees and others to keep confidential, that
agreements require such employees and third parties to keep such information
confidential in accordance with the terms thereof. Diamond has made available
copies of such written agreements, as executed, to Parent.
3.6 Diamond SEC Reports and Financial Statements.
(a) Diamond has filed all forms, reports and documents required
to be filed by Diamond with the SEC since the effective date of the registration
statement for Diamond's initial public offering. Diamond has previously
furnished to Parent true and correct copies of (i) its Annual Report of Form
10-K for the period ended December 31, 1999, (ii) its Quarterly Reports on Form
10-Q for the periods ended March 31, 2000, June 30, 2000 and September 30, 2000,
(iii) all other reports filed by it with the Securities and Exchange Commission
(the "Commission") under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") since December 31, 1999 and (iv) Diamond hereby agrees to
furnish to Parent true and correct copies of all reports filed by it with the
Commission after the date hereof prior to the Closing all in the form (including
exhibits) so filed (collectively, the "Diamond SEC Reports"). As of their
respective dates, the Diamond SEC Reports complied or will comply in all
material respects with the then applicable published rules and regulations of
the Commission with respect thereto at the date of their issuance and did not or
will not contain any untrue statement of a material fact or omit to state a
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. As of the date hereof, no additional filings or amendments to
previously filed Diamond SEC Reports
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are required pursuant to such rules and regulations. None of Diamond's
Subsidiaries is required to file any forms, reports or other documents with the
SEC.
(b) Diamond has delivered to Parent an unaudited consolidated
balance sheet (the "Unaudited Balance Sheet") as of December 31, 2000 (the
"Unaudited Balance Sheet Date") and unaudited consolidated statements of income
and cash flows for the twelve-month period ended December 31, 2000
(collectively, the "Unaudited 2000 Financial Statements"). The Unaudited 2000
Financial Statements and the audited consolidated balance sheet as of December
31, 2000 and audited consolidated statements of income and cash flows for the
twelve-month period ended December 31, 2000 (collectively, the "Audited 2000
Financial Statements") along with each of the consolidated financial statements
of Diamond (including, in each case, any related notes thereto) contained in the
Diamond SEC Reports (collectively, the "Financial Statements"), including each
Diamond SEC Report filed after the date hereof until the Closing, (i) comply as
to form in all material respects with the published rules and regulations of the
SEC with respect thereto, (ii) are prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may be indicated in
the notes thereto or, in the case of unaudited interim financial statements, as
may be permitted by the SEC under Form 10-Q, 8-K or any successor form under the
Exchange Act) and (iii) fairly present the consolidated financial position of
Diamond and its Subsidiaries in all material respects as at the respective dates
thereof and the consolidated results of their operations and cash flows for the
periods indicated, except that the unaudited interim financial statements may
not contain footnotes and were or are subject to normal and recurring year-end
adjustments.
(c) Diamond has heretofore furnished to Parent a complete and
correct copy of any amendments or modifications, which have not yet been filed
with the SEC but which are required to be filed, to agreements, documents or
other instruments which previously had been filed by Diamond with the SEC
pursuant to the Securities Act or the Exchange Act.
(d) As of the Unaudited Balance Sheet Date, there were no
material liabilities, claims or obligations of any nature, whether accrued,
absolute, contingent, anticipated or otherwise, whether due or to become due,
that are not shown or provided for either in the Unaudited Balance Sheet or
Section 3.6 of the Diamond Disclosure Schedule, and since the Unaudited Balance
Sheet Date, Diamond has incurred no material liabilities, claims or obligations
of any nature, whether accrued, absolute, contingent, anticipated or otherwise
other than in the ordinary course of business and except for liabilities
incurred by Diamond in connection with the preparation and execution of this
Agreement and the consummation of the transactions contemplated herein.
(e) All of the accounts, notes and other receivables which are
reflected in the Unaudited Balance Sheet were acquired in the ordinary course of
business; and, except to the extent reserved against in the Unaudited Balance
Sheet, all of the accounts, notes and other receivables which are reflected
therein have been collected in full, or are good and collectible, in the
ordinary course of business; and all of the accounts, notes and other
receivables which have been acquired by Diamond or any Subsidiary since the
Unaudited Balance Sheet Date were acquired in the ordinary course of business
and have been collected in full, or are good and collectible, subject to an
appropriate reserve determined in a manner consistent with past practices of
Diamond, in the ordinary course of business. No accounts, notes or other
receivables are contingent upon the performance by Diamond or any Subsidiary of
any obligation or contract. Except as set forth in Section 3.6 of the Diamond
Disclosure
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Schedule, no Person has any Lien on any of such receivables and no agreement for
deduction or discount has been made with respect thereto.
3.7 Taxes.
(a) The term "Taxes" as used herein means any and all federal,
state, local and foreign income tax, alternative or add-on minimum tax,
estimated, gross income, gross receipts, sales, use, ad valorem, value added,
transfer, franchise, capital profits, lease, service, license, withholding,
payroll, employment, excise, severance, stamp, occupation, premium, property,
environmental or windfall profit taxes, customs, duties and other taxes,
governmental fees and other like assessments and charges of any kind whatsoever,
together with all interest, penalties, additions to tax and additional amounts
with respect thereto, and the term "Tax" means any one of the foregoing Taxes.
The term "Tax Returns" as used herein means all returns, declarations, reports,
claims for refund, information statements and other documents relating to Taxes,
including all schedules and attachments thereto, and including all amendments
thereof, and the term "Tax Return" means any one of the foregoing Tax Returns.
(b) Diamond and each of its Subsidiaries has timely filed all Tax
Returns required to be filed and has paid all Taxes owed (whether or not shown
as due on such Tax Returns), including, without limitation, all Taxes which
Diamond or any of its Subsidiaries is obligated to withhold for amounts paid or
owing to employees, creditors and third parties. All Tax Returns filed by
Diamond and each of its Subsidiaries were complete and correct in all respects.
None of the Tax Returns filed by Diamond or any of its Subsidiaries or Taxes
payable by Diamond or any of its Subsidiaries have been the subject of an audit,
action, suit, proceeding, claim, examination, deficiency or assessment by any
Governmental Entity, and no such audit, action, suit, proceeding, claim,
examination, deficiency or assessment is currently pending or, to the knowledge
of Diamond or any of its Subsidiaries, threatened. Neither Diamond nor any of
its Subsidiaries is currently the beneficiary of any extension of time within
which to file any Tax Return, and neither Diamond nor any of its Subsidiaries
has waived any statute of limitation with respect to any Tax or agreed to any
extension of time with respect to a Tax assessment or deficiency. All material
elections with respect to Taxes affecting Diamond or any of its Subsidiaries, as
of the date hereof, are set forth in the Financial Statements or in Section
3.7(b) of the Diamond Disclosure Schedule. None of the Tax Returns filed by
Diamond or any of its Subsidiaries contain a disclosure statement under former
Section 6661 of the Code or Section 6662 of the Code (or any similar provision
of state, local or foreign Tax law). Neither Diamond nor any of its Subsidiaries
is a party to any Tax sharing agreement or similar arrangement. Neither Diamond
nor any of its Subsidiaries has ever been a member of a group filing a
consolidated federal income Tax Return (other than a group the common parent of
which was Diamond), and neither Diamond nor any of its Subsidiaries has any
liability for the Taxes of any Person under Treasury Regulation Section 1.1502-6
(or any corresponding provision of state, local or foreign Tax law), as a
transferee or successor, by contract, or otherwise.
(c) Neither Diamond nor any of its Subsidiaries is a party to any
agreement, contract, arrangement or plan that has resulted or would result,
separately or in the aggregate, in the payment of (i) any "excess parachute
payments" within the meaning of Section 280G of the Code (without regard to the
exceptions set forth in Sections 280G(b)(4) and 280G(b)(5) of the Code) or (ii)
any amount for which a deduction would be disallowed or deferred under Section
162 or Section 404
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of the Code. Neither Diamond nor any of its Subsidiaries has agreed to make any
adjustment under Section 481(a) of the Code (or any corresponding provision of
state, local or foreign law) by reason of a change in accounting method or
otherwise, and neither Diamond nor any of its Subsidiaries will be required to
make any such adjustment as a result of the transactions set forth in this
Agreement. Neither Diamond nor any of its Subsidiaries has or has had a
permanent establishment in any foreign country, as defined in any applicable Tax
treaty or convention between the United States and such foreign country. No
portion of any consideration paid pursuant to this Agreement (including but not
limited to the Parent Merger Shares and any amounts paid pursuant to Section
2.5) is subject to the Tax withholding provisions of Section 3406 of the Code,
or of Subchapter A of Chapter 3 of the Code or of any other provision of law. No
claim has ever been made by any Governmental Entity in a jurisdiction where
Diamond or any of its Subsidiaries does not file Tax Returns that Diamond or any
of its Subsidiaries, as the case may be, is or may be subject to Tax in that
jurisdiction. None of the shares of outstanding capital stock of Diamond or any
of its Subsidiaries are subject to a "substantial risk of forfeiture" within the
meaning of Section 83 of the Code. Neither Diamond nor any of its Subsidiaries
has ever filed a consent pursuant to Section 341(f) of the Code, relating to
collapsible corporations. Neither Diamond nor any of its Subsidiaries has net
operating losses or other tax attributes presently subject to limitation under
Sections 382, 383 or 384 of the Code, or the federal consolidated return
regulations (other than limitations imposed as a result of the transactions
contemplated pursuant to this Agreement).
(d) There are no liens for Taxes upon the assets of Diamond or
any of its Subsidiaries. The unpaid Taxes of Diamond and its Subsidiaries did
not, as of the Unaudited Balance Sheet Date, exceed the reserve for actual Taxes
(as opposed to any reserve for deferred Taxes established to reflect timing
differences between book and Tax income) as shown on the Unaudited Balance
Sheet, and will not exceed such reserve as adjusted for the passage of time
through the Closing Date in accordance with the past custom and practice of
Diamond and its Subsidiaries in filing their Tax Returns (taking into account
any Taxes incurred as a result of the transactions contemplated by this
Agreement). Neither Diamond nor any of its Subsidiaries is a party to any joint
venture, partnership, limited liability company or other arrangement or contract
which could be treated as a partnership for Tax purposes.
(e) Section 3.7(e) of the Diamond Disclosure Schedule contains a
list of all jurisdictions (whether foreign or domestic) to which any Tax is
properly payable by Diamond or any its Subsidiaries.
(f) Diamond has not been either a "distributing corporation" or a
"controlled corporation" (within the meaning of Section 355(a)(1)(A) of the
Code) in any distribution of stock intended to qualify for tax-free treatment
under the Code.
(g) Section 3.7(g) of the Diamond Disclosure Schedule sets forth
all expected Tax refunds.
3.8 Absence of Certain Changes and Events. Except as set forth in the
Diamond SEC Reports, since September 30, 2000, there has not been:
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(a) Any transaction involving more than $35,000 entered into by
Diamond or any Subsidiary other than in the ordinary course of business; any
change (or any development or combination of developments of which Diamond or
any Subsidiary has knowledge which is reasonably likely to result in such a
change) in Diamond's Business Condition, other than changes in the ordinary
course of business which in the aggregate have not been and are not expected to
be materially adverse to Diamond's Business Condition; or, without limiting the
foregoing, any loss of or damage to any of the properties of Diamond or any
Subsidiary due to fire or other casualty or other loss, whether or not insured,
amounting to more than $35,000 in the aggregate;
(b) Any declaration, setting aside or payment of any dividend or
other distribution with respect to any shares of capital stock of Diamond or any
Subsidiary, or any repurchase, redemption, retirement or other acquisition by
Diamond or any Subsidiary of any outstanding shares of capital stock, any
Diamond Option, or other securities of, or other equity or ownership interests
in, Diamond or any Subsidiary;
(c) Any discharge or satisfaction of any Lien or payment or
satisfaction of any obligation or liability (whether absolute, accrued,
contingent or otherwise and whether due or to become due) other than current
liabilities shown on the Unaudited Balance Sheet and current liabilities
incurred since the Unaudited Balance Sheet Date in the ordinary course of
business and consistent with past practice ("ordinary course of business");
(d) Any change in the Charter Documents of Diamond or any
amendment of any term of any outstanding security of Diamond;
(e) Any incurrence, assumption or guarantee by Diamond or any
Subsidiary of any indebtedness for borrowed money other than in the ordinary
course of business and in an aggregate amount exceeding $35,000;
(f) Any creation or assumption by Diamond or any Subsidiary of
any Lien on any asset in an aggregate amount exceeding $10,000;
(g) Any making of any loan, advance or capital contributions to,
or investment in, any Person;
(h) Any sale, lease, pledge, transfer or other disposition of any
material capital asset;
(i) Any transaction or commitment made, or any contract or
agreement entered into, by Diamond or any Subsidiary relating to its assets or
business (including the acquisition or disposition of any assets) with a value
of $50,000 or more or any relinquishment by Diamond or any Subsidiary of any
contract or other right with a value of $50,000 or more;
(j) Any (A) grant of any severance or termination pay to any
director, officer or employee of Diamond or any Subsidiary, (B) entering into of
any employment, severance, management, consulting, deferred compensation or
other similar agreement (or any amendment to any such existing agreement) with
any director, officer or employee of Diamond or any Subsidiary, (C) change in
benefits payable under existing severance or termination pay policies or
employment,
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severance, management, consulting or other similar agreements, (D) change in
compensation, bonus or other benefits payable to directors, officers or
employees of Diamond or any Subsidiary or (E) change in the payment or accrual
policy with respect to any of the foregoing;
(k) Any labor dispute or any activity or proceeding by a labor
union or representative thereof to organize any employees of Diamond or any
Subsidiary, or any lockouts, strikes, slowdowns, work stoppages or threats
thereof by or with respect to any employees of Diamond or any Subsidiary;
(l) Any issuance or sale of any stock, bonds, phantom stock
interest or other securities of which Diamond or any Subsidiary is the issuer,
or the grant, issuance or change of any stock options, warrants, or other rights
to purchase securities of Diamond or any Subsidiary or phantom stock interest in
Diamond or any Subsidiary;
(m) Any cancellation of any debts or claims or waiver of any
rights of substantial value in an aggregate amount exceeding $35,000;
(n) Any sale, assignment or transfer of any Diamond Intellectual
Property or other similar assets, including licenses therefor;
(o) Any capital expenditures, or commitment to make any capital
expenditures, for additions to property, plant or equipment in an aggregate
amount exceeding $50,000;
(p) Payment of any amounts to, or liability incurred to or in
respect of, or sale of any properties or assets (real, personal or mixed,
tangible or intangible) to, or any transaction or any agreement or arrangement
with, any corporation or business in which Diamond or any Subsidiary or any of
their corporate officers or directors, or any "affiliate" or "associate" (as
such terms are defined in the rules and regulations promulgated under the
Securities Act of 1933, as amended (the "Securities Act") of any such Person,
has any direct or indirect ownership interests; or
(q) Any agreement undertaking or commitment to do any of the
foregoing.
3.9 Leases in Effect. All real property leases and subleases as to which
Diamond or any Subsidiary is a party and any amendments or modifications thereof
are listed in Section 3.9 of the Diamond Disclosure Schedule (each a "Lease" and
collectively, the "Leases") are valid, in full force and effect and enforceable,
and there are no existing defaults on the part of Diamond or any Subsidiary, and
neither Diamond nor any Subsidiary has received or given notice of default or
claimed default with respect to any Lease, nor is there any event that with
notice or lapse of time, or both, would constitute a default on the part of
Diamond or any Subsidiary thereunder.
3.10 Personal Property; Real Estate. (a) Diamond and its Subsidiaries
have good and marketable title, free and clear of all title defects and Liens to
all inventory, receivables, furniture, machinery, equipment and other personal
property, tangible or otherwise, reflected on the Unaudited Balance Sheet or
used in Diamond's or any Subsidiary's business, except for acquisitions and
dispositions since the Unaudited Balance Sheet Date in the ordinary course of
business. The Diamond Disclosure Schedule lists (i) all computer equipment and
(ii) all other personal property, in each case
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having a depreciated book value of $5,000 or more, which are used by Diamond or
any Subsidiary in the conduct of their businesses, and all such equipment and
property, in the aggregate, is in good operating condition and repair,
reasonable wear and tear excepted. There is no asset used or required by Diamond
or any Subsidiary in the conduct of their businesses as presently operated which
is not either owned by it or licensed or leased to it.
(b) Section 3.10 of the Diamond Disclosure Schedule contains a
schedule setting forth and describing all real property which is owned or leased
by Diamond or any Subsidiary, or in which Diamond or any Subsidiary has any
other right, title or interest. True and complete copies of each lease have been
provided to Parent, and such leases constitute the entire understanding relating
to Diamond's or any Subsidiary's use and occupancy of the leased premises. The
leases are presently in full force and effect without further amendment or
modification. Neither Diamond nor any Subsidiary is in default in the
performance of obligations under any lease, and neither Diamond nor any
Subsidiary knows of any state of facts which with the giving of notice or the
passage of time, or both, would constitute a default by Diamond or any
Subsidiary or any other party thereunder.
(c) To the knowledge of Diamond and its Subsidiaries, the
improvements located on the real property described in Section 3.10 of the
Diamond Disclosure Schedule are not the subject of any official complaint or
notice of violation of any applicable zoning ordinance or building code and
there is no use or occupancy restriction or condemnation proceeding pending or
threatened against Diamond or any Subsidiary.
3.11 Certain Transactions. Except for (a) relationships with Diamond or
any Subsidiary as an officer, director, or employee thereof (and compensation by
Diamond or such Subsidiary in consideration of such services) and (b)
relationships with Diamond or any Subsidiary as stockholders or option holders
therein, none of the directors or officers of Diamond or any Subsidiary, or
holders of more than 5% of Diamond Stock known to Diamond ("Significant
Stockholders") or any member of any of their families, is presently a party to,
or was a party to during the year preceding the date of this Agreement, any
transaction, or series of similar transactions, with Diamond or any Subsidiary,
in which the amount involved exceeds $60,000, including, without limitation, any
contract, agreement, or other arrangement (i) providing for the furnishing of
services to or by, (ii) providing for rental of real or personal property to or
from, or (iii) otherwise requiring payments to or from, any such Person or any
other Person in which any such Person has or had a 5%-or-more interest (as a
stockholder, partner, beneficiary, or otherwise) or is or was a director,
officer, employee, or trustee. None of Diamond's officers, directors or
Significant Stockholders has any interest in any property, real or personal,
tangible or intangible, including inventions, copyrights, trademarks, or trade
names, used in or pertaining to the business of Diamond or any Subsidiary, or
any supplier, distributor, or customer of Diamond or any Subsidiary, except for
the normal rights of a stockholder, and except for rights under existing
employee benefit plans.
3.12 Litigation and Other Proceedings. There is no action, suit, claim,
investigation or proceeding (or any basis therefor known to Diamond and its
Subsidiaries) pending against or, to the knowledge of Diamond and any of its
Subsidiaries, threatened against Diamond or any Subsidiary or their properties
and assets before any court or arbitrator or any Governmental Entity. Neither
Diamond nor any Subsidiary is subject to any order, writ, judgment, decree, or
injunction.
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3.13 No Defaults. Neither Diamond nor any Subsidiary is, nor has Diamond
or any Subsidiary received notice that it would be with the passage of time, in
default or violation of any term, condition, or provision of (i) its Charter
Documents; (ii) any judgment, decree, or order applicable to Diamond or such
Subsidiary; or (iii) any loan or credit agreement, note, bond, mortgage,
indenture, contract, agreement, lease, license, or other instrument to which
Diamond or any Subsidiary is now a party or by which it or any of its properties
or assets may be bound, except for defaults and violations which, individually
or in the aggregate, would not have a material adverse effect on the Business
Condition of Diamond.
3.14 Major Contracts. Neither Diamond nor any Subsidiary is a party to
or subject to:
(a) Any union contract, or any employment contract or arrangement
(other than "at-will" employment arrangements) providing for future
compensation, written or oral, with any officer, consultant, director, or
employee;
(b) Any plan or contract or arrangement, written or oral,
providing for bonuses, pensions, deferred compensation, retirement payments,
profit-sharing or the like;
(c) Any joint venture contract or arrangement or any other
agreement which has involved or is expected to involve a sharing of profits;
(d) Any agreement, license, franchise, permit, indenture, or
authorization which has not been terminated or performed in its entirety and not
renewed which may be, by its terms, terminated, impaired, or adversely affected
by reason of the execution of this Agreement and all other agreements
contemplated hereby, the consummation of the Merger, or the consummation of the
transactions contemplated hereby or thereby;
(e) Except for trade indebtedness incurred in the ordinary course
of business, any instrument evidencing or related in any way to indebtedness
incurred in the acquisition of companies or other entities or indebtedness for
borrowed money by way of direct loan, sale of debt securities, purchase money
obligation, conditional sale, guarantee, or otherwise which individually is in
the amount of $35,000 or more;
(f) Any contract or agreement containing covenants purporting to
limit Diamond's or any Subsidiary's freedom to compete in any line of business
in any geographic area; or
(g) Any contract or agreement, not elsewhere specifically
disclosed pursuant to this Agreement, involving the payment or receipt by
Diamond or any Subsidiary of more than $35,000 in the aggregate.
All contracts, arrangements, plans, agreements, leases, licenses,
franchises, permits, indentures, authorizations, instruments and other
commitments which are listed in the Diamond Disclosure Schedule pursuant to this
Section 3.14 are valid and in full force and effect and neither Diamond nor any
Subsidiary has, nor, to the knowledge of Diamond and its Subsidiaries, has any
other party thereto, breached any material provisions of, or entered into
default in any material respect under the terms thereof. Since September 30,
2000, neither Diamond nor any Subsidiary has amended, modified or
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terminated the terms of the contracts or agreements referred to in this Section
3.14 unless such amendment, modification or termination was in the ordinary
course of business and Diamond has provided Parent with written notification of
such.
3.15 Material Reductions. To Diamond's and each of its Subsidiary's
knowledge, none of the parties to any of the contracts identified in the Diamond
Disclosure Schedule pursuant to Section 3.14 have terminated, or in any way
expressed to Diamond or any Subsidiary an intent to reduce or terminate the
amount of its business with Diamond or any Subsidiary in the future.
3.16 Insurance and Banking Facilities. Section 3.16 of the Diamond
Disclosure Schedule contains a complete and correct list of (i) all contracts of
insurance or indemnity of Diamond or any Subsidiary in force at the date of this
Agreement (including name of insurer or indemnitor, agent, annual premium,
coverage, deductible amounts and expiration date) and (ii) the names and
locations of all banks in which Diamond or any Subsidiary has accounts or safe
deposit boxes, the designation of each such account and safe deposit box, and
the names of all persons authorized to draw on or have access to each such
account and safe deposit box. All premiums and other payments due from Diamond
or any Subsidiary with respect to any such contracts of insurance or indemnity
have been paid, and neither Diamond nor any Subsidiary knows of any fact, act,
or failure to act which has or might cause any such contract to be canceled or
terminated. All known claims for insurance or indemnity have been presented.
3.17 Employees. Prior to the date hereof, Diamond has provided to
Parent, as of the date hereof, a list of (a) the names, titles, salaries and all
other compensation of all salaried employees of Diamond and its Subsidiaries
(such term meaning permanent and temporary, full-time and part-time employees)
and (b) the wage rates for non-salaried employees of Diamond and its
Subsidiaries (by classification). Any persons engaged by Diamond or any
Subsidiary as independent contractors, rather than employees, have been properly
classified as such and have been so engaged in accordance with all applicable
federal, foreign, state or local laws. No employee has stated to Diamond or any
Subsidiary that such employee intends to resign or retire as a result of the
transactions contemplated by this Agreement or otherwise within six months after
the Closing Date. Hours worked by and payments made to employees of Diamond and
its Subsidiaries have not been in violation of the Fair Labor Standards Act or
any other applicable federal, foreign, state or local laws dealing with such
matters. Neither Diamond nor any Subsidiary is nor ever has been engaged in any
dispute or litigation with an employee or former employee regarding matters
pertaining to intellectual property or assignment of inventions. Neither Diamond
nor any Subsidiary has ever been and, to the knowledge of Diamond and its
Subsidiaries, is not now subject to a union organizing effort. Neither Diamond
nor any Subsidiary has any written contract of employment or other employment,
severance or similar agreement with any of their respective employees or any
established policy or practice relating thereto, and all of its employees are
employees-at-will. Neither Diamond nor any Subsidiary is a party to any pending,
or to Diamond's and each of its Subsidiary's knowledge, threatened, labor
dispute. Diamond and each Subsidiary has complied in all material respects with
all applicable federal, state and local laws, ordinances, rules and regulations
and requirements relating to the employment of labor, including but not limited
to the provisions thereof relating to wages, hours, collective bargaining and
ensuring equality of opportunity for employment and advancement of minorities
and women. There are no claims pending, or, to the knowledge of Diamond and its
Subsidiaries, threatened to be brought, in any court or administrative agency by
any former or current employees of Diamond or any Subsidiary for
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compensation, pending severance benefits, vacation time, vacation pay or pension
benefits, or any other claim threatened or pending in any court or
administrative agency from any current or former employee or any other Person
arising out of Diamond's or any Subsidiary's status as employer, whether in the
form of claims for employment discrimination, harassment, unfair labor
practices, grievances, wrongful discharge, or otherwise.
3.18 Employee Benefit Plans. Each Plan (as defined below) covering
active, former, or retired employees of Diamond or any ERISA Affiliate (as
defined below) is listed in Section 3.18 of the Diamond Disclosure Schedule.
"Plan" means any employee benefit plan as defined in ERISA (as defined below)
and will also include any employment, severance or similar contract, arrangement
or policy and each plan or arrangement providing for insurance coverage
(including any self-insured arrangements), workers' compensation, disability
benefits, supplemental unemployment benefits, vacation benefits, pension or
retirement benefits or for deferred compensation, profit-sharing, bonuses,
phantom stock, stock options, stock appreciation rights or other forms of
incentive compensation or post-retirement insurance, compensation or benefits.
Diamond has made available to Parent a copy of each Plan, and where applicable,
any related trust agreement, annuity, or insurance contract. All annual reports
(Form 5500) required to be filed with the Internal Revenue Service have been
properly filed on a timely basis, and Diamond has provided copies of the three
most recently filed Forms 5500 for each applicable Plan. Each Plan intended to
be qualified under Section 401(a) of the Code has been determined by the
Internal Revenue Service to be so qualified and has remained tax-qualified
during the period from its inception to date, and its related trust is
tax-exempt and has been so since its creation. No Plan is covered by Title IV of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
Section 412 of the Code. No "prohibited transaction," as defined in ERISA
Section 406 or Code Section 4975 has occurred with respect to any Plan, unless
such a transaction was exempt from such rules. Each Plan has been maintained and
administered in material compliance with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations, including but
not limited to ERISA and the Code, which are applicable to such Plan. There are
no pending or anticipated claims against or otherwise involving any of the Plans
and no suit, action, or other litigation (excluding claims for benefits incurred
in the ordinary course of Plan activities) has been brought against or with
respect to any Plan. All contributions, reserves, or premium payments to the
Plan, accrued to the date hereof have been made or provided for. Neither Diamond
nor any entity which is considered one employer with Diamond under Section 414
of the Code or Section 4001 of ERISA (each, an "ERISA Affiliate") has ever
maintained or contributed to, or incurred or expects to incur liability with
respect to any Plan subject to Title IV of ERISA or any "multi-employer plan"
within the meaning of Section 4001(a)(3) of ERISA. There are no restrictions on
the rights of Diamond or its ERISA Affiliates to amend or terminate any Plan
without incurring any liability thereunder, other than benefits that have
accrued through the date of termination and any costs of termination. Since
January 1, 1998, there have been no amendments to, written interpretations of,
or announcements (whether or not written) by Diamond or any ERISA Affiliate
relating to, or change in employee participation or coverage under, any Plan.
Neither Diamond nor any of its ERISA Affiliates have any current or projected
liability in respect of post-employment or post-retirement welfare benefits for
retired or former employees other than health care continuation benefits
required to be provided under applicable law. No tax under Section 4980B or
4980D of the Code has been incurred in respect of any Plan that is a group
health plan, as defined in Section 5000(b)(1) of the Code.
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3.19 Certain Agreements. Except as contemplated by this Agreement,
neither the execution and delivery of this Agreement and all other agreements
contemplated hereby, nor the consummation of the transactions contemplated
hereby will: (i) result in any payment by Diamond or any Subsidiary (including,
without limitation, severance, unemployment compensation, parachute payment,
bonus or otherwise) becoming due to any director, employee, or independent
contractor of Diamond or any Subsidiary under any Plan, agreement, or otherwise,
(ii) increase any benefits otherwise payable under any Plan or agreement or
(iii) result in the acceleration of the time of payment or vesting of any such
benefits.
3.20 Guarantees and Suretyships. Neither Diamond nor any Subsidiary has
any powers of attorney outstanding (other than those issued in the ordinary
course of business with respect to Tax matters), and neither Diamond nor any
Subsidiary has any material obligations or liabilities (absolute or contingent)
as guarantor, surety, cosigner, endorser, co-maker, indemnitor, or otherwise
respecting the obligations or liabilities of any Person.
3.21 Brokers and Finders. Except as set forth on Section 3.21 of the
Diamond Disclosure Schedule, neither Diamond nor any Subsidiary has retained any
broker, finder, or investment banker in connection with this Agreement or any of
the transactions contemplated by this Agreement, nor does or will Diamond or any
Subsidiary owe any fee or other amount to any broker, finder, or investment
banker in connection with this Agreement or the transactions contemplated by
this Agreement.
3.22 Environmental Matters. (i) Diamond and its Subsidiaries have
complied with all federal, state and local laws (including, without limitation,
case law, rules, regulations, orders, judgments, decrees, permits, licenses and
governmental approvals) which are intended to protect the environment and/or
human health or safety (collectively, "Environmental Laws"); (ii) neither
Diamond nor any Subsidiary has handled, generated, used, stored, transported or
disposed of any material, substance or waste which is regulated by Environmental
Laws ("Hazardous Materials"), except for reasonable amounts of ordinary office
and/or office-cleaning supplies which have been used in compliance with
Environmental Laws; (iii) there is not now, nor has there ever been, any
underground storage tank or asbestos on any real property owned, operated or
leased by Diamond or any Subsidiary; (iv) neither Diamond nor any Subsidiary has
conducted, nor is it aware of, any environmental investigations, studies,
audits, tests, reviews or analyses, the purpose of which was to discover,
identify, or otherwise characterize the condition of the soil, groundwater, air
or the presence of Hazardous Materials at any real property owned, operated or
leased by Diamond or any Subsidiary; and (v) there are no "Environmental
Liabilities". For purposes of this Agreement, "Environmental Liabilities" are
any claims, demands, or liabilities under Environmental Laws which (x) arise out
of or in any way relate to Diamond's or any Subsidiary's operations or
activities, or any real property at any time owned, operated or leased by
Diamond or any Subsidiary, or any stockholder's use or ownership thereof,
whether vested or unvested, contingent or fixed, actual or potential, and (y)
arise from or relate to actions occurring (including any failure to act) or
conditions existing on or before the Closing Date.
3.23 Enforceability of Contracts, etc.
(a) No Person that is a party to any material contract,
agreement, commitment or plan to which Diamond or any Subsidiary is a party has
a valid defense, on account of non-performance or malfeasance by Diamond or such
Subsidiary, which would make any such contracts, agreement,
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commitment or plan not valid and binding upon or enforceable against such
parties in accordance with their terms, except to the extent such enforceability
may be subject to or limited by bankruptcy, insolvency, reorganization,
arrangement or similar laws affecting the rights of creditors generally and
usual equity principles.
(b) Neither Diamond, nor any Subsidiary, nor, to the knowledge of
Diamond and its Subsidiaries, any other Person, is in breach or violation of, or
default under, any material contract, agreement, arrangement, commitment or plan
to which Diamond or any Subsidiary is a party, and no event or action has
occurred, is pending, or, to the knowledge of Diamond and its Subsidiaries, is
threatened, which, after the giving of notice, or the lapse of time, or
otherwise, would constitute a breach or a default by Diamond or any Subsidiary
or, to the knowledge of Diamond and its Subsidiaries, any other Person, under
any material contract, agreement, arrangement, commitment or plan to which
Diamond or any Subsidiary is a party.
3.24 Information Supplied. None of the information supplied or to be
supplied by Diamond specifically for inclusion or incorporation by reference in
the Form S-4 (as defined below) to be filed with the Commission by Parent in
connection with the issuance of Parent Common Stock in the Merger will (except
to the extent revised or superseded by amendments or supplements contemplated
hereby), at the time the Form S-4 is filed with the Commission, at any time it
is amended or supplemented or at the time it becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they are made, not
misleading. The Proxy Statement (as defined below) relating to the special
meeting of the Diamond stockholders will not, at the date it is first mailed to
Diamond's stockholders or at the time of the Diamond stockholders meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Proxy Statement will comply as to form in all material respects
with the requirements of the Exchange Act and the rules and regulations
thereunder. Notwithstanding the foregoing, no representation or warranty is made
by Diamond with respect to statements made or incorporated by reference therein
based on information supplied by Parent specifically for inclusion or
incorporation by reference in the Proxy Statement.
3.25 Nasdaq National Market. Diamond's Common Stock is listed for
quotation on the Nasdaq Stock Market's National Market (the "Nasdaq National
Market") and, except as set forth on Section 3.25 of the Diamond Disclosure
Schedule, Diamond is in compliance with the "continued listing" standards of the
Nasdaq National Market as required for Diamond to maintain its listing on the
Nasdaq National Market.
3.26 Fairness Opinion. Diamond's Board of Directors has received a true
and correct copy of an opinion from Updata Capital, Inc., dated as of the date
hereof, to the effect that, as of the date hereof, the consideration to be
received by Diamond's stockholders in the Merger is fair to Diamond's
stockholders from a financial point of view.
3.27 Voting Requirements. The affirmative vote or consent of a majority
of the outstanding shares of Diamond Common Stock (the "Diamond Requisite
Stockholder Approval") is the only vote
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or consent of the holders of any class or series of Diamond Stock necessary to
approve and adopt this Agreement and approve the Merger and the other
transactions contemplated by this Agreement.
3.28 State Takeover Statutes. The Board of Directors of Diamond has
approved the Merger and this Agreement and the other transactions contemplated
by this Agreement, and such approval is sufficient to render inapplicable to the
Merger and this Agreement and the other transactions contemplated by this
Agreement, any state takeover statute or similar law that would otherwise be
applicable to the Merger and this Agreement and the other transactions
contemplated by this Agreement.
3.29 No Indemnity Claim. No Person has made or asserted any indemnity
claim, nor, to Diamond's knowledge, is there a basis for any such indemnity
claim, against Diamond or any Subsidiary of Diamond pursuant to that certain
Stock Purchase Agreement dated as of December 28, 2000 by and among Diamond and
Acxiom Corporation or any other contract, agreement or commitment to which
Diamond or any Subsidiary is a party, or under which Diamond or any Subsidiary
is obligated, or by which Diamond or any Subsidiary or any of the rights,
properties or assets of Diamond or any Subsidiary are subject or bound.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Except as set forth in either the documents delivered to Diamond
pursuant to Section 4.5 or the disclosure schedule of Parent dated as of the
date hereof and delivered herewith to Diamond (the "Parent Disclosure Schedule")
which identifies the section and subsection to which each disclosure therein
relates, Parent and Merger Sub jointly and severally represent and warrant to
Diamond as follows:
4.1 Organization and Qualification. Parent is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its businesses as now being conducted,
and is duly qualified and in good standing to do business in each jurisdiction
in which a failure to so qualify would have a material adverse effect on the
Business Condition of Parent. Merger Sub is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
is recently organized and has conducted no business activities, other than as
contemplated by this Agreement.
4.2 Capitalization. (a) The authorized capital stock of Parent consists
of 5,000,000 shares of preferred stock, $0.01 par value per share, of which no
shares are issued or outstanding or held in Parent's treasury, and 100,000,000
shares of Parent Common Stock, of which, as of the date of this Agreement: (a)
27,381,448 shares were validly issued and outstanding, fully paid and
nonassessable and (b) 6,768,739 shares were reserved for issuance pursuant to
Parent's stock option and stock purchase plans for its employees and directors.
Except for options and rights relating to shares described in clause (b) of the
preceding sentence and except as set forth in Section 4.2 of the Parent
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Disclosure Schedule or the Parent SEC Reports (as defined in Section 4.5), there
are no options, warrants or other rights, agreements or commitments (contingent
or otherwise) obligating Parent to issue shares of its capital stock or any
other securities convertible into or evidencing the right to subscribe to shares
of its capital stock.
(b) The authorized capital stock of Merger Sub consists of 1,000
shares of common stock, par value $0.01 per share, of which 1,000 shares are
issued and outstanding, all of which shares are owned beneficially and of record
by Parent.
4.3 Authority Relative to this Agreement. The execution, delivery and
performance of this Agreement and all other agreements contemplated hereby by
Parent and Merger Sub have been duly authorized by all necessary action of the
Boards of Directors of Parent and Merger Sub and the sole stockholder of Merger
Sub. Certified copies of the resolutions adopted by the Boards of Directors of
Parent and Merger Sub and Parent as sole stockholder of Merger Sub approving
this Agreement, all other agreements contemplated hereby and the Merger have
been or will be provided to Diamond. Each of Parent and Merger Sub has duly and
validly executed and delivered this Agreement and has, or prior to Closing, will
have duly and validly executed and delivered all other agreements contemplated
hereby to be executed by it, and each of this Agreement and such other
agreements constitutes a valid, binding and enforceable obligation of each of
Parent and Merger Sub in accordance with its terms.
4.4 Non-Contravention. Assuming the accuracy of the representations and
warranties of Diamond and the stockholders of Diamond contained in the Letters
of Transmittal and the other agreements contemplated hereby, neither the
execution, delivery or performance of this Agreement and all other agreements
contemplated hereby by Parent and Merger Sub, nor the consummation of the Merger
or any other transaction described herein, does or will, after the giving of
notice, or the lapse of time, or otherwise, conflict with, result in a breach
of, or constitute a default under, (i) the Charter Documents of Parent or Merger
Sub or (ii) any federal, foreign, state or local court or administrative order
or process, statute, law, ordinance, rule or regulation, or any contract,
agreement or commitment to which Parent is a party, or under which Parent is
obligated, or by which Parent or any of the rights, properties or assets of
Parent are subject or bound; result in the creation of any Lien upon, or
otherwise adversely affect, any of the rights, properties or assets of Parent;
terminate, amend or modify, or give any party the right to terminate, amend,
modify, abandon or refuse to perform or comply with, any contract, agreement or
commitment to which Parent is a party, or under which Parent is obligated, or by
which Parent or any of the rights, properties or assets of Parent are subject or
bound; or accelerate, postpone or modify, or give any party the right to
accelerate, postpone or modify, the time within which, or the terms and
conditions under which, any liabilities, duties or obligations are to be
satisfied or performed, or any rights or benefits are to be received, under any
contract, agreement or commitment to which Parent is a party, or under which
Parent may be obligated, or by which Parent or any of the rights, properties or
assets of Parent are subject or bound, other than any of the foregoing listed in
(ii) which would not have, individually or in the aggregate, a material adverse
effect on the Business Condition of Parent.
4.5 Parent SEC Reports and Financial Statements. (a) Parent has filed
all forms, reports and documents required to be filed by Parent with the SEC
since the effective date of the registration statement for Parent's initial
public offering. Parent has previously furnished to Diamond true and correct
copies of (i) its Annual Report on Form 10-K for the year ended December 31,
1999, (ii) its
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Quarterly Reports on Form 10-Q for the periods ended March 31, 2000, June 30,
2000 and September 30, 2000, (iii) all other reports filed by it with the
Commission under the Exchange Act since December 31, 1999 and (iv) Parent hereby
agrees to furnish to Diamond true and correct copies of all reports filed by it
with the Commission after the date hereof prior to the Closing all in the form
(including exhibits) so filed (collectively, the "Parent SEC Reports"). As of
their respective dates, the Parent SEC Reports complied or will comply in all
material respects with the then applicable published rules and regulations of
the Commission with respect thereto at the date of their issuance and did not or
will not contain any untrue statement of a material fact or omit to state a
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. As of the date hereof, no additional filings or amendments to
previously filed Parent SEC Reports are required pursuant to such rules and
regulations. Each of the audited consolidated financial statements and unaudited
interim financial statements included in the Parent SEC Reports has been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis (except as may be indicated therein or in the notes thereto)
and fairly presents the financial position of the entity or entities to which it
relates as at its date or the results of operations, stockholders' equity or
cash flows of such entity or entities (subject, in the case of unaudited
statements, to the absence of footnote disclosure and in the case of unaudited
interim statements to year-end adjustments.
(b) Parent has delivered to Diamond the unaudited consolidated
balance sheet (the "Parent Unaudited Balance Sheet") as of December 31, 2000
(the "Parent Unaudited Balance Sheet Date") and the unaudited consolidated
statements of operations for the three-month and twelve-month periods ended
December 31, 2000 (collectively, the "Unaudited Parent Financial Statements")
included in Parent's press release dated as of January 30, 2001. The Unaudited
2000 Parent Financial Statements are prepared in accordance with GAAP applied on
a consistent basis throughout the periods involved (except as may be indicated
therein) and fairly present the consolidated financial position of Parent and
its Subsidiaries in all material respects as at the respective dates thereof and
the consolidated results of their operations for the periods indicated, except
that the Unaudited Parent Financial Statements do not contain footnotes and were
or are subject to normal and recurring year-end adjustments.
4.6 Validity of Parent Merger Shares. The Parent Merger Shares to be
issued in the Merger will, when issued, be, validly issued, fully paid and
nonassessable.
4.7 Consents and Approvals of Governmental Authorities. Assuming the
accuracy of the representations and warranties of Diamond and the stockholders
of Diamond contained in the Letters of Transmittal and the other agreements
contemplated hereby, except for (a) the requirements of state securities (or
"Blue Sky") laws, (b) the filing and recording of the Merger Documents as
provided by the DGCL, (c) the filing of appropriate documents with the Nasdaq
Stock Market, (d) the filing of the Proxy Statement, the Form S-4 and a Form 8-K
with the Commission, if applicable, and (e) such other consents, approvals,
orders, authorizations, registrations, declarations and filings the failure of
which to be obtained or made, individually or in the aggregate, could not
reasonably be expected to impair in any material respect the ability of Parent
or Merger Sub to perform its obligations under this Agreement or prevent or
materially delay the consummation of any of the transactions contemplated by
this Agreement, no consent, approval or authorization of, or declaration, filing
or registration with, any Governmental Entity is required to be made or obtained
by Parent or Merger Sub in connection with
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the execution, delivery and performance of this Agreement or the consummation of
the transactions contemplated hereby.
4.8 Litigation. There is no action, suit, claim, investigation, or
proceeding (or any basis therefor known to Parent or any of its Subsidiaries)
pending against or, to the knowledge of Parent and any of its Subsidiaries,
threatened against Parent or any of its Subsidiaries or their properties and
assets before any court or arbitrator or any Governmental Entity. Neither Parent
nor any of its Subsidiaries is subject to any order, writ, judgment, decree or
injunction.
4.9 No Defaults. Neither Parent nor any of its Subsidiaries is, nor has
Parent or any of its Subsidiaries received notice that it would be with the
passage of time, in default or violation of any term, condition, or provision of
(i) its Charter Documents; or (ii) any judgment, decree, or order applicable to
Parent.
4.10 Taxes.
(a) Parent and each of its Subsidiaries has timely filed all
material Tax Returns required to be filed and has paid all material Taxes owed
(whether or not shown as due on such Tax Returns), including, without
limitation, all Taxes which Parent or any of its subsidiaries is obligated to
withhold for amounts paid or owing to employees, creditors and third parties.
All Tax Returns filed by Parent and each of its Subsidiaries were complete and
correct in all material respects. None of the Tax Returns filed by Parent or any
of its subsidiaries or Taxes payable by Parent or any of its Subsidiaries have
been the subject of an audit, action, suit, proceeding, claim, examination,
deficiency or assessment by any Governmental Entity, and no such audit, action,
suit, proceeding, claim, examination, deficiency or assessment is currently
pending or, to the knowledge of Parent or any of its Subsidiaries, threatened.
All material elections with respect to Taxes affecting Parent or any of its
Subsidiaries, as of the date hereof, are set forth in the Parent SEC Reports,
Parent Unaudited Balance Sheet or Section 4.10(a) of the Parent Disclosure
Schedule. None of the Tax Returns filed by Parent or any of its Subsidiaries
contain a disclosure statement under former Section 6661 of the Code or Section
6662 of the Code (or any similar provision of state, local or foreign Tax law).
(b) The unpaid Taxes of Parent and its Subsidiaries did not, as
of the Parent Unaudited Balance Sheet Date, exceed the reserve for actual Taxes
(as opposed to any reserve for deferred Taxes established to reflect timing
differences between book and Tax income) as shown on the Parent Unaudited
Balance Sheet, and will not exceed such reserve as adjusted for the passage of
time through the Closing Date in accordance with the past custom and practice of
Parent and its Subsidiaries in filing their Tax Returns (taking into account any
Taxes incurred as a result of the transactions contemplated by this Agreement).
4.11 Absence of Certain Changes and Events. Since December 31, 2000,
except as has been disclosed by Parent in any press release or Parent SEC
Report, there has not been any material change (or any development or
combination of developments of which Parent or any of its Subsidiaries has
knowledge which is reasonably likely to result in such a material change) on
Parent's Business Condition, other than changes in the ordinary course of
business which, in the aggregate, have not been and are not expected to be
materially adverse to Parent's Business Condition; provided; however that none
of the following shall be deemed, individually or in the aggregate, to
constitute a material adverse
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change to Parent's Business Condition: (a) any change in the market price or
trading volume of Parent Common Stock after the date hereof; (b) any failure by
Parent to meet the revenue or earnings predictions or other expectations of
equity analysts, any change in the recommendation of equity analysts with
respect to Parent's Common Stock or any decrease in revenues or earnings from
prior periods, for any period ending (or for which earnings are released) on or
after the date of this Agreement; or (c) any adverse effect due to employee
turnover or other attrition in the number of employees of Parent and its
Subsidiaries.
ARTICLE V
COVENANTS OF DIAMOND
References in this Article V to Diamond shall be deemed to mean
Diamond and all Subsidiaries of Diamond. During the period from the date of this
Agreement (except as otherwise indicated) and continuing until the earlier of
the termination of this Agreement or the Effective Time, Diamond agrees (except
as expressly contemplated by this Agreement or otherwise permitted with Parent's
prior written consent):
5.1 Conduct of Business in Ordinary Course. Diamond will carry on its
business in the ordinary course in substantially the same manner as heretofore
conducted and, to the extent consistent with such business, use all reasonable
best efforts consistent with past practice and policies to preserve intact its
present business organization, keep available the services of its present
officers, consultants and employees and preserve its relationships with
customers, suppliers and distributors and others having business dealings with
it. Diamond will confer on a regular and frequent basis with representatives of
Parent to report operational matters of a material nature and to report the
general status of the ongoing operations of the business of Diamond. The
foregoing notwithstanding, Diamond will not:
(a) other than in the ordinary course of business consistent with
prior practice, enter into any material commitment or transaction, including but
not limited to any purchase of assets (other than raw materials, supplies or
cash equivalents) for a purchase price in excess of $35,000;
(b) grant any bonus, severance or termination pay to any officer,
director, independent contractor or employee of Diamond;
(c) enter into or amend any agreements pursuant to which any
other party is granted support, service, marketing or publishing rights, other
than in the ordinary course of business consistent with prior practice, or is
granted distribution rights of any type or scope with respect to any products of
Diamond;
(d) other than in the ordinary course of business consistent with
prior practice, enter into or terminate any contracts, arrangements, plans,
agreements, leases, licenses, franchises, permits, indentures, authorizations,
instruments, or commitments, or amend or otherwise change in any material
respect the terms thereof in a manner adverse to Diamond;
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(e) commence a lawsuit other than: (i) for the routine collection
of bills, (ii) in such cases where Diamond in good faith determines that failure
to commence suit would result in a material impairment of a valuable aspect of
Diamond's business provided that Diamond consults with Parent prior to filing of
any such suit, or (iii) for a breach of this Agreement or any agreement related
hereto;
(f) modify in any material respect existing discounts or other
terms and conditions with dealers, distributors and other resellers of Diamond's
products or services in a manner adverse to Diamond;
(g) accelerate the vesting or otherwise modify any Diamond
Option, restricted stock or other outstanding rights or other securities;
(h) take any action which would cause Diamond to be unable to
meet the conditions set forth in Section 8.2(a);
(i) agree in writing or otherwise to take any of the foregoing
actions; or
(j) make or change any material election in respect of Taxes,
adopt or change any accounting method in respect of Taxes, enter into any
closing agreement, settle any claim or assessment in respect of Taxes, or
consent to any extension or waiver of the limitation period applicable to any
claim or assessment in respect of Taxes.
5.2 Dividends, Issuance of, or Changes in Securities. Diamond will not:
(i) declare or pay any dividends on or make other distributions to its
stockholders (whether in cash, shares or property), (ii) issue, deliver, sell,
or authorize, propose, or agree to, or commit to the issuance, delivery, or sale
of any shares of its capital stock of any class, any Diamond Voting Debt or any
securities convertible into its capital stock, any options, warrants, calls,
conversion rights, commitments, agreements, contracts, understandings,
restrictions, arrangements or rights of any character obligating Diamond to
issue any such shares, Diamond Voting Debt or other convertible securities
except as any of the foregoing is required by Outstanding Diamond Options; (iii)
split, combine or reclassify any of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of capital stock of Diamond, (iv) repurchase or otherwise acquire,
directly or indirectly, any shares of its capital stock or options or warrants
related thereto, or (v) propose any of the foregoing.
5.3 Governing Documents. Diamond will not amend its Charter Documents.
5.4 No Acquisitions. Diamond will not authorize, recommend, propose or
announce an intention to authorize, recommend or propose, or enter into a letter
of intent (whether or not binding), an agreement in principle or an agreement
with respect to any merger, consolidation or business combination (other than
the Merger), or any acquisition of assets or securities.
5.5 No Dispositions. Diamond will not sell, lease, license, transfer,
mortgage, encumber or otherwise dispose of any of its material assets or cancel,
release, or assign any material indebtedness or claim, except in the ordinary
course of business.
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5.6 Indebtedness. Diamond will not incur any indebtedness for borrowed
money by way of direct loan, sale of debt securities, purchase money obligation,
conditional sale, guarantee or otherwise.
5.7 Compensation. Diamond will not adopt or amend, or modify in any
material respect, any Plan or pay any pension or retirement allowance not
required by any existing Plan. Diamond will not enter into or modify any
employment or severance contracts, increase the salaries, wage rates or fringe
benefits of its officers, directors or employees or pay bonuses or other
remuneration except for current salaries, severance and other remuneration for
which Diamond is obligated under arrangements existing prior to the Unaudited
Balance Sheet Date to which Diamond is a party and which have been disclosed in
the Diamond Disclosure Schedule.
5.8 Claims. Diamond will not settle any claim, action or proceeding,
except in the ordinary course of business consistent with prior practice.
5.9 Access to Properties and Records. Subject to contractual and other
obligations, Diamond will give Parent and its representatives full access, at a
place reasonably acceptable to Diamond, during reasonable business hours and
following reasonable notice but in such a manner as not unduly to disrupt the
business of Diamond, to its senior management, senior technical personnel,
premises, properties, contracts, commitments, books, records and affairs, and
will provide Parent with such financial, technical and operating data and other
information pertaining to its business as Parent may request. With Diamond's
prior consent, which will not be unreasonably withheld, Parent will be entitled
in conjunction with Diamond personnel to make appropriate inquiries of third
parties in the course of its investigation.
5.10 Breach of Representations and Warranties. Diamond will not take any
action that would cause or constitute a breach of any of the representations and
warranties set forth in Article III or that would cause any of such
representations and warranties to be inaccurate in any material respect or that
would constitute a breach of any of its other obligations under this Agreement.
In the event of, and promptly after becoming aware of, the occurrence of or the
pending or threatened occurrence of any event that would cause or constitute
such a breach or inaccuracy, Diamond will give detailed written notice thereof
to Parent and will use its reasonable best efforts to prevent or remedy promptly
such breach or inaccuracy.
5.11 Consents. Diamond will promptly apply for or otherwise seek and use
reasonable best efforts to obtain, all Consents, and make all filings with
Governmental Entities, required with respect to the consummation of the Merger.
5.12 Tax Returns. Diamond will promptly provide or make available to
Parent copies of all Tax Returns, reports and information statements that have
been filed or are filed prior to the Closing Date.
5.13 Exclusivity; Acquisition Proposals. Unless and until this Agreement
will have been terminated by either party pursuant to Article IX hereof and
thereafter subject to Section 9.5, Diamond will not and Diamond will use its
reasonable best efforts to ensure that none of its officers, directors,
Significant Stockholders, agents, representatives or affiliates) take or cause
or permit any Person to take, directly or indirectly, any of the following
actions with any party other than Parent and its
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designees: (i) solicit, encourage, initiate or participate in any negotiations,
inquiries, or discussions with respect to any offer or proposal to acquire all
or any significant part of Diamond's business, assets or capital stock, whether
by merger, consolidation, other business combination, purchase of assets, tender
or exchange offer or otherwise (each of the foregoing, an "Acquisition
Transaction"), (ii) disclose, in connection with an Acquisition Transaction
(however preliminary), any information not customarily disclosed to any Person
other than Parent or its representatives concerning Diamond's business or
properties or afford to any Person other than Parent or its representatives
access to its properties, books, or records, (iii) enter into or execute any
agreement relating to an Acquisition Transaction, or (iv) make or authorize any
public statement, recommendation or solicitation in support of any Acquisition
Transaction or any offer or proposal relating to an Acquisition Transaction
other than with respect to the Merger. In the event that Diamond is contacted by
any third party expressing an interest in discussing an Acquisition Transaction,
Diamond will promptly, but in any event within twenty-four (24) hours, notify
Parent of such contact and the identity of the party so contacting Diamond.
Diamond shall immediately cease and cause to be terminated any activities,
discussions or negotiations conducted prior to the date of this Agreement with
any parties other than the parties hereto with respect to any of the foregoing.
In the event that Parent or any third party commences a tender offer for Diamond
Stock under Regulations 14D and 14E of the Exchange Act and only if Parent or
such third party commences such a tender offer, then nothing contained in this
Agreement shall prohibit Diamond from taking and disclosing to the stockholders
a position contemplated by Rule 14e-2(a) promulgated under the Exchange Act or
making any disclosure if, in the good faith judgment of the Board of Directors
of Diamond, failure to make such disclosure would be a breach of its fiduciary
duties.
5.14 Notice of Events. Throughout the period between the date of this
Agreement and the Closing, Diamond will promptly advise and consult with Parent
regarding any and all material events and developments concerning its financial
position, results of operations, assets, liabilities or business or any of the
items or matters concerning Diamond or any of its Subsidiaries covered by the
representations, warranties and covenants of Diamond contained in this
Agreement.
5.15 Reasonable Best Efforts. Diamond will use its reasonable best
efforts to effectuate the transactions contemplated hereby and to fulfill and
cause to be fulfilled the conditions to Closing under this Agreement.
5.16 Insurance. Diamond will use its reasonable best efforts to maintain
in force at the Effective Time policies of insurance of the same character and
coverage as those described in the Diamond Disclosure Schedule, and Diamond will
promptly notify Parent in writing of any changes in such insurance coverage
occurring prior to the Effective Time.
5.17 Confidentiality and Assignment of Inventions Agreements. Diamond
shall use its reasonable best efforts to cause each officer and employee of
Diamond and its Subsidiaries to enter into a confidentiality and assignment of
inventions agreement substantially in the form of such agreement used by Parent
in the country in which such officer or employee performs services for Diamond.
Any officer or employee of Diamond or any Subsidiary who has not entered into
such agreement shall have been terminated by Diamond or such Subsidiary prior to
the Closing.
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5.18 Stock Option Grants. At the request of Parent, Diamond shall grant,
immediately prior to Closing and effective only at Closing, stock options under
Diamond's 1997 Stock Option Plan, in the amounts, upon the terms and to the
parties specifically requested by Parent.
ARTICLE VI
COVENANTS OF PARENT
During the period from the date of this Agreement and continuing until
the earlier of the termination of this Agreement or the Effective Time (or later
where so indicated), Parent and Merger Sub agree (except as expressly
contemplated by this Agreement or with Diamond's prior written consent):
6.1 Breach of Representations and Warranties. Neither Parent nor Merger
Sub will take any action which would cause or constitute a breach of any of the
representations and warranties set forth in Article IV or which would cause any
of such representations and warranties to be inaccurate in any material respect
or that would constitute a breach of any of its other obligations under this
Agreement. In the event of, and promptly after becoming aware of, the occurrence
of or the pending or threatened occurrence of any event which would cause or
constitute such a breach or inaccuracy, Parent will give detailed written notice
thereof to Diamond and will use its reasonable best efforts to prevent or remedy
promptly such breach or inaccuracy.
6.2 Additional Information; Access. Parent will provide Diamond with the
information relating to Parent referred to in Section 4.5 and the information
relating to Parent to be included in the Form S-4. In addition, Parent will
afford to Diamond, its counsel and its other representatives access throughout
the period prior to the Effective Time to its senior management and all other
information concerning Parent as Diamond may reasonably request. Diamond will
also be afforded the opportunity to ask questions and to receive accurate and
complete answers from Parent concerning the Business Condition of Parent, the
terms and conditions of the Merger and the issuance of the Parent Merger Shares
pursuant thereto.
6.3 Consents. Parent will promptly apply for or otherwise seek, and use
its reasonable best efforts to obtain, all consents and approvals, and make
filings, required with respect to the consummation of the Merger.
6.4 Reasonable Best Efforts. Each of Parent and Merger Sub will use its
reasonable best efforts to effectuate the transactions contemplated hereby and
to fulfill and cause to be fulfilled the conditions to Closing under this
Agreement.
6.5 Nasdaq National Market Listing. Parent will use its reasonable best
efforts to cause the Parent Merger Shares to be listed for quotation on the
Nasdaq National Market.
6.6 Notice of Events. Throughout the period between the date of this
Agreement and the Closing, Parent will promptly advise and consult with Diamond
regarding any and all material adverse
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change to the representations, warranties and covenants of Parent and Merger Sub
contained in this Agreement.
ARTICLE VII
ADDITIONAL AGREEMENTS
In addition to the foregoing, Parent, Merger Sub, and Diamond each agree
to take the following actions simultaneous with or after, as the case may be,
the execution of this Agreement.
7.1 Preparation of the Form S-4 and the Proxy Statement; Stockholders
Meeting. (a) Diamond shall use its reasonable best efforts to hold one or more
special meetings of stockholders in accordance with the applicable requirements
of the DGCL and to obtain the Diamond Requisite Stockholder Approval to enable
the Merger to be effective on the Closing Date (determined without regard to the
condition to closing in Section 8.2(g)). Parent shall use its reasonable efforts
to prepare, with the assistance and cooperation of Diamond, a Registration
Statement on Form S-4 (the "Form S-4") to allow sufficient time for the Merger
to be effective on the Closing Date. The Form S-4 shall constitute a proxy and a
prospectus and shall be used for purposes of offering the Parent Merger Shares
to the stockholders of Diamond and soliciting proxies from such Diamond
stockholders for the purpose of obtaining the Diamond Requisite Stockholder
Approval (such proxy/prospectus statement, together with the accompanying letter
to stockholders, notice of meeting and form of proxy shall be referred to herein
as the "Proxy Statement"). Diamond agrees to fully cooperate with Parent in the
preparation of the Form S-4, and shall, upon request, furnish Parent with all
information concerning it and its affiliates, directors, officers and
stockholders as Parent may reasonably request in connection with the preparation
of the Form S-4. Diamond shall prepare the portions of the Form S-4 relating to
Diamond and its Subsidiaries including, but not limited to, financial
information, management of Diamond, description of Diamond's business, executive
compensation of the Diamond, the recommendation of Diamond's Board of Directors,
the notice of special meeting of the Diamond stockholders, the Diamond proxy
card, appraisal rights, risk factors relating to Diamond, and Diamond portions
of background of the Merger, reasons for the Merger, interests of certain
persons in the Merger and security ownership of certain beneficial owners and
management. No filing of, or amendment or supplement to, the Form S-4 will be
made by Parent and no amendment or supplement to the Proxy Statement will be
made by Parent or Diamond without providing the other party the opportunity to
review and comment thereon. Parent will advise Diamond, promptly after it
receives notice thereof, of the time when the Form S-4 has become effective or
any supplement or amendment has been filed, the issuance of any stop order, the
suspension of the qualification of the Parent Merger Shares for offering or sale
in any jurisdiction, or any request by the Commission for amendment of the Proxy
Statement or the Form S-4 or comments thereon and responses thereto or requests
by the Commission for additional information. If at any time prior to the
Effective Time any information relating to Parent or Diamond or any of their
respective affiliates, officers or directors, should be discovered by the Parent
or Diamond which should be set forth in an amendment or supplement to any of the
Form S-4 or the Proxy Statement, so that any of such documents would not include
any misstatement of a material fact or omit to state any material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, the party which discovers such information shall
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promptly notify the other party hereto and an appropriate amendment or
supplement describing such information shall be promptly filed with the
Commission, and to the extent required by law, disseminated to the stockholders
of Diamond. If the Commission requires a Tax opinion in connection with the
filing of the Form S-4, Diamond shall cause Xxxxxx, Xxxxxxxx & Xxxxx, counsel to
Diamond, to provide such opinion in the form required by the Commission. The
issuance of such opinion shall be conditioned upon the receipt by Xxxxxx,
Xxxxxxxx & Xxxxx of customary representation letters from each of Diamond and
Parent in a form reasonably agreed to by the parties.
(b) Parent shall file the Form S-4 with the Commission and shall,
with the assistance of Diamond, promptly respond to any comments from the
Commission on the Form S-4 and shall otherwise use its best efforts to have the
Form S-4 declared effective under the Securities Act as promptly as practicable.
Promptly following such time as the Form S-4 is declared effective, Diamond
shall distribute the Proxy Statement to its stockholders. Parent shall comply
with all applicable provisions of and rules under the Securities Act and the
Exchange Act and state securities laws in the preparation and filing of the Form
S-4 and the offering and issuance of the Parent Merger Shares. Parent shall also
ensure that any Form S-4 filed by Parent does not contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading (provided that Parent
shall not be responsible for the accuracy and completeness of information
relating to Diamond or any of its Subsidiaries or any other information
furnished by Diamond specifically for inclusion in the Form S-4).
(c) Diamond shall ensure that the Proxy Statement does not
contain an untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statement made,
under the circumstances under which it is made, not misleading (provided that
Diamond shall not be responsible for the accuracy or completeness of any
information relating to Parent or furnished by Parent specifically for inclusion
in the Form S-4 or Proxy Statement).
(d) Diamond, acting through its Board of Directors, shall include
in the Proxy Statement the unanimous recommendation of its Board of Directors
eligible to vote on such matters, and who participated in the meeting of the
Board of Directors during which such matters were voted on, that its
stockholders vote in favor of the adoption of this Agreement and the approval of
the Merger. Notwithstanding the foregoing, the obligation set forth in the
foregoing sentence shall not apply (and the Board of Directors shall be
permitted to modify or withdraw any such recommendation previously made) if the
Board of Directors of Diamond concludes in good faith, upon the written advice
of its outside legal counsel, that fulfilling the obligations in the foregoing
sentence would violate the fiduciary duties of the Board of Directors under
applicable law; provided, however, that nothing shall limit the obligation of
Diamond to otherwise use its reasonable best efforts to fulfill all of its
obligations under this Agreement, including without limitation, Diamond's
obligations under Section 7.1(a) and (c).
7.2 Legal Conditions to the Merger. Each of Parent, Merger Sub and
Diamond will use all reasonable best efforts to take actions necessary to comply
promptly with all legal requirements which may be imposed on it with respect to
the Merger. Each of Parent, Merger Sub and Diamond will use all reasonable best
efforts to take all actions to obtain (and to cooperate with the other parties
in obtaining) any consent required to be obtained or made by Diamond, Merger Sub
or Parent in connection with the Merger, or the taking of any action
contemplated thereby or by this Agreement.
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7.3 Employee Benefits. Nothing contained herein will be considered as
requiring Diamond or Parent to continue any specific plan or benefit, or to
confer upon any employee, beneficiary, dependent, legal representative or
collective bargaining agent of such employee any right or remedy of any nature
or kind whatsoever under or by reason of this Agreement, including without
limitation any right to employment or to continued employment for any specified
period, at any specified location or under any specified job category, except as
specifically provided for in an offer letter or other agreement of employment.
It is specifically understood that continued employment with Diamond or
employment with Parent is not offered or implied for any employees of Diamond
and any continuation of employment with Diamond after the Closing will be at
will except as specifically provided otherwise in an offer letter or other
agreement of employment.
7.4 Expenses. Whether or not the Merger is consummated, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby and thereby, including investment banking, legal and
accounting expenses, will be paid by the party incurring such expense; provided,
however, that the provisions of this Section 7.4 shall not be construed to
relieve a party from liability resulting from such party's breach of this
Agreement.
7.5 Additional Agreements. In case at any time after the Effective Time
any further action is reasonably necessary or desirable to carry out the
purposes of this Agreement or to vest the Surviving Corporation with full title
to all properties, assets, rights, approvals, immunities and franchises of
Diamond, the proper officers and directors of each corporation which is a party
to this Agreement will take all such necessary action.
7.6 Public Announcements. The initial press release relating to this
Agreement shall be a joint press release, the text of which has been agreed to
by each of Parent and Diamond. Thereafter, neither Parent nor Diamond will
directly or indirectly disseminate any press release or other announcement
concerning this Agreement or the transactions contemplated herein to any third
party (except to the directors, officers and employees of the parties to this
Agreement whose direct involvement is necessary for the consummation of the
transactions contemplated under this Agreement, to the attorneys, advisors and
accountants of the parties hereto, or except as either Parent or Diamond
determine in good faith to be required by applicable law after consultation with
the other) without the prior written agreement of the other party.
7.7 Confidentiality. Diamond and Parent have entered into a Mutual
Nondisclosure Agreement dated November 17, 2000 concerning each party's
obligations to protect the confidential information of the other party. Diamond
and Parent each hereby affirm each of their obligations under such agreement. If
this Agreement is terminated in accordance with Article IX hereof, Parent will,
and will cause its accountants, counsel and other representatives to deliver to
Diamond all documents and other material, and all copies thereof, obtained by
Parent or on its behalf from Diamond in connection with this Agreement, whether
so obtained before or after the execution hereof, and will not disclose any such
information or documents to any third parties or make any use of such. If this
Agreement is terminated in accordance with Article IX hereof, Diamond will, and
will cause its accountants, counsel and other representatives to, deliver to
Parent all documents and other material, and all copies thereof, obtained by
Diamond or on its behalf or by a Significant Stockholder from Parent in
connection with
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this Agreement, whether so obtained before or after the execution hereof, and
will not disclose any such information or documents to any third parties or make
any use of such.
7.8 Diamond Voting Agreement. Simultaneous with the execution of this
Agreement, Diamond will cause the voting agreement in the form attached as
EXHIBIT 7.8 (the "Diamond Voting Agreement") to be executed by all directors,
officers, affiliates and holders of 10% or more of the capital stock of Diamond
and their affiliates, and delivered to Parent.
7.9 Xxxx-Xxxxx-Xxxxxx Filing. If and to the extent applicable, Parent
and Diamond agree to file, and to cause any other Person obligated to do so as a
result of such person's stock holdings in Parent or Diamond, a Notification and
Report Form in accordance with the notification requirements of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 and the rules and
regulations thereunder (collectively, the "HSR Act") with the Antitrust Division
of the United States Department of Justice and the Federal Trade Commission and
to use its and their reasonable best efforts to achieve the prompt termination
or expiration of the waiting period or any extension thereof provided for under
the HSR Act as a prerequisite to the consummation of the transactions provided
for herein.
7.10 Parent Option. Simultaneous with the execution of this Agreement,
Diamond will issue to Parent an option in the form attached as EXHIBIT 7.10 (the
"Parent Option") exercisable, upon the consummation of an Acquisition
Transaction with a party other than Parent, for such number of shares of Diamond
Common Stock as is equal to 19.9% of the issued and outstanding shares of
Diamond Common Stock on the date of the execution of this Agreement, at an
exercise price per share equal to the product of the Conversion Ratio multiplied
by the Parent Average Closing Price.
7.11 Indemnification of Directors and Officers.
(a) From and after the Effective Time, Parent and the Surviving
Corporation each agree to indemnify, defend and hold harmless in accordance with
the Charter Documents of Diamond as of the date hereof, and subject to the
limitations of the DGCL and the Charter Documents of Diamond, each present and
past director and officer of Diamond (individually, a "Diamond Indemnitee" and
collectively, the "Diamond Indemnitees") regardless of whether the Surviving
Corporation's Charter Documents are effective after the Closing.
Notwithstanding the above, the Diamond Indemnitees shall not be
entitled to indemnification by Parent relating to any breach of Diamond's
representations and warranties and other obligations contained in this
Agreement.
(b) Parent shall cause the Surviving Corporation to, and the
Surviving Corporation agrees to, for not less than three years immediately
following the Effective Time, maintain in effect for the directors and officers
of Diamond as of the date hereof (the "Diamond Indemnitees") the current
policies of directors' and officers' liability insurance and fiduciary liability
insurance maintained by Diamond immediately prior to the Effective Time with
respect to matters occurring at or prior to the Effective Time (including,
without limitation, the transactions contemplated by this Agreement); provided
that in no event shall Parent or the Surviving Corporation be required to expend
in excess of 150% of the annual premium currently paid by the Company for such
coverage; and provided further, if the premium exceeds such amount, Parent or
the Surviving Corporation shall purchase a policy with
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the greatest coverage available for such 150% of the annual premium.
Notwithstanding the foregoing, Parent may substitute therefore policies of
substantially the same coverage containing terms and conditions which are no
less advantageous, in any material respect, to the Diamond Indemnitees.
(c) The rights of each Diamond Indemnitee hereunder shall be in
addition to any other rights such indemnified party has under the Certificate of
Incorporation or Bylaws of the Surviving Corporation, under the DGCL or
otherwise. This Section 7.11 is intended to benefit each of the Diamond
Indemnitees and shall be binding to all successors and assigns of Parent, Merger
Sub and the Surviving Corporation.
ARTICLE VIII
CONDITIONS PRECEDENT
8.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligations of each party to effect the Merger will be subject to the
satisfaction prior to the Closing Date of the following conditions:
(a) Governmental Approvals. Other than the filing of the Merger
Documents with the Secretary of State of Delaware, all statutory requirements
and all Consents of Governmental Entities legally required for the consummation
of the Merger and the transactions contemplated by this Agreement will have been
filed, occurred, or been obtained, other than such Consents for which the
failure to obtain would not have a material adverse effect on the consummation
of the Merger or the other transactions contemplated hereby or on the Business
Condition of Parent or Diamond. If and to the extent applicable, the filing and
waiting period requirements under the HSR Act will have been complied with and
will have expired or terminated.
(b) No Restraints. No statute, rule or regulation, and no final
and nonappealable order, decree or injunction will have been enacted, entered,
promulgated or enforced by any court or Governmental Entity of competent
jurisdiction which enjoins or prohibits the consummation of the Merger.
(c) Quotation. The shares of Parent Common Stock issuable to
Diamond's stockholders as contemplated by this Agreement shall have been
approved for quotation on the Nasdaq National Market, subject to official notice
of issuance.
(d) Form S-4. The Form S-4 shall have become effective under the
Securities Act and shall not be the subject of any stop order or proceedings
seeking a stop order.
8.2 Conditions of Obligations of Parent and Merger Sub. The obligations
of Parent and Merger Sub to effect the Merger are subject to the satisfaction of
the following conditions unless waived by Parent and Merger Sub:
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(a) Representations and Warranties of Diamond. The
representations and warranties of Diamond set forth in this Agreement which are
qualified as to materiality shall have been true and correct, and the
representations and warranties of Diamond which are not qualified as to
materiality shall have been true and correct in all material respects, in each
case, as of the date of this Agreement and as of the Effective Time as though
made at and as of the Effective Time, except (i) as otherwise contemplated by
this Agreement, (ii) as a result of actions taken or not taken at the direction
of or after consultation with and written concurrence of Parent and (iii) for
representations and warranties specifically limited to an earlier date(s).
Parent will have received a certificate signed by the chief executive officer
and the chief financial officer of Diamond to such effect on the Closing Date.
(b) Performance of Obligations of Diamond. Diamond will have
performed in all respects all agreements and covenants required to be performed
by them under this Agreement prior to the Closing Date except (i) as otherwise
contemplated or permitted by this Agreement, (ii) as a result of actions taken
or not taken at the direction of or after consultation with and written
concurrence of Parent, and (iii) for such failures to perform which,
individually or in the aggregate, would not have a material adverse effect on
the Business Condition of Diamond and Parent will have received a certificate
signed by the chief executive officer and the chief financial officer of Diamond
to such effect on the Closing Date.
(c) Legal Action. There will not be overtly threatened or pending
any action, proceeding or other application before any court or Governmental
Entity brought by any Person or Governmental Entity: (i) challenging or seeking
to restrain or prohibit the consummation of the transactions contemplated by
this Agreement, or seeking to obtain any damages from Parent, Merger Sub or
Diamond as a result of such transactions; or (ii) seeking to prohibit or impose
any limitations on Parent's ownership or operation of all or any portion of
Diamond's business or assets, or to compel Parent to dispose of or hold separate
all or any portion of its or Diamond's business or assets as a result of the
transactions contemplated by the Agreement which if successful would have a
material adverse effect on Parent's ability to receive the anticipated benefits
of the Merger and the employment of the individuals referenced in Section
8.2(d).
(d) Opinion of Counsel. Parent will have received an opinion
dated as of the Closing Date of Xxxxxx, Xxxxxxxx & Xxxxx, counsel to Diamond, in
form and scope reasonably satisfactory to Parent and its counsel.
(e) Consents. Parent will have received duly executed copies of
all Consents specified in Section 3.4 of the Diamond Disclosure Schedule, and
there will not be any material Consents which have not been received and are
required to be disclosed in Diamond Disclosure Schedule which have not been so
disclosed, in each case except for such thereof as Parent and Diamond will have
agreed in writing will not be obtained.
(f) Termination of Rights and Certain Securities. Any
registration rights, rights of refusal, voting rights, rights to any liquidation
preference or redemption rights relating to any security of Diamond will have
been terminated or waived or satisfied as of the Closing.
(g) Stockholder Approvals. This Agreement and the Merger will
have been approved by stockholders comprising the Diamond Requisite Stockholder
Approval.
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(h) Dissenters. Holders of not more than 4% of the Outstanding
Diamond Shares shall have exercised appraisal rights with respect to the Merger.
(i) Termination of 401k Plan. The Diamond Board of Directors will
have passed and not rescinded resolutions satisfactory to Parent's counsel
effectively terminating Diamond's 401(k) Plan immediately prior to the Closing.
(j) Corporate Proceedings Satisfactory. All corporate and other
proceedings to be taken by Diamond in connection with the transactions
contemplated hereby and all documents incident thereto will be satisfactory in
form and substance to Parent and its counsel, and Parent and its counsel will
have received all such counterpart originals or certified or other copies of
such documents as they reasonably may request.
(k) Letter from PricewaterhouseCoopers. The Parent shall have
received a letter dated as of a date not more than two days prior to the date
that the Form S-4 is declared effective and shall have received a subsequent
similar letter dated as of a date not more than two days prior to the Effective
Time, from PricewaterhouseCoopers LLP, auditors for Diamond, addressed to Parent
in a customary form reasonably satisfactory to Parent, containing statements and
information of the type ordinarily included in an accountants' "comfort letters"
with respect to the financial statements and financial information of Diamond
included in the Form S-4.
(l) Parent Option. Parent will have received, and Diamond will
have issued to Parent, the Parent Option.
(m) Resignations. Parent will have received from Diamond the
resignations of all officers and directors of Diamond and its Subsidiaries from
their positions with Diamond or its Subsidiaries, as the case may be, unless
otherwise specified by Parent.
(n) Audited 2000 Financial Statements. The consolidated financial
position of Diamond and its Subsidiaries and the consolidated results of their
operations and cash flows presented in the Audited 2000 Financial Statements
delivered to Parent after the date of this Agreement will not differ materially
from the consolidated financial position of Diamond and its Subsidiaries and the
consolidated results of their operations and cash flows presented in the
Unaudited 2000 Financial Statements.
8.3 Conditions of Obligation of Diamond. The obligation of Diamond to
effect the Merger is subject to the satisfaction of the following conditions
unless waived by Diamond:
(a) Representations and Warranties of Parent and Merger Sub. The
representations and warranties of Parent and Merger Sub set forth in this
Agreement which are qualified as to materiality shall have been true and
correct, and the representations and warranties of Parent and Merger Sub which
are not qualified as to materiality shall have been true and correct in all
material respects, in each case, as of the date of this Agreement and as of the
Effective Time as though made at and as of the Effective Time, except (i) as
otherwise contemplated by this Agreement, (ii) as a result of actions taken or
not taken at the direction of or after consultation with and written concurrence
of
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Diamond and (iii) for representations and warranties specifically limited to an
earlier date(s). Diamond will have received a certificate signed on behalf of
Parent by a duly authorized officer of Parent to such effect on the Closing
Date.
(b) Performance of Obligations of Parent and Merger Sub. Parent
and Merger Sub will have performed in all respects all agreements and covenants
required to be performed by them under this Agreement prior to the Closing Date
except (i) as otherwise contemplated or permitted by this Agreement, (ii) as a
result of actions taken or not taken at the direction of or after consultation
with and written concurrence of Diamond, and (iii) for such failures to perform
which, individually or in the aggregate, would not have a material adverse
effect on the Business Condition of Parent and Diamond will have received a
certificate signed on behalf of Parent by officers of Parent to such effect.
(c) Opinion of Parent's Counsel. Diamond will have received an
opinion dated the Closing Date of Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, in form and
scope reasonably satisfactory to Diamond and its counsel.
(d) Legal Action. There will not be overtly threatened or pending
any action, proceeding or other application before any court or Governmental
Entity brought by any Person or Governmental Entity: (i) challenging or seeking
to restrain or prohibit the consummation of the transactions contemplated by
this Agreement, or seeking to obtain any damages from Diamond as a result of the
transactions contemplated by this Agreement or (ii) restricting in any way the
receipt, ownership, or ability to dispose of the consideration to be received by
any stockholder of Diamond in the transactions contemplated by this Agreement;
provided, however, that Diamond will automatically be deemed to waive this
condition if Parent agrees to indemnify, defend and hold any such named party
harmless against any such action.
(e) Audited 2000 Financial Statements. The consolidated financial
position of Parent and its Subsidiaries and the consolidated results of their
operations presented in the audited consolidated balance sheet dated as of
December 31, 2000 and the audited consolidated statement of income for the
twelve-month period ended December 31, 2000, respectively, delivered to Diamond
after the date of this Agreement will not differ materially from the
consolidated financial position of Parent and its Subsidiaries and the
consolidated results of their operations presented in the Unaudited Parent 2000
Financial Statements.
ARTICLE IX
TERMINATION
9.1 Mutual Agreement. This Agreement may be terminated at any time prior
to the Effective Time by the written consent of Parent, Merger Sub and Diamond.
9.2 Termination by Parent. This Agreement may be terminated by Parent
(provided that it is not then in material breach of any representation,
warranty, covenant or agreement contained in this Agreement) alone, by means of
written notice to Diamond, if there has been a material breach by
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Diamond of any representation, warranty, covenant or agreement set forth in this
Agreement or other ancillary agreements, which breach would result in a failure
to satisfy the closing conditions contained in Section 8.2 and has not been
cured within five (5) business days following receipt by Diamond of notice of
such breach.
9.3 Termination by Diamond. (a) This Agreement may be terminated by
Diamond by means of written notice to Parent if it shall have failed to obtain
the Diamond Requisite Stockholder Approval by June 30, 2001.
(b) This Agreement may be terminated by Diamond (provided that it
is not then in material breach of any representation, warranty, covenant or
agreement contained in this Agreement) alone, by means of written notice to
Parent, if there has been a material breach by Parent of any representation,
warranty, covenant or agreement set forth in the Agreement or other ancillary
agreements, which breach would result in a failure to satisfy the closing
conditions contained in Section 8.3 and has not been cured within five (5)
business days following receipt by Parent of notice of such breach.
9.4 Outside Date. This Agreement may be terminated by Parent alone or by
Diamond alone by means of written notice if the Effective Time does not occur on
or prior to July 16, 2001; provided, however, that the right to terminate this
Agreement pursuant to the preceding clause will not be available to any party
whose failure to fulfill any obligation under this Agreement has been a
significant cause of, or resulted in, the failure of the Effective Time to occur
on or before such date.
9.5 Termination Fee. (a) If (i) this Agreement shall be terminated by
Diamond pursuant to Section 9.3(a) or by Parent or Diamond pursuant to Section
9.4 and (ii) Diamond's Board of Directors shall have failed to recommend that
its stockholders vote in favor of the adoption of this Agreement and the
approval of the Merger or shall have recommended that the Diamond stockholders
vote in favor of an Acquisition Transaction with a party other than Parent
(each, an "Acquiring Party"), then Diamond shall pay to Parent a termination fee
equal to $600,000 (the "Termination Fee"). The Termination Fee shall be paid by
wire transfer of immediately available funds to an account designated by Parent
within 24 hours after any such termination pursuant to Section 9.3(a) or 9.4, as
the case may be.
(b) If (i) this Agreement shall be terminated by (x) Parent or
Diamond pursuant to Section 9.4 or (y) Diamond pursuant to Section 9.3(a) and
Diamond's Board of Directors shall have recommended to its stockholders that
such stockholders vote in favor of the adoption of this Agreement and the
approval of the Merger and (ii) Diamond consummates an Acquisition Transaction
with an Acquiring Party on or prior to the nine month anniversary of the date of
any such termination pursuant to Section 9.4 or 9.3(a), as the case may be, then
Diamond shall pay to Parent the Termination Fee. The Termination Fee shall be
paid by wire transfer of immediately available funds to an account designated by
Parent simultaneously with the consummation of such Acquisition Transaction.
(c) If this Agreement shall be terminated by Parent pursuant to
Section 9.2, then Diamond shall pay to Parent the Termination Fee. The
Termination Fee shall be paid by wire transfer of immediately available funds to
an account designated by Parent within 24 hours after any such termination
pursuant to Section 9.2.
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(d) If this Agreement shall be terminated by Diamond pursuant to
Section 9.3(b), then Parent shall pay to Diamond the Termination Fee. The
Termination Fee shall be paid by wire transfer of immediately available funds to
an account designated by Diamond within 24 hours after any such termination
pursuant to Section 9.3(b).
9.6 Effect of Termination. In the event of termination of this Agreement
by either Diamond or Parent as provided in this Article, this Agreement will
forthwith become void and have no effect, and there will be no liability or
obligation on the part of Parent, Diamond, Merger Sub or their respective
officers or directors, except that (i) the provisions of Sections 7.4, 7.6, 7.7,
9.5 and 10.2 will survive any such termination and abandonment, and (ii) no
party will be released or relieved from any liability arising from the willful
breach by such party prior to termination of any of its representations,
warranties, covenants or agreements as set forth in this Agreement.
ARTICLE X
MISCELLANEOUS
10.1 Entire Agreement. This Agreement, including the exhibits, schedules
and other agreements delivered pursuant to this Agreement contain all of the
terms and conditions agreed upon by the parties relating to the subject matter
of this Agreement and supersede all prior agreements, negotiations,
correspondence, undertakings and communications of the parties, whether oral or
written, respecting that subject matter.
10.2 Governing Law; Consent to Jurisdiction. The Merger will be governed
by the DGCL to the extent applicable, and all other aspects of this Agreement
will be governed by the internal laws of the State of Delaware. Legal
proceedings relating to this Agreement, the agreements executed in connection
with this Agreement or the transactions contemplated hereby or thereby that are
commenced against Parent, Merger Sub or the Surviving Corporation may be
commenced only in the state or federal courts in the State of Delaware. Any such
legal proceedings that are commenced against Diamond may be commenced only in
the state or federal courts in the State of Delaware. Each of the parties hereby
consents to the exclusive jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives any objection to
venue laid therein. The foregoing provisions will not be construed to preclude
any party from bringing a counter-claim in any action or proceeding properly
commenced in accordance with the foregoing provisions. Process in any such
action or proceeding may be served on any party anywhere in the world.
10.3 Notices. All notices, requests, demands or other communications
which are required or may be given pursuant to the terms of this Agreement will
be in writing and will be deemed to have been duly given: (i) on the date of
delivery if personally delivered by hand, (ii) upon the third day after such
notice is deposited in the United States mail, if mailed by registered or
certified mail, postage prepaid, return receipt requested, (iii) upon the date
scheduled for delivery after such notice is sent by a nationally recognized
overnight express courier or (iv) by fax upon written confirmation (including
the
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automatic confirmation that is received from the recipient's fax machine) of
receipt by the recipient of such notice:
If to Parent or Merger Sub Lionbridge Technologies, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxx, Esq.
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
With a copy to:
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
If to Diamond: Data Dimensions, Inc.
Sterling Plaza, 3rd Floor
0000 Xxxxxxxx Xxxxxxxxx XX
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
With a copy to:
Xxxxxx, Xxxxxxxx & Xxxxx
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
Such addresses may be changed, from time to time, by means of a notice
given in the manner provided in this Section 10.3.
10.4 Severability. If any provision of this Agreement is held to be
unenforceable for any reason, it will be modified rather than voided, if
possible, in order to achieve the intent of the parties to this Agreement to the
extent possible. In any event, all other provisions of this Agreement will be
deemed valid and enforceable to the full extent.
10.5 Non-Survival of Representations and Warranties. All representations
and warranties contained in this Agreement, including the exhibits and schedules
delivered pursuant to this
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Agreement, shall terminate at the Closing, and only the covenants that by their
terms survive the Closing shall survive the Closing.
10.6 Assignment. No party to this Agreement may assign, by operation of
law or otherwise, all or any portion of its rights, obligations, or liabilities
under this Agreement without the prior written consent of Diamond, Merger Sub
and Parent, which consent may be withheld in the absolute discretion of the
party asked to grant such consent. Any attempted assignment by Merger Sub or
Parent, on the one hand, or by Diamond, on the other hand, in violation of this
Section 10.6 will be voidable and will entitle Diamond or Parent, respectively,
to terminate this Agreement at its option.
10.7 Counterparts. This Agreement may be executed in two or more
partially or fully executed counterparts each of which will be deemed an
original and will bind the signatory, but all of which together will constitute
but one and the same instrument. The execution and delivery of a Signature Page
to Agreement and Plan of Reorganization in the form annexed to this Agreement,
including a facsimile copy of the actual signature, by any party hereto who will
have been furnished the final form of this Agreement will constitute the
execution and delivery of this Agreement by such party.
10.8 Amendment. This Agreement may not be amended except by an
instrument in writing executed by Diamond, Merger Sub and Parent.
10.9 Extension, Waiver. At any time prior to the Effective Time, any
party hereto may, to the extent legally allowed: (i) extend the time for the
performance of any of the obligations or other acts of any other party hereto to
the party extending such time, (ii) waive any inaccuracies in the
representations and warranties made to such party contained herein or in any
document delivered pursuant hereto, and (iii) waive compliance with any of the
agreements, covenants or conditions for the benefit of such party contained
herein. Any agreement on the part of a party hereto to any such extension or
waiver will be valid only if set forth in an instrument in writing signed on
behalf of such party.
10.10 Interpretation. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference will be to a Section, Exhibit or
Schedule to this Agreement unless otherwise indicated. The words "include,"
"includes," and "including" when used therein will be deemed in each case to be
followed by the words "without limitation." The table of contents, index to
defined terms, and headings contained in this Agreement are for reference
purposes only and will not affect in any way the meaning or interpretation of
this Agreement.
10.11 Transfer, Sales, Documentary, Stamp and Other Similar Taxes. Any
and all transfer, sales, documentary, stamp and other similar Taxes imposed in
connection with the transactions contemplated by this Agreement will be paid by
the stockholder of Diamond with respect to which such Tax relates. At Parent's
discretion, the amount paid to any Person pursuant to this Agreement will be
reduced by the amount of Taxes payable by such Person pursuant to this Section
10.11. Any amounts so withheld will be promptly remitted to the appropriate
Governmental Entity.
(The remainder of this page has been left blank intentionally.)
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Signature Page to
Agreement and Plan of Reorganization
IN WITNESS WHEREOF, Parent, Merger Sub and, Diamond have executed this
Agreement as of the date first written above.
LIONBRIDGE TECHNOLOGIES, INC. DATA DIMENSIONS, INC.
By: By:
------------------------------- -------------------------------
Xxxx X. Xxxxx Xxxxx X. Xxxxx
Chief Executive Officer Chief Executive Officer and
President
DIAMOND ACQUISITION CORP.
By:
-------------------------------
Xxxx X. Xxxxx
Chief Executive Officer and President
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