1
Exhibit 2.2
EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
LUCENT TECHNOLOGIES INC.,
LANDO ACQUISITION, INC.,
XXXXX XXXXX
AND
KENAN SYSTEMS CORPORATION
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Dated as of January 11, 1999
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TABLE OF CONTENTS
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1. The Merger......................................................................................2
1.1. General................................................................................2
1.2. Articles of Organization...............................................................2
1.3. By-Laws................................................................................2
1.4. Directors and Officers.................................................................2
1.5. Conversion of Securities...............................................................3
1.6. Adjustment of the Exchange Ratio.......................................................3
1.7. Exchange Procedures; Stock Transfer Books..............................................4
1.8. No Fractional Shares...................................................................4
1.9. No Further Ownership Rights in Company Common Stock....................................5
1.10. Other Agreements. ....................................................................5
1.11. Further Assurances.....................................................................5
2. Approval by Stockholders of the Company and Acquisition; Further Corporate
Action..........................................................................................5
2.1. Approval by Stockholders of the Company and Acquisition................................5
3. Representations and Warranties of the Company...................................................5
3.1. Organization...........................................................................6
3.2. Capitalization; Options and Other Rights...............................................6
3.3. Authority..............................................................................6
3.4. Charter Documents......................................................................8
3.5. Financial Statements...................................................................8
3.6. Absence of Undisclosed Liabilities.....................................................8
3.7. Operations and Obligations.............................................................9
3.8. Properties............................................................................11
3.9. Leases................................................................................11
3.10. Assets................................................................................11
3.11. Accounts Receivable...................................................................11
3.12. Customers and Suppliers...............................................................11
3.13. Contracts.............................................................................12
3.14. Absence of Default....................................................................13
3.15. Insurance.............................................................................13
3.16. Financial Projections.................................................................14
3.17. Litigation............................................................................14
3.18. Compliance with Law...................................................................14
3.19. Intellectual Property.................................................................15
3.20. Tax Matters...........................................................................16
3.21. Employee Benefit Plans................................................................17
3.22. Employees.............................................................................19
3.23. Employment Matters....................................................................19
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3.24. Environmental Laws....................................................................19
3.25. Export Control Laws...................................................................20
3.26. Bank Accounts, Letters of Credit and Powers of Attorney...............................20
3.27. Subsidiaries..........................................................................20
3.28. Minute Books..........................................................................20
3.29. Complete Copies of Materials..........................................................21
3.30. Disclosure............................................................................21
3.31. Pooling of Interests; Reorganization..................................................21
3.32. Investment Matters....................................................................21
3.33. Regulation D..........................................................................22
4. Representations and Warranties of Acquisition and Lucent.......................................23
4.1. Organization..........................................................................23
4.2. Capitalization........................................................................23
4.3. Authority.............................................................................24
4.4. Litigation............................................................................26
4.5. SEC Filings; Lucent Financial Statements..............................................26
4.6. Operations and Obligations............................................................27
4.7. Pooling of Interests; Reorganization..................................................27
5. Covenants......................................................................................27
5.1. Conduct of Business Pending Closing...................................................27
5.2. Prohibited Actions Pending Closing....................................................27
5.3. Access; Documents; Supplemental Information...........................................29
5.4. No Solicitation.......................................................................30
5.5. Filings; Other Actions................................................................31
5.6. Notification of Certain Matters.......................................................31
5.7. Employee Matters......................................................................31
5.8. Tax Returns; Cooperation..............................................................32
5.9. Actions by the Parties................................................................32
5.10. Pooling of Interests; Reorganization..................................................33
5.11. Stock Exchange Listing................................................................33
5.12. Actions by the Stockholder............................................................33
5.13. Use of the Company's Name.............................................................33
5.14. Relocation of the Company.............................................................34
5.15. Indemnification.......................................................................34
5.16. Securities Matters....................................................................34
6. Conditions Precedent...........................................................................34
6.1. Conditions Precedent to Each Party's Obligation to Close..............................34
6.2. Conditions Precedent to Obligations of Acquisition
and Lucent............................................................................35
6.3. Conditions Precedent to the Obligations of the Company and the
Stockholder...........................................................................37
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7. Survival of Representations and Warranties.....................................................38
7.1. Representations and Warranties........................................................38
8. Indemnification................................................................................38
8.1. Escrow Shares.........................................................................38
8.2. General Indemnification...............................................................38
8.3. Damage Threshold......................................................................39
8.4. Escrow Period.........................................................................39
8.5. Claims Upon Escrow Fund...............................................................39
8.6. Stockholder's Tax Indemnity...........................................................40
8.7. Objections to Claims..................................................................41
8.8. Third-Party Claims....................................................................42
9. Brokers' and Finders' Fees.....................................................................42
9.1. Stockholders..........................................................................42
9.2. Acquisition and Lucent................................................................43
10. Expenses, Taxes................................................................................43
11. Press Releases.................................................................................43
12. Contents of Agreement; Parties in Interest; etc................................................43
13. Assignment and Binding Effect..................................................................43
14. Termination....................................................................................44
15. Definitions....................................................................................44
16. Notices........................................................................................47
17. Amendment......................................................................................48
18. Governing Law..................................................................................48
19. No Benefit to Others...........................................................................48
20. Severability...................................................................................48
21. Section Headings...............................................................................48
22. Schedules and Exhibits.........................................................................49
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23. Counterparts...................................................................................49
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER ("Agreement") dated as of January 11, 1999
by and among LUCENT TECHNOLOGIES INC., a Delaware corporation ("Lucent"), LANDO
ACQUISITION, INC., a Massachusetts corporation ("Acquisition"), XXXXX XXXXX (the
"Stockholder"), and KENAN SYSTEMS CORPORATION, a Massachusetts corporation (the
"Company").
BACKGROUND
A. The Company is a Massachusetts corporation with its registered
office located at Xxx Xxxx Xxxxxx, Xxxxxxxxx, XX 00000 and has authorized
191,560 shares of common stock, par value $.01 per share (the "Company Common
Stock"), of which 187,500 shares of Company Common Stock are issued and
outstanding. The Company is engaged principally in the business of providing
network billing, customer care and customer analysis software (the "Business").
B. Lucent is a Delaware corporation with its registered office located
at 0000 Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx.
C. Acquisition is a wholly-owned subsidiary of Lucent and was formed to
merge with and into the Company so that, as a result of the merger, the Company
will survive and become a wholly-owned subsidiary of Lucent. Acquisition is a
Massachusetts corporation with its registered office located at 000 Xxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000 and has authorized an aggregate of 200,000
shares of common stock, no par value per share (the "Acquisition Common Stock").
D. The Board of Directors of each of Acquisition and the Company has
determined that the merger of Acquisition with and into the Company (the
"Merger") in accordance with the provisions of the Massachusetts Business
Corporation Law, as amended (the "MBCL"), and subject to the terms and
conditions of this Agreement, is in the best interests of Acquisition and the
Company and their respective stockholders. The Board of Directors of each of
Acquisition and the Company have approved this Agreement.
E. The parties intend that, for federal income tax purposes, the Merger
shall qualify as a reorganization within the meaning of Section 368(a) of the
Code and that this Agreement shall qualify as a "Plan of Reorganization".
F. The Stockholder owns all the issued and outstanding shares of
capital stock of the Company and will derive substantial benefits from the
consummation of the transactions contemplated thereunder.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements contained herein and other
good and valuable
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consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto intending to be legally bound do hereby agree as follows:
1. The Merger.
1.1. General. (a) Subject to the terms and conditions of this
Agreement and in accordance with the MBCL, at the Effective Time (as defined
below), (i) Acquisition shall be merged with and into the Company, (ii) the
separate corporate existence of Acquisition shall cease and (iii) the Company
shall be the surviving corporation (the "Surviving Corporation") and shall
continue its corporate existence under the laws of the Commonwealth of
Massachusetts.
(b) The Merger shall become effective at the time of filing of
Articles of Merger with the Secretary of State of the Commonwealth of
Massachusetts substantially in the form of Exhibit A attached hereto ("Articles
of Merger") in accordance with the provisions of Section 78 of the MBCL and at
such later time as may be stated in the Articles of Merger or such later date as
the parties may mutually agree (the "Effective Time"); provided that such date
shall not be more than 30 days after the date of such filing. Subject to the
terms and conditions of this Agreement, the Company and Acquisition shall duly
execute and file the Articles of Merger with the Secretary of State of the
Commonwealth of Massachusetts at the time of the Closing. The closing of the
Merger (the "Closing") shall take place at the offices of Sidley & Austin, 000
Xxxxx Xxxxxx, Xxx Xxxx, X.X. at 10:00 A.M., two business days after the date on
which the last of the conditions set forth in Section 6 shall have been
satisfied or waived, or on such other date, time and place as the parties may
mutually agree (the "Closing Date").
(c) At the Effective Time, the effect of the Merger shall be
as provided in the applicable provisions of the MBCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time, all the
property, rights, privileges, powers and franchises of the Company and
Acquisition shall vest in the Surviving Corporation, and all debts, liabilities,
obligations, restrictions, disabilities and duties of the Company and
Acquisition shall become the debts, liabilities, obligations, restrictions,
disabilities and duties of the Surviving Corporation.
1.2. Articles of Organization. The Articles of Organization of
Acquisition, as in effect immediately prior to the Effective Time, shall be the
Articles of Organization of the Surviving Corporation until thereafter amended
as provided therein and by law except that Article I of such Articles of
Organization shall be amended to read as follows: "The name of the Corporation
is: Kenan Systems Corporation."
1.3. By-Laws. The By-laws of Acquisition, as in effect
immediately prior to the Effective Time, shall be the By-laws of the Surviving
Corporation until thereafter amended as provided therein and by law.
1.4. Directors and Officers. From and after the Effective
Time, (a) the directors of Acquisition at the Effective Time shall be the
initial directors of the Surviving Corporation,
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each to hold office in accordance with the Articles of Organization and By-laws
of the Surviving Corporation, and (b) the officers of Acquisition at the
Effective Time shall be the initial officers of the Surviving Corporation, in
each case, until their respective successors are duly elected or appointed and
qualified.
1.5. Conversion of Securities. At the Effective Time, by
virtue of the Merger and without any action on the part of Acquisition, the
Company or the holders of any of the following securities:
(a) Each issued and outstanding share of common stock of
Acquisition shall be converted into one validly issued, fully paid and
nonassessable share of Common Stock, $.01 par value per share, of the
Surviving Corporation;
(b) Each share of Company Common Stock held in the treasury of
the Company and each share of Company Common Stock owned by Acquisition
or Lucent shall be canceled without any conversion thereof and no
payment or distribution shall be made with respect thereto; and
(c) Subject to the provisions of Sections 1.6 and 1.8, each
share of Company Common Stock shall be converted into 68.69 (such
number as adjusted in accordance with Section 1.6 (the "Exchange
Ratio")) validly issued, fully paid and nonassessable shares of Lucent
Common Stock, including the corresponding percentage right (the
"Right") to purchase junior preferred stock, par value $1.00 per share,
pursuant to the Rights Agreement dated as of April 4, 1996, between
Lucent and First Chicago Trust Company of New York as Rights Agent so
that the 187,500 issued and outstanding shares of Company Common Stock
shall be converted into 12,878,788 shares of Lucent Common Stock. All
references in the Agreement to Lucent Common Stock to be received in
accordance with the Merger shall be deemed from and after the Effective
Time to include the Rights. Each share of Company Common Stock shall no
longer be outstanding and shall automatically be canceled and retired,
and each holder of record of a certificate (representing any shares of
Company Common Stock) shall cease to have any rights with respect
thereto other than (i) the right to receive shares of Common Stock of
Lucent to be issued in consideration therefor upon the surrender of
such certificate and (ii) any cash, without interest, to be paid in
lieu of any fractional share of Lucent Common Stock in accordance with
Section 1.8.
1.6. Adjustment of the Exchange Ratio. In the event that,
prior to the Effective Date, any stock split, combination, reclassification or
stock dividend with respect to the Lucent Common Stock, any change or conversion
of Lucent Common Stock into other securities or any other dividend or
distribution with respect to the Lucent Common Stock (other than regular
quarterly dividends) should occur or, if a record date with respect to any of
the foregoing should occur, appropriate and proportionate adjustments shall be
made to the Exchange Ratio, and
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thereafter all references to the Exchange Ratio shall be deemed to be to the
Exchange Ratio as so adjusted.
1.7. Exchange Procedures; Stock Transfer Books. (a) On the
Closing Date, Lucent shall deliver to the Stockholder, or cause to be delivered,
in exchange for certificates representing the shares of Company Common Stock
held by the Stockholder and surrendered to Lucent or the Surviving Corporation
at the Closing (the "Certificates") (i) a certificate representing the number of
whole shares of Lucent Common Stock into which such shares of the Company
Capital Stock will be converted at the Effective Time pursuant to Section 1.5(c)
less the number of shares of Lucent Common Stock to be deposited in escrow (the
"Escrow Fund") pursuant to Section 8, and (ii) cash in lieu of any fractional
share of Lucent Common Stock in accordance with Section 1.8. In addition, Lucent
shall cause to be distributed to the Escrow Agent 505,050 shares of Lucent
Common Stock which shares shall be registered in the name of the Escrow Agent as
nominee for the Stockholder, shall be held in the Escrow Fund and shall be
available to compensate Lucent as provided in Section 8.
(b) Lucent shall be entitled to deduct and withhold from the
consideration otherwise payable to the Stockholder pursuant to this Agreement
such amounts as Lucent is required to deduct and withhold with respect to the
making of such payment under the Code, or any provision of state, local or
foreign tax law. To the extent that amounts are so withheld by Lucent, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the Stockholder in respect of which such deduction and withholding
was made by Lucent. All amounts in respect of taxes received or withheld by
Lucent shall be disposed of by Lucent in accordance with the Code or such state,
local or foreign tax law, as applicable.
(c) At the close of business on the day on which the Effective
Time occurs, the stock transfer books of the Company shall be closed and
thereafter there shall be no further registration of transfers of shares of
Company Common Stock in the records of the Company. From and after the Effective
Time, the Stockholder shall cease to have any rights with respect to the shares
of Company Common Stock except as otherwise provided herein or by applicable
law.
1.8. No Fractional Shares. No certificates or scrip
representing fractional shares of Lucent Common Stock shall be issued upon the
surrender for exchange of Certificates and such fractional share shall not
entitle the record or beneficial owner thereof to vote or to any other rights as
a stockholder of Lucent. In lieu of receiving any such fractional share, the
Stockholder shall receive cash (without interest) in an amount rounded to the
nearest whole cent, determined by multiplying (i) the per share closing price on
the New York Stock Exchange, Inc. (the "NYSE") of Lucent Common Stock (as
reported in the NYSE Composite Transactions) on the date immediately preceding
the date on which the Effective Time shall occur (or, if the Lucent Common Stock
did not trade on the NYSE on such prior date, the last day of trading in Lucent
Common Stock on the NYSE prior to the Effective Time) by (ii) the fractional
share to which such holder would otherwise be entitled. Lucent shall deliver
such cash amount to the Stockholder on the Closing Date.
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1.9. No Further Ownership Rights in Company Common Stock. All
certificates representing shares of Lucent Common Stock delivered upon the
surrender for exchange of the Certificates in accordance with the terms hereof
(including any cash paid pursuant to Section 1.8) shall be deemed to have been
delivered (and paid) in full satisfaction of all rights pertaining to the
Company Common Stock previously represented by such Certificates.
1.10. Other Agreements. Each of the parties hereto agrees
that, in accordance with Section 78 of the MBCL, the Surviving Corporation (i)
shall keep a copy of this Agreement in one of the offices specified in Section
32 of the MBCL for inspection by any of its stockholders or by the Stockholder
and (ii) shall furnish a copy of this Agreement to any such stockholders or the
Stockholder upon written request and without charge.
1.11. Further Assurances. If at any time after the Effective
Time the Surviving Corporation shall consider or be advised that any deeds,
bills of sale, assignments or assurances or any other acts or things are
necessary, desirable or proper (a) to vest, perfect or confirm, of record or
otherwise, in the Surviving Corporation its right, title or interest in, to or
under any of the rights, privileges, powers, franchises, properties or assets of
either the Company or Acquisition or (b) otherwise to carry out the purposes of
this Agreement, the Surviving Corporation and its proper officers and directors
or their designees shall be authorized to execute and deliver, in the name and
on behalf of either the Company or Acquisition, all such deeds, bills of sale,
assignments and assurances and do, in the name and on behalf of the Company or
Acquisition, all such other acts and things necessary, desirable or proper to
vest, perfect or confirm its right, title or interest in, to or under any of the
rights, privileges, powers, franchises, properties or assets of the Company or
Acquisition, as applicable, and otherwise to carry out the purposes of this
Agreement.
2. Approval by Stockholders of the Company and Acquisition; Further
Corporate Action.
2.1. Approval by Stockholders of the Company and Acquisition.
The Company and the Stockholder represent that the Board of Directors of the
Company has recommended approval to the Stockholder of, and the Stockholder has
approved, this Agreement and the Merger. Lucent and Acquisition represent that
the Board of Directors of Acquisition has recommended approval to Lucent of, and
Lucent has approved, this Agreement and the Merger. The Stockholder, the
Company, Acquisition and Lucent each agree to execute and deliver such further
documents and instruments and to do such other acts and things as may be
required to complete all requisite corporate action in connection with the
transactions contemplated by this Agreement.
3. Representations and Warranties of the Company. The Stockholder
represents and warrants to Lucent and Acquisition with respect to the matters
set forth in the last sentence of Section 3.2(a) and in Sections 3.3, 3.32 and
3.33 as such representations relate to the
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Stockholder and each of the Company and the Stockholder jointly represent and
warrant to Lucent with respect to all other matters contained in this Section 3
as follows:
3.1. Organization. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite power and authority and
all necessary governmental approval to carry on its business as it has been and
is now being conducted. The Company is duly qualified or licensed as a foreign
corporation to do business and is in good standing in each jurisdiction where
the nature of its business or the ownership, leasing or operation of its
properties makes such qualification or licensing necessary, except where the
failure to be so qualified or licensed and in good standing, would not have a
Material Adverse Effect.
3.2. Capitalization; Options and Other Rights. (a) The total
authorized shares of capital stock of the Company consists solely of 191,560
shares of Company Common Stock, of which 187,500 shares are issued and
outstanding ("Shares"). All the Shares have been duly and validly authorized and
issued and are fully paid and nonassessable. None of the Shares has been issued
in violation of the preemptive rights of any stockholder of the Company. The
Shares were issued in compliance in all material respects with all applicable
federal and state securities laws and regulations. There are no options,
warrants or other rights to acquire or convert any debt or equity security into
Shares or any other capital stock of the Company. The Stockholder owns all the
Shares free and clear of all Liens.
(b) There are no existing agreements, subscriptions, options,
warrants, calls, commitments, trusts (voting or otherwise), or rights of any
kind whatsoever granting to any Person any interest in or the right to purchase
or otherwise acquire from the Company or granting to the Company any interest in
or the right to purchase or otherwise acquire from any Person, at any time, or
upon the occurrence of any stated event, any securities of the Company, whether
or not presently issued or outstanding, nor are there any outstanding securities
of the Company or any other entity which are convertible into or exchangeable
for other securities of the Company, nor are there any agreements,
subscriptions, options, warrants, calls, commitments or rights of any kind
granting to any Person any interest in or the right to purchase or otherwise
acquire from the Company or any other Person any securities so convertible or
exchangeable, nor are there any proxies, agreements or understandings with
respect to the voting of the Shares.
3.3. Authority. (a) Each of the Stockholder and the Company
has full power and authority to execute, deliver and perform this Agreement and
the Stockholder has full power and authority to execute, deliver and perform the
Registration Rights Agreement. The execution, delivery and performance of this
Agreement by the Company has been duly authorized and approved by the Company's
Board of Directors and the Stockholder and, except for (i) the requirements of
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act of 1976, as amended, and the
rules and regulations promulgated thereunder ("HSR Act") and (ii) the filing of
appropriate merger documents as required by the MBCL, no other corporate
proceedings on the part of the Company are necessary to authorize this Agreement
and the transactions contemplated hereby.
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This Agreement has been duly authorized, executed and delivered by the
Stockholder and the Company and is the legal, valid and binding obligation of
the Stockholder and the Company enforceable in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors rights generally and by the effect of general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law). The Registration Rights Agreement has been duly authorized, executed and
delivered by the Stockholder and is the legal, valid and binding obligation of
the Stockholder enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors rights generally and by the effect of general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law).
(b) The execution, delivery and performance by the Stockholder
and the Company of this Agreement and the consummation of the transactions
contemplated hereunder do not, and will not, (i) violate or conflict with any
provision of the Articles of Organization or By-laws, as amended, of the
Company, (ii) violate any law, rule, regulation, order, writ, injunction,
judgment or decree of any court, governmental authority or regulatory agency
applicable to the Stockholder or the Company, except in each case, for
violations which, individually or in the aggregate, will not have a Material
Adverse Effect, or (iii) result in a violation or breach of, or constitute (with
or without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under, any note, bond,
indenture, lien, mortgage, lease, permit, guaranty or other agreement,
instrument or obligation to which the Company is a party or by which any of its
properties may be bound, except for violations, breaches or defaults which,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
(c) The execution, delivery and performance by the Stockholder
of the Registration Rights Agreement and the consummation of the transactions
contemplated thereunder do not, and will not, (i) violate any law, rule,
regulation, order, writ, injunction, judgment or decree of any court,
governmental authority or regulatory agency applicable to the Stockholder,
except for violations which, individually or in the aggregate, will not have a
Material Adverse Effect, or (ii) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation or acceleration) under, any
note, bond, indenture, lien, mortgage, lease, permit, guaranty or other
agreement, instrument or obligation to which the Stockholder is a party, except
for violations, breaches or defaults which, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.
(d) The execution and delivery of this Agreement by the
Stockholder and the Company does not, and the performance by the Stockholder and
the Company of this Agreement will not, require any consent, approval,
authorization or permission of, or filing with or notification to any
governmental or regulatory authority, domestic or foreign, except (i) in
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connection with the requirements of the HSR Act, (ii) the filing and recording
of appropriate merger documents as required by the MBCL and (iii) any such
consent, approval, authorization, permission, notice or filing which if not
obtained or made would not have a Material Adverse Effect.
(e) The execution and delivery of the Registration Rights
Agreement by the Stockholder does not, and the performance by the Stockholder of
the Registration Rights Agreement will not, require any consent, approval,
authorization or permission of, or filing with or notification to any
governmental or regulatory authority, domestic or foreign.
(f) The Stockholder has performed all necessary shareholder
action to permit the Company to execute, deliver and perform this Agreement.
3.4. Charter Documents. The Company has previously furnished
to Lucent a true, complete and correct copy of the Articles of Organization and
the By-laws, as amended, of the Company and such Articles of Organization and
By-laws are in full force and effect. The Company is not in violation of any
provision of its Articles of Organization or its By-laws.
3.5. Financial Statements. (a) The Company has previously
furnished to Lucent true and complete copies of the following financial
statements of the Company (the "Financial Statements"):
(i) audited balance sheet of the Company as of December 31,
1997 (the "Balance Sheet") and the audited statements of operations and
stockholders' equity of the Company for the fiscal year ended December
31, 1997, each audited and with a report thereon by Ernst & Young LLP;
and
(ii) unaudited balance sheet of the Company as of December 31,
1998 and the unaudited statements of operations and stockholders'
equity of the Company for the period ended December 31, 1998, each
certified by the President and the Director of Accounting of the
Company.
(b) The Financial Statements were prepared in accordance with
GAAP. The Financial Statements were prepared on the basis of the books and
records of the Company and present fairly, in all material respects, the
financial position of the Company as of the dates thereof and the results of its
operations, cash flow and changes in stockholders' equity for the period then
ended in conformity with GAAP except that the Financial Statements referred to
in clause (a)(ii) above (i) do not contain footnotes ordinarily included in
audited financial statements and (ii) are subject to normal audit adjustments.
3.6. Absence of Undisclosed Liabilities. Except as disclosed
on Schedule 3.6 or as set forth in the notes to the Financial Statements, the
Company does not have any material liability or obligation of any nature
(whether absolute, accrued or contingent or otherwise) which
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is in excess of amounts shown or reserved therefor in the Financial Statements
other than (a) liabilities or obligations not required under GAAP on a basis
consistent with that of preceding accounting periods to be reported on such
Financial Statements and (b) liabilities or obligations incurred after the date
of the Balance Sheet reasonably incurred in the ordinary course of business and
consistent with past practice.
3.7. Operations and Obligations. (a) Except as set forth in
Schedule 3.7, since December 31, 1997:
(i) there has been no event or condition that has had or
reasonably could be expected to have a Material Adverse Effect (other
than as a result of business and economic conditions generally
affecting the billing and customer care industry); and
(ii) there has been no impairment, damage, destruction, loss
or claim, whether or not covered by insurance, or condemnation or other
taking which reasonably could be expected to have a Material Adverse
Effect.
(b) Except as set forth in Schedule 3.7, since December 31,
1997, the Company has conducted its business only in the ordinary course and
consistent with past practice. Without limiting the generality of the foregoing,
since December 31, 1997, except as set forth in such Schedule, the Company has
not:
(i) issued, delivered or agreed (conditionally or
unconditionally) to issue or deliver, or granted any option, warrant or
other right to purchase, any of its capital stock or other equity
interest or any security convertible into its capital stock or other
equity interest;
(ii) other than in the ordinary course of business consistent
with past practice, issued, delivered or agreed (conditionally or
unconditionally) to issue or deliver any bonds, notes or other debt
securities, or borrowed or agreed to borrow any funds, or entered into
any lease the obligations of which, in accordance with generally
accepted accounting principles, would be capitalized;
(iii) paid any obligation or liability (absolute or
contingent) other than current liabilities reflected on the Balance
Sheet and current liabilities incurred since December 31, 1997 in the
ordinary course of business consistent with past practice;
(iv) declared or made, or agreed to declare or make, any
payment of dividends or distributions to its stockholders or purchased
or redeemed, or agreed to purchase or redeem, any of its capital stock;
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15
(v) except in the ordinary course of business consistent with
past practice, made or permitted any material amendment or termination
of any agreement to which the Company is a party and is or should be
set forth on Schedule 3.13;
(vi) undertaken or committed to undertake capital expenditures
exceeding $25,000 for any single project or related series of projects;
(vii) sold, leased (as lessor), transferred or otherwise
disposed of, mortgaged or pledged, or imposed or suffered to be imposed
any Lien on, any of the material assets reflected on the Balance Sheet
or any material assets acquired by the Company after December 31, 1997,
except for inventory and personal property sold or otherwise disposed
of for fair value in the ordinary course of its business consistent
with past practice and except for Permitted Liens;
(viii) canceled any debts owed to or claims held by the
Company (including the settlement of any claims or litigation) other
than in the ordinary course of its business consistent with past
practice;
(ix) accelerated or delayed collection of accounts receivable
in advance of or beyond their regular due dates or the dates when the
same would have been collected except in the ordinary course of its
business consistent with past practice;
(x) delayed or accelerated payment of any account payable or
other liability beyond or in advance of its due date or the date when
such liability would have been paid except in the ordinary course of
its business consistent with past practice;
(xi) entered into or become committed to enter into any other
material transaction except in the ordinary course of business;
(xii) allowed the levels of supplies or other materials
included in the inventory of the Company to vary materially from the
levels customarily maintained in accordance with past practice;
(xiii) except for increases in the ordinary course of business
consistent with past practice, instituted any increase in any
compensation payable to any employee of the Company, amended any
Benefit Plan or modified any other benefits made available to any such
employees; or
(xiv) made any change in the accounting principles or made any
material change in accounting practices used by the Company, in each
case, from those applied in the preparation of the Financial
Statements.
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16
3.8. Properties. (a) The Company has good and valid title to
all its properties and assets reflected on the Balance Sheet or acquired after
the date thereof except for (i) properties and assets sold or otherwise disposed
of in the ordinary course of business since the date of such Balance Sheet, (ii)
leasehold interests, in which event the Company has a valid leasehold interest
and (iii) properties and assets which individually or in the aggregate are not
material.
(b) The Company does not own any real property.
3.9. Leases. Schedule 3.9 lists all outstanding leases, both
capital and operating, or licenses, pursuant to which the Company has (i)
obtained the right to use or occupy any real or personal property, or (ii)
granted to any other Person the right to use any property described on Schedule
3.10.
3.10. Assets. (a) Schedule 3.10 lists each material item of
machinery, equipment, furniture, vehicles or other personal property owned by
the Company having an original cost of $25,000 or more.
(b) Except as set forth in Schedule 3.10, the assets and
properties owned or leased by the Company constitute all the material assets and
properties used by the Company in the operation of its business (including all
books, records, computers and computer programs and data processing systems) and
are in good and serviceable condition (subject, in each case, to normal wear and
tear and obsolescence and except for assets the book value of which does not
exceed $25,000 in the aggregate) and are suitable for the uses for which
intended.
3.11. Accounts Receivable. Except as set forth in Schedule
3.11, all accounts receivable of the Company (i) have arisen from bona fide
transactions by the Company in the ordinary course of its business and represent
bona fide claims against debtors for sales and other charges and (ii) are not
subject to discount except for normal cash and immaterial trade discounts. The
amount carried for doubtful accounts and allowances accrued on the books of the
Company, based on past loss experience, is sufficient to provide for any losses
that may be sustained on realization of the accounts receivable.
3.12. Customers and Suppliers. None of the Company's customers
which individually accounted for more than 5% of the Company's gross revenues
during the year ended December 31, 1998 has terminated or indicated that it
intends to terminate any agreement with the Company. As of the date hereof, no
material supplier of the Company has indicated that it will stop, or decrease
the rate of, supplying materials, products or services to the Company. The
Company has not knowingly breached, so as to provide a benefit to the Company
that was not intended by the parties, any agreement with, or engaged in any
fraudulent conduct with respect to, any customer or supplier of the Company.
-11-
17
3.13. Contracts. Schedule 3.13 lists any of the following not
otherwise listed on any other Schedule:
(a) each written contract or commitment which creates an
obligation on the part of the Company in excess of $100,000;
(b) each written debt instrument, including, without
limitation, any loan agreement, line of credit, promissory note,
security agreement or other evidence of indebtedness, where the Company
is a lender, borrower or guarantor, in a principal amount in excess of
$25,000;
(c) each written contract or commitment restricting the
Company from engaging in any line of business;
(d) each written contract or commitment containing a change of
control provision;
(e) each written contract or commitment in excess of $10,000
to which the Company is a party for any charitable contribution;
(f) each written joint development, joint venture or
partnership agreement to which the Company is a party;
(g) each written agreement in excess of $10,000 to which the
Company is a party with respect to any assignment, discounting or
reduction of any receivables of the Company;
(h) each written distributorship, sales agency, sales
representative, reseller or marketing, value added reseller, original
equipment manufacturing, technology transfer, source code license or
other agreement containing the right to sublicense software and/or
technology, in each case, to which the Company is a party (other than
any object code licenses granted to customers in the ordinary course of
its business in connection with the sale of the Company's products);
(i) each agreement, option or commitment or right with, or
held by, any third party to acquire any assets or properties, or any
interest therein, of the Company, having a value in excess of $25,000,
except for contracts for the sale of inventory, machinery or equipment
in the ordinary course of business;
(j) each written employment contract entered into by the
Company and each written consulting contract agreement obligating the
Company to make payments in excess of $50,000; and
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(k) each supply agreement to which the Company is a party that
the Company could not readily replace without a Material Adverse
Effect.
Except as set forth on Schedule 3.13, (i) there are no oral
contracts or commitments of the types described in this Section 3.13 which
create an obligation on the part of the Company in excess of $50,000, (ii) there
are no contracts or commitments between the Company and any Affiliate and (iii)
there are no contracts, commitments or arrangements with any employee which
require the payment of any compensation upon the occurrence of any specified
contingency.
3.14. Absence of Default. Except as set forth in Schedule
3.14, each of the leases, contracts and other agreements listed or required to
be listed in Schedules 3.9, 3.13, 3.19 and 3.22 that create obligations on any
Person in excess of $50,000 constitutes a valid and binding obligation of the
parties thereto and is in full force and effect and will continue in full force
and effect after the Closing Date, in each case, without breaching the terms
thereof or resulting in the forfeiture or impairment of any rights thereunder
and without the consent, approval or act of, or the making of any filing with,
any other Person. The Company has fulfilled and performed in all material
respects its obligations under each such lease, contract or other agreement to
which it is a party to the extent such obligations are required by the terms
thereof to have been fulfilled or performed through the date hereof and the
Company is not, and, except as set forth in Schedule 3.14, the Company is not
alleged in writing to be, in breach or default under, nor, except as set forth
in Schedule 3.14, is there or is there alleged in writing to be any basis for
termination of, any such lease, contract or other agreement. To the best
knowledge of the Company, no other party to any such lease, contract or other
agreement has breached or defaulted thereunder. No event has occurred and no
condition or state of facts exists which, with the passage of time or the giving
of notice or both, would constitute such a default or breach by the Company or,
to the best knowledge of the Company, by any such other party. The Company is
not currently renegotiating any such lease, contract or other agreement or
paying liquidated damages in lieu of performance thereunder. Complete and
correct copies of each such lease, contract or other agreement and any
amendments thereto have heretofore been delivered to Lucent.
3.15. Insurance. Schedule 3.15 sets forth a list and brief
description (including nature of coverage, limits, deductibles, premiums and the
loss experience for the past five years with respect to each type of coverage)
of all policies of insurance maintained, owned or held by the Company during the
period from inception up to and including the date hereof. The Company shall use
all commercially reasonable efforts to keep such insurance or comparable
insurance in full force and effect through the Closing Date. The Company has
complied in all material respects with each such insurance policy to which it is
a party and has not failed to give any notice or present any claim thereunder in
a due and timely manner. Except as disclosed in Schedule 3.15, the full policy
limits (subject to deductibles provided in such policies) are available and
unimpaired under each such policy and, to the best knowledge of the Company, no
insurer under any of such policies has a basis to void such policy on grounds of
non-disclosure on the part of the Company
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thereunder. Each such policy is in full force and effect and will not in any way
be affected by or terminate or lapse by reason of the transactions contemplated
by this Agreement.
3.16. Financial Projections. The Company has prepared and made
available to Lucent certain financial projections with respect to the business
of the Company which projections were prepared by the Company based upon the
assumptions reflected therein. The Company makes no representation or warranty
regarding the accuracy of such projections or as to whether such projections
will be achieved or otherwise, except that the Company represents and warrants
that such projections were prepared in good faith and are based on assumptions
believed by it to be reasonable and accurate.
3.17. Litigation. (a) Except as set forth in Schedule 3.17,
(i) there are no actions, suits, arbitrations, legal or administrative
proceedings or investigations pending or, to the best knowledge of the Company,
threatened against the Company; and (ii) neither the Company nor any assets,
properties or business of the Company, is subject to any judgment, order, writ,
injunction or decree of any court, governmental agency or arbitration tribunal.
Except as set forth in Schedule 3.17, the Company is not the plaintiff in any
such proceeding and the Company is not contemplating commencing legal action
against any other Person.
(b) The Company is not a party to any suit, action,
arbitration or legal, administrative, governmental or other proceeding or
investigation pending or, to the best of its knowledge, threatened, which
reasonably could have a Material Adverse Effect.
(c) There is no judgment, order, writ, injunction or decree of
any court, governmental agency or arbitration tribunal to which the Company is
subject which reasonably could have a Material Adverse Effect.
3.18. Compliance with Law. Except as set forth in Schedule
3.18:
(a) The Company has complied in all material respects with,
and is not in violation of, in any material respect, any law, ordinance
or governmental rule or regulation (collectively, "Laws") to which it
or its business is subject; and
(b) The Company has obtained all licenses, permits,
certificates or other governmental authorizations (collectively
"Authorizations") necessary for the ownership or use of its assets and
properties or the conduct of its business other than Authorizations (i)
which are ministerial in nature and which the Company has no reason to
believe would not be issued in due course and (ii) which, the failure
of the Company to possess, would not subject the Company to penalties
other than fines not to exceed $25,000 in the aggregate ("Immaterial
Authorizations"); and
(c) The Company has not received notice of violation of, or
knows of any violation of, any Laws to which it or its business is
subject or any Authorization necessary
-14-
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for the ownership or use of its assets and properties or the conduct of
its business (other than Immaterial Authorizations).
3.19. Intellectual Property. (a) The Company owns or is
validly licensed or otherwise has the right to use, all patents, trademarks,
trade secrets, trade names, service marks, copyrights and other proprietary
intellectual property rights and computer programs which are material to the
conduct of the business of the Company (the "Intellectual Property Rights").
(b) Other than as disclosed on Schedule 3.19(b), the Company
has not interfered with, infringed upon, misappropriated or otherwise come into
conflict with any Intellectual Property Rights or other proprietary information
of any other Person; provided that the foregoing representation with respect to
patents is only to the Company's best knowledge. The Company has not received
any written charge, complaint, claim, demand or notice alleging any such
interference, infringement, misappropriation or violation (including any claim
that the Company must license or refrain from using any Intellectual Property
Rights or other proprietary information of any other Person) which has not been
settled or otherwise fully resolved. To the Company's best knowledge, no other
Person has interfered with, infringed upon, misappropriated or otherwise come
into conflict with any Intellectual Property Rights or other proprietary
information of the Company.
(c) Except as disclosed on Schedule 3.19(c), assuming that
Lucent continues to operate the business of the Company as presently conducted
and proposed to be conducted, to the Company's best knowledge Lucent will not
interfere with, infringe upon, misappropriate or otherwise come into conflict
with the Intellectual Property Rights or other proprietary information of any
other Person.
(d) Each employee, agent, consultant or contractor who has
contributed to or participated in the creation or development of any
copyrightable, patentable or trade secret material on behalf of the Company or
any predecessor in interest thereto either: (i) is a party to a "work-for-hire"
agreement under which the Company is deemed to be the owner/author of all
property rights therein; or (ii) has executed an assignment or an agreement to
assign in favor of the Company or such predecessor in interest, as applicable,
all right, title and interest in such material, a copy of which assignment or
agreement to assign has been made available to Lucent.
(e) Except as set forth on Schedule 3.19(e), the Company has
not entered into any contract (oral or written) or other arrangement pursuant to
which the Company has agreed or is obligated to license, transfer or place in
escrow the source code for any of its products (prior or current).
(f) Except as disclosed on Schedule 3.19(f), the Company has
taken reasonable steps with the intent of ensuring that its products (including
prior and current products and technology and products and technology currently
under development) will, when used in accordance with associated documentation
on a specified platform or platforms, be capable upon
-15-
21
installation of (i) operating in the same manner on dates in both the Twentieth
and Twenty-First Centuries and (ii) accurately processing, providing, and
receiving date data from, into, and between the Twentieth and Twenty-First
centuries, including the years 1999 and 2000, and making leap-year calculations
and that all other non-Company products (e.g., hardware, software and firmware)
used in or in combination with the Company's products, properly exchange data
with the Company's products. The Company further represents and warrants that it
has taken reasonable steps to assure that the year 2000 date change or any other
date change will not adversely effect in any significant respect the systems and
facilities that support the operations of the Company.
3.20. Tax Matters. (a) Except as set forth on Schedule 3.20,
(i) each of the Company and the Stockholder has filed all Tax Returns required
to be filed; (ii) all such Tax Returns are complete and accurate in all material
respects and all Taxes shown to be due on such Tax Returns have been timely
paid; (iii) all Taxes (whether or not shown on any Tax Return) owed by the
Company and the Stockholder have been timely paid or the Company has established
adequate reserves therefor in accordance with GAAP; (iv) neither the Company nor
the Stockholder has waived or been requested to waive any statute of limitations
in respect of Taxes; (v) the Tax Returns referred to in clause (i) have not been
examined by the Internal Revenue Service ("IRS") or the appropriate state, local
or foreign taxing authority or the period for assessment of the Taxes in respect
of which such Tax Returns were required to be filed has expired; (vi) there is
no action, suit, investigation, audit, claim or assessment pending, proposed or
threatened with respect to Taxes of either the Company or the Stockholder; (vii)
all deficiencies asserted or assessments made as a result of any examination of
the Tax Returns referred to in clause (i) have been paid in full or the Company
has established adequate reserves therefore in accordance with GAAP; (viii) any
Tax indemnity arrangements will terminate prior to Closing and the Surviving
Corporation will not have any liability thereunder on or after Closing; (ix)
there are no Liens for Taxes upon the assets of the Company except Liens
relating to current Taxes not yet due; (x) all Taxes which the Company is
required by law to withhold or to collect for payment have been duly withheld
and collected, and have been paid or accrued, reserved against and entered on
the books of the Company in accordance with GAAP ; (xi) except as may be limited
as a result of the transactions contemplated by this Agreement, the Company has
not taken any action prior to the Closing Date that would limit Lucent's or the
Surviving Corporation's ability to utilize any net operating carryforwards
("NOLs") of the Company; and (xii) the Company is not and has never been a
member of any group of corporations filing a consolidated tax return for United
States federal income tax purposes.
(b) No consent to the application of Section 341(f)(2) of the
Code has been filed with respect to any property or assets held or acquired or
to be acquired by the Company.
(c) The Company (i) has not agreed to nor is it required to
make any adjustment pursuant to Section 481(a) of the Code; (ii) does not have
any knowledge that the IRS has proposed any such adjustment or change in
accounting method with respect to the Company;
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22
and (iii) does not have any application pending with the IRS or any other tax
authority requesting permission for any change in accounting method.
(d) The Company does not own an interest in any (i) domestic
international sales corporation, (ii) foreign sales corporation, (iii)
controlled foreign corporation, or (iv) passive foreign investment company.
(e) The Company is not a party (other than as an investor) to
any industrial development bond.
(f) The Company has never been and is not a United States real
property holding corporation within the meaning of Section 897(c)(2) of the Code
during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code,
and the Company shall provide a certification to such effect to Lucent pursuant
to Treas. Reg. Sec. 1.897-2(h) and Treas. Reg.
Sec. 1.1445-2(c)(3)(i) at the Closing.
(g) The Company has been a validly electing S corporation
within the meaning of Sections 1361 and 1362 of the Code at all times since
January 1, 1997 and the Company will be an S corporation up to and including the
Closing Date.
(h) Neither the Company nor the Stockholder has any knowledge
that the IRS has proposed to revoke the Company's election to be treated as an S
corporation.
(i) Except as set forth in Schedule 3.20, the Company has not
been, nor will it be, liable for any Tax under Section 1374 of the Code. The
Company has not, in the past 10 years, (i) acquired assets from another
corporation in a transactions in which the Company's Tax basis for the acquired
assets was determined, in whole or in part, by reference to the Tax basis of the
acquired assets (or any other property) in the hands of the transferor or (ii)
acquired the stock of any corporation which is a qualified subchapter S
subsidiary.
(j) Except as set forth in Schedule 3.20, the Company has not
had any earnings and profits during a taxable year with respect to which an
election under Section 1362(a) of the Code to be treated as an S corporation
under Section 1361 through 1379 of the Code was not in effect.
3.21. Employee Benefit Plans. (a) Schedule 3.21 contains a
list and brief description of all "employee pension benefit plans" (as defined
in Section 3(2) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) (sometimes referred to as "Pension Plans"), "employee welfare
benefit plans" (as defined in Section 3(1) of ERISA) (sometimes referred to as
"Welfare Plans") and all other Benefit Plans (together with the Pension Plans
and Welfare Plans, the "Plans") maintained, or contributed to, by the Company or
any Person that, together with the Company, is treated as a single employer
under Section 414(b), (c), (m) or (o) of the Code (the Company and each such
other Person, a "Commonly Controlled
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Entity") for the benefit of any current or any former employees, officers or
directors of the Company. The Company has made available to Lucent true,
complete and correct copies of (i) each Plan (or, in the case of any unwritten
Benefit Plans, descriptions thereof), (ii) the most recent annual report on Form
5500 filed with the IRS with respect to each Plan (if any such report was
required), (iii) the most recent summary plan description for each Plan for
which such summary plan description is required, (iv) each trust agreement and
group annuity contract relating to any Plan and (v) all correspondence with the
IRS or the United States Department of Labor relating to any outstanding
controversy or audit. Except as would not have a Material Adverse Effect on the
Company, (i) each Plan has been administered in accordance with its terms and
(ii) the Company and all Plans are in compliance with applicable provisions of
ERISA and the Code.
(b) Each Pension Plan that is intended to be qualified under
Section 401(a) of the Code has been the subject of a determination letter from
the IRS to the effect that such Pension Plan is so qualified and the trust
thereunder is exempt from federal income taxes under Section 501(a) of the Code,
and no such determination letter has been revoked nor has any event occurred
since the date of such Plan's most recent determination letter that would
adversely affect its qualification or materially increase its costs.
(c) Neither the Company nor any Commonly Controlled Entity has
maintained, contributed to or been obligated to contribute to any Plan that is
subject to Title IV of ERISA.
(d) The Company does not have any liability or obligation
under any Welfare Plan to provide life insurance or medical benefits after
termination of employment to any employee or dependent other than as required by
Part 6 of Title I of ERISA.
(e) The Company has no stock option plans and no options to
purchase shares of Common Stock of the Company have been issued or are
outstanding.
(f) The Company has not issued any shares of Company capital
stock to any employee of the Company other than (i) the Stockholder and (ii)
shares previously issued to employees of the Company which have been repurchased
by the Company and are no longer outstanding.
(g) Except for ordinary compensation paid to each employee and
any benefits to be received by such employee as set forth on Schedule 3.21, no
employee of the Company will be entitled to any additional compensation or other
benefits from the Company after the date hereof. In addition, except as set
forth on Schedule 3.21, no employee of the Company will be entitled to any
acceleration of the time of payment or vesting of any compensation or benefits
under any Plan as a result of the transactions contemplated by this Agreement.
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24
3.22. Employees. (a) Schedule 3.22 lists the names, titles and
current annual salary rates of and bonuses paid or payable in 1998 or 1999 to
all employees whose 1999 annual base salary exceeds $100,000 ("Executive
Employees") of the Company.
(b) Except as set forth in Schedule 3.21 or 3.22, the Company
does not have any employment agreement with, or maintain any employee benefit
plan (within the meaning of Section 3(3) of ERISA) with respect to, any
Executive Employee. There are no agreements with respect to Executive Employees
which are subject to Section 280G of the Code or which would obligate the
Company to make any payment or provide any benefit that could be subject to tax
under Section 4999 of the Code.
3.23. Employment Matters. (a) The Company has complied in all
material respects with all applicable laws, rules and regulations respecting
employment and employment practices, terms and conditions of employment, wages
and hours, and the Company is not liable for any arrears of wages or any taxes
or penalties for failure to comply with any such laws, rules or regulations; (b)
the Company believes that the Company's relations with its employees are
satisfactory; (c) there are no controversies pending or, to the best knowledge
of the Company, threatened between the Company and any of its employees, which
controversies have or could have a Material Adverse Effect; (d) the Company is
not a party to any collective bargaining agreement or other labor union contract
applicable to persons employed by the Company, nor, to the best knowledge of the
Company, are there any activities or proceedings of any labor union to organize
any such employees; (e) there are no unfair labor practice complaints pending
against the Company before the National Labor Relations Board or any current
union representation questions involving employees of the Company; (f) there is
no strike, slowdown, work stoppage or lockout existing, or, to the best
knowledge of the Company, threatened, by or with respect to any employees of the
Company; (g) no charges are pending before the Equal Employment Opportunity
Commission or any state, local or foreign agency responsible for the prevention
of unlawful employment practices with respect to the Company; (h) there are no
claims pending against the Company before any workers' compensation board; and
(i) the Company has not received notice that any federal, state, local or
foreign agency responsible for the enforcement of labor or employment laws
intends to conduct an investigation of or relating to the Company and, to the
best knowledge of the Company, no such investigation is in progress.
3.24. Environmental Laws. The Company has not received any
notice or claim (and is not aware of any facts that would form a reasonable
basis for any claim), or entered into any negotiations or agreements with any
other Person, and, to the knowledge of the Company, the Company is not the
subject of any investigation by any governmental or regulatory authority,
domestic or foreign, relating to any material or potentially material liability
or remedial action under any Environmental Laws. There are no pending or, to the
best knowledge of the Company, threatened, actions, suits or proceedings against
the Company or any of its respective properties, assets or operations asserting
any such material liability or seeking any material remedial action in
connection with any Environmental Laws.
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25
3.25. Export Control Laws. The Company has conducted its
export transactions in accordance with applicable provisions of United States
export control laws and regulations, including but not limited to the Export
Administration Act and implementing Export Administration Regulations, except
for such violations which would not have a Material Adverse Effect on the
Company. Without limiting the foregoing, the Company represents and warrants
that:
(a) The Company has obtained all export licenses and other
approvals required for its exports of products, software and
technologies from the United States except where the failure to obtain
such export licenses and other approvals would not subject the Company
to penalties other than fines not to exceed $50,000 in the aggregate;
(b) The Company is in compliance with the terms of all
applicable export licenses or other approvals;
(c) There are no pending or, to the Company's knowledge,
threatened claims against the Company with respect to such export
licenses or other approvals;
(d) There are no actions, conditions or circumstances
pertaining to the Company's export transactions that may give rise to
any future claims; and
(e) No consents or approvals for the transfer of export
licenses to Lucent are required, or such consents and approvals can be
obtained expeditiously without material cost.
3.26. Bank Accounts, Letters of Credit and Powers of Attorney.
Schedule 3.26 lists (a) all bank accounts, lock boxes and safe deposit boxes
relating to the business and operations of the Company (including the name of
the Bank or other institution where such account or box is located and the name
of each authorized signatory thereto), (b) all outstanding letters of credit
issued by financial institutions for the account of the Company (setting forth,
in each case, the financial institution issuing such letter of credit, the
maximum amount available under such letter of credit, the terms (including the
expiration date) of such letter of credit and the party or parties in whose
favor such letter of credit was issued), and (c) the name and address of each
Person who has a power of attorney to act on behalf of the Company. The Company
has heretofore delivered to Lucent true, correct and complete copies of each
letter of credit and each power of attorney described on Schedule 3.26.
3.27. Subsidiaries. The Company has no Subsidiaries.
3.28. Minute Books. The minute books of the Company made
available to Lucent contain a complete and accurate summary of all meetings of
directors and stockholders or actions by written resolutions since the time of
incorporation of the Company through the date of
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26
this Agreement, and reflect all transactions referred to in such minutes and
resolutions accurately, except for omissions which are not material.
3.29. Complete Copies of Materials. The Company has delivered
or made available true and complete copies of each document that has been
requested by Lucent or its counsel in connection with their legal and accounting
review of the Company.
3.30. Disclosure. None of the representations or warranties of
the Stockholder or the Company contained herein, none of the information
contained in the Schedules referred to in this Section 3, and none of the other
information or documents furnished or to be furnished to Lucent by the
Stockholder or the Company or pursuant to the terms of this Agreement, is false
or misleading in any material respect or omits to state a fact herein or therein
necessary to make the statements herein or therein not misleading in any
material respect.
3.31. Pooling of Interests; Reorganization. The Company has
not (i) taken any action or failed to take any action which action or failure
would jeopardize the treatment of the Merger as a pooling of interests in
accordance with GAAP and the regulations and interpretations of the Securities
and Exchange Commission for accounting purposes or (ii) taken any action or
failed to take any action which action or failure would jeopardize the
qualification of the Merger as a reorganization within the meaning of Section
368(a) of the Code.
3.32. Investment Matters. (a) The Stockholder agrees not to
engage in any hedging transactions with regard to the Consideration Shares
unless in compliance with the Securities Act.
(b) The Stockholder acknowledges and agrees that the
Consideration Shares are being offered and sold to the Stockholder in reliance
on specific exemptions from the registration requirements of the United States
federal and state securities laws and that Lucent is relying upon the truth and
accuracy of the representations, warranties, agreements, acknowledgments and
understandings of the Stockholder set forth herein in order to determine the
applicability of such exemptions and the suitability of the Stockholder to
acquire the Consideration Shares.
(c) The Stockholder has received and has had an opportunity to
review Lucent's Annual Report on Form 10-K for the fiscal years ended September
30, 1998 and September 30, 1997, Lucent's 1998 Annual Report to Shareowners for
fiscal 1998, Lucent's Proxy Statement for the 1999 annual meeting of
stockholders and Lucent's Current Reports on Form 8-K dated November 19, 1998
and January 8, 1999 and the Stockholder has had a reasonable opportunity to ask
questions of and receive answers from Lucent concerning Lucent, and to obtain
any additional information reasonably necessary to verify the accuracy of the
information furnished to the Stockholder concerning Lucent and all such
questions, if any, have been answered to the full satisfaction of the
Stockholder.
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(d) The Stockholder acknowledges that no representations or
warranties have been made with respect to the Consideration Shares to the
Stockholder by Lucent or any agent, employee or Affiliate of Lucent other than
those contained in this Agreement, and in entering into the transactions
contemplated hereunder the Stockholder is not relying upon any information,
other than that referred to in the foregoing paragraph, contained in this
Agreement, and the results of independent investigations by the Stockholder and
its representatives; provided that the Stockholder acknowledges and agrees that
the only representations or warranties that Lucent has made with respect to such
information are as set forth in this Agreement.
3.33. Regulation D. (a) The Stockholder acknowledges that each
certificate representing the Consideration Shares delivered to or on behalf of
the Stockholder and the Escrow Agent shall include the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE (THE "SHARES") HAVE
NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY
STATE OF THE UNITED STATES OR OTHER JURISDICTION. NEITHER THE SHARES
NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN
THE ABSENCE OF SUCH REGISTRATION, EXCEPT PURSUANT TO AN EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, SUCH REGISTRATION REQUIREMENTS. BY
THE ACQUISITION HEREOF, THE HOLDER AGREES THAT SUCH HOLDER WILL GIVE
EACH PERSON TO WHOM THE SHARES ARE TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND. IN THE CASE OF ANY TRANSFER OR OTHER
DISPOSITION MADE OTHERWISE THAN PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT, THE HOLDER HEREOF SHALL BE REQUIRED TO PROVIDE
TO THE COMPANY, PRIOR TO SUCH TRANSFER, AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH TRANSFER IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION UNDER THE ACT AND IN COMPLIANCE WITH ALL
APPLICABLE STATE SECURITIES LAWS.
(b) The Stockholder understands that the Consideration Shares
are being issued to the Stockholder and the Escrow Agent in reliance on an
exemption from the registration requirements of the Securities Act for an offer
and sale of securities that does not involve a public offering and have not been
registered under the Securities Act or with any securities regulatory authority
of any state of the United States or other jurisdiction and, therefore, that
such Consideration Shares (and all securities issued in exchange therefor or in
substitution thereof) cannot be resold in the absence of such registration
except pursuant to an exemption from, or in a
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transaction not subject to, such registration requirements. The Stockholder
agrees that he shall not transfer any of the Consideration Shares except in a
transaction registered under the Securities Act or unless the Stockholder shall
have delivered to Lucent an opinion of United States counsel, which counsel and
opinion shall be reasonably satisfactory to Lucent, that such transfer is being
effected in accordance with an available exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act. Except as set
forth in the Registration Rights Agreement, the Stockholder is aware that Lucent
is under no obligation to effect any such registration under the Securities Act
or otherwise with respect to such Consideration Shares (or any securities issued
in exchange therefor or in substitution thereof), or to file for or comply with
any exemption from such registration.
(c) The Stockholder is either an Accredited Investor or,
immediately prior to receipt of any information regarding Lucent, had such
knowledge and experience (alone or with a Purchaser Representative) in financial
and business matters as to be able to evaluate the merits and risks of an
investment in Lucent.
(d) The Stockholder will acquire the Consideration Shares for
his own account and not with a view to any distribution (within the meaning of
the Securities Act) thereof or with any present intention of offering or selling
any of the Consideration Shares in a transaction that would violate the
Securities Act or the securities Laws of any state of the United States or any
other applicable jurisdiction.
(e) The Stockholder is not in the business of buying and
selling securities.
(f) The Stockholder acknowledges and agrees that any resale or
other transfer, or attempted resale or other transfer, which Lucent determines
in good faith was made other than in compliance with the restrictions stated
herein shall not be recognized by Lucent in respect of the Consideration Shares,
and that Lucent may deliver a corresponding stop-transfer order to Lucent's
transfer agent to that effect.
4. Representations and Warranties of Acquisition and Lucent. Each of
Acquisition and Lucent represents and warrants to the Stockholder as follows:
4.1. Organization. Each of Acquisition and Lucent is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation and has all requisite corporate power and
authority to enter into and perform this Agreement and the transactions
contemplated hereby to be performed by it.
4.2. Capitalization. (a) The total authorized shares of
capital stock of Lucent consists of (i) 3,000,000,000 shares of common stock,
par value $.01 per share (the "Lucent
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Common Stock"),(1) and (ii) 250,000,000 shares of Lucent Preferred Stock, par
value $1.00 per share (the "Lucent Preferred Stock"). At the close of business
on November 30, 1998, 1,318,615,011 shares of Lucent Common Stock were
outstanding and no shares of Lucent Preferred Stock were outstanding. All the
outstanding shares of Lucent Common Stock have been duly and validly authorized
and issued and are fully paid and nonassessable. None of the outstanding shares
of Lucent Common Stock has been issued in violation of the preemptive rights of
any stockholder of Lucent. The shares of outstanding Lucent Common Stock were
issued in compliance in all material respects with all applicable federal and
state securities laws and regulations. The shares of Lucent Common Stock to be
issued pursuant to the Merger will be duly and validly authorized and issued,
will be fully paid and non-assessable and will not be issued in violation of the
preemptive rights of any stockholder of Lucent.
(b) Except for Lucent plans providing for the issuance of
Lucent Common Stock to officers, directors and employees of Lucent (and awards
outstanding under such plans) or in connection with the acquisition by Lucent or
any of its Subsidiaries of all or substantially all the capital stock or all or
substantially all the assets of another Person or as set forth in Schedule 4.2,
there are no existing agreements, subscriptions, options, warrants, calls,
commitments, trusts (voting or otherwise), or rights of any kind whatsoever
granting to any Person any interest in or the right to purchase or otherwise
acquire from Lucent or granting to Lucent any interest in or the right to
purchase or otherwise acquire from any Person, at any time, or upon the
occurrence of any stated event, any securities of Lucent, whether or not
presently issued or outstanding, nor are there any outstanding securities of
Lucent or of any other entity which are convertible into or exchangeable for
other securities of Lucent, nor are there any agreements, subscriptions,
options, warrants, calls, commitments or rights of any kind granting to any
Person any interest in or the right to purchase or otherwise acquire from Lucent
any securities so convertible or exchangeable.
4.3. Authority. (a) Each of Acquisition and Lucent has full
corporate power and authority to execute, deliver and perform this Agreement and
Lucent has full corporate power and authority to execute, deliver and perform
the Registration Rights Agreement. The execution, delivery and performance of
this Agreement by each of Lucent and Acquisition has been duly authorized and
approved (i) in the case of Acquisition, by its Board of Directors and (ii) in
the case of Lucent, by all necessary corporate action and, except for (A) the
adoption of this Agreement by the stockholders of Acquisition, (B) the filing of
appropriate merger documents as required by the MBCL, and (C) the requirements
of the HSR Act, no other corporate proceedings other than actions previously
taken on the part of Acquisition or Lucent are necessary to authorize this
Agreement and the transactions contemplated hereby. The execution, delivery and
performance of the Registration Rights Agreement by Lucent has been duly
authorized and approved by all necessary corporate action and no other corporate
proceedings other than actions previously taken on the part of Lucent are
necessary to authorize the Registration Rights Agreement and the transactions
contemplated hereby. This Agreement has been duly authorized,
--------
(1) Lucent is considering increasing the number of authorized shares to
6,000,000,000 after the February 17, 1999 annual meeting.
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executed and delivered by Acquisition and Lucent and is the legal, valid and
binding obligation of each of Acquisition and Lucent enforceable in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors rights generally and by the effect of general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law). The Registration Rights Agreement has been duly
authorized, executed and delivered by Lucent and is the legal, valid and binding
obligation of Lucent enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors rights generally and by the effect of general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law).
(b) The execution, delivery, performance by each of
Acquisition and Lucent of this Agreement and the consummation of the
transactions hereunder do not, and will not, (i) violate or conflict with any
provision of the Certificate of Incorporation or By-laws of Lucent or the
Articles of Organization or By-Laws of Acquisition, (ii) violate any law, rule,
regulation, order, writ, injunction, judgement or decree of any court,
governmental authority, or regulatory agency, except for violations which,
individually or in the aggregate, will not have a Material Adverse Effect on
Acquisition and Lucent taken as a whole, or (iii) result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation or acceleration)
under, any note, bond, indenture, lien, mortgage, lease, permit, guaranty or
other agreement, instrument or obligation, oral or written, to which Lucent is a
party or by which any of the properties of Acquisition or Lucent may be bound,
except for violations, breaches or defaults which, individually or in the
aggregate, will not have a Material Adverse Effect on Acquisition or Lucent and
its Subsidiaries taken as a whole.
(c) The execution, delivery, performance by Lucent of the
Registration Rights Agreement and the consummation of the transactions
thereunder do not, and will not, (i) violate or conflict with any provision of
the Certificate of Incorporation or By-laws of Lucent, (ii) violate any law,
rule, regulation, order, writ, injunction, judgement or decree of any court,
governmental authority, or regulatory agency, except for violations which,
individually or in the aggregate, will not have a Material Adverse Effect on
Lucent, or (iii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under, any note, bond,
indenture, lien, mortgage, lease, permit, guaranty or other agreement,
instrument or obligation, oral or written, to which Lucent is a party or by
which any of the properties of Lucent may be bound, except for violations,
breaches or defaults which, individually or in the aggregate, will not have a
Material Adverse Effect on Lucent and its Subsidiaries taken as a whole.
(d) The execution and delivery of this Agreement by Lucent and
Acquisition does not, and the performance by Lucent and Acquisition of this
Agreement will not, require any consent, approval, authorization or permit of,
or filing with or notification to, any governmental or regulatory authority,
domestic or foreign, except (i) in connection with the requirements of the
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HSR Act, (ii) the filing and recording of appropriate merger documents as
required by the MBCL and (iii) any such consent, approval, authorization,
permission, notice or filing which if not obtained or made would not have a
Material Adverse Effect on Lucent.
(e) The execution and delivery of the Registration Rights
Agreement by Lucent does not, and the performance by Lucent or the Registration
Rights Agreement will not, require any consent, approval, authorization or
permit of, or filing with or notification to, any governmental or regulatory
authority, domestic or foreign.
4.4. Litigation. (a) Neither Acquisition nor Lucent is a party
to any suit, action, arbitration or legal, administrative, governmental or other
proceeding or investigation pending or, to its knowledge threatened, which
reasonably could adversely affect or restrict its ability to consummate the
transactions contemplated by this Agreement or to perform its obligations
hereunder.
(b) There is no judgment, order, writ, injunction or decree of
any court, governmental agency or arbitration tribunal to which Acquisition or
Lucent is subject which might adversely affect or restrict its ability to
consummate the transactions contemplated by this Agreement or to perform its
obligations hereunder.
4.5. SEC Filings; Lucent Financial Statements. (a) Since
October 1, 1997, Lucent and each of its Subsidiaries has filed all forms,
reports and documents required to be filed with the SEC under the Securities Act
or the Exchange Act. All such required forms, reports and documents are referred
to herein as the "Lucent SEC Reports." [As of their respective dates, the Lucent
SEC Documents (i) were prepared in accordance with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such Lucent SEC Documents and
(ii) did not at the time they were filed (or if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing)
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to made the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(b) Except as disclosed in the Lucent SEC Documents, the
financial statements (including, in each case, any related notes thereto)
contained in the Lucent SEC Documents, including any Lucent SEC Documents filed
after the date hereof but before the Closing, (i) comply as to form in all
material respects with the published rules and regulations of the SEC with
respect thereto, (ii) were prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may be indicated in
the notes thereto) and (iii) fairly presented the consolidated financial
position of Lucent and its Subsidiaries as at the respective dates thereof and
the consolidated results of its operations and cash flows for the periods
indicated, except that the unaudited interim financial statements were or are
subject to normal and recurring year-end adjustments and to any other
adjustments described therein. The balance sheet of Lucent contained in the
Lucent SEC Documents, as of _________ is hereinafter referred to as
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the "Lucent Balance Sheet." As of _________, neither Lucent nor any of its
Subsidiaries has any liabilities (absolute, accrued, contingent or otherwise) of
a nature required to be disclosed under GAAP on the Lucent Balance Sheet or in
the related notes which, if not so disclosed, individually or in the aggregate,
would result in a Material Adverse Effect.]
4.6. Operations and Obligations. Except as described in the
Lucent SEC Reports, since the date of the Lucent Balance Sheet, (i) except as a
result of the transactions contemplated by this Agreement or in connection with
the acquisition by Lucent or any of its Subsidiaries of all or substantially all
the capital stock or all or substantially all the assets of another Person,
there has not been any development that has had or reasonably would be expected
to have a Material Adverse Effect on Lucent and its Subsidiaries taken as a
whole; (ii) there has not been any material change by Lucent in its accounting
methods, principles or practices, except as required by changes in GAAP or any
other change provided such other change could not reasonably be expected to have
a Material Adverse Effect; or (iii) except as a result of the transactions
contemplated by this Agreement or in connection with the acquisition by Lucent
or any of its Subsidiaries of all or substantially all the capital stock or all
or substantially all the assets of another Person, there has not been any
material revaluation by Lucent of any of its assets including, without
limitation, writing down the value of capitalized software or inventory or
writing off notes or accounts receivable which would have a Material Adverse
Effect.
4.7. Pooling of Interests; Reorganization. Neither Lucent nor
any of its Subsidiaries has (i) taken any action or failed to take any action
which action or failure would jeopardize the treatment of the Merger as a
pooling of interests in accordance with GAAP and the regulations and
interpretations of the SEC for accounting purposes or (ii) taken any action or
failed to take any action which action or failure would jeopardize the
qualification of the Merger as a reorganization within the meaning of Section
368(a) of the Code.
5. Covenants.
5.1. Conduct of Business Pending Closing. From the date hereof
until the Closing, the Company shall:
(a) maintain its existence in good standing;
(b) maintain the general character of its business and
properties and conduct its business in the ordinary course consistent
with past practices, except as expressly permitted by this Agreement;
(c) maintain business and accounting records consistent with
past practices; and
(d) use its reasonable best efforts (i) to preserve its
business intact, (ii) to keep available to the Company the services of
its present officers and employees, and (iii) to
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preserve for the Company the goodwill of its suppliers, customers and
others having business relations with the Company.
5.2. Prohibited Actions Pending Closing. Unless otherwise
provided for herein or approved by Lucent in writing, from the date hereof until
the Closing, the Company shall not:
(a) amend or otherwise change its Articles of Organization or
By-laws;
(b) issue or sell or authorize for issuance or sale, or grant
any options, warrants or make other agreements with respect to, any
shares of its capital stock or any other of its securities or warrants;
(c) except as described in Schedule 5.2(c), declare, set
aside, make or pay any dividend or other distribution, payable in cash,
stock, property or otherwise with respect to any of its capital stock;
(d) reclassify, combine, split, subdivide or redeem, purchase
or otherwise acquire, directly or indirectly, any of its capital stock;
(e) (i) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets) any corporation,
partnership, other business organization or any division thereof or any
material amount of assets; (ii) incur any indebtedness for borrowed
money or issue any debt securities or assume, guarantee or endorse, or
otherwise as an accommodation become responsible for, the obligations
of any Person, or make any loans or advances, except in the ordinary
course of business and consistent with past practice; (iii) enter into
any contract or agreement other than in the ordinary course of
business, consistent with past practice; (iv) authorize any capital
commitment which is in excess of $20,000 or capital expenditures which
are, in the aggregate, in excess of $50,000; or (v) enter into or amend
any contract, agreement, commitment or arrangement with respect to any
matter set forth in this Section 5.2(e);
(f) mortgage, pledge or subject to Lien, any of its assets or
properties or agree to do so except for Permitted Liens;
(g) assume, guarantee or otherwise become responsible for the
obligations of any other Person or agree to so do;
(h) enter into or agree to enter into any employment
agreement;
(i) enter into any compensation arrangement or increase the
compensation or benefits payable or to become payable to its officers
or employees except for increases in accordance with past practices in
salaries or wages of officers or employees which increases for all
officers and employees in the aggregate shall not exceed 9% of the
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aggregate base salary for all officers and employees and, for any
officer or employee, shall not exceed 15% of such officer's or
employee's base salary, or grant any severance or termination pay to,
or enter into any severance agreement with any director, officer or
other employee of the Company, or establish, adopt or enter into any
collective bargaining, bonus, profit sharing, thrift, compensation,
stock option, restricted stock, pension, retirement, deferred
compensation, employment, termination, severance or other plan,
agreement, trust, fund, policy or arrangement for the benefit of any
such director, officer or employee or, to the extent any of the
foregoing exist, any amendment with respect thereto;
(j) take any action, other than in the ordinary course of
business and consistent with past practice, with respect to accounting
policies or procedures (including, without limitation, procedures with
respect to the payment of accounts payable and collection of accounts
receivables);
(k) make any Tax election or settle or compromise any material
federal, state, local or foreign income Tax liability;
(l) settle or compromise any pending or threatened suit,
action or claim which is material or which relates to any of the
transactions contemplated by this Agreement;
(m) pay, discharge or satisfy any claim, liability or
obligation (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the
ordinary course of business and consistent with past practice, of
liabilities reflected or reserved against in the Balance Sheet or
subsequently incurred in the ordinary course of business and consistent
with past practice;
(n) except in connection with the sale of the Company's
products in the ordinary course of business and consistent with past
practice, sell, assign, transfer, license, sublicense, pledge or
otherwise encumber any of the Intellectual Property Rights; or
(o) announce an intention, commit or agree to do any of the
foregoing.
5.3. Access; Documents; Supplemental Information. (a) From and
after the date hereof until the Closing, the Company shall afford and, with
respect to clause (ii) below, shall use its reasonable best efforts to cause the
independent certified public accountants for the Company to afford, (i) to the
officers, independent certified public accountants, counsel and other
representatives of Acquisition and Lucent, upon reasonable notice free and full
access at all reasonable times to the properties, books and records including
tax returns filed and those in preparation of the Company and the right to
consult with the officers, employees, accountants, counsel and other
representatives of the Company in order that Acquisition and Lucent may have
full opportunity to make such investigations as they shall reasonably desire to
make of the operations, properties, business, financial condition and prospects
of the Company, (ii) to the
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independent certified public accountants of Acquisition and Lucent, free and
full access at all reasonable times to the work papers and other records of the
accountants relating to the Company, and (iii) to Acquisition and Lucent and its
representatives, such additional financial and operating data and other
information as to the properties, operations, business, financial condition and
prospects of the Company as Acquisition and Lucent shall from time to time
reasonably request.
(b) From the date of this Agreement through and including the
Closing, Acquisition, Lucent and the Company agree to furnish to each other
copies of any notices, documents, requests, court papers, or other materials
received from any governmental agency or any other third party with respect to
the transactions contemplated by this Agreement, except where it is obvious from
such notice, document, request, court paper or other material that the other
party was already furnished with a copy thereof.
(c) The Company shall deliver to Lucent, without charge, the
following financial information (the "Supplemental Financial Information"): (i)
within 45 days after each fiscal quarter ending after the date hereof until the
Closing, the unaudited balance sheet of the Company as of the end of such
quarter and the unaudited consolidated and consolidating statements of
operations, cash flow and stockholders' equity of the Company for such quarter
and for the portion of the fiscal year then completed, (ii) within 90 days after
each fiscal year ending after the date hereof until the Closing, the audited
balance sheet of the Company as of the end of such year and the audited
consolidated statements of operations and stockholders' equity of the Company
for such year, in each case prepared in accordance with GAAP audited and with a
report thereon by Ernst & Young LLP and (iii) promptly upon the reasonable
request by Lucent, such additional financial information as may be required in
connection with any filing by Lucent pursuant to the requirements of federal or
state securities laws. Such Supplemental Financial Information shall present
fairly, in all material respects, the consolidated financial position of the
Company for the period covered, subject in the case of unaudited financials to
normal year-end adjustments.
5.4. No Solicitation. The Company shall not authorize or
permit any of its affiliates or any officer, director, employee, investment
banker, attorney or other adviser or representative of the Company or any of its
affiliates to (a) solicit, initiate, or encourage the submission of, any
Acquisition Proposal (as hereinafter defined) or (b) participate in any
discussions or negotiations regarding, or furnish to any Person any information
for the purpose of facilitating the making of, or take any other action to
facilitate any inquiries or the making of, any proposal that constitutes, or may
reasonably be expected to lead to, any Acquisition Proposal. Without limiting
the foregoing, it is understood that any violation, of which, the Company or any
of its Affiliates had knowledge at the time of such violation, of the
restrictions set forth in the immediately preceding sentence by any officer,
director, employee, investment banker, attorney, employee, or other adviser or
representative of the Company or any of its affiliates, whether or not such
Person is purporting to act on behalf of the Company or any of its affiliates or
otherwise, shall be deemed to be a breach of this Section 5.4 by the Company and
its affiliates. The
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Company promptly shall advise Lucent of any Acquisition Proposal and inquiries
with respect to any Acquisition Proposal. "Acquisition Proposal" means any
proposal for a merger or other business combination involving the Company or any
of its Affiliates or any proposal or offer to acquire in any manner, directly or
indirectly, an equity interest in the Company or any of its Affiliates, any
voting securities of the Company or any of its Affiliates or a substantial
portion of the assets of the Company (other than sales of the Company's products
in the ordinary course of business consistent with past practice).
5.5. Filings; Other Actions. (a) As promptly as practicable
after the date hereof, Lucent, the Stockholder and the Company shall file, with
the Federal Trade Commission and the Antitrust Division of the Department of
Justice the notifications and other information required to be filed under the
HSR Act with respect to the transactions contemplated hereby. Each of Lucent,
the Stockholder and the Company will use its reasonable best efforts to ensure
that all such filings by it shall be, as of the date filed, true and accurate
and in accordance with the requirements of the HSR Act and any such rules and
regulations. Each of Lucent and the Company agrees to make available, or cause
to be made available, to the other such information as each of them may
reasonably request relative to its business, assets and property as may be
required of each of them to file any additional information requested by such
agencies under the HSR Act and any such rules and regulations; provided that the
parties shall have entered into mutually acceptable arrangements to ensure the
continued confidentiality of any such information.
(b) Each party hereto agrees, subject to applicable laws
relating to the exchange of information, promptly to furnish the other parties
hereto with copies of written communications (and memoranda setting forth the
substance of all oral communications) received by such party, or any of its
affiliates or associates (as such terms are defined in Rule 12b-2 under the
Exchange Act) as in effect on the date hereof), from, or delivered by any of the
foregoing to, any governmental or regulatory authority, domestic or foreign,
relating to or in respect of the transactions contemplated under this Agreement.
5.6. Notification of Certain Matters. The Company shall give
prompt notice to Lucent, and Lucent shall give prompt notice to the Company, of
(a) the occurrence, or non-occurrence, of any event which would be likely to
cause (i) any representation or warranty contained in this Agreement to be
untrue or inaccurate in any material respect or (ii) any covenant, condition or
agreement contained in this Agreement not to be complied with or satisfied; and
(ii) any failure of the Company or Lucent, as the case may be, to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it hereunder; provided that the delivery of any notice pursuant to this Section
5.6 shall not limit or otherwise affect the remedies available to the party
receiving such notice.
5.7. Employee Matters. Lucent shall cause the Surviving
Corporation to make an offer of employment to each employee of the Company who
on the Closing Date is actively employed by the Company or who was actively
employed by the Company but is on authorized leave of absence. The foregoing
undertaking shall not apply to any inactive or former employee
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including any person on short-term or long-term disability or who has terminated
his or her employment, retired or died on or before the Closing Date; provided
that each employee of the Company on short-term disability leave on the Closing
Date shall be offered employment by the Surviving Corporation upon such employee
being able to return to active service. Lucent agrees that, as soon as
practicable, each employee of the Company shall be eligible to participate in
any generally available welfare benefit or fringe benefit plans maintained by
Lucent for new hires and that Lucent will recognize such employee's cumulative
prior service to the Company solely for purposes of determining eligibility to
participate in and for the vesting of benefits under such welfare benefit or
fringe benefit plans; provided that such recognition shall not be for the
purpose of determining retirement benefits and accrual.
5.8. The Company on the one hand and Lucent on the other will
cooperate with each other and provide such information as any party may require
in order to file any return to determine Tax liability or a right to a Tax
refund or to conduct a Tax audit or other Tax proceeding. Such cooperation shall
include, but not be limited to, making employees available on a mutually
convenient basis to explain any documents or information provided hereunder or
otherwise as required in the conduct of any audit or other proceeding. The
Company and Lucent will retain until the expiration of any applicable statutes
of limitations (including any extensions thereof) all Tax Returns, schedules and
workpapers and all other material records or documents relating to the Company
for all Tax periods through the first Tax period ending after the Closing Date.
At the expiration of such statutory period (including any extensions thereof),
each party shall have the right to dispose of any such Returns and other
documents or records on thirty (30) days written notice to the other party. Any
information, documents or records obtained under this Section 5.15 shall be kept
confidential, except as may be otherwise necessary in connection with the filing
of Tax Returns or claims for refund or in conducting an audit or other
proceeding.]
5.9. Actions by the Parties. Upon the terms and subject to the
conditions set forth in this Agreement, each of the parties hereto will use its
reasonable best efforts to take or cause to be taken all actions, and to do, or
cause to be done, all things necessary, proper or advisable under applicable law
and regulations to consummate and make effective in the most expeditious manner
practicable, the transactions contemplated by this Agreement including (i) the
obtaining of all necessary actions and non-actions, waivers and consents, if
any, from any governmental agency or authority and the making of all necessary
registrations and filings and the taking of all reasonable steps as may be
necessary to obtain an approval or waiver from, or to avoid an action or
proceeding by any governmental agency or authority; (ii) the obtaining of all
necessary consents, approvals or waivers from any other Person; (iii) the
defending of any claim, investigation, action, suit or other legal proceeding,
whether judicial or administrative, challenging this Agreement or the
consummation of the transactions contemplated hereby; and (iv) the execution of
additional instruments necessary to consummate the transactions contemplated by
this Agreement. Each party will promptly consult with the other and provide
necessary information (including copies thereof) with respect to all filings
made by such party with the any agency or authority in connection with this
Agreement and the transactions contemplated hereby.
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5.10. Pooling of Interests; Reorganization. Each of Lucent and
the Company shall cooperate and work together with its respective accountants,
with the objective that the transactions contemplated hereunder shall qualify as
a pooling of interests under GAAP. Neither Lucent or any of its Subsidiaries nor
the Stockholder or the Company shall take any action which could reasonably be
expected to jeopardize such qualification. Neither Lucent or its Subsidiaries
nor the Company or the Stockholder shall take any action which could reasonably
be expected to jeopardize the qualification of the transactions contemplated
hereby as a reorganization within the meaning of Section 368(a) of the Code.
5.11. Stock Exchange Listing. Lucent shall use all reasonable
best efforts to list on the NYSE, upon official notice of issuance, the shares
of Lucent Common Stock to be issued in connection with the Merger.
5.12. Actions by the Stockholder. The Stockholder shall cause
the Company to fulfill all its obligations under this Agreement.
5.13. Use of the Company's Name. (a) Lucent shall permit the
Stockholder to use the name "Kenan" for eleemosynary purposes at any time
following the Closing.
(b) At any time after the fifth annual anniversary of the
Closing, the Stockholder may request in writing that Lucent permit him to use
the name "Kenan" in connection with a business which, at the time of such
request, does not compete or propose to compete with any business that Lucent is
then engaged in or has publicly announced that it will be engaged in within the
next 24 months. Lucent will consider such request in good faith and, if Lucent
is not using such name for any external business purpose at the time of such
request, Lucent determines in its reasonable business judgment that it will not
use such name for any external business purpose in the foreseeable future and
that use of such name pursuant to the Stockholder's request will not mislead or
otherwise confuse its customers, then Lucent shall permit the Stockholder to use
such name solely in connection with such business.
5.14. Relocation of the Company. Lucent acknowledges that it
has no present intention to relocate the operations of the Company from
Cambridge, Massachusetts, and Lucent agrees that unless it concludes in the
reasonable exercise of its business judgment that such a relocation is
reasonably necessary for Lucent, it shall not relocate such operation from
Cambridge, Massachusetts for a period of 1 year following the Closing
5.15. Indemnification. From and after the Effective Time,
Lucent shall, or shall cause the Surviving Corporation to, fulfill and honor in
all respects the obligations of the Company to indemnify each person who is or
was a director or officer (an "Indemnified Party") of the Company pursuant to
any indemnifications provision of the Company's Articles of Organization or
By-laws as each is in effect on the date hereof. All rights to such
indemnification in favor or any Indemnified Party, as provided in the Company's
Articles of Organization and By-
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laws in effect on the date hereof shall survive the Merger and shall continue in
full force and effect, without amendment thereto, for a period of six years from
the Effective Time.
5.16. Securities Matters. The Stockholder will not sell,
assign, transfer or otherwise dispose of any of the Consideration Shares other
than in accordance with applicable federal and state securities laws or an
exemption therefrom.
6. Conditions Precedent.
6.1. Conditions Precedent to Each Party's Obligation to Close.
The respective obligations of each party hereto to effect the transactions
contemplated by this Agreement shall be subject to the fulfillment or
satisfaction, prior to or on the Closing Date of the following conditions:
(a) Approvals. All authorizations, consents, orders,
declarations or approvals of, or filings with, or terminations or expirations of
waiting periods imposed by, any governmental or regulatory authority, domestic
or foreign, which the failure to obtain, make or occur would have the effect of
making any of the transactions contemplated hereby illegal or would have a
Material Adverse Effect on Lucent or the Company, assuming the transactions are
consummated, shall have been obtained, made or occurred.
(b) HSR and Other Approvals. The waiting period (and any
extension thereof) applicable to the consummation of the transactions
contemplated hereby under the HSR Act shall have expired or been terminated. All
authorizations, consents, orders, declarations or approvals of, or filings with,
or terminations or expirations of waiting periods imposed by, any governmental
or regulatory authority, domestic or foreign, which the failure to obtain, make
or occur would have the effect of making any of the transactions contemplated
hereby illegal or would have a Material Adverse Effect on Lucent or the Company
shall have been obtained, made or occurred.
(c) No Injunction. No temporary restraining order, preliminary
or permanent injunction or other order from any court of competent jurisdiction
prohibiting or preventing the consummation of any of the transactions
contemplated hereunder shall be in effect.
(d) Escrow Agreement. Each of Lucent, the Company, the Escrow
Agent and the Stockholder shall have entered into the Escrow Agreement
substantially in the form of Exhibit B\ hereto (the "Escrow Agreement").
(e) Registration Rights Agreement. Lucent and the Stockholder
shall have entered into the Registration Rights Agreement.
(f) Representation Letters. Each of the Company and Lucent
shall have executed and delivered a letter of representation relating to certain
tax matters substantially in the form of Exhibits C and D hereto.
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(g) Pooling Letter. Each of the Stockholder, the Company and
its affiliates and Lucent and its affiliates shall have executed and delivered a
letter relating to pooling of interests substantially in the form of Exhibit
E-1, E-2 and E-3 hereto, respectively and each such letter shall be true and
correct in all respects and in full force and effect.
(h) Stock Exchange Listing. The shares of Lucent Common Stock
issued in accordance with the Merger shall have been authorized for listing on
the NYSE, subject to official notice of issuance.
6.2. Conditions Precedent to Obligations of Acquisition and
Lucent. All obligations of Acquisition and Lucent under this Agreement are
subject to the fulfillment or satisfaction, prior to or on the Closing Date, of
each of the following conditions precedent:
(a) Performance of Obligations; Representations and
Warranties. The Company and the Stockholder shall have performed and
complied in all material respects with all agreements and conditions
contained in this Agreement that are required to be performed or
complied with by them prior to or at the Closing. Each of the Company's
and the Stockholder's representations and warranties contained in
Section 3 of this Agreement to the extent it is qualified by Material
Adverse Effect or materiality and the representations contained in
Sections 3.19 and 3.31 shall be true and correct and each of the
Company's and the Stockholder's representations and warranties to the
extent it is not so qualified by Material Adverse Effect or
materiality, shall be true and correct in all material respects, in
each case, on and as of the Closing with the same effect as though such
representations and warranties were made on and as of the Closing,
except for changes permitted by this Agreement and except to the extent
that such representations and warranties expressly relate to an earlier
date, in which case such representations and warranties shall be as of
such earlier date. Acquisition and Lucent shall have received a
certificate dated the Closing Date and signed by the Stockholder and
the President of the Company, certifying that, the conditions specified
in this Section 6.2(a) have been satisfied.
(b) Opinion of Counsel. Acquisition and Lucent shall have
received the favorable written opinion dated the Closing Date of Xxxx
and Xxxx LLP, counsel to the Company, in form and substance
satisfactory to Acquisition and Lucent.
(c) Accounting. Lucent shall have received an opinion of
PricewaterhouseCoopers LLP, in form and substance satisfactory to
Lucent that, based on such procedures as were deemed relevant, the
transactions contemplated hereunder will qualify as a pooling of
interests under GAAP.
(d) Resignations. The Company shall have delivered to
Acquisition and Lucent the written resignation of each director and
officer of the Company as shall be
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requested in writing by Acquisition and Lucent. The Company also shall
have delivered to Lucent the written resignation of all Trustees of all
the benefit plans of the Company as shall be requested in writing by
Acquisition and Lucent.
(e) No Material Adverse Change. There shall have been no
material adverse change in the assets, business, financial condition,
operations or prospects of the Company and no event or events shall
have occurred that could reasonably be expected to have a Material
Adverse Effect (other than, in each case, as a result of business and
economic conditions affecting the United States economy generally or
affecting the billing and customer care industry in particular or as a
result of the announcement of the Merger) on the Company and Lucent
shall have received a certificate signed on behalf of the Company by
its President and its Director of Accounting to such effect.
(f) Consents. The Company shall have received all necessary
consents, in form and substance satisfactory to Acquisition and Lucent,
from the other parties to all contracts, leases or agreements to which
the Company is a party, except where the failure to receive such
consent would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect on the Company.
(g) Employment Agreement. The Stockholder shall have entered
into an employment agreement with Lucent, substantially in the form of
Exhibit F hereto (the "Employment Agreement"), and such agreement shall
be in full force and effect.
(h) Non-Competition Agreements. The Stockholder shall have
entered into a non-competition agreement with Lucent, substantially in
the form of Exhibit G hereto, and such agreement shall be in full force
and effect.
(i) Substitute Form W-9. Acquisition and Lucent shall have
received a substitute Form W-9 under the Code in form and substance
acceptable to Acquisition and Lucent executed by the Stockholder.
6.3. Conditions Precedent to the Obligations of the Company
and the Stockholder. All obligations of the Company and the Stockholder under
this Agreement are subject to the fulfillment or satisfaction, prior to or on
the Closing Date, of each of the following conditions precedent:
(a) Performance of Obligations; Representations and
Warranties. Acquisition and Lucent shall have performed and complied in
all material respects with all agreements and conditions contained in
this Agreement that are required to be performed or complied with by
them prior to or at the Closing. Each of the representations and
warranties of Acquisition and Lucent contained in Section 4 of this
Agreement to the extent it is qualified by Material Adverse Effect or
materiality shall be true and correct and each of the representations
and warranties of Acquisition and Lucent to the extent it is not so
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qualified by Material Adverse Effect or materiality shall be true and
correct in all material respects, in each case, on and as of the
Closing with the same effect as though such representations and
warranties were made on and as of the Closing except for changes
permitted by this Agreement and except to the extent that such
representations and warranties expressly relate to an earlier date, in
which case such representations and warranties shall be as of such
earlier date. The Company shall have received certificates dated the
Closing Date and signed by the President or a Vice-President of
Acquisition and Lucent and an authorized signatory of Acquisition and
Lucent, respectively, certifying that the conditions specified in this
Section 6.3(a) have been satisfied.
(b) Opinion of Counsel. The Company and the Stockholder shall
have received the favorable written opinion dated the Closing Date of
Sidley & Austin, special counsel to Acquisition and Lucent, and of
internal counsel to Acquisition and Lucent, each in form and substance
satisfactory to the Company.
(c) Accounting. The Company shall have received an opinion of
Ernst & Young LLP, in form and substance satisfactory to the Company
that, based on such procedures as were deemed relevant, the
transactions contemplated hereunder will qualify as a pooling of
interests under GAAP.
(d) No Material Adverse Change. There shall have been no
material adverse change in the assets, business, financial condition,
operations or prospects of Lucent and no event or events shall have
occurred that could reasonably be expected to have a Material Adverse
Effect (other than, in each case, as a result of business and economic
conditions affecting the United States economy generally or affecting
the billing and customer care industry in particular or as a result of
the announcement of the Merger) on Lucent, and the Company and the
Stockholder shall have received a certificate signed on behalf of
Lucent by an authorized signatory thereof.
(e) Employment Agreement. Lucent shall have executed the
Employment Agreement and such Agreement shall be in full force and
effect.
(f) Tax-Free Reorganization. The Company and the Stockholder
shall have received the opinion of Xxxx and Xxxx LLP, that the Merger
should be treated, for federal income tax purposes, as a tax-free
reorganization with the meaning of Section 368(a) of the Code.
7. Survival of Representations and Warranties.
7.1. Representations and Warranties. The representations and
warranties of the Stockholders contained in this Agreement (including the
schedules to the Agreement which are hereby incorporated by reference) or in any
instrument delivered pursuant to this Agreement shall survive for four (4)
months following the Closing Date except that the representations and
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warranties contained in the last sentence of Section 3.2(a), Section 3.19,
Section 3.20, Section 3.21(f) and Section 3.31 shall survive for twelve (12)
months following the Closing Date. This Section shall not limit any claim for
fraud or any covenant or agreement by the parties which contemplates performance
after the Effective Time.
8. Indemnification.
8.1. Escrow Shares. As soon as practicable after the Closing
Date, a total of 505,050 shares of Lucent Common Stock (the "Escrow Shares")
shall be deposited with The Bank of New York (or another institution selected by
Lucent), as escrow agent (the "Escrow Agent"), such deposit to be governed by
the terms set forth herein and in the Escrow Agreement. The Escrow Shares shall
be the sole source available to compensate Lucent for the indemnification
obligations of the Stockholder under Section 8.2 except for any claim of fraud.
8.2. General Indemnification. (a) Subject to the limitations
set forth in this Section 8, the Stockholder will indemnify and hold harmless
Lucent and each Person, if any, who controls or may control Lucent within the
meaning of the Securities Act of 1933 (and the rules and regulations
thereunder), and their respective officers, directors, employees, agents and
advisors (each such indemnitee being referred to herein as an "Indemnified
Person"), from and against any and all losses, costs, damages, liabilities,
obligations, impositions, inspections, assessments, fines, deficiencies and
expenses arising from claims, demands, actions, causes of action, including,
without limitation, reasonable legal fees (collectively, "Damages"), arising out
of (i) any inaccuracy in any representation or warranty made by the Stockholder
or the Company in this Agreement or in any exhibit or schedule to this
Agreement, and (ii) any breach or default by the Stockholder or the Company of
any of the covenants or agreements given or made by any of them in this
Agreement or any exhibit or schedule to this Agreement; provided that any
indemnification sought by Lucent in respect of Taxes (or any representation or
warranty made in respect thereof) will be governed by the tax indemnity set
forth in Section 8.6 and will not be subject to the provisions of this Section
8.2, Section 8.3 or Section 8.8.
(b) Lucent and the Stockholder each acknowledge that such
Damages, if any, would relate to unresolved contingencies existing at the
Closing Date, which if resolved at the Closing Date would have led to a
reduction in the total consideration that Lucent would have agreed to pay in
connection with the transactions contemplated hereby.
8.3. Damage Threshold. (a) Notwithstanding the foregoing, with
respect to any claim by Lucent for indemnification under Section 8.2(a)(i)
(other than any claim by Lucent covered by the tax indemnity set forth in
Section 8.6 and any claim for any inaccuracy in Section 3.19) or in the last
sentence in Section 3.2(a), Lucent may not seek indemnification with respect to
any claim for Damages until the sum of all Damages for which Lucent is seeking
indemnification under Section 8.1(a)(i) equals or exceeds $500,000 (the
"Threshold"), whereupon Lucent shall be entitled to seek indemnification with
respect to all such Damages exceeding the Threshold.
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(b) In determining the amount of any Damage for which Lucent
may seek indemnification under Section 8.2(a)(i) or Section 8.2(a)(ii), any
materiality standard contained in a representation, warranty or covenant shall
be disregarded.
8.4. Escrow Period. The Escrow Period shall terminate at the
expiration of 12 months after the Closing Date; provided, that any claim made
pursuant to Section 8.5 during such period shall be withheld pending resolution
of such claim; provided further, that the number of Escrow Shares which is
necessary to satisfy any unsatisfied claims specified in any Lucent Notice
theretofore delivered to the Escrow Agent prior to termination of the Escrow
Period with respect to facts and circumstances existing prior to expiration of
the Escrow Period, shall remain in escrow until such claims have been resolved.
8.5. Claims Upon Escrow Fund. Upon receipt by the Escrow Agent
on or before the last day of the Escrow Period of a certificate signed by any
officer of Lucent (a "Lucent Notice") specifying in reasonable detail the
individual items of Damages for which indemnification is being sought, the date
each such item was paid, or properly accrued or arose, the nature of the
misrepresentation, breach of warranty or claim to which such item is related,
the Escrow Agent shall, subject to the provisions of Section 8.7, deliver to
Lucent, as promptly as practicable, the number of Escrow Shares held in the
Escrow Fund having a fair market value on the Closing Date equal to such
Damages. Lucent shall, concurrent with the sending of any Lucent Notice to the
Escrow Agent, provide a copy of such Lucent Notice to the Stockholder.
8.6. Stockholder's Tax Indemnity.
(a) Stockholder's Tax Indemnity. (i) The Stockholder agrees to
indemnify, defend and hold harmless the Indemnified Parties from and against any
and all Damages, with respect to all Taxes of the Company and the Stockholder
pertaining to any taxable period or portion thereof that ends on or before the
Closing Date (a "Pre-Closing Tax Period"), including any Damages with respect to
such Taxes for a Pre-Closing Tax Period which the Company is liable under joint
and several liability concepts but excluding any Taxes attributable to
transactions not in the ordinary course of business that occur on the Closing
Date but after the Closing. In the case of Taxes pertaining to any taxable
period that does not end on or prior to the Closing Date, the Tax apportionable
to the Pre-Closing Tax Period shall be determined in accordance with Section
8.6(a)(ii) hereof.
(ii) The Stockholder and Lucent will, to the extent permitted
by applicable law, elect with the relevant Taxing Authority to close the taxable
year of the Company on the Closing Date. In any case where applicable law does
not permit the Company to close its taxable year on the Closing Date, in the
case of any Taxes that are imposed on a periodic basis and that are payable for
a taxable period that begins before the Closing Date and ends after the Closing
Date, the portion of such Tax that is payable for the Pre-Closing Tax Period
shall (x) in the case of any such Taxes not based upon or related to income or
receipts, be deemed to be the amount of such
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Taxes for the entire taxable period multiplied by a fraction, the numerator of
which is the number of days in the period ending on the Closing Date and the
denominator of which is the number of days in the entire taxable period; and (y)
in the case of any such Taxes based upon or related to income or receipts, be
determined on the basis of an interim closing of the books of the Company at the
close of business on the Closing Date in accordance with paragraph (iv) of this
Section 8.6(a).
(iii) For purposes of clause (x) of paragraph (ii) of this
Section 8.6(a), any credits against any Tax (other than credits for payments of
estimated taxes and foreign tax credits) shall be prorated based on the fraction
employed in such clause (x).
(iv) For purposes of clause (y) of paragraph (ii) of this
Section 8.6(a), a liability for any Tax with respect to a Pre-Closing Tax Period
shall be the product of (x) the Tax for the entire taxable period multiplied by
(y) a fraction, the numerator of which is the hypothetical Tax for the
Pre-Closing Tax Period (determined on the basis of an interim closing of the
books, without annualization) and the denominator of which is the sum of such
numerator plus the hypothetical Tax for the balance of the taxable period
(determined on the basis of such interim closing of the books, without
annualization). The hypothetical Tax for any period shall in no case be less
than zero.
(v) Payment by the Stockholder of any amount due under this
Section 8.6(a) shall be made within ten (10) business days following written
notice by Lucent that payment of such amount to the appropriate Taxing Authority
is due or will be due within ten (10) days. In the case of a Tax that is
contested in accordance with the provisions of Section 8.6(b), payment of that
Tax to the appropriate Taxing Authority will not be considered to be due earlier
than the time of a Final Determination with respect to such tax.
(b) Contest Rights. (i) Lucent shall, or shall cause the
Company to, promptly notify the Stockholder in writing upon receipt by Lucent or
the Company or any affiliate of each thereof of each written communication with
respect to any pending or threatened audit of, assessment against or court or
other proceeding against the Company for any taxable period which could give
rise to a claim for indemnity under Section 8.6(a) (an "Indemnified Tax
Liability"). The Stockholder shall have the sole right to represent the
interests of the Company in any audit, administrative, court or other proceeding
relating to an Indemnified Tax Liability, to employ counsel or other
representatives of its choice and to otherwise control the conduct of such audit
or proceeding in such manner as it deems fit in its sole discretion including,
without limitation, to contest, litigate, compromise and settle any adjustment
or assessment made or proposed therein. The Stockholder agrees to keep Lucent
informed of the progress of any such audits or proceedings and to consult in
good faith with Lucent in connection therewith. If the Stockholder elects to so
represent the Company's interests, he shall within thirty (30) days of delivery
of the notice by Lucent (or sooner, if the nature of the Indemnified Tax
Liability so requires) notify Lucent in writing of his intent to do so, and
Lucent agrees, and shall cause the Company to agree, to cooperate, at the
Stockholder's sole expense, with the Stockholder and its
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counsel or other representatives in the defense against or compromise of any
adjustment or assessment made or proposed in any such audit or proceeding. If
the Stockholder elects not to represent the Company's interests, Lucent may pay,
compromise or contest such Indemnified Tax Liability in such manner as it deems
appropriate (in its sole discretion); and the Stockholder shall be deemed to
have conceded Lucent's rights to indemnification from the Stockholder pursuant
to Section 8.6(a) hereof with respect to such Indemnified Tax Liability.
(ii) Notwithstanding paragraph (i) hereof, in respect of any
Indemnified Tax Liability, the Stockholder may not settle, compromise or
otherwise dispose of any such liability without the consent of Lucent, if such
settlement, compromise or other disposition would have a material adverse effect
on the Company for taxable periods beginning on or after the Closing Date. In
that event, the Stockholder shall permit the Company, through counsel of its own
choosing and at its sole expense, to participate in the settlement, compromise
or other disposition of such Indemnified Tax Liability.
8.7. Objections to Claims. (a) If the Stockholder shall object
to a Lucent Notice within the 10-day period after receipt thereof, then Lucent
and the Stockholder shall use their good faith efforts to resolve such dispute.
If Lucent and the Stockholder resolve such dispute, the parties shall deliver a
written notice to the Escrow Agent directing the delivery of the Escrow Shares,
if applicable.
(b) If Lucent and the Stockholder are unable to resolve such
dispute within 30 days after the Stockholder objects to such Lucent Notice,
either Lucent or the Stockholder may, by written notice to the other, demand
arbitration of such dispute. Any such arbitration shall be conducted by
JAMS/Endispute, Inc. or such other alternative dispute service ("Arbitration
Service") as shall be reasonably acceptable to Lucent and the Stockholder. The
Arbitration Service shall select one arbitrator reasonable acceptable to Lucent
and the Stockholder who shall be expert in the area of development and
production of data networking products. The decision by the arbitrator shall be
binding and conclusive and, notwithstanding any other provisions of this Section
8, the Escrow Agent shall be entitled to act in accordance with such decision
and make delivery of the Escrow Shares in accordance therewith.
(c) The arbitration shall be held in New York, New York. The
costs of any such arbitration shall be borne one-half for the account of Lucent
and one-half by the Stockholder. Judgment upon any award rendered by the
arbitrator may be entered in any court of competent jurisdiction.
8.8. Third-Party Claims. In the event Lucent becomes aware of
a third-party claim which Lucent believes may result in a demand pursuant to
this Section 8, Lucent shall promptly notify the Stockholder of such claim, and
the Stockholder shall be entitled, at the Stockholder's expense, to participate
in any defense of such claim; provided that Lucent shall control such defense,
and shall have the right to settle such claim with the consent of the
Stockholder (which consent shall not be unreasonably withheld, it being
understood that the
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withholding of such consent by the Stockholder shall not be unreasonable if the
Stockholder's payment obligations under such settlement would exceed its
indemnification obligations under this Section 8 to settle any such claim);
provided that no such consent of the Stockholder shall be required where the
third-party claim which Lucent proposes to settle involves the business
reputation of Lucent or its Affiliates, or the possible criminal liability of
Lucent or its Affiliates or any of their respective officers, directors or
employees. In the event that the Stockholder has consented to any such
settlement, the Stockholder shall have no power or authority to object under any
provision of this Section 8 to the amount of any claim by Lucent for indemnity
with respect to such settlement.
9. Brokers' and Finders' Fees.
9.1. Stockholders. The Stockholder represents and warrants to
Acquisition and Lucent that no broker, investment banker or financial advisor
other than X.X. Xxxxxx is entitled to a brokerage fee, financing commission or
other commission from the Stockholder in respect of the execution of this
Agreement or the consummation of the transactions contemplated hereby. The
Stockholder agrees that if the transactions contemplated by this Agreement are
not consummated (other than as a result of a breach or default by Acquisition or
Lucent), it shall indemnify and hold Acquisition and Lucent harmless against any
and all claims, losses, liabilities, costs or expenses which may be asserted
against it as a result of the Company's or any of its Affiliates' dealings,
arrangements or agreements with any such Person.
9.2. Acquisition and Lucent. Acquisition and Lucent represent
and warrant to the Stockholder that no broker, investment banker or financial
advisor is entitled to any brokerage fee, financing commission or other
commission from Acquisition and Lucent in respect of the execution of this
Agreement or the consummation of the transactions contemplated hereby.
Acquisition and Lucent agree that if the transactions contemplated hereby are
not consummated (other than as a result of a breach or default by the Company),
they shall jointly and severally indemnify and hold the Stockholder harmless
against any and all claims, losses, liabilities, costs or expenses which may be
asserted against the Stockholder, as a result of Acquisition's or Lucent's or
any of their respective Affiliates' dealings, arrangements or agreements with
any such Person.
10. Expenses; Taxes. The Surviving Corporation shall pay the expenses
incidental to the preparation of this Agreement, the carrying out of the
provisions of this Agreement and the consummation of the transactions
contemplated hereby. Any Tax, including but not limited to sales, use, stamp or
transfer taxes, and any other filing or recording fees, if any, which may be
payable with respect to the consummation of the transactions contemplated hereby
shall be payable as prescribed by applicable law or regulation.
11. Press Releases. Except as required by law or SEC regulations (in
each case, as determined by each party in its reasonable judgment) or Lucent's
listing agreement with the New York Stock Exchange, neither Lucent nor the
Stockholder shall issue any press release or otherwise make public any
information with respect to this Agreement nor the transactions
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contemplated hereby, prior to the Closing, without the prior written consent of
the other parties to this Agreement. The Stockholder shall cause the Company to
comply with its obligations under this Section 11.
12. Contents of Agreement; Parties in Interest; etc. This Agreement and
the agreements referred to or contemplated herein and executed simultaneously
herewith and the letter agreement dated May 8, 1998 concerning confidentiality
(the "Confidentiality Agreement") set forth the entire understanding of the
parties hereto with respect to the transactions contemplated hereby, and, except
as set forth in this Agreement, such other agreements and the Exhibits hereto
and the Confidentiality Agreement, there are no representations or warranties,
express or implied, made by any party to this Agreement with respect to the
subject matter of this Agreement and the Confidentiality Agreement. Except for
the matters set forth in the Confidentiality Agreement, any and all previous
agreements and understandings between or among the parties regarding the subject
matter hereof, whether written or oral, are superseded by this Agreement and the
agreements referred to or contemplated herein.
13. Assignment and Binding Effect. This Agreement may not be assigned
by any party hereto without the prior written consent of the other parties;
provided, that Lucent may assign its rights and obligations under this Agreement
to any directly or indirectly wholly-owned Subsidiary of Lucent, upon written
notice to the Company if the assignee shall assume the obligations of Lucent
hereunder and Lucent shall remain liable for its obligations hereunder. All the
terms and provisions of this Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of the
parties hereto.
14. Termination. This Agreement may be terminated and the transactions
contemplated hereby abandoned:
(a) by the mutual agreement of the Stockholder, Acquisition
and Lucent;
(b) by Acquisition or Lucent, on the one hand, or the
Stockholder, on the other hand if (i) the Closing Date shall not have
occurred by April 30, 1999; provided that the right to terminate this
Agreement under this Section 14(b) shall not be available to any party
whose failure to fulfill any obligation under this Agreement has been
the cause of, or resulted in, the failure of the Closing Date to occur
on or before such date; or (ii) any court of competent jurisdiction in
the United States or other United States governmental authority shall
have issued an order, decree, ruling or taken any other action
restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement and such order, decree, ruling or other
action shall have become final and nonappealable;
(c) by the Stockholder, in the event Acquisition or Lucent
materially breaches its obligations under this Agreement, unless such
breach is cured within 15 days after notice to Lucent by the
Stockholder; or
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(d) by Acquisition or Lucent, in the event the Stockholder
materially breaches its obligations under this Agreement unless such
breach is cured within 15 days after notice to the Stockholder by
Acquisition or Lucent.
15. Definitions. As used in this Agreement the terms set forth below
shall have the following meanings:
(a) "Accredited Investor shall have the meaning set forth in
Rule 501 of Regulation D under the Securities Act.
(b) "Affiliate" of a Person means any other Person who (i)
directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with, such Person or (ii) owns
more than 5% of the capital stock or equity interest in such Person.
"Control" means the possession of the power, directly or indirectly, to
direct or cause the direction of the management and policies of a
Person whether through the ownership of voting securities, by contract
or otherwise.
(c) "Benefit Plan" shall mean any bonus, pension, profit
sharing, deferred compensation, incentive compensation, stock
ownership, stock purchase, stock option, phantom stock, retirement,
vacation, severance, disability, death benefit, hospitalization,
medical or other material plan, program, arrangement or understanding
(whether or not legally binding) providing material benefits or
compensation to any current or former employee, officer or director of
the Company.
(d) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(e) "Consideration Shares" shall mean the shares of Lucent
Common Stock received by the Stockholder in exchange for all the shares
of Company Common Stock issued and outstanding pursuant to Section
1.5(c).
(f) "Environmental Laws" shall mean all applicable federal,
state, local or foreign laws, rules and regulations, orders, decrees,
judgments, permits, filings and licenses relating (i) to protection and
clean-up of the environment and activities or conditions related
thereto, including those relating to the generation, handling,
disposal, transportation or release of Hazardous Substances and (ii)
the health or safety of employees in the workplace environment, all as
amended from time to time, and shall also include any common law theory
based on nuisance, trespass, negligence or other tortious conduct.
(g) "Exchange Act" shall mean the Securities and Exchange Act
of 1934, and any successor statute, and the rules and regulations of
the Securities and Exchange Commission promulgated thereunder.
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(h) "Final Determination" shall mean (i) a decision of the
United States Tax Court, or a decision, judgment, decree or other order
by another court of competent jurisdiction, which has become final and
is either no longer subject to appeal or for which a determination not
to appeal has been made; (ii) a closing agreement made under Section
7121 of the Code or any comparable foreign, state, local or municipal
Tax statute; (iii) any disallowance of a claim for refund or credit in
respect of an overpayment of Tax unless a suit related thereto is filed
on a timely basis; (iv) any final disposition by reason of the
expiration of the applicable statute of limitations; or (v) the actual
payment by the Company of Taxes.
(i) "GAAP" shall mean generally accepted accounting
principles.
(j) "Hazardous Substances" shall mean any and all hazardous
and toxic substances, wastes or materials, any pollutants,
contaminants, or dangerous materials (including, but not limited to,
polychlorinated biphenyls, PCBs, friable asbestos, volatile and
semi-volatile organic compounds, oil, petroleum products and fractions,
and any materials which include hazardous constituents or become
hazardous, toxic, or dangerous when their composition or state is
changed), or any other similar substances or materials which are
included under or regulated by any Environmental Laws.
(k) "Liens" shall mean any mortgage, pledge, lien, security
interest, conditional or installment sale agreement, encumbrance,
charge or other claims of third parties of any kind.
(l) "Material Adverse Effect" shall mean (unless otherwise
specified) any condition or event that could reasonably be expected:
(a) to have a material adverse effect on the assets, business,
financial condition, operations or prospects of the Company, (b) to
materially impair the ability of the Stockholder to perform its
obligations under this Agreement or (c) to prevent or delay the
consummation of transactions contemplated under this Agreement.
(m) "Permitted Liens" shall mean (a) Liens for taxes,
assessments, or similar charges, incurred in the ordinary course of
business that are not yet due and payable or are being contested in
good faith; (b) pledges or deposits made in the ordinary course of
business; (c) Liens of mechanics, materialmen, warehousemen or other
like Liens securing obligations incurred in the ordinary course of
business that are not yet due and payable or are being contested in
good faith; and (d) similar Liens and encumbrances which are incurred
in the ordinary course of business and which do not in the aggregate
materially detract from the value of such assets or properties or
materially impair the use thereof in the operation of such business.
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(n) "Person" shall mean any individual, corporation,
partnership, limited partnership, limited liability company, trust,
association or entity or government agency or authority.
(o) "Purchaser Representative" shall mean any Person who
satisfies all of the conditions set forth in Rule 501 of Regulation D
under the Securities Act.
(p) "reasonable best efforts" shall mean prompt, substantial
and persistent efforts as a prudent Person desirous of achieving a
result would use in similar circumstances; provided that the Company,
the Stockholder, Lucent or Acquisition, as applicable, shall be
required to expend only such resources as are commercially reasonable
in the applicable circumstances.
(q) "Registration Rights Agreement" shall mean the
Registration Rights Agreement dated as of January 11, 1999 between the
Stockholder and Lucent.
(r) "Regulation D" shall mean Regulation D under the
Securities Act.
(s) "Securities Act" shall mean the Securities Act of 1933,
and any successor statute, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder.
(t) "SEC" shall mean the Securities and Exchange Commission.
(u) "Subsidiary" of a Person shall mean any corporation,
partnership, joint venture or other entity in which such Person (a)
owns, directly or indirectly, 50% or more of the outstanding voting
securities or equity interests or (b) is a general partner.
(v) "Tax" (and, with correlative meaning, "Taxes" and
"Taxable") shall mean any federal, state, local or foreign net income,
gross income, gross receipts, windfall profit, severance, property,
production, sales, use, license, excise, franchise, employment,
payroll, withholding, alternative or add-on minimum, ad valorem,
value-added, transfer, stamp, or environmental tax, or any custom,
duty, governmental fee or other like assessment or charge in the nature
of a tax, together with any interest or penalty, addition to tax or
additional amount imposed by any governmental authority.
(w) "Tax Return" shall mean any return, report or similar
statement required to be filed with respect to any Tax (including any
attached schedules), including, without limitation, any information
return, claim for refund, amended return or declaration of estimated
Tax.
16. Notices. Any notice, request, demand, waiver, consent, approval, or
other communication which is required or permitted to be given to any party
hereunder shall be in
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writing and shall be deemed given only if delivered to the party personally or
sent to the party by facsimile transmission (promptly followed by a hard-copy
delivered in accordance with this Section 16) or by overnight courier or
registered or certified mail (return receipt requested), with postage and
registration or certification fees thereon prepaid, addressed to the party at
its address set forth below:
If to Acquisition or Lucent:
Lucent Technologies Inc.
c/o Communications Software Group
000 Xxxxxxx Xxxxxx Xxxx
Xxxxxx, Xxx Xxxxxx 00000
Attn: President
with copy to:
Lucent Technologies Inc.
c/o Communications Software Group
000 Xxxxxxx Xxxxxx Xxxx
Xxxxxx, Xxx Xxxxxx 00000
Attn: General Counsel, Communications Software Group
If to the Company or the Stockholder:
Kenan Systems Corporation
Xxx Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx Xxxxx
with a copy to:
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxxxx, Esq.
or to such other address or Person as any party may have specified in a notice
duly given to the other party as provided herein. Such notice, request, demand,
waiver, consent, approval or other communication will be deemed to have been
given as of the date so delivered, telegraphed or mailed.
17. Amendment. This Agreement may be amended, modified or supplemented
at any time prior to the Closing Date by mutual agreement of the parties hereto.
Any amendment,
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modification or revision of this Agreement and any waiver of compliance or
consent with respect hereto shall be effective only if in a written instrument
executed by the parties hereto.
18. Governing Law. This Agreement shall be governed by and interpreted
and enforced in accordance with the laws of the State of New York as applied to
contracts made and fully performed in such state, except insofar as the MBCL
shall be mandatorily applicable to the Merger and the rights of the Stockholder
in connection therewith.
19. No Benefit to Others. The representations, warranties, covenants
and agreements contained in this Agreement are for the sole benefit of the
parties hereto, and their respective successors and assigns, and they shall not
be construed as conferring, and are not intended to confer, any rights on any
other Person.
20. Severability. If any term or other provision of this Agreement is
determined to be invalid, illegal or incapable of being enforced by any rule of
law or public policy, all other terms and provisions of the Agreement shall
remain in full force and effect. Upon such determination, the parties hereto
shall negotiate in good faith to modify this Agreement so as to give effect to
the original intent of the parties to the fullest extent permitted by applicable
law.
21. Section Headings. All section headings are for convenience only and
shall in no way modify or restrict any of the terms or provisions hereof.
22. Schedules and Exhibits. All Schedules and Exhibits referred to
herein are intended to be and hereby are specifically made a part of this
Agreement. The Schedules and Exhibits referred to herein are intended to be and
hereby are specifically made a part of this Agreement.
23. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and the Stockholder and
Lucent may become a party hereto by executing a counterpart hereof. This
Agreement and any counterpart so executed shall be deemed to be one and the same
instrument.
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IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound hereby, have duly executed this Agreement as of the date first
above written.
LUCENT TECHNOLOGIES INC.
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Group President Communications Software
LANDO ACQUISITION, INC.
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: President
LANDO ACQUISITION, INC.
By: /s/ Xxxxx X. XxXxxxx
Name: Xxxxx X. XxXxxxx
Title: Treasurer
KENAN SYSTEMS CORPORATION
By: /s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: President
KENAN SYSTEMS CORPORATION
By: /s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: Treasurer
XXXXX XXXXX
/s/ Xxxxx Xxxxx
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GLOSSARY OF DEFINED TERMS
Defined Term Location of Definition
Accredited Investor................................................................Section 15
Acquisition........................................................................Preamble
Acquisition Common Stock...........................................................Recitals
Acquisition Proposal...............................................................Section 5.4
Affiliate..........................................................................Section 15
Agreement..........................................................................Preamble
Arbitration Service................................................................Section 8.7(b)
Articles of Merger.................................................................Section 1.1(b)
Authorizations.....................................................................Section 3.18(b)
Balance Sheet......................................................................Section 3.5(a)
Benefit Plan.......................................................................Section 15
Business...........................................................................Recitals
Certificates.......................................................................Section 1.7
Closing............................................................................Section 1.1(b)
Closing Date.......................................................................Section 1.1(b)
Code...............................................................................Section 15
Commonly Controlled Entity.........................................................Section 3.21(a)
Company............................................................................Preamble
Company Common Stock...............................................................Recitals
Confidentiality Agreement..........................................................Section 12
Consideration Shares...............................................................Section 15
Damages............................................................................Section 8.2(a)
Effective Time.....................................................................Section 1.1(b)
Employment Agreement...............................................................Section 6.2
Environmental Laws.................................................................Section 15
ERISA..............................................................................Section 3.21(a)
Escrow Agent.......................................................................Section 8.1
Escrow Agreement...................................................................Section 6.1(d)
Escrow Fund........................................................................Section 1.7
Escrow Shares......................................................................Section 8.1
Exchange Act.......................................................................Section 15
Exchange Ratio.....................................................................Section 1.5(c)
Executive Employees................................................................Section 3.22(a)
Final Determination................................................................Section 15
Financial Statements...............................................................Section 3.5(a)
GAAP...............................................................................Section 15
Hazardous Substances...............................................................Section 15
HSR Act............................................................................Section 3.3(a)
Immaterial Authorizations..........................................................Section 3.18(b)
Indemnified Party..................................................................Section 5.15
Indemnified Person.................................................................Section 8.2
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Indemnified Tax Liability..........................................................Section 8.6(b)
Intellectual Property Rights.......................................................Section 3.19(a)
IRS................................................................................Section 3.20(a)
Laws...............................................................................Section 3.18(a)
Liens..............................................................................Section 15
Lucent.............................................................................Preamble
Lucent Balance Sheet...............................................................Section 4.5(b)
Lucent Common Stock................................................................Section 4.2(a)
Lucent Notice......................................................................Section 8.5
Lucent Preferred Stock.............................................................Section 4.2(a)
Lucent SEC Reports.................................................................Section 4.5(a)
Material Adverse Effect............................................................Section 15
MBCL...............................................................................Recitals
Merger.............................................................................Recitals
NOLS...............................................................................Section 3.20(a)
NYSE...............................................................................Section 1.8
Pension Plans......................................................................Section 3.21(a)
Permitted Liens....................................................................Section 15
Person.............................................................................Section 15
Plans..............................................................................Section 3.21(a)
Pre-Closing Plans..................................................................Section 8.6(a)
Purchaser Representative...........................................................Section 15
reasonable best efforts............................................................Section 15
Registration Rights Agreement......................................................Section 15
Regulation D.......................................................................Section 15
Right..............................................................................Section 1.5(c)
SEC................................................................................Section 15
Securities Act.....................................................................Section 15
Stockholder........................................................................Preamble
Shares.............................................................................Section 3.2(a)
Subsidiary.........................................................................Section 15
Supplemental Financial Information.................................................Section 5.3(c)
Surviving Corporation..............................................................Section 1.1(a)
Tax................................................................................Section 15
Tax Return.........................................................................Section 15
Threshold..........................................................................Section 8.3(a)
Welfare Plans......................................................................Section 3.21(a)
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