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SHARE EXCHANGE AGREEMENT
by and among
OPUS360 CORPORATION
and
PROHA PLC
Dated
April 11, 2001
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS..........................................................2
ARTICLE II
EXCHANGE............................................................10
SECTION 2.1. Issuance of Opus Shares...............................10
SECTION 2.2. Closing...............................................11
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.......................11
SECTION 3.1. Organization and Standing.............................12
SECTION 3.2. Authorization.........................................12
SECTION 3.3. Due Execution and Delivery; Binding Obligations.......12
SECTION 3.4. No Violation..........................................12
SECTION 3.5. Consents and Approvals................................13
SECTION 3.6. Capital Stock.........................................13
SECTION 3.7. Permits...............................................14
SECTION 3.8. Subsidiaries..........................................14
SECTION 3.9. Litigation............................................14
SECTION 3.10. Financial Statements; No Undisclosed Liabilities;
SEC Documents.........................................14
SECTION 3.11. Change in Condition...................................15
SECTION 3.12. Employee Benefit Plans and Labor Matters..............15
SECTION 3.13. Interests in Real Property............................20
SECTION 3.14. Leases................................................21
SECTION 3.15. Compliance with Law...................................21
SECTION 3.16. Related Party Transactions............................22
SECTION 3.17. Tax Matters...........................................22
SECTION 3.18. Environmental Matters.................................24
SECTION 3.19. Intellectual Property.................................25
SECTION 3.20. Registration Rights...................................27
SECTION 3.21. Insurance.............................................27
SECTION 3.22. Material Contracts....................................28
SECTION 3.23. Questionable Payments.................................29
SECTION 3.24. Accuracy of Information...............................30
SECTION 3.25. Private Offering......................................30
SECTION 3.26. Brokers...............................................30
SECTION 3.27. Determination of Amount of Capital....................30
SECTION 3.28 State Takeover Statutes...............................30
SECTION 3.29 Books and Records.....................................30
SECTION 3.30 Personal Property.....................................31
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PROHA.............................31
SECTION 4.1. Organization and Standing.............................31
SECTION 4.2. Authorization.........................................31
SECTION 4.3. Due Execution and Delivery; Binding Obligations.......32
SECTION 4.4. No Violation..........................................32
SECTION 4.5. Consents and Approvals................................32
SECTION 4.6. Capital Stock of Artemis Entities and the
Proha 2 Entities......................................32
SECTION 4.7. Permits...............................................33
SECTION 4.8. Subsidiaries..........................................33
SECTION 4.9. Litigation............................................33
SECTION 4.10. Financial Statements..................................34
SECTION 4.11. Change in Condition...................................35
SECTION 4.12. Employee Benefit Plans and Labor Matters..............35
SECTION 4.13. Interests in Real Property............................40
SECTION 4.14. Leases................................................40
SECTION 4.15. Compliance with Law...................................41
SECTION 4.16. Related Party Transactions............................41
SECTION 4.17. Tax Matters...........................................41
SECTION 4.18. Environmental Matters.................................43
SECTION 4.19. Intellectual Property.................................43
SECTION 4.20. Insurance.............................................45
SECTION 4.21. Material Contracts....................................46
SECTION 4.22. Questionable Payments.................................47
SECTION 4.23. Brokers...............................................47
SECTION 4.24 Books and Records.....................................47
SECTION 4.25 Personal Property.....................................48
SECTION 4.26. Private Placement.....................................48
SECTION 4.27. Accuracy of Information...............................49
ARTICLE V
COVENANTS OF THE COMPANY............................................50
SECTION 5.1. Operation of Business.................................50
SECTION 5.2. Access to Books and Records...........................54
SECTION 5.3. Compliance with Conditions; Commercially
Reasonably Efforts....................................54
SECTION 5.4. Consents and Approvals................................54
SECTION 5.5. Stockholder Approval..................................54
SECTION 5.6. HSR Act Filings.......................................57
SECTION 5.7. No Solicitation.......................................57
SECTION 5.8. Confidential Information..............................59
SECTION 5.9. Notification of Certain Matters.......................59
SECTION 5.10. Certain Tax Covenants.................................60
SECTION 5.11. Escrow of Break-up Fee................................60
SECTION 5.12. Fairness Opinion......................................61
ARTICLE VI
COVENANTS OF PROHA..................................................61
SECTION 6.1. Operation of Business.................................61
SECTION 6.2. Access to Books and Records...........................65
SECTION 6.3. Compliance with Conditions; Commercially
Reasonable Efforts....................................65
SECTION 6.4. Consents and Approvals................................65
SECTION 6.5. U.S. GAAP Financial Statements........................65
SECTION 6.6. HSR Act Filings.......................................66
SECTION 6.7. Confidential Information..............................66
SECTION 6.8 Notification of Certain Matters.......................67
SECTION 6.9. Artemis Reorganization................................67
SECTION 6.10. Certain Tax Covenants.................................67
SECTION 6.11. Escrow of Break-up Fee................................68
ARTICLE VII
CONDITIONS PRECEDENT TO CLOSING.....................................68
SECTION 7.1. Conditions to the Company's Obligations...............68
SECTION 7.2. Conditions to Proha's Obligations.....................70
ARTICLE VIII
POST-CLOSING MATTERS................................................72
SECTION 8.1. Distribution of Opus Shares; Proha Standstill.........72
SECTION 8.2. Transfer of AIGMBH....................................73
SECTION 8.3. Directors.............................................73
SECTION 8.4. Noncompetition Agreements.............................74
SECTION 8.5. Sale of Opus Shares...................................75
ARTICLE IX
MISCELLANEOUS.......................................................76
SECTION 9.1. Survival; Indemnification.............................76
SECTION 9.2. Notices...............................................80
SECTION 9.3. Governing Law.........................................81
SECTION 9.4. Termination; Fees.....................................82
SECTION 9.5. Entire Agreement......................................83
SECTION 9.6. Modifications and Amendments..........................84
SECTION 9.7. Waivers and Extensions................................84
SECTION 9.8. Titles and Headings; Interpretation...................84
SECTION 9.9. Exhibits and Schedules................................84
SECTION 9.10. Expenses; Brokers.....................................84
SECTION 9.11. Press Releases and Public Announcements...............84
SECTION 9.12. Assignment; No Third Party Beneficiaries..............84
SECTION 9.13. Severability..........................................85
SECTION 9.14. Counterparts; Facsimile...............................85
SECTION 9.15. Further Assurances....................................85
SECTION 9.16. Remedies Cumulative...................................85
SCHEDULES
Schedule 2.1 Liens on Exchanged Shares
Schedule 3.4 No Violation; Consents
Schedule 3.6 Capital Stock
Schedule 3.8 Subsidiaries
Schedule 3.9 Litigation
Schedule 3.11 Change in Condition
Schedule 3.12 Employee Benefit Plans and Labor Matters;
Employee Severance Arrangements
Schedule 3.13 Interests in Real Property
Schedule 3.14 Leases
Schedule 3.15 Compliance with Law
Schedule 3.16 Related Party Transactions
Schedule 3.18 Environmental Matters
Schedule 3.19 Intellectual Property
Schedule 3.20 Registration Rights
Schedule 3.22 Material Contracts
Schedule 4.4 No Violation;
Schedule 4.6 Capital Stock of Artemis Entities and
Schedule 4.8 Proha 2 Entities Subsidiaries
Schedule 4.9 Litigation
Schedule 4.11 Change in Condition
Schedule 4.12 Employee Benefit Plans and Labor Matters;
Employee Severance Arrangements
Schedule 4.13 Interests In Real Property
Schedule 4.14 Leases
Schedule 4.15 Compliance with Law
Schedule 4.16 Related Party Transactions
Schedule 4.18 Environmental Matters
Schedule 4.19 Intellectual Property
Schedule 4.21 Material Contracts
Schedule 4.25 Personal Property
Schedule 5.1(b) Company Cash Flow
Schedule 6.1(b) Permitted Transactions
Schedule 6.5 Pro-forma Proha Financials
Schedule 8.2 AIGMBH Agreement
EXHIBITS
Exhibit A Form of Registration Rights Agreement
Exhibit B Form of Proha Key Stockholder Voting Agreement
Exhibit C Form of Opus Key Stockholders Voting Agreement
Exhibit D Form of Second Amendment to Employment Agreement
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT (this "Agreement") is made
as of April 11, 2001, by and among OPUS360 CORPORATION, a Delaware
corporation (the "Company"), and PROHA PLC, a Finnish corporation
("Proha").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company is a publicly traded company whose
shares of Common Stock are currently traded on the NASDAQ;
WHEREAS, Proha is a publicly traded company whose shares
are currently traded on the Helsinki Stock Exchange;
WHEREAS, the Company has concluded that it is in the best
interests of its shareholders to enter into the transactions contemplated
hereby including inter alia to issue and transfer to Proha the Opus Shares
as described in further detail below;
WHEREAS, Proha owns, directly or indirectly, (i) all of
the issued and outstanding capital stock of Artemis Acquisition
Corporation, a Delaware corporation ("Artemis", and such stock is referred
to as the "Artemis Shares"), (ii) all of the issued and outstanding capital
stock of Solutions International SA, a French corporation ("SISA", and such
stock is referred to as the "SISA Shares"), (iii) all of the issued and
outstanding capital stock of Artemis International Sarl, a French
corporation ("AISARL", and such stock is referred to as the "AISARL
Shares"), (iv) all of the issued and outstanding capital stock of
Enterprise Management Systems Srl, an Italian corporation ("EMSSRL", and
such stock is referred to as the "EMSSRL Shares"), (v) all of the issued
and outstanding capital stock of Artemis International S.p.A., an Italian
corporation ("AISPA", and such stock is referred to as the "AISPA Shares"),
(vi) all of the issued and outstanding capital stock of JST Investments
(Asia) Pte Ltd, a Singaporean corporation ("JSTI", and such stock is
referred to as the "JSTI Shares"), (vii) all of the issued and outstanding
capital stock of PMsoft Korea Ltd., a South-Korean corporation ("PMK", and
such stock is referred to as the "PMK Shares"), (viii) all of the issued
and outstanding capital stock of Projektihallinto Proha Oy, a Finnish
corporation ("PPOY", and such stock is referred to as the "PPOY Shares"),
(ix) all of the issued and outstanding capital stock of Intellisoft Oy, a
Finnish corporation ("IOY", and such stock is referred to as the "IOY
Shares"), and (x) all of the issued and outstanding capital stock of
Accountor Oy, a Finnish corporation ("AOY", and such stock is referred to
as the "AOY Shares"),
WHEREAS, Proha has concluded that it is in its best
interests to enter into the transactions contemplated hereby including
inter alia to transfer to the Company (i) all of the Artemis Shares, (ii) a
number of IOY Shares representing 19.9% of the issued and outstanding IOY
Shares on a Fully Diluted Basis on the date hereof, and (iii) a number of
AOY Shares representing 19.9% of the issued and outstanding AOY Shares on a
Fully Diluted Basis on the date hereof (the Artemis Shares, the IOY Shares
and the AOY Shares to be transferred to the Company are referred to
collectively as the "Exchanged Shares");
WHEREAS, simultaneously with the execution and delivery
of this Agreement, the parties have executed and delivered a Distribution
Agreement, dated as of the date hereof (the "Distribution Agreement"); and
WHEREAS, simultaneously with the execution and delivery
of this Agreement, each of the Proha Key Stockholders and Opus Key
Stockholders have executed and delivered a Voting Agreement.
NOW, THEREFORE, in consideration of the mutual premises
contained herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have
the following meanings:
"Action" shall mean any action, claim, suit, litigation,
proceeding, arbitration or mediation.
"Affiliate" shall mean, with respect to any Person, any
other Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified Person and, shall
include (a) in the case of a Person who is an individual, (i) members of
such specified Person's immediate family (as defined in Instruction 2 of
Item 404(a) of Regulation S-K under the Securities Act) and (ii) trusts,
the trustee and all beneficiaries of which are such specified Person or
members of such Person's immediate family as determined in accordance with
the foregoing clause (i), and (b) any Person that directly or indirectly
owns more than 5% of any class of capital stock or other interest of such
specified Person. For the purposes of this definition, "control," when used
with respect to any Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"affiliated," "controlling" and "controlled" have meanings correlative to
the foregoing.
"Agreement" shall have the meaning set forth in the
preamble.
"AIGMBH" shall mean Artemis International GmbH
"AIGMBH Agreement" shall have the meaning set forth in
Section 8.2.
"AIGMBH Shares" shall mean the common shares of AIGMBH
owned directly or indirectly by Proha on the date hereof.
"AISARL" shall have the meaning in the recitals of this
Agreement.
"AISARL Shares" shall have the meaning in the recitals of
this Agreement.
"AISPA" shall have the meaning in the recitals of this
Agreement.
"AISPA Shares" shall have the meaning in the recitals of
this Agreement.
"Alternative Transaction" shall have the meaning set
forth in Section 5.7(a)(i).
"Alternative Transaction Documentation" shall have the
meaning set forth in Section 5.7(b).
"AOY" shall have the meaning in the recitals of this
Agreement.
"AOY Shares" shall have the meaning in the recitals of
this Agreement.
"Applicable Law" shall mean, with respect to any Person,
any law, statute, rule, regulation, ordinance, order, writ, injunction,
judgment or decree of any Governmental Authority to which such Person or
any of its Subsidiaries is bound or to which any of their respective assets
or properties is subject.
"Artemis" shall have the meaning in the recitals of this
Agreement.
"Artemis Commitments" shall have the meaning set forth in
Section 4.21
"Artemis Employee Benefit Plans" shall have the meaning
set forth in Section 4.12(a).
"Artemis Entities" shall collectively mean Artemis, SISA,
AISARL, EMSSRL, AISPA, JSTI and PMK and PPOY.
"Artemis Entities' Financial Statements" shall have the
meaning set forth in Section 4.10(a)(iv).
"Artemis Entities U.S. GAAP Financial Statements" shall
have the meaning set forth in Section 6.5(a).
"Artemis Financial Statements" shall have the meaning set
forth in Section 4.10(a)(i).
"Artemis Foreign Benefit Plan" shall have the meaning set
forth in Section 4.12(e).
"Artemis Leases" shall have the meaning set forth in
Section 4.14(a)(i).
"Artemis Shares" shall have the meaning in the recitals
of this Agreement.
"Business Day" shall mean any day except a Saturday, a
Sunday or any other day on which commercial banks are required or
authorized to close in Helsinki, Finland or New York, New York.
"Bylaws" with respect to any corporation shall mean the
bylaws of such corporation.
"Charter" with respect to any corporation shall mean the
certificate of incorporation or articles of incorporation of such
corporation.
"Closing" shall have the meaning set forth in Section
2.1(c).
"Closing Date" shall have the meaning set forth in
Section 2.2(a).
"Code" shall have the meaning set forth in Section
3.12(a)(ii).
"Commission" shall mean the United States Securities and
Exchange Commission.
"Companies Act" shall mean the Finnish Companies Act
(1978/734), as amended from time to time.
"Company Employee Benefit Plans" shall have the meaning
set forth in Section 3.12(a)(iii).
"Company Commitments" shall have the meaning set forth in
Section 3.22(a).
"Company Financial Statements" shall have the meaning set
forth in Section 3.10(a).
"Company Leases" shall have the meaning set forth in
Section 3.14(a)(i).
"Common Stock" shall mean the common stock, par value
$.001 per share, of the Company.
"Company" shall have the meaning set forth in the
Preamble.
"DGCL" shall mean the Delaware General Corporation Law.
"Distribution Agreement" shall have the meaning in the
recitals of this Agreement.
"Documents" shall mean (i) this Agreement, (ii) the
Registration Rights Agreement, and (iii) the Voting Agreements.
"EMSSRL" shall have the meaning in the recitals of this
Agreement.
"EMSSRL Financial Statements" shall have the meaning set
forth in Section 4.10(a)(iii).
"EMSSRL Shares" shall have the meaning in the recitals of
this Agreement.
"Environmental Law" shall mean any federal, state or
local or foreign law, statute, rule, regulation, order or other requirement
of law, applicable to the assets or the business of the Company and its
Subsidiaries, relating to the protection of human health or the
environment, or to the manufacture, use, transport, treatment, storage,
disposal, release or threatened release of petroleum products, asbestos,
urea formaldehyde insulation, polychlorinated biphenyls or any substance
listed, classified or regulated as hazardous or toxic, or any similar term,
under such Environmental Law.
"ERISA" shall have the meaning set forth in Section
3.12(a)(i).
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.
"Exchanged Shares" shall have the meaning in the recitals
of this Agreement.
"Finnish Documents" shall have the meaning set forth in
Section 4.10(c).
"Finnish GAAP" shall mean Finnish generally accepted
accounting principles applied on a consistent basis with prior accounting
periods.
"French GAAP" shall mean French generally accepted
accounting principles applied on a consistent basis with prior accounting
periods.
"Fully-Diluted Basis" shall mean and include, as applied
to the calculation of the total number of shares of Common Stock
outstanding at any time, (i) all shares of Common Stock outstanding at the
time of determination and (ii) without duplication, all shares of Common
Stock issuable upon the exercise, exchange or conversion of other
securities which are outstanding at the time of determination and then so
exercisable, exchangeable or convertible at an exercise or conversion price
equal to or less than the market price of the Common Stock at such time.
"Governmental Authority" shall mean any foreign, Federal,
state or local court or governmental or regulatory authority.
"Helsinki Stock Exchange" shall mean the Helsinki
Securities and Derivatives Exchange, Clearing House Ltd.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and applicable rules and regulations
and any similar state acts.
"Indemnified Party" shall have the meaning set forth in
Section 9.1(c).
"Indemnifying Party" shall have the meaning set forth in
Section 9.1(c).
"Intellectual Property" shall mean all domestic and
foreign trademarks, service marks, trade names, corporate and business
names, brand names, Internet domain names, universal resource locators
("URLs"), designs, logos, trade dress, slogans, and general intangibles of
like nature, together with all goodwill, registrations and applications
related to the foregoing (collectively, "Trademarks"); patents and
industrial designs (including any continuations, divisionals,
continuations-in-part, renewals, provisionals, reissues, and applications
for any of the foregoing); copyrights (including any registrations and
applications for any of the foregoing); Software; "mask works" (as defined
under 17 USC section 901) and any registrations and applications for "mask
works"; inventions (whether or not patentable), invention disclosures,
moral and economic rights of authors and inventors (however denominated),
technical data and customer lists; technology, trade secrets and other
confidential information, know-how, proprietary processes, formulae,
algorithms, models, and methodologies (whether or not patentable)
(collectively, "Trade Secrets"); all improvements and refinements of any of
the foregoing; rights of publicity and privacy relating to the use of the
names, likenesses, voices, signatures and biographical information of real
Persons; in each case used in or necessary for the business of a Person or
any of its Subsidiaries.
"IOY" shall have the meaning in the recitals of this
Agreement.
"IOY Shares" shall have the meaning in the recitals of
this Agreement.
"Italian GAAP" shall mean Italian generally accepted
accounting principles applied on a consistent basis with prior accounting
periods.
"JSTI" shall have the meaning in the recitals of this
Agreement.
"JSTI Shares" shall have the meaning in the recitals of
this Agreement.
"License Agreements" shall have the meaning set forth in
Section 3.19(b).
"Lien" shall mean any pledge, lien, claim, restriction,
charge or encumbrance of any kind.
"Material Adverse Effect" shall mean a material adverse
effect (i) on the business, operations, properties, assets, liabilities or
condition (financial or otherwise) of the Company and its Subsidiaries,
taken as a whole, or the Artemis Entities, taken as a whole, as the case
may be, or (ii) on the ability of the Company or any of its Subsidiaries or
the Artemis Entities and Proha 2 Entities or any of their Subsidiaries, as
the case may be, to perform their respective obligations hereunder or under
any of the other Documents.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"NASDAQ" shall mean the NASDAQ quotation system, or any
successor reporting system.
"Notice of Superior Offer" shall have the meaning set
forth in Section 5.5(b).
"Notices" shall have the meaning set forth in Section
9.2.
"Opus Key Stockholders" shall mean Xxx Xxxxxxxx and
Xxxxxx Xxxxxxx.
"Opus Shares" shall have the meaning set forth in Section
2.1(a).
"Other Directors" shall be those directors of the Company
who are not Proha Nominees.
"Overlap Period" shall have the meaning set forth in
Section 5.10(c).
"Permits" shall have the meaning set forth in Section
3.7.
"Permitted Liens" shall mean: (i) liens for Taxes and
other governmental charges and assessments arising in the ordinary course
of business which are not yet due and payable, (ii) liens of landlords and
liens of carriers, warehousemen, mechanics and materialmen and other like
liens arising in the ordinary course of business for sums not yet due and
payable, and (iii) other liens or imperfections on property which are not
material in amount, do not materially interfere with, and are not violated
by, the consummation of the transactions contemplated by this Agreement,
and do not materially impair the marketability of, or materially detract
from the value of or materially impair the existing use of, the property
affected by such lien or imperfection.
"Permitted Transferee" shall mean any Person.
"Person" shall mean any individual, partnership,
corporation, limited liability company, limited partnership, joint venture,
association, joint-stock company, trust, unincorporated organization,
government or agency or political subdivision thereof, or other entity.
"PMK" shall have the meaning in the recitals of this
Agreement.
"PMK Shares" shall have the meaning in the recitals of
this Agreement.
"PPOY" shall have the meaning in the recitals of this
Agreement.
"PPOY Financial Statements" shall have the meaning set
forth in Section 4.10(a)(iv).
"PPOY Shares" shall have the meaning in the recitals of
this Agreement.
"Pre-Closing Period" shall have the meaning set forth in
Section 5.10(c).
! "Preferred Stock" shall mean the Preferred Stock of the
Company, par value $.001 per share.
"Proha" shall have the meaning set forth in the Preamble
of this Agreement.
"Proha 2 Entities" shall collectively mean IOY and AOY.
"Proha Key Stockholders" shall mean Pekka Pere and Xxxx
Xxxxx.
"Proha Nominees" shall mean the nominees of Proha to
serve as directors of the Company.
"Proha Successor" shall have the meaning set forth in
Section 8.5(iii).
"Registration Rights Agreement" shall mean the
Registration Rights Agreement to be entered into by and among the Company
and Proha on the Closing Date, in the form attached as Exhibit A hereto.
"Related Party" shall have the meaning set forth in
Section 3.16.
"Representatives" shall have the meaning set forth in
Section 5.7(a).
"Reverse Stock Split" shall have the meaning in Section
5.5.
"Schedule" shall have the meaning set forth in Article
III.
"SEC Documents" shall have the meaning set forth in
Section 3.10(c).
"Securities Act" shall mean the Securities Act of 1933,
as amended, and the rules and regulations thereunder.
"Securities Markets Act" shall mean the Finnish
Securities Markets Act (1989/495) as amended from time to time.
"Shareholder Complaint" shall have the meaning set forth
in Section 5.2
"SISA" shall have the meaning in the recitals of this
Agreement.
"SISA Financial Statements" shall have the meaning set
forth in Section 4.10(a)(ii).
"SISA Shares" shall have the meaning in the recitals of
this Agreement.
"Software" shall mean any and all (a) computer programs,
including any and all software implementation of algorithms, models and
methodologies, whether in source code or object code form, (b) databases
and compilations, including any and all data and collections of data, (c)
designs, processes, procedures and data collectors, and (d) all
documentation, including user manuals and training materials, relating to
any of the foregoing.
"Stockholder Approval" shall have the meaning set forth
in Section 5.5(a).
"Stockholder Meeting" shall have the meaning set forth in
Section 5.5(a).
"Subsequent Filings" shall have the meaning set forth in
Section 3.10(c).
"Subsidiary" shall mean, with respect to any Person, (a)
a corporation a majority of whose capital stock with voting power, under
ordinary circumstances, to elect directors is at the time, directly or
indirectly, owned by such Person, by a Subsidiary of such Person, or by
such Person and one or more subsidiaries of such Person, (b) a partnership
in which such Person or a Subsidiary of such Person is, at the date of
determination, a general partner of such partnership, or (c) any other
Person (other than a corporation) in which such Person, a Subsidiary of
such Person or such Person and one or more subsidiaries of such Person,
directly or indirectly, at the date of determination thereof, has (i) at
least a majority ownership interest, (ii) the power to elect or direct the
election of the directors or other governing body of such Person, or (iii)
the power to direct or cause the direction of the affairs or management of
such Person. For purposes of this definition, a Person is deemed to own any
capital stock or other ownership interest if such Person has the right to
acquire such capital stock or other ownership interest, whether through the
exercise of any purchase option, conversion privilege or similar right.
"Taxes" shall mean all taxes, assessments, charges,
duties, fees, levies or other governmental charges, including, without
limitation, all Federal, state, local, foreign and other income, franchise,
profits, gross receipts, capital gains, capital stock, transfer, property,
sales, use, value-added, occupation, excise, severance, windfall profits,
stamp, license, payroll, social security, withholding and other taxes,
assessments, charges, duties, fees, levies or other governmental charges of
any kind whatsoever (whether payable directly or by withholding and whether
or not requiring the filing of a Tax Return), all estimated taxes,
deficiency assessments, additions to tax, penalties and interest and shall
include any liability for such amounts as a result either of being a member
of a combined, consolidated, unitary or affiliated group or of a
contractual obligation to indemnify any Person or other entity.
"Tax Returns" shall mean all returns, declarations,
statements, schedules, forms, reports, information returns, elections,
disclosures, estimates or other documents (including any related or
supporting information), and any amendments thereto, filed or required to
be filed with any Governmental Authority in connection with the
determination, assessment, collection or administration of any Taxes.
"Termination Fee" shall have the meaning set forth in
Section 9.4(c).
"Threshold Securities" shall mean a number of securities
of the Company that constitute, or if exercised, exchanged or converted
into Common Stock would constitute, at least 25% of the aggregate issued
and outstanding Common Stock on a Fully-Diluted Basis.
"Trade Secrets" shall have the meaning set forth in the
definition of "Intellectual Property" in this Article I.
"Trademarks" shall have the meaning set forth in the
definition of "Intellectual Property" in this Article I.
"Treasury Regulations" shall have the meaning set forth
in Section 3.12(a)(ii).
"U.S. GAAP" shall mean generally accepted accounting
principles set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants
and statements and pronouncements of the Financial Accounting Standards
Board, which are in effect from time to time, consistently applied.
"VEBAs" shall have the meaning set forth in Section
3.12(a)(ii).
"Voting Agreements" shall mean the voting agreements
dated April 11, 2001, by and among (x) the Proha Key Stockholders and the
Company in the form of Exhibit B hereto, and (y) the Opus Key Stockholders
and Proha in the form of Exhibit C hereto.
"WARN Act" shall mean the Worker Adjustment and
Retraining Notification Act of 1988, as amended, and any applicable state
or local law with regard to "plant closings" or "mass layoffs" as such
terms are defined in the WARN Act or applicable state or local law.
ARTICLE II
EXCHANGE
SECTION 2.1. Issuance of Opus Shares. (a) Upon the terms
and subject to the conditions set forth in this Agreement, the Company
shall issue and Proha shall accept from the Company on the Closing Date a
number of shares of Common Stock (the "Opus Shares") which shall equal
eighty percent (80%) of the Common Stock on a Fully-Diluted Basis as of the
Closing Date. At least three (3) Business Days prior to the Closing Date,
the Company shall deliver to Proha a certificate, certified by the
Treasurer of the Company, reflecting the calculation of the number of Opus
Shares to be delivered to Proha on the Closing Date pursuant to this
Section 2.1(a).
(b) In consideration of the issuance of the Opus Shares
on the Closing Date, Proha shall assign, transfer and deliver to the
Company (or cause to be assigned, transferred and delivered to the
Company), and the Company shall (to the extent certificated) take delivery
of the Exchanged Shares, free and clear of all Liens (other than Liens set
forth on Schedule 2.1). The certificates representing the Exchanged Shares
shall be duly endorsed, or accompanied by stock powers duly endorsed, by
Proha (or the appropriate Subsidiary of Proha) for transfer to the Company,
with all necessary transfer tax and other revenue stamps affixed (such
taxes and the cost of such stamps, if any, to be borne equally by the
parties), or in cases in which any of the Exchanged Shares have not been
certificated, the stock record books of the respective issuer of the
Exchanged Shares shall be updated to record the transfer of the Exchanged
Shares pursuant to this Agreement.
(c) The consummation of the transactions contemplated by
this Section 2.1 are referred to herein as the "Closing".
SECTION 2.2. Closing. (a) The Closing shall take place at
9:00 a.m., New York time, on the date two (2) Business Days after all of
the conditions set forth in Article VII hereof shall have been satisfied or
duly waived or at such other time and date as the parties hereto shall
agree in writing (the "Closing Date"), at the offices of White & Case LLP,
1155 Avenue of the Americas, New York, New York or at such other place as
the parties hereto shall agree in writing.
(b) On the Closing Date, the Company shall deliver to
Proha, against delivery of the stock certificates (to the extent
certificated) representing the Exchanged Shares, certificates representing
the Opus Shares, transferred to Proha pursuant to Section 2.1(a). The Opus
Shares shall be in definitive form and registered in the name of Proha or
its nominee or designee reasonably acceptable to the Company and in such
denominations as Proha shall request in writing not later than two (2)
Business Days prior to the Closing Date with appropriate securities laws
legends.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as specifically identified in the Schedules
delivered to Proha concurrent with the execution of this Agreement
(individually, a "Schedule") with reference to the particular
representation or warranty being qualified, the Company hereby represents
and warrants to Proha as follows:
SECTION 3.1. Organization and Standing. Except as set
forth on Schedule 3.1, the Company is duly incorporated, validly existing
and in good standing as a domestic corporation under the laws of the State
of Delaware and has all requisite corporate power and authority to own its
properties and assets and to carry on its business as it is now being
conducted. Except as set forth on Schedule 3.1, the Company is duly
qualified or licensed to transact business as a foreign corporation and is
in good standing in each jurisdiction in which the character of the
properties owned or leased by it or the nature of its business makes such
qualification necessary, except where the failure to so qualify or be in
good standing could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
SECTION 3.2. Authorization. The Company has the corporate
power to execute, deliver and perform its obligations under each of the
Documents to which it is a party and has taken all necessary corporate
action to authorize the execution, delivery and performance by it of each
of the Documents and to consummate the transactions contemplated hereby and
thereby, subject to the Stockholder Approval. No other corporate
proceedings on the part of the Company are necessary therefor (other than
the Stockholder Approval).
SECTION 3.3. Due Execution and Delivery; Binding
Obligations. The Company has duly executed and delivered this Agreement.
This Agreement constitutes, and each of the other Documents, when executed
and delivered by the Company and, assuming due authorization and execution
by the other parties hereto and thereto, will constitute legal, valid and
binding obligations of the Company enforceable against it in accordance
with their 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 general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
SECTION 3.4. No Violation. The execution, delivery and
performance by the Company of each of the Documents to which it is a party,
all actions taken in connection with the execution of the Voting
Agreements, the consummation of the transactions contemplated hereby and
thereby does not and will not contravene any Applicable Law, except for any
such contraventions that could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. The execution,
delivery and performance by the Company of the Documents to which it is a
party and the consummation of the transactions contemplated hereby and
thereby (i) will not (x) violate, result in a breach of or constitute (with
due notice or lapse of time or both) a default under any contract, lease,
loan agreement, Company Employee Benefit Plan, mortgage, security
agreement, trust indenture or other agreement, instrument or Company
Commitment to which the Company or any of its Subsidiaries is a party or by
which any of them is bound or to which any of their properties or assets is
subject, except to the extent any such conflict or breach, singly or in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect, (y) result in the creation or imposition of any Lien (other than a
Permitted Lien) upon any of the properties or assets of any of them, or (z)
except as set forth on Schedule 3.4, obligate the Company to make any
payment or incur any additional obligation, or give rise to any right of
any Person with respect to the Company, under any term or provision of any
contract or agreement, the Charter or Bylaws of the Company, any Company
Employee Benefit Plan or any Applicable Law, that relates to a change of
control or ownership of the Company or any similar provision, (ii) will not
violate any provision of its Charter or Bylaws of the Company, and (iii)
will not result in Proha or any of its Affiliates being an "interested
stockholder," under Section 203 of the DGCL.
SECTION 3.5. Consents and Approvals. Except as set forth
on Schedule 3.5, assuming all filings, if any, required by the HSR Act, if
any, are duly made and the waiting period thereunder has been terminated or
has expired, and except for the Stockholder Approval and filings under
applicable securities laws, no consent, permit, approval or authorization
of, or declaration, filing, application, transfer or registration with, any
Governmental Authority, or any other Person or entity is required to be
made or obtained by the Company by virtue of the execution, delivery, or
performance of this Agreement or any of the other Documents.
SECTION 3.6. Capital Stock. On the date hereof, the
authorized capital stock of the Company consists solely of (a) 150,000,000
shares of Common Stock, (b) 25,000,000 shares of Preferred Stock. As of the
date hereof, of the 150,000,000 shares of Common Stock authorized, (i)
49,665,798 shares of Common Stock are issued and outstanding, and (ii)
22,638,303 shares are reserved for issuance pursuant to outstanding options
and warrants and existing employee stock purchase plans. As of the date
hereof, there are no (and as of the Closing Date, there will be no)
outstanding shares of Preferred Stock. As of the date hereof, there are
securities convertible, exchangeable or exercisable into 16,483,886 shares
of Common Stock as described in further detail on Schedule 3.6. On the date
hereof and immediately following the Closing, each share of capital stock
of the Company that is issued and outstanding will be duly authorized,
validly issued, fully paid and nonassessable and will not be subject to nor
issued in violation of, any preemptive rights, and none of the securities
of the Company were issued in violation of the Securities Act, any state
"blue sky" law or any other applicable securities laws. Except as set forth
on Schedule 3.6 or as contemplated by this Agreement, at the date hereof
there are, and immediately following the Closing there will be (a) no
outstanding or authorized options, warrants, agreements, conversion rights,
preemptive rights, other rights, subscriptions, claims of any character,
obligations, convertible or exchangeable securities, or other commitments,
contingent or otherwise, relating to shares of capital stock of the Company
or any of its Subsidiaries or pursuant to which the Company or any of its
Subsidiaries is or may become obligated to issue shares of its capital
stock or any securities convertible into, exchangeable for, or evidencing
the right to subscribe for, purchase or acquire, any shares of the capital
stock of the Company or any of its Subsidiaries, (b) no restrictions upon
the dividends, voting or, except as required by the Securities Act and
state "blue sky" laws, the transfer of any shares of capital stock of the
Company pursuant to its Charter, Bylaws or other governing documents or any
agreement or other instruments to which it is a party or by which it is
bound, and (c) no shares of Common Stock or Preferred Stock held by the
Company in its treasury. Neither the Company nor any of its Subsidiaries
has authorized or outstanding bonds, debentures, notes or other
indebtedness the holders of which have the right to vote (or convertible or
exercisable for or exchangeable into securities the holders of which have
the right to vote) with the stockholders of such Person on any matter.
Except as contemplated by this Agreement or as set forth on Schedule 3.6,
there are no outstanding contractual obligations of the Company or any of
its Subsidiaries to repurchase, redeem or otherwise acquire any shares of
Common Stock or the capital stock of the Company or any of its
Subsidiaries.
SECTION 3.7. Permits. Except as set forth on Schedule
3.7, each of the Company and its Subsidiaries has such licenses, permits,
exemptions, consents, waivers, authorizations, orders and approvals from
appropriate Governmental Authorities ("Permits") as are necessary to own,
lease, license or operate their properties and to conduct their businesses
as currently owned and conducted and all such Permits are valid and in full
force and effect, except such Permits that the failure to have or to be in
full force and effect could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
SECTION 3.8. Subsidiaries. Schedule 3.8 contains a
complete and accurate list of all Subsidiaries of the Company. Except for
the Company's interest in its Subsidiaries, or as set forth in Schedule
3.8, neither the Company nor its Subsidiaries owns directly or indirectly
any interest or investment (whether equity or debt) in, nor is the Company
or any of its Subsidiaries subject to any obligation or requirement to
provide for or to make any investment (in the form of a loan, capital
contribution or otherwise) to or in, any Person.
SECTION 3.9. Litigation. Except as set forth on Schedule
3.9 or as disclosed in the SEC Reports, there are no pending or, to the
knowledge of the Company, threatened claims, actions, suits, labor
disputes, grievances, complaints, controversies, administrative or
arbitration or other proceedings or, to the knowledge of the Company,
investigations against the Company, its Subsidiaries or their respective
assets or properties before or by any Governmental Authority or before any
arbitrator that could, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. None of the Company, its
Subsidiaries or any of their respective assets or properties, is subject to
any order, writ, judgment, award, injunction or decree of any Governmental
Authority or arbitrator, that could, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
SECTION 3.10. Financial Statements; No Undisclosed
Liabilities; SEC Documents. (a) The Company has made available to Proha
copies of the audited consolidated balance sheets of the Company and its
consolidated Subsidiaries as of December 31, 1999 and December 31, 2000,
together with the related audited consolidated statements of operations,
stockholders' equity and cash flows for the fiscal years then ended, and
the notes thereto, accompanied by the going concern opinion thereon of KPMG
LLP (collectively, the "Company Financial Statements"). The Company
Financial Statements (including the notes thereto) were prepared in
accordance with U.S. GAAP and present fairly, in all material respects, the
consolidated financial position and results of operation of the Company and
its consolidated Subsidiaries as of December 31, 1999 and December 31, 2000
and for the periods then ended except as may be indicated in the notes
thereto.
(b) Neither the Company nor any of its Subsidiaries has
any material claims, liabilities or indebtedness, contingent or otherwise
of any kind whatsoever (whether accrued, absolute, contingent or otherwise
and whether or not required to be reflected in the Company Financial
Statements in accordance with U.S. GAAP), except as set forth on Schedule
3.10 or (i) as set forth in the Company Financial Statements (including the
notes thereto) and (ii) liabilities to trade creditors incurred subsequent
to December 31, 2000 in the ordinary course of business consistent with
past practices not involving borrowings by the Company or any of its
Subsidiaries.
(c) Since April 7, 2000, the Company has filed all forms,
reports and documents with the Commission (including all exhibits thereto)
required under the Securities Act or the Exchange Act or the rules and
regulations promulgated thereunder (collectively, the "SEC Documents"),
each of which complied in all material respects with all applicable
requirements of the Securities Act and the Exchange Act as in effect on the
dates so filed. None of the SEC Documents (as of their respective filing
dates) contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order
to make the statements made therein, in light of the circumstances under
which they were made, not misleading. Any forms, reports and documents
filed by the Company with the Commission subsequent to the date hereof and
prior to the Closing Date (collectively, the "Subsequent Filings") will
comply in all material respects with all applicable requirements of the
Securities Act and the Exchange Act and will not 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 make the statements made
therein, in light of the circumstances under which they were made, not
misleading, except to the extent of any information provided to the Company
for inclusion in a Subsequent Filing by or on behalf of Proha. The Company
will timely furnish to Proha copies of each Subsequent Filing.
SECTION 3.11. Change in Condition. Except as set forth on
Schedule 3.11 and as disclosed in the SEC Documents, since December 31,
2000, the Company and its Subsidiaries have operated their respective
businesses in the ordinary course consistent with past practices and there
has not occurred any event, occurrence or conditions, or to the knowledge
of the Company, any circumstance or development that could, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
SECTION 3.12. Employee Benefit Plans and Labor Matters.
(a) List of Plans. Set forth in Schedule 3.12 attached hereto is an
accurate and complete list of all domestic and foreign (i) "employee
benefit plans," within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended, and the rules and
regulations thereunder ("ERISA"); (ii) bonus, stock option, stock purchase,
restricted stock, incentive, fringe benefit, "voluntary employees'
beneficiary associations" ("VEBAs") under Section 501(c)(9) of the Internal
Revenue Code of 1986, as amended, (the "Code") and the regulations
thereunder as amended from time to time (the "Treasury Regulations"),
profit-sharing, pension or retirement, deferred compensation, medical, life
insurance, disability, accident, salary continuation, severance, accrued
leave, vacation, sick pay, sick leave, supplemental retirement and
unemployment benefit plans, programs, arrangements, commitments and/or
practices, whether or not insured and which, in the case of any such plan,
program, arrangement, commitment and/or practice applicable to a non-U.S.
employee, is not mandated under Applicable Law of such non-U.S.
jurisdiction; and (iii) employment, consulting, termination, and severance
contracts or agreements; in each case for active, retired or former
employees or directors, whether or not any such plans, programs,
arrangements, commitments, contracts, agreements and/or practices (referred
to in (i), (ii) or (iii) above) are in writing or are otherwise exempt from
the provisions of ERISA; that have been established, maintained or
contributed to (or with respect to which an obligation to contribute has
been undertaken) for the benefit of any U.S. or non-U.S. current or former
employee of the Company or any of its Subsidiaries or with respect to which
any potential liability is borne by the Company or any of its Subsidiaries
including, for this purpose and for the purpose of all of the
representations in this Section 3.12, all employers (whether or not
incorporated) that would be treated together with the Company and/or any of
its Subsidiaries as a single employer within the meaning of Section 414 of
the Code since January 1, 1995 ("Company Employee Benefit Plans").
(b) Status of Plans. Each Company Employee Benefit Plan
(including any related trust) complies in form with the requirements of all
applicable laws, including, without limitation, ERISA and the Code except
to the extent that any such noncompliance would not result in a material
liability and has at all times been maintained and operated in substantial
compliance with its terms and the requirements of all applicable laws,
including, without limitation, ERISA and the Code. No complete or partial
termination of any Company Employee Benefit Plan has occurred or is
expected to occur. Neither the Company nor any of its Subsidiaries has any
commitment, intention or understanding to create, modify or terminate any
Company Employee Benefit Plan. Except as required to maintain the
tax-qualified status of any Company Employee Benefit Plan intended to
qualify under Section 401(a) of the Code, no condition or circumstance
exists that would prevent the amendment or termination of any Company
Employee Benefit Plan. Except as set forth in Schedule 3.12, no event has
occurred and no condition or circumstance exists that would reasonably be
expected to result in a material increase in the benefits under or the
expense of maintaining any Company Employee Benefit Plan from the level of
benefits or expense incurred for the most recent fiscal year.
(c) No Pension Plans. No Company Employee Benefit Plan is
an "employee pension benefit plan" (within the meaning of Section 3(2) of
ERISA) subject to Section 412 of the Code or Section 302 or Title IV of
ERISA. Neither the Company nor any of its Subsidiaries has ever maintained
or contributed to, or had any obligation to contribute to (or borne any
liability with respect to) any "multiple employer plan" (within the meaning
of the Code or ERISA) or any "multiemployer plan" (as defined in Section
4001(a)(3) of ERISA).
(d) Liabilities. Except for such failures which could
not, individually or in the aggregate, reasonably be expected to result in
a material liability to the Company and its Subsidiaries, (i) neither the
Company nor any of its Subsidiaries maintains any Company Employee Benefit
Plan which is a "group health plan" (as such term is defined in Section
607(1) of ERISA or Section 5000(b)(1) of the Code) that has not been
administered and operated in all respects in compliance with the applicable
requirements of Part 6 of Subtitle B of Title I of ERISA and Section 4980B
of the Code and neither the Company nor any of its Subsidiaries is subject
to any liability, including, without limitation, additional contributions,
fines, taxes, penalties or loss of tax deduction as a result of such
administration and operation; (ii) no Company Employee Benefit Plan which
is such a group health plan is a "multiple employer welfare arrangement,"
within the meaning of Section 3(40) of ERISA; (iii) each Company Employee
Benefit Plan that is intended to meet the requirements of Section 125 of
the Code meets such requirements, and each program of benefits for which
employee contributions are provided pursuant to elections under any Company
Employee Benefit Plan meets the requirements of the Code applicable
thereto; and (iv) neither the Company nor any of its Subsidiaries maintains
any Company Employee Benefit Plan which is an "employee welfare benefit
plan" (as such term is defined in Section 3(1) of ERISA) that has provided
any "disqualified benefit" (as such term is defined in Section 4976(b) of
the Code) with respect to which an excise tax could be imposed.
Neither the Company nor any of its Subsidiaries maintains
any Company Employee Benefit Plan (whether qualified or non-qualified under
Section 401(a) of the Code) providing for post-employment or retiree
health, life insurance and/or other welfare benefits and having unfunded
liabilities, and neither the Company nor any of its Subsidiaries have any
obligation to provide any such benefits to any retired or former employees
or active employees following such employees' retirement or termination of
service. Neither the Company nor any of its Subsidiaries has any unfunded
liabilities pursuant to any Company Employee Benefit Plan that is not
intended to be qualified under Section 401(a) of the Code. No Company
Employee Benefit Plan holds as an asset any interest in any annuity
contract, guaranteed investment contract or any other investment or
insurance contract, policy or instrument issued by an insurance company
that, to the knowledge of the Company, is or may be the subject of
bankruptcy, conservatorship, insolvency, liquidation, rehabilitation or
similar proceedings.
Neither the Company nor any of its Subsidiaries has
incurred any liability for any tax or excise tax arising under Chapter 43
of the Code, and no event has occurred and no condition or circumstance has
existed that could give rise to any such liability.
There are no actions, suits, claims or disputes pending,
or, to the knowledge of the Company, threatened, anticipated or expected to
be asserted against or with respect to any Company Employee Benefit Plan or
the assets of any such plan (other than routine claims for benefits and
appeals of denied routine claims). No civil or criminal action brought
pursuant to the provisions of Title I, Subtitle B, Part 5 of ERISA is
pending, threatened, anticipated, or expected to be asserted against the
Company or any of its Subsidiaries or any fiduciary of any Company Employee
Benefit Plan, in any case with respect to any Company Employee Benefit
Plan. No Company Employee Benefit Plan or any fiduciary thereof has been
the direct or indirect subject of an audit, investigation or examination by
any governmental or quasi-governmental agency.
(e) Contributions. Full payment has been timely made of
all amounts which the Company or any of its Subsidiaries is required, under
applicable law or under any Company Employee Benefit Plan or any agreement
relating to any Company Employee Benefit Plan to which the Company or any
of its Subsidiaries is a party, to have paid as contributions or premiums
thereto as of the last day of the most recent fiscal year of such Company
Employee Benefit Plan ended prior to the date hereof. All such
contributions and/or premiums have been fully deducted for income tax
purposes and no such deduction has been challenged or disallowed by any
governmental entity, and to the knowledge of the Company no event has
occurred and no condition or circumstance exists that could, or could
reasonably be expected to, give rise to any such challenge or disallowance.
The Company has made adequate provision for reserves to meet contributions
and premiums and any other liabilities that have not been paid or satisfied
because they are not yet due under the terms of any Company Employee
Benefit Plan, applicable law or related agreements. Benefits under all
Company Employee Benefit Plans are as represented and have not been
materially increased subsequent to the date as of which documents have been
provided.
(f) Tax Qualification. Except as set forth in Schedule
3.12, each Company Employee Benefit Plan intended to be qualified under
Section 401(a) of the Code has, as currently in effect, been determined to
be so qualified by the Internal Revenue Service. Except as set forth in
Schedule 3.12, each trust established in connection with any Company
Employee Benefit Plan which is intended to be exempt from Federal income
taxation under Section 501(a) of the Code has, as currently in effect, been
determined to be so exempt by the Internal Revenue Service. No Company
Employee Benefit Plan is a VEBA. Since the date of each most recent
determination referred to in this paragraph (f), no event has occurred and
no condition or circumstance exists that would reasonably be expected to
result in the revocation of any such determination or that adversely affect
the qualified status of any such Company Employee Benefit Plan or the
exempt status of any such trust.
(g) Transactions. Neither the Company nor any of its
Subsidiaries nor any of their respective directors, officers, employees or,
to the knowledge of the Company, other Persons who participate in the
operation of any Company Employee Benefit Plan or related trust or funding
vehicle, has engaged in any transaction with respect to any Company
Employee Benefit Plan or breached any applicable fiduciary responsibilities
or obligations under Title I of ERISA that would reasonably be expected to
subject any of them to a material tax, penalty or liability for prohibited
transactions or breach of any obligations under ERISA or the Code or would
result in any claim being made under, by or on behalf of any such Company
Employee Benefit Plan by any party with standing to make such claim.
(h) Triggering Events. Except as set forth on Schedule
3.12, the execution of this Agreement and the consummation of the
transactions contemplated hereby do not constitute a triggering event under
any Company Employee Benefit Plan, policy, arrangement, statement,
commitment or agreement, whether or not legally enforceable, which (either
alone or upon the occurrence of any additional or subsequent event) will or
may result in any payment (whether of severance pay or otherwise), "excess
parachute payment" (as such term is defined in Section 280G of the Code),
acceleration, vesting or increase in benefits to any employee or former
employee or director of the Company or any of its Subsidiaries. Except as
set forth on Schedule 3.12, no Company Employee Benefit Plan provides for
the payment of severance, termination, change in control or similar-type
payments or benefits.
(i) Documents. The Company has delivered or made
available to Proha true and complete copies of all material documents in
connection with each Company Employee Benefit Plan, including, without
limitation (where applicable): (i) all Company Employee Benefit Plans as in
effect on the date hereof, together with all amendments thereto, including,
in the case of any Company Employee Benefit Plan not set forth in writing,
a written description thereof; (ii) all current summary plan descriptions
and summaries of material modifications; (iii) all current trust
agreements, declarations of trust and other documents establishing other
funding arrangements (and all amendments thereto and the latest financial
statements thereof); (iv) the most recent Internal Revenue Service
determination letter obtained with respect to each Company Employee Benefit
Plan intended to be qualified under Section 401(a) of the Code or exempt
under Section 501(a) or 501(c)(9) of the Code; (v) the annual report on
Internal Revenue Service Form 5500-series or 990 for each of the last three
years for each Company Employee Benefit Plan required to file such form;
(vi) the most recently prepared financial statements for each Company
Employee Benefit Plan for which such statements are required; and (vii) all
contracts and agreements relating to each Company Employee Benefit Plan,
including, without limitation, service provider agreements, insurance
contracts, annuity contracts, investment management agreements,
subscription agreements, participation agreements, and recordkeeping
agreements and collective bargaining agreements.
(j) Except as set forth on Schedule 3.12:
(i) there is no labor strike, dispute, slowdown,
stoppage or lockout actually pending, or to the knowledge of the
Company, threatened against or affecting the Company or any of its
Subsidiaries and during the past five (5) years there has not been
any such action;
(ii) to the knowledge of the Company, there are
no union claims to represent the employees of the Company or any
of its Subsidiaries;
(iii) neither the Company nor any of its
Subsidiaries is a party to or bound by any collective bargaining
or similar agreement with any labor organization, or work rules or
practices agreed to with any labor organization or employee
association applicable to employees of the Company or any of its
Subsidiaries;
(iv) none of the employees of the Company or any
of its Subsidiaries are represented by any labor organization and
the Company does not have any knowledge of any current union
organizing activities among the employees of the Company or any of
its Subsidiaries, nor does any question concerning representation
exist concerning such employees;
(v) true, correct and complete copies of all
written personnel policies, rules and procedures applicable to
employees of the Company or any of its Subsidiaries have
heretofore been delivered to Proha;
(vi) to the knowledge of the Company, no
federal, state, local or foreign agency responsible for the
enforcement of labor or employment laws is conducting an
investigation with respect to or relating to the Company and any
of its Subsidiaries; and
(vii) there are no complaints, controversies,
lawsuits or other proceedings pending or, to the knowledge of the
Company, any applicant for employment or classes of the foregoing
alleging breach of any express or implied contract or employment,
any law or regulation governing employment or the termination
thereof or other discriminatory, wrongful or tortious conduct in
connection with the employment relationship; and the execution of
this Agreement and the consummation of the transactions
contemplated hereby shall not result in a breach or other
violation of any collective bargaining agreement to which the
Company or any of its Subsidiaries is a party.
(k) Since the enactment of the WARN Act, neither the
Company nor any of its Subsidiaries have effectuated (i) a "plant closing"
(as defined in the WARN Act) affecting any site of employment or one or
more facilities or operating units within any site of employment or
facility of the Company or any of its Subsidiaries, or (ii) a "mass layoff"
(as defined in the WARN Act) affecting any site of employment or facility
of the Company or any of its Subsidiaries; nor has the Company or any of
its Subsidiaries been affected by any transaction or engaged in layoffs or
employment terminations sufficient in number to trigger application of any
similar state or local law. Except as set forth in Schedule 3.12, none of
the employees of the Company or any of its Subsidiaries has suffered an
"employment loss" (as defined in the WARN Act) with regard to their
employment with the Company or any of its Subsidiaries since August 17,
1998.
SECTION 3.13. Interests in Real Property. (a) Schedule
3.13 sets forth a true and complete list of all real property owned and all
material real property leased by the Company or any of its Subsidiaries.
Each of the Company and its Subsidiaries has good and marketable title in
fee simple to all real property owned by it, free and clear of all Liens,
except for Permitted Liens, and valid and enforceable leasehold interests
in all real property leased by it.
(b) None of the real property owned by, or the leasehold
estates of, the Company or any Subsidiary are subject to (i) any Liens
other than Permitted Liens or (ii) any easements, rights of way, licenses,
grants, building or use restrictions, exceptions, reservations, limitations
or other impediments that, in either case (i) or (ii), will materially
adversely affect the value thereof for their present use, taken as a whole,
or that materially interfere with or impair the present and continued use
thereof, taken as a whole, in the usual and normal conduct of the business
of any such Person.
(c) To the knowledge of the Company, all improvements on
such real properties and the operations therein conducted conform in all
material respects to all applicable health, fire, environmental, safety,
zoning and building laws, ordinances and administrative regulations
(whether through grandfathering provisions, permitted use exceptions,
variances or otherwise), except for possible nonconforming uses or
violations that do not and will not interfere with the present use,
operation or maintenance thereof as now used, operated or maintained or
access thereto, and that do not and will not materially affect the value
thereof for their present use. Neither the Company nor any of its
Subsidiaries has received notice of any violation of or noncompliance with
any such laws, ordinances or administrative regulations from any applicable
Governmental Authority, except for notices of violations or failures so to
comply, if any, that could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
SECTION 3.14. Leases. (a) (i) Except as set forth on
Schedule 3.14, neither the Company nor any Subsidiary is in breach of or
default (and no event has occurred which, with due notice or lapse of time
or both, may constitute a breach or default) under any lease required to be
set forth on Schedule 3.13 (the "Company Leases") and (ii) no party to any
Company Lease has given, or to the knowledge of the Company threatened to
give, or advised that it will be giving the Company or any Subsidiary of
the Company written notice of or made a claim with respect to any breach or
default, the consequences of which, in either case (i) or (ii) could,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(b) Except as set forth on Schedule 3.14, after taking
into account the exercise of any options (which are exercisable solely at
the discretion of the Company or any Subsidiary), none of the Company
Leases terminate by their respective terms before January 1, 2002.
(c) Except as set forth on Schedule 3.14, none of the
Company Leases require a consent to be obtained for the execution, delivery
and performance of any of the Documents or the consummation of any of the
transactions contemplated hereby or thereby.
(d) Neither the Company nor any Subsidiary of the Company
has any ownership, financial or other interest in the landlords under any
of the Company Leases.
SECTION 3.15. Compliance with Law. The operations of the
Company and its Subsidiaries have been conducted in compliance with all
Applicable Laws, except for violations or failures so to comply, if any,
that could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. Neither the Company nor any Subsidiary has
received written notice of any violation of or noncompliance with any
Applicable Laws, except as set forth on Schedule 3.15 and except for
notices of violations or failures so to comply, if any, that could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
SECTION 3.16. Related Party Transactions. Except as set
forth on Schedule 3.16 and except for the consummation of the transactions
contemplated by the Documents (including, without limitation, the Voting
Agreements), (i) neither the Company nor any of its Subsidiaries is a party
to any agreement or arrangement with or for the benefit of any Person who,
to the Company's knowledge, based on a review of Schedule 13Ds and Schedule
13Gs filed under the Exchange Act prior to the date of this Agreement, is a
holder of five percent (5%) or more of the outstanding equity securities of
the Company or any officer, director, partner or Affiliate of any such
Person ("Related Party"); (ii) all material transactions between the
Company and its Subsidiaries, on the one hand, and a Related Party, on the
other hand, are on terms and conditions which could reasonably be expected
to be obtained from a non-Affiliate in an arm's length transaction; and
(iii) no Related Party is a supplier, lessor, lessee or competitor of the
Company or any of its Subsidiaries.
SECTION 3.17. Tax Matters. (a) The Company and its
Subsidiaries have duly and properly filed, on a timely basis, all material
Tax Returns required to be filed by, or with respect to, the Company and
its Subsidiaries. All such Tax Returns were true, correct and complete in
all material respects when filed. The Company and its Subsidiaries have
paid in full all material Taxes and Tax liabilities required to be paid by
or with respect to them, other than those Taxes being contested in good
faith or those Taxes not yet due and payable, in each case which have been
adequately disclosed and for which an adequate reserve or accrual has been
established in the Company Financial Statements in accordance with U.S.
GAAP.
(b) Except as set forth on Schedule 3.17, all material
Taxes that the Company and its Subsidiaries are or were required by law to
withhold or collect have been duly and timely withheld or collected and, to
the extent required, have been timely paid to the proper Governmental
Authority. There are no Liens with respect to Taxes upon any of the
properties or assets, real or personal, tangible or intangible, of the
Company or any Subsidiary of the Company except for statutory liens for
Taxes not yet due or delinquent.
(c) Neither the Company nor any of its Subsidiaries has
been the subject of an audit or other examination with respect to Taxes by
any Governmental Authority, and, to the knowledge of the Company and any of
its Subsidiaries, no such audit or examination is contemplated or pending.
Neither the Company nor any of its Subsidiaries has received any written
notices from any Governmental Authority relating to any issue which could
materially affect the Tax liability of the Company or any of its
Subsidiaries.
(d) Neither the Company nor any of its Subsidiaries, (i)
has entered into an agreement or waiver that is currently effective, or
been requested to enter into an agreement or waiver, that extends any
statute of limitations relating to the payment or collection of Taxes of
the Company or any of its Subsidiaries, and (ii) is presently contesting
the Tax liability of the Company or any of its Subsidiaries before any
court, tribunal or agency.
(e) Neither the Company nor any of its Subsidiaries has
been included in any "consolidated," "unitary" or "combined" Tax Return
provided for under the law of the United States, any foreign jurisdiction
or any state or locality with respect to Taxes for any taxable period for
which the statute of limitations has not expired (other than a group of
which the Company and/or its Subsidiaries are the only members). Neither
the Company nor any of its Subsidiaries has any obligation by contract,
agreement, arrangement or otherwise to permit any Person, other than the
Company and its Subsidiaries, to use the benefit of a refund, credit or
offset of Tax of any of the Company or its Subsidiaries.
(f) There are no tax sharing, allocation, indemnification
or similar agreements in effect as between the Company or any of its
Subsidiaries (or any predecessor or affiliate thereof) and any other party
under which Proha, the Company or any of its Subsidiaries could be liable
for any material Taxes or other claims of any party after the Closing Date.
(g) Neither the Company nor any of its Subsidiaries has
applied for, been granted, or agreed to any accounting method change for
which it will be required to take into account any adjustment under Section
481 of the Code or any similar provision of the Code or the corresponding
tax laws of any nation, state or locality; neither the Company nor any of
its Subsidiaries has any knowledge that the U.S. Internal Revenue Service
or any other taxing authority has proposed or purported to require any such
adjustment or change in accounting method, and neither the Company nor any
of its Subsidiaries has any knowledge or belief that any such adjustment
under Section 481 of the Code or the corresponding tax laws of any nation,
state or locality will be required of the Company or its Subsidiaries upon
the completion of, or by reason of, the transaction contemplated by this
Agreement.
(h) Neither the Company nor any of its Subsidiaries is a
party to any agreement that would require the Company or any of its
Subsidiaries (or any affiliate thereof) to make any payment that would not
be deductible pursuant to Section 162(m) of the Code.
(i) (i) There are no deferred intercompany transactions
between the Company and any of its Subsidiaries or between any of its
Subsidiaries, and there is no excess loss account (within the meaning of
Treasury Regulations Section 1.1502-19 with respect to the stock of the
Company or any of its Subsidiaries) that will or may result in the
recognition of a material amount of taxable income upon the consummation of
the transaction contemplated by this Agreement, and (ii) there are no other
transactions or facts existing with respect to the Company and/or its
Subsidiaries that by reason of the consummation of the transaction
contemplated by this Agreement will result in the Company and/or its
Subsidiaries recognizing a material amount of taxable income.
(j) No indebtedness of the Company or any of its
Subsidiaries consists of "corporate acquisition indebtedness" within the
meaning of Section 279 of the Code.
(k) Neither the Company nor any of its Subsidiaries is,
has been during the five-year period ending on the date of this Agreement,
or will have been during the five-year period ending on the Closing Date, a
"United States real property holding corporation" within the meaning of
Section 897(c)(2) of the Code.
(l) No written claim has ever been made by any taxing
authority in a jurisdiction where the Company or any of its Subsidiaries
does not file Tax Returns that the Company or any of its Subsidiaries is or
may be subject to taxation by that jurisdiction.
SECTION 3.18. Environmental Matters. Except as set forth
on Schedule 3.18, (i) the Company and its Subsidiaries are in compliance in
all material respect with all applicable Environmental Laws, and have
obtained, and are in compliance in all material respect with, all permits
required under applicable Environmental Laws; (ii) there are no Actions by
any Governmental Authority or other Person or entity pending or, to the
knowledge of the Company threatened, against the Company or any of its
Subsidiaries under any Environmental Law; and (iii) to the knowledge of the
Company, there are no facts, circumstances or conditions relating to the
business or operations of the Company or any of its Subsidiaries that could
reasonably be expected to give rise to any material claim, proceeding,
Action or liability under any Environmental Law.
SECTION 3.19. Intellectual Property. (a) Schedule 3.19
sets forth, for the Intellectual Property owned by the Company or any
Subsidiary of the Company, a complete and accurate list of all U.S. and
foreign (i) patents and patent applications; (ii) trademark registrations
(including Internet domain registrations), trademark applications, and
material unregistered trademarks; (iii) copyright and mask work
registrations and material unregistered copyrights; and (iv) all Software
(other than readily available "off-the-shelf" commercial software programs
having an acquisition price of less than $5,000), in the case of subclauses
(i) through (iv) above, material to the Company's and its Subsidiaries'
respective businesses which are owned, licensed, or leased, by the Company
or any of its Subsidiaries, identifying which Intellectual Property is
owned, licensed, or leased, as the case may be. The Intellectual Property
of the Company and its Subsidiaries constitutes all the intellectual
property necessary to operate the business of the Company and its
Subsidiaries as of the Closing Date in substantially the manner in which it
is currently operated. To the extent indicated on Schedule 3.19, the
Intellectual Property of the Company and its Subsidiaries has been duly
registered in, filed in or issued by the United States Patent and Trademark
Office, United States Copyright Office, a duly authorized and appropriate
domain name registrar, the appropriate offices in the various states of the
United States and the appropriate offices of other jurisdictions (foreign
and domestic), and each such registration, filing and issuance remains in
full force and effect as of the Closing Date.
(b) Schedule 3.19 sets forth a complete and accurate list
of all material oral or written agreements (whether between the Company or
any of its Subsidiaries and third parties or inter-corporate) to which the
Company or any of its Subsidiaries is a party or otherwise bound, (i)
granting or obtaining any right to use or practice any rights under any
Intellectual Property (other than licenses for readily available
"off-the-shelf" commercial software programs having an acquisition price of
less than $5,000), or (ii) restricting the Company's or any of its
Subsidiaries' right to use any Intellectual Property, including, without
limitation, any license agreements, development agreements, distribution
agreements, settlement agreements, consent to use agreements, and covenants
not to xxx (collectively, the "License Agreements"). The License Agreements
of the Company and its Subsidiaries are valid and binding obligations of
the Company and its Subsidiaries, as applicable, enforceable in accordance
with their terms, and to the Company's knowledge, there exists no event or
condition which will result in a violation or breach of, or constitute
(with or without due notice of lapse of time or both) a default by any
party under any such License Agreement. Except as set forth in Schedule
3.19, neither the Company nor any of its Subsidiaries have licensed or
sublicensed its rights in any material Intellectual Property other than
pursuant to a valid and binding License Agreement. No royalties, honoraria
or other fees are currently payable by the Company or any of its
Subsidiaries to any third parties for the use of or right to use any
Intellectual Property except pursuant to any License Agreement and set
forth on Schedule 3.19.
(c) Except as set forth on Schedule 3.19, the Company or
a Subsidiary of the Company owns, or to the Company's knowledge, has a
valid right to use, free and clear of all Liens, other than Permitted
Liens, all of the Intellectual Property of the Company and its
Subsidiaries. The Company or a Subsidiary of the Company is listed in the
records of the appropriate United States, state, or foreign registry as the
sole current owner of record for each application and registration and has
the exclusive right to file, prosecute and maintain all applications and
registrations with respect to the Intellectual Property that is listed on
Schedule 3.19.
(d) Except as set forth on Schedule 3.19, the
Intellectual Property owned by the Company or any of its Subsidiaries and,
to the Company's knowledge, any material Intellectual Property licensed to
the Company or any of its Subsidiaries, has not been canceled, expired,
abandoned or otherwise terminated and all renewal fees in respect thereof
have been duly paid, and to the Company's knowledge is valid and
enforceable.
(e) Except as set forth on Schedule 3.19, neither the
Company nor any of its Subsidiaries has received any written notice or
claim and there is no pending or, to the knowledge of the Company,
threatened claim, suit, arbitration, interference or other adversarial or
contested proceeding before any court, agency, arbitral tribunal, or
registration authority in any jurisdiction (foreign or domestic) involving
the Intellectual Property owned by the Company or any of its Subsidiaries,
or, to the knowledge of the Company, the material Intellectual Property
licensed to the Company or any of its Subsidiaries, alleging that the
activities or the conduct of the Company's or any of its Subsidiaries'
businesses infringe upon, dilute, violate or constitute the unauthorized
use, misuse or misappropriation of the intellectual property rights of any
third party or challenging the Company's or any of its Subsidiaries'
ownership, use, validity, enforceability or registrability of any of their
respective Intellectual Property. There are no settlements, forebearances
to xxx, consents, judgments, or orders or similar obligations to which the
Company or any Subsidiary of the Company is a party other than the License
Agreements which (i) restrict the Company's or any of its Subsidiaries'
right to use any Intellectual Property, (ii) restrict the Company's or any
Subsidiary's businesses in order to accommodate a third party's
intellectual property rights or (iii) permit third parties to use any
Intellectual Property owned by the Company or any Subsidiary of the
Company. Except as set forth on Schedule 3.19, to the knowledge of the
Company, there does not exist any valid basis for any such claims.
(f) Except as set forth on Schedule 3.19, to the
Company's knowledge, the conduct of the Company's and any of its
Subsidiaries' business as currently conducted or planned to be conducted
does not infringe upon (either directly or indirectly such as through
contributory infringement or inducement to infringe) any Intellectual
Property owned or controlled by any third party. Except as set forth on
Schedule 3.19, to the Company's knowledge, no third party is
misappropriating, infringing, diluting or violating any Intellectual
Property owned by the Company or any Subsidiary of the Company and no such
claims, suits, arbitrations or other adversarial proceedings have been
brought or threatened against any third party by the Company or any
Subsidiary of the Company.
(g) The Company and each of its Subsidiaries take
reasonable measures to protect the confidentiality of its Trade Secrets,
including requiring their employees and other parties having access thereto
to execute written non-disclosure agreements. To the knowledge of the
Company, no Trade Secret of the Company or its Subsidiaries has been
disclosed or authorized to be disclosed to any third party other than
pursuant to a non-disclosure agreement. Except as set forth on Schedule
3.19, to the knowledge of the Company, no party to any non-disclosure
agreement relating to its Trade Secrets is in breach or default thereof.
Proha has been provided with a copy of the Company's form of non-disclosure
agreement and the non-disclosure agreements referred to in this clause (g)
contain substantially the same terms and conditions as the form of
non-disclosure agreement.
(h) No current or former partner, director, officer, or
employee of the Company or any Subsidiary of the Company (or any of their
respective predecessors in interest) will, after giving effect to the
transactions contemplated herein, directly own or retain any rights to use
any of the Intellectual Property owned or used by the Company or any
Subsidiary of the Company.
(i) With respect to the Software set forth in Schedule
3.19 which is owned by the Company, such Software was either developed (i)
by employees of the Company or any Subsidiary of the Company within the
scope of their employment or (ii) by independent contractors who have
assigned their rights to the Company or any Subsidiary of the Company
pursuant to signed, written agreements.
(j) The Trademarks listed on Schedule 3.19, for which the
Company or any Subsidiary of the Company has obtained or applied for a
registration that are material to the Company's business have been
continuously used in the form appearing in, and in connection with the
goods and services listed in, their respective registration certificates,
and are all the Trademarks that are material to the Company and its
Subsidiaries. To the knowledge of the Company, there has been no prior use
of the material Trademarks by any third party which would confer upon said
third party superior rights in the material Trademarks. The Company and its
Subsidiaries have undertaken reasonable policing of such Trademarks against
third party infringement.
SECTION 3.20. Registration Rights. Except as set forth on
Schedule 3.20 or pursuant to the Registration Rights Agreement, neither the
Company nor any of its Subsidiaries is under any obligation to register any
of its outstanding securities pursuant to the Securities Act.
SECTION 3.21. Insurance. Except as set forth on Schedule
3.21, the Company and its Subsidiaries maintain, with reputable insurers,
insurance in such amounts, including deductible arrangements, and of such a
character as is customary for companies engaged in the same or similar
business. Schedule 3.21 sets forth a list and brief description of all
policies of title, fire, liability, casualty, business interruption, errors
and omissions, workers' compensation and other forms of insurance
including, but not limited to, directors and officers insurance, held by
the Company and its Subsidiaries as of the date hereof. Neither the Company
nor any of its Subsidiaries is in default under any provisions of any such
policy of insurance and, as of the date hereof, all premiums due have been
paid and neither the Company nor any of its Subsidiaries has received
notice of cancellation or termination (or intent to cancel or terminate) of
any such insurance. Neither the Company nor any of its Subsidiaries has
received a written refusal of coverage thereunder, or any notice that any
issuer of any such policy has filed for protection under applicable
bankruptcy laws or is otherwise in the process of liquidating or has been
liquidated or any other indication that such policies are no longer in full
force and effect or that the issuer of any such policy is no longer willing
or able to perform its obligations thereunder. The Company has received a
binder for the renewal of its directors and officers insurance policy
effective on April 7, 2001.
SECTION 3.22. Material Contracts. (a) Schedule 3.22 sets
forth a true and complete list of all contracts and other instruments (with
the exception of the License Agreements listed on Schedule 3.19) to which
the Company or any of its Subsidiaries is a party that are material to the
business, operations, properties, prospects or financial condition of any
of them (collectively, the "Company Commitments"), including without
limitation:
(i) any material agreement, contract or
commitment relating to the employment of any Person by the Company
or any of its Subsidiaries, or any bonus, deferred compensation,
pension, profit sharing, stock option, employee stock purchase,
retirement or other employee benefit plan;
(ii) any material agreement, indenture or other
instrument which contains restrictions with respect to payment of
dividends or any other distribution in respect of its capital
stock;
(iii) any agreement, contract or commitment
relating to capital expenditures in excess of $50,000 in any
fiscal year;
(iv) any agreement to acquire, directly or
indirectly, any equity interest in or assets of any other Person
(other than purchases of supplies, inventory, or equipment in the
ordinary course of business) whether or not the transactions
contemplated thereby have been consummated, and under which the
Company or any of its Subsidiaries continues to have any
outstanding obligations;
(v) any loan (other than accounts receivable
from trade debtors arising in the ordinary course of business) or
advance to (other than travel or entertainment advances to
employees made in the ordinary course of business), or investment
in, any Person or any agreement, contract or commitment relating
to the making of any such loan, advance or investment;
(vi) any agreement relating to indebtedness in
excess of $50,000;
(vii) any guarantee or other contingent
liability in respect of any indebtedness or obligation of any
other Person (other than the endorsement of negotiable instruments
for collection in the ordinary course of business) in excess of
$50,000;
(viii) any material management service,
consulting, financial advisory or any other similar type contract
including, without limitation, any contract with any investment or
commercial bank;
(ix) any material agreement, contract or
commitment limiting the ability of the Company or any of its
Subsidiaries to engage in any line of business or to compete with
any Person;
(x) any agreement, contract or commitment which
involves payments in excess of $50,000 in any calendar year and is
not cancelable without penalty within thirty (30) days;
(xi) any agreement, contract or commitment for
the disposal of a material amount of assets or properties of the
Company or any of its Subsidiaries (other than sales to customers
in the ordinary course of business);
(xii) any agreement, contract or commitment
which is material to the Company or any of its Subsidiaries and
contain a "change in control" or similar provision;
(xiii) any agreement, contract or commitment
relating to any material joint venture, partnership, strategic
alliance or similar arrangement;
(xiv) any material agreement, contract or
commitment with any Affiliate;
(xv) any source code agreements with third
parties; and
(xvi) any other material agreement, contract or
commitment.
(b) Except as set forth on Schedule 3.22, each Company
Commitment is in full force and effect on the date hereof. Neither the
Company nor any of its Subsidiaries is in default in respect of any Company
Commitment, and no event has occurred which, with due notice or lapse of
time or both, would constitute such a default, except for any such defaults
that could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. To the knowledge of the Company, no other
party to any of the Company Commitments is in default in respect thereof,
and no event has occurred which, with due notice or lapse of time or both,
would constitute such a default.
SECTION 3.23. Questionable Payments. None of the Company,
any of its Subsidiaries nor, to the Company's knowledge, any employee,
agent or representative of the Company or any of its Subsidiaries acting on
their behalf has, directly or indirectly, made any bribes, kickbacks,
illegal payments or illegal political contributions using corporate funds
of the Company or any Subsidiary or made any illegal payments to obtain or
retain business using corporate funds of the Company or any Subsidiary in
violation of the U.S. Foreign Corrupt Practices Act of 1977.
SECTION 3.24. Accuracy of Information. None of the
representations, warranties or statements made by the Company contained in
this Agreement or in the exhibits hereto contains any untrue statement of a
material fact or, taken as a whole together with the SEC Documents and
Schedules, omits to state any material fact necessary in order to make any
of such representations, warranties or statements, in light of the
circumstances under which they were made, not misleading.
SECTION 3.25. Private Offering. Assuming the accuracy of
Section 4.26, none of the Company, any of its Subsidiaries, nor anyone
acting on their behalf, has offered or sold or will offer or sell any
securities, or has taken or will take any other action, which could
reasonably be expected to subject the offer, issuance or sale of the Opus
Shares, as contemplated hereby, to the registration provisions of the
Securities Act.
SECTION 3.26. Brokers. The Company and its Subsidiaries
and their agents and representatives have incurred no obligation or
liability, contingent or otherwise, for brokerage or finders' fees, agents'
commissions, investment banking fees, or other similar payment in
connection with this Agreement, except for any fee incurred in connection
with the performance by the Company of the covenant described in Section
5.12.
SECTION 3.27. Determination of Amount of Capital. The
Board of Directors of the Company has, by resolution, duly resolved in
accordance with Section 154 of the DGCL that $.001 per share shall
constitute "capital" and the remainder of the consideration received by the
Company for such shares shall constitute "surplus" (in each case, as such
terms are used in Section 154 of the DGCL).
SECTION 3.28 State Takeover Statutes. The Company has
taken all necessary actions to render inapplicable Section 203 of the DGCL
to Proha and its assignee under Section 9.12 hereof. No other takeover
statute or similar statute or regulation of any state is applicable to this
Agreement (including all of the transactions contemplated hereby and
thereby).
SECTION 3.29 Books and Records. Except as set forth on
Schedule 3.29, the respective minute books of the Company and its
Subsidiaries, to the extent previously made available to Proha and its
representatives, contain, and the respective minutes of books of the
Company and its Subsidiaries made available to Proha after the date hereof
will contain, accurate records of all meetings of, and corporate actions
taken by (including action taken by written consent) the respective
shareholders and Board of Directors of the Company and its Subsidiaries.
None of the Company or any of its Subsidiaries has any of its records,
systems, controls, data or information recorded, stored, maintained,
operated or otherwise wholly or partly dependent upon or held by any means
(including any electronic, mechanical or photographic process, whether
computerized or not) which (including all means of access thereto and
therefrom) are not under the exclusive ownership and direct control of the
Company or its Subsidiaries.
SECTION 3.30 Personal Property. Except for properties and
assets reflected in the Company Financial Statements, or acquired since
December 31, 2000, which have been sold or otherwise disposed of in the
ordinary course of business, and except as set forth on Schedule 3.31, each
of the Company and its Subsidiaries has good, valid and marketable title to
(a) all of its owned personal properties and assets (tangible and
intangible), including, without limitation, all of the personal properties
and assets reflected in the Company Financial Statements, except as may be
indicated in the notes thereto, and (b) all of the personal properties and
assets (tangible or intangible) purchased by the Company and its
Subsidiaries since December 31, 2000, in each case free and clear of all
Liens, except for Permitted Liens. All of the tangible personal property
owned by each of the Company and its Subsidiaries is in good operating
condition and repair, ordinary wear and tear excepted, and is adequate and
suitable for the purposes for which they are presently being used.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PROHA
Except as specifically identified in the Schedules
delivered to the Company concurrent with the execution of this Agreement
with reference to the particular representation or warranty being
qualified, Proha hereby represents and warrants to the Company as follows:
SECTION 4.1. Organization and Standing. Except as set
forth on Schedule 4.1, Proha, each Artemis Entity and each Proha 2 Entity
is duly organized and validly existing in good (to the extent that the
concept of good standing is recognized under the laws of the relevant
jurisdiction of organization) standing as a corporation under the laws of
its jurisdiction of organization and has all requisite corporate power and
authority to own its properties and assets and to carry on its business as
it is now being conducted. Proha, each Artemis Entity and each Proha 2
Entity is duly qualified or licensed to transact business as a foreign
corporation and is in good standing in each jurisdiction in which the
character of the properties owned or leased by it or the nature of its
business makes such qualification necessary, except where the failure to so
qualify or be in good standing could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
SECTION 4.2. Authorization. Proha has the corporate power
to execute, deliver and perform its obligations under each of the Documents
to which it is a party and has taken all necessary corporate action to
authorize the execution, delivery and performance by it of each of such
Documents and to consummate the transactions contemplated hereby and
thereby subject to the approval of Proha's stockholders under the Companies
Act. No other corporate proceedings on the part of Proha are necessary
therefor (other than the approval of Proha's stockholders under the
Companies Act).
SECTION 4.3. Due Execution and Delivery; Binding
Obligations. Proha has duly executed and delivered this Agreement. This
Agreement constitutes, and each of the other Documents, when executed and
delivered by Proha and, assuming due authorization and execution by the
other parties hereto and thereto, will constitute legal, valid and binding
obligations of Proha enforceable against it in accordance with their 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 general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law).
SECTION 4.4. No Violation. The execution, delivery and
performance by Proha of each of the Documents to which it is a party, the
consummation of the transactions contemplated hereby and thereby does not
and will not contravene any Applicable Law, except for any such
contraventions that could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect. The execution, delivery and
performance by Proha of the Documents to which it is a party and the
consummation of the transactions contemplated hereby and thereby will not
(i) violate, result in a breach of or constitute (with due notice or lapse
of time or both) a default under any contract, lease, loan agreement,
mortgage, security agreement, trust indenture or other agreement or
instrument to which Proha or any of its Subsidiaries is a party or by which
any of them is bound or to which any of their properties or assets is
subject, except to the extent any such conflict or breach, singly or in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect, (ii) result in the creation or imposition of any Lien (other than a
Permitted Lien) upon any of the properties or assets of any of them, (iii)
except as set forth on Schedule 4.4, obligate Proha, or any Artemis Entity
or any Proha 2 Entity to make any payment or incur any additional
obligation, or give rise to any right of any Person with respect to Proha,
any Artemis Entity or any Proha 2 Entity, under any term or provision of
any contract or agreement, the Charter or Bylaws of Proha, any Artemis
Entity or any Proha 2 Entity or any Proha Employee Benefit Plan or
Applicable Law, or (iv) will not violate any provision of the Charter or
Bylaws of Proha.
SECTION 4.5. Consents and Approvals. Except as set forth
on Schedule 4.5, assuming all filings, if any, required by the HSR Act, if
any, are duly made and the waiting period thereunder has been terminated or
has expired, and except for the approval of Proha's stockholders, no
consent, permit, approval or authorization of, or declaration, filing,
application, transfer or registration with, any Governmental Authority, or
any other Person or entity is required to be made or obtained by Proha by
virtue of the execution, delivery, or performance of this Agreement or any
of the other Documents.
SECTION 4.6. Capital Stock of Artemis Entities and the
Proha 2 Entities. Except as set forth on Schedule 4.6, the Artemis Shares,
the SISA Shares, the AISARL Shares, the AIGMBH Shares, the EMSSRL Shares,
the AISPA Shares, the JSTI Shares, the PMK Shares, the PPOY Shares, the IOY
Shares and the AOY Shares constitute all of the issued and outstanding
capital stock of Artemis, SISA, AISARL, AIGMBH, EMSSRL, AISPA, JSTI, PMK,
PPOY, IOY and AOY, respectively. The authorized and outstanding capital
stock of each of Artemis, SISA, AISARL, AIGMBH, EMSSRL, AISPA, JSTI, PMK,
PPOY, IOY and AOY is set forth on Schedule 4.6. Each share of capital stock
of the Artemis Entities and the Proha 2 Entities has been duly authorized,
validly issued, fully paid and nonassessable and will not be subject to nor
issued in violation of, any preemptive rights, and none of the securities
of any Artemis Entity or any Proha 2 Entity were issued in violation of the
Securities Act, any state "blue sky" laws or any other applicable
securities laws. At the date hereof there are, and immediately following
the Closing there will be (a) no outstanding or authorized options,
warrants, agreements, conversion rights, preemptive rights, other rights,
subscriptions, claims of any character, obligations, convertible or
exchangeable securities, or other commitments, contingent or otherwise,
relating to shares of capital stock of any Artemis Entity or any Proha 2
Entity or pursuant to which any Artemis Entity or any Proha 2 Entity is or
may become obligated to issue shares of its capital stock or any securities
convertible into, exchangeable for, or evidencing the right to subscribe
for, purchase or acquire, any shares of the capital stock of any Artemis
Entity or any Proha 2 Entity, as the case may be, (b) no restrictions upon
the dividends, voting or transfer, except as required by the Securities Act
and state "blue sky" laws, of any shares of capital stock of any Artemis
Entity or any Proha 2 Entity pursuant to its Charter, Bylaws or other
governing documents or any agreement or other instruments to which it is a
party or by which it is bound, and (c) no shares of capital stock of any
Artemis Entity or any Proha 2 Entity are held in its treasury. No Artemis
Entity or any Proha 2 Entity has authorized or outstanding bonds,
debentures, notes or other indebtedness the holders of which have the right
to vote (or convertible or exercisable for or exchangeable into securities
the holders of which have the right to vote) with the stockholders of such
Person on any matter.
SECTION 4.7. Permits. Each Artemis Entity has such
Permits as are necessary to own, lease, license or operate their respective
properties and to conduct their businesses as currently owned and conducted
and all such Permits are valid and in full force and effect, except such
Permits that the failure to have or to be in full force and effect could
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
SECTION 4.8. Subsidiaries. Schedule 4.8 contains a
complete and accurate list of all Subsidiaries of each Artemis Entity, each
Proha 2 Entity and of Proha. Except for Proha's interest in its
Subsidiaries, or as set forth in Schedule 4.8, neither Proha nor any
Artemis Entity or Proha 2 Entity owns directly or indirectly any interest
or investment (whether equity or debt) in, nor is the Company or any of its
Subsidiaries subject to any obligation or requirement to provide for or to
make any investment (in the form of a loan, capital contribution or
otherwise) to or in, any Person.
SECTION 4.9. Litigation. Except as set forth on Schedule
4.9, there are no pending or, to the knowledge of Proha, threatened claims,
actions, suits, labor disputes, grievances, administrative or arbitration
or other proceedings or, to the knowledge of Proha, investigations against
Proha or any Artemis Entity or their respective assets or properties before
or by any Governmental Authority or before any arbitrator that could,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Neither Proha nor any Artemis Entity or any of their
respective assets or properties, is subject to any order, writ, judgment,
award, injunction or decree of any Governmental Authority or arbitrator,
that could, individually or in the aggregate reasonably be expected to have
a Material Adverse Effect.
SECTION 4.10. Financial Statements. (a) Proha has made
available to the Company copies of (i) the audited consolidated balance
sheet of Artemis and its consolidated Subsidiaries as of December 31, 2000,
together with the related audited consolidated statements of operations,
stockholders' equity and cash flows for the nine months then ended, and the
notes thereto, accompanied by the unqualified opinion thereon of Ernst &
Young (the "Artemis Financial Statements") (ii) the audited consolidated
balance sheets of SISA and its consolidated Subsidiaries as of December 31,
2000, together with the related audited consolidated statements of
operations, stockholders' equity and cash flows for the six months then
ended, and the notes thereto, accompanied by the unqualified opinion
thereon of Ernst & Young (collectively, the "SISA Financial Statements"),
(iii) the audited consolidated balance sheets of EMSSRL and its
consolidated Subsidiaries as of December 31, 2000, together with the
related audited consolidated statements of operations, stockholders' equity
and cash flows for the five months then ended, and the notes thereto,
accompanied by the unqualified opinion thereon of Ernst & Young
(collectively, the "EMSSRL Financial Statements"), and (iv) the audited
consolidated balance sheets of the PPOY and its consolidated Subsidiaries
as of December 31, 2000, together with the related audited consolidated
statements of operations, stockholders' equity and cash flows for the
twelve months then ended, and the notes thereto, accompanied by the
unqualified opinion thereon of Xxxxx Xxxxxx, a certified public accountant
(collectively, the "PPOY Financial Statements" and together with the
Artemis Financial Statements, SISA Financial Statements, EMSSRL Financial
Statements and PPOY Financial Statements, the "Artemis Entities' Financial
Statements"). The Artemis Financial Statements (including the notes
thereto) were prepared in accordance with U.S. GAAP and present fairly, in
all material respects, the consolidated financial position and results of
operation of Artemis and its consolidated Subsidiaries Entities at the date
and for the period indicated. The SISA Financial Statements (including the
notes thereto) were prepared in accordance with French GAAP and present
fairly, in all material respects, the consolidated financial position and
results of operation of SISA and its consolidated Subsidiaries at the date
and for the period indicated. The EMSSRL Financial Statements (including
the notes thereto) were prepared in accordance with Italian GAAP and
present fairly, in all material respects, the consolidated financial
position and results of operation of EMSSRL and its consolidated
Subsidiaries at the date and for the period indicated. The PPOY Financial
Statements (including the notes thereto) were prepared in accordance with
Finnish GAAP and present fairly, in all material respects, the consolidated
financial position and results of operation of PPOY and its consolidated
Subsidiaries at the date and for the period indicated.
(b) Artemis does not have any material claims,
liabilities or indebtedness, contingent or otherwise of any kind whatsoever
(whether accrued, absolute, contingent or otherwise and whether or not
required to be reflected in its financial statements in accordance with
U.S. GAAP), except as set forth in Schedule 4.10, or (i) as set forth in
the Artemis Financial Statements and (ii) liabilities to trade creditors
incurred subsequent to December 31, 2000 in the ordinary course of business
consistent with past practices not involving borrowings by Artemis. SISA
does not have any material claims, liabilities or indebtedness, contingent
or otherwise of any kind whatsoever (whether accrued, absolute, contingent
or otherwise and whether or not required to be reflected in its financial
statements in accordance with French GAAP), except as set forth in Schedule
4.10 (i) as set forth in the SISA Financial Statements and (ii) liabilities
to trade creditors incurred subsequent to December 31, 2000 in the ordinary
course of business consistent with past practices not involving borrowings
by SISA. EMSSRL does not have any material claims, liabilities or
indebtedness, contingent or otherwise of any kind whatsoever (whether
accrued, absolute, contingent or otherwise and whether or not required to
be reflected in its financial statements in accordance with Italian GAAP),
except as set forth in Schedule 4.10 (i) as set forth in the EMSSRL
Financial Statements and (ii) liabilities to trade creditors incurred
subsequent to December 31, 2000 in the ordinary course of business
consistent with past practices not involving borrowings by EMSSRL. PPOY
does not have any material claims, liabilities or indebtedness, contingent
or otherwise of any kind whatsoever (whether accrued, absolute, contingent
or otherwise and whether or not required to be reflected in its financial
statements in accordance with Finnish GAAP), except as set forth in
Schedule 4.10 (i) as set forth in the PPOY Financial Statements and (ii)
liabilities to trade creditors incurred subsequent to December 31, 2000 in
the ordinary course of business consistent with past practices not
involving borrowings by PPOY.
(c) Proha has made public all reports, documents and
information required to be made public by Proha pursuant to (i) the
Securities Market Act, (ii) the Companies Act, (iii) the rules and
regulations of the Finnish Financial Supervision Authority, and (iv) the
rules and regulations of the Helsinki Stock Exchange, which reports,
documents and information (collectively, the "Finnish Documents") complied
in form and substance in all material respects with the requirements of
Applicable Law. The disclosed reports, documents or information did not and
do not, except as superceded or updated by reports, documents or
information subsequently made public contain, as of the date hereof and as
of the Closing Date, any untrue statement of a material fact or omit to
state a material fact required to be stated therein.
SECTION 4.11. Change in Condition. Except as set forth on
Schedule 4.11, since December 31, 2000, the Artemis Entities have operated
their respective businesses in the ordinary course consistent with past
practices and there has not occurred (i) any event, occurrence or
conditions, or to the knowledge of Proha, any circumstance or development
that could, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect, or (ii) any action specified in Section
6.1(b) of this Agreement.
SECTION 4.12. Employee Benefit Plans and Labor Matters.
(a) List of Plans. Set forth in Schedule 4.12 attached hereto is an
accurate and complete list of all domestic and foreign (i) "employee
benefit plans," within the meaning of Section 3(3) of ERISA; (ii) bonus,
stock option, stock purchase, restricted stock, incentive, fringe benefit,
VEBAs under Section 501(c)(9) of the Code and the Treasury Regulations
thereunder, profit-sharing, pension or retirement, deferred compensation,
medical, life insurance, disability, accident, salary continuation,
severance, accrued leave, vacation, sick pay, sick leave, supplemental
retirement and unemployment benefit plans, programs, arrangements,
commitments and/or practices, whether or not insured and which, in the case
of any such plan, program, arrangement, commitment and/or practice
applicable to a non-U.S. employee, is not mandated under Applicable Law of
such non-U.S. jurisdiction; and (iii) employment, consulting, termination,
and severance contracts or agreements; in each case for active, retired or
former employees or directors, whether or not any such plans, programs,
arrangements, commitments, contracts, agreements and/or practices (referred
to in (i), (ii) or (iii) above) are in writing or are otherwise exempt from
the provisions of ERISA; that have been established, maintained or
contributed to (or with respect to which an obligation to contribute has
been undertaken) for the benefit of any U.S. or non-U.S. current or former
employee of Artemis or any of its Subsidiaries or with respect to which any
potential liability is borne by Artemis or any of its Subsidiaries
(including, for this purpose and for the purpose of all of the
representations in this Section 4.12, all employers (whether or not
incorporated) that would be treated together with Artemis, any of its
Subsidiaries as a single employer within the meaning of Section 414) of the
Code ("Artemis Employee Benefit Plans").
(b) Status of Plans. Each Artemis Employee Benefit Plan
(including any related trust) complies in all material respects in form
with the requirements of all applicable laws, including, without
limitation, ERISA and the Code, and has at all times been maintained and
operated in substantial compliance with its terms and the requirements of
all applicable laws, including, without limitation, ERISA and the Code. No
complete or partial termination of any Artemis Employee Benefit Plan has
occurred or is expected to occur. Neither Artemis nor any of its
Subsidiaries has any commitment, intention or understanding to create,
modify or terminate any Artemis Employee Benefit Plan. Except as required
to maintain the tax-qualified status of any Artemis Employee Benefit Plan
intended to qualify under Section 401(a) of the Code, no condition or
circumstance exists that would prevent the amendment or termination of any
Artemis Employee Benefit Plan. No event has occurred and no condition or
circumstance exists that would reasonably be expected to result in a
material increase in the benefits under or the expense of maintaining any
Artemis Employee Benefit Plan from the level of benefits or expense
incurred for the most recent fiscal year ended thereof.
(c) No Pension Plans. No Artemis Employee Benefit Plan is
an "employee pension benefit plan" (within the meaning of Section 3(2) of
ERISA, whether or not subject to ERISA) subject to Section 412 of the Code
or Section 302 or Title IV of ERISA, or any similar Applicable Law of a
non-U.S. jurisdiction. Neither Artemis nor any of its Subsidiaries has ever
maintained or contributed to, or had any obligation to contribute to (or
borne any liability with respect to) any "multiple employer plan" (within
the meaning of the Code or ERISA) or any "multiemployer plan" (as defined
in Section 4001(a)(3) of ERISA).
(d) Liabilities. Neither Artemis nor any of its
Subsidiaries maintains any Artemis Employee Benefit Plan (whether qualified
or non-qualified under Section 401(a) of the Code) providing for
post-employment or retiree health, life insurance and/or other welfare
benefits and having unfunded liabilities, and neither Artemis nor any of
its Subsidiaries have any obligation to provide any such benefits to any
retired or former employees or active employees following such employees'
retirement or termination of service. Neither Artemis nor any of its
Subsidiaries has any unfunded liabilities pursuant to any Artemis Employee
Benefit Plan that is not intended to be qualified under Section 401(a) of
the Code.
Neither Artemis nor any of its Subsidiaries has incurred
any liability for any tax or excise tax arising under Chapter 43 of the
Code, and no event has occurred and no condition or circumstance has
existed that could give rise to any such liability.
There are no actions, suits, claims or disputes pending,
or, to the knowledge of Proha, threatened, anticipated or expected to be
asserted against or with respect to any Artemis Employee Benefit Plan or
the assets of any such plan (other than routine claims for benefits and
appeals of denied routine claims). No civil or criminal action brought
pursuant to the provisions of Title I, Subtitle B, Part 5 of ERISA is
pending or, to the knowledge of Proha, threatened, anticipated, or expected
to be asserted against Artemis or any of its Subsidiaries or any fiduciary
of any Artemis Employee Benefit Plan, in any case with respect to any
Artemis Employee Benefit Plan.
(e) Non-U.S. Plans. With respect to each Artemis Employee
Benefit Plan that is not subject to United States law (an "Artemis Foreign
Benefit Plan"): (i) all employer and employee contributions to each Artemis
Foreign Benefit Plan required by Applicable Law or by the terms of such
Artemis Foreign Benefit Plan have been made, or if applicable, accrued in
accordance with normal accounting practices; (ii) the sum of the fair
market value of the assets of each funded Artemis Foreign Benefit Plan, the
liability of each insurer for any Artemis Foreign Benefit Plan funded
through insurance and the book reserve established for any Artemis Foreign
Benefit Plan, together with any accrued contributions, is, collectively,
sufficient to procure or provide for the accrued benefit obligations, as of
the Closing Date, with respect to all current and former participants in
such plan according to the actuarial assumptions and valuations most
recently used to determine employer contributions to such Artemis Foreign
Benefit Plan and no transaction contemplated by this Agreement shall cause
such assets or insurance obligations to be less than such benefit
obligations; and (iii) each Artemis Foreign Benefit Plan required to be
registered has been registered and has been maintained in good standing
with applicable regulatory authorities.
(f) Tax Qualification. Each Artemis Employee Benefit Plan
intended to be qualified under Section 401(a) of the Code has, as currently
in effect, been determined to be so qualified by the Internal Revenue
Service. Each trust established in connection with any Artemis Employee
Benefit Plan which is intended to be exempt from Federal income taxation
under Section 501(a) of the Code has, as currently in effect, been
determined to be so exempt by the Internal Revenue Service. Each VEBA has
been determined by the Internal Revenue Service to be exempt from Federal
income tax under Section 501(c)(9) of the Code. Since the date of each most
recent determination referred to in this paragraph (f), no event has
occurred and no condition or circumstance exists that could reasonably be
expected to result in the revocation of any such determination or that
could adversely affect the qualified status of any such Artemis Employee
Benefit Plan or the exempt status of any such trust or VEBA.
(g) Transactions. Neither Artemis nor any of its
Subsidiaries nor any of their respective directors, officers, employees or,
to the knowledge of Proha, other Persons who participate in the operation
of any Artemis Employee Benefit Plan or related trust or funding vehicle,
has engaged in any transaction with respect to any Artemis Employee Benefit
Plan or breached any applicable fiduciary responsibilities or obligations
under Title I of ERISA that would subject any of them to a tax, penalty or
liability for prohibited transactions or breach of any obligations under
ERISA or the Code or would result in any claim being made under, by or on
behalf of any such Artemis Employee Benefit Plan by any party with standing
to make such claim.
(h) Triggering Events. The execution of this Agreement
and the consummation of the transactions contemplated hereby, do not
constitute a triggering event under any Artemis Employee Benefit Plan,
policy, arrangement, statement, commitment or agreement, whether or not
legally enforceable, which (either alone or upon the occurrence of any
additional or subsequent event) will or may result in any payment (whether
of severance pay or otherwise), acceleration, vesting or increase in
benefits to any employee or former employee or director of Proha or any of
its Subsidiaries.
(i) Documents. Proha has delivered or made available to
the Company and its counsel true and complete copies of all material
documents in connection with each Artemis Employee Benefit Plan, including,
without limitation (where applicable): (i) all Artemis Employee Benefit
Plans as in effect on the date hereof, together with all amendments
thereto, including, in the case of any Artemis Employee Benefit Plan not
set forth in writing, a written description thereof; (ii) all current
summary plan descriptions and summaries of material modifications; (iii)
all current trust agreements, declarations of trust and other documents
establishing other funding arrangements (and all amendments thereto and the
latest financial statements thereof); (iv) the most recent Internal Revenue
Service determination letter obtained with respect to each Artemis Employee
Benefit Plan intended to be qualified under Section 401(a) of the Code or
exempt under Section 501(a) or 501(c)(9) of the Code; (v) the annual report
on Internal Revenue Service Form 5500-series or 990 for each of the last
three years for each Artemis Employee Benefit Plan required to file such
form; (vi) the most recently prepared financial statements for each Artemis
Employee Benefit Plan for which such statements are required; and (vii) all
material contracts and agreements relating to each Artemis Employee Benefit
Plan, including, without limitation, service provider agreements, insurance
contracts, annuity contracts, investment management agreements,
subscription agreements, participation agreements, and recordkeeping
agreements and collective bargaining agreements.
(j) Except as set forth on Schedule 4.12:
(i) there is no labor strike, dispute, slowdown,
stoppage or lockout actually pending, or to the knowledge of
Proha, threatened against or affecting the Artemis Entities and
during the past five years there has not been any such action;
(ii) to the knowledge of Proha, there are no
union claims to represent the employees of the any Artemis Entity;
(iii) no Artemis Entity is a party to or bound
by any collective bargaining or similar agreement with any labor
organization, or work rules or practices agreed to with any labor
organization or employee association applicable to employees of
any Artemis Entity;
(iv) none of the employees of any Artemis Entity
are represented by any labor organization and Proha does not have
any knowledge of any current union organizing activities among the
employees of any Artemis Entity, nor does any question concerning
representation exist concerning such employees;
(v) true, correct and complete copies of all
written personnel policies, rules and procedures applicable to
employees of the Artemis Entities have heretofore been delivered
to the Company;
(vi) to the knowledge of Proha, no federal,
state, local or foreign agency responsible for the enforcement of
labor or employment laws is conducting an investigation with
respect to or relating to any Artemis Entity; and
(vii) there are no complaints, controversies,
lawsuits or other proceedings pending or, to the knowledge of
Proha, any applicant for employment or classes of the foregoing
alleging breach of any express or implied contract or employment,
any law or regulation governing employment or the termination
thereof or other discriminatory, wrongful or tortious conduct in
connection with the employment relationship; and the execution of
this Agreement and the consummation of the transactions
contemplated hereby shall not result in a breach or other
violation of any collective bargaining agreement to which any
Artemis Entity is a party.
(k) Since the enactment of the WARN Act, no Artemis
Entity has effectuated (i) a "plant closing" (as defined in the WARN Act)
affecting any site of employment or one or more facilities or operating
units within any site of employment or facility of the Artemis Entities, or
(ii) a "mass layoff" (as defined in the WARN Act) affecting any site of
employment or facility of the Artemis Entities; nor has any Artemis Entity
been affected by any transaction or engaged in layoffs or employment
terminations sufficient in number to trigger application of any similar
state or local law. Except as set forth in Schedule 4.12, none of the
employees of the Artemis Entities has suffered an "employment loss" (as
defined in the WARN Act) with regard to their employment with the Artemis
Entities since March 1, 1997.
SECTION 4.13. Interests in Real Property. (a) Schedule
4.13 sets forth a true and complete list of all real property owned and all
material real property leased by each Artemis Entity. Each Artemis Entity
has good and marketable title in fee simple to all real property owned by
it, free and clear of all Liens, except for Permitted Liens, and valid and
enforceable leasehold interests in all real estate leased by it.
(b) None of the real property owned by, or the leasehold
estates of, the Artemis Entities are subject to (i) any Liens other than
Permitted Liens or (ii) any easements, rights of way, licenses, grants,
building or use restrictions, exceptions, reservations, limitations or
other impediments that, in either case (i) or (ii), will materially
adversely affect the value thereof for their present use, taken as a whole,
or that materially interfere with or impair the present and continued use
thereof, taken as a whole, in the usual and normal conduct of the business
of any such Person.
(c) To the knowledge of Proha, all improvements on such
real property and the operations therein conducted conform in all material
respects to all applicable health, fire, environmental, safety, zoning and
building laws, ordinances and administrative regulations (whether through
grandfathering provisions, permitted use exceptions, variances or
otherwise), except for possible nonconforming uses or violations that do
not and will not interfere with the present use, operation or maintenance
thereof as now used, operated or maintained or access thereto, and that do
not and will not materially affect the value thereof for their present use.
To the knowledge of Proha, no Artemis Entity has received notice of any
violation of or noncompliance with any such laws, ordinances or
administrative regulations from any Governmental Authority, except for
notices of violations or failures so to comply, if any, that could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
SECTION 4.14. Leases. (a)(i) No Artemis Entity is in
breach of or default (and no event has occurred which, with due notice or
lapse of time or both, may constitute a breach or default) under any lease
required to be set forth on Schedule 4.13 (the "Artemis Leases") and (ii)
no party to any Artemis Lease has given, or to the knowledge of Proha
threatened to give, or advised that it will be giving Proha or any Artemis
Entity written notice of or made a claim with respect to any breach or
default, the consequences of which, in either case (i) or (ii) could,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(b) Except as set forth on Schedule 4.14, after taking
into account the exercise of any options (which are exercisable solely at
the discretion of any Artemis Entity), none of the Artemis Leases
terminates by their respective terms before January 1, 2002.
(c) Except as set forth on Schedule 4.14, none of the
Artemis Leases require a consent to be obtained for the execution, delivery
and performance of any of the Documents or the consummation of any of the
transactions contemplated hereby or thereby.
(d) Neither Proha nor any Artemis Entity has any
ownership, financial or other interest in the landlords under any of the
Artemis Leases.
SECTION 4.15. Compliance with Law. The operations of the
Artemis Entities have been conducted in compliance with all Applicable
Laws, except for violations or failures so to comply, if any, that could
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. To the knowledge of Proha, no Artemis Entity has
received written notice of any noncompliance with any Applicable Laws,
except as set forth on Schedule 4.15 and except for notices of violations
or failures so to comply, if any, that could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
SECTION 4.16. Related Party Transactions. Except as set
forth on Schedule 4.16 and except for the consummation of the transactions
contemplated by the Documents (including, without limitation, the Voting
Agreements), (i) neither Proha nor any Artemis Entity is a party to any
agreement or arrangement with or for the benefit of any other Subsidiary of
Proha; (ii) all transactions between Proha and an Artemis Entity are on the
terms and conditions which could reasonably be obtained from a
non-Affiliate in an arm's length transaction; and (iii) no Affiliate of
Proha is a supplier, lessor, lessee or competitor of any Artemis Entity.
SECTION 4.17. Tax Matters. (a) Artemis Entities have duly
and properly filed, on a timely basis, all material Tax Returns required to
be filed by, or with respect to, Artemis Entities. All such Tax Returns
were true, correct and complete in all material respects when filed.
Artemis Entities have paid in full all material Taxes and Tax liabilities
required to be paid by or with respect to them, other than those Taxes
being contested in good faith or those Taxes not yet due and payable, in
each case which have been adequately disclosed and for which an adequate
reserve or accrual has been established in the Artemis Entities' Financial
Statements or as set forth on Schedule 4.17.
(b) All material Taxes that Artemis Entities are or were
required by law to withhold or collect have been duly and timely withheld
or collected and, to the extent required, have been timely paid to the
proper Governmental Authority. There are no Liens with respect to Taxes
upon any of the properties or assets, real or personal, tangible or
intangible, of any Artemis Entity except for statutory liens for Taxes not
yet due or delinquent.
(c) Except as set forth on Schedule 4.17, no Artemis
Entity has been the subject of an audit or other examination with respect
to Taxes by any Governmental Authority, and, to the knowledge of Artemis
Entity, no such audit or examination is contemplated or pending. No Artemis
Entity has received any written notices from any Governmental Authority
relating to any issue which could materially affect the Tax liability of
any Artemis Entity.
(d) No Artemis Entity, (i) has entered into an agreement
or waiver that is currently effective, or been requested to enter into an
agreement or waiver, that extends any statute of limitations relating to
the payment or collection of Taxes of any Artemis Entity, and (ii) is
presently contesting the Tax liability of any Artemis Entity before any
court, tribunal or agency.
(e) No Artemis Entity has been included in any
"consolidated," "unitary" or "combined" Tax Return provided for under the
law of the United States, any foreign jurisdiction or any state or locality
with respect to Taxes for any taxable period for which the statute of
limitations has not expired (other than a group of which Artemis and/or its
Subsidiaries are the only members). No Artemis Entity has any obligation by
contract, agreement, arrangement or otherwise to permit any Person, other
than Artemis Entities, to use the benefit of a refund, credit or offset of
Tax of any Artemis Entity.
(f) There are no tax sharing, allocation, indemnification
or similar agreements in effect as between Artemis Entity (or any
predecessor or affiliate thereof) and any other party under which the
Company or Artemis Entity could be liable for any material Taxes or other
claims of any party after the Closing Date.
(g) No Artemis Entity has applied for, been granted, or
agreed to any accounting method change for which it will be required to
take into account any adjustment under Section 481 of the Code or any
similar provision of the Code or the corresponding tax laws of any nation,
state or locality; no Artemis Entity has any knowledge that the U.S.
Internal Revenue Service or any other taxing authority has proposed or
purported to require any such adjustment or change in accounting method,
and no Artemis Entity has any knowledge or belief that any such adjustment
under Section 481 of the Code or the corresponding tax laws of any nation,
state or locality will be required of Artemis Entity upon the completion
of, or by reason of, the transaction contemplated by this Agreement.
(h) No Artemis Entity is a party to any agreement that
would require any Artemis Entity (or any affiliate thereof) to make any
payment that would not be deductible pursuant to Section 162(m) of the
Code.
(i) (i) There are no deferred intercompany transactions
between any Artemis Entity, and there is no excess loss account (within the
meaning of Treasury Regulations Section 1.1502-19 with respect to the stock
of any Artemis Entity) that will or may result in the recognition of a
material amount of taxable income upon the consummation of the transaction
contemplated by this Agreement, and (ii) there are no other transactions or
facts existing with respect to Artemis Entities that by reason of the
consummation of the transaction contemplated by this Agreement will result
in Artemis Entity recognizing a material amount of taxable income.
(j) No indebtedness of Artemis Entity consists of
"corporate acquisition indebtedness" within the meaning of Section 279 of
the Code.
(k) No Artemis Entity is, has been during the five-year
period ending on the date of this Agreement, or will have been during the
five-year period ending on the Closing Date, a "United States real property
holding corporation" within the meaning of Section 897(c)(2) of the Code.
(l) No written claim has ever been made by any taxing
authority in a jurisdiction where any Artemis Entity does not file Tax
Returns that any Artemis Entity is or may be subject to taxation by that
jurisdiction.
SECTION 4.18. Environmental Matters. Except as set forth
on Schedule 4.18, (i) the Artemis Entities are in compliance in all
material respect with all applicable Environmental Laws, and have obtained,
and are in compliance in all material respect with, all permits required
under applicable Environmental Laws; (ii) there are no Actions by any
Governmental Authority or other Person or entity pending or, to the
knowledge of Proha threatened, against any Artemis Entities under any
Environmental Law; and (iii) to the knowledge of Proha, there are no facts,
circumstances or conditions relating to the business or operations of any
Artemis Entity that could reasonably be expected to give rise to any
material claim, proceeding, Action or liability under any Environmental
Law.
SECTION 4.19. Intellectual Property. (a) Schedule 4.19
sets forth, for the Intellectual Property owned by the Artemis Entities, a
complete and accurate list of all U.S. and foreign (i) patents and patent
applications; (ii) trademark registrations (including Internet domain
registrations), trademark applications, and material unregistered
trademarks; (iii) copyright and mask work registrations, copyright and mask
work applications, and material unregistered copyrights; and (iv) all
Software (other than readily available "off-the-shelf" commercial software
programs having an acquisition price of less than $5,000) material to the
Artemis Entities' respective businesses which are owned, licensed, or
leased, by the Artemis Entities, identifying which Intellectual Property is
owned, licensed, or leased, as the case may be. The Intellectual Property
of the Artemis Entities constitutes all the intellectual property necessary
to operate their respective businesses as of the Closing Date in
substantially the manner in which it is currently operated. To the extent
indicated on Schedule 4.19, the Intellectual Property of the Artemis
Entities has been duly registered in, filed in or issued by the United
States Patent and Trademark Office, United States Copyright Office, a duly
authorized and appropriate domain name registrar, the appropriate offices
in the various states of the United States and the appropriate offices of
other jurisdictions (foreign and domestic), and each such registration,
filing and issuance remains in full force and effect as of the Closing
Date.
(b) Schedule 4.19 sets forth a complete and accurate list
of all material oral or written agreements (whether between Proha or any
Artemis Entity and third parties or inter-corporate) to which any Artemis
Entity is a party or otherwise bound, (i) granting or obtaining any right
to use or practice any rights under any Intellectual Property (other than
licenses for readily available "off-the-shelf" commercial software programs
having an acquisition price of less than $5,000), or (ii) restricting the
Artemis Entities right to use any Intellectual Property, including, without
limitation, any License Agreements. The License Agreements of the Artemis
Entities are valid and binding obligations of the Artemis Entities, as
applicable, enforceable in accordance with their terms, and to Proha's
knowledge, there exists no event or condition which will result in a
violation or breach of, or constitute (with or without due notice of lapse
of time or both) a default by any party under any such License Agreement.
Except as set forth in Schedule 4.19, no Artemis Entity has licensed or
sublicensed its rights in any material Intellectual Property other than
pursuant to a valid and binding License Agreement. No royalties, honoraria
or other fees are currently payable by the Artemis Entities to any third
parties for the use of or right to use any Intellectual Property except
pursuant to any License Agreement and set forth on Schedule 4.19.
(c) The Artemis Entities own, or to Proha's knowledge,
has a valid right to use, free and clear of all Liens other than Permitted
Liens, all of the Intellectual Property of the Artemis Entities. An Artemis
Entity is listed in the records of the appropriate United States, state, or
foreign registry as the sole current owner of record for each application
and registration and has the exclusive right to file, prosecute and
maintain all applications and registrations with respect to the
Intellectual Property that is listed on Schedule 4.19.
(d) The Intellectual Property owned by the Artemis
Entities and, to Proha's knowledge, any material Intellectual Property
licensed to the Artemis Entities, has not been canceled, expired, abandoned
or otherwise terminated and all renewal fees in respect thereof have been
duly paid, and to Proha's knowledge is valid and enforceable.
(e) No Artemis Entity has received any written notice or
claim and there is no pending or, threatened claim, suit, arbitration,
interference or other adversarial or contested proceeding before any court,
agency, arbitral tribunal, or registration authority in any jurisdiction
(foreign or domestic) involving the Intellectual Property owned by the
Artemis Entities, or, to Proha's knowledge, the material Intellectual
Property licensed to the Artemis Entities, alleging that the activities or
the conduct of the Artemis Entities businesses infringe upon, dilute,
violate or constitute the unauthorized use, misuse or misappropriation of
the intellectual property rights of any third party or challenging the
Artemis Entities' ownership, use, validity, enforceability or
registrability of any of their respective Intellectual Property. There are
no settlements, forebearances to xxx, consents, judgments, or orders or
similar obligations to which any Artemis Entity is a party other than the
License Agreements which (i) restrict any Artemis Entities' right to use
any Intellectual Property, (ii) restrict the Artemis Entities' businesses
in order to accommodate a third party's intellectual property rights or
(iii) permit third parties to use any Intellectual Property owned by any
Artemis Entity. To the knowledge of Proha, there does not exist any valid
basis for any such claims.
(f) To Proha's knowledge, the conduct of each Artemis
Entities' business as currently conducted or planned to be conducted does
not infringe upon (either directly or indirectly such as through
contributory infringement or inducement to infringe) any Intellectual
Property owned or controlled by any third party. To Proha's knowledge, no
third party is misappropriating, infringing, diluting or violating any
Intellectual Property owned by any Artemis Entity and no such claims,
suits, arbitrations or other adversarial proceedings have been brought or
threatened against any third party by any Artemis Entity.
(g) Each Artemis Entity takes reasonable measures to
protect the confidentiality of its Trade Secrets, including requiring their
employees and other parties having access thereto to execute written
non-disclosure agreements. To the knowledge of Proha, no Trade Secret of
any Artemis Entity has been disclosed or authorized to be disclosed to any
third party other than pursuant to a non-disclosure agreement. To the
knowledge of Proha, no party to any non-disclosure agreement relating to
its Trade Secrets is in breach or default thereof. The Company has been
provided with a copy of Proha's form of non-disclosure agreement and the
non-disclosure agreements referred to in this clause (g) contain
substantially the same terms and conditions as the form of non-disclosure
agreement.
(h) No current or former partner, director, officer, or
employee of any Artemis Entity (or any of its respective predecessors in
interest) will, after giving effect to the transactions contemplated
herein, directly own or retain any rights to use any of the Intellectual
Property owned or used by any Artemis Entity.
(i) With respect to the Software set forth in Schedule
4.19 which is owned by an Artemis Entity, such Software was either
developed (i) by employees of Proha or any Subsidiary of Proha within the
scope of their employment or (ii) by independent contractors who have
assigned their rights to Proha or any Subsidiary of Proha pursuant to
signed, written agreements.
(j) The Trademarks listed on Schedule 4.19, for which any
Artemis Entity has obtained or applied for a registration that are material
to the Artemis Entity business have been continuously used in the form
appearing in, and in connection with the goods and services listed in,
their respective registration certificates, and are all the Trademarks that
are material to each Artemis Entity. To the knowledge of Proha, there has
been no prior use of the material Trademarks by any third party which would
confer upon said third party superior rights in the material Trademarks. To
the knowledge of Proha, the Artemis Entities have undertaken reasonable
policing of the material Trademarks against third party infringement.
SECTION 4.20. Insurance. Each Artemis Entity maintains,
with reputable insurers, insurance in such amounts, including deductible
arrangements, and of such a character as is customary for companies engaged
in the same or similar business. All policies of title, fire, liability,
casualty, business interruption, workers' compensation and other forms of
insurance including, but not limited to, directors and officers insurance,
held by the Artemis Entities as of the date hereof, are in full force and
effect in accordance with their terms. To the knowledge of Proha, no
Artemis Entity is in default under any material provisions of any such
policy of insurance and to the knowledge of Proha, no Artemis Entity has
received notice of cancellation of any such insurance.
SECTION 4.21. Material Contracts. (a) Schedule 4.21 sets
forth a true and complete list of all contracts and other instruments (with
the exception of the License Agreements listed on Schedule 4.19) to which
each Artemis Entity is a party that are material to the business,
operations, properties, prospects or financial condition of any of them
(collectively, the "Artemis Commitments"), including without limitation:
(i) any material agreement, contract or
commitment relating to the employment of any Person by any Artemis
Entity, or any bonus, deferred compensation, pension, profit
sharing, stock option, employee stock purchase, retirement or
other employee benefit plan;
(ii) any material agreement, indenture or other
instrument which contains restrictions with respect to payment of
dividends or any other distribution in respect of its capital
stock;
(iii) any agreement, contract or commitment
relating to capital expenditures in excess of $100,000 in any
fiscal year;
(iv) any agreement to acquire, directly or
indirectly, any equity interest in or assets of any other Person
(other than purchases of supplies, inventory, or equipment in the
ordinary course of business) whether or not the transactions
contemplated thereby have been consummated, and under which an
Artemis Entity continues to have any outstanding obligations;
(v) any loan (other than accounts receivable
from trade debtors arising in the ordinary course of business) or
advance to (other than travel or entertainment advances to
employees made in the ordinary course of business), or investment
in, any Person or any agreement, contract or commitment relating
to the making of any such loan, advance or investment;
(vi) any agreement relating to indebtedness in
excess of $100,000;
(vii) any guarantee or other contingent
liability in respect of any indebtedness or obligation of any
other Person (other than the endorsement of negotiable instruments
for collection in the ordinary course of business) in excess of
$100,000;
(viii) any material management service,
consulting, financial advisory or any other similar type contract
including, without limitation, any contract with any investment or
commercial bank;
(ix) any material agreement, contract or
commitment limiting the ability of any Artemis Entity to engage in
any line of business or to compete with any Person;
(x) any agreement, contract or commitment which
involves payments in excess of $100,000 in any calendar year and
is not cancelable without penalty within thirty (30) days;
(xi) any agreement, contract or commitment for
the disposal of a material amount of assets or properties of any
Artemis Entity (other than sales to customers in the ordinary
course of business);
(xii) any agreement, contract or commitment
which is material to any Artemis Entity and contain a "change in
control" or similar provision;
(xiii) any agreement, contract or commitment
relating to any material joint venture, partnership, strategic
alliance or similar arrangement;
(xiv) any material agreement, contract or
commitment with any Affiliate; and
(xv) any other material agreement, contract or
commitment.
(b) Each Artemis Commitment is in full force and effect
on the date hereof. No Artemis Entity is in default in respect of any
Artemis Commitment, and no event has occurred which, with due notice or
lapse of time or both, would constitute such a default, except for any such
defaults that could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. To the knowledge of Proha, no
other party to any of the Artemis Commitments is in default in respect
thereof, and no event has occurred which, with due notice or lapse of time
or both, would constitute such a default.
SECTION 4.22. Questionable Payments. No Artemis Entity
nor, to Proha's knowledge, any employee, agent or representative of any
Artemis Entity acting on their behalf has, directly or indirectly, made any
bribes, kickbacks, illegal payments or illegal political contributions
using corporate funds of any Artemis Entity or made any illegal payments to
obtain or retain business using corporate funds of any Artemis Entity in
violation of the U.S. Foreign Corrupt Practices Act of 1977.
SECTION 4.23. Brokers. Proha and its agents and
representatives have incurred no obligation or liability, contingent or
otherwise, for brokerage or finders' fees, agents' commissions, investment
banking fees, or other similar payment in connection with this Agreement.
SECTION 4.24 Books and Records. The respective minute
books of each Artemis Entity, to the extent previously made available to
the Company and its representatives, contain, and the respective minutes of
books of the Artemis Entities made available to the Company after the date
hereof will contain, accurate records of all meetings of, and corporate
actions taken by (including action taken by written consent) the respective
shareholders and Board of Directors of the Artemis Entities. To the
knowledge of Proha, no Artemis Entity has any of its records, systems,
controls, data or information recorded, stored, maintained, operated or
otherwise wholly or partly dependent upon or held by any means (including
any electronic, mechanical or photographic process, whether computerized or
not) which (including all means of access thereto and therefrom) are not
under the exclusive ownership and direct control of Proha or its
Subsidiaries.
SECTION 4.25 Personal Property. Except as set forth on
Schedule 4.25 and except for properties and assets reflected in the Artemis
Entities' Financial Statements, or acquired since December 31, 2000, which
have been sold or otherwise disposed of in the ordinary course of business,
each Artemis Entity has good, valid and marketable title to (a) all of its
owned personal properties and assets (tangible and intangible), including,
without limitation, all of the personal properties and assets reflected in
the relevant Artemis Entities' Financial Statements, except as may be
indicated in the notes thereto, and (b) all of the personal properties and
assets (tangible or intangible) purchased by the Artemis Entities since
December 31, 2000, in each case free and clear of all Liens, except for
Permitted Liens. All of the tangible personal property owned by each
Artemis Entity is in good operating condition and repair, ordinary wear and
tear excepted, and is adequate and suitable for the purposes for which they
are presently being used.
SECTION 4.26. Private Placement. (a) Proha understands
that the offering and sale of the Opus Shares by the Company to Proha is
intended to be exempt from registration under the Securities Act pursuant
to Section 4(2) thereof.
(b) The Opus Shares to be acquired by Proha pursuant to
this Agreement are being acquired for its own account and without a view to
making a distribution thereof in violation of the Securities Act, without
prejudice, however, to its right to sell or otherwise dispose of all or any
part of such Opus Shares in compliance with the provisions of the
Securities Act and applicable state securities or "blue sky" laws.
(c) Proha has sufficient knowledge and experience in
financial and business matters so as to be capable of evaluating the merits
and risks of its investment in the Opus Shares and Proha is capable of
bearing the economic risks of such investment, including a complete loss of
its investment in the Securities.
(d) Proha is an "accredited investor," as such term is
defined in Rule 501(a) under Regulation D under the Securities Act.
(e) Proha acknowledges that the Company will rely on the
accuracy and truth of its representations in this Section 4.26, and Proha
hereby consents to such reliance.
(f) Proha has had the opportunity to ask questions of,
and receive answers from, representatives of the Company concerning the
Company and the terms and conditions of this transaction, as well as to
obtain any information requested by Proha. Any questions raised by Proha
concerning the transaction have been answered to the satisfaction of Proha.
Proha's decision to enter into the transactions contemplated hereby is
based solely on Proha's own evaluation of the risks and merits of the
purchase of the Opus Shares and the Company's business activities.
(g) Proha acknowledges and agrees that the certificate(s)
representing the Opus Shares to be delivered to Proha pursuant to Section
2.2(b), shall bear the following legends:
THE SHARES OF COMMON STOCK, PAR VALUE $0.001 PER SHARE (THE
"COMMON STOCK"), OF OPUS360 ("OPUS") REPRESENTED BY THIS
CERTIFICATE MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE UNITED STATES ABSENT
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY
APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION FROM
SUCH REGISTRATION REQUIREMENTS.
THE TRANSFER OF THE COMMON STOCK EVIDENCED BY THIS CERTIFICATE IS
SUBJECT TO RESTRICTIONS ON TRANSFER PROVIDED FOR IN THE SHARE
EXCHANGE AGREEMENT, BY AND BETWEEN OPUS AND PROHA PLC ("PROHA"),
DATED AS OF APRIL 11, 2001 (THE "SHARE EXCHANGE AGREEMENT"). A
COPY OF THE SHARE EXCHANGE AGREEMENT IS ON FILE AT THE EXECUTIVE
OFFICES OF OPUS AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER
OF THIS CERTIFICATE UPON WRITTEN REQUEST TO THE SECRETARY OF OPUS.
THE SHARES OF COMMON STOCK EVIDENCED BY THIS CERTIFICATE MAY BE
ENTITLED TO THE BENEFITS OF A REGISTRATION RIGHTS AGREEMENT, BY
AND BETWEEN OPUS AND PROHA, DATED AS OF APRIL 11, 2001 (THE
"REGISTRATION RIGHTS AGREEMENT"). A COPY OF THE REGISTRATION
RIGHTS AGREEMENT IS ON FILE AT THE EXECUTIVE OFFICES OF OPUS AND
WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF THIS CERTIFICATE
UPON WRITTEN REQUEST TO THE SECRETARY OF OPUS.
SECTION 4.27. Accuracy of Information. None of the
representations, warranties or statements of Proha contained in this
Agreement or in the exhibits hereto contains any untrue statement of a
material fact or, taken as a whole together with the Finnish Documents and
Schedules, omits to state any material fact necessary in order to make any
of such representations, warranties or statements not misleading.
ARTICLE V
COVENANTS OF THE COMPANY
SECTION 5.1. Operation of Business. (a) Except as
contemplated hereby or as consented to in writing by Proha, between the
date hereof and the Closing Date, the Company shall, and shall cause each
of the Subsidiaries to: (i) in all material respects carry on their
respective businesses in, and not enter into any material transaction other
than in accordance with, the regular and ordinary course, (ii) use their
commercially reasonable efforts to preserve intact their business
organizations, (iii) keep available the services of their officers and
employees, (iv) preserve their relationships with customers, suppliers and
others having material business dealings with them, (v) maintain, in all
material respects, its assets and properties and keep its books in
accordance with present practices in a condition suitable for its current
use and (vi) maintain cash and marketable securities on hand representing
an aggregate value of at least ninety-five percent (95%) of the "schedule
commitment" at the end of each month other than the month in which the
Closing occurs (in which case, the Company shall have cash and marketable
securities on hand representing an aggregate value of at least one hundred
percent (100%) of the "schedule commitment" for the month in which the
Closing occurs), as set forth on Schedule 5.1(a).
(b) Without limiting the generality of Section 5.1(a),
and, except as otherwise expressly permitted or required by this Agreement
or set forth in Schedule 5.1(b), between the date hereof and the Closing
Date, the Company shall not, and shall not permit any of its Subsidiaries
to, without the prior written consent of Proha or as contemplated hereby:
(i) (x) declare, set aside or pay any dividends
on (whether in cash, shares of capital stock of the Company, or
other property), or make any other actual, constructive or deemed
distributions in respect of, any of its capital stock, or
otherwise make any payments to shareholders of the Company in
their capacity as such, (y) split, combine or reclassify any of
its capital stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for shares
of its capital stock or (z) redeem or otherwise acquire any shares
of capital stock of the Company or any of its Subsidiaries or any
other securities thereof or any rights, warrants or options to
acquire any such shares or other securities or set apart money or
other property for any mandatory purchase or analogous fund for
the redemption, purchase or acquisition of any shares of capital
stock of the Company;
(ii) authorize, issue, deliver, sell, pledge,
dispose of or otherwise encumber any shares of its capital stock
! or other voting securities or equity equivalent or any securities
convertible into or exchangeable or exercisable for, or any
rights, warrants or options to acquire, any such shares or voting
securities or convertible securities or equity equivalent or any
phantom stock or stock appreciation rights or enter into any
agreement or contract with respect to the sale or issuance of any
of such securities; other than (x) the issuance of stock options
pursuant to employee stock option plans providing for the issuance
of shares of Common Stock in an aggregate amount not to exceed
900,000 shares and the issuance of Common Stock upon exercise
thereof, (y) the issuance of Common Stock upon exercise of
warrants or stock options outstanding on the date hereof or issued
pursuant to clause (x) and (z) the issuance of shares of Common
Stock to employees under the Company's employee stock purchase
plan in effect as of the date hereof;
(iii) amend its Charter or Bylaws or equivalent
governing documents;
(iv) acquire or agree to acquire by merging
with, or by purchasing a material amount of assets of or equity
in, or by any other manner, any business (other than the
acquisition of the assets of Mirronex Technologies Inc.) or any
corporation, partnership, association or other business
organization or division thereof or otherwise acquire or agree to
acquire any assets other than inventory in the ordinary course of
business or assets having a purchase price not in excess of
$50,000 individually or $250,000 in the aggregate;
(v) sell, lease or otherwise dispose of or agree
to sell, lease or otherwise dispose of, any of its assets (other
than the contemplated sale by the Company of the assets comprising
the XxxxXxxxx.xxx business), other than sales of inventory in the
ordinary course of business, or which involve assets having a
current value not in excess of $50,000 individually or $250,000 in
the aggregate or allow any properties or assets (including,
without limitation, Intellectual Property) to become subject to
any Lien other than a Permitted Lien;
(vi) incur any indebtedness for borrowed money
in excess of $50,000 in any calendar year or guarantee any such
indebtedness or issue or sell any debt securities or guarantee any
debt securities of others, or make any loans, advances or capital
contributions to, or investments, in each case in excess of
$50,000 in the aggregate in any calendar year in, any other Person
other than a wholly owned Subsidiary, enter into any "keep-well"
or other agreement to maintain any financial state and condition
of another Person or enter into any arrangement having the
economic effect of any of the foregoing;
(vii) grant any severance or termination pay not
currently required to be paid under existing severance plans or
enter into or adopt, or amend any existing, severance plan,
agreement or arrangement, or enter into or amend any employee
benefit plan except as required by Applicable Law, or enter into,
amend or terminate any employment or consulting agreement, except,
in each case as required by Applicable Law;
(viii) enter into any contract or commitment
with respect to capital expenditures other than expenditures
within a capital budget provided to Proha for the current calendar
year or capital expenditures not in excess of $50,000 in the
aggregate in the current calendar year;
(ix) except to the extent required under
existing employee and director benefit plans, agreements or
arrangements as in effect on the date of this Agreement or as
required under Applicable Law, make a material amendment or
modification of the compensation, bonus or fringe benefits of any
of its directors, officers or employees of the Company or any of
its Subsidiaries;
(x) agree to the settlement of any material
claim or litigation;
(xi) make or rescind any material Tax election,
settle or compromise any material Tax liability, or file or cause
to be filed any amended Tax Return or any claim for a Tax refund,
except, in each case, as required by Applicable Law;
(xii) except as required by Applicable Law or
U.S. GAAP, make any change in its method of accounting or
accounting policies;
(xiii) except as set forth on the Schedules
hereto, accelerate the payment, right to payment or vesting of any
bonus, severance, profit sharing, retirement, deferred
compensation, stock option, insurance or other compensation or
benefits;
(xiv) pay, discharge or satisfy any material
claims, liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment,
discharge or satisfaction of any such claims, liabilities or
obligations in the ordinary course of business and consistent with
past practice;
(xv) enter into any agreement, understanding or
commitment that significantly restrains, limits or impedes the
Company's or any of its Subsidiaries' ability to compete with or
conduct any business or line of business, including, but not
limited to, geographic limitations on the Company's or any of its
Subsidiaries' activities;
(xvi) materially modify, amend or terminate any
Company Commitment or waive any of its rights or claims thereunder
or enter into any contract, agreement, commitment or arrangement
that, if in existence on the date hereof, would be a Company
Commitment;
(xvii) establish, adopt, enter into, amend or
terminate 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 directors, officers or
employees, except, in the case of collective bargaining, pension
or retirement arrangements, or trusts, as required by Applicable
Law;
(xviii) execute any new lease or sublease for
real property or cancel, modify, terminate or amend any lease or
sublease for real property;
(xix) adopt or enter into a plan of complete or
partial liquidation, dissolution, winding up, merger,
consolidation, restructuring, recapitalization or other
reorganization of the Company or any of its Subsidiaries, other
than liquidations, dissolutions, mergers, consolidations,
restructurings, recapitalizations, or other reorganizations
involving only wholly-owned Subsidiaries of the Company and no
other Person;
(xx) plan, announce, implement or effect any
reduction in force, lay-off, early retirement program, severance
program or other program or effort concerning the termination of
employment of employees of the Company or its Subsidiaries;
(xxi) fail to maintain its Intellectual Property
as currently maintained, or allow any material Intellectual
Property of the Company or its Subsidiaries to expire or to become
abandoned, canceled or otherwise terminated;
(xxii) commence or terminate the employment of,
or materially amend the employment terms of, or materially change
the responsibilities or duties of, the Chairman, Chief Executive
Officer, President, or Chief Financial Officer or any other
executive officer of the Company;
(xxiii) transfer, license, sell or otherwise
dispose of any Intellectual Property or Software other than in the
ordinary course of business;
(xxiv) enter into any agreement, arrangement or
transaction with or for the benefit of any Person who is an
Affiliate of the Company;
(xxv) create any Subsidiary;
(xxvi) cause or permit the number of directors
of the Company to be greater than 8;
(xxvii) take any action including, without
limitation, the adoption of any shareholder rights plan or
amendments to its Charter, Bylaws or other governing documents,
which would, directly or indirectly, restrict or impair the
ability of Proha to vote, or otherwise to exercise the rights and
receive the benefits of a stockholder with respect to, securities
of the Company that may be acquired or controlled by Proha;
(xxviii) increase the number of authorized
shares of Preferred Stock or authorize the issuance of or issue
any shares of the Preferred Stock;
(xxix) take any action that would reasonably be
expected to cause any representations made by the Company in this
Agreement not to remain true and correct; and
(xxx) agree, in writing or otherwise, to take
any of the foregoing actions.
SECTION 5.2. Access to Books and Records. Upon reasonable
notice, the Company shall afford, and shall cause each of its Subsidiaries
to afford, to Proha and Proha's accountants, counsel and representatives
full access to all the Company's and its Subsidiaries' properties, books,
contracts, commitments, records (including, but not limited to, Tax
Returns), employees, customers, suppliers and accountants and, shall
furnish promptly to Proha (a) a copy of each report, schedule and other
document filed or received by the Company or any of its Subsidiaries
pursuant to the requirements of federal or state securities laws, and (b)
all other information concerning the Company's and its Subsidiaries'
businesses, properties and personnel as Proha may reasonably request,
provided that no investigation or receipt of information pursuant to this
Section 5.2 shall affect any representation or warranty of the Company or
the conditions to the obligations of Proha. In addition, the Company shall
send to Proha a monthly flash report reflecting cash receipts and
disbursements in reasonable detail to allow Proha the ability to monitor
Schedule 5.1(a), and shall provide such documents and other information
reasonably requested by Proha in connection with making its determination
under Section 7.2(n) (provided, that the Company, shall not be required to
provide any document or information to Proha that would constitute a waiver
of the attorney-client privilege).
SECTION 5.3. Compliance with Conditions; Commercially
Reasonably Efforts. The Company shall use its commercially reasonable
efforts to cause all of the obligations imposed upon it in this Agreement
to be duly complied with and to cause all conditions precedent to the
obligations of the Company and Proha to be satisfied. Upon the terms and
subject to the conditions of this Agreement, the Company shall use its
commercially reasonable efforts to take, or cause to be taken, all action,
and to do, or cause to be done, all things necessary, proper or advisable
consistent with Applicable Law to consummate and make effective in the most
expeditious manner practicable the transactions contemplated hereby.
SECTION 5.4. Consents and Approvals. The Company shall
(a) use its commercially reasonable efforts to obtain all necessary
consents, waivers, authorizations and approvals of all Governmental
Authorities and of all other Persons, firms or corporations required in
connection with the execution, delivery and performance by them of this
Agreement, any other Document or any of the transactions contemplated
hereby or thereby, and (b) diligently assist and cooperate with Proha in
preparing and filing all documents required to be submitted by Proha to any
Governmental Authority in connection with such transactions and in
obtaining any governmental consents, waivers, authorizations or approvals
which may be required to be obtained by Proha in connection with such
transactions (which assistance and cooperation shall include, without
limitation, timely furnishing to Proha all information concerning the
Company and its Subsidiaries that counsel to Proha determines is required
to be included in such documents or would be helpful in obtaining any such
required consent, waiver, authorization or approval).
SECTION 5.5. Stockholder Approval (a) The Company shall
(x) as soon as practicable, but not later than 15 days after receipt of all
financial information required to be delivered pursuant to Section 6.5 and
any other Proha information reasonably requested pursuant to advice from
the Company's accountants, financial and legal advisors, as required for
the proxy statement, prepare and file a proxy statement with the Commission
with respect to the holding of a stockholders' meeting (the "Stockholder
Meeting") for the purpose of obtaining stockholder approval ("Stockholder
Approval") of, amongst other things, (i) the issuance of the Opus Shares to
the extent required by Applicable Law and NASD rules and regulations, (ii)
the amendment and restatement of the Company's Certificate of Incorporation
in a manner reasonably satisfactory to Proha and to reflect a four-for-one
(4-1) reverse stock split (the "Reverse Stock Split") of the outstanding
shares of Common Stock and addressing any desired name change of the
Company, and (iii) more generally, if requested by Proha, the approval of
this Agreement, the other Documents and the transactions contemplated
hereby and thereby, (y) promptly call and give notice of such meeting
following the Commission's clearance of such proxy statement and (z) on or
before the fortieth (40th) day following the Commission's clearance of such
proxy statement, convene and hold such meeting. Subject to Section 5.5(b),
the Company shall use its commercially reasonable efforts to obtain such
Stockholder Approval, including, but not limited to, responding promptly to
the Commission's comments in order to obtain clearance of such proxy
statement. Subject to Section 5.5(b), the Company shall, through its Board
of Directors, recommend to its stockholders that Stockholder Approval be
given, and the Company shall use its commercially reasonable efforts to
cause each member of the Company's Board of Directors and all other Opus
Key Stockholders to vote their shares of Common Stock to approve the items
set forth in clause (x) of this Section 5.5. The Company shall afford Proha
and its counsel a reasonable opportunity to review and comment upon any
description of Proha or its Affiliates, this Agreement, the other Documents
or the transactions contemplated hereby and thereby set forth in such proxy
statement (including all drafts or amendments thereto). Proha shall provide
the Company with all necessary information reasonably requested with
respect to itself and its Affiliates solely for inclusion by the Company in
such proxy statement (including Artemis Entities U.S. GAAP Financial
Statements). The Company shall notify Proha promptly of the receipt of any
comments from the Commission or its staff and of any request by the
Commission or its staff for amendments or supplements to such proxy
statement or for additional information and will supply Proha with copies
of all correspondence between the Company or any of its representatives, on
the one hand, and the Commission or its staff, on the other hand, with
respect to such proxy statement. If at any time prior to such stockholders
meeting there shall occur any event that would be required, under the
Exchange Act and the rules and regulations thereunder, to be set forth in
an amendment or supplement to such proxy statement, the Company will
promptly prepare and mail to its stockholders such an amendment or
supplement. Notwithstanding anything to the contrary contained in this
Agreement, the Company (i) may adjourn or postpone the Stockholder Meeting
on one occasion not to exceed thirty (30) days to the extent necessary to
ensure that any necessary supplement or amendment to the proxy statement is
provided to the Company's stockholders in advance of a vote on Stockholder
Approval or (ii) shall adjourn or postpone the Stockholder Meeting, if as
of the time for which the Stockholder Meeting is originally scheduled (as
set forth in the proxy statement) or subsequently rescheduled or
reconvened, there are insufficient shares of Common Stock represented
(either in Person or by proxy) to constitute a quorum necessary to conduct
the business of the Stockholder Meeting.
(b) Nothing in this Agreement shall prevent the Board of
Directors of the Company from withholding, withdrawing, amending or
modifying its recommendation in favor of Stockholder Approval if (i) a
Superior Offer (as defined below) is made to the Company and is not
withdrawn, (ii) the Company shall have provided written notice to Proha (a
"Notice of Superior Offer") advising Proha that the Company has received a
Superior Offer, specifying all of the material terms and conditions of such
Superior Offer and identifying the Person or entity making such Superior
Offer, (iii) Proha shall not have, within five (5) Business Days of Proha's
receipt of the Notice of Superior Offer, made an offer that the Company's
Board of Directors by a majority vote determines in its good faith judgment
(after having received the written advice of a financial advisor of
national standing) to be at least as favorable to the Company's
stockholders as such Superior Offer (it being agreed that the Board of
Directors of the Company shall convene a meeting to consider any such offer
by Proha promptly following the receipt thereof), (iv) the Board of
Directors of the Company concludes in good faith, after consultation with
its outside counsel, that, in light of such Superior Offer, the
withholding, withdrawal, amendment or modification of such recommendation
is required in order for the Board of Directors of Company to comply with
its fiduciary duties to the Company's stockholders under Applicable Law and
(v) the Company shall not have violated any of the restrictions set forth
in Section 5.7 or this Section 5.5. The Company shall provide Proha with at
least three (3) Business Days prior notice of any meeting of the Company's
Board of Directors at which the Company's Board of Directors is to consider
any Alternative Transaction to determine whether such Alternative
Transaction is a Superior Offer. Notwithstanding the foregoing, the Company
agrees to submit this Agreement to its stockholders for approval and
adoption whether or not the Board of Directors of the Company determines at
any time subsequent to the date hereof that this Agreement is no longer
advisable and recommends that the stockholders of the Company reject it and
notwithstanding any Alternative Transaction.
(c) For the purposes of this Agreement, "Superior Offer"
shall mean an unsolicited, bona fide written offer made by a third party to
consummate an Alternative Transaction which is not subject to any financing
contingencies or complete copies of executed, bona fide customary
commitments from reputable financial institutions for all necessary
financing shall have been furnished to the Company, and the Board of
Directors of the Company has determined in good faith that (x) such
Alternative Transaction, if accepted, would be reasonably likely to be
consummated taking into account all legal, financial, regulatory and other
aspects of the proposal and the Person making the proposal, and (y) after
consultation with and considering the written advice of independent
financial advisors of national standing and after consideration of other
matters it deems relevant, would, if consummated, result in a transaction
more favorable to the Company's stockholders from a financial point of view
than the transactions contemplated hereby.
(d) Nothing contained in this Agreement shall prohibit
the Company or its Board of Directors from taking and disclosing to its
stockholders a position contemplated by Rules 14d-9 and 14e-2 promulgated
under the Exchange Act.
SECTION 5.6. HSR Act Filings. (a) As promptly as
practicable after the date on which the parties determine that a filing
under the HSR Act is required, the Company shall file all reports and
documents as may be necessary to comply with the HSR Act. The Company shall
cooperate with and assist Proha and take such action as may be reasonably
required and as permitted under law in connection with such filings
(including cooperating with additional requests for information, documents
and interviews of officers and personnel by either of the antitrust
enforcement agencies).
(b) The Company shall use commercially reasonable efforts
to resolve such objections, if any, as may be asserted under any antitrust
law with respect to the transactions contemplated by this Agreement. If any
administrative, judicial or legislative action or proceeding is instituted
(or threatened to be instituted) challenging any transaction contemplated
by this Agreement as violative of any antitrust law, the Company shall,
cooperate with and assist Proha to contest and resist any such action or
proceeding, and to have vacated, lifted, reversed or overturned any decree,
judgment, injunction or other order (whether temporary, preliminary or
permanent) that is in effect and that restricts, prevents or prohibits
consummation of the transactions as contemplated by this Agreement,
including, without limitation, by pursuing all reasonable avenues of
administrative and judicial appeal.
SECTION 5.7. No Solicitation. (a) From the date hereof
until the Closing Date, the Company shall not and shall cause its
Affiliates and each of their respective officers, directors, employees,
auditors, agents, representatives, consultants, advisors, investment
bankers, attorneys, accountants and other agents (collectively,
"Representatives") not to, directly or indirectly, (i) initiate, solicit or
entertain offers from, negotiate with or in any manner encourage, discuss,
accept, or consider any proposal of any other Person relating to (w) the
acquisition of capital stock of the Company or any of its Subsidiaries,
securities convertible into or exchangeable for shares of capital stock of
the Company or any of its Subsidiaries, (x) the acquisition of the
Company's or any of its Subsidiaries' assets or business, in whole or in
part (other than the contemplated sale by the Company of the assets
comprising XxxxXxxxx.xxx business), whether directly or indirectly, through
purchase, merger, consolidation, business combination, recapitalization,
liquidation, dissolution or otherwise, or (y) any other transaction the
consummation of which could reasonably be expected to impede, interfere
with, prevent, delay or dilute the benefits to Proha of the transactions
contemplated hereby, including, without limitation, by taking any action
that would make Section 203 of the DGCL inapplicable to an Alternative
Transaction (other than the transactions contemplated by this Agreement,
sales of inventory in the ordinary course and shares issued upon the
exercise of existing stock options) (any of the foregoing being an
"Alternative Transaction"), (ii) initiate, participate or engage in, or
agree to initiate, participate or engage in negotiations or discussions
concerning, or provide to any Person or entity any information or data
relating to the Company or any Subsidiary, or otherwise cooperate with or
assist or participate in, facilitating or encouraging, any inquiries or the
making of any proposal that constitutes, or may reasonably be expected to
lead to an Alternative Transaction, (iii) in connection with any
Alternative Transaction, require it to abandon, terminate or fail to
consummate the transactions contemplated by this Agreement or the other
Documents, (iv) grant any waiver or release under or amend any standstill,
confidentiality or similar agreement entered into by the Company or any of
its Affiliates or representatives; (v) agree to, approve or recommend any
Alternative Transaction, or (vi) take any other action inconsistent with
the obligations and commitments assumed by the Company pursuant to this
Section 5.7; provided, however, that notwithstanding the foregoing, prior
to the adoption of this Agreement by the Company's stockholders, this
Section 5.7 shall not prohibit the Company from furnishing nonpublic
information regarding the Company and its Subsidiaries to, or entering into
discussions with or request clarifications from, any Person or group who
has submitted (and not withdrawn) to the Company after the date of this
Agreement an unsolicited, written, bona fide Alternative Transaction that
the Board of Directors of the Company reasonably concludes (based on the
written advice of a financial advisor of national standing) would, if
consummated, constitute a Superior Offer if (1) neither the Company nor any
representative of the Company and its Subsidiaries shall have violated any
of the restrictions set forth in this Section 5.7, (2) the Board of
Directors of Company concludes in good faith, after consultation with its
outside legal counsel, that such action is required in order for the Board
of Directors of the Company to comply with its fiduciary obligations to the
Company's stockholders under Applicable Law, (3) prior to furnishing any
such nonpublic information to, or entering into any such discussions with,
such Person or group, the Company provides Proha with the information set
forth in Section 5.7(b), and the Company receives from such Person or group
an executed confidentiality agreement on terms and conditions not more
favorable in any material respect than the terms of the Confidentiality
Agreement as in effect on the date hereof, (4) the Company gives Proha at
least three (3) Business Days advance notice of its intent to furnish such
nonpublic information or enter into such discussions, and (5)
contemporaneously with furnishing any such nonpublic information to such
Person or group, the Company furnishes such nonpublic information to Proha
(to the extent such nonpublic information has not been previously furnished
by the Company to Proha). The Company shall immediately cease and cause to
be terminated any existing activities, discussions or negotiations by the
Company, its Affiliates or their respective Representatives with any Person
conducted heretofore with respect to any of the foregoing. Without limiting
the foregoing, it is agreed that any violation of the restrictions set
forth in this Section 5.7 by any Representative of the Company or any of
its Affiliates acting for and on behalf of the Company or its Subsidiaries
or any of its Affiliates, shall constitute a breach of this Section 5.7 by
the Company.
(b) In addition to the obligations of the Company set
forth in paragraph (a) of this Section 5.7, the Company shall promptly (but
in any event within twenty-four (24) hours of receipt or occurrence
thereof), (i) advise Proha orally and in writing of any request for
information with respect to, or any inquiry or proposal regarding any
Alternative Transaction, or of any inquiry or proposal regarding any
Alternative Transaction, (ii) advise Proha of the terms and conditions of
such request or inquiry, and (iii) provide to Proha copies of any written
documentation material to understanding or evaluating such request,
Alternative Transaction or inquiry (the "Alternative Transaction
Documentation") which is received by the Company from the Person (or from
any representatives of such Person) making such Alternative Transaction,
inquiry or proposal and the identity of the Person making any such request,
Alternative Transaction or such inquiry or proposal. The Company shall (x)
keep Proha fully informed of the status and material details (including
amendments or proposed amendments) of any such request or Alternative
Transaction, (y) keep Proha fully informed as to the material details of
any information requested, and (z) provide to Proha within one (1) day of
receipt thereof all copies of any additional Alternative Transaction
Documentation received by the Company from the Person (or from any
representatives of such Person) making such Alternative Transaction,
inquiry or proposal. The Company shall promptly provide to Proha any
information concerning the Company provided to any other Person in
connection with any Alternative Transaction which was not previously
provided to Proha.
(c) The Company shall immediately, but in any event
within one (1) day of the execution of this Agreement, request each Person
which has heretofore executed a confidentiality agreement in connection
with its consideration of acquiring the Company or any portion thereof or
any Alternative Transaction to return or destroy all confidential
information heretofore furnished to such Person by or on behalf of the
Company and the Company shall use its commercially reasonable efforts to
have such information returned.
SECTION 5.8. Confidential Information. The Company
acknowledges that the information being provided under Section 6.2 may be
material non-public information and hereby covenants and agrees to keep,
and cause its Affiliates and representatives to keep, confidential any
information identified by Proha as confidential, unless (a) such
information becomes generally available to the public (other than as a
result of a breach of this provision by Proha), (b) such information was
available to the Company on a non-confidential basis from a source (other
than Proha or its representatives) that, to the Company's knowledge, is not
and was not prohibited from disclosing such information to the Company by a
contractual, legal or fiduciary obligation or (c) the Company is required
by law or the rules of NASDAQ to disclose such information; provided, that
in an event specified in clause (c), the Company shall provide Proha with
prompt prior written notice of such required disclosure, the Company shall
disclose only that portion of the confidential information that the Company
is advised by counsel is legally required. The Company agrees that it will
comply, and will cause its representatives to comply, with all Finnish
securities laws applicable to the receipt of material non-public
information and restrictions on trading in securities when in possession of
such information. The Company agrees not to use any confidential
information in violation of any law.
SECTION 5.9. Notification of Certain Matters. From the
date hereof through the Closing Date, the Company shall promptly notify
Proha of the occurrence or non-occurrence of any fact or event which has
caused or could reasonably likely cause (x) any representation or warranty
made by it in this Agreement or the other Documents to be untrue or
inaccurate in any material respect at any time or (y) any covenant,
condition or agreement under this Agreement or the other Documents not to
be complied with or satisfied by it in any material respect; provided,
however, that no such notification shall modify the representations or
warranties of any party or the conditions to the obligations of any party
hereunder. The Company shall promptly notify Proha of any notice or other
communication from any third party alleging that the consent of such third
party is or may be required in connection with the transactions
contemplated by this Agreement or the other Documents.
SECTION 5.10. Certain Tax Covenants. (a) The Company
shall furnish to Proha at or before the Closing the appropriate affidavit
required by Section 1445(b) of the Code to enable Proha not to withhold a
Tax under Section 1445(a) of the Code with respect to the transactions
contemplated by this Agreement.
(b) The Company and each of its Subsidiaries agree, from
and after the date of this Agreement and until the Closing, to prepare all
Tax Returns in a manner which is consistent with the past practices of the
Company and each Subsidiary, as the case may be, with respect to the
treatment of items on such Tax Returns, unless otherwise required by
Applicable Law.
(c) The Company and its Subsidiaries shall timely pay in
full on or prior to the Closing Date all material Taxes and Tax liabilities
required to be paid by or with respect to them for all taxable years or
other taxable periods that end on or before the Closing Date and, with
respect to any taxable year or other taxable period beginning on or before
the Closing Date and ending after the Closing Date, the portion of such
taxable year or period ending on and including the Closing Date (each a
"Pre-Closing Period"), other than those Taxes being contested in good faith
as of the Closing Date or those Taxes not due and payable as of the Closing
Date, in each case which are adequately disclosed and for which an adequate
reserve or accrual are established in the Company Financial Statements in
accordance with U.S. GAAP as of the Closing Date. For purposes of the
immediately preceding sentence, Taxes and Tax liabilities of the Company or
any of its Subsidiaries that relate to any taxable year or other taxable
period beginning on or before the Closing Date and ending after the Closing
Date (each an "Overlap Period") shall be apportioned between the portion of
the Overlap Period ending on and including the Closing Date and the portion
of the Overlap Period beginning on the day after the Closing Date as
follows: (i) in the case of Taxes other than income, sales and use and
withholding Taxes, on a per diem basis, and (ii) in the case of income,
sales and use and withholding Taxes, as determined from the books and
records of the Company and its Subsidiaries as though the taxable year of
the Company or any relevant Subsidiary terminated at the close of business
on the Closing Date.
SECTION 5.11. Escrow of Break-up Fee. The Company shall
within five (5) Business Days of the date hereof deposit with an escrow
agent $250,000 as security for partial performance of its obligations, if
any, under Sections 9.4(c) and (d) hereof. Such escrow agent shall be
chosen by the parties and such amount shall be held by the escrow agent
pursuant to an escrow agreement between the parties and the escrow agent on
terms and conditions reasonably satisfactory to the Company, Proha and the
escrow agent.
SECTION 5.12. Fairness Opinion. The Company shall have
received prior to filing the proxy statement in accordance with Section
5.5, an opinion from a reputable investment banking firm in customary form
and substance to the effect that the transactions contemplated hereby are
fair to the Company and/or its stockholders.
SECTION 5.13. Safeguard Approval. The Company shall
obtain (and deliver the same to Proha) from Safeguard Scientific, Inc., no
later than April 13, 2001, a letter obligating Safeguard Scientific, Inc.
to vote in favor of the transactions contemplated hereby at the Stockholder
Meeting.
ARTICLE VI
COVENANTS OF PROHA
SECTION 6.1. Operation of Business. (a) Except as
contemplated hereby or as consented to in writing by the Company, between
the date hereof and the Closing Date, Proha shall, and shall cause each of
the Artemis Entities to: (i) in all material respects carry on their
respective businesses in, and not enter into any material transaction other
than in accordance with, the regular and ordinary course, (ii) use their
commercially reasonable efforts to preserve intact their business
organizations, (iii) keep available the services of their officers and
employees, (iv) preserve their relationships with customers, suppliers and
others having material business dealings with them, and (v) maintain, in
all material respects, its assets and properties and keep its books in
accordance with present practices in a condition suitable for its current
use.
(b) Without limiting the generality of Section 6.1(a),
and, except as otherwise expressly permitted or required by this Agreement
or set forth in Schedule 6.1(b), between the date hereof and the Closing
Date, Proha shall not permit any Artemis Entity to, without the prior
written consent of the Company:
(i) (x) declare, set aside or pay any dividends
on (whether in cash, shares of capital stock of such Artemis
Entity, or other property), or make any other actual, constructive
or deemed distributions in respect of, any of its capital stock,
or otherwise make any payments to Proha, (y) split, combine or
reclassify any of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock or (z) redeem or
otherwise acquire any of its shares of capital stock or any other
securities thereof or any rights, warrants or options to acquire
any such shares or other securities or set apart money or other
property for any mandatory purchase or analogous fund for the
redemption, purchase or acquisition of any of its shares of
capital stock;
(ii) authorize, issue, deliver, sell, pledge,
dispose of or otherwise encumber any shares of its capital stock
or other voting securities or equity equivalent or any securities
convertible into or exchangeable or exercisable for, or any
rights, warrants or options to acquire, any such shares or voting
securities or convertible securities or equity equivalent or any
phantom stock or stock appreciation rights or enter into any
agreement or contract with respect to the sale or issuance of any
of such securities;
(iii) amend its Charter or Bylaws or equivalent
governing documents;
(iv) acquire or agree to acquire by merging
with, or by purchasing a material amount of assets of or equity
in, or by any other manner, any business or any corporation,
partnership, association or other business organization or
division thereof or otherwise acquire or agree to acquire any
assets other than inventory in the ordinary course of business or
assets having a purchase price not in excess of $100,000
individually or $500,000 in the aggregate;
(v) sell, lease or otherwise dispose of or agree
to sell, lease or otherwise dispose of, any of its assets, other
than sales of inventory in the ordinary course of business, or
which involve assets having a current value not in excess of
$100,000 individually or $500,000 in the aggregate or allow any
properties or assets (including, without limitation, Intellectual
Property) to become subject to any Lien other than a Permitted
Lien;
(vi) incur any indebtedness for borrowed money
in excess of $100,000 in any calendar year or guarantee any such
indebtedness or issue or sell any debt securities or guarantee any
debt securities of others, or make any loans, advances or capital
contributions to, or investments, in each case in excess of
$100,000 in the aggregate in any calendar year, in any other
Person other than a wholly owned Subsidiary, enter into any
"keep-well" or other agreement to maintain any financial state and
condition of another Person or enter into any arrangement having
the economic effect of any of the foregoing;
(vii) grant any severance or termination pay not
currently required to be paid under existing severance plans or
enter into or adopt, or amend any existing, severance plan,
agreement or arrangement, or enter into or amend any employee
benefit plan except as required by Applicable Law, or enter into,
amend or terminate any employment or consulting agreement, except,
in each case as required by Applicable Law;
(viii) enter into any contract or commitment
with respect to capital expenditures other than expenditures
within the capital budget provided to the Company for the upcoming
calendar year or capital expenditures not in excess of $100,000 in
the aggregate in the current calendar year;
(ix) except to the extent required under
existing employee and director benefit plans, agreements or
arrangements as in effect on the date of this Agreement or as
required under Applicable Law, make a material amendment or
modification of the compensation, bonus or fringe benefits of any
of its directors, officers or employees of such Artemis Entity;
(x) agree to the settlement of any material
claim or litigation;
(xi) make or rescind any material Tax election,
settle or compromise any material Tax liability, or file or cause
to be filed any amended Tax Return or any claim for a Tax refund,
except, in each case, as required by Applicable Law;
(xii) except as required by Applicable Law, U.S.
GAAP, Finnish GAAP, or any other applicable accounting principles,
make any change in its method of accounting or accounting
policies;
(xiii) except as set forth on the Schedules
hereto, accelerate the payment, right to payment or vesting of any
bonus, severance, profit sharing, retirement, deferred
compensation, stock option, insurance or other compensation or
benefits;
(xiv) pay, discharge or satisfy any material
claims, liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment,
discharge or satisfaction of any such claims, liabilities or
obligations in the ordinary course of business and consistent with
past practice;
(xv) enter into any agreement, understanding or
commitment that significantly restrains, limits or impedes the
ability of such Artemis Entity or any of its Subsidiaries to
compete with or conduct any business or line of business,
including, but not limited to, geographic limitations on such
Artemis Entity's or any of its Subsidiaries' activities;
(xvi) materially modify, amend or terminate any
Artemis Commitment or waive any of its rights or claims thereunder
or enter into any contract, agreement, commitment or arrangement
that, if in existence on the date hereof, would be an Artemis
Commitment;
(xvii) establish, adopt, enter into, amend or
terminate 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 directors, officers or
employees, except, in the case of collective bargaining, pension
or retirement arrangements, or trusts, as required by Applicable
Law;
(xviii) execute any new lease or sublease for
real property or cancel, modify, terminate or amend any lease or
sublease for real property;
(xix) adopt or enter into a plan of complete or
partial liquidation, dissolution, winding up, merger,
consolidation, restructuring, recapitalization or other
reorganization of such Artemis Entity or any of its Subsidiaries,
other than liquidations, dissolutions, mergers, consolidations,
restructurings, recapitalizations, or other reorganizations
involving only a wholly-owned Subsidiary of such Artemis Entity
and no other Person;
(xx) plan, announce, implement or effect any
reduction in force, lay-off, early retirement program, severance
program or other program or effort concerning the termination of
employment of employees of such Artemis Entity or its
Subsidiaries;
(xxi) fail to maintain its Intellectual Property
as currently maintained, or allow any material Intellectual
Property of the such Artemis Entity or its Subsidiaries to expire
or to become abandoned, canceled or otherwise terminated;
(xxii) commence or terminate the employment of,
or materially amend the employment terms of, or change the
responsibilities or duties of, the Chairman, Chief Executive
Officer, President, Chief Operating Officer, Chief Financial
Officer or Chief Technology Officer or any other executive officer
of such Artemis Entity;
(xxiii) transfer, license, sell or otherwise
dispose of any Intellectual Property or Software other than in the
ordinary course of business;
(xxiv) enter into any agreement, arrangement or
transaction with or for the benefit of any Person who is an
Affiliate of Proha;
(xxv) create any Subsidiary;
(xxvi) cause or permit the number of directors
of Artemis to be greater than 8;
(xxvii) take any action including, without
limitation, the adoption of any shareholder rights plan or
amendments to its Charter, Bylaws or other governing documents,
which would, directly or indirectly, restrict or impair the
ability of the Company to vote, or otherwise to exercise the
rights and receive the benefits of a stockholder with respect to,
Exchanged Shares;
(xxviii) takes any action that would reasonably
be expected to cause any of the representations and warranties
made by Proha in this Agreement not to remain true and correct;
and
(xxix) agree, in writing or otherwise, to take
any of the foregoing actions.
SECTION 6.2. Access to Books and Records. Upon reasonable
notice, Proha shall afford, and shall cause each of the Artemis Entities to
afford, to the Company and the Company's accountants, counsel and
representatives full access to all the Artemis Entities' and their
respective Subsidiaries' properties, books, contracts, commitments, records
(including, but not limited to, Tax Returns), employees, customers,
suppliers and accountants, and shall furnish promptly to the Company all
other information concerning the Artemis Entities and their respective
Subsidiaries' businesses, properties and personnel as the Company may
reasonably request, provided that no investigation or receipt of
information pursuant to this Section 6.2 shall affect any representation or
warranty of Proha or the conditions to the obligations of the Company.
SECTION 6.3. Compliance with Conditions; Commercially
Reasonable Efforts. Proha will use its commercially reasonable efforts to
cause all of the obligations imposed upon it in this Agreement to be duly
complied with, and to cause all conditions precedent to the obligations of
the Company and Proha to be satisfied. Upon the terms and subject to the
conditions of this Agreement, Proha shall use its commercially reasonable
efforts to take, or cause to be taken, all action, and to do, or cause to
be done, all things necessary, proper or advisable consistent with
Applicable Law to consummate and make effective in the most expeditious
manner practicable the transactions contemplated hereby.
SECTION 6.4. Consents and Approvals. Proha shall (a) use
its commercially reasonable efforts to obtain all necessary consents,
waivers, authorizations and approvals of all Governmental Authorities and
of all other Persons (including the approval of its stockholders as may be
required under the Companies Act), firms or corporations required in
connection with the execution, delivery and performance by them of this
Agreement, any other Document to which it is a party or any of the
transactions contemplated hereby or thereby, and (b) diligently assist and
cooperate with the Company in preparing and filing all documents required
to be submitted by the Company to any Governmental Authority in connection
with such transactions (including Artemis Entities U.S. GAAP Financial
Statements) and in obtaining any governmental consents, waivers,
authorizations or approvals which may be required to be obtained by the
Company in connection with such transactions (which assistance and
cooperation shall include, without limitation, timely furnishing to the
Company all information concerning Proha and the Artemis Entities and their
respective Subsidiaries that counsel to the Company determines is required
to be included in such documents or would be helpful in obtaining any such
required consent, waiver, authorization or approval).
SECTION 6.5. U.S. GAAP Financial Statements. (a) Promptly
after the date hereof but no later than one hundred twenty (120) days from
the date hereof, Proha shall provide the Company with audited consolidated
balances sheet of the Artemis Entities and their consolidated Subsidiaries
as of December 31, 1999, December 31, 2000 and March 31, 2001, together
with the related audited consolidated statements of operations,
stockholders' equity and cash flows for the fiscal years ended December 31,
1998, 1999 and 2000 and the fiscal quarter ended March 31, 2001, and the
notes thereto (only with respect to the consolidated balance sheet and
related financial statements as of December 31, 1998, 1999 and 2000, as the
case may be), accompanied by the unqualified opinion thereon of KPMG LLP
(collectively, the "Artemis Entities U.S. GAAP Financial Statements") and
if required, selected financial information concerning the Artemis Entities
and their consolidated subsidiaries. Artemis Entities U.S. GAAP Financial
Statements (including the notes thereto (only with respect to the audited
financial statements as of December 31, 1998, 1999 and 2000)) shall be
prepared in accordance with U.S. GAAP and present fairly, in all material
respects, the consolidated financial position and results of operation of
the Artemis Entities and their consolidated Subsidiaries as of December 31,
1998, 1999 and 2000 and March 31, 2001 and for the fiscal year and fiscal
quarter, respectively, then ended.
(b) Proha acknowledges that the Company will use the
Artemis Entities U.S. GAAP Financial Statements for use in its proxy
statement sent to the stockholders of Company pursuant to Section 5.5.
(c) The audited consolidated income statement for the
fiscal year ended December 31, 2000 included in the Artemis Entities U.S.
GAAP Financial Statements shall not materially differ from the pro forma
revenues and earnings before interest income and expense, amortization of
goodwill, acquisition costs, management fees and translation adjustments of
the Artemis Entities (excluding PPOY) for the fiscal year then ended as set
forth on Schedule 6.5.
SECTION 6.6. HSR Act Filings. (a) As promptly as
practicable after the date on which the parties determine that a filing
under the HSR Act is required, Proha shall file all reports and documents
as may be necessary to comply with the HSR Act. Proha shall cooperate with
and assist the Company and take such action as may be reasonably required
and as permitted under law in connection with such filings (including
cooperating with additional requests for information, documents and
interviews of officers and personnel by either of the antitrust enforcement
agencies).
(b) Proha shall use commercially reasonable efforts to
resolve such objections, if any, as may be asserted under any antitrust law
with respect to the transactions contemplated by this Agreement. If any
administrative, judicial or legislative action or proceeding is instituted
(or threatened to be instituted) challenging any transaction contemplated
by this Agreement as violative of any antitrust law, Proha shall cooperate
with and assist the Company to contest and resist any such action or
proceeding, and to have vacated, lifted, reversed or overturned any decree,
judgment, injunction or other order (whether temporary, preliminary or
permanent) that is in effect and that restricts, prevents or prohibits
consummation of the transactions as contemplated by this Agreement,
including, without limitation, by pursuing all reasonable avenues of
administrative and judicial appeal.
SECTION 6.7. Confidential Information. Proha acknowledges
that the information being provided under Section 5.2 may be material
non-public information and hereby covenants and agrees to keep, and cause
its Affiliates and representatives to keep, confidential any information
identified by the Company as confidential, unless (a) such information
becomes generally available to the public (other than as a result of a
breach of this provision by Proha), (b) such information was available to
Proha on a non-confidential basis from a source (other than the Company or
its representatives) that, to Proha's knowledge, is not and was not
prohibited from disclosing such information to Proha by a contractual,
legal or fiduciary obligation or (c) Proha is required by law or rules or
regulations of the Helsinki Stock Exchange to disclose such information;
provided, that in an event specified in clause (c), Proha shall provide the
Company with prompt prior written notice of such required disclosure, Proha
shall disclose only that portion of the confidential information that Proha
is advised by counsel is legally required. Proha agrees that it will
comply, and will cause its representatives to comply, with all U.S.
securities laws applicable to the receipt of material non-public
information and restrictions on trading in securities when in possession of
such information. Proha agrees not to use any confidential information in
violation of any law.
SECTION 6.8 Notification of Certain Matters. From the
date hereof through the Closing Date, Proha shall promptly notify the
Company of the occurrence or non-occurrence of any fact or event of which
the Company is aware which has caused or could reasonably likely cause (x)
any representation or warranty made by it in this Agreement or the other
Documents to be untrue or inaccurate in any material respect at any time or
(y) any covenant, condition or agreement under this Agreement or the other
Documents not to be complied with or satisfied by it in any material
respect; provided, however, that no such notification shall modify the
representations or warranties of any party or the conditions to the
obligations of any party hereunder. Proha shall promptly notify the Company
of any notice or other communication from any third party alleging that the
consent of such third party is or may be required in connection with the
transactions contemplated by this Agreement or the other Documents.
SECTION 6.9. Artemis Reorganization. Proha shall
undertake a restructuring of the Artemis Entities pursuant to which each of
the Artemis Entities (other than Artemis) shall be either a direct or
indirect wholly-owned Subsidiary of Artemis immediately prior to the
Closing. Proha shall have sole discretion to conduct and implement the
reorganization required by this Section 6.9 in any manner it sees fit and
Proha shall respond to inquiries of the Company concerning the status of
such reorganization.
SECTION 6.10. Certain Tax Covenants. (a) Proha shall
furnish to the Company at or before the Closing the appropriate affidavit
required by Section 1445(b) of the Code to enable the Company not to
withhold a Tax under Section 1445(a) of the Code with respect to the
transactions contemplated by this Agreement.
(b) The Artemis Entities agree, from and after the date
of this Agreement and until Closing, to prepare all Tax Returns in a manner
which is consistent with the past practices of Artemis Entities, as the
case may be, with respect to the treatment of items on such Tax Returns,
unless otherwise required by Applicable Law.
(c) Artemis Entities shall timely pay in full on or prior
to the Closing Date all material Taxes and Tax liabilities required to be
paid by or with respect to them for all Pre-Closing Periods, other than
those Taxes being contested in good faith as of the Closing Date or those
Taxes not due and payable as of the Closing Date, in each case which are
adequately disclosed and for which an adequate reserve or accrual are
established in the Artemis Entities Financial Statements or as set forth in
the Schedules of Proha attached hereto. For purposes of the immediately
preceding sentence, Taxes and Tax liabilities of Artemis Entities that
relate to any Overlap Period shall be apportioned between the portion of
the Overlap Period ending on and including the Closing Date and the portion
of the Overlap Period beginning on the day after the Closing Date as
follows: (i) in the case of Taxes other than income, sales and use and
withholding Taxes, on a per diem basis, and (ii) in the case of income,
sales and use and withholding Taxes, as determined from the books and
records of Artemis Entities as though the taxable year of Artemis or any
relevant Subsidiary terminated at the close of business on the Closing
Date.
SECTION 6.11. Escrow of Break-up Fee. Proha shall within
five (5) Business Days of the date hereof deposit with an escrow agent
$250,000 as security for partial performance of its obligations, if any,
under Sections 9.4(c) hereof. Such escrow agent shall be chosen by the
parties and such amount shall be held by the escrow agent pursuant to an
escrow agreement between the parties and escrow agent on terms and
conditions reasonably satisfactory to the Company, Proha and the escrow
agent.
ARTICLE VII
CONDITIONS PRECEDENT TO CLOSING
SECTION 7.1. Conditions to the Company's Obligations. The
obligations of the Company hereunder required to be performed at the
Closing shall be subject, at its election, to the satisfaction or waiver
(which waiver, if so requested by Proha, shall be made in writing), at or
prior to the Closing, of the following conditions:
(a) The representations and warranties of Proha contained
in this Agreement shall be true and correct in all material respects on and
as of the Closing Date, as if such representation or warranty was made as
of the Closing, except to the extent that any such representation or
warranty is made as of a specified date, in which case such representation
or warranty shall have been true and correct as of such specified date.
(b) Proha shall have performed in all material respects
all obligations and agreements, and complied in all material respects with
all covenants, contained in this Agreement and the other Documents, to be
performed and complied with by Proha at or prior to the Closing Date.
(c) All material governmental and regulatory approvals
and clearances and all third-party consents necessary for the consummation
of the transactions contemplated by the Documents to occur on the Closing
Date shall have been obtained and shall be in full force and effect, the
Company shall reasonably be satisfied that the consummation of such
transactions does not and will not contravene any Applicable Law, except to
the extent any contravention or contraventions, individually or in the
aggregate, could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(d) Proha shall have delivered to the Company a
certificate, executed by Proha or on its behalf by a duly authorized
representative, dated as of the Closing Date, certifying that each of the
conditions specified in this Section 7.1 has been satisfied with respect to
Proha.
(e) All Documents, instruments, agreements and
arrangements relating to the transactions contemplated by the Documents
shall be reasonably satisfactory to the Company, shall have been executed
and delivered by the parties thereto be in full force and effect and no
party to any of the foregoing (other than the Company) shall have breached
any of its material obligations thereunder.
(f) There shall be no litigation, proceeding or other
action seeking an injunction or other restraining order, damages or other
relief from a Governmental Authority pending or threatened which, in the
reasonable judgment of the Company, would materially adversely affect the
consummation of the transactions contemplated by the Documents on the terms
contemplated hereby and thereby and there shall be no litigation,
proceeding or other action (including, without limitation, relating to
environmental matters or the Artemis Employee Benefit Plans) pending or
threatened against the Artemis Entities which could, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(g) The Company shall have received stock certificates
(to the extent certificated) representing the Exchanged Shares as set forth
hereunder.
(h) Proha shall have delivered to the Company
certificates of the appropriate public officials, if available, to the
effect that each of Proha and each Artemis Entity is a validly existing
corporation in good standing (to the extent that the concept of good
standing is recognized under the laws of the relevant jurisdiction of
organization) in its jurisdiction of organization dated not more than five
(5) days prior to the Closing Date.
(i) Proha shall have delivered to the Company a
certificate of the Secretary of its Board of Directors (i) certifying that
a true and correct copy of the Charter and Bylaws of the Artemis Entities
and all resolutions of the Board of Directors of Proha authorizing the
execution and delivery of this Agreement and each Document to which Proha
is a party and authorizing the performance by Proha of the transactions
contemplated hereby and thereby is attached thereto and (ii) containing the
incumbency and specimen signature of each of the officers of Proha.
(j) Proha's stockholders shall have elected Proha
Nominees and the Other Nominees to the Board of Directors of Proha, subject
to the completion of the transactions contemplated herein.
(k) The Company shall have received Stockholder Approval.
(l) The reorganization of the Artemis Entities decribed
in Section 6.9 shall have occurred.
SECTION 7.2. Conditions to Proha's Obligations. The
obligations of Proha hereunder required to be performed at the Closing
shall be subject, at its election, to the satisfaction or waiver (which
waiver, if so requested by the Company, shall be made in writing), at or
prior to the Closing, of the following conditions:
(a) The representations and warranties of the Company
contained in this Agreement shall be true and correct in all material
respects when made and on and as of the Closing Date, as if such
representation or warranty was made as of the Closing, except to the extent
that any such representation or warranty is made as of a specified date, in
which case such representation or warranty shall have been true and correct
as of such specified date.
(b) The Company shall have performed in all material
respects all obligations and agreements, and complied in all material
respects with all covenants (except, in the case of Section 5.1(a)(vi),
which the Company shall have complied with in all respects), contained in
this Agreement and the other Documents, to be performed and complied with
by it at or prior to the Closing Date.
(c) The Company's Board of Directors shall consist of not
more than eight (8) directors. The Company shall have taken all necessary
action so that the Board of Directors of the Company shall have approved
the election of Proha Nominees and the Other Directors.
(d) All Documents and all documents, instruments,
agreements and arrangements relating to the transactions contemplated by
the Documents shall be reasonably satisfactory to Proha, shall have been
executed and delivered by the parties thereto (including, but not limited
to, the Registration Rights Agreement and the Second Amendment to
Employment Agreement in the form of Exhibit D hereto), be in full force and
effect and no party to any of the foregoing (other than Proha) shall have
breached any of its material obligations thereunder.
(e) There shall be no litigation, proceeding or other
action seeking an injunction or other restraining order, damages or other
relief from a Governmental Authority pending or threatened which, in the
reasonable judgment of Proha, would materially adversely affect the
consummation of the transactions contemplated by the Documents on the terms
contemplated hereby and thereby and there shall be no litigation,
proceeding or other action (including, without limitation, relating to
environmental matters or the Company Employee Benefit Plans) but excluding
any NASDAQ delisting proceedings pending or threatened against the Company
or its Subsidiaries which could, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(f) During the seven-calendar-day period ending on the
Closing Date, (A) trading in securities generally on the NASDAQ shall not
have been suspended and minimum prices shall not have been established on
either of such exchanges or such market by such exchange or by the
Commission, and (B) a general banking moratorium shall not have been
declared by Federal, New York or Finnish authorities.
(g) All material governmental and regulatory approvals
and clearances and all third-party consents necessary for the consummation
of all of the transactions contemplated by the Documents to occur on the
Closing Date shall have been obtained and shall be in full force and
effect, and Proha shall be reasonably satisfied that the consummation of
such transactions does not and will not contravene any Applicable Law,
except to the extent any contravention or contraventions, individually or
in the aggregate, could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(h) The Company shall have delivered to Proha a
certificate, executed by it or on its behalf by a duly authorized
representative, dated as of the Closing Date, certifying that each of the
conditions specified in this Section 7.2 has been satisfied.
(i) Proha shall have received delivery of the Opus Shares
as set forth hereunder.
(j) The Company shall have delivered to Proha
certificates of the appropriate public officials to the effect that each of
the Company and its Subsidiaries is a validly existing corporation in good
standing in its jurisdiction of organization dated not more than five (5)
days prior to the Closing Date.
(k) The Company shall have delivered to Proha a
certificate of the Secretary of the Company (i) certifying that a true and
correct copy of the Charter and Bylaws of the Company and all resolutions
of the Board of Directors authorizing the execution and delivery of this
Agreement and each Document to which the Company is a party and authorizing
the performance by the Company of the transactions contemplated hereby and
thereby is attached thereto and (ii) containing the incumbency and specimen
signature of each of the officers of the Company.
(l) Proha shall have received such other certificates,
instruments and documents in furtherance of the transactions contemplated
by this Agreement or the other Documents as it may reasonably request.
(m) Proha's stockholders shall have authorized the
transactions contemplated by this Agreement in accordance with the
Companies Act.
(n) On or before that date which is ninety (90) days from
the date hereof, Proha shall be satisfied in its discretion, after
conducting a review of the matter referred to below, that the Company has
adequate existing insurance coverage for substantially all of the
reasonably anticipated liabilities, damages, deficiencies, demands, claims
(including, but not limited to, indemnification claims of current and
former officers, directors, employees, advisors and affiliates of the
Company and its Subsidiaries) suits, actions, causes of action, fines,
penalties, losses sought and costs and expenses (including, without
limitation, attorneys' fees and expenses and court costs) incurred or
reasonably anticipated to be incurred by the Company and its Subsidiaries
in connection with the class action suit filed by Xxxxxxx Xxxxx in the
United States District Court for the Southern District of New York (Case
No. 01 CIV. 2938) on April 6, 2001 (as the same is supplemented or amended
from time to time, the "Shareholder Complaint") and any other suit based
on, or derived from, the same or substantially similar facts or
circumstances alleged in the Shareholder Complaint.
ARTICLE VIII
POST-CLOSING MATTERS
SECTION 8.1. Distribution of Opus Shares; Proha
Standstill. (a) It is the intent of Proha that after giving effect to the
transactions contemplated hereby, Proha will endeavor to distribute all or
part of the Opus Shares to the Proha shareholders in an orderly and
efficient manner provided that nothing in this Section 8.1(a) shall create
an obligation for Proha to distribute any Opus shares to the Proha
shareholders in the event the Board of Directors determines that such
distribution would not be in the best interests of, or would result in the
imposition of tax on, Proha and/or some or all of its shareholders. In
connection with the foregoing, the Board of Directors of Proha will
consider at the appropriate time whether to distribute all or part of the
Opus Shares to its shareholders and the amount of any such distribution,
and may take into account any tax, accounting, securities laws and any
other considerations it deems appropriate in light of prevailing market and
other conditions at the time of any such proposed distribution. The Board
of Directors of Proha shall endeavor to maintain value for the Proha
shareholders and the Company shareholders and will not authorize any such
distribution that would reasonably be expected to materially and adversely
effect the market value of the Opus Shares to the detriment of the
Company's shareholders (other than Proha) and to the benefit of the Proha
shareholders; provided, that for the avoidance of doubt, nothing in this
Section 8.1(a) shall prohibit or in any way restrict the ability of Proha
to sell or otherwise dispose of any or all of the Opus Shares in one or a
series of related transactions.
(b) Proha hereby agrees that for a period of one (1) year
from the Closing Date, it will not initiate a tender offer to acquire the
remaining issued and outstanding shares of Common Stock of the Company.
SECTION 8.2. Transfer of AIGMBH. (a) Proha covenants and
agrees to exercise its purchase option within ninety (90) days following
January 1, 2002 to acquire the remaining issued and outstanding shares of
AIGMBH pursuant to that certain Share Option Agreement, dated as of
December 4, 2000, by and between Proha and Xxxxxx Xxxxxxxxxx and Xxxxx
Xxxxxxx (the "AIGMBH Agreement"). Promptly after acquiring the shares
subject to the purchase option under the AIGMBH Agreement, Proha shall
contribute all AIGMBH Shares and the shares of AIGMBH it purchases pursuant
to the AIGMBH Agreement to the Company at no additional consideration. The
basic terms of the AIGMBH Agreement are described on Schedule 8.2.
(b) Proha hereby agrees that it will not reduce, or in
any way set off against, the AIGMBH shares to be contributed to the Company
pursuant to Section 8.2(a) in connection with any pending indemnification
claim Proha may have under Section 9.1(b)(i) hereof.
SECTION 8.3. Directors. (a) The Company and Proha (or any
Affiliate of Proha or any Proha Successor that beneficially owns the Opus
Shares purchased hereunder) shall use their respective commercially
reasonable efforts to ensure that the Board of Directors of the Company and
Proha (or any successor entity that beneficially owns the Opus Shares
purchased hereunder), as the case may be, shall initially consist of not
more than eight (8) directors.
(b) As long as Proha (or any Affiliate of Proha or any
Proha Successor that beneficially owns the Opus Shares) beneficially owns
Opus Shares that constitute at least (i) fifty percent (50%) of the
aggregate issued and outstanding Common Stock, the Company shall use its
commercially reasonable efforts to ensure that a total of five (5) Proha
Nominees are members of the Board of Directors of the Company, (ii)
thirty-three and one third percent (33.33%) but less than fifty percent
(50%) of the aggregate issued and outstanding Common Stock, the Company
shall use its commercially reasonable efforts to ensure that a total of
four (4) Proha Nominees are members of the Board of Directors of the
Company, (iii) ten percent (10%) but less than thirty-three and one third
percent (33.33%) of the aggregate issued and outstanding Common Stock, the
Company shall use its commercially reasonable efforts to ensure that a
total of three (3) Proha Nominees are members of the Board of Directors of
the Company. The Company and its Board of Directors may not take any
action, without due cause, to remove the Proha Nominees serving as
directors of the Company.
(c) The Company shall ensure that its Board of Directors
(and the Company's nominating committee, if any) shall recommend the
inclusion of the Proha Nominees in the slate of nominees recommended to
stockholders for election as directors at each annual meeting of
stockholders of the Company.
(d) The Board of Directors of the Company shall appoint
Proha Nominees to serve on each committee of the Board of Directors in at
least the same proportions that the number of Proha Nominees serving on the
Board of Directors of the Company bears to the total number of directors
then comprising the Board of Directors of the Company; provided, however,
that the Company and Proha shall cooperate in order to comply with any NASD
rules or regulations (or the rules and regulations of any national exchange
on which the Company's Common Stock is traded) relating to director
independence on committees.
(e) If at any time, a vacancy is created on the Board of
Directors of the Company by reason of the incapacity, death, removal or
resignation of any Proha Nominee, then Proha shall appoint an individual to
fill such vacancy until the next meeting of stockholders.
(f) The Company shall provide the Proha Nominees serving
as directors notice of each meeting of the Board of Directors of the
Company at the same time and in the same manner as other members of its
Board of Directors.
(g) The Proha Nominees serving as directors shall be
entitled to compensation and indemnification rights consistent with those
of other directors of the Company, including, without limitation, any
rights to participate in stock option or similar plans. At all times on and
after the date hereof, the Company shall be a party to and comply with
indemnification agreements (in such form as is currently available to the
Company's directors or such other form mutually satisfactory to Proha and
the Company) with each of the nominees of Proha serving as directors. The
Company shall at all times maintain a directors' and officers' insurance
policy covering the Company's directors and officers that provides, in the
aggregate, at least $10,000,000 of liability coverage and, in any event,
substantially no less coverage than the policy covering the current
directors of the Company as of the date of this Agreement.
(h) The provisions of this Section 8.3 shall be further
effected pursuant to an amendment to the Company's Bylaws in a form
acceptable to Proha, which shall not be further amended by the Board of
Directors of the Company in a manner that, individually or in the
aggregate, adversely affects Proha.
SECTION 8.4. Noncompetition Agreements. In consideration
of the benefits to be received by the parties hereto, each of the Company
and Proha hereby agrees that from the date hereof until the later of (x)
termination of this Agreement pursuant to its terms and (y) the date on
which Proha no longer owns or controls a number of shares of Common Stock
of the Company equal to or greater than the Threshold Securities, each of
Proha and the Company hereby agree, respectively, that:
(i) Proha and its Subsidiaries (other than Xxxxxx Plc.
and its affiliates) shall not own, manage, operate, control,
consult with, be employed by or participate in the ownership,
management, operation or control of, or be connected in any manner
with, any business which, (x) competes with the Company or its
Subsidiaries (including the Artemis Entities after the Closing) or
(y) provides services to the past or present clients and customers
of the Company or its Subsidiaries (including the Artemis Entities
after the Closing) as of the date of this Agreement, within any
jurisdiction or marketing area in which the Company or any of its
Subsidiaries (including the Artemis Entities after the Closing)
has contracted to do business, is doing business, is qualified to
do business or has contracted to acquire or merge with any other
Person engaged in substantially the same business as the Company,
directly or indirectly, without the prior written consent of the
Company, such consent to be given or withheld at the sole
discretion of the Company. For the purposes of this clause (i),
ownership of securities of 5% or less of any class of securities
of a public company shall not be considered to be competition with
the Company. The foregoing restrictions shall also apply to Xxxxxx
Plc. and its affiliates, but only to the extent of any business
they transact outside of Scandinavia (which includes the countries
of Denmark, Finland, Norway and Sweden), and in the event Xxxxxx
Plc. and its affiliates transact business outside Scandinavia,
Proha shall use its commercially reasonable efforts to cause
Xxxxxx Plc. and its affiliates to enter into appropriate marketing
and distribution arrangements with the Company (which includes,
for purposes of this Section 8.4(i), the Artemis Entities) to
ensure that their respective products are marketed through the
Company's distribution and marketing network.
(ii) The Company and its Subsidiaries (including the
Artemis Entities after the Closing), directly or indirectly,
without the prior written consent of Proha, such consent to be
given or withheld at the sole discretion of Proha, shall not own,
manage, operate, control, consult with, be employed by or
participate in the ownership, management, operation or control of,
or be connected in any manner with, any business which, (x)
competes with Proha or its Subsidiaries, or (y) provides services
to the past or present clients and customers of Proha or its
Subsidiaries as of the date of this Agreement, within any
jurisdiction or marketing area in which Proha or any of its
Subsidiaries (which excludes for purposes of this Section 8.4, the
Company and its Subsidiaries so long as the Company would be a
Subsidiary of Proha after the Closing Date) has contracted to do
business, is doing business, is qualified to do business or has
contracted to acquire or merge with any other Person engaged in
substantially the same business as Proha. For the purposes of this
clause (ii), ownership of securities of 5% or less of any class of
securities of a public company shall not be considered to be
competition with Proha.
SECTION 8.5. Sale of Opus Shares. If, at any time prior
to the first anniversary of the Closing Date, Proha proposes to privately
sell to an independent third party in one or a series of related
transactions at least 30% of the Opus shares acquired pursuant to this
Agreement, Proha covenants and agrees that it will not consummate any such
sale unless the proposed transferee agrees to offer to purchase the
remaining issued and outstanding shares of Common Stock on a Fully-Diluted
Basis. The provisions of this Section 8.5 shall not apply to (i) any sale
of the Opus Shares in connection with the exercise by Proha of its
registration rights under the Registration Rights Agreement, (ii) any
transfer of such shares to any Affiliate of Proha, or (iii) any transfer to
the Proha shareholders pursuant to Section 8.1, or (iv) any transfer of
such shares to any successor entity of Proha (a "Proha Successor") in
connection with any merger, recapitalization, reorganization or de-merger
in which Proha is the surviving entity and which does not result in any
reclassification of the outstanding shares of Proha common stock into
shares of other stock or other securities or property, provided however
that the transferee in a transfer pursuant to clause (ii), or (iv) shall be
subject to the provisions of this Section 8.5.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Survival; Indemnification. (a) All
representations, warranties, covenants and agreements (except covenants and
agreements which are expressly required to be performed and are performed
in full on or before the Closing Date) contained in this Agreement shall be
deemed made at the Closing as if made at such time (except to the extent
that any such representation or warranty is made as of a specified date, in
which case such representation or warranty shall have been true and correct
as of such specified date) and shall survive the Closing for nine (9)
months, except that (i) with respect to claims asserted pursuant to this
Section 9.1 before the expiration of the applicable representation or
warranty, such claims shall survive until the date they are finally
liquidated or otherwise resolved, (ii) Sections 3.12, 3.17, 3.18, 4.12,
4.17 and 4.18 shall survive until thirty (30) days after the end of the
applicable statute of limitations (as waived, tolled or amended), (iii)
Sections 3.6 and 4.6 and this Section 9.1 shall survive indefinitely and
(iv) Section 8.2 shall survive in accordance with its terms. All statements
as to factual matters contained in any certificate, document or other
instrument executed and delivered by the parties pursuant hereto shall be
deemed to be representations, warranties and covenants by such party
hereunder. No claim may be commenced under this Section 9.1 (or otherwise)
following expiration of the applicable period of survival, and upon such
expiration the Indemnifying Party shall be released from all liability with
respect to claims under each such section not theretofore made by the
Indemnified Party. A claim shall be made or commenced hereunder by the
Indemnified Party delivering to the Indemnifying Party a written notice
specifying in reasonable detail the nature of the claim, the amount claimed
(if known or reasonably estimable), and the factual basis for the claim.
(b) (i) The Company agrees after the Closing Date to
indemnify and hold harmless Proha, its Affiliates, and their respective
officers, directors, employees and duly authorized agents and each of their
affiliates and each other Person controlling Proha or any of their
Affiliates within the meaning of either section 15 of the Securities Act or
section 20 of the Exchange Act and any partner of any of them from and
against all losses, claims, damages or liabilities resulting from any
claim, lawsuit or other proceeding by any Person to which any party
indemnified under this clause may become subject which is related to or
arises out of (A) any breach of, or failure to perform, any of the
covenants (other than the covenant of the Company contained in 5.1(a)(vi)
hereof) or agreements made in this Agreement by the Company, (B) any breach
or failure of any representation or warranty made by the Company in this
Agreement to be true and correct as of the applicable time; provided,
however, that, for purposes of this clause (B), the determination of any
such breach or failure, or the existence of any facts resulting in any
breach or failure of, any such representation or warranty, shall be
determined without regard to any "material," "materially," "Material
Adverse Effect" or similar exception or qualification contained herein or
therein; or (C) any action or omission of the Company or any of its
Subsidiaries in connection with the transactions contemplated hereby or by
the other Documents, and will reimburse Proha and any other party
indemnified under this clause for all reasonable out-of-pocket expenses
(including, without limitation, reasonable counsel fees and disbursements)
incurred by Proha or any such other party indemnified under this clause and
further agrees that the indemnification and reimbursements commitments
herein shall apply whether or not Proha or any such other party indemnified
under this clause is a formal party to any such lawsuits, claims or other
proceedings. The foregoing provisions are expressly intended to cover,
without limitation, reimbursement of legal and other expenses incurred in a
deposition or other discovery proceeding, delayed or conditioned
(ii) Notwithstanding the foregoing clause (i),
the Company shall not be liable to any party otherwise entitled to
indemnification pursuant thereto: (A) in respect of any loss,
claim, damage, liability or expense to the extent the same is
determined, in final judgment by a court having jurisdiction, to
have resulted from the gross negligence or willful misconduct of
such party or (B) for any settlement effected by such party
without the written consent of the Company, which consent shall
not be unreasonably withheld.
(iii) Proha agrees after the Closing Date to
indemnify and hold harmless the Company, its Affiliates, and their
respective officers, directors, employees and duly authorized
agents and each of their affiliates and each other Person
controlling Proha or any of their Affiliates within the meaning of
either section 15 of the Securities Act or section 20 of the
Exchange Act and any partner of any of them from and against all
losses, claims, damages or liabilities resulting from any claim,
lawsuit or other proceeding by any Person to which any party
indemnified under this clause may become subject which is related
to or arises out of (A) any breach of, or failure to perform, any
of the covenants or agreements made in this Agreement by Proha,
(B) any breach or failure of any representation or warranty made
by Proha in this Agreement to be true and correct as of the
applicable time (other than the representation of Proha contained
in Section 6.5(c) hereof); provided, however, that, for purposes
of this clause (B), the determination of any such breach or
failure, or the existence of any facts resulting in any breach or
failure of, any such representation or warranty, shall be
determined without regard to any "material," "materially,"
"Material Adverse Effect" or similar exception or qualification
contained herein or therein; or (C) any action or omission of
Proha or any of its Subsidiaries in connection with the
transactions contemplated hereby or by the other Documents, and
will reimburse the Company and any other party indemnified under
this clause for all reasonable out-of-pocket expenses (including,
without limitation, reasonable counsel fees and disbursements)
incurred by the Company or any such other party indemnified under
this clause and further agrees that the indemnification and
reimbursements commitments herein shall apply whether or not the
Company or any such other party indemnified under this clause is a
formal party to any such lawsuits, claims or other proceedings.
The foregoing provisions are expressly intended to cover, without
limitation, reimbursement of legal and other expenses incurred in
a deposition or other discovery proceeding.
(iv) Notwithstanding the foregoing clause (iii),
Proha shall not be liable to any party otherwise entitled to
indemnification pursuant thereto: (A) in respect of any loss,
claim, damage, liability or expense to the extent the same is
determined, in final judgment by a court having jurisdiction, to
have resulted from the gross negligence or willful misconduct of
such party or (B) for any settlement effected by such party
without the written consent of Proha, which consent shall not be
unreasonably withheld, delayed or conditioned.
(c) If a Person entitled to indemnity hereunder (an
"Indemnified Party") asserts that any party hereto (the "Indemnifying
Party") has become obligated to the Indemnified Party pursuant to Section
9.1(b), or if any suit, action, investigation, claim or proceeding is
begun, made or instituted as a result of which the Indemnifying Party may
become obligated to the Indemnified Party hereunder, the Indemnified Party
agrees to notify the Indemnifying Party promptly and to cooperate with the
Indemnifying Party, at the Indemnifying Party's expense, to the extent
reasonably necessary for the resolution of such claim or in the defense of
such suit, action or proceeding, including making available any
information, documents and things in the possession of the Indemnified
Party which are reasonably necessary therefor.
Notwithstanding the foregoing notice requirement, the
right to indemnification hereunder shall not be affected by any failure to
give, or delay in giving, notice unless, and only to the extent that, the
rights and remedies of the Indemnifying Party shall have been prejudiced as
a result of such failure or delay.
(d) In fulfilling its obligations under this Section 9.1,
after providing each Indemnified Party with a written acknowledgment of any
liability under this Section 9.1 as between such Indemnified Party and the
Indemnifying Party, the Indemnifying Party shall have the right to
investigate, defend, settle or otherwise handle, with the aforesaid
cooperation, any claim, suit, action or proceeding brought by a third party
in such manner as the Indemnifying Party may in its sole discretion deem
appropriate; provided, however, that (i) counsel retained by the
Indemnifying Party is reasonably satisfactory to the Indemnified Party and
(ii) the Indemnifying Party shall not, except with the consent of the
Indemnified Party, enter into any settlement that does not include as an
unconditional term thereof the giving by the Person or Persons asserting
such claim to all Indemnified Parties of an unconditional release from all
liability with respect to such claim or consent to entry of any judgment.
Notwithstanding anything to the contrary contained herein, the Indemnifying
Party may retain one firm of counsel to represent all Indemnified Parties
in such claim, action or proceeding; provided, however, that in the event
that the defendants in, or targets of, any such claim, action or proceeding
include more than one Indemnified Party, and any Indemnified Party shall
have reasonably concluded, based on the opinion of its own counsel, that
there may be one or more legal defenses available to it which are in
conflict with those available to any other Indemnified Party, then such
Indemnified Party may employ separate counsel to represent or defend it or
any other Person entitled to indemnification and reimbursement hereunder
with respect to any such claim, action or proceeding in which it or such
other Person may become involved or is named as defendant and the
Indemnifying Party shall pay the reasonable fees and disbursement of such
counsel. Notwithstanding the Indemnifying Party's election to assume the
defense or investigation of such claim, action or proceeding, the
Indemnified Party shall have the right to employ separate counsel at the
expense of the Indemnifying Party and to direct the defense or
investigation of such claim, action or proceeding if (A) in the written
opinion of counsel to the Indemnified Party, use of counsel of the
Indemnifying Party's choice could reasonably be expected to give rise to a
conflict of interest, or (B) the Indemnifying Party shall not have employed
counsel reasonably satisfactory to the Indemnified Party to represent the
Indemnified Party within a reasonable time after notice of the assertion of
any such claim or institution of any such action or proceeding. In all
other situations, the Indemnified Party shall have the right to participate
in the defense or investigation of such claim, action or proceeding if the
Indemnifying Party shall authorize the Indemnified Party to employ separate
counsel at the Indemnifying Party's expense or if the fees and expenses of
counsel for the Indemnified Party shall be borne by the Indemnified Party.
If the Indemnifying Party does not notify the Indemnified Party within
thirty (30) days after the receipt of the Indemnified Party's notice of a
claim of indemnity hereunder that it elects to undertake the defense
thereof, the Indemnified Party shall have the right to contest, settle or
compromise the claim but shall not thereby waive any right to indemnity
therefor pursuant to this Agreement.
(e) If for any reason (other than the gross negligence or
willful misconduct referred to in subclauses (b)(ii) and (b)(iv) above) the
foregoing indemnification by the Company or Proha, as the case may be, is
unavailable to any Indemnified Party or is insufficient to hold it harmless
as and to the extent contemplated by subclauses (b), (c) and (d) above,
then the Company or Proha, as the case may be, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect
the relative benefits received by the Company, its Affiliates and any other
applicable Indemnified Party, on the one hand, and Proha, its Affiliates
and any other applicable Indemnified Party, as the case may be, on the
other hand, as well as any other relevant equitable considerations.
(f) Notwithstanding anything in this Section 9.1 to the
contrary,
(i) The Company shall not be liable for any
indemnification under Section 9.1(b)(i) until the amount of such
losses, claims, damages or liabilities resulting from any claim,
lawsuit or other proceeding incurred by Proha exceeds $500,000 in
the aggregate. If the aggregate amount of such losses, claims,
damages or liabilities resulting from any claim, lawsuit or other
proceeding exceeds $500,000, the Company shall be liable for the
entire amount of such losses, claims, damages or liabilities
resulting from any claim, lawsuit or other proceeding; provided,
however, that the Company shall have no liability for any such
losses, claims, damages or liabilities resulting from any claim,
lawsuit or other proceeding in connection with any single claim
under Section 9.1(b)(i) unless the amount of such losses, claims,
damages or liabilities resulting from any claim, lawsuit or other
proceeding exceeds $100,000, in which case the entire amount of
such losses, claims, damages or liabilities resulting from any
claim, lawsuit or other proceeding shall be covered by this
indemnification; and provided, further, that the aggregate
liability of the Company under this Section 9.1 shall not exceed
$5,000,000.
(ii) Proha shall not be liable for any
indemnification under Section 9.1(b)(iii) until the amount of such
losses, claims, damages or liabilities resulting from any claim,
lawsuit or other proceeding incurred by the Company exceeds
$500,000 in the aggregate. If the aggregate amount of such losses,
claims, damages or liabilities resulting from any claim, lawsuit
or other proceeding exceeds $500,000, Proha shall be liable for
the entire amount of such losses, claims, damages or liabilities
resulting from any claim, lawsuit or other proceeding; provided,
however, that Proha shall have no liability for any such losses,
claims, damages or liabilities resulting from any claim, lawsuit
or other proceeding in connection with any single claim under
Section 9.1(b)(iii) unless the amount of such losses, claims,
damages or liabilities resulting from any claim, lawsuit or other
proceeding exceeds $100,000, in which case the entire amount of
such losses, claims, damages or liabilities resulting from any
claim, lawsuit or other proceeding shall be covered by this
indemnification; and provided, further, that the aggregate
liability of Proha under this Section 9.1 shall not exceed
$5,000,000.
SECTION 9.2. Notices. All notices, demands, requests,
consents, approvals or other communications (collectively, "Notices")
required or permitted to be given hereunder or which are given with respect
to this Agreement shall be in writing and shall be personally served,
delivered by a reputable air courier service with tracking capability, with
charges prepaid, or transmitted by hand delivery or facsimile, addressed as
set forth below, or to such other address as such party shall have
specified most recently by written notice. Notice shall be deemed given on
the date of service or transmission if personally served or transmitted by
facsimile. Notice otherwise sent as provided herein shall be deemed given
on the next Business Day following delivery of such notice to a reputable
air courier service.
If to the Company, to it at:
Opus360 Corporation
00 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxx
Facsimile: 000-000-0000
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
0 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
if to Proha:
Proha PLC
Xxxxxxxxxxxxx 0X
XXX-00000 Xxxxx
Xxxxxxx
Attention: Pekka Pere
Facsimile: 011-358-20-4362-500
and a copy (which shall not constitute notice) to:
White & Case LLP
Xxxx xxxxx 14
FIN-00130 Helsinki
Finland
Attention: Petri Y.J. Haussila, Esq.
Facsimile: 011-358-9-228-64-228
SECTION 9.3. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, AND EACH
PARTY HERETO SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND
FEDERAL COURTS WITHIN THE COUNTY OF NEW YORK IN THE STATE OF NEW YORK. ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN
THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR
THE SOUTHERN DISTRICT OF NEW YORK AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE COMPANY AND PROHA HEREBY ACCEPTS FOR ITSELF AND IN RESPECT
OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. THE COMPANY AND PROHA FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO THE COMPANY AT ITS ADDRESS SET FORTH IN SECTION
9.2, SUCH SERVICE TO BECOME EFFECTIVE SEVEN DAYS AFTER SUCH MAILING.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF PROHA OR THE COMPANY TO SERVE
PROCESS IN ANY OF THE MATTERS PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY IN ANY OTHER
JURISDICTION. THE COMPANY AND PROHA HEREBY IRREVOCABLY WAIVES ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE
AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT BROUGHT IN THE COURTS REFERRED TO ABOVE AND HEREBY FURTHER
IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT
ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.
SECTION 9.4. Termination; Fees.
(a) This Agreement may be terminated by:
(i) by mutual agreement of the parties at any
time,
(ii) by either party, if, at the Stockholder
Meeting (including any adjournment or postponement thereof), the
Stockholder Approval shall have not been obtained;
(iii) by either party if any court of competent
jurisdiction or any Governmental Authority shall have issued an
order, decree or ruling or taken any other action permanently
restricting, enjoining, restraining or otherwise prohibiting the
transactions contemplated hereby and such order, decree or ruling
or other action shall have become final and nonappealable;
(iv) by the Company if (x) the Board of
Directors of Proha fails to recommend the approval of this
Agreement and the transactions contemplated hereby to its
stockholders at a duly convened meeting or (y) the representation
contained in Section 6.5(c) shall not be true and correct;
(v) by Proha if (x) the Board of Directors of
the Company approves an Alternative Transaction, or (y) the
Company otherwise materially breached the provisions of Sections
5.5 or 5.7 or (z) Section 5.1(a)(vi) of this Agreement; or
(vi) by Proha if (x) the Company shall have
failed to obtain a fairness opinion as required by Section 5.12,
or (y) the condition contained in Section 7.2(n) has not been
satisfied and Proha has provided written notice to the Company of
the same within the time frame specified in Section 7.2(n).
(b) In addition to the foregoing, this Agreement shall
automatically terminate and be of no further force and effect if the
transactions contemplated hereby are not consummated on or prior to
September 30, 2001.
(c) If this Agreement is terminated (x) by Proha in
accordance with Section 9.4(a)(v) (other than a termination pursuant to
Section 9.4(a)(v)(z) prior to the delivery by Proha of the Artemis Entities
U.S. GAAP Financial Statements) or Section 9.4(a)(vi)(x) or (y) by the
Company in accordance with Section 9.4(a)(iv), the Company or Proha, as the
case may be, shall (x) reimburse Proha or the Company, as the case may be,
in immediately available funds for the out-of-pocket expenses of Proha or
the Company, as the case may be, (including, without limitation, printing
fees, filing fees and fees and expenses of its legal advisors and outside
accountants (which shall include, in the case of Proha, all fees and
expenses of its outside accountants incurred in connection with preparing
the Artemis Entities U.S. GAAP Financial Statements)) related to this
Agreement or the other Documents, the transactions contemplated hereby and
thereby and any related financing, and (y) pay to Proha or the Company, as
the case may be, in immediately available funds an amount equal to $250,000
(the "Termination Fee").
(d) If this Agreement is terminated by Proha or the
Company pursuant to Section 9.4(a)(ii) hereof and (x) an Alternative
Transaction has been made and publicly announced or communicated to the
Company's shareholders after the date of this Agreement and prior to the
Stockholders Meeting and, to the extent applicable, (y) concurrently with
or within twelve (12) months after the date of such termination the Company
enters into a binding agreement with respect to such Alternative
Transaction, then the Company shall (i) within one (1) Business Day of the
date of termination pursuant to Section 9.4(a)(ii) (A) pay to Proha 50% of
the Termination Fee and (B) reimburse Proha in immediately available funds
for the out-of-pocket expenses of Proha (including, without limitation,
printing fees, filing fees and fees and expenses of its legal advisors and
outside accountants (which shall include, in the case of Proha, all fees
and expenses of its outside accountants incurred in connection with
preparing the Artemis Entities U.S. GAAP Financial Statements)) related to
this Agreement or the other Documents, the transactions contemplated hereby
and thereby and any related financing, and (ii) within one (1) Business Day
of the consummation of such Alternative Transaction (including any
revisions or amendments thereto) pay to Proha 50% of the Termination Fee.
(e) If this Agreement is terminated by Proha in
accordance with Section 9.4(a)(vi)(y), the Company shall reimburse Proha in
immediately available funds for the out-of-pocket expenses of Proha
incurred after the date hereof (including, without limitation, printing
fees, filing fees and fees and expenses of its legal advisors and outside
accountants (including all fees and expenses of its outside accountants
incurred in connection with preparing the Artemis Entities U.S. GAAP
Financial Statements)) related to this Agreement or the other Documents in
an amount not to exceed $500,000 in the aggregate.
(f) No termination of this Agreement shall affect any
party's liability for willful breach of this Agreement and, except for
liability from a willful breach, or pursuant to Section 9.4(c), or (d) or
(e), no party shall have any liability to the other in the event of a
termination of this Agreement.
SECTION 9.5. Entire Agreement. This Agreement (including
all agreements entered into pursuant hereto and all certificates and
instruments delivered pursuant hereto and thereto) constitutes the entire
agreement of the parties with respect to the subject matter hereof and
supersedes all prior and contemporaneous agreements, representations,
understandings, negotiations and discussions between the parties or their
Affiliates, whether oral or written, with respect to the subject matter
hereof, including, without limitation, the term sheet dated March 30, 2001.
SECTION 9.6. Modifications and Amendments. No amendment,
modification or termination of this Agreement shall be binding upon any
other party unless executed in writing by the parties hereto intending to
be bound thereby.
SECTION 9.7. Waivers and Extensions. Any party to this
Agreement may waive any right, breach or default which such party has the
right to waive, provided that such waiver will not be effective against the
waiving party unless it is in writing, is signed by such party, and
specifically refers to this Agreement. Waivers may be made in advance or
after the right waived has arisen or the breach or default waived has
occurred. Any waiver may be conditional. No waiver of any breach of any
agreement or provision herein contained shall be deemed a waiver of any
preceding or succeeding breach thereof nor of any other agreement or
provision herein contained. No waiver or extension of time for performance
of any obligations or acts shall be deemed a waiver or extension of the
time for performance of any other obligations or acts.
SECTION 9.8. Titles and Headings; Interpretation. Titles
and headings of sections of this Agreement are for convenience only and
shall not affect the construction of any provision of this Agreement.
SECTION 9.9. Exhibits and Schedules. Each of the annexes,
exhibits and schedules referred to herein and attached hereto is an
integral part of this Agreement and is incorporated herein by reference.
SECTION 9.10. Expenses; Brokers. Subject to the
provisions of Section 9.4(c) and 9.4(d), each party shall pay or cause to
be paid, whether or not the Closing occurs hereunder, their respective
out-of-pocket fees and expenses incurred in connection with the
transactions contemplated by this Agreement, the other Documents and all
matters related thereto (including, without limitation, HSR Act filing fees
(if any), and reasonable fees and disbursements of counsel and
consultants). Each of the parties represents to the others that neither it
nor any of its Affiliates has used a broker or other intermediary, in
connection with the transactions contemplated by this Agreement for whose
fees or expenses any other party will be liable and respectively agrees to
indemnify and hold the others harmless from and against any and all claims,
liabilities or obligations with respect to any such fees or expenses
asserted by any Person on the basis of any act or statement alleged to have
been made by such party or any of its Affiliates.
SECTION 9.11. Press Releases and Public Announcements.
All press releases and similar public announcements relating to the
transactions contemplated by the Documents shall be made only if mutually
agreed upon by the Company and Proha, except to the extent that such
disclosure is, in the opinion of counsel, required by law or by stock
exchange regulation; provided that any such required disclosure shall only
be made by one party, to the extent consistent with law, after consultation
with the other party.
SECTION 9.12. Assignment; No Third Party Beneficiaries.
This Agreement and the rights, duties and obligations hereunder may not be
assigned or delegated by either the Company or Proha without the prior
written consent of the other; provided that Proha may assign or delegate
its rights, duties and obligations hereunder to its Affiliates; provided,
further, that such assignment shall not release Proha from its obligations
under this Agreement. Except as provided in the preceding sentence, any
assignment or delegation of rights, duties or obligations hereunder made
without the prior written consent of the other party hereto shall be void
and of no effect. This Agreement and the provisions hereof shall be binding
upon and shall inure to the benefit of each of the parties and their
respective successors and permitted assigns. This Agreement is not intended
to confer any rights or benefits on any Persons that are not party hereto
other than as expressly set forth in Section 9.1.
SECTION 9.13. Severability. This Agreement shall be
deemed severable, and the invalidity or unenforceability of any term or
provision hereof shall not affect the validity or enforceability of this
Agreement or of any other term or provision hereof. Furthermore, in lieu of
any such invalid or unenforceable term or provision, the parties hereto
intend that there shall be added as a part of this Agreement a provision as
similar in terms to such invalid or unenforceable provision as may be
possible and be valid and enforceable.
SECTION 9.14. Counterparts; Facsimile. This Agreement may
be executed in multiple counterparts, each of which shall be deemed an
original, and all of which taken together shall constitute one and the same
instrument.
SECTION 9.15. Further Assurances. Each party hereto, upon
the request of any other party hereto, shall do all such further acts and
execute, acknowledge and deliver all such further instruments and documents
as may be necessary or desirable to carry out the transactions contemplated
by this Agreement, including, in the case of the Company, such acts,
instruments and documents as may be necessary or desirable to convey and
transfer to Proha the Shares to be purchased by it hereunder.
SECTION 9.16. Remedies Cumulative. The remedies provided
herein shall be cumulative and shall not preclude the assertion by any
party hereto of any other rights or the seeking of any remedies against the
other party hereto.
* * * * *
[Share Exchange Agreement signature page]
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
OPUS360 CORPORATION
By: /s/ Xxx Xxxxxxxx
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Name: Xxx Xxxxxxxx
Title: Chairman and Chief Executive Officer
PROHA PLC
By: /s/ Pekka Pere
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Name: Pekka Pere
Title: Managing Director
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: Director
