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Exhibit (d)(1)
AGREEMENT FOR TENDER OFFER AND MERGER
among
MISYS PLC,
KIRSTY, INC.,
SUNSHINE ACQUISITION CORPORATION,
and
SUNQUEST INFORMATION SYSTEMS, INC.
Dated as of June 24, 2001
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TABLE OF CONTENTS
Page
----
ARTICLE I THE OFFER ...................................................... 1
SECTION 1.01 The Offer ............................................... 1
SECTION 1.02 Company Action .......................................... 3
SECTION 1.03 Directors ............................................... 4
ARTICLE II THE MERGER ..................................................... 5
SECTION 2.01 Parent's Agreement to Effectuate Merger ................. 5
ARTICLE III CONVERSION OF SECURITIES ....................................... 6
SECTION 3.01 Conversion of Securities ................................ 6
SECTION 3.02 Stock Options ........................................... 7
SECTION 3.03 Exchange of Certificates ................................ 8
SECTION 3.04 Stock Transfer Books .................................... 9
ARTICLE IV REPRESENTATIONS AND WARRANTIES
OF THE COMPANY ................................................. 10
SECTION 4.01 Organization and Qualification .......................... 10
SECTION 4.02 Subsidiaries ............................................ 10
SECTION 4.03 Authority Relative to Agreement ......................... 11
SECTION 4.04 Non-Contravention ....................................... 11
SECTION 4.05 Capitalization .......................................... 12
SECTION 4.06 SEC Filings ............................................. 12
SECTION 4.07 Financial Statements .................................... 13
SECTION 4.08 Absence of Certain Changes or Events .................... 13
SECTION 4.09 Governmental Approvals .................................. 13
SECTION 4.10 Compliance with Laws .................................... 14
SECTION 4.11 Disclosure Documents .................................... 14
SECTION 4.12 Litigation .............................................. 15
SECTION 4.13 Title to Properties ..................................... 15
SECTION 4.14 Real Property Interests ................................. 15
SECTION 4.15 Intellectual Property ................................... 15
SECTION 4.16 Labor Matters ........................................... 17
SECTION 4.17 Taxes ................................................... 17
SECTION 4.18 Employee Benefit Plans .................................. 19
SECTION 4.19 Environmental Matters ................................... 21
SECTION 4.20 Contracts ............................................... 21
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SECTION 4.21 Certain Transactions .................................... 22
SECTION 4.22 Insurance ............................................... 22
SECTION 4.23 Opinion of Financial Advisor ............................ 22
SECTION 4.24 Brokers ................................................. 22
SECTION 4.25 European Union Operations ............................... 23
SECTION 4.26 Voting Requirements ..................................... 23
ARTICLE V REPRESENTATIONS AND WARRANTIES
OF PARENT, U.S. PARENT AND ACQUISITION SUB ..................... 23
SECTION 5.01 Organization and Qualification .......................... 23
SECTION 5.02 Authority Relative to Agreement ......................... 23
SECTION 5.03 Non-Contravention ....................................... 24
SECTION 5.04 Governmental Approvals .................................. 24
SECTION 5.05 Disclosure Documents .................................... 24
SECTION 5.06 Financing ............................................... 25
ARTICLE VI CERTAIN AGREEMENTS ............................................. 25
SECTION 6.01 Conduct of the Company's Business ....................... 25
SECTION 6.02 Shareholder Approval .................................... 27
SECTION 6.03 Access to Information ................................... 27
SECTION 6.04 Further Assurances ...................................... 27
SECTION 6.05 Inquiries and Negotiations .............................. 28
SECTION 6.06 Notification of Certain Matters ......................... 30
SECTION 6.07 Indemnification ......................................... 30
SECTION 6.08 Employee Benefits ....................................... 31
SECTION 6.09 SEC and Other Filings ................................... 31
SECTION 6.10 FIRPTA Certificate ...................................... 31
ARTICLE VII CONDITIONS TO THE MERGER ....................................... 32
SECTION 7.01 Conditions to Parent's Obligation to Effect the Merger .. 32
ARTICLE VIII TERMINATION AND ABANDONMENT .................................... 33
SECTION 8.01 Termination and Abandonment ............................. 33
SECTION 8.02 Effect of Termination ................................... 34
ARTICLE IX MISCELLANEOUS .................................................. 35
SECTION 9.01 Nonsurvival of Representations and Warranties ........... 35
SECTION 9.02 Expenses, Etc ........................................... 35
SECTION 9.03 Publicity ............................................... 35
SECTION 9.04 Execution in Counterparts ............................... 35
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SECTION 9.05 Notices ................................................. 35
SECTION 9.06 Waivers ................................................. 37
SECTION 9.07 Entire Agreement ........................................ 37
SECTION 9.08 Applicable Law .......................................... 37
SECTION 9.09 Severability ............................................ 37
SECTION 9.10 Specific Performance .................................... 38
SECTION 9.11 Submission to Jurisdiction .............................. 38
SECTION 9.12 Binding Effect, Benefits ................................ 38
SECTION 9.13 Assignability ........................................... 38
SECTION 9.14 Amendments .............................................. 38
SECTION 9.15 Interpretation .......................................... 39
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INDEX TO DEFINED TERMS
THIS INDEX IS INCLUDED FOR CONVENIENCE ONLY AND
DOES NOT CONSTITUTE A PART OF THE AGREEMENT
Term Reference
---------- ---------
"Acquisition Proposal" 6.05(a)
"Acquisition Sub" Recitals
"Antrim" 4.16
"Business Combination" 8.02(b)
"Certificates" 3.03(b)
"Closing Date" 2.01(c)
"Code" 3.03(e)
"Company" Recitals
"Company Common Stock" Recitals
"Company Disclosure Schedule" Article IV
"Company Plan" 4.18
"Company Preferred Stock" 4.05
"Company Properties" 4.14
"Company SEC Filings" 4.06
"Company Stock Options" 4.05
"Company Stock Plan" 1.01(a)
"Completion Date" 3.02(a)
"Constituent Corporations" Recitals
"Continuing Director" 1.03(a)
"Contracts" 4.20
"Dissenters Rights Law" 3.01(d)
"Dissenting Shares" 3.01(d)
"Effective Time" 2.01(d)
"Environmental Event" 4.19
"Environmental Law" 4.19
"ERISA" 4.18(a)
"Exchange Act" 1.03(b)
"Exchange Agent" 3.03(a)
"Exchange Fund" 3.03(a)
"GAAP" 4.07
"HSR Act" 4.09
"Intellectual Property" 4.15(g)
"Liens" 4.02(b)
"Material Adverse Effect" 4.01
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"Merger" 2.01
"Merger Consideration" 3.01(c)
"Minimum Condition" 1.01(a)
"Offer" 1.01(a)
"Offer Consideration" 1.01(a)
"Offer Documents" 1.01(b)
"Option Plan" 3.02(a)
"Owned Software" 4.15(f)
"Parent" Recitals
"Pennsylvania BCL" Recitals
"Related Person" 4.18
"Returns" 4.17(a)
"Schedule 14D-9" 1.02(b)
"SEC" 1.01(b)
"Securities Act" 4.06
"Shares" 1.01(a)
"Shareholders' Agreement" Recitals
"Subsidiary" 4.02(c)
"Superior Proposal" 6.05(a)
"Surviving Corporation" Recitals
"Taxes" 4.17(f)
"Termination Date" 8.01(c)
"Termination Fee" 8.02(b)
"U.S. Parent" Recitals
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AGREEMENT FOR TENDER OFFER AND MERGER
AGREEMENT FOR TENDER OFFER AND MERGER, dated as of June 24, 2001, among
MISYS PLC, a public company organized under the laws of England ("Parent"),
KIRSTY, INC., a Delaware corporation and an indirect wholly-owned subsidiary of
Parent ("U.S. Parent"), SUNSHINE ACQUISITION CORPORATION, a Pennsylvania
corporation and a direct wholly-owned subsidiary of U.S. Parent ("Acquisition
Sub"), and SUNQUEST INFORMATION SYSTEMS, INC., a Pennsylvania corporation (the
"Company"). The Company and Acquisition Sub are hereinafter sometimes referred
to as the "Constituent Corporations" and the Company as the "Surviving
Corporation."
WHEREAS, the respective Boards of Directors of Parent, U.S. Parent,
Acquisition Sub and the Company have each approved, pursuant to the terms and
conditions of this Agreement, the acquisition of the Company by Acquisition Sub
pursuant to a tender offer by Acquisition Sub for all the outstanding shares of
Common Stock, no par value ("Company Common Stock"), of the Company; and
WHEREAS, concurrently with the execution of this Agreement and as an
inducement to Parent, U.S. Parent and Acquisition Sub to enter into this
Agreement, Parent, U.S. Parent, Acquisition Sub and certain shareholders of the
Company are entering into a Shareholders' Agreement (the "Shareholders'
Agreement") pursuant to which such shareholders have agreed, among other things,
severally to tender all of their shares of Company Common Stock into the Offer;
and
WHEREAS, following the consummation of the Offer, Parent and U.S.
Parent shall cause Acquisition Sub to be merged with and into the Company by
Acquisition Sub's adoption of a plan and agreement of merger, pursuant to
Section 1924(b)(1)(ii) of the Business Corporation Law of the Commonwealth of
Pennsylvania (the "Pennsylvania BCL");
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants, agreements and conditions contained herein, and in order
to set forth the terms and conditions of the merger and the mode of carrying the
same into effect, the parties hereto hereby agree as follows:
ARTICLE I
THE OFFER
SECTION 1.01 The Offer. (a) Provided that nothing shall have
occurred that, had the Offer referred to below been commenced, would give rise
to a right to terminate the Offer under any of the conditions set forth in Annex
I hereto, Acquisition Sub shall, and Parent shall cause Acquisition Sub to, as
promptly as practicable after the date hereof, but in no event later than ten
business days following the public announcement of the terms of this Agreement,
commence an offer (the "Offer") to purchase all of the outstanding shares (the
"Shares") of
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Company Common Stock at a price of $24.00 per Share, net to the seller in cash
(or at such higher price as Acquisition Sub, in its sole discretion, elects to
offer) (the "Offer Consideration"), but subject to any withholding required by
law. The Offer shall be subject (i) to the condition that there shall be validly
tendered prior to the expiration date of the Offer and not withdrawn a number of
Shares representing at least 80% of the Shares outstanding on a fully diluted
basis (the "Minimum Condition"), (ii) to the other conditions set forth in Annex
I hereto and (iii) to the condition that Acquisition Sub shall have received
certificates signed by the president or the chief financial officer of the
Company to the effect that (A) the condition to the obligation of Acquisition
Sub set forth in paragraph (e) of Annex I does not exist and (B) the acquisition
of Shares pursuant to the Offer is exempt from Section 1445 of the Code (as
defined below). For purposes of determining the Minimum Condition, (i) Shares
tendered subject to guaranteed delivery shall not be considered validly tendered
unless and until delivery shall have been completed and (ii) Shares outstanding
on a fully-diluted basis shall mean all Shares actually outstanding plus all
Shares issuable upon exercise, conversion or exchange of then-outstanding vested
options, warrants and other rights to purchase, or other securities convertible
into or exchangeable for, Company Common Stock, including any Shares issuable
pursuant to vested options under the Company's Stock Incentive Plan of 1996, as
amended, and pursuant to the Company's Employee Stock Purchase Plan (together,
the "Company Stock Plans"). Acquisition Sub expressly reserves the right to
modify the terms of the Offer, but Acquisition Sub will not, without the prior
written consent of the Company, make any change in the terms or conditions of
the Offer that (i) changes the form of consideration to be paid, (ii) decreases
the price per Share or the number of Shares sought in the Offer, (iii) imposes
conditions to the Offer in addition to those set forth in Annex I, (iv) changes
or waives the Minimum Condition, or (v) is adverse to the holders of the Shares.
Parent and Acquisition Sub agree that, subject to the terms and conditions of
the Offer and this Agreement, Acquisition Sub shall, and Parent shall cause
Acquisition Sub to, accept for payment and pay for all Shares validly tendered
and not withdrawn pursuant to the Offer promptly after expiration of the Offer.
The Offer shall initially provide that it shall expire 20 business days after it
is commenced. The Offer may only be extended with the prior written consent of
the Company provided that so long as this Agreement is in effect, Acquisition
Sub may, without the consent of the Company, extend the expiration of the Offer,
(i) as required to comply with any rule, regulation, interpretation or position
of the SEC or the staff thereof applicable to the Offer, (ii) if at the
scheduled or extended expiration date of the Offer any of the conditions set
forth in Annex I have not been satisfied or waived, until such time as all such
conditions are satisfied or waived, or (iii) on one occasion, for an aggregate
period of not more than ten business days for any reason other than those
specified in the immediately preceding clauses (i) and (ii). So long as this
Agreement is in effect, Parent, U.S. Parent and Acquisition Sub agree that if
all of the conditions set forth in Annex I hereto are not satisfied on any
scheduled expiration date of the Offer then, provided that all such conditions
are reasonably capable of being satisfied by the reasonable best efforts of the
parties hereto, Acquisition Sub shall extend the Offer from time to time until
such conditions are satisfied or waived. Notwithstanding the foregoing, in no
event shall any extension of the Offer extend beyond the Termination Date.
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(b) On the date of commencement of the Offer, Parent and
Acquisition Sub shall file with the Securities and Exchange Commission ("SEC") a
Tender Offer Statement on Schedule TO with respect to the Offer which will
contain the offer to purchase and form of the related letter of transmittal
(together with any supplements or amendments thereto, collectively the "Offer
Documents"). Parent, U.S. Parent, Acquisition Sub and the Company each agrees
promptly to correct any information provided by it for use in the Offer
Documents if and to the extent that it shall have become false or misleading in
any material respect. Each of Parent and Acquisition Sub agrees to take all
steps necessary to cause the Offer Documents as so corrected to be filed with
the SEC and to be disseminated to holders of Shares, in each case as and to the
extent required by applicable federal securities laws. The Company and its
counsel shall be given a reasonable opportunity to review and comment on the
Offer Documents prior to their being filed with the SEC and disseminated to
holders of Shares. Parent and Acquisition Sub agree to provide the Company with
any comments that may be received from the SEC or its staff with respect to the
Offer Documents and any amendments thereto, promptly after receipt thereof.
(c) Parent shall provide or cause to be provided to
Acquisition Sub on a timely basis the funds necessary to purchase any Shares
that Acquisition Sub becomes obligated to purchase pursuant to the Offer.
SECTION 1.02 Company Action. (a) The Company hereby approves
and consents to the Offer and represents that its Board of Directors, at a
meeting duly called and held, has unanimously (i) determined that this Agreement
and the transactions contemplated hereby, including the Offer and the Merger (as
defined in Section 2.01), are fair to and in the best interest of the Company's
shareholders, (ii) approved this Agreement, the Shareholders' Agreement and the
transactions contemplated hereby and thereby, including the Offer and the Merger
(which approval constituted approval of the Offer, the Shareholders' Agreement
and this Agreement for purposes Section 2539 and 2555(1) of the Pennsylvania
BCL, but did not constitute adoption of the plan and agreement of merger for
purposes Section 1924(b)(1)(ii) of the Pennsylvania BCL, which adoption shall be
made by Acquisition Sub as provided in Article II hereof), and (iii) resolved
(subject to its fiduciary duties referred to in Section 6.05(b), as advised by
legal counsel), to recommend acceptance of the Offer by its shareholders. The
Company has been advised that all of its directors and executive officers intend
to tender their Shares pursuant to the Offer. The Company will promptly furnish
Acquisition Sub with a list of its shareholders, mailing labels and any
available listing or computer file containing the names and addresses of all
record holders of Shares and lists of securities positions of Shares held in
stock depositories, in each case true and correct as of the most recent
practicable date, and will provide to Acquisition Sub such additional
information (including, without limitation, updated lists of shareholders,
mailing labels and lists of securities positions) and such other assistance as
Acquisition Sub may reasonably request in connection with the Offer. Subject to
the requirements of applicable law, Parent, U.S. Parent and Acquisition Sub will
hold such lists and other information in confidence, shall use such information
only in connection with the Offer
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and, if this Agreement is terminated, shall deliver to the Company all copies of
such information (and extracts and summaries thereof) then in their or their
agents' or advisors' possession.
(b) As promptly as practicable after the filing of the Offer
Documents by Acquisition Sub with the SEC, the Company will file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9"),
which shall reflect the recommendations of the Company's Board of Directors
referred to above, in each case subject to the fiduciary duties of the Board of
Directors of the Company. The Company, Parent, U.S. Parent and Acquisition Sub
each agree promptly to correct any information provided by it for use in the
Schedule 14D-9 if and to the extent that it shall have become false or
misleading in any material respect. The Company agrees to take all steps
necessary to cause the Schedule 14D-9 as so corrected to be filed with the SEC
and to be disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities laws. Parent, U.S. Parent, Acquisition
Sub and their counsel shall be given an opportunity to review and comment on the
Schedule 14D-9 prior to its being filed with the SEC and disseminated to holders
of Shares. The Company agrees to provide Parent, U.S. Parent and Acquisition Sub
with any comments that may be received from the SEC or its staff with respect to
the Schedule 14D-9 and any amendments thereto, promptly after receipt thereof.
SECTION 1.03 Directors. (a) Effective upon the acceptance for
payment by Acquisition Sub of, and deposit by Acquisition Sub with the
depositary for the Offer of funds sufficient to make payment for, at least 80%
of the outstanding Shares tendered pursuant to the Offer, Acquisition Sub shall
be entitled to designate the number of directors, rounded up to the next whole
number, on the Company's Board of Directors that equals the product of (i) the
total number of directors on the Company's Board of Directors (giving effect to
the election of any additional directors pursuant to this Section) and (ii) the
percentage that the number of Shares owned by Acquisition Sub (including Shares
accepted for payment pursuant to the Offer and for which deposit has been made
as aforesaid) bears to the total number of Shares outstanding, and the Company,
to the extent permitted under the Company's Articles of Incorporation and Bylaws
and the Pennsylvania BCL, shall take all action necessary to cause Acquisition
Sub's designees to be elected or appointed to the Company's Board of Directors,
including, without limitation, increasing the number of directors and seeking
and accepting resignations of incumbent directors (it being understood that, in
the event that the Minimum Condition and the other conditions set forth in Annex
I hereto shall have been satisfied in accordance with this Agreement,
Acquisition Sub shall deposit with the depositary for the Offer funds sufficient
to make payment for all Shares validly tendered pursuant to the Offer). At such
times, the Company will use its reasonable best efforts to cause individuals
designated by Acquisition Sub to constitute the same percentage as such
individuals represent on the Company's Board of Directors of (1) each committee
of the Board (other than any committee of the Board established to take action
under this Agreement), (2) each board of directors of each Subsidiary (as
defined in Section 3.02) and (3) each committee of each such board.
Notwithstanding the foregoing, at all times prior to the Effective Time the
Board shall include at least two directors in office as of the date hereof who
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are not employees of the Company or any of its subsidiaries or affiliates of
Parent, U.S. Parent or Acquisition Sub (any such director remaining in office
being a "Continuing Director").
(b) The Company's obligations to appoint designees to the
Board of Directors shall be subject to Section 14(f) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and Rule 14f-1 promulgated
thereunder. At the request and expense of Acquisition Sub, the Company shall
take all actions required pursuant to Section 14(f) and Rule 14f-1 in order to
fulfill its obligations under this Section 1.03 and shall include in the
Schedule 14D-9 such information with respect to the Company and its officers and
directors as is required under Section 14(f) and Rule 14f-1 to fulfill its
obligations hereunder. Parent, U.S. Parent and Acquisition Sub will supply to
the Company in writing and be solely responsible for any information with
respect to themselves and their respective nominees, officers, directors and
affiliates required by Section 14(f) and Rule 14f-1.
ARTICLE II
THE MERGER
SECTION 2.01 Parent's Agreement to Effectuate Merger. Promptly
after Acquisition Sub's consummation of its purchase of Shares pursuant to the
Offer upon satisfaction of the Minimum Condition as provided for in this
Agreement and subject to the terms and conditions of this Agreement, Parent and
U.S. Parent shall cause Acquisition Sub to be merged with and into the Company
(the "Merger") by Acquisition Sub's adoption, pursuant to Section 1924(b)(1)(ii)
of the Pennsylvania BCL, of a plan and agreement of merger that effectuates the
provisions of this Article II and of Article III hereof and having the following
terms and conditions:
(a) Surviving Corporation. Upon effectiveness of the Merger at
the Effective Time (as hereinafter defined), the separate existence of
Acquisition Sub (except as it may be continued by operation of law) shall cease,
and the Company shall continue as the surviving corporation under the corporate
name of "Sunquest Information Systems, Inc."
(b) Effect of the Merger. Upon the effectiveness of the
Merger, the Surviving Corporation shall succeed to and assume all the rights and
obligations of the Company and Acquisition Sub in accordance with the
Pennsylvania BCL and the Merger shall otherwise have the effects set forth in
Section 1929 of the Pennsylvania BCL.
(c) Closing. Unless this Agreement shall have been terminated
previously, Parent and U.S. Parent shall cause the consummation of the Merger to
take place at a time and on a date to be specified by the Parent and U.S. Parent
(upon notice to the Company) (the "Closing Date"), which shall be no later than
the second business day following the satisfaction or waiver of all of the
conditions set forth in Article VII (other than those conditions that by their
nature are
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to be satisfied at such closing, but subject to the fulfillment or waiver of
such conditions at such closing), at the offices of Debevoise & Xxxxxxxx, 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, unless another time, date or place is
agreed to by the parties hereto.
(d) Effective Time. Subject to the terms and conditions of
this Agreement, on the Closing Date, Parent and U.S. Parent will cause the
Merger to be consummated by filing with the Secretary of State of the
Commonwealth of Pennsylvania properly executed articles of merger in accordance
with the Pennsylvania BCL, which shall be effective upon filing or on such later
date which shall not be more than two business days after such filing (the time
of such effectiveness being the "Effective Time").
(e) Articles of Incorporation and Bylaws; Directors and
Officers. (i) The Articles of Incorporation of Acquisition Sub in effect at the
Effective Time shall be the Articles of Incorporation of the Surviving
Corporation (except that such Articles of Incorporation shall be amended to
provide that the name of the Surviving Corporation shall be " Sunquest
Information Systems, Inc."), until thereafter amended in accordance with the
provisions thereof and as provided by the Pennsylvania BCL. The Bylaws of
Acquisition Sub in effect at the Effective Time shall be the Bylaws of the
Surviving Corporation, until thereafter amended in accordance with the
provisions thereof and of the Articles of Incorporation of the Surviving
Corporation and as provided by the Pennsylvania BCL.
(ii) From and after the Effective Time and until their
respective successors are duly elected or appointed and qualified, or until
their earlier death, resignation or removal, (x) the directors of Acquisition
Sub at the Effective Time shall be the directors of the Surviving Corporation
and (y) the officers of the Company at the Effective Time shall be the officers
of the Surviving Corporation.
(f) Additional Actions. If, at any time after the Effective
Time, the Surviving Corporation shall consider or be advised that any further
deeds, assignments or assurances in law or any other acts are necessary or
desirable to (i) vest, perfect or confirm, of record or otherwise, in the
Surviving Corporation its right, title or interest in, to or under any of the
rights, properties or assets of the Company, or (ii) otherwise carry out the
provisions of this Agreement, the Company and its officers and directors shall
be deemed to have granted to the Surviving Corporation an irrevocable power of
attorney to execute and deliver all such deeds, assignments or assurances in law
and to take all acts necessary, proper or desirable to vest, perfect or confirm
title to and possession of such rights, properties or assets in the Surviving
Corporation and otherwise to carry out the provisions of this Agreement, and the
officers and directors of the Surviving Corporation are authorized in the name
of the Company or otherwise to take any and all such action.
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ARTICLE III
CONVERSION OF SECURITIES
SECTION 3.01 Conversion of Securities. The plan and agreement of merger
to be adopted by Acquisition Sub to implement the Merger, as contemplated by
Article II, shall provide that, without any action on the part of either
Constituent Corporation or any holder of the capital stock thereof, after
Acquisition Sub's adoption of the plan and agreement of merger for the Merger,
at the Effective Time:
(a) Each share of Common Stock, $1.00 par value, of
Acquisition Sub issued and outstanding immediately prior to the Effective Time
shall be converted into and become one validly issued, fully paid and
nonassessable share of Common Stock of the Surviving Corporation;
(b) Each share of Company Common Stock that is held in the
treasury of the Company or by Parent or any Subsidiary (as hereinafter defined)
of Parent or the Company shall be canceled and retired and no consideration
shall be paid or delivered in exchange therefor; and
(c) Subject to Section 3.01(d), each share of Company Common
Stock (other than shares to be canceled in accordance with Section 3.01(b)) that
is issued and outstanding immediately prior to the Effective Time shall be
converted into the right to receive an amount in cash equal to $24.00 or any
higher price paid for each Share in the Offer (the "Merger Consideration").
(d) Notwithstanding anything in the plan and agreement of
merger to the contrary, shares of Company Common Stock that are issued and
outstanding immediately prior to the Effective Time and are held by shareholders
who have not voted such shares in favor of the Merger and the approval and
adoption of this Agreement and who shall have properly demanded appraisal of
such shares of Company Common Stock (the "Dissenting Shares") in accordance with
Section 1930 of the Pennsylvania BCL or any successor or replacement provision
(the "Dissenters Rights Law") shall not be converted into the right to receive
the Merger Consideration at or after the Effective Time, unless and until the
holder of such Dissenting Shares shall have failed to perfect or shall have
effectively withdrawn or lost such right to appraisal and payment under the
Pennsylvania BCL. If a holder of Dissenting Shares shall have failed to perfect
or shall have effectively withdrawn or lost such right to appraisal and payment,
then, as of the Effective Time or the occurrence of such event, whichever last
occurs, such holder's Dissenting Shares shall be converted into and represent
solely the right to receive the Merger Consideration, without any interest
thereon. The Company shall give Parent (i) prompt notice of any written demands
for appraisal, withdrawals of demands for appraisal and any other instruments
served pursuant to the Dissenters Rights Law which are received by the Company
and (ii) the opportunity to direct all negotiations and proceedings with respect
to demands for
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appraisal under the Pennsylvania BCL. The Company will not voluntarily make any
payment with respect to any demands for appraisal and will not, without the
prior written consent of Parent, settle or offer to settle any such demands.
SECTION 3.02 Stock Options. (a) Upon the completion of the Offer (the
"Completion Date"), Parent and U.S. Parent shall cause each stock option granted
under the Company's Stock Incentive Plan of 1996, as amended (the "Option Plan")
that is outstanding immediately prior to the Completion Date, whether vested or
unvested, to be canceled and Parent and U.S. Parent shall cause the Company to
pay each holder of any such option as soon as practicable after the Completion
Date for each such option an amount in cash determined by multiplying (i) the
excess, if any, of the Offer Consideration per Share over the applicable
exercise price of such option by (ii) the number of Shares such holder could
have purchased (assuming full vesting of all options) had such holder exercised
such option in full immediately prior to the Completion Date. The Option Plan
shall be terminated as of the Completion Date.
(b) Prior to the Effective Time, Parent and U.S. Parent shall
cause the Company to take such actions (including, but without limitation,
adopting such amendments to the terms of the Company Stock Plans) that are
necessary to give effect to the transactions contemplated by Section 3.02(a).
SECTION 3.03 Exchange of Certificates. (a) As of the Effective
Time, Parent shall deposit, or shall cause to be deposited, with or for the
account of ChaseMellon Shareholder Services, L.L.C. or another bank or trust
company designated by Parent, which shall be reasonably satisfactory to the
Company (the "Exchange Agent"), for the benefit of the holders of shares of
Company Common Stock, for exchange in accordance with this Article III, through
the Exchange Agent, the Merger Consideration to be paid in respect of the Shares
converted pursuant to Section 3.01 (the "Exchange Fund").
(b) As soon as reasonably practicable after the Effective
Time, Parent shall instruct the Exchange Agent to mail to each holder of record
of a certificate or certificates that immediately prior to the Effective Time
evidenced outstanding shares of Company Common Stock (the "Certificates"), a
letter of transmittal and instructions (which shall specify that delivery shall
be effected, and risk of loss and title to the Certificates shall pass, only
upon proper delivery of the Certificates to the Exchange Agent and shall be in
such form and have such other provisions as Parent may reasonably specify). Upon
surrender of a Certificate to the Exchange Agent together with such letter of
transmittal, duly executed, and such other customary documents as may be
required pursuant to such instructions, the holder of such Certificate shall be
entitled to receive in exchange therefor the Merger Consideration payable for
each Share represented by such Certificate and the Certificate so surrendered
shall forthwith be canceled. If any portion of the Merger Consideration is to be
paid to a person other than the person in whose name the surrendered Certificate
is registered, it shall be a condition of such payment that the Certificate so
surrendered shall be properly endorsed and otherwise in proper form for transfer
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and that the person requesting such exchange shall pay to the Exchange Agent any
transfer or other taxes required by reason of such payment to a person other
than the registered holder of the Certificate surrendered, or shall establish to
the satisfaction of the Exchange Agent that such tax has been paid or is not
applicable. Until surrendered as contemplated by this Section 3.03, each
Certificate shall be deemed at any time after the Effective Time to evidence
only the right to receive the Merger Consideration upon such surrender.
(c) Any portion of the Exchange Fund (including the proceeds
of any interest and other income received by the Exchange Agent in respect of
all such funds) that remains undistributed to the holders of Company Common
Stock for six months after the Effective Time shall be delivered to the
Surviving Corporation, upon demand, and any holders of Company Common Stock who
have not theretofore complied with this Article III shall thereafter look only
to the Surviving Corporation for the Merger Consideration to which they are
entitled pursuant to this Agreement.
(d) None of Parent, U.S. Parent, the Surviving Corporation or
any director, officer, employee or other agent or representative thereof shall
be liable to any holder of shares of Company Common Stock for any amount
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law.
(e) Each of Parent, U.S. Parent, the Surviving Corporation and
the Exchange Agent shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any holder of
shares of Company Common Stock such amounts as Parent, U.S. Parent, the
Surviving Corporation or the Exchange Agent, as the case may be, is required to
deduct and withhold with respect to the making of such payment under the
Internal Revenue Code of 1986, as amended (the "Code"), or any provision of
state, local or foreign tax law. To the extent that amounts are so withheld by
Parent, U.S. Parent, the Surviving Corporation or the Exchange Agent, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of the shares of Company Common Stock in respect of
which such deduction and withholding was made by Parent, U.S. Parent, the
Surviving Corporation or the Exchange Agent. No interest will be paid or will
accrue on any consideration payable pursuant to this Agreement to any holder of
shares of Company Common Stock.
(f) If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person or entity
claiming such Certificate to be lost, stolen or destroyed and, if required by
Parent or the Exchange Agent, the posting by such person or entity of a bond in
such reasonable amount as Parent or the Exchange Agent may direct as indemnity
against any claim that may be made against it with respect to such Certificate,
the Exchange Agent shall exchange the Merger Consideration for such lost, stolen
or destroyed Certificate pursuant to this Agreement.
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(g) The Exchange Agent shall invest the cash in the Exchange
Fund on a daily basis, as instructed by Parent. Any interest and other income
resulting from such investments shall be paid to Parent before the Effective
Time and to the Surviving Corporation thereafter.
SECTION 3.04 Stock Transfer Books. At the Effective Time,
Parent and U.S. Parent shall cause the stock transfer books of the Company to be
closed, and there shall be no further registration of transfers of shares of
Company Common Stock thereafter on the records of the Company. If, after the
Effective Time, Certificates are presented to the Surviving Corporation, they
shall be canceled and exchanged for the Merger Consideration provided for, and
in accordance with the provisions set forth in this Article III.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure schedule delivered by
the Company to Parent prior to the execution of this Agreement (the "Company
Disclosure Schedule"), the Company represents and warrants to Parent and
Acquisition Sub as follows:
SECTION 4.01 Organization and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the Commonwealth of Pennsylvania and has all requisite corporate power and
authority to own or lease and operate its properties and assets and to carry on
its business as it is now being conducted. The Company is duly qualified as a
foreign corporation to do business, and is in good standing in each jurisdiction
where the character of its properties owned, operated or leased or the nature of
its activities makes such qualification or licensing necessary, except for those
jurisdictions where the failure to be so qualified or licensed would not
reasonably be expected to result in a Material Adverse Effect (as hereinafter
defined) on the Company. The Company has heretofore delivered or made available
to Parent true and correct copies of the Articles of Incorporation and By-laws
of the Company as currently in effect. As used herein, "Material Adverse Effect"
shall mean, with respect to any party, (i) any material adverse effect on the
business, operations, assets (tangible and intangible), properties, condition
(financial or other) or operating results of such entity and its Subsidiaries
taken as a whole, other than any change, circumstance, effect or development (A)
relating to the economy in general in any country in which such entity operates
or owns assets, or (B) relating to such entity's industry, in the case of
clauses (A) and (B), that does not disproportionately affect such entity,
provided that neither (x) any change in the market price or trading volume of
such entity's common stock nor (y) a failure by such entity to meet the revenue
or earnings predictions of equity analysts or any other revenue or earnings
predictions or expectations, for any period ending on or after the date of this
Agreement shall, in the case of either (x) or (y), in and of itself, constitute
a Material Adverse Effect (it being understood that this proviso, as it relates
to (y), shall not exclude any underlying change, circumstance, effect or
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development which resulted in such failure to meet such estimates, predictions
or expectations, or (ii) the material impairment or material delay of the
ability of such party to perform its obligations hereunder, including to
consummate the transactions contemplated by this Agreement.
SECTION 4.02 Subsidiaries. (a) Except for shares of its
Subsidiaries (as hereinafter defined), the Company does not own of record or
beneficially, directly or indirectly, (i) any shares of outstanding capital
stock or securities convertible into or exchangeable for capital stock of any
other corporation or (ii) any participating interest in any partnership, limited
liability company, joint venture or other non-corporate business enterprise.
Each Subsidiary of the Company is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation and has
all requisite corporate power and authority to own or lease and operate its
properties and to carry on its business as it is now being conducted. Each
Subsidiary of the Company is duly qualified as a foreign corporation to do
business, and is in good standing in each jurisdiction where the character of
its properties owned, operated or leased or the nature of its activities makes
such qualification or licensing necessary, except as set forth in Item 4.02 of
the Company Disclosure Schedule and except for those jurisdictions where the
failure to be so qualified or licensed would not reasonably be expected to have
a Material Adverse Effect on the Company. The Company has heretofore delivered
or made available to Parent true and correct copies of the Articles of
Incorporation and By-laws (or appropriate constituent documents) of each of the
Subsidiaries of the Company, each as currently in effect.
(b) The Company has previously delivered or made available to
Parent a true and complete list of all of the Company's Subsidiaries, indicating
the jurisdiction of incorporation of each such Subsidiary and the Company's
equity interest therein. All the outstanding shares of capital stock of each
Subsidiary of the Company are validly issued, fully paid and nonassessable and
are owned by the Company or by a wholly-owned Subsidiary of the Company, free
and clear of any liens, claims, charges, encumbrances or adverse claims
(collectively, "Liens"), and there are no proxies outstanding or restrictions on
voting with respect to any such shares. There are no outstanding securities of
any Subsidiary of the Company convertible or exchangeable for shares of capital
stock or voting securities of such Subsidiary.
(c) For purposes of this Agreement, with respect to any party,
the term "Subsidiary" shall mean any corporation or other business entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time owned by such party and/or one or more other
Subsidiaries of such party.
SECTION 4.03 Authority Relative to Agreement. The Company has
all requisite corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder. The execution and delivery
of this Agreement by the Company and the consummation by it of the transactions
contemplated hereby and thereby have been duly
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authorized by the Board of Directors of the Company and no other corporate
proceedings on the part of the Company are necessary to authorize this Agreement
and the transactions contemplated hereby, other than adoption by Parent of a
plan and agreement of merger to effect the Merger as contemplated by Article II
hereof. This Agreement has been duly executed and delivered by the Company and,
subject to the due execution and delivery by the other parties hereto,
constitutes a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, moratorium, reorganization and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
SECTION 4.04 Non-Contravention. The execution and delivery of
this Agreement by the Company does not and the consummation by the Company of
the transactions contemplated hereby will not (i) violate or conflict with, in
any material respect, any provision of the Amended and Restated Articles of
Incorporation or Bylaws of the Company; (ii) violate or conflict with any
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to the Company or any Subsidiary of the Company or their respective properties;
or (iii) except as set forth in Item 4.04 of the Company Disclosure Schedule,
result (with the giving of notice or the lapse of time or both) in any violation
of or default under or loss of, or decrease (to the Company or a Subsidiary of
the Company) or increase (to any other person) in, any benefit under, or permit
the acceleration, other modification or termination of any obligation under, any
material mortgage, indenture, lease, agreement or other instrument, permit,
concession, grant, franchise or license applicable to the Company or any
Subsidiary of the Company or their respective properties; or (iv) result in the
creation or imposition of any Lien of any nature whatsoever upon any asset of
the Company or any Subsidiary of the Company; other than (in the cases of
clauses (iii) and (iv) above) such as would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect on the
Company.
SECTION 4.05 Capitalization. The authorized capital stock of
the Company consists of (i) 35,000,000 shares of Company Common Stock and (ii)
15,000,000 shares of Preferred Stock, no par value, of the Company ("Company
Preferred Stock"). As of June 21, 2001, 15,601,368 shares of Company Common
Stock were issued and outstanding, all of which were duly and validly issued,
fully paid and nonassessable, and none of which were issued in violation of any
preemptive or similar right. As of June 21, 2001, no shares of Company Common
Stock were held in the Company's treasury and no shares of Company Preferred
Stock were outstanding. Except for options (the "Company Stock Options") to
purchase an aggregate 2,343,692 shares of Company Common Stock granted pursuant
to the Option Plan and rights to purchase 4,248 shares of Company Common Stock
on June 29, 2001 under the Company's Employee Stock Purchase Plan, no
subscription, warrant, option, convertible security, stock appreciation or other
right (contingent or other) to purchase or acquire, or any securities
convertible into or exchangeable for, any shares of any class of capital stock
of the Company or any Subsidiary of the Company is authorized or outstanding and
there is not any commitment of
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the Company or any Subsidiary of the Company to issue, or register under the
Securities Act (as hereinafter defined), any shares, warrants, options or other
such rights or to distribute to holders of any class of its capital stock any
evidences of indebtedness or assets. Item 4.05 of the Company Disclosure
Schedule sets forth a complete and correct list as of the date hereof of all
outstanding Company Stock Options and the exercise price thereof. Neither the
Company nor any Subsidiary of the Company has any obligation (contingent or
other) to purchase, redeem or otherwise acquire any shares of its capital stock
or any interest therein or to pay any dividend or make any other distribution in
respect thereof. Except as set forth in Item 4.05 of the Company Disclosure
Schedule, the Company is not a party to, and is not aware of any agreement or
proxy relating to the voting or transfer of the Company Common Stock.
SECTION 4.06 SEC Filings. The Company has filed all
registration statements, prospectuses, reports, schedules, forms, statements and
other documents required to be filed by it with the SEC since January 1, 1999
(collectively, the "Company SEC Filings"). No Subsidiary of the Company is
required to file any form, report, registration statement, prospectus or other
document with the SEC. The Company SEC Filings (including, without limitation,
any financial statements or schedules included therein) (i) were prepared in
compliance in all material respects with the requirements of the Securities Act
of 1933, as amended, and the rules and regulations thereunder (the "Securities
Act"), or the Exchange Act, as the case may be, and (ii) did not at the time of
filing (or if amended, supplemented or superseded by a subsequent filing, on the
date of that subsequent filing) and, in the case of any registration statement,
at the time of effectiveness, or, in the case of any proxy statement, at the
time of mailing, 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 therein, in light of the circumstances under which they were
made, not misleading.
SECTION 4.07 Financial Statements. Each of the financial
statements (including the related notes) included in the Company SEC Filings
fairly presents the consolidated financial position and consolidated results of
operations and cash flows of the Company and its consolidated Subsidiaries as of
the respective dates or for the respective periods set forth therein, all in
conformity with generally accepted accounting principles ("GAAP") consistently
applied during the periods involved except as otherwise noted therein, and
subject, in the case of unaudited interim financial statements, to normal and
recurring year-end adjustments that have not been and are not expected to be
material in amount. The Company and its Subsidiaries have no liabilities or
obligations of any kind, whether contingent or otherwise, except liabilities and
obligations (i) reflected or reserved against in the Company's consolidated
balance sheet as of December 31, 2000 included in the Company SEC Filings, (ii)
incurred on or prior to December 31, 2000 and not required by GAAP to be
reflected or disclosed in such consolidated balance sheet or the footnotes
thereto, (iii) incurred since December 31, 2000 in the ordinary course of
business or (iv) incurred since December 31, 2000 and that, individually or in
the aggregate, would not reasonably be expected to have a Material Adverse
Effect on the Company.
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SECTION 4.08 Absence of Certain Changes or Events. Except as
set forth in the Company SEC Filings made prior to the date hereof, since
December 31, 2000, the Company and its Subsidiaries have conducted their
business only in the ordinary course, consistent with past practice, and there
has not been any change, circumstance, event or development which, individually
or in the aggregate, has had, or would reasonably be expected to have, a
Material Adverse Effect on the Company. Except as set forth in Item 4.08 of the
Company Disclosure Schedule, since December 31, 2000 through the date of this
Agreement, none of the Company nor any of its Subsidiaries has taken any action
that, if taken during the period from the date of this Agreement through the
Effective Time, would constitute a breach of Section 6.01.
SECTION 4.09 Governmental Approvals. No consent, approval,
order or authorization of, or registration, declaration or filing with, any
federal, state, local or foreign governmental or regulatory authority is
required to be made or obtained by the Company in connection with the execution
and delivery of this Agreement by the Company or the consummation by the Company
of the transactions contemplated hereby and thereby, except for (i) compliance
by the Company with the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000
(xxx "XXX Xxx") and the laws of any foreign country, (ii) the filing of articles
of merger with the Secretary of State of the Commonwealth of Pennsylvania in
accordance with the Pennsylvania BCL, (iii) filings pursuant to the Securities
Act and Exchange Act and the rules and regulations promulgated by the SEC
thereunder, and (iv) such consents, approvals, orders or authorizations which if
not obtained, or registrations, declarations or filings which if not made, would
not be material to the Company or materially impair or materially delay the
ability of the Company to perform its obligations hereunder, including to
consummate the transactions contemplated hereby.
SECTION 4.10 Compliance with Laws. Neither the Company nor any
Subsidiary of the Company is in default under or in violation of, in any
material respect, any order or decree of any court, governmental authority or
arbitration board or tribunal to which the Company or any such Subsidiary is or
was subject or in violation of in any material respect any laws, ordinances,
governmental rules or regulations to which the Company or any such Subsidiary is
or was subject. Neither the Company nor any Subsidiary of the Company has failed
to obtain any licenses, permits, franchises or other governmental authorizations
necessary to the ownership of its properties or to the conduct of its business,
which failure would reasonably be expected to have a Material Adverse Effect on
the Company. No action, demand, requirement or investigation by any governmental
authority or entity with respect to the Company or any of its Subsidiaries is
pending and has been served upon the Company, or, to the knowledge of the
Company, is threatened with respect to any of the foregoing, except for such
actions, demands, requirements, or investigations that, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect on
the Company.
SECTION 4.11 Disclosure Documents. (a) At the time of the
filing of the Schedule 14D-9 and at the time of distribution thereof, the
Schedule 14D-9 will not contain any
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untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading. The
Schedule 14D-9 will comply as to form in all material respects with the
applicable provisions of the Exchange Act, and the rules and regulations
promulgated thereunder, except that no representation is made by the Company
with respect to statements made therein based on information supplied by Parent
or its representatives for inclusion in the Schedule 14D-9 or with respect to
information concerning Parent or any of its Subsidiaries incorporated by
reference in the Schedule 14D-9.
(b) None of the information with respect to the Company or any
Subsidiary supplied by the Company (and not retracted prior to the relevant
date) to Parent for inclusion or incorporation by reference in the Offer
Documents will, at the time of the filing of the Offer Documents, at the time of
any distribution thereof and at the time of the consummation of the Offer,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
SECTION 4.12 Litigation. Except as set forth in Item 4.12 to
the Company Disclosure Schedule, there is no material action, suit,
investigation, proceeding or claim pending or, to the knowledge of the Company,
threatened against or affecting the Company or any of its Subsidiaries, or their
respective properties or rights, before any governmental body or arbitration
board or tribunal.
SECTION 4.13 Title to Properties. Except as set forth in Item
4.13 to the Company Disclosure Schedule and except as would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect on
the Company, the Company and its Subsidiaries have good and marketable title to
the properties and assets reflected on the consolidated balance sheet of the
Company as of December 31, 2000 (other than inventory and non-material
properties and assets disposed of in the ordinary course of business consistent
with past practice since the date of such balance sheet), and all such
properties and assets are free and clear of Liens.
SECTION 4.14 Real Property Interests. Except as would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect on the Company, (i) the Company or its Subsidiaries have good and
marketable fee title to, or a valid leasehold interest in, all of the real
property used by the Company or its Subsidiaries or otherwise reflected on the
consolidated balance sheet of the Company as of December 31, 2000 (collectively,
the "Company Properties"), in each case free and clear of any Liens or rights of
third parties, (ii) the Company Properties are suitable and adequate for the
conduct of the businesses of the Company and its Subsidiaries as currently
conducted and (iii) the Company and its Subsidiaries enjoy peaceful and
undisturbed possession of the Company Properties.
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SECTION 4.15 Intellectual Property. (a) Item 4.15 of the
Company Disclosure Schedule sets forth a complete and correct list of all
material Intellectual Property (as defined below) owned by the Company and each
of its Subsidiaries and that is registered or subject to an application for
registration with any governmental or regulatory authority. Except as set forth
in Item 4.15 of the Company Disclosure Schedule, the Company has made available
to Parent all material licenses, agreements or arrangements to which the Company
or any of its Subsidiaries is a party, permitting or limiting the use of
Intellectual Property.
(b) Except as set forth in the Company SEC Filings made prior
to the date hereof or as set forth on Item 4.15 of the Company Disclosure
Schedule, and except as would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect on the Company, (i) the Company
and each of its Subsidiaries owns, or has valid and effective licenses to use
(in each case, free and clear of any Liens), all Intellectual Property used in
or necessary for the conduct of its business as currently conducted; and (ii)
the use of the Intellectual Property is in accordance with any applicable
license, agreement or arrangement pursuant to which the Company or any
Subsidiary acquired the right to use any Intellectual Property.
(c) Except as set forth on Item 4.15 of the Company Disclosure
Schedule, (i) the use of any material Intellectual Property owned by, and to the
knowledge of the Company, the material Intellectual Property licensed to, the
Company and its Subsidiaries, and the conduct of the business of the Company
does not infringe on, misappropriate or otherwise violate the rights of any
Person in any material respect; (ii) no person is challenging, and to the
knowledge of the Company, no person is infringing on, misappropriating or
otherwise violating any right of the Company or any of its Subsidiaries with
respect to any material Intellectual Property owned by and/or licensed to the
Company or its Subsidiaries; (iii) there are no claims, orders or proceedings
pending or, to the knowledge of the Company, threatened, with respect to any
material Intellectual Property used by the Company or its Subsidiaries; and (iv)
the material Intellectual Property owned by, and, to the knowledge of the
Company, the material Intellectual Property licensed to the Company or its
Subsidiaries is valid and enforceable and is being used or enforced in a manner
that would reasonably be expected not to result in the abandonment, cancellation
or unenforceability of such Intellectual Property.
(d) Except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company,
immediately after the Effective Time, the Company and its Subsidiaries shall own
or have licensed to them, all Intellectual Property used in the business, free
and clear of any Liens, and on the same terms and conditions as in effect prior
to the Effective Time.
(e) Except as set forth on Item 4.15 of the Company Disclosure
Schedule and except as would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect on the Company, the Company and
each of its Subsidiaries has taken all necessary actions to ensure protection of
the Intellectual Property used in its business (including
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maintaining the secrecy of all confidential Intellectual Property) under any
applicable law, ordinance, governmental rule or regulation, including but not
limited to having and enforcing a policy requiring relevant employees,
consultants and independent contractors to execute an agreement to maintain the
secrecy of all confidential Intellectual Property used in the business.
(f) Except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company, the
Company and its Subsidiaries own all right, title and interest in all software
currently used in its business and which was developed by or for the Company or
its Subsidiaries by any employee of the Company or its Subsidiaries or by an
independent contractor or consultant ("Owned Software"). The Company and each of
its Subsidiaries have written agreements with relevant employees, consultants
and independent contractors assigning any rights such person may have in any
material Owned Software to the Company or its Subsidiaries. To the knowledge of
the Company, unless otherwise permitted pursuant to the applicable customer
license agreement, there are no intentionally introduced viruses, disabling
devices, trojan horses, worms or similar code in the Owned Software when
delivered or made available to customers. To the knowledge of the Company, there
are no defects in the Owned Software, when licensed for production mode by the
Company and its Subsidiaries, that would prevent it from performing in all
material respects the tasks and functions that it was intended to perform.
(g) For purposes of this Agreement, "Intellectual Property"
shall mean trademarks, service marks, brand names, certification marks, domain
names, trade dress and other indications of origin, the goodwill associated with
the foregoing and registrations in any jurisdiction of, and applications in any
jurisdiction to register, the foregoing, including any extension, modification
or renewal of any such registration or application; inventions, discoveries,
processes, designs, formulae and ideas, whether patentable or not, in any
jurisdiction; patents, applications for patents, including, without limitation,
provisionals, divisions, continuations, continuations in part or reissues
thereof, in any jurisdiction; nonpublic information, trade secrets and
confidential information and rights in any jurisdiction to limit the use or
disclosure thereof by any person; writings, software, databases, firmware,
semi-conductor chip rights, mask works, internet websites and other works,
whether copyrightable or not, in any jurisdiction; and registrations or
applications for registration of copyrights in any jurisdiction, and any
renewals or extensions thereof; and any similar intellectual property or
proprietary rights.
SECTION 4.16 Labor Matters. Neither the Company nor any of its
Subsidiaries is or has been a party to, or bound by, any collective bargaining
or other contracts or understandings with labor unions or labor organizations,
and no such agreement is being negotiated by the Company or any of its
Subsidiaries or is or has been applicable to any employees of the Company or any
of its Subsidiaries; provided, that, in the case of Antrim Corporation
("Antrim"), this sentence applies only to the period subsequent to the
acquisition of Antrim by the Company. There are no controversies between the
Company or any of its Subsidiaries and any of such employees that would
reasonably be expected to have a Material Adverse Effect on
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the Company, or any unresolved labor union grievances or unfair labor practice
or labor arbitration proceedings pending, or, to the knowledge of the Company,
threatened against the Company or any Subsidiary of the Company that would
reasonably be expected to have a Material Adverse Effect on the Company. There
are no labor unions or other organizations representing or purporting to
represent any employees of the Company or any of its Subsidiaries and, to the
knowledge of the Company, there are no organizational efforts currently being
made or threatened involving any of such employees. Neither the Company nor any
of its Subsidiaries is in violation of any applicable laws pertaining to the
employment or termination of employment of its employees, including all such
laws relating to labor relations, equal employment opportunities, fair
employment practices, prohibited discrimination or distinction and other similar
employment activities, except as set forth in Item 4.16 of the Company
Disclosure Schedule and for such violations that, in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on the Company.
SECTION 4.17 Taxes. (a) Except as set forth in Item 4.17 of
the Company Disclosure Schedule, each of the Company, its Subsidiaries and any
affiliated, combined or unitary group of which any such corporation is or was a
member has (i) timely filed all material federal, state, local and foreign
returns, declarations, reports, estimates, information returns and statements
("Returns") required to be filed by it in respect of any Taxes (as hereinafter
defined), which Returns correctly reflect in all material respects the facts
regarding the income, business, assets, operations, activities and status of the
Company and its Subsidiaries and are correct in all other material respects,
(ii) timely paid or withheld all material Taxes that are due and payable by
them, including with respect to the Returns referred to in clause (i) (other
than Taxes that are being contested in good faith by appropriate proceedings and
are adequately reserved for in the Company's most recent consolidated financial
statements included in the Company SEC Filings made prior to the date hereof),
(iii) established reserves that are adequate for the payment of all Taxes not
yet due and payable with respect to the results of operations of the Company and
its Subsidiaries through the date hereof, and (iv) to the knowledge of the
Company, complied in all material respects with all applicable laws, rules and
regulations relating to the payment and withholding of Taxes and has timely
withheld from employee wages and paid over to the proper governmental
authorities all amounts required to be so withheld and paid over.
(b) Except as set forth in Item 4.17 of the Company Disclosure
Schedule, (i) there is no deficiency, claim, audit, action, suit, proceeding or
investigation now pending or threatened against or with respect to the Company
or any Subsidiary of the Company in respect of any Taxes; and (ii) there are no
requests for rulings or determinations in respect of any Taxes pending between
the Company or any Subsidiary of the Company and any taxing authority.
(c) Except as set forth in Item 4.17 of the Company Disclosure
Schedule, neither the Company nor any Subsidiary of the Company has executed or
entered into (or prior to the Effective Time will execute or enter into) with
the Internal Revenue Service or any taxing authority (i) any agreement or other
document extending or having the effect of extending the
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period for assessments or collection of any Taxes for which the Company or any
such Subsidiary would be liable or (ii) a closing agreement pursuant to Section
7121 of the Code, or any predecessor provision thereof or any similar provision
of foreign, state or local Tax law that relates to the assets or operations of
the Company or any such Subsidiary.
(d) Except as set forth in Item 4.17 of the Company Disclosure
Schedule, the Internal Revenue Service has completed examinations of the federal
income Tax Returns filed by or with respect to the Company for all periods
through and including December 31, 1994 (or the statute of limitations for the
assessment of federal income Taxes for such period has expired).
(e) Neither the Company nor any of its Subsidiaries (other
than Antrim): (i) has been a member of an affiliated group (within the meaning
of Section 1504(a) of the Code), or any similar affiliated, combined or
consolidated group for state, local or foreign tax purposes (other than a group
the common parent of which is the Company), or (ii) has any liability for Taxes
of any person (other than the Company or its current Subsidiaries) under
Treasury Regulation 1.1502-6 or any similar provision of state, local or foreign
law.
(f) For purposes of this Agreement, "Tax" (and with
correlative meaning, "Taxes") shall mean all federal, state, local, foreign or
other taxing authority net income, franchise, sales, use, ad valorem, property,
payroll, withholding, excise, severance, transfer, employment, alternative or
add-on minimum, stamp, occupation, premium, environmental or windfall profits
taxes, and other taxes, charges, fees, levies, imposts, customs, duties,
licenses or other assessments, together with any interest and any penalties,
additions to tax or additional amounts imposed by any taxing authority.
SECTION 4.18 Employee Benefit Plans. (a) Item 4.18(a) of the
Company Disclosure Schedule lists each Company Plan currently maintained by the
Company or any Related Person. Each of the Company and its Related Persons has
complied and currently is in compliance in all material respects, both as to
form and operation, with applicable laws including without limitation, the
applicable provisions, of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), and the Code with respect to each Company Plan which the
Company or any Related Person (i) has ever adopted, maintained, established or
to which any of the same has been required to contribute to or has ever
contributed or (ii) currently maintains or to which any of the same currently
contributes or is required to contribute or (iii) currently participates in or
is required to participate in; provided, that, in the case of Antrim, this
paragraph (a) and the succeeding provisions of this Section 4.18 apply only to
the period subsequent to the acquisition of Antrim by the Company.
(b) Except as set forth in Item 4.18 to the Company Disclosure
Schedule, neither the Company nor any Related Person has ever maintained,
adopted or established, contributed or been required to contribute to, or
otherwise participated in or been required to participate in, a "multiemployer
plan" (as defined in Section 3(37) of ERISA) or a "multiple employer plan" (as
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defined in Section 4063 or 4064 of ERISA). No amount is due or owing from the
Company or any Related Person on account of a "multiemployer plan" (as defined
in Section 3(37) of ERISA) or on account of any withdrawal therefrom.
(c) Except as set forth in Item 4.18(c) of the Company
Disclosure Schedule, other than routine claims for benefits and liability for
premiums due to the Pension Benefit Guaranty Corporation, neither the Company
nor any Related Person has incurred any liability that is, individually or in
the aggregate, a material liability with respect to a Company Plan that is
currently due and owing and has not yet been satisfied, including, without
limitation, under ERISA (including, without limitation, Title I or Title IV
thereof), the Code or other applicable law, and no event has occurred, and there
exists no condition or set of circumstances (other than the accrual of benefits
under the normal terms of the Company Plans), that could result in the
imposition of any liability that is, individually or in the aggregate, a
material liability on the Company or any Related Person of the Company with
respect to a Company Plan, including, without limitation, under ERISA
(including, without limitation, Title I or Title IV of ERISA), the Code or other
applicable law with respect to a Company Plan.
(d) Except as required by applicable law or as set forth in
Item 4.18 of the Company Disclosure Schedule, neither the Company nor any
Related Person has committed itself, orally or in writing, (x) to provide or
cause to be provided to any person any payments or provision of any "welfare" or
"pension" benefits (as defined in Sections 3(1) and 3(2) of ERISA) in addition
to, or in lieu of, those payments or benefits set forth under any Company Plan,
(y) to continue the payment of, or accelerate the payment of, benefits under any
Company Plan, except as expressly set forth thereunder or (z) to provide or
cause to be provided any severance or other post-employment benefit, salary
continuation, termination, disability, death, retirement, health or medical
benefit to any person (including, without limitation, any former or current
employee) except as set forth under any Company Plan.
(e) Qualification. Each Company Plan intended to be qualified
under Section 401(a) of the Code, and each trust (if any) forming a part
thereof, has received a favorable determination letter from the IRS as to its
qualification under the Code and to the effect that such trust is exempt from
taxation under Section 501(a) of the Code, and nothing has occurred since the
date of such determination letter that could reasonably be expected to adversely
affect such qualification or tax-exempt status.
(f) Section 280G. Except as set forth in Item 4.18(f) of the
Company Disclosure Schedule, the Company will not, as a result of the
transactions contemplated by this Agreement, make or become obligated to make
any parachute payment as defined in Section 280(G) of the Code.
(g) Documents. With respect to each Company Plan, the Company
has previously delivered or made available to Parent complete and correct copies
of: (i) such
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Company Plan, if written, or a description of such Company Plan if not written,
and (ii) to the extent applicable to such Company Plan: all trust agreements,
insurance contracts or other funding arrangements; the three most recent
actuarial and trust reports; the three most recent Forms 5500 required to have
been filed with the IRS and all schedules thereto; the most recent IRS
determination letter, all current summary plan descriptions, all material
communications received from or sent to the IRS, the Pension Benefit Guaranty
Corporation or the Department of Labor (including a written description of any
oral communication); any actuarial study of any post-employment life or medical
benefits provided under any such Company Plan, if any; statements or other
communications regarding withdrawal or other multiemployer plan liabilities, if
any; and all amendments and modifications to any such document.
For purposes of this Agreement, "Company Plan" shall mean each "employee benefit
plan" as such term is defined in Section 3(3) of ERISA, and each bonus,
incentive or deferred compensation, severance, termination, retention, change of
control, stock option, stock appreciation, stock purchase, phantom stock or
other equity-based, performance or other employee or retiree benefit or
compensation plan, program, arrangement, agreement, policy or understanding,
whether written or unwritten, that provides or may provide benefits or
compensation in respect of any current or former shareholder, officer, director
or employee of the Company or the beneficiaries or dependents of any such person
that is or has been maintained or established by the Company or any other
Related Person, or to which the Company or any Related Person contributes or is
or has been obligated or required to contributed. For purposes of this
Agreement, "Related Person" shall mean any trade or business, whether or not
incorporated, which, together with the Company, is or would have been at any
date of determination occurring within the preceding six years, treated as a
single employer under Section 414 of the Code.
SECTION 4.19 Environmental Matters. Each of the Company and
its Subsidiaries conducts its business and operations in material compliance
with all applicable Environmental Laws, and neither the Company nor any
Subsidiary of the Company has received notice of any claim, action, suit,
proceeding, hearing or investigation, based on or related to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling, or the emission, discharge, release or threatened release into the
environment, of any pollutant, contaminant, or hazardous or toxic material or
waste (collectively, an "Environmental Event") by the Company or any Subsidiary
of the Company. "Environmental Law" means any statute, regulation, rule, order,
ordinance, decree, injunction, judgment, governmental approval or any other
requirement of law (including common law) regulating or relating to the
protection of human health or safety, natural resources or the environment,
including laws relating to the use, generation, handling, disposal, storage,
release or threatened release of hazardous substances. Except as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company, the Company and its Subsidiaries are in
possession of, and in compliance with, all permits, authorizations and consents
required pursuant to applicable Environmental Laws. To the knowledge of the
Company, no notice of any Environmental Event was given to any person or entity
that occupied any of the premises occupied by or used by the
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Company or any Subsidiary of the Company prior to the date such premises were so
occupied. Without limiting the generality of the foregoing, to the knowledge of
the Company, neither the Company nor any Subsidiary of the Company has disposed
of, released or placed on or in any property or facility used in its business
any waste materials, hazardous materials or hazardous substances (including
petroleum products) in violation of law. Neither the Company nor any of its
Subsidiaries has caused or taken any action that will result in any liability or
obligation relating to environmental conditions or releases of hazardous
materials or hazardous substances (including petroleum products), other than
such liabilities or obligations that, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect on the Company. The
Company has delivered or made available to Parent all environmental site
assessments, compliance audits and related studies.
SECTION 4.20 Contracts. All of the material contracts of the
Company and its Subsidiaries that are required to be described in the Company
SEC Filings or listed or filed as exhibits to the Company's Form 10-K for its
fiscal year ended December 31, 2000 (the "Contracts") are described in such
Company SEC Filings or listed or filed as exhibits thereto, respectively, and
are valid and binding and are in full force and effect. There is not under any
such Contract any existing default or event, which after notice or lapse of
time, or both, would constitute a default, by the Company or any of its
Subsidiaries, or to the Company's knowledge, any other party, except for such
defaults as would not reasonably be expected to have, individually or in
aggregate, a Material Adverse Effect on the Company. Except as set forth in Item
4.20 of the Company Disclosure Schedule, the Company has made available to
Parent all of the material contracts of the Company and its Subsidiaries.
SECTION 4.21 Certain Transactions. (a) Except as disclosed in
the Company SEC Filings made prior to the date hereof or as set forth in Item
4.21 of the Company Disclosure Schedule, there are no existing or proposed
transactions, agreements, understandings or arrangements involving in any case
an aggregate amount in excess of $60,000 between the Company or any Subsidiary
of the Company and (i) any director or executive officer of the Company or any
family member, relative or affiliate of any such director or executive officer
or (ii) any other person or entity controlling or under common control with the
Company.
(b) Except as disclosed in the Company SEC Filings made prior
to the date hereof or as set forth in Item 4.21 of the Company Disclosure
Schedule, no shareholder, officer, director or employee of the Company or any of
its Subsidiaries, or any family member, relative or affiliate of any such
shareholder, officer, director or employee, (i) owns, directly or indirectly,
and whether on individual, joint or other basis, any interest in (x) any
material property, asset or right, real or personal, tangible or intangible,
used in or held for use in connection with or pertaining to the business of the
Company and its Subsidiaries or (y) any person that is a material supplier,
customer or competitor of the Company or any of its Subsidiaries or (ii) has
received any loans from or is otherwise a debtor of, or made any loans or is
otherwise a creditor of, the Company or any of its Subsidiaries.
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SECTION 4.22 Insurance. Item 4.22 of the Company Disclosure
Schedule, contains a complete and correct list and summary description of all
insurance policies maintained (including directors' and officers' insurance) by
or on behalf of the Company and its Subsidiaries. The Company has delivered or
made available to Parent complete and correct copies of all such policies
together with all riders and amendments thereto. Except as set forth in Item
4.22 of the Company Disclosure Schedule, all such policies are customary and
appropriate under the circumstances and in full force and effect, all premiums
due thereon have been paid, and the Company and its Subsidiaries have complied
with the provisions of such policies.
SECTION 4.23 Opinion of Financial Advisor. The Company has
received the opinion of Deutsche Banc Alex. Xxxxx Inc. dated June 24, 2001,
substantially to the effect that the consideration to be received in the Offer
and the Merger by the holders of Company Common Stock is fair to such holders
from a financial point of view, a copy of which opinion has been delivered to
Parent.
SECTION 4.24 Brokers. Except as set forth in Item 4.24 of the
Company Disclosure Schedule, no person is entitled to any brokerage, finder's,
financial advisor or other similar fee or commission in connection with the
transactions contemplated by this Agreement as a result of any action taken by
or on behalf of the Company, other than Deutsche Banc Alex. Xxxxx Inc. pursuant
to an engagement letter dated August 8, 2000, a copy of which has been furnished
to Parent.
SECTION 4.25 European Union Operations. Except as set forth in
Item 4.25 of the Company Disclosure Schedule, neither the Company nor any of its
Subsidiaries has any material operations or assets in the United Kingdom or the
European Union or derives any material revenues or income from the United
Kingdom or the European Union.
SECTION 4.26 Voting Requirements. Adoption by the Parent of
the plan and agreement of merger, as contemplated by Article II hereof, is the
only action by the holders of any class or series of the capital stock of the
Company necessary with respect to this Agreement and the transactions
contemplated hereby.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PARENT, U.S. PARENT AND ACQUISITION SUB
Parent, U.S. Parent and Acquisition Sub represent and warrant
to the Company as follows:
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SECTION 5.01 Organization and Qualification. Each of Parent,
U.S. Parent and Acquisition Sub is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and has all requisite corporate power and authority to own or
lease and operate its properties and assets and to carry on its business as it
is now being conducted. Parent is duly qualified as a foreign corporation to do
business, and is in good standing, in each jurisdiction in which the character
of its properties owned or leased or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified would not
have a Material Adverse Effect on Parent. Parent has previously delivered or
made available to the Company complete and correct copies of its Certificate of
Incorporation and Bylaws, each as in effect on the date hereof. Parent is not in
default in the performance, observance or fulfillment of any provision of its
Certificate of Incorporation or Bylaws. Since the date of its incorporation,
Acquisition Sub has not engaged in any activities other than in connection with
or as contemplated by this Agreement.
SECTION 5.02 Authority Relative to Agreement. Each of Parent,
U.S. Parent and Acquisition Sub has all requisite corporate power and authority
to execute and deliver this Agreement and to perform its obligations hereunder.
The execution and delivery of this Agreement by Parent, U.S. Parent and
Acquisition Sub and the consummation by Parent, U.S. Parent and Acquisition Sub
of the transactions contemplated hereby have been duly authorized by the
respective boards of directors of Parent, U.S. Parent and Acquisition Sub, and
no other corporate proceedings on the part of Parent, U.S. Parent and
Acquisition Sub are necessary to authorize this Agreement and such transactions.
This Agreement has been duly executed and delivered by Parent, U.S. Parent and
Acquisition Sub and, subject to the due execution and delivery by the other
parties thereto, constitutes the legal, valid and binding obligation of each of
Parent, U.S. Parent and Acquisition Sub, enforceable against it in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
moratorium, reorganization and similar laws of general applicability relating to
or affecting creditors' right and to general equity principles (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
SECTION 5.03 Non-Contravention. The execution and delivery of
this Agreement by Parent, U.S. Parent and Acquisition Sub and the consummation
by Parent, U.S. Parent and Acquisition Sub of the transactions contemplated
hereby will not (i) violate or conflict with any provision of the Certificate or
Articles of Incorporation or Bylaws of Parent, U.S. Parent or Acquisition Sub or
(ii) result (with the giving of notice or the lapse of time or both) in any
violation of or default or loss of a benefit under, or permit the acceleration
of any obligation under, any mortgage, indenture, lease, agreement or other
instrument, permit, concession, grant, franchise, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to Parent, U.S.
Parent or Acquisition Sub or any of their respective properties, other than any
such violation, default, loss or acceleration that would not materially impair
or materially delay the ability of Parent, U.S. Parent and Acquisition Sub to
consummate the transactions contemplated hereby.
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SECTION 5.04 Governmental Approvals. No consent, approval,
order or authorization of, or registration, declaration or filing with, any
federal, state, local or foreign governmental or regulatory authority is
required to be made or obtained by Parent, U.S. Parent or Acquisition Sub in
connection with the execution and delivery of this Agreement by Parent, U.S.
Parent and Acquisition Sub or the consummation by Parent, U.S. Parent and
Acquisition Sub of the transactions contemplated hereby, except for (i)
compliance the HSR Act, (ii) filings pursuant to the Securities Act and the
Exchange Act and the rules and regulations promulgated by the SEC thereunder,
(iii) the filing of articles of merger with the Secretary of State of the
Commonwealth of Pennsylvania in accordance with the Pennsylvania BCL, and (iv)
such consents, approvals, orders or authorizations which if not obtained, or
registrations, declarations or filings which if not made, would not materially
impair or materially delay the ability of Parent, U.S. Parent and Acquisition
Sub to consummate the transactions contemplated hereby.
SECTION 5.05 Disclosure Documents. (a) The Offer Documents
will not, at the time of filing with the SEC and at the time of distribution
thereof, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The Offer Documents will comply as to form in all material
respects with the applicable provisions of the Exchange Act, and the rules and
regulations promulgated thereunder, except that no representation is made by
Parent, U.S. Parent or Acquisition Sub with respect to statements made therein
based on information supplied by the Company or its representatives for
inclusion in the Offer Documents or with respect to information concerning the
Company or any of its Subsidiaries incorporated by reference in the Offer
Documents.
(b) None of the information with respect to Parent, U.S.
Parent or Acquisition Sub supplied (and not retracted prior to the relevant
date) by Parent, U.S. Parent or Acquisition Sub for inclusion in the Schedule
14D-9 or any amendments thereof or supplements thereto, will at the time of the
filing of the Schedule 14D-9 and any amendments or supplement thereto, and at
the time of any distribution thereto, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading.
SECTION 5.06 Financing. Parent has entered into a credit
facility with X.X. Xxxxxx plc, Lloyds TSB Capital Markets and certain other
lenders (copies of which have been delivered to the Company) pursuant to which
such lenders, subject to certain conditions set forth in such credit agreement,
will provide all funds necessary, together with funds available to Parent, U.S.
Parent and Acquisition Sub, to consummate the Offer and pay the Merger
Consideration.
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ARTICLE VI
CERTAIN AGREEMENTS
SECTION 6.01 Conduct of the Company's Business. The Company
covenants and agrees that, prior to the Effective Time, unless Parent shall
otherwise consent in writing, or as otherwise set forth in Item 6.01 of the
Company Disclosure Schedule or expressly contemplated by this Agreement:
(a) the business of the Company and its Subsidiaries shall be
conducted in the ordinary course of business and consistent with past practice
and in compliance in all material respects with all applicable laws and
regulations and the Company and its Subsidiaries shall not take any action
except in the ordinary course of business and consistent with past practice;
(b) the Company will not and will not permit any of its
Subsidiaries to, directly or indirectly, do any of the following: (i) sell,
pledge, dispose of or encumber any properties, assets or rights (tangible or
intangible) of the Company or any such Subsidiary, except inventory and
immaterial assets in the ordinary course of business; (ii) amend or propose to
amend its Articles of Incorporation or Bylaws (or comparable organizational
documents); (iii) split, combine or reclassify any of its capital stock, or
declare, set aside or pay any dividend payable in cash, stock, property or
otherwise or otherwise make any distribution with respect to such shares (except
for any dividends paid in the ordinary course to the Company or to any
wholly-owned Subsidiary of the Company); (iv) redeem, purchase, acquire or offer
to acquire any shares of its capital stock or any securities convertible or
exchangeable for, or any options, warrants or rights of any kind to acquire,
shares of its capital stock; or (v) enter into any contract, agreement,
commitment or arrangement with respect to any of the matters set forth in this
paragraph (b);
(c) the Company will not and will not permit any of its
Subsidiaries to, directly or indirectly, do any of the following: (i) issue,
sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of
(whether through the issuance or granting of additional options, warrants,
commitments, subscriptions, rights to purchase, or otherwise), any shares of, or
securities convertible or exchangeable for, or any options, warrants or rights
of any kind to acquire any shares of, its capital stock whether pursuant to the
Company Stock Plan or otherwise, provided that the Company may issue shares of
Company Common Stock upon the exercise of currently outstanding options referred
to in Section 4.05 hereof in accordance with their present terms; (ii) acquire
(by merger, consolidation or acquisition of stock or assets) any corporation,
partnership or other business organization or division thereof or make any
loans, advances or capital contributions to, or investments in, any Person other
than any Subsidiary of the Company in an amount exceeding $200,000, provided
that the Company may enter into alpha and beta test agreements for products of
the Company and may provide hardware and software to its customers in connection
therewith; (iii) incur, create, issue, endorse or otherwise become liable
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for any indebtedness for borrowed money or issue any debt securities in an
amount exceeding $1,000,000 in the aggregate; (iv) enter into or modify any
material contract, lease, agreement or commitment, except in the ordinary course
of business and consistent with past practice; (v) terminate, modify,
exclusively license, assign, waive, release or relinquish any material contract
rights or Intellectual Property rights or amend any other material rights or
claims, except in the ordinary course of business and consistent with past
practice or (vi) settle or compromise any material claim, action, tax audit,
suit or proceeding pending or threatened against the Company, or, if the Company
may be liable or obligated to provide indemnification, against the Company's
directors or officers, before any court, governmental agency or arbitrator,
provided that nothing herein shall require any action that might impair or
otherwise affect the obligation of any insurance carrier under any insurance
policy maintained by the Company;
(d) the Company will not and will not permit any of its
Subsidiaries to, directly or indirectly, do any of the following: (A) grant any
increase in the salary or other compensation of its employees except (i)
pursuant to the current terms of employment agreements in effect on the date
hereof and previously disclosed to Parent and (ii) in the case of employees who
are not executive officers of the Company, in the ordinary course of business
and consistent with past practice, or (B) grant any bonus to any employee or
enter into any employment or severance agreement or make any loan to or enter
into any material transaction of any other nature with any employee of the
Company or any Subsidiary of the Company;
(e) the Company will not and will not permit any of its
Subsidiaries to, directly or indirectly, do any of the following: (except for
salary increases for employees who are not executive officers of the Company in
the ordinary course of business and consistent with past practice) adopt or
amend, in any respect, except as contemplated hereby or as may be required by
applicable law or regulation, any collective bargaining, bonus, profit sharing,
compensation, stock option, restricted stock, stock purchase plan, pension,
retirement, deferred compensation, employment or other employee benefit plan,
agreement, trust, fund, plan or arrangement for the benefit or welfare of any
directors, officers or employees (including, without limitation, any such plan
or arrangement relating to severance or termination pay);
(f) the Company will not and will not permit any of its
Subsidiaries to, directly or indirectly, do any of the following: (A) take any
action that would make any representation or warranty of the Company hereunder
inaccurate in any respect at, or as of any time prior to, the Effective Time, or
(B) omit to take any action necessary to prevent any such representation or
warranty from being inaccurate in any respect at any such time, or (C)
voluntarily take any action that could reasonably be expected to result in any
of the conditions to the Merger set forth in Article VII from being satisfied;
(g) the Company will and will cause each of its Subsidiaries
to use reasonable best efforts, to the extent not prohibited by the foregoing
provisions of this Section 6.01, to preserve intact its current business
organization and maintain its relationships with its
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suppliers and customers, and if and as requested by Parent, (i) use reasonable
best efforts to make arrangements for representatives of Parent to meet with
customers and suppliers and (ii) schedule, and cause its management to
participate in, meetings of representatives of Parent with its employees; and
(h) the Company will not and will not permit any of its
Subsidiaries to, directly or indirectly, do any of the following: (A) make any
material Tax election (unless required by law or unless consistent with prior
practice), or (B) settle or compromise any material income Tax liability, or (C)
amend any Tax Return.
SECTION 6.02 Shareholder Approval. If Acquisition Sub shall
own, following acceptance of Shares for payment pursuant to the Offer, at least
80% of the outstanding Shares, the Parent shall adopt the plan and agreement of
merger contemplated by Article II hereof and otherwise take all necessary and
appropriate action to cause the Merger to become effective, as soon as
practicable after the consummation of the Offer (but in any event no later than
ten business days thereafter), without a meeting of the shareholders of the
Company, in accordance with Section 1924(b)(1)(ii) of the Pennsylvania BCL.
SECTION 6.03 Access to Information. The Company shall, and
shall cause its Subsidiaries and its officers, directors, employees,
representatives and agents to, afford, from the date hereof to the Effective
Time, the officers, employees, representatives and agents of Parent reasonable
access during regular business hours to the officers, employees, agents,
properties, offices, plants and other facilities, books, records and workpapers
of the Company and its Subsidiaries, and shall promptly furnish Parent all
financial, operating and other information and data as Parent, through its
officers, employees or agents, may reasonably request.
SECTION 6.04 Further Assurances. (a) Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use all
reasonable best efforts to take, or cause to be taken, all action and to do, or
cause to be done, all things necessary, proper or advisable to ensure that the
conditions set forth in Annex I hereto and Article VII hereof are satisfied and
to consummate and make effective as promptly as practicable the transactions
contemplated by this Agreement, including, without limitation, using all
reasonable best efforts to obtain all necessary waivers, consents and approvals
and to effect all necessary registrations and filings (including, without
limitation, any necessary filings under the HSR Act).
(b) In connection with and without limiting the foregoing, the
Company and Parent and their respective Board of Directors shall (i) take all
action reasonably necessary to ensure that no "fair price," "moratorium,"
"control transaction" or other form of takeover statute or similar statute or
regulation is or becomes applicable to the Offer, the Merger or to this
Agreement, the Shareholders' Agreement or any of the other transactions
contemplated hereby or thereby and (ii) if any state takeover statute or similar
statute or regulation becomes applicable to the Offer, the Merger, this
Agreement, the Shareholders' Agreement or any of the other
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transactions contemplated hereby or thereby, take all action reasonably
necessary to ensure that the Offer, the Merger and the other transactions
contemplated hereby and in the Shareholders' Agreement may be consummated as
promptly as practicable on the terms contemplated by this Agreement and the
Shareholders' Agreement and otherwise to minimize the effect of such statute or
regulation on the Offer, the Merger and the other transactions contemplated by
this Agreement and the Shareholders' Agreement.
SECTION 6.05 Inquiries and Negotiations. (a) The Company shall
not, and shall not cause, authorize or permit any of its Subsidiaries to, nor
shall it cause, authorize or permit any officer, director or employee of, or any
investment banker, attorney, accountant or other advisor or representative of,
the Company or any of its Subsidiaries to, directly or indirectly, (i) solicit,
initiate or encourage the submission of any Acquisition Proposal (as hereinafter
defined) or (ii) participate in any discussions or negotiations regarding, or
furnish to any person any information in respect of, or take any other action to
facilitate, any Acquisition Proposal or any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead to, any
Acquisition Proposal, provided that during the period following the execution of
this Agreement and prior to the consummation of the Offer, nothing contained in
this Section 6.05(a) shall prohibit the Board of the Directors of the Company
from furnishing any information to, or entering into discussions or negotiations
with, any person that makes after the date hereof an unsolicited bona fide
Acquisition Proposal if, and only to the extent that, (A) the Board of Directors
of the Company, after consultation with outside legal counsel, determines in
good faith that it is probable that the failure to take such action would be a
breach of its fiduciary duties under Pennsylvania law, (B) the Board of
Directors of the Company determines in good faith that such Acquisition Proposal
is reasonably likely to lead to a transaction that would, if consummated, result
in a transaction more favorable to the Company's shareholders from a financial
point of view than the transactions contemplated by this Agreement (any such
more favorable Acquisition Proposal being referred to herein as a "Superior
Proposal"), and (C) prior to taking such action, the Company (x) provides
reasonable notice to Parent to the effect that it is taking such action and (y)
receives from the person submitting such Acquisition Proposal an executed
confidentiality/standstill agreement in reasonably customary form and in any
event containing terms (with respect to confidentiality) at least as stringent
as those contained in the Confidentiality Agreement between Parent and the
Company. The Company shall not during the term of this Agreement release any
third party from, or agree to amend or waive any provision of, and the Company
shall take all reasonable best efforts to enforce, to the fullest extent
permitted by applicable law, each such confidentiality/standstill agreement and
any other confidentiality or standstill agreement to which the Company is or
becomes a party. The Company shall notify Parent of any Acquisition Proposal
(including, the material terms and conditions thereof and the identity of the
person making it) as promptly as practicable (but in no case later than 24
hours) after its receipt thereof. The Company will keep Parent informed of any
material changes (including material amendments) to any such Acquisition
Proposal. The Company shall immediately cease and terminate, and shall
immediately cause its Subsidiaries and affiliates, and their respective
officers, directors, employees, investment bankers, attorneys, accountants and
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other agents and representatives to cease and terminate, any existing
activities, discussions or negotiations with any parties conducted heretofore in
respect of any possible Acquisition Proposal and shall demand the immediate
return of all confidential information previously provided to such third
parties. Without limiting the foregoing, it is understood that any violation of
the restrictions set forth in this Section 6.05(a) by any director or officer of
the Company or any of its Subsidiaries or any financial advisor, attorney or
other representative of the Company or any of its Subsidiaries, acting on behalf
of the Company or any of its Subsidiaries, shall be deemed a breach of this
Section 6.05(a) by the Company. As used herein, "Acquisition Proposal" means an
inquiry, offer or proposal by any person, corporation, entity or group (other
than Parent and its affiliates) to acquire 25% or more of the business and
properties of the Company and its Subsidiaries, taken as a whole, or beneficial
ownership (as determined pursuant to Rule 13d-3 promulgated under the Exchange
Act) of in excess of 25% of the shares of the capital stock of the Company,
whether by any of the following actions or otherwise: (w) merger, consolidation,
share exchange, recapitalization, business combination or other similar
transaction; (x) sale, lease, exchange, mortgage, pledge, transfer or other
disposition of the assets of the Company and its Subsidiaries, in a single
transaction or series of related transactions; (y) tender offer or exchange
offer or the filing of a registration statement under the Securities Act in
connection therewith; or (z) any public announcement of a proposal, plan or
intention to do any of the foregoing or any agreement to engage in any of the
foregoing.
(b) Neither the Board of Directors of the Company nor any
committee thereof shall (i) withdraw or modify, or propose to withdraw or
modify, in a manner adverse to Parent, the approval or recommendation by such
Board of Directors or such committee of this Agreement, the Shareholders'
Agreement or the transactions contemplated hereby or thereby, (ii) approve,
adopt or recommend, or propose to approve, adopt or recommend, an Acquisition
Proposal, or (iii) approve or recommend, or propose to approve or recommend, or
cause the Company to enter into, any letter of intent, agreement in principle,
memorandum of understanding, acquisition agreement or other agreement with
respect to an Acquisition Proposal; provided, however, that, prior to the
acceptance for payment of Shares by Acquisition Sub under the Offer, the Board
of Directors of the Company may take any of such actions if (A) the Board of
Directors of the Company, after consultation with outside legal counsel,
determines in good faith that it is probable that the failure to take any such
action would be a breach of its fiduciary duties under Pennsylvania law, (B) in
the case of clause (i), there exists an Acquisition Proposal, and in the case of
clauses (i) through (iii), inclusive, the Board of Directors of the Company
determines in good faith that the applicable Acquisition Proposal is a Superior
Proposal and (C) prior to taking any such action, the Company provides four
days' prior written notice to Parent of its intent to take any such action and
such Acquisition Proposal continues to be a Superior Proposal notwithstanding
any modification by Parent of the terms of the Offer during such four day
period. Notwithstanding the foregoing, nothing contained in this Section 6.05(b)
shall prohibit the Company from taking and disclosing to its shareholders a
position contemplated by Rule 14d-9 or Rule 14e-2(a) promulgated under the
Exchange Act or from making any disclosure to the Company's shareholders which,
in the good faith reasonable judgment of the Board of
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Directors of the Company, after consultation with outside legal counsel, is
required under applicable law, provided that except as otherwise permitted in
this Section 6.05(b), the Company does not withdraw or modify, or propose to
withdraw or modify, its position in respect of the Offer or the Merger or the
transactions contemplated by the Shareholders' Agreement or approve or
recommend, or propose to approve or recommend, an Acquisition Proposal.
Notwithstanding anything contained in this Agreement to the contrary, any action
by the Board of Directors of the Company permitted by, and taken in accordance
with, this Section 6.05(b) shall not constitute a breach of this Agreement by
the Company. Notwithstanding the foregoing, nothing in this Section 6.05(b)
shall (i) permit the Company to terminate this Agreement (except as provided in
Article VIII hereof) or (ii) affect any other obligations of the Company under
this Agreement.
SECTION 6.06 Notification of Certain Matters. The Company
shall give prompt notice to Parent, and Parent shall give prompt notice to the
Company, of (i) the occurrence, or failure to occur, of any event that such
party believes would be likely to cause either (A) any of its representations or
warranties contained in this Agreement to be untrue or inaccurate in any
material respect at any time from the date hereof to the Effective Time, (B) any
condition set forth in Annex I or Article VII hereof to be unsatisfied in any
material respect at any time from the date hereof to the date Acquisition Sub
purchases Shares pursuant to the Offer, (ii) any material failure of the
Company, on the one hand, or Parent or Acquisition Sub, on the other hand, or
any officer, director, employee or agent thereof, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder, provided that failure to give such notice shall not constitute a
waiver of any defense that may be validly asserted.
SECTION 6.07 Indemnification. (a) From and after the Effective
Time, Parent shall cause the Surviving Corporation and its Subsidiaries to
fulfill and honor in all respects (i) their obligations pursuant to any
indemnification agreements with their directors and officers in effect
immediately prior to the Effective Time and (ii) any obligations to indemnify
and hold harmless from liabilities for acts or omissions occurring at or prior
to the Effective Time those classes of persons currently entitled to
indemnification from the Company and its Subsidiaries as provided in their
respective Certificate or Articles of Incorporation and Bylaws (or comparable
organizational documents). The Articles of Incorporation and Bylaws of the
Surviving Corporation shall contain the provisions with respect to
indemnification and exculpation from liability set forth in the Company's
Articles of Incorporation and Bylaws as in effect on the date hereof, which
provisions shall not be amended, repealed or otherwise modified for a period of
six years from the Effective Time in any manner that would adversely affect the
rights thereunder of individuals who, on or prior to the Effective Time, were
directors, officers, employees or agents of the Company, unless such
modification is required by law.
(b) In the event that Parent or any of its successors or
assigns (i) consolidates with or merges into any other person and is not the
continuing or surviving corporation or entity of such consolidation or merger or
(ii) transfers or conveys all or substantially all of its properties
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and assets to any person, then, and in each such case, proper provision will be
made so that the successors and assigns of Parent assume the obligations set
forth in this Section 6.07.
(c) For a period of six years after the Effective Time, Parent
shall maintain in effect the Company's current directors' and officers'
liability insurance covering acts or omissions occurring prior to the Effective
Time with respect to those persons who are currently covered by the Company's
directors' and officers' liability insurance on terms with respect to coverage
and amount no less favorable than those of such policy or policies as in effect
on the date hereof, provided that Parent may substitute therefor policies of
Parent or its Subsidiaries containing terms with respect to coverage and amount
no less favorable to such directors or officers.
(d) The provisions of this Section 6.07 shall survive the
consummation of the Merger and are intended to be for the benefit of, and will
be enforceable by, each indemnified party, his or her heirs and his or her
representatives.
SECTION 6.08 Employee Benefits. Employees who continue as
employees of the Surviving Corporation or any of its Subsidiaries shall be
entitled to participate in all employee benefit plans (subject to the terms and
conditions thereunder) maintained by Parent or the Surviving Corporation for
employees of the Surviving Corporation generally, it being understood and
agreed, however, that nothing in this Section 6.08 shall require Parent (i) to
provide or continue for the benefit of any employees any Plan currently
maintained by the Company or any Subsidiary thereof or (ii) to maintain the
organizational structure of the Company and its Subsidiaries as in effect on the
date of this Agreement.
SECTION 6.09 SEC and Other Filings. Each of Parent and the
Company shall promptly provide the other (or its counsel) with copies of all
filings made by such party or any of its Subsidiaries with the SEC or any other
state, federal or foreign governmental entity in connection with this Agreement
and the transactions contemplated hereby.
SECTION 6.10 FIRPTA Certificate. Immediately prior to the
expiration of the Offer, the Company shall provide U.S. Parent with a statement
complying with Treasury Regulation sections 1.1445-2(c)(3) and 1.897-2(h), in
substantially the form provided to U.S. Parent upon the signing of this
Agreement, certifying that the Shares are not "United States real property
interests" (within the meaning of section 897 of the Code).
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ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01 Conditions to Parent's Obligation to Effect the
Merger. The obligation of Parent and U.S. Parent to implement the Merger, as
contemplated by Article II hereof, is subject to the fulfillment at or prior to
the Effective Time of the following conditions, any or all of which may be
waived in whole or in part by Parent, U.S. Parent and Acquisition Sub, to the
extent permitted by applicable law:
(a) Injunction, etc. There shall be (i) in effect no
preliminary or permanent injunction or other order of any governmental entity or
regulatory agency or court of competent jurisdiction that restrains, enjoins or
otherwise prohibits, or imposes material and adverse conditions upon
consummation of the transactions contemplated hereby, (ii) in effect no pending
or threatened suit, action or proceeding by any governmental or regulatory
agency or any third party seeking to prohibit or limit the ownership or
operations by Parent, the Company or any of their respective Subsidiaries, or to
compel any of such persons to dispose of or hold separate, any material portion
of the assets or business of the Company and its Subsidiaries or of Parent, the
Company and their respective Subsidiaries, taken as a whole, in each case, as a
result of the transactions contemplated hereby, or (iii) no statute, law,
ordinance, rule or regulation shall be in effect and no action by a governmental
entity or regulatory agency or third party shall be pending or threatened that
could have any of the effects referred to in (i) or (ii) above, provided that
prior to invoking this condition a party shall use all reasonable best efforts
to have any injunction or order referred to in (i) above vacated.
(b) Governmental Filings and Consents. All governmental
filings required to be made prior to the Effective Time by Parent, Acquisition
Sub and the Company with, and all governmental consents required to be obtained
prior to the Effective Time by Parent, Acquisition Sub and the Company from,
governmental and regulatory authorities in connection with the execution and
delivery of this Agreement by Parent, Acquisition Sub or the Company, as the
case may be, and the consummation of the transactions contemplated hereby shall
have been made or obtained, except where the failure to make such filing or
obtain such consent would not reasonably be expected to result in a Material
Adverse Effect on Parent and its Subsidiaries (assuming the Merger had taken
place), and all applicable waiting periods under the HSR Act shall have expired
or been terminated.
(c) Acquisition Sub shall have purchased Shares pursuant to
the Offer.
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ARTICLE VIII
TERMINATION AND ABANDONMENT
SECTION 8.01 Termination and Abandonment. This Agreement may
be terminated and the transactions hereby may be abandoned at any time prior to
Acquisition Sub's purchase of Shares pursuant to the Offer:
(a) by the mutual written consent of Parent and the Company
provided that, any such consent shall require the concurrence of a majority of
the Continuing Directors if it occurs after the purchase by Acquisition Sub of
shares of Company Common Stock pursuant to the Offer;
(b) by (i) Parent if the Company shall have breached any of
its representations, warranties, covenants or agreements contained in this
Agreement with the effect that the condition set forth in paragraph (e) of Annex
I would be incapable of being satisfied on or prior to the Termination Date or
(ii) the Company, if Parent, U.S. Parent or Acquisition Sub shall have breached
any of its representations, warranties, covenants or agreements contained herein
which breach would reasonably be expected to materially impair or materially
delay the ability of Parent to consummate the transactions contemplated by this
Agreement, and, such breach by its nature is not capable of being cured prior to
the last date to which the Offer could be extended pursuant to Section 1.01(a);
(c) by either Parent or the Company if the Offer shall not
have been consummated prior to the close of business on October 1, 2001 (the
"Termination Date"), provided that neither the right to terminate this Agreement
or extend such date under this Section 8.01(c) shall be available to any party
whose breach of this Agreement has been the cause of, or resulted in, the
failure of the Offer to be consummated on or before the close of business on
such date;
(d) by Parent, if the Offer is terminated or expires without
the purchase of any Shares thereunder, unless such termination has been caused
by the failure of Parent or Acquisition Sub to perform in any material respect
any of its obligations under this Agreement and the Offer.
(e) by the Company if, prior to the acceptance for payment of
Shares by Acquisition Sub under the Offer, (i) the Company is not in breach of
its obligations under Section 6.05, and (ii) the Board of Directors of the
Company authorizes the Company, subject to complying with the terms of this
Agreement, to enter into a binding written agreement concerning a transaction
that constitutes a Superior Proposal and the Company notifies Parent in writing
that it intends to enter into such an agreement, provided that the Company may
not effect such termination unless contemporaneously therewith the Company pays
to Parent, by wire
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transfer of immediately available funds to an account designated by Parent, the
Termination Fee required to be paid pursuant to Section 8.02(b);
(f) by Parent if, prior to the acceptance for payment of
Shares by Acquisition Sub under the Offer, the Board of Directors of the Company
shall have taken any of the actions described in the first sentence of Section
6.05(b), or if the Company has breached or is deemed to have breached, any of
the material provisions of Section 6.05; or
(g) by either Parent or the Company, if any court of competent
jurisdiction shall have issued any judgment, injunction, order or decree
enjoining, restraining or otherwise prohibiting Acquisition Sub from accepting
for payment, and paying for, the shares of Company Common Stock pursuant to the
Offer, or Parent from implementing the Merger, and such judgment, injunction,
order or decree shall become final and nonappealable.
Any party desiring to terminate this Agreement pursuant to this Section 8.01
shall give notice to the other party in accordance with Section 9.05 (and
Section 8.01(e), in the case of a termination by the Company pursuant to Section
8.01(e)).
SECTION 8.02 Effect of Termination. (a) In the event of the
termination of this Agreement pursuant to Section 8.01, this Agreement, except
for the provisions of Section 8.02 and Article IX, shall become void and have no
effect, without any liability on the part of any party or its directors,
officers or shareholders, provided that nothing in this Section 8.02 shall
relieve any party of liability for a material breach of any provision of this
Agreement.
(b) The Company agrees that, if (i) the Company terminates
this Agreement pursuant to Section 8.01(e); or (ii) Parent terminates this
Agreement pursuant to 8.01(f); or (iii) (A) Parent terminates this Agreement
pursuant to Section 8.01(d) as a result of the Minimum Condition not having been
satisfied, (B) at any time prior to such termination there shall have been made
to the Company, or publicly announced or disclosed an intention to make (whether
or not contingent), an Acquisition Proposal with respect to the Company, and (C)
within 12 months after such termination, the Company enters into a definitive
agreement to make a Business Combination or consummates a Business Combination;
then, (X) in the case of a termination by the Company as described in clause (i)
above, concurrently with such termination, (Y) in the case of a termination by
Parent as described in clause (ii) above, within three business days following
any such termination, or (Z) in the case of a termination by Parent or the
Company as described in clause (iii) above, prior to the earlier of the
consummation of such Business Combination or the execution of a definitive
agreement with respect thereto, the Company will pay to Parent in cash by wire
transfer in immediately available funds to an account designated by Parent a
termination fee in an amount equal to $12,133,000 (the "Termination Fee"). For
the purposes of this Section 8.02, "Business Combination" means (i) a merger,
consolidation, share exchange, business combination or similar transaction
involving the Company as a result of which the shareholders of the Company prior
to such transaction in the aggregate cease to own 70% or
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more of the voting securities of the entity surviving or resulting from such
transaction (or the ultimate parent entity thereof), (ii) a sale, lease,
exchange, transfer or other disposition of more than 30% of the assets of the
Company and its subsidiaries, taken as a whole, in a single transaction or a
series of related transactions, or (iii) the acquisition, by a third party of
beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of more
than 30% of the Company Common Stock then outstanding whether by tender or
exchange offer or otherwise.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Nonsurvival of Representations and Warranties.
None of the representations or warranties contained in this Agreement or in any
instrument delivered pursuant hereto shall survive the consummation of the
Offer.
SECTION 9.02 Expenses, Etc. Subject to Section 8.02, whether
or not the transactions contemplated by this Agreement are consummated, neither
the Company, on the one hand, nor Parent, U.S. Parent and Acquisition Sub, on
the other hand, shall have any obligation to pay any of the fees and expenses of
the other incident to the negotiation, preparation and execution of this
Agreement, including the fees and expenses of counsel, accountants, investment
bankers and other experts.
SECTION 9.03 Publicity. The Company and Parent agree that they
will not issue any press release or make any other public announcement
concerning this Agreement or the transactions contemplated hereby without the
prior consent of the other party, except that the Company or Parent may make
such public disclosure that it believes in good faith to be required by law (in
which event such party shall consult with the other prior to making such
disclosure).
SECTION 9.04 Execution in Counterparts. For the convenience of
the parties, this Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
SECTION 9.05 Notices. All notices, requests, instructions or
other documents that are required to be or may be given or delivered pursuant to
the terms of this Agreement shall be in writing and shall be sufficient in all
respects if delivered by hand or national overnight courier service, transmitted
by facsimile or mailed by registered or certified mail, postage prepaid, as
follows:
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If to Parent, U.S. Parent or Acquisition Sub, to:
Misys plc
Xxxxxxxx Xxxxx
Xxxxxx Xxx
Xxxxxxx Xxxxxx
Xxxxxxxxxxxx XX00 0XX
Xxxxxxx
Attention: Xxxx Xxxxxx
with copies to:
Misys plc
000 Xxxxxxxxxx Xxxx Xxxxxx
Xxxxxx X0 0XX
Xxxxxxx
Attention: Xxxx X. Xxxxxx
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx, Xx., Esq.
If to the Company, to:
Sunquest Information Systems, Inc.
0000 Xxxx Xxxxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
with a copy to:
Reboul, MacMurray, Xxxxxx, Xxxxxxx & Kristol
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
and
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Xxxxx Rooney Xxxxxx & Xxxxxxxxx
Xxx Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxx, Esq.
or such other address or addresses as any party hereto shall have designated by
notice in writing to the other parties hereto. Such notices, requests,
instructions and other documents shall be deemed given or delivered (i) five
business days following sending by registered or certified mail, postage
prepaid, (ii) one business day following sending by national overnight courier
service, (iii) when sent, if sent by facsimile, provided that such facsimile is
promptly confirmed by telephone, or (iv) when delivered, if delivered by hand.
SECTION 9.06 Waivers. The Company, on the one hand, and
Parent, U.S. Parent and Acquisition Sub, on the other hand, may, by written
notice to the other, (i) extend the time for the performance of any of the
obligations or other actions of the other under this Agreement; (ii) waive any
inaccuracies in the representations or warranties of the other contained in this
Agreement or in any document delivered pursuant to this Agreement; (iii) waive
compliance with any of the conditions of the other contained in this Agreement;
or (iv) waive performance of any of the obligations of the other under this
Agreement. Except as provided in the preceding sentence, no action taken
pursuant to this Agreement, including, without limitation, any investigation by
or on behalf of any party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any representations, warranties, covenants
or agreements contained in this Agreement. The waiver by any party hereto of a
breach of any provision of this Agreement shall not operate or be construed as a
waiver of any subsequent breach.
SECTION 9.07 Entire Agreement. This Agreement, the Company
Disclosure Schedule, the documents to be delivered by the parties on or prior to
the Closing Date in connection herewith and the Confidentiality Agreement (which
shall expressly survive the execution and termination of this Agreement)
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof and supersede all prior agreements and understandings,
oral and written, among the parties hereto with respect to the subject matter
hereof. No representation, warranty, promise, inducement or statement of
intention has been made by any party that is not embodied in this Agreement or
such other documents, and none of the parties shall be bound by, or be liable
for, any alleged representation, warranty, promise, inducement or statement of
intention not embodied herein or therein.
SECTION 9.08 Applicable Law. This Agreement shall be governed
by and construed in accordance with the laws of the Commonwealth of
Pennsylvania, without regard to principles of conflict of laws thereof.
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SECTION 9.09 Severability. The provisions of this Agreement
shall be deemed severable and the invalidity or unenforceability of any
provision shall not affect the validity or enforceability of the other
provisions hereof. If any provision of this Agreement, or the application
thereof to any person or any circumstance, is invalid or unenforceable, (a) a
suitable and equitable provision shall be substituted therefor in order to carry
out, so far as may be valid and enforceable, the intent and purpose of such
invalid or unenforceable provision and (b) the remainder of this Agreement and
the application of such provision to other persons or circumstances shall not be
affected by such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.
SECTION 9.10 Specific Performance. The parties agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement, this being in
addition to any other remedy to which they are entitled at law or in equity.
SECTION 9.11 Submission to Jurisdiction. Each of Parent, U.S.
Parent, Acquisition Sub and the Company irrevocably agrees that any legal action
or proceeding with respect to this Agreement or for recognition and enforcement
of any judgment in respect hereof brought by the other party hereto or its
successors or assigns may be brought and determined in the Courts of the
Commonwealth of Pennsylvania, and each of Parent, U.S. Parent, Acquisition Sub
and the Company hereby irrevocably submits with regard to any such action or
proceeding for itself and in respect to its property, generally and
unconditionally, to the exclusive jurisdiction of the aforesaid courts. Each of
Parent, U.S. Parent, Acquisition Sub and the Company hereby irrevocably waives,
and agrees not to assert, by way of motion, as a defense, counterclaim or
otherwise, in any action or proceeding with respect to this Agreement, (a) any
claim that it is not personally subject to the jurisdiction of such courts for
any reason other than the failure to lawfully serve process, (b) that it or its
property is exempt or immune from jurisdiction of any such court or from any
legal process commenced in such courts (whether through service of notice,
attachment prior to judgment, attachment in aid of execution of judgment,
execution of judgment or otherwise), (c) to the fullest extent permitted by
applicable law, that (i) the suit, action or proceeding in any such court is
brought in an inconvenient forum, (ii) the venue of such suit, action or
proceeding is improper and (iii) this Agreement, or the subject matter hereof,
may not be enforced in or by such courts and (d) any right to a trial by jury.
SECTION 9.12 Binding Effect, Benefits. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective permitted successors and assigns. Except as otherwise provided in
Section 6.07 hereof, nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties hereto, or their
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respective permitted successors and assigns, any rights, remedies, obligations
or liabilities under or by reason of this Agreement.
SECTION 9.13 Assignability. Neither this Agreement nor any of
the parties' rights hereunder shall be assignable by any party hereto without
the prior written consent of the other parties hereto.
SECTION 9.14 Amendments. This Agreement may be varied, amended
or supplemented at any time prior to the Effective Time by action of the
respective boards of directors of the Company, Parent, U.S. Parent and
Acquisition Sub, without action by the shareholders thereof, provided that,
after the purchase by Acquisition Sub of shares of Company Common Stock, no such
variance, amendment or supplement shall reduce the amount or alter the form of
the consideration that the holders of Company Common Stock shall be entitled to
receive upon the Effective Time pursuant to Section 3.01 hereof and provided,
further, that after the purchase by Acquisition Sub of shares of Company Common
Stock, any such amendment or supplement shall require the concurrence of a
majority of the Continuing Directors. Without limiting the generality of the
foregoing, this Agreement may only be amended, varied or supplemented by an
instrument in writing, signed by the parties hereto.
SECTION 9.15 Interpretation. (a) The words "hereof," "herein,"
"herewith" and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement as a whole and not to any particular
provision of this Agreement, and article, section, paragraph, exhibit, and
schedule references are to the articles, sections, paragraphs, exhibits, and
schedules of this Agreement unless otherwise specified. Whenever the words
"include," "includes," or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation," the word "or" shall
mean "and/or." All terms defined in this Agreement shall have the defined
meanings contained herein when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein. The definitions
contained in this Agreement are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine and neuter
genders of such terms. Any agreement, instrument or statute defined or referred
to herein or in any agreement or instrument that is referred to herein means
such agreement, instrument or statute as from time to time amended, qualified or
supplemented, including (in the case of agreements and instruments) by waiver or
consent and (in the case of statutes) by succession of comparable successor
statutes and all attachments thereto and instruments incorporated therein.
References to a person are also to its permitted successors and assigns. As used
herein, the following terms shall have the following meanings: "business day"
means any day other than Saturday, Sunday or any day on which banks in New York
City are required or authorized by law to be closed for business; "know" or
"knowledge" means, in respect of any party, the actual knowledge of the officers
and employees of such party actively participating in the negotiation of this
Agreement and related due diligence activities, without any requirement to
undertake an independent investigation; and "person" mean
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an individual, corporation, limited liability company, partnership, association,
trust, unincorporated organization, other entity or group (as defined in the
Exchange Act).
(b) The parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provisions
of this Agreement.
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INTENDING TO BE LEGALLY BOUND HEREBY, the parties have
executed and delivered this Agreement for Tender Offer and Merger as of the day
and year first above written.
MISYS PLC
By:
---------------------------------
Name:
Title:
KIRSTY, INC.
By:
---------------------------------
Name:
Title:
SUNSHINE ACQUISITION CORPORATION
By:
---------------------------------
Name:
Title:
SUNQUEST INFORMATION SYSTEMS, INC.
By:
---------------------------------
Name:
Title:
49
ANNEX I
CONDITIONS TO THE OFFER
Capitalized terms used in this Annex I shall have the meanings
assigned to them in the Agreement to which it is attached (the "Agreement").
Notwithstanding any other provision of the Offer, Acquisition
Sub shall not be required to accept for payment or, subject to the provisions of
Rule 14e-1(c) promulgated under the Exchange Act, pay for any Shares, and may
terminate the Offer, if (1) prior to the expiration date of the Offer (A) the
number of Shares validly tendered and not withdrawn, together with any Shares
then owned by Acquisition Sub, shall not satisfy the Minimum Condition, or (B)
the applicable waiting period under the HSR Act shall not have expired or been
terminated; or (2) at any time on or after the date of the Agreement, and prior
to acceptance for payment of or payment for Shares, any of the following
conditions exist:
(a) there shall be instituted, pending, or, to the knowledge
of the Company, threatened any action or proceeding by any government
or governmental authority or agency, before any court or governmental
authority or agency of competent jurisdiction, (i) challenging or
seeking to make illegal, to materially delay or otherwise directly or
indirectly to materially restrain or prohibit the making of the Offer,
the acceptance for payment of or payment for some of or all the Shares
by Acquisition Sub, or the consummation by Acquisition Sub or Parent of
the Offer or the Merger, or seeking to obtain material damages relating
to the transactions contemplated by the Offer or the Merger, (ii)
seeking to restrain or prohibit Parent's or Acquisition Sub's full
rights of ownership or operation (or that of Parent's subsidiaries or
affiliates) of a material portion of the business or assets of the
Company and its subsidiaries, taken as a whole, or of Parent and its
subsidiaries, taken as a whole, or any of their respective affiliates
or to compel Parent or any of its subsidiaries or affiliates to dispose
of or hold separate a material portion of the business or assets of the
Company and its subsidiaries, taken as a whole, or of Parent and its
subsidiaries, taken as a whole, or any of their respective affiliates,
(iii) seeking to impose limitations on the ability of Parent or any of
its subsidiaries or affiliates effectively to exercise full rights of
ownership of the Shares, including, without limitation, the right to
vote any Shares acquired or owned by Parent or any of its subsidiaries
or affiliates on all matters properly presented to the Company's
shareholders, (iv) seeking to require divestiture by Parent or any of
its subsidiaries or affiliates of any Shares, or (v) that otherwise
would reasonably expected to have a Material Adverse Effect on the
Company; or
(b) there shall have been any action taken or any statute,
rule, regulation, judgment, administrative interpretation, injunction,
order or decree proposed, enacted, enforced, promulgated, issued or
deemed applicable to Parent,
50
U.S. Parent, Acquisition Sub, the Company or any Subsidiary or
affiliate of Parent or the Company or the Offer, the acceptance for
payment of or payment for any Shares or the Merger, by any court,
government or governmental authority or agency of competent
jurisdiction (other than the application of the waiting period
provisions of the HSR Act to the Offer, the acceptance for payment of
or payment for any Shares or the Merger), that has, directly or
indirectly, resulted, or is reasonably likely to, directly or
indirectly, result in any of the consequences referred to in clauses
(i) through (v) of paragraph (a) above; or
(c) any change shall have occurred or been threatened (or any
development shall have occurred or been threatened involving a
prospective change) in the business, assets, liabilities, financial
condition, capitalization, operations or results of operations of the
Company or any of its subsidiaries or affiliates that, individually or
in the aggregate, has had or would reasonably be expected to have a
Material Adverse Effect on the Company, or Parent and Acquisition Sub
shall have become aware of any facts that have had or are reasonably
likely to have a Material Adverse Effect on the Company; or
(d) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for securities on any national
securities exchange or in the over-the-counter market, (ii) the
declaration of any banking moratorium or any suspension of payments in
respect of banks or any material limitation (whether or not mandatory)
on the extension of credit by lending institutions in the United States
or in the United Kingdom, (iii) the commencement of a war, material
armed hostilities or other material international or national calamity
directly or indirectly involving the United States or the United
Kingdom having a significant adverse effect on the functioning of the
financial markets in the United States or in the United Kingdom, (iv) a
currency moratorium on the exchange markets in London or New York City
with respect to the English pound sterling or the United States dollar,
or (v) in the case of any of the foregoing existing at the time of
execution of the Agreement, a material acceleration or worsening
thereof; or
(e) the Company shall have breached or failed to perform any
of its covenants or agreements under the Agreement, or any of the
representations and warranties of the Company set forth in the
Agreement shall not have been true when made, or at any time prior to
consummation of the Offer, as if made at and as of such time, provided
that representations and warranties made as of a particular date need
be true only as of such date (for the purpose of this paragraph (e),
representations and warranties of the Company that are expressly
qualified by a materiality qualification shall be true and correct
subject to such materiality qualification, and all other
representations and warranties shall be true and correct in all
material respects); and in any such case, such breach, failure or
untruth would reasonably be expected to materially influence the
investment decision of a reasonable purchaser of all or a substantial
portion of the Company's outstanding securities; or
2
51
(f) all consents, approvals, licenses, certificates,
accreditations, authorizations or orders of any governmental
commission, board or other regulatory body required in connection with
the execution, delivery and performance of the Agreement and for the
Surviving Corporation and the Subsidiaries to conduct business in
substantially the manner conducted by the Company and the Subsidiaries
as of the date of the Agreement, shall not have been obtained, except
for any of the same, the failure to obtain which would not reasonably
be expected to have a Material Adverse Effect on the Company; or
(g) the Agreement shall have been terminated in accordance
with its terms or amended in accordance with its terms to provide for
such termination or amendment of the Offer,
which, in the reasonable judgment of Acquisition Sub in any such case, and
regardless of the circumstances giving rise to any such condition, makes it
inadvisable to proceed with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of
Acquisition Sub and may be asserted or waived by Acquisition Sub in whole or in
part at any time and from time to time in its sole discretion. The failure by
Acquisition Sub at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right and each such right shall be deemed an ongoing
right and may be asserted at any time and from time to time.
3
