EXECUTION COPY
EXHIBIT 99.1
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "AGREEMENT") is made and
entered into as of February 22, 2002 by and among Identix Incorporated, a
Delaware corporation ("IDENTIX"), Viper Acquisition Corp., a Delaware
corporation and wholly-owned subsidiary of Identix ("MERGER SUB"), and Visionics
Corporation, a Delaware corporation ("VISIONICS"), with respect to the following
facts:
A. The respective boards of directors of Identix, Merger Sub and
Visionics have approved and declared advisable the merger of Merger Sub with and
into Visionics (the "MERGER"), upon the terms and subject to the conditions set
forth herein, and have determined that the Merger and the other transactions
contemplated by this Agreement are fair to, and in the best interests of, their
respective stockholders.
B. Pursuant to the Merger, among other things, the outstanding shares
of Visionics Common Stock, $0.01 par value ("VISIONICS COMMON STOCK"), will be
converted into shares of Identix Common Stock, $0.01 par value ("IDENTIX COMMON
STOCK"), at the rate set forth herein.
C. Simultaneously with the execution and delivery of this Agreement and
as a condition and inducement to Identix' and Merger Sub's willingness to enter
into this Agreement, Identix is entering into Voting Agreements in the form of
Exhibit A attached hereto with each of the members of the Board of Directors and
each officer of Visionics in their respective capacities as stockholders of
Visionics (the "VISIONICS VOTING AGREEMENTS").
D. Simultaneously with the execution and delivery of this Agreement and
as a condition and inducement to Visionics' willingness to enter into this
Agreement, Visionics is entering into Voting Agreements in the form of Exhibit B
attached hereto with each of the members of the Board of Directors and each
officer of Identix in their respective capacities as stockholders of Identix
(the "IDENTIX VOTING AGREEMENTS")
E. For United States federal income tax purposes, it is intended that
the Merger will qualify as a reorganization under the provisions of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "CODE").
The parties agree as follows:
99.1-1
ARTICLE I
THE MERGER
1.1 THE MERGER. At the Effective Time (as defined in Section 1.2) and
subject to and upon the terms and conditions of this Agreement and the
applicable provisions of Delaware General Corporation Law ("DELAWARE LAW"),
(i) Merger Sub shall be merged with and into Visionics, (ii) the separate
corporate existence of Merger Sub shall cease, and (iii) Visionics shall be the
surviving corporation and a wholly owned subsidiary of Identix. Visionics, as
the surviving corporation after the Merger, is hereinafter sometimes referred to
as the "SURVIVING CORPORATION."
1.2 CLOSING; EFFECTIVE TIME. The closing of the Merger and the other
transactions contemplated hereby (the "CLOSING") will take place at 10:00 a.m.,
local time, on a date to be specified by the parties (the "CLOSING DATE"), which
shall be no later than the second business day after satisfaction or waiver of
the conditions set forth in Articles VI and VII, unless another time or date is
agreed to by the parties hereto. The Closing shall take place at the offices of
Xxxxxx Xxxxxx White & XxXxxxxxx LLP, 000 Xxxxxxxxxxx Xxxx, Xxxxx Xxxx,
Xxxxxxxxxx, or at such other location as the parties hereto shall mutually
agree. At the Closing, the parties hereto shall cause the Merger to be
consummated by filing a certificate of merger substantially in the form of
Exhibit C (the "CERTIFICATE OF MERGER") with the Secretary of State of the State
of Delaware, in accordance with the relevant provisions of Delaware Law (the
time of such filing, or such later time as may be agreed in writing by the
parties and specified in the Certificate of Merger, being the "EFFECTIVE TIME").
1.3 EFFECTS OF THE MERGER. The effects of the Merger shall be as
provided in this Agreement, the Certificate of Merger and the applicable
provisions of Delaware Law. Without limiting the foregoing, at the Effective
Time all the property, rights, privileges, powers and franchises of Visionics
and Merger Sub shall vest in the Surviving Corporation, and all debts,
liabilities and duties of Visionics and Merger Sub shall become the debts,
liabilities and duties of the Surviving Corporation.
1.4 CERTIFICATE OF INCORPORATION; BYLAWS.
Subject to Section 5.8, from and after the Effective Time, the
certificate of incorporation of Merger Sub, as in effect immediately prior to
the Effective Time, shall be the certificate of incorporation of the Surviving
Corporation; provided, however, that at the Effective Time the certificate of
incorporation of Merger Sub shall be amended so that the name of the Surviving
Corporation shall be "VISIONICS CORPORATION".
Subject to Section 5.8, from and after the Effective Time the
bylaws of Merger Sub, as in effect immediately prior to the Effective Time,
shall be the bylaws of the Surviving Corporation.
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1.5 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. The directors
and officers of Merger Sub immediately prior to the Effective Time shall serve
as the initial directors and officers of the Surviving Corporation, until their
respective successors are duly elected or appointed and qualified.
ARTICLE II
CONVERSION OF SHARES
2.1 CONVERSION OF STOCK. Pursuant to the Merger, and without any action
on the part of the holders of any outstanding shares of capital stock or
securities of Visionics or Merger Sub:
(a) As of the Effective Time, each share of Visionics Common
Stock, together with the rights (the "VISIONICS RIGHTS"), if any, associated
with each such share issued in connection with the Visionics Rights Agreement
(the "VISIONICS RIGHTS PLAN") dated May 2, 1996 between Visionics and Xxxxx
Fargo Bank, issued and outstanding immediately prior to the Effective Time
(other than shares of Visionics Common Stock to be canceled pursuant to Section
2.1(c)), shall be automatically converted into 1.3436 (the "EXCHANGE RATIO")
fully paid and nonassessable shares of Identix Common Stock.
(b) As of the Effective Time, each holder of a certificate or
certificates which immediately prior to the Effective Time represented
outstanding shares of Visionics Common Stock shall cease to have any rights with
respect thereto, except the right to receive (i) a certificate (or direct
registration) representing the number of whole shares of Identix Common Stock
into which such shares have been converted (the "IDENTIX CERTIFICATES"), and
(ii) cash in lieu of fractional shares of Identix Common Stock in accordance
with Section 2.1(f), without interest.
(c) As of the Effective Time, each share of Visionics Common
Stock held of record immediately prior to the Effective Time by Visionics,
Merger Sub, Identix or any Subsidiary (as defined in Section 2.1(g)) of
Visionics or of Identix shall be canceled and extinguished without any
conversion thereof.
(d) As of the Effective Time, each share of Common Stock,
$0.01 par value, of Merger Sub (the "MERGER SUB COMMON STOCK") issued and
outstanding immediately prior to the Effective Time shall be canceled,
extinguished and automatically converted into one validly issued, fully paid and
nonassessable share of Common Stock, $0.01 par value, of the Surviving
Corporation. Each certificate evidencing ownership of a number of shares of
Merger Sub Common Stock shall be deemed to evidence ownership of the same number
of shares of Common Stock, $0.01, of the Surviving Corporation.
99.1-3
(e) Without limiting any other provision of this Agreement,
the Exchange Ratio shall be adjusted to reflect fully the effect of any stock
split, reverse stock split, stock dividend (including any dividend or
distribution of securities convertible into Identix Common Stock or Visionics
Common Stock), extraordinary dividend or distribution, reorganization,
reclassification, recapitalization or other like change with respect to Identix
Common Stock or Visionics Common Stock occurring or having a record date or an
effective date on or after the date hereof and prior to the Effective Time.
(f) No fraction of a share of Identix Common Stock will be
issued by virtue of the Merger. Instead, each holder of shares of Visionics
Common Stock who would otherwise be entitled to a fraction of a share of Identix
Common Stock (after aggregating all fractional shares of Identix Common Stock to
be received by such holder) shall receive from Identix an amount of cash
(rounded down to the nearest whole cent) equal to the product of (i) such
fraction, multiplied by (ii) the Identix Closing Value. For the purposes of this
Agreement, "IDENTIX CLOSING VALUE" shall mean the closing price per share of
Identix Common Stock as reported on the Nasdaq National Market ("NASDAQ") on the
trading day immediately preceding the Effective Time.
(g) For the purposes of this Agreement, the "EXCHANGE
MULTIPLE" of any quantity means the product obtained from multiplying such
quantity by the Exchange Ratio, and the "EXCHANGE QUOTIENT" of any quantity
means the quotient obtained from dividing such quantity by the Exchange Ratio.
For purposes of this Agreement, (i) the term "SUBSIDIARY", when used with
respect to any Person, means any corporation or other organization, whether
incorporated or unincorporated, of which (A) at least a majority of the
securities or other interests having by their terms ordinary voting power to
elect a majority of the board of directors or others performing similar
functions with respect to such corporation or other organization is directly or
indirectly owned or controlled by such Person (through ownership of securities,
by contract or otherwise) or (B) such Person or any Subsidiary of such Person is
a general partner of any general partnership or a manager of any limited
liability company. For the purposes of this Agreement, the term "PERSON" means
any individual, group, organization, corporation, partnership, joint venture,
limited liability company, trust or entity of any kind.
2.2 VISIONICS OPTIONS, VISIONICS WARRANTS
(a) As of the Effective Time, Identix shall, to the full
extent permitted by applicable law, assume all of the stock options of Visionics
outstanding immediately prior to the Effective Time under the Visionics Stock
Plans (as defined below) (the "VISIONICS OPTIONS"). For purposes of this
Agreement, "VISIONICS STOCK PLANS" means Visionics' Stock Incentive Plan, 1990
Stock Option Plan, as amended, and 1998 Stock Option Plan. Each Visionics
Option, whether or not exercisable at the Effective Time, shall, to the full
extent permitted by applicable law, be assumed by Identix in such a manner that
it shall be exercisable upon the same terms and conditions as under the
Visionics Stock Plan pursuant to which it was granted and the applicable option
agreement issued thereunder; provided that (i) each such option thereafter shall
be exercisable for a number of shares of Identix Common Stock (rounded down to
99.1-4
the nearest whole share) equal to the Exchange Multiple of the number of shares
of Visionics Common Stock subject to such option, and (ii) the option price per
share of Identix Common Stock thereafter shall equal the Exchange Quotient
(rounded up to the nearest whole cent) of the option price per share of
Visionics Common Stock subject to such option in effect immediately prior to the
Effective Time (the "IDENTIX EXCHANGE OPTIONS"). With respect to shares of
Visionics Common Stock issued pursuant to the Visionics 1992 Restricted Stock
Plan ("VISIONICS RESTRICTED STOCK"), all such Visionics Restricted Stock, which
shall automatically be converted into shares of Identix Common Stock as provided
in Section 2.1, shall continue to be subject to such restrictions and rights of
repurchase as are provided for in the 1992 Restricted Stock Plan. Prior to the
Effective Time, Visionics shall make all adjustments provided for in the
Visionics Stock Plans with respect to the Visionics Options to facilitate the
implementation of the provisions of this Section 2.2(a).
(b) As of the Effective Time, Identix shall, to the full
extent permitted by applicable law, assume all of the warrants of Visionics
identified on Schedule 3.6(e) of the Identix Disclosure Statement and
outstanding immediately prior to the Effective Time (the "VISIONICS WARRANTS")
under the agreements pursuant to which the Visionics Warrants were issued (the
"VISIONICS WARRANT AGREEMENTS"). Each Visionics Warrant shall, to the full
extent permitted by applicable law, be assumed by Identix in such a manner that
it shall be exercisable upon the same terms and conditions as under the
Visionics Warrant Agreement pursuant to which it was granted; provided that (i)
each such warrant thereafter shall be exercisable for a number of shares of
Identix Common Stock (rounded down to the nearest whole share) equal to the
Exchange Multiple of the number of shares of Visionics Common Stock subject to
such warrant, and (ii) the warrant exercise price per share of Identix Common
Stock thereafter shall equal the Exchange Quotient (rounded up to the nearest
whole cent) of the warrant exercise price per share of Visionics Common Stock
subject to such warrant in effect immediately prior to the Effective Time (the
"IDENTIX EXCHANGE WARRANTS"). Prior to the Effective Time, Visionics shall make
all adjustments provided for in the Visionics Warrant Agreements with respect to
the Visionics Warrants to facilitate the implementation of the provisions of
this Section 2.2(b).
2.3 EXCHANGE OF STOCK CERTIFICATES.
(a) At or prior to the Effective Time, Identix shall enter
into an agreement with a bank or trust company selected by Identix and
reasonably acceptable to Visionics to act as the exchange agent for the Merger
(the "EXCHANGE AGENT").
(b) At or prior to the Effective Time, Identix shall supply or
cause to be supplied to or for the account of the Exchange Agent in trust for
the benefit of the holders of Visionics Common Stock, for exchange pursuant to
this Section 2.3 (i) certificates (or direct registration) evidencing the shares
of Identix Common Stock issuable pursuant to Section 2.1 to be exchanged for
outstanding shares of Visionics Common Stock, and (ii) cash in an aggregate
amount sufficient to make the payments in lieu of fractional shares provided for
in Section 2.1(f).
99.1-5
(c) Promptly after the Effective Time, Identix shall mail or
shall cause to be mailed to each Holder (as defined below) a letter of
transmittal in customary form (which shall specify that delivery shall be
effected, and risk of loss and title to the Visionics Certificates shall pass,
only upon proper delivery of the Visionics Certificates to the Exchange Agent)
and instructions for surrender of the Visionics Certificates. Upon surrender to
the Exchange Agent of a Visionics Certificate, together with such letter of
transmittal duly executed, the Holder shall be entitled to receive in exchange
therefor: (i) certificates evidencing that number of shares of Identix Common
Stock issuable to such Holder in accordance with this Article II; (ii) any
dividends or other distributions that such Holder has the right to receive
pursuant to Section 2.3(d); and (iii) cash in respect of fractional shares as
provided in Section 2.1(f), and such Visionics Certificate so surrendered shall
forthwith be canceled. No certificate representing shares of Identix Common
Stock will be issued to a Person who is not the registered owner of a
surrendered Visionics Certificate unless (i) the Visionics Certificate so
surrendered has been properly endorsed or otherwise is in proper form for
transfer, and (ii) such Person shall either (A) pay any transfer or other tax
required by reason of such issuance or (B) establish to the reasonable
satisfaction of the Surviving Corporation that such tax has been paid or is not
applicable. Until surrendered in accordance with the provisions of this Section
2.3, from and after the Effective Time, each Visionics Certificate shall be
deemed to represent, for all purposes other than payment of dividends, the right
to receive a certificate representing the number of full shares of Identix
Common Stock as determined in accordance with this Article II and cash in lieu
of fractional shares as provided in Section 2.1(f). For purposes of this
Agreement, "VISIONICS CERTIFICATE" means a certificate which immediately prior
to the Effective Time represented shares of Visionics Common Stock, and "HOLDER"
means a person who holds one or more Visionics Certificates as of the Effective
Time.
(d) No dividend or other distribution declared with respect to
Identix Common Stock with a record date after the Effective Time will be paid to
Holders of unsurrendered Visionics Certificates until such Holders surrender
their Visionics Certificates. Upon the surrender of such Visionics Certificates,
there shall be paid to such Holders, promptly after such surrender, the amount
of dividends or other distributions, excluding interest, declared with a record
date after the Effective Time and not paid because of the failure to surrender
Visionics Certificates for exchange.
(e) Notwithstanding anything to the contrary in this
Agreement, neither the Exchange Agent, Identix, the Surviving Corporation nor
any party hereto shall be liable to any holder of shares of Visionics Common
Stock for shares of Identix Common Stock or cash in lieu of fractional shares
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law.
99.1-6
2.4 LOST, STOLEN OR DESTROYED CERTIFICATES. In the event that any
Visionics Certificates shall have been lost, stolen or destroyed, the Exchange
Agent shall issue and pay in respect of such lost, stolen or destroyed Visionics
Certificates, upon the making of an affidavit of that fact by the holder
thereof, certificates representing the shares of Identix Common Stock as may be
required pursuant to Section 2.1 and cash in lieu of fractional shares, if any,
as may be required pursuant to Section 2.1(f) and any dividends or distributions
payable pursuant to Section 2.3(d); provided, however, that Identix may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed Visionics Certificates to deliver a bond
in such sum as it may reasonably direct as indemnity against any claim that may
be made against Identix or the Exchange Agent with respect to the Visionics
Certificates alleged to have been lost, stolen or destroyed.
2.5 TAX CONSEQUENCES. For United States federal income tax purposes, it
is intended by the parties hereto that the Merger qualify as a "reorganization"
within the meaning of Section 368(a) of the Code and that this Agreement
constitutes a "plan of reorganization" within the meaning of Treasury
Regulations Sections 1.368-2(g) and 1.368-3.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF VISIONICS
Visionics makes to Identix and Merger Sub the representations and
warranties contained in this Article III, in each case subject to the exceptions
set forth in the disclosure statement, dated as of the date hereof, delivered by
Visionics to Identix at least forty-eight hours prior to the execution of this
Agreement (the "VISIONICS DISCLOSURE STATEMENT"). The Visionics Disclosure
Statement shall be arranged in schedules corresponding to the numbered and
lettered Sections of this Article III, and the disclosure in any Schedule of the
Visionics Disclosure Statement shall qualify only the corresponding Section of
this Article III.
3.1 ORGANIZATION, ETC.
(a) Each of Visionics and its Subsidiaries, all of which are
listed on Schedule 3.1(b) of the Visionics Disclosure Statement (the "VISIONICS
SUBSIDIARIES"), is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, and has all
requisite power and authority to own, lease and operate its properties and to
carry on its business as now being conducted, except where the failure to be so
organized, existing or in good standing or to have such power, authority or
qualification would not, individually or in the aggregate, have a Visionics
Material Adverse Effect. Each of Visionics and the Visionics Subsidiaries is
duly qualified as a foreign Person to do business, and is in good standing, in
each jurisdiction where the character of its owned or leased properties or the
nature of its activities makes such qualification necessary, except where the
failure to be so qualified or in good standing would not, individually or in the
aggregate, have a Visionics Material Adverse Effect.
99.1-7
For the purposes of this Agreement, "VISIONICS MATERIAL ADVERSE EFFECT"
means any state of facts, change, event or effect that has had or could
reasonably be expected to have a material adverse effect on (i) the business,
financial condition, results of operations or assets and liabilities, taken as a
whole, of Visionics, including the Visionics Subsidiaries, (ii) the ability of
Visionics to consummate the Merger or any of the transactions contemplated by
the Agreement or to perform any of its obligations under the Agreement before
the Effective Time, or (iii) Identix' ability to vote, receive dividends with
respect to or otherwise exercise ownership rights with respect to the stock of
the Surviving Corporation. Notwithstanding the foregoing, with respect to item
(i) above, none of the following shall be deemed (either alone or in
combination) to constitute, and none of the following shall be taken into
account in determining whether there has been or will be, a Visionics Material
Adverse Effect: (A) any adverse change, event or effect arising from or relating
to general business or economic conditions; (B) any adverse change, event or
effect relating to or affecting the security industry generally; and (C) any
adverse change, event or effect arising from or relating to the announcement or
pendency of the Merger.
(b) Neither Visionics nor any of the Visionics Subsidiaries is
in violation of any provision of its certificate of incorporation, bylaws or any
other charter document. Schedule 3.1(b) of the Visionics Disclosure Statement
sets forth (i) the full name of each Visionics Subsidiary and any other entity
in which Visionics has a significant equity interest, its capitalization and the
ownership interest of Visionics and each other Person (if any) therein, (ii) the
jurisdiction in which each such Visionics Subsidiary is organized, (iii) each
jurisdiction in which Visionics and each of the Visionics Subsidiaries is
qualified to do business as a foreign Person, and (iv) the names of the current
directors and officers of Visionics and of each Visionics Subsidiary. Visionics
has made available to Identix accurate and complete copies of the certificate of
incorporation, bylaws and any other charter documents, as currently in effect,
of Visionics and each of the Visionics Subsidiaries.
3.2 AUTHORITY RELATIVE TO THIS AGREEMENT. Visionics has full corporate
power and authority to (i) execute and deliver this Agreement, and (ii) assuming
the approval of the Merger by a majority of the outstanding shares of Visionics
Common Stock at the Visionics Special Meeting or any adjournment or postponement
thereof in accordance with Delaware Law, consummate the Merger and the other
transactions contemplated hereby. The execution and delivery of this Agreement,
and the consummation of the Merger and the other transactions contemplated
hereby, have been duly and validly authorized by the vote of the board of
directors of Visionics, and no other corporate proceedings on the part of
Visionics are necessary to authorize this Agreement or to consummate the Merger
and the other transactions contemplated hereby (other than, with respect to the
Merger, the approval of the adoption of the Agreement and approval of the Merger
by a majority of the outstanding shares of Visionics Common Stock at the
Visionics Special Meeting or any adjournment or postponement thereof in
accordance with Delaware Law). The Agreement has been duly and validly executed
99.1-8
and delivered by Visionics and, assuming due authorization, execution and
delivery by Identix and Merger Sub, constitutes a valid and binding agreement of
Visionics, enforceable against Visionics in accordance with its terms, except to
the extent that its enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting the enforcement
of creditors' rights generally or by general equitable principles.
3.3 NO VIOLATIONS, ETC. No filing with or notification to, and no
permit, authorization, consent or approval of, any court, administrative agency,
commission, or other governmental or regulatory body, authority or
instrumentality ("GOVERNMENT ENTITY") is necessary on the part of Visionics for
the consummation by Visionics of the Merger and the other transactions
contemplated hereby, or for the exercise by Identix and the Surviving
Corporation of full rights to own and operate the business of Visionics and the
Visionics Subsidiaries as presently being conducted, except (i) for the filing
of the Certificate of Merger as required by Delaware Law, (ii) the applicable
requirements of the Securities and Exchange Act of 1934, as amended (together
with the Rules and Regulations promulgated thereunder, the "EXCHANGE ACT"),
state securities or "blue sky" laws and state takeover laws, (iii) any filing
required under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx
"XXX XXX"), and (iv) where the failure to make such filing or notification or to
obtain such permit, authorization, consent or approval would not prevent or
materially delay the Merger, or otherwise prevent or materially delay Visionics
from performing its obligations under this Agreement or individually or in the
aggregate, have a Visionics Material Adverse Effect. Neither the execution and
delivery of the Agreement, nor the consummation of the Merger and the other
transactions contemplated hereby, nor compliance by Visionics with all of the
provisions hereof and thereof, nor the exercise by Identix and the Surviving
Corporation of full rights to own and operate the business of Visionics and the
Visionics Subsidiaries as presently being conducted will, subject to obtaining
the approval of this Agreement by the holders of a majority of the outstanding
shares of Visionics Common Stock at the Visionics Special Meeting or any
adjournment thereof in accordance with Delaware Law, (i) conflict with or result
in any breach of any provision of the certificate of incorporation, bylaws or
other charter document of Visionics or any Visionics Subsidiary, (ii) violate
any material order, writ, injunction, decree, statute, rule or regulation
applicable to Visionics or any Visionics Subsidiary, or by which any of their
properties or assets may be bound, or (iii) result in a violation or breach of,
or constitute (with or without due notice or lapse of time or both) a default
under, or result in any material change in, or give rise to any right of
termination, cancellation, acceleration, redemption or repurchase under, any of
the terms, conditions or provisions of any material note, bond, mortgage,
indenture, deed of trust, license, lease, contract, agreement or other
instrument or obligation to which Visionics or any Visionics Subsidiary is a
party or by which any of them or any of their properties or assets may be bound.
Schedule 3.3 of the Visionics Disclosure Statement lists all consents, waivers
and approvals required to be obtained in connection with the consummation of the
transactions contemplated hereby under any of Visionics' or any Visionics
Subsidiaries' notes, bonds, mortgages, indentures, deeds of trust, licenses or
leases, contracts, agreements or other instruments or obligations the failure to
obtain which would have a Visionics Material Adverse Effect.
99.1-9
3.4 BOARD RECOMMENDATION. The board of directors of Visionics has, at a
meeting of such board duly held on February 22, 2002, (i) approved and adopted
the Agreement, (ii) determined that this Agreement is fair to and in the best
interests of the stockholders of Visionics, (iii) resolved to recommend adoption
and approval of this Agreement to the stockholders of Visionics, (iv) resolved
that Visionics take all action necessary to exempt the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby and
thereby from the provisions of all applicable state antitakeover statutes or
regulations including but not limited to Section 203 of Delaware Law, and (v)
resolved to render the Visionics Rights issued under the Visionics Rights Plan
inapplicable to the Merger, this Agreement and the other transactions
contemplated hereby.
3.5 FAIRNESS OPINION. Visionics has received the opinion of Xxxxxx
Xxxxxx & Company, Inc. dated the date of the approval of this Agreement by the
board of directors of Visionics to the effect that the Exchange Ratio is fair to
Visionics' stockholders from a financial point of view, and has provided a copy
of such opinion to Identix.
3.6 CAPITALIZATION.
(a) The authorized capital stock of Visionics consists of
40,000,000 shares of Visionics Common Stock and 5,000,000 shares of Preferred
Stock, $0.01 par value ("VISIONICS PREFERRED STOCK"). As of February 21, 2002,
there were (i) 28,874,332 shares of Visionics Common Stock outstanding, (ii) no
shares of Visionics Preferred Stock outstanding, and (iii) no treasury shares.
(b) Except for the Visionics Options, the Visionics Warrants
and the Visionics Rights there are no warrants, options, convertible securities,
calls, rights, stock appreciation rights, preemptive rights, rights of first
refusal, or agreements or commitments of any nature obligating Visionics to
issue, deliver or sell, or cause to be issued, delivered or sold, additional
shares of capital stock or other equity interests of Visionics, or obligating
Visionics to grant, issue, extend, accelerate the vesting of, or enter into, any
such warrant, option, convertible security, call, right, stock appreciation
right, preemptive right, right of first refusal, agreement or commitment. To the
knowledge of Visionics, except for the Visionics Voting Agreements, there are no
voting trusts, proxies or other agreements or understandings with respect to the
capital stock of Visionics. For purposes of this Agreement, "TO THE KNOWLEDGE OF
VISIONICS," or words of similar import, shall mean the actual knowledge of the
persons set forth on Schedule 3.6(b) of the Visionics Disclosure Statement.
99.1-10
(c) True and complete copies of each Visionics Stock Plan, the
Visionics Warrant Agreements and the Visionics Rights Plan, and of the forms of
all agreements and instruments relating to or issued under each thereof, have
been made available to Identix. Such agreements, instruments, and forms have not
been amended, modified or supplemented, and there are no agreements to amend,
modify or supplement any such agreements, instruments or forms.
(d) Schedule 3.6(d) of the Visionics Disclosure Statement sets
forth the following information with respect to each Visionics Option: the
aggregate number of shares issuable thereunder, the type of option, the grant
date, the expiration date, the exercise price and the vesting schedule. Each
Visionics Option and share of Visionics Restricted Stock was granted in
accordance with the terms of the Visionics Stock Plan applicable thereto or the
1992 Restricted Stock Plan, respectively. The terms of each of the Visionics
Stock Plans do not prohibit the assumption of the Visionics Options as provided
in Section 2.2(a). Consummation of the Merger will not accelerate vesting of any
Visionics Option or any Visionics Restricted Stock.
(e) Schedule 3.6(e) of the Visionics Disclosure Statement sets
forth the following information with respect to each Visionics Warrant: the
aggregate number of warrants outstanding, the expiration date and the exercise
price. Each Visionics Warrant was issued in accordance with the terms of the
Visionics Warrant Agreement applicable thereto. The terms of each of the
Visionics Warrant Agreements do not prohibit the assumption of the Visionics
Warrants as provided in Section 2.2(b).
3.7 SEC FILINGS. Visionics has filed with the Securities and Exchange
Commission (the "SEC") all required forms, reports, registration statements and
documents required to be filed by it with the SEC (collectively, all such forms,
reports, registration statements and documents filed since January 1, 1999 are
referred to herein as the "VISIONICS SEC REPORTS"). All of the Visionics SEC
Reports complied as to form, when filed, in all material respects with the
applicable provisions of the Securities Act of 1933, as amended (together with
the rules and regulations promulgated thereunder, the "SECURITIES ACT") and the
Exchange Act. Accurate and complete copies of the Visionics SEC Reports have
been made available to Identix. As of their respective dates, the Visionics SEC
Reports (including all exhibits and schedules thereto and documents incorporated
by reference therein) did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. Visionics has been advised by each of its officers and
directors that each such person and such persons' affiliates have complied with
all filing requirements under Section 13 and Section 16(a) of the Exchange Act.
3.8 COMPLIANCE WITH LAWS. Neither Visionics nor any Visionics
Subsidiary has violated or failed to comply with any statute, law, ordinance,
rule or regulation (including without limitation relating to the export or
import of goods or technology) of any foreign, federal, state or local
99.1-11
government or any other governmental department or agency, except where any such
violations or failures to comply would not, individually or in the aggregate,
have a Visionics Material Adverse Effect. Visionics and the Visionics
Subsidiaries have all permits, licenses and franchises from governmental
agencies required to conduct their businesses as now being conducted and as
proposed to be conducted, except for those, the absence of which, would not,
individually or in the aggregate, have a Visionics Material Adverse Effect.
3.9 FINANCIAL STATEMENTS. Each of the consolidated financial statements
(including, in each case, any related notes thereto) contained in the Visionics
SEC Reports (the "VISIONICS FINANCIAL STATEMENTS"), (x) was prepared in
accordance with accounting principles generally accepted in the United States of
America ("GAAP") applied on a consistent basis throughout the periods involved
(except as may be indicated in the notes thereto or, in the case of unaudited
interim financial statements, as may be permitted by the SEC on Form 10-Q under
the Exchange Act) and (y) fairly presented the consolidated financial position
of Visionics and the Visionics Subsidiaries as at the respective dates thereof
and the consolidated results of its operations and cash flows for the periods
indicated, consistent with the books and records of Visionics, except that the
unaudited interim financial statements were or are subject to normal and
recurring year-end adjustments which were not, or are not expected to be,
material in amount. The balance sheet of Visionics contained in Visionics' Form
10-Q for the quarter ended December 31, 2001 (the "REFERENCE DATE") is
hereinafter referred to as the "VISIONICS BALANCE SHEET."
3.10 ABSENCE OF UNDISCLOSED LIABILITIES. Neither Visionics, nor any of
the Visionics Subsidiaries or the entities listed on Schedule 3.1(b) has any
liabilities (absolute, accrued, contingent or otherwise) other than (i)
liabilities included in the Visionics Balance Sheet and the related notes to the
financial statements, (ii) normal or recurring liabilities incurred since the
Reference Date in the ordinary course of business consistent with past practice
which, individually or in the aggregate, would not be reasonably likely to have
a Visionics Material Adverse Effect, and (iii) liabilities under this Agreement.
3.11 ABSENCE OF CHANGES OR EVENTS. Except as contemplated by this
Agreement, since the Reference Date no Visionics Material Adverse Effect has
occurred and, in addition, Visionics, the Visionics Subsidiaries and the
entities listed on Schedule 3.1(b) have not, directly or indirectly:
(a) purchased, otherwise acquired, or agreed to purchase or
otherwise acquire, any shares of capital stock of Visionics or any of the
Visionics Subsidiaries, or declared, set aside or paid any dividend or otherwise
made a distribution (whether in cash, stock or property or any combination
thereof) in respect of their capital stock (other than dividends or other
distributions payable solely to Visionics or a wholly-owned Subsidiary of
Visionics);
99.1-12
(b) authorized for issuance, issued, sold, delivered, granted
or issued any options, warrants, calls, subscriptions or other rights for, or
otherwise agreed or committed to issue, sell or deliver any shares of any class
of capital stock of Visionics or the Visionics Subsidiaries or any securities
convertible into or exchangeable or exercisable for shares of any class of
capital stock of Visionics or the Visionics Subsidiaries, other than pursuant to
and in accordance with the Visionics Stock Plans and the Visionics Warrants;
(c) (i) created or incurred any indebtedness for borrowed
money exceeding $250,000 in the aggregate, (ii) assumed, guaranteed, endorsed or
otherwise as an accommodation become responsible for the obligations of any
other individual, firm or corporation, made any loans or advances to any other
individual, firm or corporation exceeding $100,000 in the aggregate, (iii)
entered into any oral or written material agreement or any material commitment
or transaction or incurred any liabilities material to Visionics and the
Visionics Subsidiaries taken as a whole, or involving in excess of $250,000;
(d) instituted any change in accounting methods, principles or
practices other than as required by GAAP or the rules and regulations
promulgated by the SEC and disclosed in the notes to the Visionics Financial
Statements;
(e) revalued any assets, including without limitation, writing
down the value of inventory or writing off notes or accounts receivable in
excess of amounts previously reserved as reflected in the Visionics Balance
Sheet;
(f) suffered any damage, destruction or loss, whether covered
by insurance or not, except for such as would not, individually and in the
aggregate exceed $250,000;
(g) (i) increased in any manner the compensation of any of its
directors, officers or, other than in the ordinary course of business and
consistent with past practice, non-officer employees, (ii) granted any severance
or termination pay to any Person other than in the ordinary course of business
and consistent with past practice; (iii) entered into any oral or written
employment, consulting, indemnification or severance agreement with any Person;
(iv) other than as required by law, adopted, become obligated under, or amended
any employee benefit plan, program or arrangement; or (v) repriced any Visionics
Options or Visionics Warrants;
(h) sold, transferred, leased, licensed, pledged, mortgaged,
encumbered, or otherwise disposed of, or agreed to sell, transfer, lease,
license, pledge, mortgage, encumber, or otherwise dispose of, any material
properties (including intangibles, real, personal or mixed);
(i) amended its certificate of incorporation, bylaws, or any
other charter document, or effected or been a party to any merger,
consolidation, share exchange, business combination, recapitalization,
reclassification of shares, stock split, reverse stock split or similar
transaction;
99.1-13
(j) made any capital expenditure in any calendar month which,
when added to all other capital expenditures made by or on behalf of Visionics
and the Visionics Subsidiaries in such calendar month resulted in such capital
expenditures exceeding $250,000 in the aggregate;
(k) paid, discharged or satisfied any material claims,
liabilities or obligations (absolute, accrued, contingent or otherwise), other
than the payment, discharge or satisfaction of liabilities (including accounts
payable) in the ordinary course of business and consistent with past practice,
or collected, or accelerated the collection of, any amounts owed (including
accounts receivable) other than their collection in the ordinary course of
business;
(l) waived, released, assigned, settled or compromised any
material claim or litigation, or commenced a lawsuit other than for the routine
collection of bills;
(m) agreed or proposed to do any of the things described in
the preceding clauses (a) through (l) other than as expressly contemplated or
provided for in this Agreement.
3.12 CAPITAL STOCK OF SUBSIDIARIES. Visionics is directly or indirectly
the record and beneficial owner of all of the outstanding shares of capital
stock or other equity interests of each of the Visionics Subsidiaries. All of
such shares have been duly authorized and are validly issued, fully paid,
nonassessable and free of preemptive rights with respect thereto and are owned
by Visionics free and clear of any claim, lien or encumbrance of any kind with
respect thereto. There are no proxies or voting agreements with respect to such
shares, and there are not any existing options, warrants, calls, subscriptions,
or other rights or other agreements or commitments obligating Visionics or any
of the Visionics Subsidiaries to issue, transfer or sell any shares of capital
stock of any Subsidiary or any other securities convertible into, exercisable
for, or evidencing the right to subscribe for any such shares. Visionics does
not directly or indirectly own any interest in any Person except the Visionics
Subsidiaries.
3.13 LITIGATION.
(a) There is no private or governmental claim, action, suit
(whether in law or in equity), or proceeding of any nature ("ACTION") pending
or, to the knowledge of Visionics, any private or governmental investigation, or
any of the foregoing threatened against Visionics, any of the Visionics
Subsidiaries or any of their respective officers and directors (in their
capacities as such), or involving any of their assets, before any court,
governmental or regulatory authority or body, or arbitration tribunal, except
for those Actions which, individually and in the aggregate, would not have a
Visionics Material Adverse Effect. There is no Action pending or, to the
knowledge of Visionics, threatened which in any manner challenges, seeks to, or
is reasonably likely to prevent, enjoin, alter or delay the transactions
contemplated by this Agreement.
99.1-14
(b) There is no outstanding judgment, order, writ, injunction
or decree of any court, governmental or regulatory authority, body or agency, or
arbitration tribunal in a proceeding to which Visionics, any Subsidiary of
Visionics, or any of their assets is or was a party or by which Visionics, any
Subsidiary of Visionics, or any of their assets is bound.
3.14 INSURANCE. Schedule 3.14 of the Visionics Disclosure Statement
lists all insurance policies (including without limitation workers' compensation
insurance policies) covering the business, properties or assets of Visionics and
the Visionics Subsidiaries, the premiums and coverages of such policies, and all
claims in excess of $50,000 made against any such policies since January 1,
1999. All such policies are in effect, and true and complete copies of all such
policies have been made available to Identix. Visionics has not received notice
of the cancellation or threat of cancellation of any of such policy.
3.15 CONTRACTS AND COMMITMENTS.
(a) Except as filed as an exhibit to Visionics' SEC Reports,
neither Visionics, the Visionics Subsidiaries, or the entities listed on
Schedule 3.1(b) is a party to or bound by any oral or written contract,
obligation or commitment of any type in any of the following categories:
(i) agreements or arrangements that contain severance
pay, understandings with respect to tax arrangements, understandings with
respect to expatriate benefits, or post-employment liabilities or obligations;
(ii) agreements or plans under which benefits will be
increased or accelerated by the occurrence of any of the transactions
contemplated by this Agreement, or under which the value of the benefits will be
calculated on the basis of any of the transactions contemplated by this
Agreement;
(iii) agreements, contracts or commitments currently
in force relating to the disposition or acquisition of assets other than in the
ordinary course of business, or relating to an ownership interest in any
corporation, partnership, joint venture or other business enterprise;
(iv) agreements, contracts or commitments for the
purchase of materials, supplies or equipment which provide for purchase prices
substantially greater than those presently prevailing for such materials,
supplies or equipment, or which are with sole or single source suppliers;
99.1-15
(v) guarantees or other agreements, contracts or
commitments under which Visionics or any of the Visionics Subsidiaries is
absolutely or contingently liable for (A) the performance of any other person,
firm or corporation (other than Visionics or the Visionics Subsidiaries), or (B)
the whole or any part of the indebtedness or liabilities of any other person,
firm or corporation (other than Visionics or the Visionics Subsidiaries);
(vi) powers of attorney authorizing the incurrence of
a material obligation on the part of Visionics or the Visionics Subsidiaries;
(vii) agreements, contracts or commitments which
limit or restrict (A) where Visionics or any of the Visionics Subsidiaries may
conduct business, (B) the type or lines of business (current or future) in which
they may engage, or (C) any acquisition of assets or stock (tangible or
intangible) by Visionics or any of the Visionics Subsidiaries;
(viii) agreements, contracts or commitments
containing any agreement with respect to a change of control of Visionics or any
of the Visionics Subsidiaries;
(ix) agreements, contracts or commitments for the
borrowing or lending of money, or the availability of credit (except credit
extended by Visionics or any of the Visionics Subsidiaries to customers in the
ordinary course of business and consistent with past practice);
(x) any hedging, option, derivative or other similar
transaction and any foreign exchange position or contract for the exchange of
currency.
(b) Neither Visionics nor any of the Visionics Subsidiaries,
nor to Visionics' knowledge any other party to a Visionics Contract (as defined
below), has breached, violated or defaulted under, or received notice that it
has breached, violated or defaulted under, (nor does there exist any condition
under which, with the passage of time or the giving of notice or both, could
reasonably be expected to cause such a breach, violation or default under), any
material agreement, contract or commitment to which Visionics or any of the
Visionics Subsidiaries is a party or by which any of them or any of their
properties or assets may be bound (any such agreement, contract or commitment, a
"VISIONICS CONTRACT"), other than any breaches, violations or defaults which
individually or in the aggregate would not have a Visionics Material Adverse
Effect.
(c) Each Visionics Contract is a valid, binding and
enforceable obligation of Visionics and to Visionics' knowledge, of the other
party or parties thereto, in accordance with its terms, and in full force and
effect, except where the failure to be valid, binding, enforceable and in full
force and effect would not have a Visionics Material Adverse Effect and to the
extent enforcement may be limited by applicable bankruptcy, insolvency,
moratorium or other laws affecting the enforcement of creditors' rights
governing or by general principles of equity.
99.1-16
(d) An accurate and complete copy of each Visionics Contract
has been made available to Identix.
3.16 LABOR MATTERS; EMPLOYMENT AND LABOR CONTRACTS.
(a) None of Visionics or any of the Visionics Subsidiaries is
a party to any union contract or other collective bargaining agreement, nor to
the knowledge of Visionics or any of the Visionics Subsidiaries are there any
activities or proceedings of any labor union to organize any of its employees.
Each of Visionics and the Visionics Subsidiaries is in compliance with all
applicable (i) laws, regulations and agreements respecting employment and
employment practices and (ii) occupational health and safety requirements,
except for those failures to comply which, individually or in the aggregate,
would not have a Visionics Material Adverse Effect.
(b) There is no labor strike, slowdown or stoppage pending (or
any labor strike or stoppage threatened) against Visionics or any of the
Visionics Subsidiaries. No petition for certification has been filed and is
pending before the National Labor Relations Board with respect to any employees
of Visionics or any of the Visionics Subsidiaries who are not currently
organized. Neither Visionics nor any of the Visionics Subsidiaries has any
obligations under the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended ("COBRA"), with respect to any former employees or qualifying
beneficiaries thereunder, except for obligations that would not have,
individually or in the aggregate, a Visionics Material Adverse Effect. There are
no controversies pending or, to the knowledge of Visionics or any of the
Visionics Subsidiaries, threatened, between Visionics or any of the Visionics
Subsidiaries and any of their respective employees, which controversies would
have, individually or in the aggregate, a Visionics Material Adverse Effect.
3.17 INTELLECTUAL PROPERTY RIGHTS.
(a) Visionics and the Visionics Subsidiaries own or have the
right to use all intellectual property used to conduct their respective
businesses (such intellectual property and the rights thereto are collectively
referred to herein as the "VISIONICS IP RIGHTS"). No royalties or other payments
are payable to any Person with respect to commercialization of any products
presently sold or under development by Visionics or the Visionics Subsidiaries.
(b) The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby will not constitute
a material breach of any instrument or agreement governing any Visionics IP
Rights, will not (i) cause the modification of any material term of any license
or agreement relating to any Visionics IP Rights including but not limited to
99.1-17
the modification of the effective rate of any royalties or other payments
provided for in any such license or agreement, (ii) cause the forfeiture or
termination of any Visionics IP Rights, (iii) give rise to a right of forfeiture
or termination of any Visionics IP Rights or (iv) materially impair the right of
Visionics or the Surviving Corporation to use, sell or license any Visionics IP
Rights or portion thereof.
(c) Neither the manufacture, marketing, license, sale or
intended use of any product or technology currently licensed or sold or under
development by Visionics or any of the Visionics Subsidiaries (i) violates in
any material respect any license or agreement between Visionics or any of the
Visionics Subsidiaries and any third party or (ii) infringes in any material
respect any patents or other intellectual property rights of any other party;
and there is no pending or threatened claim or litigation contesting the
validity, ownership or right to use, sell, license or dispose of any Visionics
IP Rights, or asserting that any Visionics IP Rights or the proposed use, sale,
license or disposition thereof, or the manufacture, use or sale of any Visionics
products, conflicts or will conflict with the rights of any other party.
(d) Schedule 3.17(d) of the Visionics Disclosure Statement
lists all patents, trade names, trademarks and service marks, and applications
for any of the foregoing owned or possessed by Visionics or any of the Visionics
Subsidiaries and true and complete copies of such materials have been made
available to Identix.
(e) Visionics has provided to Identix a true and complete copy
of its standard form of employee confidentiality agreement and taken all
commercially reasonably necessary steps to ensure that all employees have
executed such an agreement. All consultants or third parties with access to
proprietary information of Visionics have executed appropriate non-disclosure
agreements which adequately protect the Visionics IP Rights.
(f) To Visionics' knowledge, Visionics' and the Visionics
Subsidiaries' source codes and trade secrets have not been used, distributed or
otherwise commercially exploited under circumstances which have caused, or with
the passage of time could cause, the loss of copyright or trade secret status.
(g) Neither Visionics nor any of the Visionics Subsidiaries
has knowledge that any of its employees or consultants is obligated under any
contract, covenant or other agreement or commitment of any nature, or subject to
any judgment, decree or order of any court or administrative agency, that would
interfere with the use of such employee's or consultant's best efforts to
promote the interests of Visionics and the Visionics Subsidiaries or that would
conflict with the business of Visionics as presently conducted or proposed to be
conducted. Neither Visionics nor any of the Visionics Subsidiaries has entered
into any agreement to indemnify any other person, including but not limited to
any employee or consultant of Visionics or any of the Visionics Subsidiaries,
99.1-18
against any charge of infringement, misappropriation or misuse of any
intellectual property, other than indemnification provisions contained in
purchase orders or customer agreements arising in the ordinary course of
business. All current employees and consultants and, to the knowledge of
Visionics, all former employees and consultants, of any of Visionics or any of
the Visionics Subsidiaries have signed valid and enforceable written assignments
to Visionics or the Visionics Subsidiaries of any and all rights or claims in
any intellectual property that any such employee or consultant has or may have
by reason of any contribution, participation or other role in the development,
conception, creation, reduction to practice or authorship of any invention,
innovation, development or work of authorship or any other intellectual property
that is used in the business of Visionics, and Visionics and the Visionics
Subsidiaries possess signed copies of all such written assignments by such
employees and consultants. With respect to assignments of patents or application
for patents, Visionics and the Visionics Subsidiaries possess signed copies of
assignments from the inventors of the intellectual property covered by the
patents and applications.
3.18 TAXES.
(a) For the purposes of this Agreement, "TAX" or "TAXES"
refers to any and all federal, state, local and foreign taxes, assessments and
other governmental charges, duties, impositions and liabilities relating to
taxes, including taxes based upon or measured by gross receipts, income,
profits, sales, use and occupation, and value added, ad valorem, transfer,
franchise, withholding, payroll, recapture, employment, excise and property
taxes, together with all interest, penalties and additions imposed with respect
to such amounts and any obligations imposed by law for the Taxes of another
person, including under Treasury Regulations Section 1.1502-6 and analogous
provisions of foreign, state and local law, and including any liability for
taxes of a predecessor entity. For purposes of this Agreement, "TAX RETURN" or
"TAX RETURNS" refers to all federal, state and local and foreign returns,
schedules, estimates, information statements and reports relating to Taxes.
(b) Visionics and each of the Visionics Subsidiaries have
filed all material Tax Returns required to be filed by them, and all such Tax
Returns are true, correct, and complete except with respect to immaterial items.
Visionics and each of the Visionics Subsidiaries have paid (or Visionics has
paid on behalf of each of the Visionics Subsidiaries) all Taxes due and payable
as shown on such Tax Returns. True and correct copies of all Tax Returns filed
by Visionics and the Visionics Subsidiaries for the period beginning October 1,
1996 through the date hereof have been provided to Identix. The most recent
financial statements contained in the Visionics SEC Reports reflect an adequate
reserve (which reserves were established in accordance with GAAP) for the
payment of all Taxes of Visionics and the Visionics Subsidiaries, accrued
through the date of such financial statements. No deficiencies for any Taxes
have been proposed, asserted or assessed against Visionics or any of the
Visionics Subsidiaries, other than deficiencies that are reflected by reserves
maintained in accordance with GAAP and are being contested in good faith and by
appropriate procedures.
99.1-19
(c) None of Visionics and the Visionics Subsidiaries has filed
any consent agreement under Section 341(f) of the Code.
(d) None of Visionics and the Visionics Subsidiaries (i) has
received any notice that it is being audited by any taxing authority; (ii) has
granted any presently operative waiver of any statute of limitations with
respect to, or any extension of a period for the assessment of, any Tax; (iii)
has granted to any person a power of attorney with respect to Taxes, which power
of attorney will be in effect as of or following the Closing; (iv) has received
an inquiry regarding the filing of Tax Returns from a jurisdiction where it is
not presently filing Tax Returns; or (v) has availed itself of any Tax amnesty
or similar relief in any taxing jurisdiction.
(e) None of Visionics and the Visionics Subsidiaries has
assumed liability for the Taxes of another Person under any contract, agreement
or arrangement.
(f) There is no lien for Taxes on any of the assets of
Visionics or any of the Visionics Subsidiaries, except for inchoate liens for
Taxes not yet due and payable.
(g) There is no agreement, plan, arrangement or other contract
covering any employee or independent contractor or former employee or
independent contractor of Visionics or any Visionics Subsidiary that, considered
individually or collectively with any other such agreement, plan, arrangement,
or contract, will, or could reasonably be expected to, give rise to the payment
of any amount that would not be deductible under Section 280G or 162(m) of the
Code (or any comparable provision of state or local law).
(h) Visionics and each of the Visionics Subsidiaries have
properly withheld on all amounts paid to consultants or employees, or to persons
located outside the United States.
(i) Visionics has not been a party to a transaction intended
to qualify under Section 355 of the Code (whether as distributing or distributed
company) within the last five years.
(j) Visionics does not have knowledge of any reason why the
Merger will fail to qualify as a reorganization under the provisions of Section
368(a) of the Code.
3.19 EMPLOYEE BENEFIT PLANS; ERISA.
(a) Schedule 3.19(a) of the Visionics Disclosure Statement
lists all "employee pension benefit plans" as defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") ("PENSION
PLANS"), "welfare benefit plans" as defined in Section 3(1) of ERISA ("WELFARE
PLANS"), or stock bonus, stock option, restricted stock, stock appreciation
99.1-20
right, stock purchase, bonus, incentive, deferred compensation, severance,
holiday, or vacation plans, or any other employee benefit plan, program, policy
or arrangement covering employees (or former employees) employed in the United
States that either is maintained or contributed to by Visionics or any of the
Visionics Subsidiaries or any of their Visionics ERISA Affiliates (as
hereinafter defined) or to which Visionics or any of the Visionics Subsidiaries
or any of their Visionics ERISA Affiliates is obligated to make payments or
otherwise may have any liability (collectively, the "VISIONICS EMPLOYEE BENEFIT
PLANS") with respect to employees or former employees of Visionics, the
Visionics Subsidiaries, or any of their ERISA Affiliates. For purposes of this
Agreement, "VISIONICS ERISA AFFILIATE" shall mean any person (as defined in
Section 3(9) of ERISA) that is or has been a member of any group of persons
described in Section 414(b), (c), (m) or (o) of the Code, including without
limitation Visionics or any of the Visionics Subsidiaries.
(b) Visionics and each of the Visionics Subsidiaries, and each
of the Visionics Employee Benefit Plans, are in compliance with the applicable
provisions of ERISA, the Code and other applicable laws, except where the
failure to comply would not, individually or in the aggregate, have a Visionics
Material Adverse Effect.
(c) All contributions to, and payments from, the Pension Plans
which are required to have been made in accordance with the Pension Plans have
been timely made, except where the failure to make such contributions or
payments on a timely basis would not, individually or in the aggregate,
reasonably be expected to have a Visionics Material Adverse Effect.
(d) To the knowledge of Visionics, all of Visionics' Pension
Plans and Visionics' Subsidiaries' Pension Plans intended to qualify under
Section 401 of the Code so qualify, and no event has occurred and no condition
exists with respect to the form or operation of such Pension Plans which would
cause the loss of such qualification or the imposition of any material
liability, penalty or tax under ERISA or the Code, except for such operational
failures as would not, individually or in the aggregate, have a Visionics
Material Adverse Effect.
(e) To the knowledge of Visionics, there are no (i)
investigations pending by any governmental entity involving the Visionics
Employee Benefit Plans, nor (ii) pending or threatened claims (other than
routine claims for benefits), suits or proceedings against any Visionics
Employee Benefit Plans, against the assets of any of the trusts under any
Visionics Employee Benefit Plans or against any fiduciary of any Visionics
Employee Benefit Plans with respect to the operation of such plan or asserting
any rights or claims to benefits under any Visionics Employee Benefit Plans or
against the assets of any trust under such plan, except for those which would
not, individually or in the aggregate, give rise to any liability which would
have a Visionics Material Adverse Effect. To the knowledge of Visionics, there
are no facts which would give rise to any liability under this Section 3.19(e)
except for those which would not, individually or in the aggregate, reasonably
be expected to have a Visionics Material Adverse Effect in the event of any such
investigation, claim, suit or proceeding.
99.1-21
(f) None of Visionics, any of the Visionics Subsidiaries nor
any employee of the foregoing, nor any trustee, administrator, other fiduciary
or any other "party in interest" or "disqualified person" with respect to the
Pension Plans or Welfare Plans, has engaged in a "prohibited transaction" (as
such term is defined in Section 4975 of the Code or Section 406 of ERISA) other
than such transactions that would not, individually or in the aggregate,
reasonably be expected to have a Visionics Material Adverse Effect.
(g) None of Visionics, any of the Visionics Subsidiaries, or
any of their Visionics ERISA Affiliates maintain or contribute to, nor have they
ever maintained or contributed to, any pension plan subject to Title IV of ERISA
or Section 412 of the Code or Section 302 of ERISA.
(h) Neither Visionics nor any Subsidiary of Visionics nor any
Visionics ERISA Affiliate has incurred any material liability under Title IV of
ERISA that has not been satisfied in full.
(i) Neither Visionics, any of the Visionics Subsidiaries nor
any of their Identix ERISA Affiliates has any material liability (including any
contingent liability under Section 4204 of ERISA) with respect to any
multiemployer plan, within the meaning of Section 3(37) of ERISA.
(j) With respect to each of the Visionics Employee Benefit
Plans, true, correct and complete copies of the following documents have been
made available to Identix: (i) the plan document and any related trust
agreement, including amendments thereto, (ii) any current summary plan
descriptions and other material communications to participants relating to the
Visionics Employee Benefit Plans, (iii) the three most recent Forms 5500, if
applicable, and (iv) the most recent United States Internal Revenue Service
("IRS") determination letter, if applicable.
(k) None of the Welfare Plans maintained by Visionics or any
of the Visionics Subsidiaries provides for continuing benefits or coverage for
any participant or any beneficiary of a participant following termination of
employment, except as may be required under COBRA, or except at the expense of
the participant or the participant's beneficiary. Visionics and each of the
Visionics Subsidiaries which maintain a "group health plan" within the meaning
of Section 5000(b)(1) of the Code have complied with the notice and continuation
requirements of Section 4980B of the Code, COBRA, Part 6 of Subtitle B of Title
I of ERISA and the regulations thereunder except where the failure to comply
would not, individually or in the aggregate, reasonably be expected to have a
Visionics Material Adverse Effect.
99.1-22
(l) No liability under any Pension Benefit Plan or Welfare
Plan has been funded nor has any such obligation been satisfied with the
purchase of a contract from an insurance company as to which Visionics or any of
the Visionics Subsidiaries has received notice that such insurance company is in
rehabilitation or a comparable proceeding.
(m) The consummation of the transactions contemplated by this
Agreement will not result in an increase in the amount of compensation or
benefits or accelerate the vesting or timing of payment of any benefits or
compensation payable to or in respect of any employee of Visionics or any of the
Visionics Subsidiaries.
(n) Schedule 3.19(n) of the Visionics Disclosure Statement
lists each Visionics Foreign Plan (as hereinafter defined). For purposes hereof,
the term "VISIONICS FOREIGN PLAN" shall mean any material plan, program, policy,
arrangement or agreement maintained or contributed to by, or entered into with,
Visionics or any Subsidiary with respect to employees (or former employees)
employed outside the United States to the extent the benefits provided
thereunder are not mandated by the laws of the applicable foreign jurisdiction.
3.20 ENVIRONMENTAL MATTERS.
(a) To the knowledge of Visionics, except for such cases that,
individually or in the aggregate, have not and would not reasonably be expected
to have a Visionics Material Adverse Effect, no underground storage tanks and no
amount of any substance that has been designated by any Government Entity or by
applicable federal, state or local law to be radioactive, toxic, hazardous or
otherwise a danger to health or the environment, including, without limitation,
PCBs, asbestos, petroleum, urea-formaldehyde and all substances listed as
hazardous substances pursuant to the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, or defined as a hazardous
waste pursuant to the United States Resource Conservation and Recovery Act of
1976, as amended, and the regulations promulgated pursuant to said laws which
term shall not include office and janitorial supplies (insofar as they are
stored or used in the ordinary course of business) (a "HAZARDOUS MATERIAL"), are
present, as a result of the actions of Visionics or any of the Visionics
Subsidiaries or, to Visionics' knowledge, as a result of any actions of any
third party or otherwise, in, on or under any property, including the land and
the improvements, ground water and surface water thereof, that Visionics or any
of the Visionics Subsidiaries has at any time owned, operated, occupied or
leased.
(b) Except for such cases that, individually or in the
aggregate, have not and would not reasonably be expected to have a Visionics
Material Adverse Effect, neither Visionics nor any of the Visionics Subsidiaries
has transported, stored, used, manufactured, disposed of, released or exposed
its employees or others to Hazardous Materials in violation of any law in effect
on or before the Closing Date, nor has Visionics or any of the Visionics
99.1-23
Subsidiaries disposed of, transported, sold, used, released, exposed its
employees or others to or manufactured any product containing a Hazardous
Material (collectively "HAZARDOUS MATERIALS ACTIVITIES") in violation of any
rule, regulation, treaty or statute promulgated by any Government Entity in
effect prior to or as of the date hereof to prohibit, regulate or control
Hazardous Materials or any Hazardous Material Activity.
(c) Visionics and the Visionics Subsidiaries currently hold
all environmental approvals, permits, licenses, clearances and consents (the
"VISIONICS ENVIRONMENTAL PERMITS") necessary for the conduct of Visionics' and
the Visionics Subsidiaries' Hazardous Material Activities and other businesses
of Visionics and the Visionics Subsidiaries as such activities and businesses
are currently being conducted. To the knowledge of Visionics, there are no facts
or circumstances indicating that any Visionics Environmental Permit will or may
be revoked, suspended, canceled or not renewed. All appropriate action in
connection with the renewal or extension of any Visionics Environmental Permit
has been taken.
(d) No material action, proceeding, revocation proceeding,
amendment procedure, writ, injunction or claim is pending, or to Visionics'
knowledge, threatened concerning any Visionics Environmental Permit, Hazardous
Material or any Hazardous Materials Activity of Visionics or any of the
Visionics Subsidiaries. Visionics does not have knowledge of any fact or
circumstance which could involve Visionics or any of the Visionics Subsidiaries
in any environmental litigation reasonably expected to have a Visionics Material
Adverse Effect. Visionics and the Visionics Subsidiaries have not received
notice, nor to Visionics' knowledge is there a threatened notice, that Visionics
or the Visionics Subsidiaries are responsible, or potentially responsible, for
the investigation, remediation, clean-up, or similar action at property
presently or formerly used by Visionics or any of the Visionics Subsidiaries for
recycling, disposal, or handling of waste.
3.21 OFFICER'S CERTIFICATE AS TO TAX MATTERS. Visionics knows of no
reason why it will be unable to deliver to Xxxxxx Xxxxxx White & XxXxxxxxx LLP
and Xxxxxx Xxxxxxx Xxxxxx & Brand, LLP prior to (i) the filing of Registration
Statement (as hereinafter defined) and (ii) the Closing an Officer's Certificate
in form sufficient to enable each such counsel to render the opinions required
by Section 6.6.
3.22 AFFILIATES. Visionics has delivered to Identix in accordance with
Section 5.9 a list identifying all persons who to Visionics' knowledge may be
deemed to be "affiliates" of Visionics for purposes of Rule 145 under the
Securities Act ("AFFILIATES").
3.23 FINDERS OR BROKERS. Except for Xxxxxx Xxxxxx & Company, Inc.,
whose fees are listed on Schedule 3.23, neither Visionics nor any of the
Visionics Subsidiaries has employed any investment banker, broker, finder or
intermediary in connection with the transactions contemplated hereby who might
be entitled to a fee or any commission the receipt of which is conditioned upon
consummation of the Merger.
99.1-24
3.24 REGISTRATION STATEMENT; JOINT PROXY STATEMENT/PROSPECTUS. The
information supplied by Visionics for inclusion or incorporation by reference in
the Registration Statement on Form S-4 registering the Identix Common Stock to
be issued in the Merger (the "REGISTRATION STATEMENT") as it relates to
Visionics, at the time the Registration Statement is declared effective by the
SEC, shall not 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 not misleading. The information supplied by Visionics for
inclusion in the joint proxy statement/prospectus to be sent to the stockholders
of Visionics and stockholders of Identix in connection with the Visionics
Special Meeting and in connection with the Identix Special Meeting (such joint
proxy statement/prospectus, as amended and supplemented, is referred to herein
as the "JOINT PROXY STATEMENT/PROSPECTUS"), at the date the Joint Proxy
Statement/Prospectus is first mailed to stockholders, at the time of the
Visionics Special Meeting or the Identix Special Meeting and at the Effective
Time shall not 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. If at any time prior to the Effective Time any event with
respect to Visionics or any of the Visionics Subsidiaries shall occur which is
required to be described in the Joint Proxy Statement/Prospectus, such event
shall be so described, and an amendment or supplement shall be promptly filed
with the SEC and, as required by law, disseminated to the stockholders of
Visionics and the stockholders of Identix.
3.25 TITLE TO PROPERTY. Visionics and the Visionics Subsidiaries have
good and valid title to all of their respective properties, interests in
properties and assets, real and personal, reflected in the Visionics Balance
Sheet or acquired after the Reference Date, and have valid leasehold interests
in all leased properties and assets, in each case free and clear of all
mortgages, liens, pledges, charges or encumbrances of any kind or character,
except (i) liens for current taxes not yet due and payable, (ii) such
imperfections of title, liens and easements as do not and will not materially
detract from or interfere with the use of the properties subject thereto or
affected thereby, or otherwise materially impair business operations involving
such properties, (iii) liens securing debt reflected on the Visionics Balance
Sheet, (iv) liens recorded pursuant to any Environmental Law or (v) liens which
would not, individually or in the aggregate, have a Visionics Material Adverse
Effect. Schedule 3.25 of the Visionics Disclosure Statement identifies each
parcel of real property owned or leased by Visionics or any of the Visionics
Subsidiaries.
3.26 NO EXISTING DISCUSSIONS. As of the date hereof, neither Visionics
nor any of its representatives is engaged, directly or indirectly, in any
discussions or negotiations with any other Person relating to any Acquisition
Proposal (as defined in Section 5.2(a)).
99.1-25
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF IDENTIX AND MERGER SUB
Identix and Merger Sub make to Visionics the representations and
warranties contained in this Article IV, in each case subject to the exceptions
set forth in the disclosure statement, dated as of the date hereof, delivered by
Identix to Visionics at least forty-eight hours prior to the execution of this
Agreement (the "IDENTIX DISCLOSURE STATEMENT"). The Identix Disclosure Statement
shall be arranged in schedules corresponding to the numbered and lettered
Sections of this Article IV, and the disclosure in any schedule of the Identix
Disclosure Statement shall qualify only the corresponding Section of this
Article IV.
4.1 ORGANIZATION, ETC.
(a) Each of Identix, its Subsidiaries listed on Schedule
4.1(b) of the Identix Disclosure Statement (the "IDENTIX SUBSIDIARIES"), and
Merger Sub is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has all
requisite power and authority to own, lease and operate its properties and to
carry on its business as now being conducted, except where the failure to be so
organized, existing or in good standing or to have such power, authority or
qualification would not, individually or in the aggregate, have an Identix
Material Adverse Effect. Identix and each Identix Subsidiary are duly qualified
as a foreign Person to do business, and are each in good standing, in each
jurisdiction where the character of its owned or leased properties or the nature
of its activities makes such qualification necessary, except where the failure
to be so qualified or in good standing would not, individually and in the
aggregate, have an Identix Material Adverse Effect. None of Identix nor any
Identix Subsidiary is in violation of any provision of its certificate of
incorporation, bylaws or any other charter document.
For the purposes of this Agreement, "IDENTIX MATERIAL ADVERSE EFFECT"
means any state of facts, change, event or effect that has had or could
reasonably be expected to have a material adverse effect on (i) the business,
financial condition, results of operations or assets and liabilities, taken as a
whole, of Identix, including the Identix Subsidiaries, or (ii) the ability of
Identix to consummate the Merger or any of the transactions contemplated by the
Agreement or to perform any of its obligations under the Agreement before the
Effective Time. Notwithstanding the foregoing, with respect to item (i) above,
none of the following shall be deemed (either alone or in combination) to
constitute, and none of the following shall be taken into account in determining
whether there has been or will be, an Identix Material Adverse Effect: (A) any
adverse change, event or effect arising from or relating to general business or
economic conditions; (B) any adverse change, event or effect relating to or
affecting the security industry generally; and (C) any adverse change, event or
effect arising from or relating to the announcement or pendency of the Merger.
99.1-26
(b) Neither Identix, the Identix Subsidiaries or Merger Sub is
in violation of any provision of its certificate of incorporation, bylaws or
other charter documents. Schedule 4.1(b) of the Identix Disclosure Statement
sets forth (i) the full name of each Identix Subsidiary and any other entity in
which Identix has a significant equity interest, its capitalization and the
ownership interest of Identix and each other Person (if any) therein, (ii) the
jurisdiction in which each such Identix Subsidiary is organized, (iii) each
jurisdiction in which Identix and each of the Identix Subsidiaries is qualified
to do business as a foreign Person, and (iv) the names of the current directors
and officers of Identix and of each Identix Subsidiary. Identix has made
available to Visionics accurate and complete copies of the certificate of
incorporation, bylaws and any other charter documents, as currently in effect,
of Identix and each of the Identix Subsidiaries.
4.2 AUTHORITY RELATIVE TO THIS AGREEMENT. Each of Identix and Merger
Sub has full corporate power and authority to execute and deliver this Agreement
and to consummate the Merger and the other transactions contemplated hereby and
thereby. The execution and delivery of the Agreement, and the consummation of
the Merger and the other transactions contemplated hereby have been duly and
validly authorized by the board of directors of each of Identix and Merger Sub
and no other corporate proceedings on the part of either Identix or Merger Sub
are necessary to authorize this Agreement or to consummate the Merger and the
other transactions contemplated hereby and thereby (other than, with respect to
the Merger, the approval of (i) the issuance of shares of Identix Common Stock
by virtue of the Merger; (ii) the amendment of Identix' Certificate of
Incorporation to increase its authorized share capital; and (iii) approval of a
new Identix Equity Incentive Plan at the Identix Special Meeting or any
adjournment or postponement thereof in accordance with Delaware Law). The
Agreement has been duly and validly executed and delivered by each of Identix
and Merger Sub and, assuming due authorization, execution and delivery by
Visionics, constitutes a valid and binding agreement of each of Identix and
Merger Sub, enforceable against each of them in accordance with its terms,
except to the extent that its enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting the
enforcement of creditors' rights generally or by general equitable principles.
4.3 NO VIOLATIONS, ETC. No filing with or notification to, and no
permit, authorization, consent or approval of, any Government Entity is
necessary on the part of either Identix or Merger Sub for the consummation by
Identix or Merger Sub of the Merger or the other transactions contemplated
hereby, except (i) the filing of the Certificate of Merger as required by
Delaware Law, (ii) the filing with the SEC and the effectiveness of the
Registration Statement, (iii) the applicable requirements of the Exchange Act,
state securities or "blue sky" laws, state takeover laws and the listing
requirements of Nasdaq, (iv) any filings required under and in compliance with
the HSR Act, (v) where the failure to make such filing or notification or to
obtain such permit, authorization, consent or approval would not prevent or
materially delay the Merger, or otherwise prevent or materially delay Visionics
from performing its obligations under this Agreement or individually or in the
99.1-27
aggregate, have an Identix Material Adverse Effect. Neither the execution and
delivery of the Agreement, nor the consummation of the Merger or the other
transactions contemplated hereby, nor compliance by Identix and Merger Sub with
all of the provisions hereof and thereof will, subject to obtaining the approval
of the issuance of Identix Common Stock in the Merger by the holders of a
majority of the shares of Identix Common Stock represented in person or by proxy
at the Identix Special Meeting or any adjournment thereof in accordance with
Delaware Law, (i) conflict with or result in any breach of any provision of the
certificate of incorporation, bylaws or other charter documents of Identix or
any Identix Subsidiary, (ii) violate any material order, writ, injunction,
decree, statute, rule or regulation applicable to Identix or any Identix
Subsidiary, or by which any of their properties or assets may be bound, or
(iii) result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default under, or result in any material
change in, or give rise to any right of termination, cancellation, acceleration,
redemption or repurchase under, any of the terms, conditions or provisions of
any material note, bond, mortgage, indenture, deed of trust, license, lease,
contract, agreement or other instrument or obligation to which Identix or any
Identix Subsidiary is a party or by which any of them or any of their properties
or assets may be bound. Schedule 4.3 of the Identix Disclosure Statement lists
all consents, waivers and approvals required to be obtained in connection with
the consummation of the transactions contemplated hereby under any of Identix'
or any of the Identix Subsidiaries' notes, bonds, mortgages, indentures, deeds
of trust, licenses or leases, contracts, agreements or other instruments or
obligations the failure to obtain which would have an Identix Material Adverse
Effect.
4.4 BOARD RECOMMENDATION. The board of directors of Identix has, at a
meeting of such board duly held on February 22, 2002, (i) approved and adopted
this Agreement, (ii) determined that this Agreement is fair to and in the best
interests of the stockholders of Identix, (iii) resolved to recommend issuance
of the shares in the Merger pursuant to this Agreement to the stockholders of
Identix, and (iv) resolved that Identix take all action necessary to exempt the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby from the provisions of all applicable state
antitakeover statutes or regulations including but not limited to Section 203 of
Delaware Law.
4.5 FAIRNESS OPINION. Identix has received the opinion of Xxxxxx
Brothers dated the date of the approval of this Agreement by the board of
directors of Identix to the effect that the Exchange Ratio is fair to Identix'
stockholders from a financial point of view, and has provided a copy of such
opinion to Identix.
4.6 CAPITALIZATION.
(a) The authorized capital stock of Identix consists of
100,000,000 shares of Identix Common Stock and 2,000,000 shares of Preferred
Stock, $0.01 par value ("IDENTIX PREFERRED STOCK"). As of February 21, 2002,
there were (i) 44,810,395 shares of Identix Common Stock outstanding, (ii)
234,558 shares of Identix Preferred Stock, designated as Series A Identix
99.1-28
Preferred Stock, outstanding, and (iii) no treasury shares. The authorized
capital stock of Merger Sub consists of 100 shares of Merger Sub Common Stock,
$0.01 par value. As of February 22, 2002, there were (i) 100 shares of Merger
Sub Common Stock outstanding, and (ii) no treasury shares. Merger Sub was formed
for the purpose of consummating the Merger and has no material assets or
liabilities except as necessary for such purpose.
(b) Except for the stock options of Identix outstanding
immediately prior to the Effective Time under the Identix Stock Plans (as
defined below) (the "IDENTIX OPTIONS"), there are no warrants, options,
convertible securities, calls, rights, stock appreciation rights, preemptive
rights, rights of first refusal, or agreements or commitments of any nature
obligating Identix to issue, deliver or sell, or cause to be issued, delivered
or sold, additional shares of capital stock or other equity interests of
Identix, or obligating Identix to grant, issue, extend, accelerate the vesting
of, or enter into, any such warrant, option, convertible security, call, right,
stock appreciation right, preemptive right, right of first refusal, agreement or
commitment. For purposes of this Agreement, "IDENTIX STOCK PLANS" means the 1992
Incentive Stock Option Plan, the Equity Incentive Plan, the Non-Employee
Directors Stock Option Plan, the New Employee Stock Incentive Plan and the
Employee Stock Purchase Plan. To the knowledge of Identix, except for the
Identix Voting Agreements, there are no voting trusts, proxies or other
agreements or understandings with respect to the capital stock of Identix. For
purposes of this Agreement, "TO THE KNOWLEDGE OF IDENTIX," or words of similar
import, shall mean the actual knowledge of the persons set forth on Schedule
4.6(b) of the Identix Disclosure Statement.
(c) True and complete copies of each Identix Stock Plan, and
of the forms of all agreements and instruments relating to or issued under each
thereof, have been made available to Visionics. Such agreements, instruments,
and forms have not been amended, modified or supplemented, and there are no
agreements to amend, modify or supplement any such agreements, instruments or
forms.
(d) Schedule 4.6(d) of the Identix Disclosure Statement sets
forth the following information with respect to each Identix Option: the
aggregate number of shares issuable thereunder, the type of option, the grant
date, the expiration date, the exercise price and the vesting schedule. Each
Identix Option was granted in accordance with the terms of the Identix Stock
Plan applicable thereto. Consummation of the Merger will not accelerate vesting
of any Identix Option.
4.7 SEC FILINGS. Identix has filed with the SEC all required forms,
reports, registration statements and documents required to be filed by it with
the SEC (collectively, all such forms, reports, registration statements and
documents filed after January 1, 1999 are referred to herein as the "IDENTIX SEC
REPORTS"). All of the Identix SEC Reports complied as to form, when filed, in
all material respects with the applicable provisions of the Securities Act and
99.1-29
the Exchange Act. Accurate and complete copies of the Identix SEC reports have
been made available to Visionics. As of their respective dates the Identix SEC
Reports (including all exhibits and schedules thereto and documents incorporated
by reference therein) did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. Identix has been advised by each of its officers and
directors that each such person and such persons' affiliates have complied with
all filing requirements under Section 13 and Section 16(a) of the Exchange Act.
4.8 COMPLIANCE WITH LAWS. Neither Identix nor any Identix Subsidiary
has violated or failed to comply with any statute, law, ordinance, rule or
regulation (including, without limitation, relating to the export or import of
goods or technology) of any foreign, federal, state or local government or any
other governmental department or agency, except where any such violations or
failures to comply would not, individually or in the aggregate, have an Identix
Material Adverse Effect. Identix, the Identix Subsidiaries and Merger Sub have
all permits, licenses and franchises from governmental agencies required to
conduct their businesses as now being conducted and as proposed to be conducted,
except for those the absence of which would not, individually or in the
aggregate, have an Identix Material Adverse Effect.
4.9 FINANCIAL STATEMENTS. Each of the consolidated financial statements
(including, in each case, any related notes thereto) contained in the Identix
SEC Reports (the "IDENTIX FINANCIAL STATEMENTS"), (x) was prepared in accordance
with GAAP applied on a consistent basis throughout the periods involved (except
as may be indicated in the notes thereto or, in the case of unaudited interim
financial statements, as may be permitted by the SEC on Form 10-Q under the
Exchange Act) and (y) fairly presented the consolidated financial position of
Identix and the Identix Subsidiaries as at the respective dates thereof and the
consolidated results of its operations and cash flows for the periods indicated,
consistent with the books and records of Identix, except that the unaudited
interim financial statements were or are subject to normal and recurring
year-end adjustments which were not, or are not expected to be, material in
amount. The balance sheet of Identix contained in Identix' Form 10-Q for the
quarter ended December 31, 2001 is hereinafter referred to as the "IDENTIX
BALANCE SHEET."
4.10 ABSENCE OF UNDISCLOSED LIABILITIES. Neither Identix, nor any of
the Identix Subsidiaries or the entities listed on Schedule 4.1(b) has any
liabilities (absolute, accrued, contingent or otherwise) other than (i)
liabilities included in the Identix Balance Sheet and the related notes to the
financial statements, (ii) normal or recurring liabilities incurred since
December 31, 2001 in the ordinary course of business consistent with past
practice, which, individually or in the aggregate, are not or would not be
reasonably likely to have, an Identix Material Adverse Effect, and (iii)
liabilities under this Agreement.
99.1-30
4.11 ABSENCE OF CHANGES OR EVENTS. Except as contemplated by this
Agreement, since December 31, 2001 no Identix Material Adverse Effect has
occurred and, in addition, Identix, the Identix Subsidiaries and the entities
listed on Schedule 4.1(b) have not, directly or indirectly:
(a) purchased, otherwise acquired, or agreed to purchase or
otherwise acquire, any shares of capital stock of Identix or any of the Identix
Subsidiaries, or declared, set aside or paid any dividend or otherwise made a
distribution (whether in cash, stock or property or any combination thereof) in
respect of their capital stock (other than dividends or other distributions
payable solely to Identix or a wholly-owned Subsidiary of Identix);
(b) authorized for issuance, issued, sold, delivered, granted
or issued any options, warrants, calls, subscriptions or other rights for, or
otherwise agreed or committed to issue, sell or deliver any shares of any class
of capital stock of Identix or the Identix Subsidiaries or any securities
convertible into or exchangeable or exercisable for shares of any class of
capital stock of Identix or the Identix Subsidiaries, other than pursuant to and
in accordance with the Identix Stock Plans;
(c) (i) created or incurred any indebtedness for borrowed
money exceeding $250,000 in the aggregate, (ii) assumed, guaranteed, endorsed or
otherwise as an accommodation become responsible for the obligations of any
other individual, firm or corporation, made any loans or advances to any other
individual, firm or corporation exceeding $100,000 in the aggregate, (iii)
entered into any oral or written material agreement or any material commitment
or transaction or incurred any liabilities material to Identix and the Identix
Subsidiaries taken as a whole, or involving in excess of $250,000;
(d) instituted any change in accounting methods, principles or
practices other than as required by GAAP or the rules and regulations
promulgated by the SEC and disclosed in the notes to the Identix Financial
Statements;
(e) revalued any assets, including without limitation, writing
down the value of inventory or writing off notes or accounts receivable in
excess of amounts previously reserved as reflected in the Identix Balance Sheet;
(f) suffered any damage, destruction or loss, whether covered
by insurance or not, except for such as would not, individually and in the
aggregate exceed $250,000;
(g) (i) increased in any manner the compensation of any of its
directors, officers or, other than in the ordinary course of business and
consistent with past practice, non-officer employees, (ii) granted any severance
or termination pay to any Person other than in the ordinary course of business
and consistent with past practice; (iii) entered into any oral or written
employment, consulting, indemnification or severance agreement with any Person;
(iv) other than as required by law, adopted, become obligated under, or amended
any employee benefit plan, program or arrangement; or (v) repriced any Identix
Options;
99.1-31
(h) sold, transferred, leased, licensed, pledged, mortgaged,
encumbered, or otherwise disposed of, or agreed to sell, transfer, lease,
license, pledge, mortgage, encumber, or otherwise dispose of, any material
properties (including intangibles, real, personal or mixed);
(i) amended its certificate of incorporation, bylaws, or any
other charter document, or effected or been a party to any merger,
consolidation, share exchange, business combination, recapitalization,
reclassification of shares, stock split, reverse stock split or similar
transaction;
(j) made any capital expenditure in any calendar month which,
when added to all other capital expenditures made by or on behalf of Identix and
the Identix Subsidiaries in such calendar month resulted in such capital
expenditures exceeding $250,000 in the aggregate;
(k) paid, discharged or satisfied any material claims,
liabilities or obligations (absolute, accrued, contingent or otherwise), other
than the payment, discharge or satisfaction of liabilities (including accounts
payable) in the ordinary course of business and consistent with past practice,
or collected, or accelerated the collection of, any amounts owed (including
accounts receivable) other than their collection in the ordinary course of
business;
(l) waived, released, assigned, settled or compromised any
material claim or litigation, or commenced a lawsuit other than for the routine
collection of bills;
(m) agreed or proposed to do any of the things described in
the preceding clauses (a) through (l) other than as expressly contemplated or
provided for in this Agreement.
4.12 CAPITAL STOCK OF SUBSIDIARIES. Identix is directly or indirectly
the record and beneficial owner of all of the outstanding shares of capital
stock or other equity interests of each of the Identix Subsidiaries. All of such
shares have been duly authorized and are validly issued, fully paid,
nonassessable and free of preemptive rights with respect thereto and are owned
by Identix free and clear of any claim, lien or encumbrance of any kind with
respect thereto. There are no proxies or voting agreements with respect to such
shares, and there are not any existing options, warrants, calls, subscriptions,
or other rights or other agreements or commitments obligating Identix or any of
the Identix Subsidiaries to issue, transfer or sell any shares of capital stock
of any Subsidiary or any other securities convertible into, exercisable for, or
evidencing the right to subscribe for any such shares. Identix does not directly
or indirectly own any interest in any Person except the Identix Subsidiaries.
99.1-32
4.13 LITIGATION.
(a) There is no Action pending or, to the knowledge of
Identix, any private or governmental investigation, or any of the foregoing
threatened against Identix, any of the Identix Subsidiaries, or any of their
respective officers and directors (in their capacities as such), or involving
any of their assets, before any court, or governmental or regulatory authority
or body, or arbitration tribunal, except for those Actions which, individually
or in the aggregate, would not have an Identix Material Adverse Effect. There is
no Action pending or, to the knowledge of Identix, threatened which in any
manner challenges, seeks to, or is reasonably likely to prevent, enjoin, alter
or delay the transactions anticipated by this Agreement.
(b) There is no outstanding judgment, order, writ, injunction
or decree of any court, governmental or regulatory authority, body, or agency or
arbitration tribunal in a proceeding to which Identix, any Subsidiary of
Identix, or any of their assets is or was a party, or by which Identix, any
Identix Subsidiary, or any of their assets is bound.
4.14 INSURANCE. Schedule 4.14 of the Identix Disclosure Statement lists
all insurance policies (including without limitation workers' compensation
insurance policies) covering the business, properties or assets of Identix and
the Identix Subsidiaries, the premiums and coverages of such policies, and all
claims in excess of $50,000 made against any such policies since January 1,
1999. All such policies are in effect, and true and complete copies of all such
policies have been made available to Visionics. Identix has not received notice
of the cancellation or threat of cancellation of any of such policy.
4.15 CONTRACTS AND COMMITMENTS.
(a) Except as filed as an exhibit to Identix' SEC Reports,
neither Identix, the Identix Subsidiaries, or the entities listed on Schedule
3.1(b) is a party to or bound by any oral or written contract, obligation or
commitment of any type in any of the following categories:
(i) agreements or arrangements that contain severance
pay, understandings with respect to tax arrangements, understandings with
respect to expatriate benefits, or post-employment liabilities or obligations;
(ii) agreements or plans under which benefits will be
increased or accelerated by the occurrence of any of the transactions
contemplated by this Agreement, or under which the value of the benefits will be
calculated on the basis of any of the transactions contemplated by this
Agreement;
99.1-33
(iii) agreements, contracts or commitments currently
in force relating to the disposition or acquisition of assets other than in the
ordinary course of business, or relating to an ownership interest in any
corporation, partnership, joint venture or other business enterprise;
(iv) agreements, contracts or commitments for the
purchase of materials, supplies or equipment which provide for purchase prices
substantially greater than those presently prevailing for such materials,
supplies or equipment, or which are with sole or single source suppliers;
(v) guarantees or other agreements, contracts or
commitments under which Identix or any of the Identix Subsidiaries is absolutely
or contingently liable for (A) the performance of any other person, firm or
corporation (other than Identix or the Identix Subsidiaries), or (B) the whole
or any part of the indebtedness or liabilities of any other person, firm or
corporation (other than Identix or the Identix Subsidiaries);
(vi) powers of attorney authorizing the incurrence of
a material obligation on the part of Identix or the Identix Subsidiaries;
(vii) agreements, contracts or commitments which
limit or restrict (A) where Identix or any of the Identix Subsidiaries may
conduct business, (B) the type or lines of business (current or future) in which
they may engage, or (C) any acquisition of assets or stock (tangible or
intangible) by Identix or any of the Identix Subsidiaries;
(viii) agreements, contracts or commitments
containing any agreement with respect to a change of control of Identix or any
of the Identix Subsidiaries;
(ix) agreements, contracts or commitments for the
borrowing or lending of money, or the availability of credit (except credit
extended by Identix or any of the Identix Subsidiaries to customers in the
ordinary course of business and consistent with past practice);
(x) any hedging, option, derivative or other similar
transaction and any foreign exchange position or contract for the exchange of
currency.
(b) Neither Identix nor any of the Identix Subsidiaries, nor
to Identix' knowledge any other party to an Identix Contract (as defined below),
has breached, violated or defaulted under, or received notice that it has
breached, violated or defaulted under, (nor does there exist any condition under
which, with the passage of time or the giving of notice or both, could
reasonably be expected to cause such a breach, violation or default under), any
material agreement, contract or commitment to which Identix or any of the
Identix Subsidiaries is a party or by which any of them or any of their
properties or assets may be bound (any such agreement, contract or commitment,
an "IDENTIX CONTRACT"), other than any breaches, violations or defaults which
individually or in the aggregate would not have an Identix Material Adverse
Effect.
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(c) Each Identix Contract is a valid, binding and enforceable
obligation of Identix and to Identix' knowledge, of the other party or parties
thereto, in accordance with its terms, and in full force and effect, except
where the failure to be valid, binding, enforceable and in full force and effect
would not have an Identix Material Adverse Effect and to the extent enforcement
may be limited by applicable bankruptcy, insolvency, moratorium or other laws
affecting the enforcement of creditors' rights governing or by general
principles of equity.
(d) An accurate and complete copy of each Identix Contract has
been made available to Visionics.
4.16 LABOR MATTERS; EMPLOYMENT AND LABOR CONTRACTS.
(a) None of Identix or any of the Identix Subsidiaries is a
party to any union contract or other collective bargaining agreement, nor to the
knowledge of Identix or any of the Identix Subsidiaries are there any activities
or proceedings of any labor union to organize any of its employees. Each of
Identix and the Identix Subsidiaries is in compliance with all applicable (i)
laws, regulations and agreements respecting employment and employment practices
and (ii) occupational health and safety requirements, except for those failures
to comply which, individually or in the aggregate, would not have an Identix
Material Adverse Effect.
There is no labor strike, slowdown or stoppage pending (or any labor
strike or stoppage threatened) against Identix or any of the Identix
Subsidiaries. No petition for certification has been filed and is pending before
the National Labor Relations Board with respect to any employees of Identix or
any of the Identix Subsidiaries who are not currently organized. Neither Identix
nor any of the Identix Subsidiaries has any obligations under COBRA, with
respect to any former employees or qualifying beneficiaries thereunder, except
for obligations that would not have, individually or in the aggregate, an
Identix Material Adverse Effect. There are no controversies pending or, to the
knowledge of Identix or any of the Identix Subsidiaries, threatened, between
Identix or any of the Identix Subsidiaries and any of their respective
employees, which controversies would have, individually or in the aggregate, an
Identix Material Adverse Effect.
4.17 INTELLECTUAL PROPERTY RIGHTS.
(a) Identix and the Identix Subsidiaries own or have the right
to use all intellectual property used to conduct their respective businesses
(such intellectual property and the rights thereto are collectively referred to
herein as the "IDENTIX IP RIGHTS"). No royalties or other payments are payable
to any Person with respect to commercialization of any products presently sold
or under development by Identix or the Identix Subsidiaries.
99.1-35
(b) The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby will not constitute
a material breach of any instrument or agreement governing any Identix IP
Rights, will not (i) cause the modification of any material term of any license
or agreement relating to any Identix IP Rights including but not limited to the
modification of the effective rate of any royalties or other payments provided
for in any such license or agreement, (ii) cause the forfeiture or termination
of any Identix IP Rights, (iii) give rise to a right of forfeiture or
termination of any Identix IP Rights or (iv) materially impair the right of
Identix to use, sell or license any Identix IP Rights or portion thereof.
(c) Neither the manufacture, marketing, license, sale or
intended use of any product or technology currently licensed or sold or under
development by Identix or any of the Identix Subsidiaries (i) violates in any
material respect any license or agreement between Identix or any of the Identix
Subsidiaries and any third party or (ii) infringes in any material respect any
patents or other intellectual property rights of any other party; and there is
no pending or threatened claim or litigation contesting the validity, ownership
or right to use, sell, license or dispose of any Identix IP Rights, or asserting
that any Identix IP Rights or the proposed use, sale, license or disposition
thereof, or the manufacture, use or sale of any Identix products, conflicts or
will conflict with the rights of any other party.
(d) Schedule 4.17(d) of the Identix Disclosure Statement lists
all patents, trade names, trademarks and service marks, and applications for any
of the foregoing owned or possessed by Identix or any of the Identix
Subsidiaries and true and complete copies of such materials have been made
available to Visionics.
(e) Identix has provided to Visionics a true and complete copy
of its standard form of employee confidentiality agreement and taken all
commercially reasonably necessary steps to ensure that all employees have
executed such an agreement. All consultants or third parties with access to
proprietary information of Identix have executed appropriate non-disclosure
agreements which adequately protect the Identix IP Rights.
(f) To Identix' knowledge, Identix' and the Identix
Subsidiaries' source codes and trade secrets have not been used, distributed or
otherwise commercially exploited under circumstances which have caused, or with
the passage of time could cause, the loss of copyright or trade secret status.
(g) Neither Identix nor any of the Identix Subsidiaries has
knowledge that any of its employees or consultants is obligated under any
contract, covenant or other agreement or commitment of any nature, or subject to
any judgment, decree or order of any court or administrative agency, that would
interfere with the use of such employee's or consultant's best efforts to
promote the interests of Identix and the Identix Subsidiaries or that would
conflict with the business of Identix as presently conducted or proposed to be
99.1-36
conducted. Neither Identix nor any of the Identix Subsidiaries has entered into
any agreement to indemnify any other person, including but not limited to any
employee or consultant of Identix or any of the Identix Subsidiaries, against
any charge of infringement, misappropriation or misuse of any intellectual
property, other than indemnification provisions contained in purchase orders or
customer agreements arising in the ordinary course of business. All current
employees and consultants and, to the knowledge of Identix, all former employees
and consultants, of any of Identix or any of the Identix Subsidiaries have
signed valid and enforceable written assignments to Identix or the Identix
Subsidiaries of any and all rights or claims in any intellectual property that
any such employee or consultant has or may have by reason of any contribution,
participation or other role in the development, conception, creation, reduction
to practice or authorship of any invention, innovation, development or work of
authorship or any other intellectual property that is used in the business of
Identix, and Identix and the Identix Subsidiaries possess signed copies of all
such written assignments by such employees and consultants. With respect to
assignments of patents or application for patents, Identix and the Identix
Subsidiaries possess signed copies of assignments from the inventors of the
intellectual property covered by the patents and applications.
4.18 TAXES.
(a) Identix and each of the Identix Subsidiaries have filed
all material Tax Returns required to be filed by them, and all such Tax Returns
are true, correct, and complete except with respect to immaterial items. Identix
and each of the Identix Subsidiaries have paid (or Identix has paid on behalf of
each of the Identix Subsidiaries) all Taxes due and payable as shown on such Tax
Returns. True and correct copies of all Tax Returns filed by Identix and the
Identix Subsidiaries for the period beginning July 1, 1997 through the Closing
have been provided to Visionics. The most recent financial statements contained
in the Identix SEC Reports reflect an adequate reserve (which reserves were
established in accordance with GAAP) for the payment of all Taxes of Identix and
the Identix Subsidiaries, accrued through the date of such financial statements.
No deficiencies for any Taxes have been proposed, asserted or assessed against
Identix or any of the Identix Subsidiaries, other than deficiencies that are
reflected by reserves maintained in accordance with GAAP and are being contested
in good faith and by appropriate procedures.
(b) None of Identix and the Identix Subsidiaries has filed any
consent agreement under Section 341(f) of the Code.
(c) None of Identix and the Identix Subsidiaries (i) has
received any notice that it is being audited by any taxing authority; (ii) has
granted any presently operative waiver of any statute of limitations with
respect to, or any extension of a period for the assessment of, any Tax; (iii)
has granted to any person a power of attorney with respect to Taxes, which power
of attorney will be in effect as of or following the Closing; (iv) has received
an inquiry regarding the filing of Tax Returns from a jurisdiction where it is
not presently filing Tax Returns; or (v) has availed itself of any Tax amnesty
or similar relief in any taxing jurisdiction.
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(d) None of Identix and the Identix Subsidiaries has assumed
liability for the Taxes of another Person under any contract, agreement or
arrangement.
(e) There is no lien for Taxes on any of the assets of Identix
or any of the Identix Subsidiaries, except for inchoate liens for Taxes not yet
due and payable.
(f) There is no agreement, plan, arrangement or other contract
covering any employee or independent contractor or former employee or
independent contractor of Identix or any Identix Subsidiary that, considered
individually or collectively with any other such agreement, plan, arrangement,
or contract, will, or could reasonably be expected to, give rise to the payment
of any amount that would not be deductible under Section 280G or 162(m) of the
Code (or any comparable provision of state or local law).
(g) Identix and each of the Identix Subsidiaries have properly
withheld on all amounts paid to consultants or employees, or to persons located
outside the United States.
(h) Identix has not been a party to a transaction intended to
qualify under Section 355 of the Code (whether as distributing or distributed
company) within the last five years.
(i) Identix does not have knowledge of any reason why the
Merger will fail to qualify as a reorganization under the provisions of Section
368(a) of the Code.
4.19 EMPLOYEE BENEFIT PLANS; ERISA.
(a) Schedule 4.19(a) of the Identix Disclosure Statement lists
all Pension Plans, Welfare Plans, or stock bonus, stock option, restricted
stock, stock appreciation right, stock purchase, bonus, incentive, deferred
compensation, severance, holiday, or vacation plans, or any other employee
benefit plan, program, policy or arrangement covering employees (or former
employees) employed in the United States that either is maintained or
contributed to by Identix or any of the Identix Subsidiaries or any of their
Identix ERISA Affiliates (as hereinafter defined) or to which Identix or any of
the Identix Subsidiaries or any of their Identix ERISA Affiliates is obligated
to make payments or otherwise may have any liability (collectively, the "IDENTIX
EMPLOYEE BENEFIT PLANS") with respect to employees or former employees of
Identix, the Identix Subsidiaries, or any of their Identix ERISA Affiliates. For
purposes of this Agreement, "IDENTIX ERISA AFFILIATE" shall mean any person (as
defined in Section 3(9) of ERISA) that is or has been a member of any group of
persons described in Section 414(b), (c), (m) or (o) of the Code, including
without limitation Identix or any of the Identix Subsidiaries.
99.1-38
(b) Identix and each of the Identix Subsidiaries, and each of
the Identix Employee Benefit Plans, are in compliance with the applicable
provisions of ERISA, the Code and other applicable laws, except where the
failure to comply would not, individually or in the aggregate, have an Identix
Material Adverse Effect.
(c) All contributions to, and payments from, the Pension Plans
which are required to have been made in accordance with the Pension Plans have
been timely made, except where the failure to make such contributions or
payments on a timely basis would not, individually or in the aggregate,
reasonably be expected to have an Identix Material Adverse Effect.
(d) To the knowledge of Identix, all of Identix' Pension Plans
and Identix' Subsidiaries' Pension Plans intended to qualify under Section 401
of the Code so qualify, and no event has occurred and no condition exists with
respect to the form or operation of such Pension Plans which would cause the
loss of such qualification or the imposition of any material liability, penalty
or tax under ERISA or the Code, except for such operational failures as would
not, individually or in the aggregate, have an Identix Material Adverse Effect.
(e) To the knowledge of Identix, there are no (i)
investigations pending by any governmental entity involving the Identix Employee
Benefit Plans, nor (ii) pending or threatened claims (other than routine claims
for benefits), suits or proceedings against any Identix Employee Benefit Plans,
against the assets of any of the trusts under any Identix Employee Benefit Plans
or against any fiduciary of any Identix Employee Benefit Plans with respect to
the operation of such plan or asserting any rights or claims to benefits under
any Identix Employee Benefit Plans or against the assets of any trust under such
plan, except for those which would not, individually or in the aggregate, give
rise to any liability which would have an Identix Material Adverse Effect. To
the knowledge of Identix, there are no facts which would give rise to any
liability under this Section 4.19(e) except for those which would not,
individually or in the aggregate, reasonably be expected to have an Identix
Material Adverse Effect in the event of any such investigation, claim, suit or
proceeding.
(f) None of Identix, any of the Identix Subsidiaries or any
employee of the foregoing, nor any trustee, administrator, other fiduciary or
any other "party in interest" or "disqualified person" with respect to the
Pension Plans or Welfare Plans, has engaged in a "prohibited transaction" (as
such term is defined in Section 4975 of the Code or Section 406 of ERISA) other
than such transactions that would not, individually or in the aggregate,
reasonably be expected to have an Identix Material Adverse Effect.
(g) None of Identix, any of the Identix Subsidiaries, nor any
of their Identix ERISA Affiliates maintain or contribute to, nor have they ever
maintained or contributed to, any pension plan subject to Title IV of ERISA or
Section 412 of the Code or Section 302 of ERISA.
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(h) Neither Identix nor any Subsidiary of Identix nor any
Identix ERISA Affiliate has incurred any material liability under Title IV of
ERISA that has not been satisfied in full.
(i) Neither Identix, any of the Identix Subsidiaries nor any
of their Identix ERISA Affiliates has any material liability (including any
contingent liability under Section 4204 of ERISA) with respect to any
multiemployer plan, within the meaning of Section 3(37) of ERISA.
(j) With respect to each of the Identix Employee Benefit
Plans, true, correct and complete copies of the following documents have been
made available to Visionics: (i) the plan document and any related trust
agreement, including amendments thereto, (ii) any current summary plan
descriptions and other material communications to participants relating to the
Identix Employee Benefit Plans, (iii) the three most recent Forms 5500, if
applicable, and (iv) the most recent IRS determination letter, if applicable.
(k) None of the Welfare Plans maintained by Identix or any of
the Identix Subsidiaries provides for continuing benefits or coverage for any
participant or any beneficiary of a participant following termination of
employment, except as may be required under COBRA, or except at the expense of
the participant or the participant's beneficiary. Identix and each of the
Identix Subsidiaries which maintain a "group health plan" within the meaning of
Section 5000(b)(1) of the Code have complied with the notice and continuation
requirements of Section 4980B of the Code, COBRA, Part 6 of Subtitle B of Title
I of ERISA and the regulations thereunder except where the failure to comply
would not, individually or in the aggregate, reasonably be expected to have an
Identix Material Adverse Effect.
(l) No liability under any Pension Benefit Plan or Welfare
Plan has been funded nor has any such obligation been satisfied with the
purchase of a contract from an insurance company as to which Identix or any of
the Identix Subsidiaries has received notice that such insurance company is in
rehabilitation or a comparable proceeding.
(m) The consummation of the transactions contemplated by this
Agreement will not result in an increase in the amount of compensation or
benefits or accelerate the vesting or timing of payment of any benefits or
compensation payable to or in respect of any employee of Identix or any of the
Identix Subsidiaries.
Schedule 4.19(n) of the Identix Disclosure Statement lists each Foreign
Plan (as hereinafter defined). For purposes hereof, the term "IDENTIX FOREIGN
PLAN" shall mean any material plan, program, policy, arrangement or agreement
maintained or contributed to by, or entered into with, Identix or any Subsidiary
with respect to employees (or former employees) employed outside the United
States to the extent the benefits provided thereunder are not mandated by the
laws of the applicable foreign jurisdiction.
99.1-40
4.20 ENVIRONMENTAL MATTERS.
(a) To the knowledge of Identix, except for such cases that,
individually or in the aggregate, have not and would not reasonably be expected
to have an Identix Material Adverse Effect, no underground storage tanks and no
amount of any Hazardous Materials are present, as a result of the actions of
Identix or any of the Identix Subsidiaries or, to Identix' knowledge, as a
result of any actions of any third party or otherwise, in, on or under any
property, including the land and the improvements, ground water and surface
water thereof, that Identix or any of the Identix Subsidiaries has at any time
owned, operated, occupied or leased.
(b) Except for such cases that, individually or in the
aggregate, have not and would not reasonably be expected to have an Identix
Material Adverse Effect, neither Identix nor any of the Identix Subsidiaries has
transported, stored, used, manufactured, disposed of, released or exposed its
employees or others to Hazardous Materials in violation of any law in effect on
or before the Closing Date, nor has Identix or any of the Identix Subsidiaries
engaged in any Hazardous Materials Activities in violation of any rule,
regulation, treaty or statute promulgated by any Government Entity in effect
prior to or as of the date hereof to prohibit, regulate or control Hazardous
Materials or any Hazardous Material Activity.
(c) Identix and the Identix Subsidiaries currently hold all
environmental approvals, permits, licenses, clearances and consents (the
"IDENTIX ENVIRONMENTAL PERMITS") necessary for the conduct of Identix' and the
Identix Subsidiaries' Hazardous Material Activities and other businesses of
Identix and the Identix Subsidiaries as such activities and businesses are
currently being conducted. To the knowledge of Identix, there are no facts or
circumstances indicating that any Identix Environmental Permit will or may be
revoked, suspended, canceled or not renewed. All appropriate action in
connection with the renewal or extension of any Identix Environmental Permit has
been taken.
(d) No material action, proceeding, revocation proceeding,
amendment procedure, writ, injunction or claim is pending, or to Identix'
knowledge, threatened concerning any Identix Environmental Permit, Hazardous
Material or any Hazardous Materials Activity of Identix or any of the Identix
Subsidiaries. Identix does not have knowledge of any fact or circumstance which
could involve Identix or any of the Identix Subsidiaries in any environmental
litigation reasonably expected to have an Identix Material Adverse Effect.
Identix and the Identix Subsidiaries have not received notice, nor to Identix'
knowledge is there a threatened notice, that Identix or the Identix Subsidiaries
are responsible, or potentially responsible, for the investigation, remediation,
clean-up, or similar action at property presently or formerly used by Identix or
any of the Identix Subsidiaries for recycling, disposal, or handling of waste.
99.1-41
4.21 OFFICER'S CERTIFICATE AS TO TAX MATTERS. Identix knows of no
reason why it will be unable to deliver to Xxxxxx Xxxxxx White & XxXxxxxxx LLP
and Xxxxxx Xxxxxxx Xxxxxx & Brand, LLP prior to (i) the filing of Registration
Statement and (ii) the Closing an Officer's Certificate in form sufficient to
enable each such counsel to render the opinions required by Section 6.6.
4.22 FINDERS OR BROKERS. Except for Xxxxxx Brothers, whose fees are
listed on Schedule 4.22, neither Identix nor any of the Identix Subsidiaries has
employed any investment banker, broker, finder or intermediary in connection
with the transactions contemplated hereby who might be entitled to a fee or any
commission the receipt of which is conditioned upon consummation of the Merger.
4.23 REGISTRATION STATEMENT; JOINT PROXY STATEMENT/PROSPECTUS. The
information supplied by Identix for inclusion or incorporation by reference in
the Registration Statement as it relates to Identix, at the time the
Registration Statement is declared effective by the SEC, shall not 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 not
misleading. The information supplied by Identix for inclusion in the Joint Proxy
Statement/Prospectus to be sent to the stockholders of Visionics and
stockholders of Identix in connection with the Visionics Special Meeting and in
connection with the Identix Special Meeting, at the date the Joint Proxy
Statement/Prospectus is first mailed to stockholders, at the time of the
Visionics Special Meeting or the Identix Special Meeting and at the Effective
Time shall not 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. If at any time prior to the Effective Time any event with
respect to Identix or any of the Identix Subsidiaries shall occur which is
required to be described in the Joint Proxy Statement/Prospectus, such event
shall be so described, and an amendment or supplement shall be promptly filed
with the SEC and, as required by law, disseminated to the stockholders of
Visionics and the stockholders of Identix.
4.24 TITLE TO PROPERTY. Identix and the Identix Subsidiaries have good
and valid title to all of their respective properties, interests in properties
and assets, real and personal, reflected in the Identix Balance Sheet or
acquired after December 31, 2001, and have valid leasehold interests in all
leased properties and assets, in each case free and clear of all mortgages,
liens, pledges, charges or encumbrances of any kind or character, except (i)
liens for current taxes not yet due and payable, (ii) such imperfections of
title, liens and easements as do not and will not materially detract from or
interfere with the use of the properties subject thereto or affected thereby, or
otherwise materially impair business operations involving such properties, (iii)
liens securing debt reflected on the Identix Balance Sheet, (iv) liens recorded
pursuant to any Environmental Law or (v) liens which would not, individually or
in the aggregate, have an Identix Material Adverse Effect. Schedule 4.24 of the
Identix Disclosure Statement identifies each parcel of real property owned or
leased by Visionics or any of the Identix Subsidiaries.
99.1-42
4.25 NO EXISTING DISCUSSIONS. As of the date hereof, neither Identix
nor any of its representatives is engaged, directly or indirectly, in any
discussions or negotiations with any other Person relating to any Acquisition
Proposal (as defined in Section 5.2(a)).
ARTICLE V
COVENANTS
5.1 CONDUCT OF BUSINESS DURING INTERIM PERIOD. During the period from
the date of this Agreement to the earlier of the termination of this Agreement
or the Effective Time, each of Visionics and the Visionics Subsidiaries and
Identix and the Identix Subsidiaries, except as contemplated or required by this
Agreement or as expressly consented to in writing by the other party, will (i)
conduct its respective operations according to its ordinary and usual course of
business and consistent with past practices, (ii) use commercially reasonable
efforts to preserve intact its business organization, to keep available the
services of its officers and employees in each business function and to maintain
satisfactory relationships with suppliers, distributors, customers and others
having business relationships with it, and (iii) not take any action which would
adversely affect its ability to consummate the Merger or the other transactions
contemplated hereby. Without limiting the generality of the foregoing, and
except as otherwise expressly provided in this Agreement, prior to the earlier
of the termination of this Agreement or Effective Time neither Visionics nor
Identix will, and neither Visionics nor Identix will permit its respective
Subsidiaries, without the prior written consent of the other party, directly or
indirectly, do any of the following:
(a) enter into, violate, extend, amend or otherwise modify or
waive any of the material terms of (i) any joint venture, license, or agreement
relating to the joint development or transfer of technology or Visionics IP
Rights or Identix IP Rights or (ii) except in the ordinary course of business
and consistent with past practice, any other agreements, commitments or
contracts.
(b) waive any stock repurchase rights, accelerate, amend or
change the period of exercisability of options or restricted stock, or reprice
options granted under any employee, consultant or director stock plans or
authorize cash payments in exchange for any options granted under any of such
plans;
(c) grant any severance or termination pay to any officer or
employee except payments in amounts consistent with policies and past practices
or pursuant to written agreements outstanding, or policies existing, on the date
hereof and as previously disclosed in writing to the other, or adopt any new
severance plan;
(d) declare or pay any dividends on or make any other
distributions (whether in cash, stock or property) in respect of any capital
stock or split, combine or reclassify any capital stock or issue or authorize
the issuance of any other securities in respect of, in lieu of or in
substitution for any capital stock;
99.1-43
(e) repurchase or otherwise acquire, directly or indirectly,
any shares of capital stock except pursuant to rights of repurchase of any such
shares under any employee, consultant or director stock plan existing on the
date hereof;
(f) cause, permit or propose any amendments to any charter
document or Bylaw (or similar governing instruments of any subsidiaries);
(g) sell, lease, license, encumber or otherwise dispose of any
properties or assets which are material, individually or in the aggregate, to
the business of Identix or Visionics, as the case may be, except in the ordinary
course of business consistent with past practice;
(h) incur any indebtedness for borrowed money (other than
ordinary course trade payables or pursuant to existing credit facilities in the
ordinary course of business) or guarantee any such indebtedness or issue or sell
any debt securities or warrants or rights to acquire debt securities of Identix
or Visionics, as the case may be, or guarantee any debt securities of others;
(i) adopt or amend any employee benefit or employee stock
purchase or employee option plan, or enter into any employment contract, pay any
special bonus or special remuneration to any director or employee, or increase
the salaries or wage rates of its officers or employees other than in the
ordinary course of business, consistent with past practice, or change in any
material respect any management policies or procedures;
(j) pay, discharge or satisfy any claim, liability or
obligation (absolute, accrued, asserted or unasserted, contingent or otherwise),
other than the payment, discharge or satisfaction in the ordinary course of
business;
(k) split, combine or reclassify any shares of its capital
stock;
(l) except as permitted by Section 5.4(e) of this Agreement
authorize, solicit, propose or announce an intention to authorize, recommend or
propose, or enter into any agreement in principle or an agreement with any other
person with respect to, any plan of liquidation or dissolution, any acquisition
of a material amount of assets or securities, any disposition of a material
amount of assets or securities, any material change in capitalization, or any
partnership, association, joint venture, joint development, technology transfer,
or other material business alliance;
(m) fail to renew any insurance policy naming it as a
beneficiary or a loss payee, or take any steps or fail to take any steps that
would permit any insurance policy naming it as a beneficiary or a loss payee to
be canceled, terminated or materially altered, except in the ordinary course of
business and consistent with past practice and following written notice to the
other party;
99.1-44
(n) maintain its books and records in a manner other than in
the ordinary course of business and consistent with past practice;
(o) enter into any hedging, option, derivative or other
similar transaction or any foreign exchange position or contract for the
exchange of currency other than in the ordinary course of business and
consistent with past practice;
(p) institute any change in its accounting methods, principles
or practices other than as required by GAAP, or the rules and regulations
promulgated by the SEC, or revalue any assets, including without limitation,
writing down the value of inventory or writing off notes or accounts
receivables;
(q) in respect of any Taxes, make or change any material
election, change any accounting method, enter into any closing agreement, settle
any material claim or assessment, or consent to any extension or waiver of the
limitation period applicable to any material claim or assessment except as
required by applicable law;
(r) suspend, terminate or otherwise discontinue any planned or
ongoing material research and development activities, programs or other such
activities other than in the ordinary course of business and consistent with
past practice;
(s) issue any capital stock or other options, warrants or
other rights to purchase or acquire capital stock, except for the customary
grant of stock options in accordance with past practice; or
(t) take or agree to take any action which would make any of
its representations or warranties contained in this Agreement untrue or
incorrect or prevent it from performing or cause it not to perform its covenants
hereunder.
5.2 NO SOLICITATION.
(a) Restrictions on Visionics.
From and after the date of this Agreement until the Effective Time or
termination of this Agreement pursuant to Article VIII, Visionics and the
Visionics Subsidiaries will not, nor will they authorize or permit any of their
respective officers, directors, affiliates or employees or any investment
banker, attorney or other advisor or representative retained by any of them to,
directly or indirectly, (i) solicit, initiate, encourage or induce the making,
submission or announcement of any Acquisition Proposal (as hereinafter defined),
(ii) participate in any discussions or negotiations regarding, or furnish to any
Person any nonpublic information with respect to, or take any other action to
facilitate any inquiries or the making of any proposal that constitutes or may
reasonably be expected to lead to, any Acquisition Proposal, (iii) engage in
discussions with any Person with respect to any Acquisition Proposal, (iv)
approve, endorse or recommend any Acquisition Proposal or (v) enter into any
99.1-45
letter of intent or similar document or any contract, agreement or commitment
contemplating or otherwise relating to any Acquisition Transaction (as
hereinafter defined); provided however, that this Section 5.2(a) shall not
prohibit Visionics from furnishing nonpublic information to, or entering into
discussions or negotiations with, any Person that has made an unsolicited
Acquisition Proposal (a "POTENTIAL ACQUIROR") (that is not withdrawn) if (A)
neither Visionics nor the Visionics Subsidiaries nor any of their respective
officers, directors, affiliates or employees or any investment banker, attorney
or other advisor or representative retained by any of them shall have breached
or taken any action inconsistent with any of the provisions set forth in this
Section 5.2(a), (B) Visionics' board of directors is advised by its financial
advisor that the Potential Acquiror submitting such Acquisition Proposal has the
financial wherewithal to be reasonably capable of consummating such an
Acquisition Proposal, and the board determines in good faith (x) after
consultation with its financial advisor, that such Acquisition Proposal is or is
reasonably likely to result in a Visionics Superior Offer (as hereafter
defined), and (y) based upon advice of outside legal counsel, that the failure
to participate in such discussions or negotiations or to furnish such
information or approve an Acquisition Proposal would be inconsistent with the
board's fiduciary duties under applicable law; (C) at least three business days
prior to furnishing any such nonpublic information to, or entering into
discussions with a Potential Acquiror, Visionics gives Identix written notice of
the identity of such Potential Acquiror and of Visionics' intention to furnish
nonpublic information to, or enter into discussions with, such Potential
Acquiror; (D) Visionics receives from such Potential Acquiror an executed
confidentiality, standstill and nonsolicitation agreement containing provisions
at least as favorable to Visionics as the confidentiality, standstill and
nonsolicitation provisions of the Confidentiality Agreement (as defined in
Section 5.3); and (E) at least three business days prior to furnishing any such
nonpublic information to such Potential Acquiror, Visionics furnishes such
nonpublic information to Identix (to the extent such nonpublic information has
not been previously furnished by Visionics to Identix).
For purposes of this Agreement, "ACQUISITION PROPOSAL" with respect to
an entity shall mean any offer or proposal (other than an offer or proposal by
the other party) relating to any Acquisition Transaction. For purposes of this
Agreement, "ACQUISITION TRANSACTION" shall mean any transaction or series of
related transactions involving: (A) any purchase from the entity or acquisition
by any person or "group" (as defined under Section 13(d) of the Exchange Act and
the rules and regulations thereunder) of more than a 15% interest in the total
outstanding voting securities of the entity or of any Subsidiary or any tender
offer or exchange offer that if consummated would result in any person or
"group" (as defined under Section 13(d) of the Exchange Act and the rules and
regulations thereunder) beneficially owning 15% or more of the total outstanding
voting securities of the entity or of any Subsidiary or any merger,
consolidation, business combination or similar transaction involving the entity;
(B) any sale, lease (other than in the ordinary course of business), exchange,
transfer, license (other than in the ordinary course of business), acquisition
or disposition of more than 15% of the assets of the entity; or (C) any
liquidation or dissolution of the entity.
In addition to the obligations of Visionics set forth in this Section
5.2(a), Visionics shall promptly (and in no event later than twenty-four (24)
hours after receipt of any Acquisition Proposal, any inquiry or indication of
interest that Visionics reasonably believes could lead to an Acquisition
Proposal) advise Identix orally and in writing of any Acquisition Proposal or
any request for nonpublic information or inquiry which Visionics reasonably
believes would lead to an Acquisition Proposal or to any Acquisition
Transaction, the material terms and conditions of such Acquisition Proposal,
99.1-46
request or inquiry, and the identity of the person or group making any such
Acquisition Proposal, request or inquiry. Visionics will keep Identix informed
as promptly as practicable in all material respects of the status and details
(including material amendments or proposed material amendments) of any such
Acquisition Proposal, request or inquiry made after the date hereof.
(b) Restrictions on Identix.
From and after the date of this Agreement until the Effective Time or
termination of this Agreement pursuant to Article VIII, Identix and the Identix
Subsidiaries will not, nor will they authorize or permit any of their respective
officers, directors, affiliates or employees or any investment banker, attorney
or other advisor or representative retained by any of them to, directly or
indirectly, (i) solicit, initiate, encourage or induce the making, submission or
announcement of any Acquisition Proposal, (ii) participate in any discussions or
negotiations regarding, or furnish to any Person any nonpublic information with
respect to, or take any other action to facilitate any inquiries or the making
of any proposal that constitutes or may reasonably be expected to lead to, any
Acquisition Proposal, (iii) engage in discussions with any Person with respect
to any Acquisition Proposal, (iv) approve, endorse or recommend any Acquisition
Proposal or (v) enter into any letter of intent or similar document or any
contract, agreement or commitment contemplating or otherwise relating to any
Acquisition Transaction; provided however, that this Section 5.2(b) shall not
prohibit Identix from furnishing nonpublic information to, or entering into
discussions or negotiations with a Potential Acquiror (that is not withdrawn)
if: (A) neither Identix, nor the Identix Subsidiaries nor any of their
respective officers, directors, affiliates or employees or any investment
banker, attorney or other advisor or representative retained by any of them
shall have breached or taken any action inconsistent with any of the provisions
set forth in this Section 5.2(b); (B) Identix' board of directors is advised by
its financial advisor that the Potential Acquiror submitting such Acquisition
Proposal has the financial wherewithal to be reasonably capable of consummating
such an Acquisition Proposal, and the board determines in good faith (x) after
consultation with its financial advisor, that such Acquisition Proposal is or is
reasonably likely to result in an Identix Superior Offer (as hereafter defined),
and (y) based upon advice of outside legal counsel, that the failure to
participate in such discussions or negotiations or to furnish such information
or approve an Acquisition Proposal would be inconsistent with the board's
fiduciary duties under applicable law; (C) at least three business days prior to
furnishing any such nonpublic information to, or entering into discussions with
a Potential Acquiror, Identix gives Visionics written notice of the identity of
such Potential Acquiror and of Identix' intention to furnish nonpublic
information to, or enter into discussions with, such Potential Acquiror; (D)
Identix receives from such Potential Acquiror an executed confidentiality,
standstill and nonsolicitation agreement containing provisions at least as
favorable to Identix as the confidentiality, standstill and nonsolicitation
provisions of the Confidentiality Agreement (as defined in Section 5.3); and (E)
at least three business days prior to furnishing any such nonpublic information
to such Potential Acquiror, Identix furnishes such nonpublic information to
Visionics (to the extent such nonpublic information has not been previously
furnished by Identix to Visionics).
In addition to the obligations of Identix set forth in this Section
5.2(b), Identix shall promptly (and in no event later than twenty-four (24)
hours after receipt of any Acquisition Proposal, any inquiry or indication of
interest that Identix reasonably believes could lead to an Acquisition Proposal)
advise Visionics orally and in writing of any Acquisition Proposal or any
99.1-47
request for nonpublic information or inquiry which Identix reasonably believes
would lead to an Acquisition Proposal or to any Acquisition Transaction, the
material terms and conditions of such Acquisition Proposal, request or inquiry,
and the identity of the person or group making any such Acquisition Proposal,
request or inquiry. Identix will keep Visionics informed as promptly as
practicable in all material respects of the status and details (including
material amendments or proposed material amendments) of any such Acquisition
Proposal, request or inquiry made after the date hereof.
5.3 ACCESS TO INFORMATION. From the date of this Agreement until the
Effective Time, each of Visionics and Identix will afford to the other and their
authorized representatives (including counsel, financial advisors, consultants,
accountants, auditors and agents) reasonable access during normal business hours
and upon reasonable notice to all of its facilities, personnel and operations
and to all of its and its Subsidiaries books and records, will permit the other
and its authorized representatives to conduct inspections as they may reasonably
request and will instruct its officers and those of its Subsidiaries to furnish
such persons with such financial and operating data and other information with
respect to its business and properties as they may from time to time reasonably
request, subject to the restrictions set forth in the Confidentiality Agreement,
dated as of January 18, 2002 and amended as of January 29, 2002 between Identix
and Visionics (the "CONFIDENTIALITY AGREEMENT").
5.4 SPECIAL MEETING; REGISTRATION STATEMENT; BOARD RECOMMENDATIONS.
(a) Promptly after the date hereof, Visionics will take all
action necessary in accordance with Delaware Law and its certificate of
incorporation and bylaws to convene a meeting of Visionics' stockholders to
consider adoption and approval of this Agreement and approval of the Merger (the
"VISIONICS SPECIAL MEETING") to be held as promptly as practicable, and in any
event (to the extent permissible under applicable law) within 45 days after the
declaration of effectiveness of the Registration Statement. Subject to Section
5.4(e), Visionics will use its commercially reasonable efforts to solicit from
its stockholders proxies in favor of the adoption and approval of this Agreement
and the approval of the Merger and will take all other action necessary or
advisable to secure the vote or consent of its stockholders required by the
rules of Nasdaq or Delaware Law to obtain such approvals. Notwithstanding
anything to the contrary contained in this Agreement, Visionics may adjourn or
postpone the Visionics Special Meeting to the extent necessary to ensure that
any necessary supplement or amendment to the Joint Proxy Statement/Prospectus is
provided to Visionics' stockholders in advance of a vote on the Merger and this
Agreement or, if as of the time for which the Visionics Special Meeting is
originally scheduled (as set forth in the Joint Proxy Statement/Prospectus)
there are insufficient shares of Visionics Common Stock represented (either in
person or by proxy) to constitute a quorum necessary to conduct the business of
the Visionics Special Meeting. Visionics shall ensure that the Visionics Special
Meeting is called, noticed, convened, held and conducted, and that all proxies
solicited by Visionics in connection with the Visionics Special Meeting are
solicited in compliance with the Delaware Law and the Exchange Act, Visionics'
certificate of incorporation and bylaws, the rules of Nasdaq and all other
applicable legal requirements.
99.1-48
(b) Promptly after the date hereof, Identix will take all
action necessary in accordance with Delaware Law and its certificate of
incorporation and bylaws to convene a meeting of Identix' stockholders to
consider the issuance of Identix Common Stock in the Merger (the "IDENTIX
SPECIAL MEETING") to be held as promptly as practicable, and in any event (to
the extent permissible under applicable law) within 45 days after the
declaration of effectiveness of the Registration Statement. Subject to Section
5.4(f), Identix will use its commercially reasonable efforts to solicit from its
stockholders proxies in favor of the issuance of Identix Common Stock in the
Merger and will take all other action necessary or advisable to secure the vote
or consent of its stockholders required by the rules of Nasdaq or Delaware Law
to obtain such approval. Notwithstanding anything to the contrary contained in
this Agreement, Identix may adjourn or postpone the Identix Special Meeting to
the extent necessary to ensure that any necessary supplement or amendment to the
Joint Proxy Statement/Prospectus is provided to Identix' stockholders in advance
of a vote on the issuance of Identix Common Stock in the Merger and this
Agreement or, if as of the time for which the Identix Special Meeting is
originally scheduled (as set forth in the Joint Proxy Statement/Prospectus)
there are insufficient shares of Identix Common Stock represented (either in
person or by proxy) to constitute a quorum necessary to conduct the business of
the Identix Special Meeting. Identix shall ensure that the Identix Special
Meeting is called, noticed, convened, held and conducted, and that all proxies
solicited by Identix in connection with the Identix Special Meeting are
solicited in compliance with the Delaware Law and the Exchange Act, Identix'
certificate of incorporation and bylaws, the rules of Nasdaq and all other
applicable legal requirements.
(c) Subject to Section 5.4(e): (i) the board of directors of
Visionics shall recommend that Visionics' stockholders vote in favor of and
adopt and approve this Agreement and approve the Merger at the Visionics Special
Meeting; (ii) the Joint Proxy Statement/Prospectus shall include a statement to
the effect that the board of directors of Visionics has recommended that
Visionics' stockholders vote in favor of and adopt and approve this Agreement
and the Merger at the Visionics Special Meeting; and (iii) neither the board of
directors of Visionics nor any committee thereof shall withdraw, amend or
modify, or propose or resolve to withdraw, amend or modify in a manner adverse
to Identix, the recommendation of the board of directors of Visionics that
Visionics' stockholders vote in favor of and adopt and approve this Agreement
and the Merger.
(d) Subject to Section 5.4(f): (i) the board of directors of
Identix shall recommend that Identix' stockholders vote in favor of the issuance
of Identix Common Stock in the Merger at the Identix Special Meeting; (ii) the
Joint Proxy Statement/Prospectus shall include a statement to the effect that
the board of directors of Identix has recommended that Identix' stockholders
vote in favor of the issuance of Identix Common Stock in the Merger at the
Identix Special Meeting; and (iii) neither the board of directors of Identix nor
any committee thereof shall withdraw, amend or modify, or propose or resolve to
withdraw, amend or modify in a manner adverse to Visionics, the recommendation
of the board of directors of Identix that Identix' stockholders vote in favor of
the issuance of Identix Common Stock in the Merger.
99.1-49
(e) Nothing in this Agreement shall prevent the board of
directors of Visionics from withholding, withdrawing, amending or modifying its
recommendation in favor of the Merger if (i) a Visionics Superior Offer is made
to Visionics and is not withdrawn, (ii) Visionics shall have provided written
notice to Identix (a "VISIONICS NOTICE OF SUPERIOR OFFER") advising Identix that
Visionics has received a Visionics Superior Offer, specifying the material terms
and conditions of such Visionics Superior Offer and identifying the person or
entity making such Superior Offer, (iii) Identix shall not have, within three
(3) business days of Identix' receipt of the Visionics Notice of Superior Offer,
made an offer that Visionics board of directors by a majority vote determines in
its good faith judgment (after consultation with its financial advisor) to be at
least as favorable to Visionics' stockholders as such Visionics Superior Offer
(it being agreed that the Visionics board of directors shall convene a meeting
to consider any such offer by Identix promptly following the receipt thereof).
Visionics shall provide Identix with at least three (3) business days prior
notice (or such lesser prior notice as provided to the members of Visionics'
board of directors but in no event less than twenty-four (24) hours) of any
meeting of Visionics' board of directors at which Visionics' board of directors
is reasonably expected to consider any Acquisition Transaction. For purposes of
this Agreement "VISIONICS SUPERIOR OFFER" shall mean an unsolicited, bona fide
written offer made by a third party to consummate any of the following
transactions: (i) a merger or consolidation involving Visionics pursuant to
which the stockholders of Visionics immediately preceding such transaction hold
less than a majority of the equity interest in the surviving or resulting entity
of such transaction or (ii) the acquisition by any person or group (including by
way of a tender offer or an exchange offer or a two step transaction involving a
tender offer followed with reasonable promptness by a merger involving
Visionics), directly or indirectly, of ownership of 51% of the then outstanding
shares of capital stock of Visionics, on terms that the board of directors of
Visionics determines, in its reasonable judgment (after consultation with its
financial advisor) to be more favorable to its stockholders than the terms of
the Merger; provided, however, that any such offer shall not be deemed to be a
"Visionics Superior Offer" if any financing required to consummate the
transaction contemplated by such offer is not committed and is not likely in the
reasonable judgment of Visionics' board of directors (after consultation with
its financial advisor) to be obtained by such third party on a timely basis.
(f) Nothing in this Agreement shall prevent the board of
directors of Identix from withholding, withdrawing, amending or modifying its
recommendation in favor of the Merger if (i) an Identix Superior Offer is made
to Identix and is not withdrawn, (ii) Identix shall have provided written notice
to Visionics (an "IDENTIX NOTICE OF SUPERIOR OFFER") advising Visionics that
Identix has received an Identix Superior Offer, specifying the material terms
and conditions of such Identix Superior Offer and identifying the person or
99.1-50
entity making such Identix Superior Offer, (iii) Visionics shall not have,
within three (3) business days of Visionics' receipt of the Identix Notice of
Superior Offer, made an offer that the Identix board of directors by a majority
vote determines in its good faith judgment (after consultation with its
financial advisor) to be at least as favorable to Identix' stockholders as such
Identix Superior Offer (it being agreed that Identix board of directors shall
convene a meeting to consider any such offer by Visionics promptly following the
receipt thereof). Identix shall provide Visionics with at least three (3)
business days prior notice (or such lesser prior notice as provided to the
members of Identix' board of directors but in no event less than twenty-four
(24) hours) of any meeting of Identix' board of directors at which Identix'
board of directors is reasonably expected to consider any Acquisition
Transaction. For purposes of this Agreement "IDENTIX SUPERIOR OFFER" shall mean
an unsolicited, bona fide written offer made by a third party to consummate any
of the following transactions: (i) a merger or consolidation involving Identix
pursuant to which the stockholders of Identix immediately preceding such
transaction hold less than a majority of the equity interest in the surviving or
resulting entity of such transaction or (ii) the acquisition by any person or
group (including by way of a tender offer or an exchange offer or a two step
transaction involving a tender offer followed with reasonable promptness by a
merger involving Identix), directly or indirectly, of ownership of 51% of the
then outstanding shares of capital stock of Identix, on terms that the board of
directors of Identix determines, in its reasonable judgment (after consultation
with of its financial advisor) to be more favorable to its stockholders than the
terms of the Merger; provided, however, that any such offer shall not be deemed
to be a "Identix Superior Offer" if any financing required to consummate the
transaction contemplated by such offer is not committed and is not likely in the
reasonable judgment of Identix' board of directors (after consultation with its
financial advisor) to be obtained by such third party on a timely basis.
(g) Nothing contained in this Agreement shall prohibit
Visionics or Identix or its respective board of directors from taking and
disclosing to its stockholders a position contemplated by Rules 14d-9 and
14e-2(a) promulgated under the Exchange Act.
(h) As promptly as practicable after the execution of this
Agreement, Visionics and Identix shall mutually prepare, and Identix shall file
the Registration Statement with the SEC. As promptly as practicable following
receipt of SEC comments on such Registration Statement, Identix and Visionics
shall mutually prepare a response to such comments. Identix and Visionics shall
use all commercially reasonable efforts to have the Registration Statement
declared effective by the SEC as promptly as practicable. Identix shall also
take any action required to be taken under applicable state blue sky or
securities laws in connection with Identix Common Stock to be issued in exchange
for the shares of Visionics Common Stock. Identix and Visionics shall promptly
furnish to each other all information, and take such other actions (including
without limitation using all commercially reasonable efforts to provide any
required consents of their respective independent auditors), as may reasonably
be requested in connection with any action by any of them in connection with the
99.1-51
preceding sentences of this Section 5.4(h). Whenever any party learns of the
occurrence of any event which is required to be set forth in an amendment or
supplement to the Joint Proxy Statement/Prospectus, the Registration Statement
or any other filing made pursuant to this Section 5.4(h), Identix or Visionics,
as the case may be, shall promptly inform the other of such occurrence and
cooperate in filing with the SEC or its staff and/or mailing to stockholders of
Visionics such amendment or supplement.
5.5 COMMERCIALLY REASONABLE EFFORTS.
(a) Subject to the terms and conditions herein provided,
Identix, Merger Sub and Visionics shall use commercially reasonable efforts to
take, or cause to be taken, all actions and do, or cause to be done, all things
necessary, proper or appropriate under this Agreement, applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement, including, without limitation, (i) promptly filing Notification
and Report Forms under the HSR Act with the United States Federal Trade
Commission (the "FTC") and the Antitrust Division of the United States
Department of Justice (the "ANTITRUST DIVISION") and responding as promptly as
practicable to any inquiries received from the FTC or the Antitrust Division for
additional information or documentation, (ii) using commercially reasonable
efforts to obtain all necessary governmental and private party consents,
approvals or waivers, and (iii) using commercially reasonable efforts to lift
any legal bar to the Merger. Identix shall cause Merger Sub to perform all of
its obligations under this Agreement.
(b) Notwithstanding anything to the contrary in this
Agreement, neither Identix, the Surviving Corporation, nor Visionics nor any of
their Subsidiaries shall be required to (i) divest, hold separate or license any
business(es), product line(s) or asset(s), (ii) take any action or accept any
limitation that would reasonably be expected to have an Identix Material Adverse
Effect or a Visionics Material Adverse Effect, or (iii) agree to any of the
foregoing.
5.6 PUBLIC ANNOUNCEMENTS. Before issuing any press release or otherwise
making any public statement with respect to the Merger or any of the other
transactions contemplated hereby, Identix, Merger Sub and Visionics agree to
consult with each other as to its form and substance, and agree not to issue any
such press release or general communication to employees or make any public
statement prior to obtaining the consent of the other (which shall not be
unreasonably withheld or delayed), except as may be required by applicable law
or by the rules and regulations of or listing agreement with Nasdaq, or as may
otherwise be required by Nasdaq or the SEC.
5.7 NOTIFICATION OF CERTAIN MATTERS. Each of Visionics and Identix
shall promptly notify the other party of the occurrence or non-occurrence of any
event the respective occurrence or non-occurrence of which would be reasonably
likely to cause any condition to the obligations of the notifying party to
effect the Merger not to be fulfilled. Each of Visionics and Identix shall also
give prompt notice to the other of any communication from any Person alleging
that the consent of such Person is or may be required in connection with the
Merger or other transactions contemplated hereby.
99.1-52
5.8 INDEMNIFICATION.
(a) The Certificate of Incorporation and Bylaws of the
Surviving Corporation will contain, and Identix will cause the Surviving
Corporation to honor, the provisions with respect to indemnification set forth
in the Certificate of Incorporation and Bylaws of Visionics immediately prior to
the Effective Time, which provisions will not be amended, repealed or otherwise
modified for a period of six (6) years after the Effective Time in any manner
that would adversely affect the rights thereunder of individuals who at the
Effective Time were directors, officers, employees or agents of Visionics,
unless such modification is required by law.
(b) Identix will cause the Surviving Corporation to honor and
fulfill the obligations of Visionics and Identix pursuant to indemnification
agreements with Visionics' directors and officers and Identix' directors and
officers existing at or before the Effective Time.
(c) For a period of six (6) years after the Effective Time,
Identix will or will cause the Surviving Corporation to maintain in effect
directors' and officers' liability insurance covering those persons who are
currently covered by the Visionicss directors' and officers' liability insurance
policy (a copy of which has been made available to Identix) on terms comparable
to those now applicable to directors and officers of Visionics; provided,
however, that in no event will Identix or the Surviving Corporation be required
to expend in excess of $500,000 in the aggregate for such coverage; and provided
further, that if the premium for such coverage exceeds such amount, Identix or
the Surviving Corporation will purchase a policy with the greatest coverage
available for such amount.
5.9 AFFILIATE AGREEMENTS. Concurrently with the execution and delivery
hereof, Visionics shall deliver to Identix a list, reasonably satisfactory to
counsel for Identix, setting forth the names of all Persons who are expected to
be, at the Effective Time, in Visionics' reasonable judgment, Affiliates of
Visionics. Visionics shall furnish such information and documents as Identix may
reasonably request for the purpose of reviewing such list. Visionics shall
deliver a written agreement in substantially the form of Exhibit D attached
hereto (a "VISIONICS AFFILIATE AGREEMENT") executed by each Person identified as
an Affiliate in the list furnished pursuant to this Section 5.9 within ten (10)
days after the execution of this Agreement.
5.10 STOCK EXCHANGE LISTING. Prior to the Effective Time, Identix
agrees to cause the shares of Identix Common Stock issuable, and those required
to be reserved for issuance in connection with the Merger, to be authorized for
listing on Nasdaq, subject to official notice of issuance.
99.1-53
5.11 BOARD OF DIRECTORS AND CERTAIN OFFICERS OF THE COMBINED COMPANY.
(a) The Board of Directors of Identix will take all actions
necessary to cause the Board of Directors of Identix, immediately after the
Effective Time, to consist of nine (9) persons, four (4) of whom were directors
of Identix immediately prior to the Effective Time (including Xxxxxx XxXxxxxx),
four (4) of whom were directors of Visionics prior to the Effective Time
(including Xxxxxx Xxxxx), and one (1) of whom shall be a new and independent
board member mutually agreed upon by the parties. If, prior to the Effective
Time, any of the Visionics' designees or Identix' designees shall decline or be
unable to serve as a director of Identix, Visionics (if such person was
designated by Visionics) or Identix (if such person was designated by Identix)
shall designate another person to serve in such person's stead, which person
shall be reasonably acceptable to the other party.
(b) At the Effective Time, Xxxxxx XxXxxxxx, Identix' Chief
Executive Officer will be offered a position as the Chairman of the Board of
Identix, Xxxxxx Xxxxx, Visionics' Chief Executive Officer will be offered a
position as the Chief Executive Officer of Identix and Xxxxx Xxxxxxxx, the
President and Chief Operating Officer of Identix will be offered a position as
the President and Chief Operating Officer of Identix.
5.12 CONSENTS OF IDENTIX' AND VISIONICS' ACCOUNTANTS. Each of Identix
and Visionics shall use commercially reasonable efforts to cause its independent
accountants to deliver to Identix a consent, dated no more than three days prior
to the date on which the Registration Statement shall become effective, in form
reasonably satisfactory to Identix and customary in scope and substance for
consents delivered by independent public accountants in connection with
registration statements on Form S-4 under the Securities Act.
5.13 VOTING AGREEMENTS.
(a) Concurrently with the execution hereof, Visionics shall
deliver to Identix the Visionics Voting Agreements executed by each director and
officer of Visionics identified on Schedule 5.13(a) of the Visionics Disclosure
Statement.
(b) Concurrently with the execution hereof, Identix shall
deliver to Visionics the Identix Voting Agreements executed by each director and
officer of Identix identified on Schedule 5.13(b) of the Identix Disclosure
Statement.
5.14 FORM S-8. No later than ten (10) business days after the Effective
Time, Identix shall file with the SEC a Registration Statement, on Form S-8 or
other appropriate form under the Securities Act, to register Identix Common
Stock issuable upon exercise of the Identix Exchange Options following the
Effective Time. Identix shall use commercially reasonable efforts to cause such
Registration Statement to remain effective until the exercise or expiration of
such options.
5.15 NOTIFICATION OF CERTAIN MATTERS. Visionics shall give prompt
notice to Identix and Merger Sub, and Identix and Merger Sub shall give prompt
notice to Visionics, of (i) the occurrence or nonoccurrence of any event the
99.1-54
occurrence or nonoccurrence of which would be likely to cause any representation
or warranty contained in this Agreement to be untrue or inaccurate in any
material respect at or prior to the Effective Time, (ii) any material failure of
Visionics, Identix or Merger Sub, as the case may be, to comply with or satisfy
any covenant, condition or agreement to be complied with or satisfied by it
hereunder, (iii) any notice or other communication from any third party alleging
that the consent of such third party is or may be required in connection with
the transactions contemplated by this Agreement, or (iv) any facts or
circumstances arise that could reasonably be expected to result in a Visionics
Material Adverse Effect or an Identix Material Adverse Effect, as the case may
be.
5.16 TAX TREATMENT. Each of Identix and Visionics shall use its
commercially reasonable efforts to cause the Merger to qualify as a
reorganization within the meaning of Section 368(a) of the Code and to obtain
the opinion of counsel referred to in Section 6.6, including by executing the
Officer's Certificate referred to in Sections 3.21 and 4.21 and delivering such
Certificate prior to (i) the filing of the Registration Statement and (ii) the
Closing.
5.17 SEC FILINGS.
(a) Visionics will deliver promptly to Identix true and
complete copies of each report, registration statement or statement mailed by it
to its security holders generally or filed by it with the SEC, in each case
subsequent to the date hereof and prior to the Effective Time. As of their
respective dates, such reports, including the consolidated financial statements
included therein, and statements (excluding any information therein provided by
Identix or Merger Sub, as to which Visionics makes no representation) will not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they are made, not misleading and will
comply in all material respects with all applicable requirements of law. Each of
the consolidated financial statements (including, in each case, any related
notes thereto) contained in such reports, (x) shall comply as to form in all
material respects with applicable accounting requirements and with the published
rules and regulations of the SEC with respect thereto, (y) shall be prepared in
accordance with GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto or, in the case of
unaudited interim financial statements, as may be permitted by the SEC on Form
10-Q under the Exchange Act) and (z) shall fairly present the consolidated
financial position of Visionics and the Visionics Subsidiaries as at the
respective dates thereof and the consolidated results of its operations and cash
flows for the periods indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments
which were not, or are not expected to be, material in amount.
(b) Identix will deliver promptly to Visionics true and
complete copies of each report, registration statement or statement mailed by it
to its security holders generally or filed by it with the SEC, in each case
subsequent to the date hereof and prior to the Effective Time. As of their
respective dates, such reports, including the consolidated financial statements
99.1-55
included therein, and statements (excluding any information therein provided by
Visionics, as to which neither Identix nor Merger Sub makes no representation)
will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made, not misleading
and will comply in all material respects with all applicable requirements of
law. Each of the consolidated financial statements (including, in each case, any
related notes thereto) contained in such reports, (x) shall comply as to form in
all material respects with applicable accounting requirements and with the
published rules and regulations of the SEC with respect thereto, (y) shall be
prepared in accordance with GAAP applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto or, in the
case of unaudited interim financial statements, as may be permitted by the SEC
on Form 10-Q under the Exchange Act) and (z) shall fairly present the
consolidated financial position of Identix and the Identix Subsidiaries as at
the respective dates thereof and the consolidated results of its operations and
cash flows for the periods indicated, except that the unaudited interim
financial statements were or are subject to normal and recurring year-end
adjustments which were not, or are not expected to be, material in amount.
5.18 EMPLOYEE BENEFIT MATTERS. Identix agrees to cause employees of
Visionics who continue as employees of Identix or the Surviving Corporation
following the Effective Time to be eligible to participate in the Identix Stock
Option Plan and health and life insurance plans consistent with the eligibility
criteria applied by Identix to other employees of Identix. Such employees will
receive full credit for prior years of service with Visionics and parity with
Identix employees with respect to eligibility to participate in all Identix
employee benefit plans and programs. Compensation provided to employees of
Visionics who continue as employees of Identix following the Effective Time
shall be determined by Identix in its sole discretion.
5.19 VISIONICS RIGHTS PLAN. Except as expressly required by this
Agreement, or as determined by Visionics' board of directors in good faith after
consultation with legal counsel to be required in order to comply with its
fiduciary duties to Visionics' stockholders under applicable law, Visionics
shall not, without the prior written consent of Identix, amend the Visionics
Rights Plan or take any other action with respect to, or make any determination
under the Visionics Rights Plan, including a redemption of the rights granted
under the Rights Agreement or any action to facilitate an Acquisition Proposal;
provided, however, that Visionics shall use its commercially reasonable efforts
to cause the Visionics Rights Plan to be amended, in a manner reasonably
satisfactory to Identix, to provide that the Visionics Rights Plan shall
terminate immediately prior to the Effective Time.
5.20 INCREASE IN AUTHORIZED AND RESERVED SHARES. Subject to the terms
hereof, at the Identix Special Meeting Identix shall propose and recommend that
its Certificate of Incorporation be amended at the Effective Time to increase
the authorized number of shares of Identix Common Stock thereunder to
200,000,000 shares and that a new Identix Equity Incentive Plan be approved;
provided that Identix may propose and recommend an increase of such lesser
number as in good faith it determines, provided that such lesser increase
satisfies any conditions necessary to consummate the Merger.
99.1-56
ARTICLE VI
CONDITIONS TO THE OBLIGATIONS OF EACH PARTY
The respective obligations of each party to this Agreement to effect
the Merger shall be subject to the fulfillment on or before the Effective Time
of each of the following conditions, any one or more of which may be waived in
writing by all the parties hereto:
6.1 REGISTRATION STATEMENT. The Registration Statement shall have
become effective in accordance with the provisions of the Securities Act. No
stop order suspending the effectiveness of the Registration Statement shall have
been issued by the SEC and remain in effect and no proceedings for such purpose
shall be pending before or threatened by the SEC.
6.2 VISIONICS STOCKHOLDER APPROVAL. The approval of a majority of the
outstanding shares of Visionics Common Stock for adoption of the Merger
Agreement and approval of the Merger shall have been obtained at the Visionics
Special Meeting or any adjournment or postponement thereof.
6.3 IDENTIX STOCKHOLDER APPROVAL. The approval of a majority of the
shares of Identix Common Stock represented at the Identix Special Meeting in
favor of the issuance of Identix Common Stock in the Merger shall have been
obtained at the Identix Special Meeting or any adjournment or postponement
thereof.
6.4 LISTING OF ADDITIONAL SHARES. The Identix Common Stock issuable in
connection with the Merger shall have been authorized for listing on Nasdaq,
subject to official notice of issuance.
6.5 GOVERNMENTAL CLEARANCES. The waiting period applicable to
consummation of the Merger under the HSR Act shall have expired or been
terminated. Other than the filing of the Certificate of Merger which shall be
accomplished as provided in Section 1.2, all authorizations, consents, orders or
approvals of, or declarations or filings with, or expirations of waiting periods
imposed by, any Government Entity the failure of which to obtain or comply with
would be reasonably likely to have a Visionics Material Adverse Effect or an
Identix Material Adverse Effect shall have been obtained or filed.
6.6 TAX MATTERS. Each of Identix and Merger Sub shall have received an
opinion of Xxxxxx Xxxxxx White & XxXxxxxxx LLP, counsel to Identix and Merger
Sub, and Visionics shall have received an opinion of Xxxxxx Xxxxxxx Xxxxxx &
Brand, LLP, counsel to Visionics, each such opinion dated as of the Effective
Time, substantially to the effect that on the basis of the facts,
representations and assumptions set forth in such opinions, (i) the Merger will
be treated as a reorganization within the meaning of Section 368(a) of the Code;
(ii) each of Identix, Merger Sub and Visionics will be a party to such
reorganization within the meaning of Section 368(b) of the Code; and (iii)
except with respect to cash received in lieu of fractional share interest in
Identix Common Stock, no gain or loss will be recognized, for United States
federal income tax purposes, by a stockholder of Visionics as a result of the
Merger with respect to the shares of Visionics Common Stock converted into
Identix Common Stock. If counsel to either Identix or Visionics does not render
such opinion, this condition shall nonetheless be deemed to be satisfied with
respect to such party if counsel to the other party renders such opinion in the
required form to such party.
99.1-57
6.7 STATUTE OR DECREE. No writ, order, temporary restraining order,
preliminary injunction or injunction shall have been enacted, entered,
promulgated or enforced by any court or other tribunal or governmental body or
authority, which remains in effect, and prohibits the consummation of the Merger
or otherwise makes it illegal, nor shall any governmental agency have instituted
any action, suit or proceeding which remains pending and which seeks, and which
is reasonably likely, to enjoin, restrain or prohibit the consummation of the
Merger in accordance with the terms of this Agreement.
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF VISIONICS AND IDENTIX
7.1 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF VISIONICS. The
obligations of Visionics to effect the Merger shall be subject to the
fulfillment of each of the following additional conditions, any one or more of
which may be waived in writing by Visionics:
(a) The representations and warranties of Identix and Merger
Sub contained in this Agreement (without regard to any materiality exceptions or
provisions therein) shall be true and correct, in all material respects, as of
the Effective Time, with the same force and effect as if made at the Effective
Time, except (i) for changes specifically permitted by the terms of this
Agreement, (ii) that the accuracy of the representations and warranties that by
their terms speak as of the date of this Agreement or some other date will be
determined as of such date and (iii) where the failure of such representations
and warranties to be so true and correct does not constitute an Identix Material
Adverse Effect.
(b) Identix and Merger Sub shall have performed and complied
in all material respects with all agreements and obligations required by this
Agreement to be performed or complied with by them on or prior to the Closing
Date.
(c) Identix and Merger Sub shall have furnished a certificate
or certificates of Identix and Merger Sub executed on behalf of one or more of
their respective officers to evidence compliance with the conditions set forth
in Sections 7.1(a) and (b) of this Agreement.
7.2 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF IDENTIX AND MERGER SUB.
The obligations of Identix and Merger Sub to effect the Merger shall be subject
to the fulfillment of each of the following additional conditions, any one or
more of which may be waived in writing by Identix:
(a) The representations and warranties of Visionics, contained
in this Agreement shall be true and correct, in all material respects, as of the
Effective Time, with the same force and effect as if made at the Effective Time,
except (i) for changes specifically permitted by the terms of this Agreement,
(ii) that the accuracy of the representations and warranties that by their terms
speak as of the date of this Agreement or some other date will be determined as
of such date and (iii) where the failure of such representations and warranties
to be so true and correct does not constitute a Visionics Material Adverse
Effect.
99.1-58
(b) Visionics shall have performed and complied in all
material respects with all agreements and obligations required by this Agreement
to be performed or complied with by it on or prior to the Closing Date.
(c) Visionics shall have furnished a certificate of Visionics
executed by one of its officers to evidence compliance with the conditions set
forth in Sections 7.2(a) and (b) of this Agreement.
ARTICLE VIII
TERMINATION
8.1 TERMINATION. This Agreement may be terminated at any time prior to
the Effective Time, whether before or after the requisite approval of Visionics'
stockholders:
(a) by mutual written consent duly authorized by the boards of
directors of Identix and Visionics;
(b) by either Visionics or Identix if the Merger shall not
have been consummated by September 30, 2002 (the "END DATE"), which date may be
extended by mutual consent of the parties hereto, for any reason; provided,
however, that the right to terminate this Agreement under this Section 8.1(b)
shall not be available to any party whose action or failure to act has been a
principal cause of or resulted in the failure of the Merger to occur on or
before such date and such action or failure to act constitutes a material breach
of this Agreement;
(c) by either Visionics or Identix if (i) a statute, rule,
regulation or executive order shall have been enacted, entered or promulgated
prohibiting the consummation of the Merger substantially on the terms
contemplated hereby or (ii) a court of competent jurisdiction or other
Government Entity shall have issued an order, decree or ruling or taken any
other action, in any case having the effect of permanently restraining,
enjoining or otherwise prohibiting the Merger, which order, decree, ruling or
other action is final and nonappealable;
(d) by Visionics or Identix if the required approval of the
stockholders of Visionics contemplated by this Agreement shall not have been
obtained by reason of the failure to hold the meeting or the failure to obtain
the required vote at a meeting of Visionics stockholders duly convened therefore
or at any adjournment thereof; provided, however, that the right to terminate
this Agreement under this Section 8.1(d) shall not be available to Visionics
where the failure to obtain Visionics stockholder approval shall have been
caused by (i) the action or failure to act of Visionics and such action or
failure to act constitutes a material breach by Visionics of this Agreement or
(ii) a breach of any Visionics Voting Agreement by any party thereto other than
Identix.
99.1-59
(e) by Visionics or Identix if the required approval of the
stockholders of Identix contemplated by this Agreement shall not have been
obtained by reason of the failure to hold the meeting or the failure to obtain
the required vote at a meeting of Identix stockholders duly convened therefore
or at any adjournment thereof; provided, however, that the right to terminate
this Agreement under this Section 8.1(e) shall not be available to Identix where
the failure to obtain Identix stockholder approval shall have been caused by (i)
the action or failure to act of Identix and such action or failure to act
constitutes a material breach by Identix of this Agreement or (ii) a breach of
any Identix Voting Agreement by any party thereto other than Visionics.
(f) by Identix (at any time prior to the adoption and approval
of this Agreement and the Merger by the required vote of the stockholders of
Visionics) if a Visionics Triggering Event (as defined below) shall have
occurred;
(g) by Visionics (at any time prior to the approval of the
issuance of Identix Common Stock in the Merger by the required vote of the
stockholders of Identix) if an Identix Triggering Event (as defined below) shall
have occurred;
(h) by Visionics, upon a breach of any representation,
warranty, covenant or agreement on the part of Identix set forth in this
Agreement, or if any representation or warranty of Identix shall have become
untrue, in either case such that the conditions set forth in Section 7.1(a) or
Section 7.1(b) would not be satisfied as of the time of such breach or as of the
time such representation or warranty shall have become untrue, provided that
such inaccuracy in Identix' representations and warranties or breach by Identix
remains uncured on the date which is twenty (20) business days following written
notice of such breach or inaccuracy from Visionics to Identix (it being
understood that Visionics may not terminate this Agreement pursuant to this
paragraph (h) if it shall have materially breached this Agreement and remains in
breach of this agreement as of the date of such termination); or
(i) by Identix, upon a breach of any representation, warranty,
covenant or agreement on the part of Visionics set forth in this Agreement, or
if any representation or warranty of Visionics shall have become untrue, in
either case such that the conditions set forth in Section 7.2(a) or Section
7.2(b) would not be satisfied as of the time of such breach or as of the time
such representation or warranty shall have become untrue, provided that such
inaccuracy in Visionics' representations and warranties or breach by Visionics
remains uncured on the date which is twenty (20) business days following written
notice of such breach or inaccuracy from Identix to Visionics (it being
understood that Identix may not terminate this Agreement pursuant to this
paragraph (i) if it shall have materially breached this Agreement and remains in
breach of this agreement as of the date of such termination).
(j) For the purposes of this Agreement, a "VISIONICS
TRIGGERING EVENT" shall be deemed to have occurred if: (i) the board of
directors of Visionics shall for any reason have withdrawn or shall have amended
99.1-60
or modified in a manner adverse to Identix its recommendation in favor of, the
adoption and approval of the Agreement or the approval of the Merger; (ii)
Visionics shall have failed to include in the Joint Proxy Statement/Prospectus
the recommendation of the board of directors of Visionics in favor of the
adoption and approval of the Agreement and the approval of the Merger; (iii) the
board of directors of Visionics fails to reaffirm its recommendation in favor of
the adoption and approval of the Agreement and the approval of the Merger within
ten (10) days after Identix requests in writing that such recommendation be
reaffirmed; (iv) the board of directors of Visionics or any committee thereof
shall have approved or recommended any Acquisition Proposal with respect to
Visionics; or (v) a tender or exchange offer relating to securities of Visionics
shall have been commenced by a Person unaffiliated with Identix and Visionics
shall not have sent to its security holders pursuant to Rule 14e-2 promulgated
under the Securities Act, within ten (10) business days after such tender or
exchange offer is first published, sent or given, a statement disclosing that
Visionics recommends rejection of such tender or exchange offer.
(k) For the purposes of this Agreement, an "IDENTIX TRIGGERING
EVENT" shall be deemed to have occurred if: (i) the board of directors of
Identix shall for any reason have withdrawn or shall have amended or modified in
a manner adverse to Visionics its recommendation in favor of the issuance of
Identix Common Stock in the Merger; (ii) Identix shall have failed to include in
the Joint Proxy Statement/Prospectus the recommendation of the board of
directors of Identix in favor of the issuance of Identix Common Stock in the
Merger; or (iii) the board of directors of Identix fails to reaffirm its
recommendation in favor of the issuance of Identix Common Stock in the Merger
within (10) ten days after Visionics requests in writing that such
recommendation be reaffirmed; (iv) the board of directors of Identix or any
committee thereof shall have approved or recommended any Acquisition Proposal
with respect to Identix; or (v) a tender or exchange offer relating to
securities of Identix shall have been commenced by a Person unaffiliated with
Identix and Visionics shall not have sent to its security holders pursuant to
Rule 14e-2 promulgated under the Securities Act, within ten (10) business days
after such tender or exchange offer is first published, sent or given, a
statement disclosing that Identix recommends rejection of such tender or
exchange offer.
8.2 NOTICE OF TERMINATION; EFFECT OF TERMINATION. Any termination of
this Agreement pursuant to Section 8.1 will be effective immediately upon the
delivery of a valid written notice of the terminating party to the other parties
hereto. In the event of the termination of this Agreement as provided in Section
8.1, this Agreement shall be of no further force or effect, except (i) as set
forth in Section 5.3, this Section 8.2, Section 8.3 and Article IX, each of
which shall survive the termination of this Agreement, and (ii) nothing herein
shall relieve any party from liability for any willful breach of this Agreement.
No termination of this Agreement shall affect the obligations of the parties
contained in the Confidentiality Agreement, all of which obligations shall
survive termination of this Agreement in accordance with their terms.
99.1-61
8.3 FEES AND EXPENSES.
(a) Except as set forth in this Section 8.3, all fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses whether
or not the Merger is consummated; provided, however, that Identix and Visionics
shall share equally all fees and expenses, other than attorneys' and accountants
fees and expenses, incurred in relation to the printing and filing (with the
SEC) of the Registration Statement and the Joint Proxy Statement/Prospectus
(including any preliminary materials related thereto) and the Registration
Statement (including financial statements and exhibits) and any amendments or
supplements thereto and shall share equally all fees and expenses relating to
any filings under the HSR Act and any Nasdaq filings.
(b) Visionics Payments.
(i) Subject to Section 8.3(b)(ii) and 8.3(b)(iii)
below, in the event that this Agreement is terminated by Identix or Visionics,
as applicable, pursuant to Sections 8.1(b), (d) or (f), Visionics shall pay
Identix a fee equal to $12,300,000 plus the Identix Expenses (as hereinafter
defined) in immediately available funds (the "VISIONICS TERMINATION FEE").
(ii) In the event that this Agreement is terminated
by Identix or Visionics, as applicable, pursuant to Section 8.1(b) or 8.1(d),
(A) Visionics shall pay Identix the Visionics Termination Fee, less any Identix
Expenses previously paid pursuant to Section 8.3(b)(iii) below, only if
following the date hereof and prior to the termination of this Agreement, a
third party has publicly announced an Acquisition Proposal with respect to
Visionics and within 12 months following the termination of this Agreement, a
Visionics Acquisition (as hereinafter defined) is consummated or Visionics
enters into an agreement providing for a Visionics Acquisition, and (B) such
payment shall be made promptly, but in no event later than two days after the
consummation of such Visionics Acquisition (regardless of when such consummation
occurs if Visionics has entered into such an agreement within such 12-month
period) in immediately available funds.
(iii) In the event that this Agreement is terminated
by Identix or Visionics pursuant to Section 8.1(d) and Visionics is not required
to pay Identix the Visionics Termination Fee as of the time of such termination,
Visionics shall reimburse Identix for all documented expenses incurred by
Identix in connection with this Agreement and the transactions contemplated
hereby (the "IDENTIX EXPENSES") in immediately available funds not later than
ten (10) business days after termination of this Agreement.
(iv) In the event that this Agreement is terminated
by Identix pursuant to Section 8.1(i) because the condition set forth in Section
7.2(b) is not satisfied, Visionics shall not later than ten (10) business days
after the date of such termination, reimburse Identix for the Identix Expenses
in immediately available funds.
99.1-62
(v) Visionics acknowledges that the agreements
contained in this Section 8.3(b) are an integral part of the transactions
contemplated by this Agreement, and that, without these agreements, Identix
would not enter into this Agreement; accordingly, if Visionics fails to pay in a
timely manner the amounts due pursuant to this Section 8.3(b), and, in order to
obtain such payment, Identix makes a claim that results in a judgment against
Visionics for any or all of the amounts set forth in this Section 8.3(b),
Visionics shall pay to Identix its reasonable costs and expenses (including
reasonable attorneys' fees and expenses) incurred in connection with such suit,
together with interest on the amounts set forth in this Section 8.3(b) at the
prime rate of The Chase Manhattan Bank in effect on the date such payment was
required to be made.
For the purposes of this Agreement, "VISIONICS ACQUISITION" shall mean
any of the following transactions (other than the transactions contemplated by
this Agreement); (i) a merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving
Visionics pursuant to which Visionics' stockholders immediately preceding such
transaction hold less than 50% of the aggregate equity interests in the
surviving or resulting entity of such transaction, (ii) a sale or other
disposition by Visionics of assets representing in excess of 50% of the
aggregate fair market value of Visionics' business immediately prior to such
sale or (iii) the acquisition by any Person (including by way of a tender offer
or an exchange offer or issuance by Visionics), directly or indirectly, of
beneficial ownership or a right to acquire beneficial ownership of shares
representing in excess of 50% of the voting power of the then outstanding shares
of capital stock of Visionics.
(c) Identix Payments.
(i) Subject to Section 8.3(c)(ii) and 8.3(c)(iii)
below, in the event that this Agreement is terminated by Identix or Visionics,
as applicable, pursuant to Sections 8.1(b), (e) or (g), Identix shall pay
Visionics a fee equal to $12,300,000 plus the Visionics Expenses (as hereinafter
defined) in immediately available funds (the "IDENTIX TERMINATION FEE").
(ii) In the event that this Agreement is terminated
by Identix or Visionics, as applicable, pursuant to Section 8.1(b) or 8.1(e),
(A) Identix shall pay Visionics the Identix Termination Fee, less any Visionics
Expenses previously paid pursuant to Section 8.3(c)(iii) below, only if
following the date hereof and prior to the termination of this Agreement, a
third party has publicly announced an Acquisition Proposal with respect to
Identix and within 12 months following the termination of this Agreement, an
Identix Acquisition (as hereinafter defined) is consummated or Identix enters
into an agreement providing for an Identix Acquisition, and (B) such payment
shall be made promptly, but in no event later than two days after the
consummation of such Identix Acquisition (regardless of when such consummation
occurs if Identix has entered into such an agreement within such 12-month
period) in immediately available funds.
99.1-63
(iii) In the event that this Agreement is terminated
by Identix or Visionics pursuant to Section 8.1(e) and Identix is not required
to pay Visionics the Identix Termination Fee as of the time of such termination,
Identix shall reimburse Visionics for all documented expenses incurred by
Visionics in connection with this Agreement and the transactions contemplated
hereby (the "VISIONICS EXPENSES") in immediately available funds not later than
ten (10) business days after termination of this Agreement.
(iv) In the event that this Agreement is terminated
by Visionics pursuant to Section 8.1(h) because the condition set forth in
Section 7.1(b) is not satisfied, Identix shall not later than ten (10) business
days after the date of such termination, reimburse Visionics for the Visionics
Expenses in immediately available funds.
(v) Identix acknowledges that the agreements
contained in this Section 8.3(c) are an integral part of the transactions
contemplated by this Agreement, and that, without these agreements, Visionics
would not enter into this Agreement; accordingly, if Identix fails to pay in a
timely manner the amounts due pursuant to this Section 8.3(c), and, in order to
obtain such payment, Visionics makes a claim that results in a judgment against
Identix for any or all of the amounts set forth in this Section 8.3(c), Identix
shall pay to Visionics its reasonable costs and expenses (including reasonable
attorneys' fees and expenses) incurred in connection with such suit, together
with interest on the amounts set forth in this Section 8.3(c) at the prime rate
of The Chase Manhattan Bank in effect on the date such payment was required to
be made.
For the purposes of this Agreement, "IDENTIX ACQUISITION" shall mean
any of the following transactions (other than the transactions contemplated by
this Agreement); (i) a merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving
Identix pursuant to which Identix' stockholders immediately preceding such
transaction hold less than 50% of the aggregate equity interests in the
surviving or resulting entity of such transaction, (ii) a sale or other
disposition by Identix of assets representing in excess of 50% of the aggregate
fair market value of Identix' business immediately prior to such sale or (iii)
the acquisition by any Person (including by way of a tender offer or an exchange
offer or issuance by Identix), directly or indirectly, of beneficial ownership
or a right to acquire beneficial ownership of shares representing in excess of
50% of the voting power of the then outstanding shares of capital stock of
Identix.
8.4 AMENDMENT. Subject to applicable law, this Agreement may be amended
by the parties hereto at any time by execution of an instrument in writing
signed on behalf of each of Identix and Visionics.
99.1-64
8.5 EXTENSION; WAIVER. At any time prior to the Effective Time any
party hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto and (iii)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. Delay in exercising any right under this
Agreement shall not constitute a waiver of such right.
ARTICLE IX
MISCELLANEOUS
9.1 AMENDMENT AND MODIFICATION. Subject to applicable law, this
Agreement may be amended, modified or supplemented only by written agreement of
Identix, Merger Sub and Visionics at any time prior to the Effective Time;
provided, however, that after approval of this Agreement by the stockholders of
Visionics, no such amendment or modification shall change the amount or form of
the consideration to be received by Visionics' stockholders in the Merger.
9.2 WAIVER OF COMPLIANCE; CONSENTS. Any failure of Identix or Merger
Sub, on the one hand, or Visionics, on the other hand, to comply with any
obligation, covenant, agreement or condition herein may be waived by Visionics
(with respect to any failure by Identix or Merger Sub) or Identix or Merger Sub
(with respect to any failure by Visionics), respectively, only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure. Whenever this Agreement requires or permits consent
by or on behalf of any party hereto, such consent shall be given in writing in a
manner consistent with the requirements for a waiver of compliance as set forth
in this Section 9.2.
9.3 SURVIVAL; INVESTIGATIONS. The respective representations and
warranties of Identix, Merger Sub and Visionics contained herein or in any
certificates or other documents delivered prior to or at the Closing shall not
be deemed waived or otherwise affected by any investigation made by any party
hereto and shall not survive the Effective Time.
9.4 NOTICES. All notices and other communications hereunder shall be in
writing and shall be delivered personally by overnight courier or similar means
or sent by facsimile with written confirmation of receipt, to the parties at the
addresses specified below (or at such other address for a party as shall be
specified by like notice. Any such notice shall be effective upon receipt, if
personally delivered or on the next business day following transmittal if sent
by confirmed facsimile. Notices, including oral notices, shall be delivered as
follows:
if to Visionics, to: 0000 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxx
99.1-65
with a copy to: Xxxxxx Xxxxxxx Xxxxxx & Brand, LLP
3300 Xxxxx Fargo Center
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxxxxx
if to Identix, or Merger Sub, to: 000 Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention:
with a copy to: Xxxxxx Xxxxxx White & XxXxxxxxx LLP
000 Xxxxxxxxxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Peers, Esq.
9.5 ASSIGNMENT; THIRD PARTY BENEFICIARIES. Neither this Agreement nor
any right, interest or obligation hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns. This Agreement is not
intended to confer any rights or remedies upon any Person other than the parties
hereto and, with respect only to Section 5.8, the Indemnified Parties.
9.6 GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Delaware without reference to principles of conflicts of laws.
9.7 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.8 SEVERABILITY. In case any one or more of the provisions contained
in this Agreement should be finally determined to be invalid, illegal or
unenforceable in any respect against a party hereto, it shall be adjusted if
possible to effect the intent of the parties. In any event, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby, and such invalidity, illegality
or unenforceability shall only apply as to such party in the specific
jurisdiction where such final determination shall have been made.
9.9 INTERPRETATION. The Article and Section headings contained in this
Agreement are solely for the purpose of reference and shall not in any way
affect the meaning or interpretation of this Agreement. The word "including"
shall be deemed to mean "including without limitation."
9.10 ENTIRE AGREEMENT. This Agreement, the Voting Agreements and the
Confidentiality Agreement including the exhibits hereto and the documents and
instruments referred to herein (including the Visionics Disclosure Statement and
the Identix Disclosure Statement), embody the entire agreement and understanding
of the parties hereto in respect of the subject matter contained herein. There
are no representations, promises, warranties, covenants, or undertakings, other
than those expressly set forth or referred to herein and therein.
99.1-66
9.11 DEFINITION OF "LAW". When used in this Agreement "law" refers to
any applicable law (whether civil, criminal or administrative) including,
without limitation, common law, statute, statutory instrument, treaty,
regulation, directive, decision, code, order, decree, injunction, resolution or
judgment of any government, quasi-government, supranational, federal, state or
local government, statutory or regulatory body, court, or agency.
9.12 RULES OF CONSTRUCTION. Each party to this Agreement has been
represented by counsel during the preparation and execution of this Agreement,
and therefore waives any rule of construction that would construe ambiguities
against the party drafting the agreement.
[SIGNATURE PAGE FOLLOWS]
99.1-67
IN WITNESS WHEREOF, Identix, Merger Sub and Visionics have caused this
Agreement to be signed by their respective duly authorized officers as of the
date first above written.
IDENTIX INCORPORATED
By: /s/ Xxxxxx XxXxxxxx
-----------------------
Xxxxxx XxXxxxxx
Chairman and Chief Executive Officer
VIPER ACQUISITION CORP.
By: /s/ Xxxxxx XxXxxxxx
-----------------------
Xxxxxx XxXxxxxx
President
VISIONICS CORPORATION
By: /s/ Xxxxxx Xxxxx
--------------------
Xxxxxx Xxxxx
Chairman and Chief Executive Officer
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER]
99.1-68
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
IDENTIX INCORPORATED
VIPER ACQUISITION CORP.
AND
VISIONICS CORPORATION
DATED AS OF FEBRUARY 22, 2002
99.1-69
TABLE OF CONTENTS
PAGE
----
ARTICLE I THE MERGER.......................................................................2
1.1 The Merger...............................................................2
1.2 Closing; Effective Time..................................................2
1.3 Effects of the Merger....................................................2
1.4 Certificate of Incorporation; Bylaws.....................................2
1.5 Directors and Officers of the Surviving Corporation......................3
ARTICLE II CONVERSION OF SHARES............................................................3
2.1 Conversion of Stock......................................................3
2.2 Visionics Options, Visionics Warrants....................................4
2.3 Exchange of Stock Certificates...........................................5
2.4 Lost, Stolen or Destroyed Certificates...................................7
2.5 Tax Consequences.........................................................7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF VISIONICS....................................7
3.1 Organization, Etc........................................................7
3.2 Authority Relative to This Agreement.....................................8
3.3 No Violations, Etc.......................................................9
3.4 Board Recommendation.....................................................10
3.5 Fairness Opinion.........................................................10
3.6 Capitalization...........................................................10
3.7 SEC Filings..............................................................11
3.8 Compliance with Laws.....................................................11
3.9 Financial Statements.....................................................12
3.10 Absence of Undisclosed Liabilities.......................................12
3.11 Absence of Changes or Events.............................................12
3.12 Capital Stock of Subsidiaries............................................14
3.13 Litigation...............................................................14
3.14 Insurance................................................................15
3.15 Contracts and Commitments................................................15
3.16 Labor Matters; Employment and Labor Contracts............................17
3.17 Intellectual Property Rights.............................................17
3.18 Taxes....................................................................19
3.19 Employee Benefit Plans; ERISA............................................20
3.20 Environmental Matters....................................................23
3.21 Officer's Certificate as to Tax Matters..................................24
3.22 Affiliates...............................................................24
3.23 Finders or Brokers.......................................................24
3.24 Registration Statement; Joint Proxy Statement/Prospectus.................25
99.1-70
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
3.25 Title to Property........................................................25
3.26 No Existing Discussions..................................................25
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF IDENTIX AND
MERGER SUB.................................................................................26
4.1 Organization, Etc........................................................26
4.2 Authority Relative to This Agreement.....................................27
4.3 No Violations, Etc.......................................................27
4.4 Board Recommendation.....................................................28
4.5 Fairness Opinion.........................................................28
4.6 Capitalization...........................................................28
4.7 SEC Filings..............................................................29
4.8 Compliance with Laws.....................................................30
4.9 Financial Statements.....................................................30
4.10 Absence of Undisclosed Liabilities.......................................30
4.11 Absence of Changes or Events.............................................31
4.12 Capital Stock of Subsidiaries............................................32
4.13 Litigation...............................................................33
4.14 Insurance................................................................33
4.15 Contracts and Commitments................................................33
4.16 Labor Matters; Employment and Labor Contracts............................35
4.17 Intellectual Property Rights.............................................35
4.18 Taxes....................................................................37
4.19 Employee Benefit Plans; ERISA............................................38
4.20 Environmental Matters....................................................41
4.21 Officer's Certificate as to Tax Matters..................................42
4.22 Finders or Brokers.......................................................42
4.23 Registration Statement; Joint Proxy Statement/Prospectus.................42
4.24 Title to Property........................................................42
4.25 No Existing Discussions..................................................43
ARTICLE V COVENANTS........................................................................43
5.1 Conduct of Business During Interim Period................................43
5.2 No Solicitation..........................................................45
5.3 Access to Information....................................................48
5.4 Special Meeting; Registration Statement; Board Recommendations...........48
5.5 Commercially Reasonable Efforts..........................................52
5.6 Public Announcements.....................................................52
5.7 Notification of Certain Matters..........................................52
99.1-71
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
5.8 Indemnification..........................................................53
5.9 Affiliate Agreements.....................................................53
5.10 Stock Exchange Listing...................................................53
5.11 Board of Directors and Certain Officers of the Combined Company..........54
5.12 Consents of Identix' and Visionics' Accountants..........................54
5.13 Voting Agreements........................................................54
5.14 Form S-8.................................................................54
5.15 Notification of Certain Matters..........................................54
5.16 SEC Filings..............................................................55
5.17 Employee Benefit Matters.................................................56
5.18 Visionics Rights Plan....................................................56
5.19 Increase in Authorized Shares............................................56
ARTICLE VI CONDITIONS TO THE OBLIGATIONS OF EACH PARTY.....................................57
6.1 Registration Statement...................................................57
6.2 Visionics Stockholder Approval...........................................57
6.3 Identix Stockholder Approval.............................................57
6.4 Listing of Additional Shares.............................................57
6.5 Governmental Clearances..................................................57
6.6 Tax Matters..............................................................57
6.7 Statute or Decree........................................................58
ARTICLE VII CONDITIONS TO THE OBLIGATIONS OF VISIONICS AND
IDENTIX....................................................................................58
7.1 Additional Conditions To The Obligations Of Visionics....................58
7.2 Additional Conditions To The Obligations Of Identix And Merger Sub.......58
ARTICLE VIII TERMINATION...................................................................59
8.1 Termination..............................................................59
8.2 Notice of Termination; Effect of Termination.............................61
8.3 Fees and Expenses........................................................62
8.4 Amendment................................................................64
8.5 Extension; Waiver........................................................65
ARTICLE IX MISCELLANEOUS...................................................................65
9.1 Amendment and Modification...............................................65
9.2 Waiver of Compliance; Consents...........................................65
9.3 Survival; Investigations.................................................65
9.4 Notices..................................................................65
9.5 Assignment; Third Party Beneficiaries....................................66
99.1-72
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
9.6 Governing Law............................................................66
9.7 Counterparts.............................................................66
9.8 Severability.............................................................66
9.9 Interpretation...........................................................66
9.10 Entire Agreement.........................................................66
9.11 Definition of "law"......................................................67
9.12 Rules of Construction....................................................67
99.1-73
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
Exhibits
--------
Exhibit A - Form of Visionics Voting Agreement
Exhibit B - Form of Identix Voting Agreement
Exhibit C - Certificate of Merger
Exhibit D - Form of Visionics Affiliate Agreement
99.1-74
INDEX OF DEFINED TERMS
"Acquisition Proposal".................................. Section 5.2(a)
"Acquisition Transaction"............................... Section 5.2(a)
"Action"................................................ Section 3.13
"Affiliates"............................................ Section 3.22
"Agreement"............................................. Preamble
"Antitrust Division".................................... Section 5.5(a)
"Certificate of Merger"................................. Section 1.2
"Closing Date".......................................... Section 1.2
"Closing"............................................... Section 1.2
"COBRA"................................................. Section 3.16(b)
"Code".................................................. Recitals
"Confidentiality Agreement"............................. Section 5.3
"Delaware Law".......................................... Section 1.1
"Effective Time"........................................ Section 1.2
"End Date".............................................. Section 8.1(b)
"ERISA"................................................. Section 3.19(a)
"Exchange Act".......................................... Section 3.3
"Exchange Agent"........................................ Section 2.3(a)
"Exchange Multiple"..................................... Section 2.1(g)
"Exchange Quotient"..................................... Section 2.1(g)
"Exchange Ratio"........................................ Section 2.1(a)
"FTC"................................................... Section 5.5(a)
"GAAP".................................................. Section 3.9
"Government Entity"..................................... Section 3.3
"group health plan"..................................... Section 3.19(k)
"Hazardous Material".................................... Section 3.20(a)
"Hazardous Materials Activities"........................ Section 3.20(b)
"Holder"................................................ Section 2.3(c)
"HSR Act"............................................... Section 3.3
"Identix"............................................... Preamble
"Identix Acquisition"................................... Section 8.3(c)
"Identix Affiliate Agreement"........................... Section 5.10(b)
"Identix Balance Sheet"................................. Section 4.9
"Identix Certificates".................................. Section 2.1(b)
"Identix Closing Value"................................. Section 2.1(f)
"Identix Common Stock".................................. Recitals
"Identix Contract"...................................... Section 4.15(b)
"Identix Disclosure Statement".......................... Article IV
"Identix Employee Benefit Plans"........................ Section 4.19(a)
99.1-75
INDEX OF DEFINED TERMS
(CONTINUED)
"Identix Environmental Permits"......................... Section 4.20(c)
"Identix ERISA Affiliate"............................... Section 4.19(a)
"Identix Exchange Options".............................. Section 2.2(a)
"Identix Exchange Warrants"............................. Section 2.2(b)
"Identix Expenses"...................................... Section 8.3(b)(iii)
"Identix Financial Statements".......................... Section 4.9
"Identix Foreign Plan".................................. Section 4.19(m)
"Identix IP Rights"..................................... Section 4.17
"Identix Material Adverse Effect"....................... Section 4.1(a)
"Identix Notice of Superior Offer"...................... Section 5.4(f)
"Identix Options"....................................... Section 4.6(b)
"Identix Preferred Stock"............................... Section 4.6(a)
"Identix SEC Reports"................................... Section 4.7
"Identix Special Meeting"............................... Section 5.4(b)
"Identix Stock Plans"................................... Section 4.6(b)
"Identix Subsidiaries".................................. Section 4.1(a)
"Identix Superior Offer"................................ Section 5.4(f)
"Identix Termination Fee"............................... Section 8.3(c)(i)
"Identix Triggering Event".............................. Section 8.1(k)
"Identix Voting Agreements"............................. Recitals
"IRS"................................................... Section 3.19(j)
"Joint Proxy Statement/Prospectus"...................... Section 3.24
"law"................................................... Section 9.11
"Merger Sub Common Stock"............................... Section 2.1(d)
"Merger Sub"............................................ Preamble
"Merger"................................................ Recitals
"Nasdaq"................................................ Section 2.1(f)
"Pension Plans"......................................... Section 3.19(a)
"Person"................................................ Section 2.1(g)
"Potential Acquiror".................................... Section 5.2(a)
"Reference Date"........................................ Section 3.9
"Registration Statement"................................ Section 3.24
"SEC"................................................... Section 3.7
"Securities Act"........................................ Section 3.7
"Subsidiary"............................................ Section 2.1(g)
"Surviving Corporation"................................. Section 1.1
"Tax Return" or "Tax Returns"........................... Section 3.18(a)
"Tax" or "Taxes"........................................ Section 3.18(a)
"To the knowledge of Identix"........................... Section 4.6(b)
99.1-76
INDEX OF DEFINED TERMS
(CONTINUED)
"To the knowledge of Visionics"......................... Section 3.6(b)
"Visionics"............................................. Preamble
"Visionics"............................................. Section 1.4(a)
"Visionics Acquisition"................................. Section 8.3(b)
"Visionics Affiliate Agreement"......................... Section 5.10(a)
"Visionics Affiliate Agreement"......................... Section 5.9
"Visionics Balance Sheet"............................... Section 3.9
"Visionics Certificate"................................. Section 2.3(c)
"Visionics Common Stock"................................ Recitals
"Visionics Contract".................................... Section 3.15(b)
"Visionics Disclosure Statement"........................ Article III
"Visionics Employee Benefit Plans"...................... Section 3.19(a)
"Visionics Environmental Permits"....................... Section 3.20(c)
"Visionics ERISA Affiliate"............................. Section 3.19(a)
"Visionics Expenses".................................... Section 8.3(c)(iii)
"Visionics Financial Statements"........................ Section 3.9
"Visionics Foreign Plan"................................ Section 3.19(n)
"Visionics IP Rights"................................... Section 3.17(a)
"Visionics Material Adverse Effect"..................... Section 3.1(a)
"Visionics Notice of Superior Offer".................... Section 5.4(e)
"Visionics Options"..................................... Section 2.2(a)
"Visionics Preferred Stock"............................. Section 3.6(a)
"Visionics Restricted Stock"............................ Section 2.2(a)
"Visionics Rights"...................................... Section 2.1(a)
"Visionics Rights Plan"................................. Section 2.1(a)
"Visionics SEC Reports"................................. Section 3.7
"Visionics Special Meeting"............................. Section 5.4(a)
"Visionics Stock Plans"................................. Section 2.2(a)
"Visionics Subsidiaries"................................ Section 3.1(a)
"Visionics Superior Offer".............................. Section 5.4(e)
"Visionics Termination Fee"............................. Section 8.3(b)(i)
"Visionics Triggering Event"............................ Section 8.1(j)
"Visionics Voting Agreements"........................... Recitals
"Visionics Warrant Agreements".......................... Section 2.2(b)
"Visionics Warrants".................................... Section 2.2(b)
"Voting Agreements"..................................... Section 5.15
"Welfare Plans"......................................... Section 3.19(a)
99.1-77
