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AGREEMENT AND PLAN OF MERGER
dated January 20, 2003:
FOR THE ACQUISITION OF
CAMINUS CORPORATION
BY
SUNGARD DATA SYSTEMS INC.
TABLE OF CONTENTS
Page
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Section 1: THE OFFER.......................................................................................2
1.1 Conduct of the Offer................................................................................2
1.2 Company Actions.....................................................................................4
1.3 Directors...........................................................................................5
Section 2: MERGER TRANSACTION..............................................................................6
2.1 Merger of Acquisition Sub into the Company..........................................................6
2.2 Effect of the Merger................................................................................6
2.3 Closing; Effective Time.............................................................................6
2.4 Certificate of Incorporation and Bylaws; Directors and Officers.....................................7
2.5 Conversion of Shares................................................................................7
2.6 Surrender of Certificates; Stock Transfer Books.....................................................8
2.7 Shares Subject to Appraisal Rights..................................................................9
2.8 Further Action.....................................................................................10
Section 3: REPRESENTATIONS AND WARRANTIES OF THE COMPANY..................................................10
3.1 Organization.......................................................................................10
3.2 Capital Stock and Ownership........................................................................11
3.3 Financial and Corporate Records....................................................................12
3.4 Compliance with Law................................................................................12
3.5 SEC Filings........................................................................................12
3.6 Assets.............................................................................................13
3.7 Obligations........................................................................................13
3.8 Operations Since September 30, 2002................................................................13
3.9 Tangible Property..................................................................................15
3.10 Real Property......................................................................................15
3.11 Environmental......................................................................................15
3.12 Software and Other Intangibles.....................................................................15
3.13 Contracts..........................................................................................18
3.14 Employees and Independent Contractors..............................................................19
3.15 Employee Benefit Plans.............................................................................19
3.16 Intentionally Omitted..............................................................................20
3.17 Taxes..............................................................................................21
3.18 Proceedings and Judgments..........................................................................22
3.19 Insurance..........................................................................................22
3.20 Questionable Payments..............................................................................22
3.21 Related Party and Affiliate Transactions...........................................................23
3.22 Effect of Agreement; Inapplicability of Anti-takeover Statutes.....................................23
3.23 Section 203 of the DGCL Not Applicable.............................................................23
3.24 Vote Required......................................................................................23
3.25 Non-Contravention; Consents........................................................................23
3.26 Fairness Opinion...................................................................................24
3.27 Financial Advisory and Other Fees..................................................................24
3.28 Financial Advisory Agreements......................................................................25
3.29 Full Disclosure....................................................................................25
Section 4: REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION SUB...................................26
4.1 Due Organization...................................................................................26
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Page
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4.2 Authority; Binding Nature of Agreement.............................................................26
4.3 Non-Contravention; Consents........................................................................26
4.4 Disclosure.........................................................................................26
4.5 Funds..............................................................................................26
4.6 Warranty Disclaimer................................................................................27
Section 5: CERTAIN COVENANTS OF THE COMPANY...............................................................27
5.1 Access and Investigation...........................................................................27
5.2 Operation of the Company's Business................................................................27
5.3 No Solicitation....................................................................................30
5.4 Certain Resolutions................................................................................33
Section 6: ADDITIONAL COVENANTS OF THE PARTIES............................................................33
6.1 Stockholder Approval; Proxy Statement..............................................................33
6.2 Regulatory Approvals...............................................................................34
6.3 Stock Options......................................................................................34
6.4 Employee Benefits..................................................................................35
6.5 Indemnification of Officers and Directors..........................................................36
6.6 Additional Agreements..............................................................................37
6.7 Disclosure.........................................................................................37
6.8 Resignation of Officers and Directors..............................................................38
6.9 General Cooperation................................................................................38
6.10 Section 16 Matters.................................................................................38
Section 7: CONDITIONS PRECEDENT TO THE MERGER.............................................................38
7.1 Stockholder Approval...............................................................................38
7.2 No Restraints......................................................................................38
7.3 Consummation of Offer..............................................................................38
Section 8: TERMINATION....................................................................................38
8.1 Termination........................................................................................38
8.2 Effect of Termination..............................................................................40
8.3 Expenses; Termination Fees.........................................................................41
Section 9: MISCELLANEOUS PROVISIONS.......................................................................43
9.1 Amendment..........................................................................................43
9.2 Waiver.............................................................................................43
9.3 No Survival of Representations and Warranties......................................................43
9.4 Entire Agreement; Counterparts; No Third Party Beneficiaries.......................................43
9.5 Applicable Law; Jurisdiction.......................................................................43
9.6 Headings...........................................................................................44
9.7 Attorneys' Fees....................................................................................44
9.8 Assignability......................................................................................44
9.9 Notices............................................................................................44
9.10 Cooperation........................................................................................44
9.11 Severability.......................................................................................45
9.12 Interpretation of Representations..................................................................45
9.13 Reliance by Parent and Acquisition Sub.............................................................45
9.14 Bankruptcy Qualification...........................................................................45
9.15 Construction.......................................................................................45
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EXHIBITS
Exhibit A -- Definitions
Exhibit B -- List of Persons Entering into Tender and Voting Agreement
Annex I -- Conditions of the Offer
COMPANY DISCLOSURE LETTER
Section 3.1 -- Organization
Section 3.2 -- Capital Stock and Ownership
Section 3.5 -- SEC Filings
Section 3.6 -- Assets
Section 3.7 -- Obligations
Section 3.8 -- Operations Since September 30, 2002
Section 3.10 -- Real Property
Section 3.11 -- Environmental
Section 3.12 -- Software and Other Intangibles
Section 3.15 -- Employee Benefit Plans
Section 3.17 -- Taxes
Section 3.18 -- Proceedings and Judgments
Section 3.19 -- Insurance
Section 3.21 -- Related Party and Affiliate Transactions
Section 3.25 -- Non-Contravention; Consents
Section 5.2(b) -- Operation of the Company's Business During
the Pre-Closing Period
Section 6.3(b) -- Assumed Option Exchange Ratio
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AGREEMENT AND PLAN OF MERGER
PARTIES: CAMINUS CORPORATION
a Delaware corporation (the "Company")
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
SUNGARD DATA SYSTEMS INC.
a Delaware corporation ("Parent")
0000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxx, XX 00000
RAPID RESOURCES INC.
a Delaware corporation ("Acquisition Sub")
0000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxx, XX 00000
DATE: JANUARY 20, 2003
BACKGROUND
A. The respective boards of directors of Parent, Acquisition Sub and the
Company have each determined that it is advisable and in the best interests of
their respective stockholders for Parent to acquire the Company upon the terms
and provisions of and subject to the conditions set forth in this Agreement.
B. It is proposed that Acquisition Sub make a cash tender offer (the
"Offer") to acquire all of the outstanding shares of common stock, $.01 par
value per share of the Company ("Company Common Stock") for $9.00 per share
(such amount, or any greater per share amount paid pursuant to the Offer,
subject to Section 1.1(e), being the "Per Share Amount"), upon the terms and
provisions of and subject to the conditions of this Agreement.
C. In furtherance of the acquisition of the Company by Parent, the
respective boards of directors of Parent, Acquisition Sub and the Company have
each approved a merger (the "Merger") of Acquisition Sub with and into the
Company, with the Company as the surviving corporation, upon the terms and
provisions of and subject to the conditions set forth in this Agreement.
D. By resolutions duly adopted, the board of directors of the Company has,
in light of and subject to the terms and conditions hereof: (i) determined that
this Agreement and the transactions contemplated hereby, including the Offer and
the Merger, are fair to and in the best interests of the Company and its
stockholders; and (ii) resolved to recommend that the stockholders of the
Company accept the Offer and tender their shares pursuant to the Offer and adopt
this Agreement.
E. In order to induce Parent and Acquisition Sub to enter into this
Agreement and to consummate the transactions contemplated hereby, concurrently
with the execution and delivery of this Agreement certain of the stockholders,
executive officers and directors of the
Company set forth on Exhibit B hereto are executing a tender and voting
agreement in favor of Parent and Acquisition Sub (the "Tender and Voting
Agreement").
F. Capitalized terms used herein shall have the meanings set forth in
Exhibit A hereto.
INTENDING TO BE LEGALLY BOUND, in consideration of the mutual agreements
contained herein and subject to the satisfaction of the terms and conditions set
forth herein, the parties hereto agree as follows:
Section 1: THE OFFER
1.1 Conduct of the Offer.
(a) Provided that this Agreement shall not have been terminated in
accordance with Section 8 hereof and that none of the events or circumstances
set forth in Annex I shall have occurred or exist (excluding the events or
circumstances set forth in paragraph "(a)" in Annex I), as promptly as
practicable (and in any event not later than ten (10) business days after the
date of this Agreement, provided that the Company has, within a reasonable time
prior theretofore, provided Parent with the information about the Company
required to be included in the Offer Statement (defined below)), Acquisition Sub
shall commence (within the meaning of Rule 14d-2 under the Exchange Act) the
Offer.
(b) Subject to the terms and conditions of the Offer and this
Agreement, Acquisition Sub shall accept for payment all shares of Company Common
Stock validly tendered and not withdrawn pursuant to the Offer as soon as it is
permitted to do so under applicable Law and shall pay for such shares promptly
thereafter (and in any event in compliance with Rule 14e-1(c) under the Exchange
Act). The obligation of Acquisition Sub to accept for payment and to pay for any
shares of Company Common Stock tendered pursuant to the Offer shall be subject
to (i) the condition that there shall be validly tendered and not withdrawn a
number of shares of Company Common Stock that (including the shares tendered
under the Tender and Voting Agreement) immediately prior to the acceptance for
payment of shares of Company Common Stock pursuant to the Offer ("Parent-Owned
Shares"), represents at least a majority of the Fully Diluted Number of Company
Shares (the "Minimum Condition") and (ii) the other conditions set forth in
Annex I. Acquisition Sub expressly reserves the right at its sole discretion to
increase the initial Per Share Amount, to waive (in whole or in part) any of the
conditions of the offer set forth in Annex I or to make any other changes in the
terms and conditions of the Offer; provided that without the prior written
consent of the Company: (i) the Minimum Condition may not be amended or waived;
(ii) no change may be made that changes the form of consideration to be paid,
that reduces the Per Share Amount or that changes the number of shares of
Company Common Stock sought in the Offer, or imposes conditions to the Offer in
addition to the Minimum Condition and the conditions set forth in Annex I; (iii)
except as provided in Section 1.1(c), no change may be made that extends the
expiration date of the Offer beyond the initial expiration date of the Offer,
and (iv) no change may be made that amends any other terms of the Offer in a
manner adverse to the holders of the Company Common Stock. Simultaneously with
the acceptance for payment of any shares in the Offer, Parent shall cause
Acquisition Sub to deposit with the Paying Agent immediately available cash
funds sufficient to pay for all shares of Company Common Stock validly tendered
and not withdrawn pursuant to the Offer.
(c) The Offer shall initially be scheduled to expire 20 business days
following the date of the commencement thereof. Notwithstanding anything to the
contrary contained in this Agreement, but subject to the parties' respective
termination rights under Section 8.1, (i) if,
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at any then-scheduled expiration date, any of the conditions to the Offer have
not been satisfied or waived, Acquisition Sub shall be entitled to extend the
Offer for such amount of time as is reasonably necessary to cause such
conditions to the Offer to be satisfied; (ii) Acquisition Sub may, without the
consent of the Company or any other Person (A) extend the Offer (one or more
times) for any period required by any rule, regulation, interpretation or
position of the SEC applicable to the Offer and (B) if the sum of (1) the number
of shares of Company Common Stock that shall have been validly tendered and not
withdrawn pursuant to the Offer (other than shares tendered by guaranteed
delivery where actual delivery has not occurred) as of the scheduled or extended
expiration date of the Offer, plus (2) the number of Parent-Owned Shares as of
such date, represents more than a majority of the Fully Diluted Number of
Company Shares but less than 90% of the Fully Diluted Number of Company Shares
as of such date, extend the Offer (one or more times) for an aggregate
additional period of not more than 20 business days; (iii) Acquisition Sub may,
without the consent of the Company or any other Person, elect to provide for a
subsequent offering period (and one or more extensions thereof) pursuant to, and
in accordance with the terms of, Rule 14d under the Exchange Act; and (iv) if,
at any then-scheduled expiration date any of the conditions to the Offer have
not been satisfied or waived, Acquisition Sub shall, if the Company so requests
in writing, extend the Offer for 10 business days.
(d) On the date of commencement of the Offer, Parent and Acquisition
Sub shall (i) file with the SEC a Tender Offer Statement on Schedule TO with
respect to the Offer which will contain or incorporate by reference the offer to
purchase shares of Company Common Stock pursuant to the Offer (the "Offer
Statement") and form of the related letter of transmittal and (ii) cause the
Offer Statement and related documents to be disseminated to holders of shares of
Company Common Stock in accordance with applicable federal securities laws.
Parent and Acquisition Sub agree that they shall use all reasonable efforts to
cause the Schedule TO and all exhibits, amendments or supplements thereto (which
together constitute the "Offer Documents") to comply in all material respects
with the Exchange Act, the Securities Act and the rules and regulations
thereunder and other applicable Law. Each of Parent, Acquisition Sub and the
Company agrees to use all reasonable efforts to respond promptly to any comments
of the SEC or its staff with respect to the Offer Documents or the Offer and to
correct promptly any information provided by it for use in the Offer Documents
if and to the extent that such information shall have become false or misleading
in any material respect. Parent and Acquisition Sub agree to take all steps
necessary to cause the Offer Documents as supplemented or amended to correct
such information to be filed with the SEC and to be disseminated to holders of
shares of Company Common Stock, in each case as and to the extent required by
applicable federal securities laws. The Company shall promptly furnish to Parent
and Acquisition Sub all information concerning the Acquired Companies and the
Company's stockholders that may be required or reasonably requested in
connection with any action contemplated by this Section 1.1(d). The Company and
its counsel shall be given reasonable opportunity to review and comment on the
Offer Documents (including any amendment thereto) prior to the filing thereof
with the SEC. Parent and Acquisition Sub agree to provide the Company and its
counsel with any comments Parent, Acquisition Sub or their counsel may receive
from the SEC or its staff with respect to the Offer Documents promptly after
receipt of such comments.
(e) If, between the date of this Agreement and the date on which any
particular share of Company Common Stock is accepted for payment pursuant to the
Offer, the outstanding shares of Company Common Stock are changed into a
different number or class of shares by reason of any stock split, division or
subdivision of shares, stock dividend, reverse stock split, consolidation of
shares, reclassification, recapitalization or other similar transaction,
3
then the Per Share Amount shall be appropriately adjusted to reflect such change
or transaction.
1.2 Company Actions.
(a) The Company hereby approves and consents to the Offer and
represents that its board of directors, at a meeting duly called and held, has
by the unanimous vote of all directors of the Company (i) determined that this
Agreement and the transactions contemplated hereby, including the Offer and the
Merger, are fair to and in the best interests of the Company and its
stockholders, (ii) approved and adopted this Agreement and the transactions
contemplated hereby, including the Offer and the Merger, in accordance with the
requirements of the Delaware General Corporation Law ("DGCL"), (iii) declared
that this Agreement is advisable, (iv) resolved to recommend that stockholders
of the Company accept the Offer and tender their shares of Company Common Stock
pursuant to the Offer and, to the extent necessary under applicable law to
accomplish the Merger, adopt this Agreement (the recommendation of the Company's
board of directors that the stockholders of the Company accept the Offer and
tender their shares of Company Common Stock pursuant to the Offer and adopt this
Agreement being referred to as the "Company Board Recommendation"), and (v) to
the extent necessary, adopted a resolution having the effect of causing the
Company not to be subject to any state takeover law or similar Law, including,
without limitation, Section 203 of the DGCL, that might otherwise apply to the
Offer or the Merger or any of the other transactions contemplated by this
Agreement. Subject to Section 5.3: (A) the Company hereby consents to the
inclusion of the Company Board Recommendation in the Offer Documents; and (B)
the Company Board Recommendation shall not be withdrawn or modified in a manner
adverse to Parent or Acquisition Sub, and no resolution by the board of
directors of the Company or any committee thereof to withdraw or modify the
Company Board Recommendation in a manner adverse to Parent or Acquisition Sub
shall be adopted or proposed.
(b) As promptly as practicable on the day that the Offer is commenced,
the Company shall file with the SEC and (following or contemporaneously with the
dissemination of the Offer Statement and related documents) disseminate to
holders of shares of Company Common Stock, in each case as and to the extent
required by applicable federal securities laws, a Solicitation/Recommendation
Statement on Schedule 14D-9 with respect to the Offer (together with any
amendments or supplements thereto, the "Schedule 14D-9") that shall reflect,
subject to Section 5.3, the Company Board Recommendation. The Company agrees
that it shall cause the Schedule 14D-9 to comply in all material respects with
the Exchange Act and the rules and regulations thereunder and other applicable
Law. Each of Parent, Acquisition Sub and the Company agrees to promptly correct
any information provided by it for use in the Schedule 14D-9 if and to the
extent that such information shall have become false or misleading in any
material respect, and the Company further agrees to take all steps necessary to
cause the Schedule 14D-9 as supplemented or amended to correct such information
to be filed with the SEC and to be disseminated to holders of shares of Company
Common Stock, in each case as and to the extent required by applicable federal
securities laws. Parent and its counsel shall be given reasonable opportunity to
review and comment on the Schedule 14D-9 (including any amendment thereto) prior
to the filing thereof with the SEC. The Company agrees to provide Parent and its
counsel with any comments the Company or its counsel may receive from the SEC or
its staff with respect to the Schedule 14D-9 promptly after receipt of such
comments.
(c) The Company will, or will cause its transfer agent to, promptly
furnish Parent and Acquisition Sub with a list of its stockholders, mailing
labels and any available listing or computer file containing the names and
addresses of all record holders of shares of Company Common Stock and lists of
securities positions of shares of Company Common Stock
4
held in stock depositories, in each case true and correct as of the most recent
practicable date, and will provide to Parent such additional information
(including updated lists of stockholders, mailing labels and lists of securities
positions) and such other assistance as Parent or Acquisition Sub may reasonably
request in connection with the Offer and the Merger. Parent and Acquisition Sub
and their agents shall hold in confidence the information contained in any such
labels, listings and files, will use such information only in connection with
the Offer and the Merger and, if this Agreement shall be terminated, will, upon
request, deliver to the Company or destroy, and will use their reasonable
efforts to cause their agents to deliver to the Company or destroy, all copies
and any extracts or summaries from such information then in their possession or
control.
1.3 Directors.
(a) Effective upon the acceptance for payment of any shares of Company
Common Stock pursuant to the Offer, Parent shall be entitled to designate the
number of directors, rounded up to the next whole number, on the Company's board
of directors that equals the product of (i) the total number of directors on the
Company's board of directors (giving effect to the election of any additional
directors pursuant to this Section) and (ii) a fraction whose numerator is the
aggregate number of shares of Company Common Stock then beneficially owned by
Parent or Acquisition Sub (including shares of Company Common Stock accepted for
payment pursuant to the Offer), and whose denominator is the total number of
shares of Company Common Stock then outstanding, and the Company shall take all
commercially reasonable actions necessary to cause Parent's designees to be
elected or appointed to the Company's board of directors, including increasing
the number of directors, and seeking and accepting resignations of incumbent
directors. At such time, to the extent requested by Parent, the Company will
also use all commercially reasonable actions to cause individuals designated by
Parent to constitute the number of members, rounded up to the next whole number,
on (i) each committee of the Company's board of directors and (ii) each board of
directors of each Subsidiary of the Company (and each committee thereof) that
represents the same percentage as individuals designated by Parent represent on
the board of directors of the Company. Notwithstanding the provisions of this
Section 1.3, the parties hereto shall use their respective commercially
reasonable efforts to cause at least two of the members of the Company's board
of directors, at all times prior to the Effective Time, to be individuals who
were directors of the Company and were not officers or employees of the Company
or any of its Subsidiaries on the date hereof (the "Continuing Directors");
provided, however, that if at any time prior to the Effective Time there shall
be in office only one Continuing Director for any reason, the Company's board of
directors shall cause a person who is not an officer or employee of the Company
or any of its Subsidiaries designated by the remaining Continuing Director to
fill such vacancy (and such person shall be deemed to be a Continuing Director
for all purposes of this Agreement), and if at any time prior to the Effective
Time no Continuing Directors then remain, the other directors of the Company
then in office shall use reasonable efforts to designate two persons to fill
such vacancies who are not officers or employees or affiliates of the Company,
its Subsidiaries, Parent or Acquisition Sub or any of their respective
affiliates (and such persons shall be deemed to be Continuing Directors for all
purposes of this Agreement).
(b) The Company's obligations to appoint Parent's designees to the
Company's board of directors shall be subject to Section 14(f) of the Exchange
Act and Rule 14f-1 promulgated thereunder. The Company shall promptly take all
actions, and shall include in the Schedule 14D-9 such information with respect
to the Company and its officers and directors, as Section 14(f) and Rule 14f-1
of the Exchange Act require in order to fulfill its obligations under this
Section, so long as Parent shall have provided to the Company on a timely basis
the
5
information with respect to Parent and its nominees, officers, directors and
affiliates required by Section 14(f) and Rule 14f-1 of the Exchange Act. The
provisions of this Section 1.3 are in addition to and shall not limit any rights
which Acquisition Sub, Parent or any of their affiliates may have as a holder or
beneficial owner of shares of Company Common Stock as a matter of applicable law
with respect to the election of directors or otherwise.
(c) Following the election or appointment of Parent's designees
pursuant to Section 1.3(a) and until the Effective Time, the approval of a
majority of the Continuing Directors or if there shall only be one, of a
Continuing Director, shall be required to authorize (and such authorization
shall constitute the authorization of the Company's board of directors and no
other action on the part of the Company, including any action by any other
director of the Company, shall be required to authorize) any termination of this
Agreement by the Company, any amendment of this Agreement requiring action by
the Company's board of directors, any extension of time for performance of any
obligation or action hereunder by Parent or Acquisition Sub requiring the
consent of the Company, any waiver of compliance by the Company of any of the
agreements or conditions contained herein for the benefit of the Company or its
stockholders, any required or permitted consent or action by the board of
directors of the Company hereunder and any other action of the Company hereunder
which adversely affects the holders of shares of Company Common Stock (other
than Parent or Acquisition Sub); provided, that, if for any reason there shall
be no Continuing Directors and the Company has used commercially reasonable
efforts to appoint Continuing Directors but has been unable after a reasonable
period of time to find suitable candidates willing to serve, such actions may be
effected by majority vote of the entire board of directors of the Company.
Section 2: MERGER TRANSACTION
2.1 Merger of Acquisition Sub into the Company. Upon the terms and subject
to the conditions set forth in this Agreement and in accordance with the DGCL,
at the Effective Time, Acquisition Sub shall be merged with and into the
Company, the separate existence of Acquisition Sub shall cease and the Company
will continue as the surviving corporation in the Merger (the "Surviving
Corporation").
2.2 Effect of the Merger. The Merger shall have the effects set forth in
this Agreement and in the applicable provisions of the DGCL. Without limiting
the generality of the foregoing, and subject thereto, at the Effective Time, all
property of the Company and Acquisition Sub shall vest in the Surviving
Corporation, and all debts, liabilities, obligations and duties of the Company
and Acquisition Sub shall become debts, liabilities, obligations and duties of
the Surviving Corporation.
2.3 Closing; Effective Time. Unless this Agreement shall have been
terminated and the transactions contemplated hereby shall have been abandoned
pursuant to Section 8 hereof, the consummation of the Merger (the "Closing")
shall take place at the New York offices of Blank Rome LLP, at 10:00 a.m., New
York City time, on a date to be designated by Parent (the "Closing Date"), which
shall be no later than the fifth business day after the satisfaction or waiver
of the last to be satisfied or waived of the conditions set forth in Section 7
(other than delivery of items to be delivered at the Closing and other than
those conditions that by their nature are to be satisfied at the Closing, it
being understood that the occurrence of the Closing shall remain subject to the
delivery of such items and the satisfaction or waiver of such conditions at the
Closing), unless another date, time or place is agreed to in writing by the
parties hereto. Subject to the provisions of this Agreement, a certificate of
merger satisfying the applicable requirements of the DGCL shall be duly executed
by the Company and, concurrently with or as soon as practicable following the
Closing, filed with the Secretary of State of the State
6
of Delaware. The Merger shall become effective upon the date and time of the
filing of such certificate of merger with the Secretary of State of the State of
Delaware, or at such later time as is specified in the certificate of merger
(the "Effective Time").
2.4 Certificate of Incorporation and Bylaws; Directors and Officers. Unless
otherwise determined by Parent prior to the Effective Time:
(a) subject to Section 6.5(a), the certificate of incorporation of the
Surviving Corporation shall be amended and restated as of the Effective Time to
conform to the certificate of incorporation of Acquisition Sub as in effect
immediately prior to the Effective Time until thereafter changed or amended in
accordance with the provisions thereof and applicable law;
(b) subject to Section 6.5(a), the bylaws of the Surviving Corporation
shall be amended and restated as of the Effective Time to conform to the bylaws
of Acquisition Sub as in effect immediately prior to the Effective Time until
thereafter changed or amended in accordance with the provisions thereof and
applicable law;
(c) the directors of the Surviving Corporation immediately after the
Effective Time shall be the respective individuals who are directors of
Acquisition Sub immediately prior to the Effective Time until the earlier of
their resignation or removal or until their respective successors are duly
elected and qualified, as the case may be; and
(d) the officers of the Surviving Corporation immediately after the
Effective Time shall be the respective individuals who are officers of the
Company immediately prior to the Effective Time until the earlier of their
resignation or removal or until their respective successors are duly elected and
qualified, as the case may be.
2.5 Conversion of Shares.
(a) At the Effective Time, by virtue of the Merger and without any
further action on the part of Parent, Acquisition Sub, the Company or any
stockholder of the Company:
(i) any shares of Company Common Stock then held by the Company or
any wholly owned Subsidiary of the Company (or held in the Company's treasury)
shall be canceled and retired and shall cease to exist, and no consideration
shall be delivered in exchange therefor;
(ii) any shares of Company Common Stock, if any, then held by
Parent, Acquisition Sub or any other wholly owned Subsidiary of Parent shall be
canceled and retired and shall cease to exist, and no consideration shall be
delivered in exchange therefor;
(iii) except as provided in clauses "(i)" and "(ii)" above and
subject to Sections 2.5(b), 2.5(c) and 2.7, each share of Company Common Stock
then outstanding shall be converted into the right to receive the Per Share
Amount (the "Merger Consideration"), without interest; and
(iv) each of the shares of the common stock, $0.01 par value per
share, of Acquisition Sub then outstanding shall be converted into one share of
Company Common Stock.
(b) If, between the date of this Agreement and the Effective Time, the
outstanding shares of Company Common Stock are changed into a different number
or class of
7
shares by reason of any stock split, division or subdivision of shares, stock
dividend, reverse stock split, consolidation of shares, reclassification,
recapitalization or other similar transaction, then the Merger Consideration
shall be appropriately adjusted to reflect such change or transaction.
(c) If, any shares of Company Common Stock outstanding immediately
prior to the Effective Time are unvested or are subject to a repurchase option,
risk of forfeiture or other condition under any applicable restricted stock
purchase agreement or other agreement with the Company or under which the
Company has any rights, then the Merger Consideration payable with respect
thereto will also be unvested and subject to the same repurchase option, risk of
forfeiture or other condition. The Company shall take all action that may be
necessary to ensure that, from and after the Effective Time, Parent is entitled
to exercise any such repurchase option or other right set forth in any such
restricted stock purchase agreement or other agreement.
2.6 Surrender of Certificates; Stock Transfer Books.
(a) Prior to the Effective Time, Parent shall designate a bank or trust
company reasonably acceptable to the Company to act as agent (the "Paying
Agent") for the holders of shares of Company Common Stock to receive the funds
to which holders of such shares shall become entitled pursuant to Section 2.5.
Such funds shall be invested by the Paying Agent as directed by the Parent or
the Surviving Corporation. Earnings from such investments shall be the sole and
exclusive property of Parent and the Surviving Corporation, and no part of such
earnings shall accrue to the benefit of holders of shares of Company Common
Stock.
(b) As soon as reasonably practicable after the Effective Time, the
Surviving Corporation shall cause to be mailed to each Person who was, at the
Effective Time, a holder of record of shares of Company Common Stock entitled to
receive the Merger Consideration pursuant to Section 2.5, a form of letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the certificates evidencing such shares (the "Certificates")
shall pass, only upon proper delivery of the Certificates to the Paying Agent)
and instructions for use in effecting the surrender of the Certificates pursuant
to such letter of transmittal. Upon surrender to the Paying Agent of a
Certificate, together with such letter of transmittal, duly completed and
validly executed in accordance with the instructions thereto, and such other
documents as may be required pursuant to such instructions, the holder of such
Certificate shall be entitled to receive in exchange therefor the Merger
Consideration for each share of Company Common Stock formerly evidenced by such
Certificate, and such Certificate shall then be canceled. No interest shall
accrue or be paid on the Merger Consideration payable upon the surrender of any
Certificate for the benefit of the holder of such Certificate. If the payment of
the Merger Consideration is to be made to a Person other than the Person in
whose name the surrendered Certificate formerly evidencing shares of Company
Common Stock is registered on the stock transfer books of the Company, it shall
be a condition of payment that the Certificate so surrendered be endorsed
properly or otherwise be in proper form for transfer and that the Person
requesting such payment shall have paid all transfer and other similar Taxes
required by reason of the payment of the Merger Consideration to a Person other
than the registered holder of the Certificate surrendered, or shall have
established to the satisfaction of Acquisition Sub that such Taxes either have
been paid or are not applicable. Until surrendered as contemplated by this
Section 2.6(b), each Certificate shall be deemed, from and after the Effective
Time, to represent only the right to receive the Merger Consideration for each
share of Company Common Stock formerly evidenced by such Certificate. If any
Certificate shall have been lost, stolen or destroyed, Parent may, in its
discretion and as a condition precedent to the payment of
8
the Merger Consideration for each share of Company Common Stock formerly
evidenced by such Certificate, require the owner of such lost, stolen or
destroyed Certificate to provide an appropriate affidavit and to deliver a bond
(in such sum as Parent may reasonably direct) as indemnity against any claim
that may be made against the Paying Agent, Parent or the Surviving Corporation
with respect to such Certificate.
(c) At any time following the sixth month after the Effective Time, the
Surviving Corporation shall be entitled to require the Paying Agent to deliver
to it any funds which had been made available to the Paying Agent and not
disbursed to holders of shares of Company Common Stock (including, without
limitation, all interest and other income received by the Paying Agent in
respect of all funds made available to it), and, thereafter, such holders shall
be entitled to look to the Surviving Corporation (subject to abandoned property,
escheat and other similar laws) only as general creditors thereof with respect
to any Merger Consideration that may be payable upon due surrender of the
Certificates held by them. Notwithstanding the foregoing, none of the Surviving
Corporation, Parent or the Paying Agent shall be liable to any holder of a share
of Company Common Stock for any Merger Consideration delivered in respect of
such share to a public official pursuant to any abandoned property, escheat or
other similar law. If any Certificates shall not have been surrendered prior to
five years after the Effective Time (or immediately prior to such earlier date
on which any Merger Consideration in respect of such Certificate would otherwise
escheat to or become the property of any Governmental Body), any amounts payable
in respect of such Certificate shall, to the extent permitted by applicable law,
become the property of the Surviving Corporation, free and clear of all claims
or interest of any Person previously entitled thereto.
(d) At the close of business on the day of the Effective Time, the
stock transfer books of the Company with respect to the shares of Company Common
Stock shall be closed and thereafter there shall be no further registration of
transfers of shares of Company Common Stock on the records of the Company. From
and after the Effective Time, the holders of shares of Company Common Stock
outstanding immediately prior to the Effective Time shall cease to have any
rights with respect to such shares except as otherwise provided herein or by
applicable Law.
(e) Each of the Surviving Corporation, Parent and Acquisition Sub shall
be entitled to deduct and withhold (or cause the Paying Agent to deduct and
withhold) from the consideration otherwise payable in the Merger to any holder
of shares of Company Common Stock such amounts as it is required to deduct and
withhold with respect to Taxes. To the extent that amounts are so withheld, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of the shares of Company Common Stock in respect of
which such deduction and withholding was made.
2.7 Shares Subject to Appraisal Rights.
(a) Notwithstanding anything to the contrary contained in this
Agreement, to the extent that the provisions of Section 262 of the DGCL are or,
prior to the Effective Time become, applicable to the Merger, any shares of
Company Common Stock that, as of the Effective Time, are held by holders who
have as of the Effective Time preserved appraisal rights under Section 262 of
the DGCL with respect to such shares shall not be converted into or represent
the right to receive the Merger Consideration in accordance with Section 2.5(a),
and the holder or holders of such shares shall be entitled only to such rights
as may be provided to such holder or holders pursuant to Section 262 of the
DGCL; provided, however, that if such appraisal rights shall not be perfected or
the holders of such shares shall otherwise lose their appraisal rights with
respect to such shares, then, as of the later of the Effective Time or the
9
time of the failure to perfect such status or the loss of such rights, such
shares shall automatically be converted into and shall represent only the right
to receive (upon the surrender of the certificate or certificates representing
such shares) the Merger Consideration in accordance with Section 2.5(a).
(b) The Company shall give Parent (i) prompt notice of any written
demand received by the Company prior to the Effective Time to require the
Company to purchase shares of Company Common Stock pursuant to Section 262 of
the DGCL and of any other demand, notice or instrument delivered to the Company
prior to the Effective Time pursuant to the DGCL, and (ii) the opportunity to
participate in all negotiations and proceedings with respect to any such demand,
notice or instrument. The Company shall not make any payment or settlement offer
prior to the Effective Time with respect to any such demand unless Parent shall
have consented in writing to such payment or settlement offer.
2.8 Further Action. If, at any time after the Effective Time, any further
action is determined by Parent to be reasonably necessary or desirable to carry
out the purposes of this Agreement or to vest the Surviving Corporation with
full right, title and possession of and to all rights and property of
Acquisition Sub and the Company, the officers and directors of the Surviving
Corporation and Parent shall be fully authorized (in the name of Acquisition
Sub, in the name of the Company and otherwise) to take such action.
Section 3: REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Company Disclosure Letter, the Company
represents and warrants as follows (it being acknowledged that disclosure in the
Company Disclosure Letter with respect to any particular Section of the
Agreement shall be deemed disclosure with respect to each other Section of the
Agreement only if the applicability of such disclosure to the subject matter of
such other Section is reasonably clear on its face):
3.1 Organization. Except as set forth on Section 3.1 of the Company
Disclosure Letter, each of the Company and its Subsidiaries is a corporation,
company or limited liability company, as applicable, duly organized, validly
existing and in good standing under the Law of the jurisdiction of its
formation. Each of the Company and its Subsidiaries possesses the full
corporate, company or limited liability company power and authority to own its
Assets and to conduct its business as and where presently conducted. Except as
set forth on Section 3.1 of the Company Disclosure Letter, each of the Company
and its Subsidiaries is duly qualified or registered to do business in each
jurisdiction where such qualification or registration is required by applicable
Law, except where the failure to be so qualified or registered would not have a
Material Adverse Effect. Except as set forth on Section 3.1 of the Company
Disclosure Letter, the Company has no Subsidiaries and does not own any
securities of any corporation or any other interest in any Person. None of the
Acquired Companies has agreed or is obligated to make, or is bound by any
Contract under which it may become obligated to make, any future equity or
similar investment in or capital contribution to any other Person. Accurate and
complete copies of articles or certificates of incorporation, bylaws and other
organization and related documents of the Company, each as amended to date and
all Contracts relating to the acquisition of each of the Acquired Companies have
been delivered to Parent. Accurate and complete copies of articles or
certificates of incorporation, bylaws and other organization and related
documents, each as amended to date, of the Company's Subsidiaries have been made
available to Parent.
10
3.2 Capital Stock and Ownership.
(a) As of January 15, 2003, the authorized capital stock of the Company
consists of 50,000,000 shares of Company Common Stock, of which 16,782,306
shares were issued and outstanding as of that date and of which 2,900,055 shares
were held by Company in its treasury as of that date. The Company is the sole
record and beneficial owner of all of the shares of capital stock or other
equity interest of each of its Subsidiaries and it has good and marketable title
to such shares, free and clear of any Encumbrances other than Permitted
Encumbrances. There are no shares of Company Common Stock held by any of the
Company's Subsidiaries. Except as set forth in Section 3.2 of the Company
Disclosure Letter and except in respect of the Company Options: (i) none of the
outstanding shares of Company Common Stock is entitled or subject to any
preemptive right, right of participation, right of maintenance or any similar
right; (ii) none of the outstanding shares of Company Common Stock is subject to
any right of first refusal in favor of the Company; and (iii) there is no
Contract to which the Company or the Company's Subsidiaries is a party or by the
Company or any of the Company's Subsidiaries or any of their business or Assets
is bound relating to the voting or registration of, or restricting any Person
from purchasing, selling, pledging or otherwise disposing of (or granting any
option or similar right with respect to), any shares of Company Common Stock.
None of the Company or the Company's Subsidiaries is under any obligation, or is
bound by any Contract pursuant to which it may become obligated, to repurchase,
redeem or otherwise acquire any outstanding shares of Company Common Stock.
Except as set forth in Section 3.2 of the Company Disclosure Letter, since
January 1, 2002, the Company has not repurchased, redeemed or otherwise acquired
any shares of Company Common Stock.
(b) As of January 9, 2003: (i) 1,176,828 shares of Company Common Stock
are subject to issuance pursuant to the exercise of outstanding options (not
including shares subject to issuance pursuant to the Company's 1999 Employee
Stock Purchase Plan); (ii) up to 300,000 shares of Company Common Stock are
subject to issuance pursuant to the current (and only ) outstanding offering
under the Company's 1999 Employee Stock Purchase Plan (the offering period of
which expires on January 31, 2003); and (iii) 2,647,515 shares of Company Common
Stock are reserved for future grants of options pursuant to the Company's 1998
Stock Incentive Plan, 1999 Employee Stock Purchase Plan, 1999 Stock Incentive
Plan and 2001 Non-Officer Employee Stock Incentive Plan (the "Company's Stock
Option Plans"). (Stock options granted by the Company pursuant to the Company's
Stock Option Plans and non-plan grants are referred to in this Agreement as
"Company Options.") Section 3.2 of the Company Disclosure Letter sets forth the
following information with respect to each Company Option outstanding as of the
date of this Agreement: (i) the particular plan pursuant to which such Company
Option was granted (or whether such option was a non-plan grant); (ii) the name
of the optionee; (iii) the number of shares of Company Stock subject to such
Company Option; (iv) the exercise price of such Company Option; (v) the date on
which such Company Option was granted; (vi) the applicable vesting schedules,
and the extent to which such Company Option is vested and exercisable as of the
date set forth in the Company Disclosure Letter; and (vii) the date on which
such Company Option expires. The Company has delivered to Parent and Acquisition
Sub accurate and complete copies of all stock option plans pursuant to which
Company has ever granted stock options, and the forms of all stock option
agreements evidencing such options.
(c) Except for the Company Options and obligations arising under the
Option Tender Offer, there is no: (i) outstanding subscription, option, call,
warrant or right (whether or not currently exercisable) to acquire any shares of
the capital stock or other securities of Company (or any of the Company's
Subsidiaries); (ii) outstanding security, instrument or obligation that is or
may become convertible into or exchangeable for any shares of the capital
11
stock or other securities of Company (or any of the Company's Subsidiaries); or
(iii) stockholder rights plan (or similar plan commonly referred to as a "poison
pill") or Contract under which Company (or any of the Company's Subsidiaries) is
or may become obligated to sell or otherwise issue any shares of its capital
stock or any other securities. All of the issued and outstanding shares of
capital stock of each of the Company and the Company's Subsidiaries have been
duly authorized and validly issued, and are fully paid and nonassessable, with
no liability attaching to the ownership thereof. All issuances and grants of all
outstanding Company Options, and all offerings, sales and issuances by the
Company and each of the Company's Subsidiaries of any shares of capital stock,
including the Company Common Stock, were conducted in compliance with all
applicable Law and all requirements set forth in all applicable Contracts.
3.3 Financial and Corporate Records. The Company has delivered to Parent an
accurate and complete list, as of the date of the Agreement, of all bank
accounts, other accounts, certificates of deposit, marketable securities, other
investments, safe deposit boxes, lock boxes and safes of each of the Acquired
Companies, and the names of all officers, employees or other individuals who
have access thereto or are authorized to make withdrawals therefrom or
dispositions thereof.
3.4 Compliance with Law. Except as specifically disclosed in the Company
SEC Documents, the operations of each of the Acquired Companies, the conduct of
the business of each of the Acquired Companies, as and where such business has
been or presently is conducted, and the ownership, possession and use of the
Assets of each of the Acquired Companies have complied (in each case since the
date on which the respective Acquired Companies were formed or acquired by the
Company and, to the knowledge of the Company, at any time prior to such date)
and currently do comply with all applicable Laws, in all material respects,
including without limitation, SOX. From January 1, 2001 through the date of this
Agreement, none of the Company or its Subsidiaries has received any notice from
any Governmental Body regarding any actual or possible material violation of, or
material failure to comply with, any Law.
3.5 SEC Filings.
(a) The Company has made available to Parent and Acquisition Sub
accurate and complete copies of all registration statements, definitive proxy
statements and other statements, reports, schedules, forms and other documents
(and all amendments or supplements thereto) filed by Company with the SEC since
January 27, 2000 (the "Company SEC Documents"). Except as set forth in Section
3.5 of the Company Disclosure Letter, all statements, reports, schedules, forms
and other documents required to have been filed by Company with the SEC since
January 27, 2000 have been so filed and in a timely manner. As of the time it
was filed with the SEC (or, if amended, supplemented or superseded by a filing
prior to the date of this Agreement, then on the date of such filing): (i) each
of the Company SEC Documents complied in all material respects with the
applicable requirements of the Securities Act or the Exchange Act (as the case
may be) including, without limitation, with the provisions of SOX; and (ii)
except to the extent that information contained in any Company SEC Document has
been revised or superseded by a later filed Company SEC Document, none of the
Company SEC Documents contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(b) Except to the extent stated therein, the consolidated financial
statements (including any related notes) contained in the Company SEC Documents:
(i) when filed,
12
complied as to form in all material respects with the published rules and
regulations of the SEC applicable thereto; (ii) when filed, were prepared in
accordance with GAAP (except as may be indicated in the notes to such financial
statements or, in the case of unaudited statements, as permitted by Form 10-Q of
the SEC, and except that the unaudited financial statements may not contain
footnotes and are subject to normal and recurring year-end adjustments), and
(iii) fairly present in all material respects the consolidated financial
position of Company as of the respective dates thereof and the consolidated
results of operations and cash flows of Company for the periods covered thereby
(except as may be indicated in the notes to such financial statements or, in the
case of unaudited statements, as permitted by Form 10-Q of the SEC, and except
that the unaudited financial statements may not contain footnotes and are
subject to normal and recurring year-end adjustments). The unaudited
consolidated balance sheet of the Company and its Subsidiaries as of September
30, 2002 included in the Company's Quarterly Report for the quarter ended
September 30, 2002 is sometimes referred to as the "Latest Balance Sheet".
(c) The Company has and will have in place the "disclosure controls and
procedures" (as defined in Rules 13a-14(c) and 15d-14(c) of the Exchange Act)
required in order for the Chief Executive Officer and Chief Financial Officer of
the Company to engage in the review and evaluation process mandated by the
Exchange Act. The Company's "disclosure controls and procedures" are reasonably
designed to ensure that all information (both financial and non-financial)
required to be disclosed by the Company in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the rules and forms of the SEC, and that all such
information is accumulated and communicated to the Company's management as
appropriate to allow timely decisions regarding required disclosure and to make
the certifications of the Chief Executive Officer and Chief Financial Officer of
the Company required under the Exchange Act with respect to such reports.
3.6 Assets. As of the date of this Agreement, each of the Company and its
Subsidiaries has good and marketable title to all of its respective Assets
reflected on the Latest Balance Sheet (other than Assets disposed of in the
ordinary course of business since the date of the Latest Balance Sheet) and has
the right to transfer all rights, title and interest in such Assets, free and
clear of any Encumbrance other than (i) Encumbrances set forth in the Latest
Balance Sheet or otherwise disclosed in the Company SEC Reports, (ii) Permitted
Encumbrances, or (iii) Encumbrances set forth in Section 3.6 of the Company
Disclosure Letter. Each of the Acquired Companies has all material Assets
necessary to operate, or which are material to the operation of, its respective
business as currently conducted.
3.7 Obligations. As of the date of this Agreement, except as set forth in
Section 3.7 of the Company Disclosure Letter, neither the Company nor any of its
Subsidiaries has any Obligations of a type required by GAAP to be reflected on a
consolidated balance sheet of the Company or in the notes thereto other than (i)
Obligations reflected on the Latest Balance Sheet or in the notes thereto; (ii)
Obligations that have been incurred by the Acquired Companies since the date of
the Latest Balance Sheet and not in breach of any of the representations and
warranties made in Section 3.8.
3.8 Operations Since September 30, 2002. Except as set forth in Section 3.8
of the Company Disclosure Letter, from September 30, 2002 and on or prior to the
date of this Agreement:
13
(a) No event has occurred, and no circumstance has arisen, that alone
or in combination with any other events or circumstances, had or would
reasonably be expected to have a Material Adverse Effect;
(b) None of the Acquired Companies has incurred any Obligation,
acquired or disposed of any business or Assets, or entered into any Contract
(other than customer Contracts) or other transaction, involving an amount
exceeding $200,000 in any single case;
(c) None of the Acquired Companies has sold, issued or granted, or
authorized the issuance of, (A) any capital stock or other security (except for
Company Common Stock issued upon the exercise of outstanding Company Options),
(B) any option, warrant or right to acquire any capital stock or any other
security (except for Company Options described in Section 3.2 of the Company
Disclosure Letter, and Company Options issued pursuant to Section 5.2(b)(ii) or
(C) any instrument convertible into or exchangeable for any capital stock or
other security;
(d) Neither the Company nor any of its Subsidiaries has: (i) entered
into a Specified Contract, except in the ordinary course of business and
consistent with past practices, (ii) adopted or entered into any new Employee
Benefit Plan, or modified or waived any right under any existing Employee
Benefit Plan or any Contract or award under any existing Employee Benefit Plan,
except to comply with Law or otherwise in the ordinary course of business and
consistent with past practices, (iii) participated in any merger, consolidation,
reorganization, share exchange, business combination, recapitalization,
reclassification of shares, stock split, reverse stock split or similar
transaction, (iv) acquired the business or any bulk assets of any other Person,
(v) completely or partially liquidated or dissolved, (vi) terminated any part
of their respective material businesses, (vii) changed any of their methods of
accounting or accounting practices in any material respect, other than to comply
with applicable laws or GAAP, (viii) made any material Tax election, or (ix)
commenced or settled any material Proceeding.
(e) Neither the Company nor any of its Subsidiaries has: (i) redeemed,
retired or purchased, or created, sold, granted or issued any capital stock or
other security, any options, warrants or other Contracts or Contract Rights with
respect to, any shares of capital stock or other securities, or created, sold,
granted or issued any stock options, stock appreciation rights, phantom shares
or other similar rights (except for Company Options described in Section 3.2 of
the Company Disclosure Letter, Company Options issued pursuant to Section
5.2(b)(ii) and the issuance of Company Common Stock upon the valid exercise of
Company Options); (ii) declared, accrued, set aside or paid any dividend or made
any distribution with respect to any shares of capital stock (other than
transactions between or among the Company and its Subsidiaries); (iii) formed
any subsidiary or acquired any equity or other interest in any Person; (iv)
amended their respective articles or certificates of incorporation or formation,
bylaws or other organization documents; (v) bought, sold or engaged in any other
transaction involving capital stock of Parent, other securities of Parent or any
equity interests in Parent, other than the Merger; or (vi) entered into any
Contract that commits or committed any of them to take any action or omit to
take any action that would constitute a breach of any of the provisions of this
Agreement.
(f) There has been no termination, cancellation or material curtailment
of the business relationship of the Company or any of its Subsidiaries with any
customer or supplier or group of affiliated customers or suppliers which
individually or in the aggregate would result in a Material Adverse Effect nor
has there been any written notice of intent to so terminate, cancel or
materially curtail which would have such a Material Adverse Effect. For purposes
of this Section
14
3.8(f), "curtailment" as it applies to customers shall mean that (a) a customer
reduces the level of purchases from what it had been purchasing prior to
September 30, 2002 or (b) a customer is contractually obligated to purchase at a
certain level, but cancels or reduces below that level.
3.9 Tangible Property. All material Tangible Property of each of the
Acquired Companies, wherever located, is, in the aggregate, (i) suitable, in all
material respects, for the uses for which it is employed and (ii) in
satisfactory operating condition (except for ordinary wear and tear).
3.10 Real Property. Neither the Company nor any of its Subsidiaries owns
any Real Property. Section 3.10 of the Company Disclosure Letter is a list of
all Real Property leased by any of the Acquired Companies as of the date of
this Agreement ("Company Real Property"). All of the Company Real Property is
sufficient, in all material respects, for the current operations of the
Acquired Companies.
3.11 Environmental. Except as set forth in Section 3.11 of the Company
Disclosure Letter, the Company and its Subsidiaries are in compliance, in all
material respects, with applicable Environmental Laws, including, without
limitation, holding all material permits and authorizations required pursuant
to such laws for the ownership and operation of its business as currently
conducted and compliance, in all material respects, with the terms
thereof, and the Company has no knowledge of any facts or circumstances that
would prevent, interfere with, or materially increase the cost of maintaining
such compliance in the future. Neither the Company nor any of its Subsidiaries
has (i) placed, held, located, released, transported or disposed of any
Hazardous Substance on, under, from or at any of the Company Real Property other
than in a manner that would not require remediation pursuant to applicable
Environmental Laws, (ii) any knowledge of the presence of any Hazardous
Substances that have been released by them into the environment on, under or at
any of the Company Real Property other than that which would not require
remediation pursuant to Environmental Laws, or (iii) received any written notice
(A) of any material violation of any Environmental Laws by them that has not
been resolved, (B) of the institution or pendency of any material suit, action,
claim, proceeding or investigation by any Governmental Body or any third party
against them in connection with any such violation, (C) requiring the response
to or remediation of a release of Hazardous Substances by them at or arising
from any of the Company Real Property, (D) alleging non-compliance by the
Company or any of its Subsidiaries with the terms of any Permit required under
any Environmental Laws in any manner reasonably likely to require material
expenditures or to result in material liability or (E) demanding payment by them
of a material amount for response to or remediation of a release of Hazardous
Substances at or arising from any of the Company Real Property. To the knowledge
of the Company, none of the Acquired Companies has ever owned any Real Property.
The Company has provided to Parent all material assessments, reports, data,
results of investigations or audits, and other material information that is in
the possession of or reasonably available to the Company regarding environmental
matters pertaining to or the environmental condition of the business of the
Company and its Subsidiaries, or the compliance (or noncompliance) by the
Company or any of its Subsidiaries with any Environmental Laws.
3.12 Software and Other Intangibles.
(a) Section 3.12(a) of the Company Disclosure Letter contains an
accurate and complete list of all (i) Software owned or purported to be owned
(by inclusion in Section 3.12(a) of the Company Disclosure Letter) by any of the
Acquired Companies and material Software developed or under development by any
of the Acquired Companies (collectively, "Owned Company Software"); (ii)
material Software which is licensed, marketed, supported, maintained or used by
the Acquired Companies (other than Commercially Available Software
15
and the Owned Company Software); and (iii) all material names, material
corporate names, material fictitious names, material trade names, material
trademarks, material trademark applications, material service marks, material
service xxxx applications, material brand names, material product names, and
material slogans, material patents, material patent applications, material
copyrights, material copyright applications, material trademarkable designs and
material logos that are owned, marketed, licensed, supported, maintained, or
used by the Company and its Subsidiaries (such Software and Intangibles
described in subsections (i), (ii) and (iii) above and Commercially Available
Software collectively referred to herein as the "Company Intangibles"). Except
for Commercially Available Software and the Software and Intangibles as set
forth in Section 3.12(a) of the Company Disclosure Letter, no other Software or
Intangibles (other than trade secrets and know-how) are currently used in a
material manner to operate the business of any of the Acquired Companies.
(b) At least one of the Acquired Companies has (i) good and valid title
to, and has the full right to use, all of the Company Intangibles that are owned
or purported to be owned (by inclusion in Section 3.12(a) of the Company
Disclosure Letter) by any of the Acquired Companies (collectively, "Owned
Company Intangibles"), (ii) the full right to use all other Company Intangibles
(other than Commercially Available Software), in all material respects, as
necessary to currently operate the Company's business and (iii) to Company's
knowledge, the full right to use all Commercially Available Software, as
materially necessary to currently operate the Company's business in each case
free and clear of any Encumbrance (except for Permitted Encumbrances). Except as
set forth in Section 3.12(b) of the Company Disclosure Letter, no rights of any
third party are materially necessary to market, license, sell, modify, update,
and/or create derivative works for the Owned Company Intangibles.
(c) Except as set forth in Section 3.12(c) of the Company Disclosure
Letter, the Company has historically used its commercially reasonable efforts
(i) to have all of the Owned Company Intangibles created as a work for hire (as
defined under U.S. copyright law) by regular full time employees of the Acquired
Companies or (ii) to the extent that any author or developer of the Acquired
Companies was not a regular full-time employee of the Acquired Companies at the
time such Person contributed to any Owned Company Intangibles, to have such
author or developer irrevocably assign to Company in writing all copyrights and
other proprietary rights in such Person's work with respect to such Owned
Company Intangibles.
(d) With respect to the Owned Company Software (i) the Acquired
Companies maintain machine-readable master-reproducible copies, source code
listings, technical documentation and online user documentation for the most
current releases or versions thereof and for all earlier material releases or
versions thereof currently being supported by them; (ii) in each case, the
machine-readable copy substantially conforms to the corresponding source code
listing; (iii) it can be reasonably maintained and modified by reasonably
competent programmers familiar with the relevant language, hardware and
operating systems; and (iv) in each case, it operates in accordance with the
relevant online documentation, in all material respects, therefor without
material operating defects.
(e) (i) None of the Owned Company Intangibles and, to the knowledge of
the Company, none of the other Company Intangibles (other than Commercially
Available Software) or their respective past or current uses, including the
preparation, distribution, marketing or licensing thereof, has violated or
infringed upon, or is violating or infringing upon, any Software, technology,
patent, copyright, trade secret or other Intangible of any Person, in a material
manner; (ii) none of the Owned Company Intangibles and, to the knowledge of the
Company, no other Company Intangibles (other than Commercially Available
Software) is subject to any material Judgment; (iii) no Proceeding is pending
or, to the knowledge of the Company, is
16
threatened, in writing, nor has any written claim or demand been made, which
challenges or challenged the legality, validity, enforceability, use or
exclusive ownership by Company of any of the Owned Company Intangibles in a
material way; and (iv) to the knowledge of the Company, no Person is violating
or infringing upon, or has violated or infringed upon at any time, any of the
Company Intangibles (other than Commercially Available Software), in a material
way.
(f) Each of the Acquired Companies has taken commercially reasonable
steps (in accordance with Software and data processing industry standards) to
maintain the confidentiality of all of its trade secrets with respect to the
Company Intangibles.
(g) Any license, sublicense or other Contract covering or relating to
any Company Intangible is legal, valid, binding, enforceable and in full force
and effect, in all material respects, and, except as set forth in Section
3.12(g) of the Company Disclosure Letter, upon consummation of the transactions
contemplated hereby, will continue to be legal, valid, binding, enforceable and
in full force and effect, in all respects, on terms identical to those in effect
immediately prior to the consummation of the transactions contemplated hereby,
except where the failure to be in full force and effect, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect.
None of the Acquired Companies is in breach of or default under, any license,
sublicense or other Contract covering or relating to any Company Intangible or
has performed any act or omitted to perform any act which, with notice or lapse
of time or both, will become or result in a violation, breach or default
thereunder, except in each case for those breaches or defaults which,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect. No Proceeding is pending or, to the knowledge of the
Company, is being or has been threatened in writing nor has any claim or demand
been made, in writing, which challenges the legality, validity, enforceability
or ownership of any license, sublicense or other Contract covering or relating
to any Company Intangible, in any material manner.
(h) To the Company's knowledge, none of the Software or other
Intangibles listed or required to be listed in Section 3.12 of the Company
Disclosure Letter is owned by or registered in the name of any current or former
owner, shareholder, member, partner, director, executive, officer, employee,
salesman, agent, customer, representative or contractor of any of the Acquired
Companies (or any of their respective affiliates or predecessors) nor does any
such Person have any material interest therein or material right thereto,
including the right to royalty payments.
(i) Except as disclosed in Section 3.12(i) of the Company Disclosure
Letter, except with respect to demonstration or trial copies, no portion of any
Owned Company Intangibles and, to the knowledge of the Company, no portion of
any other Company Intangibles (other than Commercially Available Software)
contains any "back door," "time bomb," "Trojan horse," "worm," "drop dead
device," "virus" or other software routines or hardware components designed to
permit unauthorized access or to disable or erase software, hardware, or data
without the consent of the user.
(j) Except as disclosed in Section 3.12(j), there is no material
governmental prohibition or restriction on the use of any of the Owned Company
Intangibles in the United States, United Kingdom or Canada or, to Company's
knowledge, in any other jurisdiction or on the export of any of the Owned
Company Intangibles from the United States, United Kingdom or Canada to any
other jurisdiction or, to Company's knowledge, the import from the United
States, United Kingdom, or Canada to any other jurisdiction.
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(k) Except as disclosed in Section 3.12(k) of the Company Disclosure
Letter, to the Company's knowledge, (i) at least one of the Acquired Companies
is the sole owner of, and has good and marketable title to, and all right, title
and interest in and to all material databases created by the Company that is
used in and related to the Company's business, free and clear of any material
Encumbrance (other than Permitted Encumbrances); (ii) no Person other than the
Acquired Companies has any material right or interest of any kind or nature in
or to such databases; (iii) no Person (A) is materially violating or infringing
upon, or has materially violated or infringed upon at any time, any right of the
Acquired Companies in or to such databases; or (B) is materially breaching or
has breached at any time any material duty, any duty or obligation owed to the
Acquired Companies in respect of such databases; and (iv) neither the past nor
current use of any such database or the information contained therein in the
business of the Acquired Companies (A) has violated or infringed upon, or is
violating or infringing upon, the rights of any Person; in any material respect
or (B) breaches any duty or obligation owed to any Person; in any material
respect or (C) violates the privacy or any Law relating to the privacy of any
Person, in any material respect.
3.13 Contracts. The Company has made available to Parent copies of all of
the following types of Contracts to which any of the Acquired Companies is a
party or by which any of the Acquired Companies is bound as of the date of this
Agreement (collectively, the "Specified Contracts"), grouped into the following
categories: (a) Software license, remote processing, time sharing, and Software
maintenance Contracts, service Contracts and other customer Contracts, excluding
purchase orders made in the ordinary course of business which are pursuant to an
underlying master Contract; (b) Contracts for the purchase, license, lease
and/or maintenance of any Software other than Commercially Available Software;
(c) Contracts for the purchase or lease of Real Property or otherwise concerning
Real Property owned or used by any of the Acquired Companies; (d) loan
agreements, mortgages, notes, and guarantees; (e) employment Contracts
(excluding Contracts which constitute Employee Benefit Plans listed in Section
3.15 of the Company Disclosure Letter, and excluding oral Contracts with
employees for "at will" employment); (f) Contracts under which any rights in
and/or ownership of any Software product, technology or other Intangible of any
of the Acquired Companies, or any prior version thereof, or any part of the
customer base, business or Assets of any of the Acquired Companies, or any
shares or other ownership interests in any of the Acquired Companies (or any of
their predecessors) was acquired; and (g) other material Contracts, including
Contracts for the purchase, lease and/or maintenance of computer equipment and
other equipment, Contracts for the purchase, license, lease and/or maintenance
of Commercially Available Software under which any of the Acquired Companies is
the purchaser, licensee, lessee or user and consulting and sales representative
Contracts (excluding Contracts which constitute Insurance Policies, purchase
orders made in the ordinary course of business which are pursuant to an
underlying master Contract, and excluding this Agreement and all other Contracts
entered into between any of the Acquired Companies and Parent, or among any of
the Acquired Companies, Parent and other parties in connection herewith), in
each case where a Contract requires payments in excess of $100,000 per year. As
of the date of this Agreement, with respect to each of the Contracts to which
any of the Acquired Companies is a party or is bound, none of the Acquired
Companies is in default thereunder, nor would be in default thereunder with the
passage of time, the giving of notice, or both, and, to the knowledge of the
Company, none of the other parties to any Specified Contract is in default
thereunder or would be in default thereunder with the passage of time, the
giving of notice or both, except in each case for those defaults which,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect. Each Contract to which any of the Acquired Companies is
a party or is bound, is in full force and effect in accordance with its terms,
except
18
where the failure of any or all of such Contracts to be in full force and
effect, individually or in the aggregate, would not reasonably be excepted to
have a Material Adverse Effect.
3.14 Employees and Independent Contractors. The Company has made available
to Parent a list of all of the employees of the Company and its Subsidiaries as
of the date of this Agreement and (a) their titles or responsibilities; (b)
their social security numbers; (c) the dates of hire; (d) their current salaries
or wages and all bonuses, commissions and incentives paid at any time during the
past twelve months; and (e) any outstanding loans or advances made to them. The
Company has delivered to Parent a list of all sales representatives and
independent contractors engaged by the Acquired Companies and (a) their tax
identification numbers and state or country of residence; and (b) their payment
arrangements. As of the date of this Agreement, none of the Acquired Companies
is a party to or bound by any union or collective bargaining Contract, nor is
any such Contract currently being negotiated by or on behalf of any of the
Acquired Companies. The Company has historically used commercially reasonable
efforts to execute agreements with independent contractors that contain
restrictions to protect the proprietary and confidential information of the
Acquired Companies and vest in the Acquired Companies the full ownership of
items developed by any such contractor. There are no controversies pending or,
to the knowledge of the Company, threatened between the Company or its
Subsidiaries and any of their respective employees, except for such
controversies which have not had and could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. As of the date of
this Agreement, none of the Acquired Companies is engaged in any unfair labor
practice of any nature. From January 1, 2002 through the date of this Agreement,
there has not been any slowdown, work stoppage, labor dispute or union
organizing activity, or any similar activity or dispute, affecting any of the
Acquired Companies or any of their employees. As of the date of this Agreement,
there is not now pending, and to the knowledge of the Company, no Person has
threatened to commence, any such slowdown, work stoppage, labor dispute or union
organizing activity or any similar activity or dispute.
3.15 Employee Benefit Plans. Section 3.15 of the Company Disclosure Letter
sets forth an accurate and complete list of all Employee Benefit Plans of the
Company and its Subsidiaries and their ERISA Affiliates in effect as of the date
hereof (collectively referred to as "Company's Employee Benefit Plans"). Except
as set forth in Section 3.15 of the Company Disclosure Letter, neither the
Company, any of its Subsidiaries nor any of their ERISA Affiliates has, as of
the date hereof, (a) established, maintained or contributed to (or had the
obligation to contribute to) any Employee Benefit Plans, (b) proposed any
Employee Benefit Plans which it plans to establish or maintain or to which it
plans to contribute, or (c) proposed any changes to any Employee Benefit Plans
now in effect. Accurate and complete copies and descriptions of all of the
Company's Employee Benefit Plans, all employees affected or covered by Company's
Employee Benefit Plans, and all liabilities and obligations thereunder have been
made available to Parent and Acquisition Sub. Except as set forth in Section
3.15 of the Company Disclosure Letter, if permitted and/or required by
applicable Law, the Company and its Subsidiaries have properly submitted all of
Company's Employee Benefit Plans in good faith to the Internal Revenue Service
(the "IRS") for its determination letter within the time prescribed therefor
under applicable federal regulations. Favorable letters of determination of such
tax-qualified status from the IRS have been made available to Parent and
Acquisition Sub. With respect to Company's Employee Benefit Plans, the Company
and its Subsidiaries will have made, on or before the Closing Date, all payments
required to be made by them on or before the Closing Date and will have accrued
(in accordance with GAAP) as of the Closing Date all payments due but not yet
payable as of the Closing Date, so there will not have been, nor will there be,
any Accumulated Funding Deficiencies (as defined in Section 302 of ERISA or
Section 412 of the Code) or waivers of such deficiencies. The Company has made
available to Parent and Acquisition Sub an accurate and complete copy of the
most current Form 5500 and any other
19
form or filing required to be submitted to any Governmental Body with regard to
any of Company's Employee Benefit Plans and the most current actuarial report
with regard to any of Company's Employee Benefit Plans for which such an
actuarial report is required. All of the Company's Employee Benefit Plans are,
and have been, operated in material compliance with their provisions and with
all applicable Law including ERISA and the Code and the regulations and rulings
thereunder. Except as set forth in Section 3.15 of the Company Disclosure
Letter, the Company and its Subsidiaries and all fiduciaries of the Company's
Employee Benefit Plans have materially complied with the provisions of Company's
Employee Benefit Plans and with all applicable Law including ERISA and the Code
and the regulations and rulings thereunder. There have been no Reportable Events
(as defined in ERISA), and no events described in Sections 4062, 4063 or 4064 of
ERISA, with respect to any of the Company's Employee Benefit Plans. There has
been no termination or partial termination of any of Company's Employee Benefit
Plans other than in accordance with ERISA. There would be no obligation of any
of the Company and its Subsidiaries or their ERISA Affiliates under Title IV of
ERISA if any of Company's Employee Benefit Plans were terminated as of the
Closing Date. None of the Company and its Subsidiaries or their ERISA Affiliates
has incurred any withdrawal liability, nor do any of the Company and its
Subsidiaries or their ERISA Affiliates have any contingent withdrawal liability,
under ERISA to any Multiemployer Plan (as defined in ERISA or the Code). None of
the Company and its Subsidiaries or their ERISA Affiliates has incurred any
obligation to the Pension Benefit Guaranty Corporation (or any successor
thereto), except for routine payments of premiums. Except as set forth in
Section 3.15 of the Company Disclosure Letter, neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will (x) result in any payment (including any severance, unemployment
compensation or golden parachute payment) becoming due from any of the Company
or its Subsidiaries under any of Company's Employee Benefit Plans or under any
Contract to which any of the Company or its Subsidiaries is a party, (y)
increase any benefits otherwise payable under any of Company's Employee Benefit
Plans or under any Contract to which any of the Company or its Subsidiaries is a
party, or (z) result in the acceleration of the time of payment or vesting of
any such benefits to any extent. There are no pending Proceedings that have been
asserted or instituted against any of Company's Employee Benefit Plans, the
Assets of any of the trusts under such plans, the plan sponsor, the plan
administrator or any fiduciary of any such plan (other than routine benefit
claims), and, to the Company's knowledge, there are no facts which could form
the basis for any such Proceeding. There are no investigations or audits of any
of Company's Employee Benefit Plans, any trusts under such plans, the plan
sponsor, the plan administrator or any fiduciary of any such plan that have been
instituted or, to the Company's knowledge, threatened, and, to the Company's
knowledge, there are no facts which could form the basis for any such
investigation or audit, the results of which would reasonably be expected to be
materially adverse to the Acquired Companies. Except as set forth in Section
3.15 of the Company Disclosure Letter, no event has occurred which would
constitute a breach of the foregoing representations and which would result in
any of the Acquired Companies having an obligation in connection with any
Employee Benefit Plan established, maintained, contributed to or to which there
has been an obligation to contribute (currently or previously) by it or by any
other Entity which, together with any of the Acquired Companies, constitute
elements of either (i) a group of trades or businesses under common control
(within the meaning of Sections 414(b) of the Code, (ii) a group of trades or
businesses under common control (within the meaning of Sections 414(o) of the
Code or 4001 of ERISA), (iii) an affiliated service group (within the meaning of
Section 414(m) of the Code), or (iv) another arrangement covered by Section
414(o) of the Code, the results of which would reasonably be expected to have a
Material Adverse Effect.
3.16 Intentionally Omitted.
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3.17 Taxes.
(a) Except as disclosed in Section 3.17 of the Company Disclosure
Letter, (i) each of the Acquired Companies has properly and timely filed all Tax
Returns required to be filed by it, all of which were prepared and completed in
all material respects in compliance with all applicable Law; (ii) each of the
Acquired Companies has properly withheld in all material respects from payments
to its employees, agents, representatives, contractors and suppliers all amounts
required by Law to be withheld for Taxes; (iii) each of the Acquired Companies
has paid all Taxes required to be paid by it, except for any unpaid Taxes for
which the Company has made an appropriate reserve on the Latest Balance Sheet;
and (iv) there are no agreements or waivers currently in effect that provide
for an extension of time for the assessment of any Tax against any of the
Acquired Companies.
(b) Neither the Company nor any of its Subsidiaries has made an
election under Section 341(f) of the Code or agreed to have Section 34l(f)(2)
of the Code apply to any disposition of a subsection (f) asset (as such term
is defined in Section 341(f)(4) of the Code) owned by Company or any of its
Subsidiaries. None of the Assets of the Company or any of its Subsidiaries is
required to be treated as being owned by any other Person pursuant to the
"safe harbor" leasing provisions of Section 168(f)(8) of the Internal
Revenue Code of 1954 as formerly in effect.
(c) Neither the Company nor any of its Subsidiaries (i) is a party to,
is bound by or has any Obligation under any Tax sharing agreement or similar
agreement or arrangement other than one that is solely between the Company and
one or more of its Subsidiaries or (ii) has any liability for Taxes of any party
(other than the Company or any of its Subsidiaries) under Treasury Regulation
Section 1.1502-6 or any similar provision of state, local or foreign law, as a
transferee or successor, by Contract or otherwise.
(d) Neither the Company nor any of its Subsidiaries has agreed to make,
nor is it required to make, any adjustment under Section 481(a) of the Code by
reason of a change in accounting method or otherwise, and, the IRS has not
proposed any such adjustment or change in accounting method.
(e) Neither the Company nor any of its Subsidiaries is, or has been, a
United States Real Property Holding Corporation within the meaning of Section
897(c)(2) of the Code during the applicable period specified in Section
897(c)(1)(A)(ii) of the Code.
(f) Except for the affiliated group of which the Company is presently a
member, the Company has never been a member of an affiliated group of
corporations, within the meaning of Section 1504 of the Code, other than as a
common parent corporation, and each of Company's Subsidiaries (other than Altra
Software Services, Inc. and its Subsidiaries) has never been a member of an
affiliated group of corporations, within the meaning of Section 1504 of the
Code, except where the Company was the common parent of such affiliated group.
(g) Neither the Company nor any Subsidiary is a party to any agreement,
Contract, arrangement or plan that has resulted, or by reason of the
transactions contemplated in this Agreement would result, separately or in the
aggregate, in the payment of any "excess parachute payments" within the meaning
of Section 280G of the Code.
(h) Except as set forth in Section 3.17 of the Company Disclosure
Letter, there are no material Tax Encumbrances upon any Asset or property of the
Company or any of its Subsidiaries except liens for Taxes not yet due and
payable.
21
(i) Except as set forth in Section 3.17 of the Company Disclosure
Letter, no power of attorney currently in force has been granted by the Company
or any of its Subsidiaries concerning any Tax matter.
(j) Neither the Company nor any of its Subsidiaries has made a
disclosure on a federal income Tax Return pursuant to Section 6662 of the Code.
(k) Except as set forth in Section 3.17 of the Company Disclosure
Letter, no audits or other administrative Proceedings or court Proceedings are
presently pending or, to the knowledge of the Company, threatened with regard to
any Taxes or Tax Return of the Company, any of its Subsidiaries or any
affiliated, consolidated, combined or unitary group of which the Company or any
Subsidiary of the Company is a member (other than those being contested in good
faith and for which adequate reserves have been established) and, to the
knowledge of the Company, no material issues have been raised by any Tax
authority in connection with any Tax or Tax Return.
3.18 Proceedings and Judgments. Except as set forth in the Company SEC
Documents and in Section 3.18 of the Company Disclosure Letter, as of the date
of this Agreement, there is no pending Proceeding, and, to the knowledge of the
Company, no Person has threatened to commence any Proceeding that involves any
of the Acquired Companies or any of the Assets owned or used by any of the
Acquired Companies, except as have not had and would not reasonably be expected
to have a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries is subject to any outstanding and unsatisfied Judgment.
3.19 Insurance. The Company has made available to Parent copies of all
material Insurance Policies as of the date of this Agreement relating to the
business, assets and operations of the Acquired Companies. As of the date of
this Agreement, each of such Insurance Policies is in full force and effect.
Except as set forth in Section 3.19 of the Company Disclosure Letter, from
January 1, 2002 through the date of this Agreement, none of the Acquired
Companies has received any written notice regarding any actual or threatened (a)
cancellation or invalidation of any Insurance Policy, (b) refusal of any
coverage or rejection of any material claim under any Insurance Policy, or (c)
material adjustment in the amount of the premiums payable with respect to any
Insurance Policy. Since January 27, 2000 the Company's directors' and officers'
Insurance Policies and other "claims" made Insurance Policies have been in full
force and effect during the respective period(s) of coverage.
3.20 Questionable Payments. To the knowledge of the Company, no current or
former director, executive, officer, representative, agent or employee of any of
the Acquired Companies (when acting in such capacity or otherwise on behalf of
any of the Acquired Companies or any of their predecessors), (a) has used or is
using any corporate funds for any illegal contributions, gifts, entertainment or
other unlawful expenses relating to political activity; (b) has used or is using
any corporate funds for any direct or indirect unlawful payments to any foreign
or domestic government officials or employees; (c) has violated or is violating
any provision of the Foreign Corrupt Practices Act of 1977; (d) has established
or maintained, or is maintaining, any unlawful or unrecorded fund of corporate
monies or other properties; (e) has made at any time since the Formation Date,
any false or fictitious entries on the books and records of any of the Acquired
Companies; or (f) has made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment of any nature using corporate funds or
otherwise on behalf of any of the Acquired Companies; or (g) made any material
favor or gift that is not deductible for federal income tax purposes using
corporate funds or otherwise on behalf of any of the Acquired Companies.
22
3.21 Related Party and Affiliate Transactions. Except as set forth in
Section 3.21 of the Company Disclosure Letter, since the date of Company's last
proxy statement filed with the SEC, no event has occurred that would be required
to be reported by Company pursuant to Item 404 of Regulation S-K promulgated by
the SEC.
3.22 Effect of Agreement; Inapplicability of Anti-takeover Statutes. The
Company has the corporate right, power and authority to enter into and to
perform its obligations under this Agreement and the transactions contemplated
hereby. This Agreement has been duly executed and delivered by the Company and,
assuming due and valid authorization, execution and delivery thereof by Parent
and Acquisition Sub, this Agreement is a valid and binding obligation of the
Company enforceable against the Company in accordance with its terms. Neither
the Company nor any of its Subsidiaries is subject to any "moratorium", "control
share", "fair price" or other antitakeover laws and regulations of any state
(collectively the "Takeover Laws") that would affect this Agreement or the
transactions contemplated hereby. The Company's board of directors has approved
the Offer, the Merger and this Agreement and the transactions contemplated
hereby or thereby for the purpose of such Takeover Laws. Prior to the execution
of the Tender and Voting Agreement, the board of directors of the Company
unanimously approved the Tender and Voting Agreement and the transactions
contemplated thereby.
3.23 Section 203 of the DGCL Not Applicable. As of the date hereof and at
all times on or prior to the Effective Time, the board of directors of the
Company has and will take all actions so that the restrictions applicable to
business combinations contained in Section 203 of the DGCL are, and will be,
inapplicable to the execution, delivery and performance of this Agreement and
the Tender and Voting Agreement and to the consummation of the Offer, the Merger
and the other transactions contemplated by this Agreement and the Tender and
Voting Agreement.
3.24 Vote Required. If required under applicable Law, the affirmative vote
of the holders of a majority of the shares of Company Common Stock outstanding
on the record date for the Company Stockholders' Meeting (the "Required Company
Stockholder Vote") is the only vote of the holders of any class or series of the
Company's capital stock necessary to adopt this Agreement, approve the Merger or
consummate any of the other transactions contemplated by this Agreement.
3.25 Non-Contravention; Consents. Subject in the case of the Merger to the
adoption of this Agreement by the holders of the Company Common Stock (if
necessary), neither (i) the execution, delivery or performance of this
Agreement, nor (ii) the consummation by the Company of the Offer, the Merger or
any of the other transactions contemplated by this Agreement, will directly or
indirectly (with or without notice or lapse of time):
(a) contravene, conflict with or result in a violation of (i) any of
the provisions of the articles or certificate of incorporation or formation,
bylaws or other charter or organizational documents of any of the Company or its
Subsidiaries, or (ii) any resolution adopted by the stockholders, the board of
directors or any committee of the board of directors of any of the Company or
its Subsidiaries;
(b) contravene, conflict with or result in a violation of, or give any
Governmental Body or other Person the right to challenge the Offer, the Merger
or any of the other transactions contemplated by this Agreement or to exercise
any remedy or obtain any relief under, any Law or any order, writ, injunction,
judgment or decree to which any of the
23
Company or its Subsidiaries, or any of the assets owned or used by any of the
Company or its Subsidiaries, is subject, in each case excluding as a result or
pursuant to any Excluded Laws;
(c) contravene, conflict with or result in a violation of any of the
terms or requirements of, or give any Governmental Body the right to revoke,
withdraw, suspend, cancel, terminate or modify, any material Governmental
Authorization that is held by any of the Company or its Subsidiaries or that
otherwise relates to the business of any of the Company or its Subsidiaries or
to any of the assets owned or used by any of the Company or its Subsidiaries, in
each case excluding as a result or pursuant to any Excluded Laws;
(d) except as set forth in Section 3.25 of the Company Disclosure
Letter, contravene, conflict with or result in a violation or breach of, or
result in a default under, any provision of any Specified Contract to which any
of the Company or its Subsidiaries is a party or is bound, or give any Person
the right to (i) declare a default (or give rise to any right of termination,
amendment, cancellation or acceleration) or exercise any remedy under any such
Specified Contract, (ii) a rebate, chargeback, penalty or change in delivery
schedule under any such Specified Contract, (iii) accelerate the maturity or
performance of any such Specified Contract, or (iv) cancel, terminate or modify
any term of such Specified Contract, in each case in this clause (d) other
than any such matter or matters that individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect;
(e) result in the imposition or creation of any material Encumbrance
upon or with respect to any Asset owned or used by any of the Company or its
Subsidiaries (except Permitted Encumbrances); or
(f) result in, or increase the likelihood of, the disclosure or
delivery to any escrowholder or other Person of any source code for or relating
to any past, present or future product of any of the Acquired Companies or any
portion or aspect of such source code of any of the Acquired Companies, in
each case other than any such matter or matters that individually or in the
aggregate would not reasonably be expected to have a Material Adverse Effect.
Except as may be required by the Exchange Act and the DGCL, any antitrust
law or regulation including the HSR Act and the NASD Bylaws (collectively, the
"Excluded Laws"), none of the Company or its Subsidiaries was, is or will be
required to make any filing with or give any notice to, or to obtain any Consent
from, any Governmental Authority in connection with (x) the execution, delivery
or performance of this Agreement by the Company, or (y) the consummation by the
Company of the Offer, the Merger or any of the other transactions contemplated
by this Agreement.
3.26 Fairness Opinion. The Company's board of directors has received the
written opinion of Banc of America Securities LLC, financial advisor to the
Company, dated January 18, 2003, to the effect that as of such date the Per
Share Amount is fair to the stockholders of the Company from a financial point
of view. The Company has furnished a true and correct copy of said written
opinion to Parent.
3.27 Financial Advisory and Other Fees. Except for Banc of America
Securities LLC, no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the Offer, the
Merger or any of the other transactions contemplated by this Agreement based
upon arrangements made by or on behalf of any of the Acquired Companies. The
Company has furnished to Parent accurate and complete copies of all agreements
under which all fees, commissions and other amounts have been paid or may
24
become payable and all indemnification and other agreements related to the
engagement of Banc of America Securities LLC.
3.28 Financial Advisory Agreements. Subject to Section 3.27, none of the
Acquired Companies has any obligation or liability of any nature under, or with
respect to, any brokerage agreement, finders agreement, placement agency
agreement, financial advisory agreement, underwriting agreement or similar
agreement.
3.29 Full Disclosure.
(a) No representation or warranty by the Company contained in this
Agreement or pursuant hereto (including, without limitation, the Company
Disclosure Letter) and no statement contained in any document (including,
without limitation, financial statements and certificates), or other writings
furnished or to be furnished by the Company to Parent or Acquisition Sub or any
of their representatives (excluding financial forecasts, and other forward
looking projections or information) pursuant to the provisions hereof or
identified or referred to in the Company Disclosure Letter contains or will
contain any untrue statement of material fact or omits or will omit to state any
material fact necessary, in light of the circumstances under which it was made,
in order to make the statements herein or therein not false or misleading.
(b) The copies of documents attached as Schedules to this Agreement or
otherwise delivered to Parent in connection with the transactions contemplated
hereby (other than financial forecasts and projections) are authentic and
complete, in all material respects, and are not missing any amendments,
modifications, correspondence or other related papers which would be pertinent
to Parent's understanding thereof in any material respect.
(c) Subject to Parent's and Acquisition Sub's fulfillment of their
respective obligations with respect thereto, the Schedule 14D-9 and the Proxy
Statement will contain (and will be amended in a timely manner so as to contain)
all information which is required to be included therein in accordance with the
Exchange Act and the rules and regulations thereunder and any other applicable
Law and will conform in all material respects with the requirements of the
Exchange Act and any other applicable Law, and neither the Schedule 14D-9 nor
the Proxy Statement will, at the respective times they are filed with the SEC or
published, sent or given to Company's stockholders, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading; provided, however, that
no representation or warranty is hereby made by the Company with respect to any
information supplied by Parent or Acquisition Sub in writing for inclusion in,
or with respect to Parent or Acquisition Sub information derived from Parent's
public SEC filings which is included or incorporated by reference in, the
Schedule 14D-9 or the Proxy Statement. None of the information supplied or to be
supplied in writing by Company for inclusion or incorporation by reference in,
or which may be deemed to be incorporated by reference in, any of the Offer
Documents will, at the respective times the Offer Documents are filed with the
SEC or published, sent or given to Company's stockholders, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading. If at any time prior to
the Effective Time the Company becomes aware of any event with respect to the
Company, or with respect to any information supplied by the Company for
inclusion in any of the Offer Documents, shall occur which is required to be
described in an amendment of, or a supplement to, any of the Offer Documents,
the Company shall so describe the event to Parent.
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Section 4: REPRESENTATIONS AND WARRANTIES OF PARENT
AND ACQUISITION SUB
Parent and Acquisition Sub represent and warrant to the Company as follows:
4.1 Due Organization. Parent is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
Acquisition Sub is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.
4.2 Authority; Binding Nature of Agreement. Parent and Acquisition Sub have
the corporate right, power and authority to perform their obligations under this
Agreement; and the execution, delivery and performance by Parent and Acquisition
Sub of this Agreement have been duly authorized by all necessary action on the
part of Parent and Acquisition Sub and their respective boards of directors.
This Agreement constitutes the legal, valid and binding obligation of Parent and
Acquisition Sub, enforceable against them in accordance with its terms. No vote
of the holders of Parent's securities is required to adopt this Agreement,
approve the Merger or permit the consummation of any of the other transactions
contemplated by this Agreement.
4.3 Non-Contravention; Consents. Neither the execution and delivery of this
Agreement by Parent and Acquisition Sub nor the consummation by Parent and
Acquisition Sub of the Offer or the Merger will (a) conflict with or result in
any breach of any provision of the certificate of incorporation or bylaws of
Parent or Acquisition Sub, (b) result in a default by Parent or Acquisition Sub
under any Contract to which Parent or Acquisition Sub is a party, except for any
default that has not had and will not have a material adverse effect on the
ability of Parent and Acquisition Sub to consummate the Offer or the Merger, or
(c) result in a violation by Parent or Acquisition Sub of any order, writ,
injunction, judgment or decree to which Parent or Acquisition Sub is subject,
except for any violation that has not had and will not have a material adverse
effect on the ability of Parent and Acquisition Sub to consummate the Offer or
the Merger. Except as may be required by the Securities Act, the Exchange Act,
state securities or "blue sky" laws, the DGCL, any antitrust law or regulation
(including the HSR Act) and the rules of the NYSE, Parent is not and will not be
required to make any filing with or give any notice to, or to obtain any Consent
from, any Person in connection with the execution, delivery or performance of
this Agreement or the consummation of the Offer or the Merger.
4.4 Disclosure. None of the information supplied or to be supplied in
writing by or on behalf of Parent for inclusion in the Offer Documents will, at
the time the Offer Documents are mailed to the stockholders of the Company or at
any time between the time the Offer Documents are mailed to the stockholders of
the Company and the acceptance of shares of Company Common Stock pursuant to the
Offer, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they are made,
not misleading. None of the information supplied or to be supplied in writing by
or on behalf of Parent for inclusion in the Proxy Statement will, at the time
the Proxy Statement is mailed to the stockholders of the Company or at the time
of the Company Stockholders' Meeting (or any adjournment or postponement
thereof), contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they are made,
not misleading.
4.5 Funds. Acquisition Sub has sufficient liquid cash funds available to
permit Acquisition Sub to satisfy the obligation to pay for shares of Company
Common Stock in the Offer and to pay the Merger Consideration in the Merger.
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4.6 Warranty Disclaimer. Except as specifically set forth in this
Agreement, the Company makes no other representations or warranties, whether
express or implied.
Section 5: CERTAIN COVENANTS OF THE COMPANY
5.1 Access and Investigation. During the period from the date of this
Agreement through the acceptance of shares of Company Common Stock for purchase
pursuant to the Offer (the "Pre-Closing Period"), the Company shall, and shall
cause the respective Representatives of the Acquired Companies to: (a) provide
Parent and Parent's Representatives with reasonable access to the Acquired
Companies' Representatives, personnel and Assets and to all existing books,
records, Tax Returns, work papers and other documents and information relating
to the Acquired Companies; (b) provide Parent and Parent's Representatives with
such copies of the existing books, records, Tax Returns, work papers and other
documents and information relating to the Acquired Companies, and with such
additional financial, operating and other data and information regarding the
Acquired Companies and their financial condition, as Parent may reasonably
request; (c) provide to Parent all information concerning the Acquired
Companies' business that Parent reasonably requests; (d) permit Parent and its
Representatives to contact major customers of the businesses of the Acquired
Companies; provided, however, that any customer contact shall be coordinated
through senior management of the Company (and Company counsel), and the Company
shall have the right to approve in advance the script, if any, to be used in
connection with such customer contact; and (e) advise Parent of any changes in
the shares of Company Common Stock being held in escrow in connection with the
acquisition of Altra Software Services, Inc. Without limiting the generality of
the foregoing, during the Pre-Closing Period, the Company shall furnish promptly
to Parent (i) a copy of each report, schedule, registration statement and other
document filed by the Company during the Pre-Closing Period with the SEC, and
(ii) all other information concerning its business, properties and personnel as
Parent may reasonably request. In addition, the Company shall during the
Pre-Closing Period give prompt written notice to Parent, and the Parent shall
during the Pre-Closing Period give prompt written notice to the Company, if it
becomes aware of (a) any representation or warranty made by it contained in this
Agreement becoming untrue or inaccurate in any material respect, (b) the failure
by it to comply with or satisfy in any material respect any covenant, condition
or agreement to be complied with or satisfied by it under this Agreement, (c)
the occurrence of an event or circumstance that could be reasonably expected to
make the timely satisfaction of any of the conditions set forth in Annex I
impossible or unlikely or that has had or would reasonably be expected to have a
Material Adverse Effect, or (d) the commencement of any litigation or Proceeding
against or affecting this Agreement, the Offer or the Merger.
Notwithstanding anything in this Section 5.1 to the contrary, no notice,
report or document given pursuant to this Section 5.1 shall have any effect on
the representations, warranties, covenants or agreements contained in this
Agreement for purposes of determining satisfaction of any condition contained
herein.
5.2 Operation of the Company's Business.
(a) During the Pre-Closing Period: (i) the Company shall use
commercially reasonable efforts to ensure that each of the Acquired Companies
conducts its businesses and operations (A) in the ordinary course consistent
with past practices and (B) in compliance in all material respects with all
applicable Law and the requirements of all Specified Contracts; (ii) the Company
shall use all commercially reasonable efforts to ensure that each of the
Acquired Companies preserves intact its current business organization, keeps
available the services of its current officers and employees and maintains its
existing material relations and goodwill with all
27
suppliers, customers, landlords, creditors, licensors, licensees, employees and
other Persons having business relationships with any of the Acquired Companies;
(iii) the Company shall keep in full force all insurance policies referred to in
Section 3.19 or comparable replacement or renewal policies; (iv) the Company
shall use commercially reasonable efforts to cause to be provided all notices,
assurances and support required by any Specified Contract relating to any
Software or Intangibles in order to ensure that no condition under such
Specified Contract occurs that could result in (A) any transfer or disclosure by
any Acquired Company of any source code, or (B) a release from any escrow of any
source code that has been deposited or is required to be deposited in escrow
under the terms of such Specified Contract; and (v) the Company shall promptly
notify Parent of any notice or other communication from any Person alleging that
the Consent of such Person is or may be required in connection with any of the
transactions contemplated by this Agreement.
(b) During the Pre-Closing Period, the Company shall not (without the
prior written consent of Parent), and shall not permit any of the other Acquired
Companies to, except as set forth in Section 5.2(b) of the Company Disclosure
Letter:
(i) (A) declare, accrue, set aside or pay any dividend on, or make
any other distribution (whether in cash, securities or other property) in
respect of, any of its outstanding capital stock (other than, with respect to a
Subsidiary of the Company, to its corporate parent), (B) split, combine or
reclassify any of its outstanding capital stock or other equity interests or
issue or authorize the issuance of any other securities in respect of, in lieu
of or in substitution for shares of its outstanding capital stock or other
equity interests, or (C) purchase, redeem or otherwise acquire any shares of
outstanding capital stock or any rights, warrants or options to acquire any such
shares (other than the valid exercise of Company Options outstanding as of the
date of this Agreement or issued pursuant to Section 5.2(b)(ii);
(ii) sell, issue, grant, pledge or Encumber or authorize the
issuance, grant, pledge or Encumbrance of (A) any capital stock or other
security, (B) any option, call, warrant or right to acquire any capital stock or
other security, or (C) any instrument convertible into or exchangeable for any
capital stock or other security (except that the Company may issue shares of
Company Common Stock upon the valid exercise of Company Options outstanding as
of the date of this Agreement, including shares that may be issued pursuant to
the Company's 1999 Employee Stock Purchase Plan, and the Company may in the
ordinary course of business grant each employee hired during the Pre-Closing
Period a Company Option to purchase up to 20,000 shares of Company Common Stock
(and the Company may issue shares of Company Common Stock upon the valid
exercise of such Company Options); provided, however, that (X) such Company
Options, in the aggregate, shall not grant rights to purchase greater than
200,000 shares of Company Common Stock and (Y) any such Company Options shall be
issued with an exercise price per share of the higher of $9.00 and the fair
market value of a share of Company Common Stock on the date of grant (determined
by the closing price of such share on Nasdaq on the date of grant);
(iii) amend or waive any of its rights under any provision of any
of the Company's Stock Option Plans, any provision of any agreement evidencing
any outstanding stock option or any restricted stock purchase agreement, or
otherwise modify any of the terms of any outstanding option, warrant or other
security or any related Contract, in each case with respect to the capital stock
of the Company or the Acquired Companies;
(iv) amend or permit the adoption of any amendment to its
certificate of incorporation or bylaws or other charter or organizational
documents, or effect or become a party to any merger, consolidation, share
exchange, business combination, amalgamation,
28
recapitalization, reclassification of shares, stock split, reverse stock split,
division or subdivision of shares, consolidation of shares or similar
transaction;
(v) form any Subsidiary or directly or indirectly acquire any
equity or other interest in, or make any other investment in or capital
contribution to, any other Entity;
(vi) make any capital expenditure that would have a material
adverse impact on the Acquired Companies. For purposes of this Section
5.2(b)(vi), "material adverse impact on the Acquired Companies" shall mean
capital expenditures that, when added to all other capital expenditures made on
behalf of the Acquired Companies during the Pre-Closing Period, exceed the
aggregation of $200,000 for each month during the Pre-Closing Period;
(vii) except as otherwise permitted by this Section 5.2, enter
into or become bound by, or permit any of the material assets owned or used by
it to become bound by, any material Contract, or amend or terminate, or waive or
exercise any material right or remedy under, any material Contract, in each case
other than in the ordinary course of business and consistent with past
practices;
(viii) acquire, lease or license any right or other material asset
from any other Person or sell or otherwise dispose of, or lease or license, any
material right or other material Asset, including without limitation, any
Software or Intangibles of the Acquired Companies to any other Person, except in
each case for assets acquired, leased, licensed or disposed of by the Company in
the ordinary course of business and consistent with past practices;
(ix) dispose of or permit to lapse any material rights to the use
of any Software or Intangibles of the Acquired Companies, or dispose of or
disclose to any Person other than representatives of Parent any material trade
secret, formula, process, know-how or other Intangibles not theretofore a matter
of public knowledge, except in each case in ordinary course of business and
consistent with past practices;
(x) lend money to any Person, or incur or guarantee any
indebtedness, including without limitation, any additional borrowings under any
existing lines of credit (except that the Company may make routine borrowings
and advancement of expenses in the ordinary course of business and consistent
with past practices);
(xi) (A) except as required to comply with applicable Law,
establish, adopt or amend any Employee Benefit Plan, pay, commit to pay or
accelerate the payment of any bonus or make, commit to make or accelerate any
profit-sharing or similar payment to, or increase or commit to increase the
amount of the wages, salary, commissions, fringe benefits, severance, insurance
or other compensation or remuneration payable to, any of its directors,
officers, employees or consultants, except that the Company may (i) make
routine, reasonable salary increases in connection with the Company's customary
employee review process, (ii) pay bonus payments in accordance with its
established bonus policy which payments have been identified in a Schedule
delivered by Company to Parent prior to the date of this Agreement, and (iii)
make severance payments to employees terminated or contemplated to be terminated
in connection with the transactions contemplated by this Agreement in accordance
with its standard severance practices (to the extent the Company uses its
commercially reasonable efforts to obtain releases from such employees
reasonably acceptable to Parent), or (B) other than as permitted by in Section
5.2(b)(xii), enter into or amend any employment, consulting, severance or
similar agreement with any individual other than consulting agreements entered
into in the ordinary course of business involving payments in the aggregate for
all such
29
consulting agreements not in excess of $50,000 in any month and not with a term
in excess of 90 days;
(xii) hire any employee with an annual base salary in excess of
$100,000, or with total annual compensation in excess of $200,000, or promote
any employee except in order to fill a position vacated after the date of this
Agreement;
(xiii) make any material change in any method of accounting or
accounting practice or policy (including any method, practice or policy relating
to Taxes), except as required by any changes in GAAP or as otherwise required by
Law;
(xiv) make or rescind any material Tax election or settle or
compromise any material Tax liability of the Company or of any Acquired Company;
(xv) (A) commence or settle any material Proceeding, or (B) pay,
discharge or satisfy any material claims, liabilities or obligations (absolute,
accrued, asserted or unasserted, contingent or otherwise), other than the
payment, discharge or satisfaction of claims, liabilities or obligations
reflected or reserved against in the consolidated financial statements (or the
notes thereto) of the Company and its consolidated Subsidiaries (except in the
ordinary course of business and consistent with past practices);
(xvi) adopt or enter into a plan of complete or partial
liquidation, dissolution, merger, consolidation, restructuring, recapitalization
or other material reorganization or any agreement relating to an Acquisition
Proposal;
(xvii) permit any material insurance policy naming it as a
beneficiary or a loss payable payee to be cancelled or terminated without notice
to Parent;
(xviii) enter into any agreement, understanding or commitment that
restrains, limits or impedes, in any material respect, the ability of any
Acquired Company to compete with or conduct any business or line of business;
(xix) plan, announce, implement or effect any reduction in force,
lay-off, early retirement program, severance program or other program or effort
concerning the termination of employment of employees of the Company or its
Subsidiaries generally;
(xx) take any action that could be reasonably expected to result
in any of the conditions to the Offer set forth in Annex I not being satisfied;
(xxi) enter into any material transaction or take any other
material action outside the ordinary course of business and inconsistent with
past practices;
(xxii) acquire, lease or enter into any agreement to acquire or
lease any Real Property; or
(xxiii) agree or commit to take any of the actions described in
clauses "(i)" through "(xxii)" of this Section 5.2(b).
5.3 No Solicitation.
(a) The Company shall not, nor shall it permit any of its Subsidiaries
to, nor shall it authorize (and shall use its best efforts not to permit) any
affiliate, officer, director,
30
manager or employee of, or any investment banker, attorney or other advisor or
representative (collectively, "Representatives") of the Company or any of its
Subsidiaries to, (i) solicit, initiate, facilitate or encourage, directly or
indirectly, any inquiries relating to, or the submission of, any Acquisition
Proposal, (ii) participate in any discussions or negotiations regarding any
Acquisition Proposal, or in connection with any Acquisition Proposal, or furnish
to any Person any information or data with respect to or provide access to the
properties of the Company or any of its Subsidiaries, or take any other action
to facilitate the making of any proposal that constitutes, or may reasonably be
expected to lead to, any Acquisition Proposal or (iii) enter into any agreement
with respect to any Acquisition Proposal or approve or resolve to approve any
Acquisition Proposal; provided, that notwithstanding anything to the contrary
contained in this Agreement nothing contained in this Section 5.3 or any other
provision hereof shall prohibit the Company or the Company's board of directors
from taking and disclosing to the Company's stockholders a position with respect
to a tender or exchange offer by a third party pursuant to Rules 14d-9 and 14e-2
promulgated under the Exchange Act, provided that Company may not, except as
permitted by Section 5.3(b), withdraw or modify, or propose to withdraw or
modify, the Company Board Recommendation or approve or recommend, or propose to
approve or recommend any Acquisition Proposal, or enter into any agreement with
respect to any Acquisition Proposal. Upon execution of this Agreement, the
Company will immediately cease any existing activities, discussions or
negotiations with any Person conducted heretofore with respect to any of the
foregoing. Notwithstanding the foregoing, prior to the time of acceptance of
Company Common Stock for payment pursuant to the Offer, the Company may furnish
information concerning its businesses or its Subsidiaries, properties or assets
to any Person or "group" (as defined in the Exchange Act and the rules
promulgated thereunder) and may negotiate and participate in discussions and
negotiations with such Person or group concerning a Superior Proposal (as
defined below), provided that such Person or group shall have entered into a
confidentiality agreement, the confidentiality provisions of which shall not be
materially more favorable to such third party than those provided for in the
Confidentiality Agreement (provided that such confidentiality agreement must
permit the Company to disclose to Parent all of the information required to be
disclosed by the Company to Parent by this Section 5.3) if:
(x) such Person or group has submitted a Superior Proposal;
(y) in the good faith opinion of the Company's board of directors,
determined only after consulting with independent legal counsel to the
Company, the failure to do so would result in a breach of the board's
fiduciary duties to the Company's stockholders under applicable law; and
(z) the Company has notified Parent in writing of its intention to
engage in such discussions or negotiations or to provide such confidential
information not less than the 24 hours prior to so doing.
The Company will promptly (but in no case later than 24 hours after receipt
thereof) notify Parent in writing of the existence of any proposal, discussion,
negotiation or inquiry received by the Company regarding any Acquisition
Proposal, and the Company will immediately communicate to Parent the material
terms of any proposal, discussion, negotiation or inquiry that it may receive
regarding any Acquisition Proposal and the identity of the party making such
proposal or inquiry or engaging in such discussion or negotiation. The Company
will promptly provide to Parent any non-public information concerning the
Company provided to any other Person in connection with any Acquisition Proposal
which was not previously provided to Parent. The Company will keep Parent
informed on a prompt basis of the status and details of any such Acquisition
Proposal and of any amendments or proposed amendments to any
31
Acquisition Proposal and of the status of any discussions or negotiations
relating to any Acquisition Proposal.
(b) Except as set forth in this Section 5.3(b), neither the board of
directors of the Company nor any committee thereof shall (i) withdraw or modify,
or propose to withdraw or modify, in a manner adverse to Parent or Acquisition
Sub, the Company Board Recommendation, (ii) approve or recommend, or propose to
approve or recommend, any Acquisition Proposal or (iii) enter into any agreement
with respect to any Acquisition Proposal (other than a confidentiality agreement
that is entered into in accordance with Section 5.3(a)). Notwithstanding the
foregoing, subject to compliance with the provisions of this Section 5.3, prior
to the time of acceptance for payment of Company Common Stock pursuant to the
Offer, the Company's board of directors, after consulting with independent legal
counsel, may withdraw or modify the Company Board Recommendation, approve or
recommend a Superior Proposal, or enter into an agreement with respect to a
Superior Proposal, if the board determines in good faith that the failure to
take such action would result in a breach of the board's fiduciary duties to the
Company's stockholders under applicable law, provided that in each case the
Company has given Parent written notice at least three business days in advance
of such action that the board of directors of the Company has received a
Superior Proposal that it intends to accept, specifying the material terms and
conditions of such Superior Proposal and identifying the Person making such
Superior Proposal.
(c) Nothing in this Section 5.3, and no action taken by the board of
directors of the Company pursuant to this Section 5.3, will (i) permit the
Company to enter into any agreement providing for any transaction contemplated
by an Acquisition Proposal (other than a confidentiality agreement to the extent
permitted under Section 5.3 hereof) for as long as this Agreement remains in
effect or (ii) affect in any manner any other obligation of the Company under
this Agreement.
(d) For purposes of this Agreement, "Acquisition Proposal" means any
bona fide offer, proposal or other indication of interest regarding any of the
following (other than the transactions provided for in this Agreement involving
the Company): (i) any merger, consolidation, share exchange, recapitalization,
business combination or other similar transaction involving the Company or any
of its Subsidiaries; (ii) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition of all or a significant portion of the assets of the
Company and its Subsidiaries, taken as a whole, including, without limitation,
any license, lease or other transfer or disposition of all or a significant
portion of the Software and Intangibles of the Company and its Subsidiaries,
taken as a whole, in a single transaction or series of related transactions;
(iii) any purchase of or tender offer or exchange offer for 10% percent or more
of the outstanding shares of capital stock of the Company, or the filing of a
registration statement under the Securities Act in connection therewith; or (iv)
any public announcement of a proposal, plan or intention to do any of the
foregoing or any agreement to engage in any of the foregoing. For purposes of
this Agreement, "Superior Proposal" means an unsolicited Acquisition Proposal on
terms which the board of directors of the Company determines in good faith,
taking into consideration such matters that it deems relevant (including,
without limitation, the additional time necessary to consummate the Acquisition
Proposal), to be more favorable to the Company's stockholders than the Offer and
the Merger (based on advice of the Company's independent financial advisor that
the value of the consideration provided for in such proposal is superior to the
value of the consideration provided for in the Offer), for which financing, to
the extent required, is (based upon the advice of the Company's independent
financial advisor) reasonably capable of being obtained; provided, however, that
for purposes of this definition, "Acquisition Proposal" shall be deemed to refer
only to a transaction involving a majority of the
32
outstanding voting securities of the Company or all or substantially all of the
assets of the Company.
(e) The Company agrees not to release or permit the release of any
Person from, or to waive or permit the waiver of any provision of, any
confidentiality, "standstill" or similar agreement to which any of the Acquired
Companies is a party or under which any of the Acquired Companies has any
rights, and will use its best efforts to enforce or cause to be enforced each
such agreement at the request of Parent. The Company also will promptly request
each Person that has executed a confidentiality agreement in connection with its
consideration of a possible Acquisition Proposal or equity investment to return
all confidential information heretofore furnished to such Person by or on behalf
of any of the Acquired Companies.
5.4 Certain Resolutions. The board of directors of the Company or the
compensation committee thereof shall pass any necessary resolutions as soon as
practicable after the date hereof to provide for the treatment of Company
Options as set forth in Section 6.3 of this Agreement.
Section 6: ADDITIONAL COVENANTS OF THE PARTIES
6.1 Stockholder Approval; Proxy Statement.
(a) If the adoption of this Agreement by the Company's stockholders is
required by applicable Law, the Company shall, as promptly as practicable
following the date the Acquisition Sub shall accept for payment shares of
Company Common Stock, take all action necessary under all applicable Law to
call, give notice of and hold a meeting of the holders of Company Common Stock
to vote on the adoption of this Agreement (the "Company Stockholders' Meeting").
The Company shall ensure that all proxies solicited in connection with the
Company Stockholders' Meeting are solicited in compliance with all applicable
Law.
(b) If the adoption of this Agreement by the Company's stockholders is
required by Law, the Company shall, as soon as practicable following the date
the Acquisition Sub shall accept for payment shares of Company Common Stock,
prepare and file with the SEC the Proxy Statement and shall use all reasonable
efforts to respond to any comments of the SEC or its staff and to cause the
Proxy Statement to be mailed to the Company's stockholders, as promptly as
practicable. The Company shall notify Parent promptly of the receipt of any
comments from the SEC or its staff and of any request by the SEC or its staff
for amendments or supplements to the Proxy Statement or for additional
information and will supply Parent with copies of all correspondence between the
Company or any of its Representatives, on the one hand, and the SEC or its
staff, on the other hand, with respect to the Proxy Statement. The Company shall
give Parent an opportunity to comment on any correspondence with the SEC or its
staff or any proposed material to be included in the Proxy Statement prior to
transmission to the SEC or its staff and shall not transmit any such material to
which Parent reasonably objects. If at any time prior to the Company
Stockholders' Meeting there shall occur any event that should be set forth in an
amendment or supplement to the Proxy Statement, the Company shall promptly
prepare such an amendment or supplement and after obtaining the consent of
Parent to such amendment or supplement, shall promptly transmit such amendment
or supplement to the Company's stockholders.
(c) Notwithstanding anything to the contrary contained in this
Agreement, if Acquisition Sub shall own by virtue of the Offer or otherwise at
least 90% of the outstanding shares of Company Common Stock, the parties shall
take all necessary and appropriate action
33
to cause the merger of Acquisition Sub and the Company to become effective as
soon as practicable after the expiration date of the Offer (as such expiration
date may have been extended in accordance with the terms of this Agreement)
without a stockholders' meeting in accordance with Section 253 of the DGCL (a
"Short Form Merger").
(d) Parent agrees to cause all shares of Company Common Stock, if any,
owned by Parent or any subsidiary of Parent to be voted in favor of the adoption
of the Agreement at the Company Stockholders' Meeting.
6.2 Regulatory Approvals. Each party shall use all reasonable efforts to
file, as soon as practicable after the date of this Agreement, all notices,
reports and other documents required to be filed by such party with any
Governmental Body with respect to the Offer, the Merger and the other
transactions contemplated by this Agreement, and to submit promptly any
additional information requested by any such Governmental Body. Without limiting
the generality of the foregoing, the Company and Parent shall, promptly after
the date of this Agreement, prepare and file any notifications required under
any applicable antitrust Laws in connection with the Offer, the Merger or the
other transactions contemplated by this Agreement. The Company and Parent shall
respond as promptly as practicable to any inquiries or requests received from
any antitrust authority or other Governmental Body in connection with antitrust
or related matters. Each of the Company and Parent shall (a) give the other
party prompt notice of the commencement or threat of commencement of any
Proceeding by or before any Governmental Body with respect to the Offer, the
Merger or any of the other transactions contemplated by this Agreement, (b) keep
the other party informed as to the status of any such Proceeding or threat, and
(c) promptly inform the other party of any communication to or from any
Governmental Body regarding the Offer, the Merger or any of the other
transactions contemplated by this Agreement. Except as may be prohibited by any
Governmental Body or by any Law, (y) each party will consult and cooperate with
the other, and will consider in good faith the views of the other, in connection
with any analysis, appearance, presentation, memorandum, brief, Proceeding under
or relating to any foreign, federal or state antitrust or fair trade Law, and
(z) in connection with any such Proceeding, each party will permit authorized
Representatives of the other to be present at each meeting or conference
relating to any such Proceeding and to have access to and be consulted in
connection with any document, opinion or proposal made or submitted to any
Governmental Body in connection with any such Proceeding. At the request, and
only at the request, of Parent, the Company shall agree to divest, sell, dispose
of, hold separate or otherwise take or commit to take any action that limits its
freedom of action with respect to its or its Subsidiaries' ability to operate or
retain any of the businesses, product lines or assets of the Company or any of
its Subsidiaries, provided that any such action is conditioned upon the
consummation of the Offer.
6.3 Stock Options.
(a) Immediately prior to the Effective Time, each holder of a Company
Option will be entitled to receive from the Company, and shall receive, in
settlement of each Company Option a "Cash Amount". All Options shall terminate
as of the Effective Time. The "Cash Amount" shall be equal to the product of (i)
the excess, if any, of the Merger Consideration over the exercise price per
share of such Company Option at the Effective Time and (ii) the number of shares
subject to such Company Option. Except as provided for in Section 6.3(b) or as
may be otherwise agreed to by Parent and the Company, all stock option plans
established by the Company or any of its Subsidiaries shall terminate as of the
Effective Time and the provisions in any other plan, program or arrangement
providing for the issuance or grant of any other interest in respect of the
capital stock of Company or any Subsidiary of the Company shall be deleted,
terminated and of no further force or effect as of the Effective Time.
34
(b) As of the Effective Time, the Surviving Corporation shall continue
to be bound by the Company's commitment to issue options pursuant to the
Company's Tender Offer Statement on Schedule TO filed with the SEC on October
28, 2002, as amended (the "Option Tender Offer"), it being understood that such
options issued pursuant to the Option Tender Offer (hereinafter "Assumed
Option") shall be options to purchase shares of Parent common stock $.01 par
value per share ("Parent Common Stock"). In furtherance of the foregoing, (i)
the number of shares of Parent Common Stock purchasable upon exercise of such
Assumed Option shall be equal to the Assumed Option Exchange Ratio (as defined
in Section 6.3(b) of the Company Disclosure Letter) multiplied by the number of
shares of Company Common Stock which had been purchasable upon exercise of the
Company options surrendered in the Option Tender Offer, and (ii) the per share
exercise price under each such Assumed Option shall be the closing sale price of
a share of Parent Common Stock reported on the New York Stock Exchange on the
day on which the Assumed Options are granted pursuant to the Option Tender
Offer, and rounding up to the nearest cent. The Parent, Acquisition Sub and the
Company has determined that the foregoing conversion formula is reasonable and
complies with terms of the Option Tender Offer.
(c) Prior to the Effective Time, at the request of Parent, the Company
shall take all action (including amending any and all of the Company's existing
stock option plans and program and any and all stock option agreements) that
Parent determines may be necessary (under the plans pursuant to which Company
Options are outstanding and otherwise) to effectuate the provisions of this
Section 6.3 and to ensure that, from and after the Effective Time, holders of
Company Options have no rights with respect thereto other than those
specifically provided in this Section 6.3.
(d) Parent shall take all corporate action necessary to reserve for
issuance a sufficient number of shares of Parent Common Stock for delivery upon
exercise of the Assumed Options. Parent shall file with the SEC a registration
statement on Form S-8 (or any successor form) under the Securities Act or on
another appropriate form, reasonably promptly following the Effective Time, with
respect to Parent Common Stock subject to the Assumed Options and shall use
commercially reasonable efforts to maintain the effectiveness of such
registration statement or statements for so long as the Assumed Options remain
outstanding and exercisable.
6.4 Employee Benefits.
(a) Parent agrees that all employees of the Acquired Companies who
continue employment with Parent, the Surviving Corporation or any Subsidiary of
the Surviving Corporation after the Effective Time ("Continuing Employees")
shall be eligible to continue to participate in the Surviving Corporation's
health and welfare benefit plans; provided, however, that (i) nothing in this
Section 6.4 or elsewhere in this Agreement shall limit the right of Parent or
the Surviving Corporation to amend or terminate any such health or welfare
benefit plan at any time (including as of the Effective Time), and (ii) if
Parent or the Surviving Corporation terminates any such health or welfare
benefit plan, then the Continuing Employees shall be immediately eligible to
participate in Parent's health and welfare Plans ("Parent Employee Benefit
Plans") to substantially the same extent as similarly situated employees of
Parent. Immediately after the Effective Time, the Continuing Employees shall be
entitled to participate in a plan that contains a cash or deferred arrangement
intended to qualify under Section 401(k) of the Code sponsored, maintained or
contributed to by Parent or its Subsidiaries (a "Parent 401(k) Plan"). Each
Continuing Employee's period of service and compensation history with the
Company and the Acquired Companies shall be counted in determining eligibility
for, and the amount and vesting of, benefits under each Parent Employee Benefit
Plan (including, without limitation, the Parent 401(k) Plan). Each Continuing
Employee who participates in a Parent
35
Employee Benefit Plan that provides health care benefits (whether or not through
insurance) shall participate without regard to any waiting period or any
condition or exclusion based on pre-existing conditions, medical history, claims
experience, evidence of insurability, or genetic factors, and shall receive full
credit for any co-payments or deductible payments, or account balances under any
cafeteria or flexible spending plan made before the Closing Date. In the event
that any Continuing Employee receives an "eligible rollover distribution"
(within the meaning of Section 402(c)(4) of the Code) from an Employee Benefit
Plan of the Company intended to qualify under Section 401(k) of the Code (a
"Company 401(k) Plan"), Parent shall cause a Parent 401(k) Plan to accept a
direct rollover of such eligible rollover distribution (including, but not
limited to, any portion of such eligible rollover distribution comprised of the
outstanding balance of a loan from such Company 401(k) Plan). Nothing in this
Section 6.4(a) or elsewhere in this Agreement shall be construed to create a
right in any employee to employment with Parent, the Surviving Corporation or
any other Subsidiary of the Surviving Corporation and the employment of each
Continuing Employee shall be "at will" employment.
(b) Unless Parent provides written notice otherwise, the Company shall
terminate, effective as of the day immediately prior to and contingent upon the
Company becoming a member of the same Controlled Group of Corporations (as such
term is defined in Section 414(b) of the Code) as Parent (the "401(k)
Termination Date"), any Company 401(k) Plan. The Company shall provide Parent
evidence that the Company 401(k) Plans have been terminated pursuant to
resolutions of the board of directors of the applicable Acquired Company (the
form and substance of such resolutions shall be subject to review and approval
of Parent) effective as of the 401(k) Termination Date.
6.5 Indemnification of Officers and Directors.
(a) All rights to indemnification existing in favor of those Persons
who are or have at any time been directors and officers of the Company (the
"Indemnified Persons") for their acts and omissions occurring prior to the
Effective Time, as provided in the Company's bylaws and certificate of
incorporation as in effect as of the date of this Agreement, shall survive the
Merger and shall be observed by the Surviving Corporation to the fullest extent
available under Delaware law for a period of six years from the Effective Time.
(b) Provided that the officers of the Company as of the date hereof
prepare and execute the application with respect thereto, the Surviving
Corporation shall maintain in effect, for the benefit of the Indemnified Persons
with respect to their acts and omissions occurring prior to the Effective Time,
a "tail" policy of directors' and officers' liability insurance (the "Tail
Policy") covering the period of time from the Effective Time until up to the
sixth anniversary of the Effective Time, providing comparable coverage to the
existing directors' and officers' liability insurance policy maintained by the
Company as of the date hereof; provided, however, that the Surviving Corporation
shall not be required to pay an aggregate premium for such Tail Policy in excess
of $3 million, and, in the event the aggregate premium for such Tail Policy
exceeds $3 million, the Surviving Corporation shall be entitled to alter the
terms of such coverage and/or period of such coverage under the Tail Policy to
such terms of coverage and/or period of time that can be obtained for an
aggregate premium equal to $3 million.
(c) In the event Parent or any of its successors or assigns (i)
consolidates with or merges into any other Person and shall not be the
continuing or surviving corporation of such consolidation or merger, or (ii)
transfers or conveys all or substantially all of its properties and assets to
any Person, then, and in each such case, to the extent necessary to effectuate
the purposes of this Section 6.5, proper provision shall be made so that the
successors and
36
assigns of Parent assume the obligations set forth in this Section 6.5, and none
of the actions described in clause "(i)" or clause "(ii)" shall be taken until
such provision is made.
(d) Parent shall cause the Surviving Corporation to perform all of the
Surviving Corporation's obligations under this Section 6.5. The provisions of
this Section 6.5 shall be enforceable by each Indemnified Person and his heirs
and representatives, and are in addition to and not in substitution for, any
other right to indemnification or contribution that such Indemnified Person may
have under the certificate of incorporation and bylaws of the Company or the
Surviving Corporation, under any acquisition Contract, under the DGCL or
otherwise.
6.6 Additional Agreements.
(a) Subject to Section 6.6(b), Parent and the Company shall use all
reasonable efforts to take, or cause to be taken, all actions necessary to
consummate the Offer and the Merger and make effective the other transactions
contemplated by this Agreement. Without limiting the generality of the
foregoing, but subject to Section 6.6(b), each party to this Agreement (i) shall
make all filings and give all notices required to be made and given by such
party in connection with the Offer and the Merger and the other transactions
contemplated by this Agreement, (ii) shall use all reasonable efforts to obtain
each Consent (if any) required to be obtained (pursuant to any applicable Law or
Contract, or otherwise) by such party in connection with the Offer and the
Merger and each of the other transactions contemplated by this Agreement, and
(iii) shall use all reasonable efforts to lift any restraint, injunction or
other legal bar to the Offer, the Merger or any of the other transactions
contemplated by this Agreement. Each party shall promptly deliver to the other
parties a copy of each such filing made, each such notice given and each such
Consent obtained by such party during the Pre-Closing Period.
(b) Notwithstanding anything to the contrary contained in this
Agreement, Parent shall not have any obligation under this Agreement: (i) to
dispose of or transfer or cause any of its Subsidiaries to dispose of or
transfer any assets, or to commit to cause any of the Acquired Companies to
dispose of any assets; (ii) to discontinue or cause any of its Subsidiaries to
discontinue offering any product or service, or to commit to cause any of the
Acquired Companies to discontinue offering any product or service; (iii) to
license or otherwise make available, or cause any of its Subsidiaries to license
or otherwise make available, to any Person, any technology, Software or
Intangible, or to commit to cause any of the Acquired Companies to license or
otherwise make available to any Person any technology, Software or Intangible;
(iv) to hold separate or cause any of its Subsidiaries to hold separate any
assets or operations (either before or after the Closing Date), or to commit to
cause any of the Acquired Companies to hold separate any assets or operations;
(v) to make or cause any of its Subsidiaries to make any commitment (to any
Governmental Body or otherwise) regarding its future operations or the future
operations of any of the Acquired Companies; or (vi) to contest any Proceeding
relating to the Offer, the Merger or any of the other transactions contemplated
by this Agreement if Parent determines in good faith that contesting such
Proceeding might not be in Parent's best interest.
6.7 Disclosure. Parent and the Company shall consult with each other before
issuing any press release or otherwise making any public statement with respect
to the Offer, the Merger or any of the other transactions contemplated by this
Agreement. Without limiting the generality of the foregoing, the Company shall
not, and shall not permit any of its Subsidiaries or any Representative of any
of the Acquired Companies to, make any disclosure to employees of any of the
Acquired Companies, to the public or otherwise regarding the Offer, the Merger
or any of the other transactions contemplated by this Agreement unless (a)
Parent shall have been given the opportunity to review and comment upon such
disclosure and shall
37
have approved such disclosure or (b) the Company shall have been advised in
writing by its outside legal counsel that such disclosure is required by
applicable law.
6.8 Resignation of Officers and Directors. The Company shall use
commercially reasonable efforts to obtain and deliver to Parent on or prior to
the acceptance of shares of Company Common Stock pursuant to the Offer the
resignation of each director of each of the Acquired Companies (subject to
Section 1.3) and such officers of the Acquired Companies as Parent shall
request.
6.9 General Cooperation. From the date hereof through the Effective Time,
the Acquired Companies will use their commercially reasonable good faith efforts
to operate their businesses in such a manner as to achieve a smooth transition
consistent with the mutual business interests of the Acquired Companies and
Parent. In this regard, the Acquired Companies and Parent agree that they will
enter into good faith discussions concerning the businesses of the Acquired
Companies, including, but not limited to, personnel policies and procedures, and
other operational matters.
6.10 Section 16 Matters. The board of directors of the Company shall adopt
a resolution in advance of the Effective Time providing that the disposition by
the officers and directors of Company Common Stock, Company Options or other
equity securities of the Company pursuant to the Offer, the Merger or the other
transactions contemplated by this Agreement is intended to be exempt from
liability pursuant to Rule 16b-3 under the Exchange Act.
Section 7: CONDITIONS PRECEDENT TO THE MERGER
The obligations of the parties to effect the Merger are subject to the
satisfaction, at or prior to the Closing, of each of the following conditions:
7.1 Stockholder Approval. If required by applicable Law, this Agreement
shall have been duly adopted by the Required Company Stockholder Vote.
7.2 No Restraints. No temporary restraining order, preliminary or permanent
injunction or other order preventing the consummation of the Merger shall have
been issued by any court of competent jurisdiction and remain in effect, and
there shall not be any Law enacted or deemed applicable to the Merger that makes
consummation of the Merger illegal; provided that, subject to Section 6.6(b), in
the case of a restraining order, injunction or other order, each of the parties
shall have used their commercially reasonable efforts to prevent the entry of
any such restraining order, injunction or other order and to appeal as promptly
as possible any restraining order, injunction or other order that may be
entered.
7.3 Consummation of Offer. Acquisition Sub shall have accepted for payment
and paid for shares of Company Common Stock pursuant to the Offer (the date on
which the foregoing occurs referred to as the "Offer Closing Date").
Section 8: TERMINATION
8.1 Termination. This Agreement may be terminated prior to the Offer
Closing Date or the Effective Time, as set forth below, for any reason provided
below:
(a) by mutual written consent of Parent and the Company;
38
(b) prior to the Effective Time, by either Parent or the Company if a
court of competent jurisdiction or other Governmental Body shall have issued a
final and nonappealable order, decree or ruling, or shall have taken any other
action, having the effect of permanently restraining, enjoining or otherwise
prohibiting the acceptance of shares of Company Common Stock pursuant to the
Offer or the Merger or making consummation of the Offer or the Merger illegal;
provided, that in the case of a restraining order, injunction or other order,
each of the parties shall have used their commercially reasonable efforts to
prevent the entry of any such restraining order, injunction or other order and
to appeal as promptly as possible any restraining order, injunction or other
order that may be entered;
(c) prior to the Offer Closing Date, by either Parent or the Company if
the Offer shall have expired without the acceptance for payment of shares of
Company Common Stock; provided, however, that: (i) a party shall not be
permitted to terminate this Agreement pursuant to this Section 8.1(c) if the
failure of the acceptance for payment of shares of Company Common Stock pursuant
to the Offer is attributable to a failure on the part of such party to perform
any covenant in this Agreement required to be performed by such party at or
prior to the acceptance for payment of shares of Company Common Stock pursuant
to the Offer; and (ii) the Company shall not be permitted to terminate this
Agreement pursuant to this Section 8.1(c) unless the Company shall have made any
payment required to be made to Parent pursuant to Section 8.3(a) and shall have
paid to Parent the fee, if any, required to be paid to Parent pursuant to
Section 8.3(c);
(d) prior to the Offer Closing Date, by either Parent or the Company if
the acceptance for payment of shares of Company Common Stock pursuant to the
Offer shall not have occurred on or prior to the close of business on April 4,
2003; provided, however, that: (i) a party shall not be permitted to terminate
this Agreement pursuant to this Section 8.1(d) if the failure of the acceptance
for payment of shares of Company Common Stock pursuant to the Offer by the close
of business on April 4, 2003 is attributable to a failure on the part of such
party to perform any covenant in this Agreement required to be performed by such
party or a material breach of any representation of warranty by such party at or
prior to the acceptance for payment of shares of Company Common Stock pursuant
to the Offer; and (ii) the Company shall not be permitted to terminate this
Agreement pursuant to this Section 8.1(d) unless the Company shall have made any
payment required to be made to Parent pursuant to Section 8.3(a) and shall have
paid to Parent the fee, if any, required to be paid to Parent pursuant to
Section 8.3(c);
(e) prior to the Offer Closing Date, by Parent if a Triggering Event
shall have occurred;
(f) prior to the Offer Closing Date, by Parent if: (i)(x) any
representations and warranties of the Company set forth in Section 3.1, 3.2,
3.5(a), 3.5(b), 3.22, 3.23, 3.24, 3.26, 3.27 (first sentence only), 3.28 or
3.29(c) of the Agreement shall not be true and correct in any material respect
(determined without regard to any knowledge or materiality qualifications
therein), except to the extent such representations and warranties are qualified
by a Material Adverse Effect qualification, in which case they shall not be true
and correct in any respect, in each case as of the date of this Agreement or as
of a date subsequent to the date of this Agreement as if made on such subsequent
date (other than to the extent such representations and warranties expressly
relate to an earlier date, in which case such representations and warranties
shall not be true and correct in any material respect as of such earlier date,
determined without regard to any knowledge or materiality qualifications
therein, except to the extent such representations and warranties are qualified
by a Material Adverse Effect qualification, in which case they shall not be true
and correct in any respect as of such earlier
39
date), or (y) the representations and warranties of the Company set forth in the
Agreement shall not be true and correct (determined without regard to any
knowledge qualifications or any materiality or Material Adverse Effect
qualifications therein), as of the date of this Agreement or as of a date
subsequent to the date of this Agreement as if made on such subsequent date
(other than to the extent such representations and warranties expressly relate
to an earlier date, in which case such representations and warranties shall not
be true and correct as of such earlier date, determined without regard to any
knowledge qualifications or any materiality or Material Adverse Effect
qualifications therein), except for purposes of this subclause (y), to the
extent the failure of such representations or warranties to be true and correct,
taken together in their entirety, would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, or (ii) the Company
shall not have performed and complied, in all material respects, with each
material covenant or agreement contained in the Agreement and required to be
performed or complied with by it; provided, however, if such inaccuracy or
breach is curable by the Company, then Parent may not terminate this Agreement
under this Section 8.1(f) with respect to a particular inaccuracy or breach
prior to or during the 10-business day period commencing upon delivery by Parent
of written notice to the Company of such inaccuracy or breach, provided the
Company continues to exercise commercially reasonable efforts to cure such
inaccuracy or breach;
(g) prior to the Offer Closing Date, by the Company if: (i) any of
Parent's representations and warranties contained in this Agreement shall fail
to be true and correct as of the date of this Agreement, or as of a date
subsequent to the date of this Agreement (as if made on such subsequent date)
(except to the extent such representations and warranties expressly relate to an
earlier date, in which case such representations and warranties shall not be
true and correct as of such earlier date), except where such failure does not
have a material adverse effect on the ability of Parent or Acquisition Sub to
consummate the Offer or the Merger; or (ii) if Parent shall not have complied
with, in all material respects, Parent's covenants contained in this Agreement,
except where such noncompliance does not have a material adverse effect on the
ability of Parent or Acquisition Sub to consummate the Offer or the Merger;
provided, however, if such inaccuracy or breach is curable by Parent, then the
Company may not terminate this Agreement under this Section 8.1(g) with respect
to a particular inaccuracy or breach prior to or during the 10-business day
period commencing upon delivery by the Company of written notice to Parent of
such inaccuracy or breach, provided Parent continues to exercise commercially
reasonable efforts to cure such inaccuracy or breach;
(h) prior to the Offer Closing Date, by the Company if the Company has
proposed to enter into an agreement with respect to a Superior Proposal or has
approved or recommended a Superior Proposal in accordance with Section 5.3,
provided that the Company has complied with all of the provisions of Section
5.3, including the notice provisions therein, and that simultaneously with
terminating this Agreement the Company makes all payments required to be made to
Parent pursuant to Section 8.3; or
(i) prior to the Offer Closing Date, by Parent if any Person or "group"
(as defined in the Exchange Act and the rules promulgated thereunder) of Persons
directly or indirectly acquires or agrees to acquire beneficial or record
ownership of securities representing more than 20% of the outstanding securities
of any class of voting securities of the Company.
8.2 Effect of Termination. Except as otherwise provided in Section 8.3(d),
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; provided, however, that
(i) Section 6.7, this Section 8.2, Section 8.3 and Section 9 (and the
Confidentiality Agreement) shall survive the termination of this Agreement and
shall remain in full force and effect, (ii) the termination of this Agreement
shall
40
not relieve any party from any liability for any breach of any representation,
warranty, covenant, obligation or other provision contained in this Agreement
and (iii) no termination of this Agreement shall in any way affect any of the
parties' rights or obligations with respect to any shares of Company Common
Stock accepted for payment and paid for pursuant to the Offer prior to such
termination.
8.3 Expenses; Termination Fees.
(a) Except as set forth in this Section 8.3, all fees and expenses
incurred in connection with this Agreement and the transactions contemplated by
this Agreement shall be paid by the party incurring such expenses, whether or
not the Offer or the Merger is consummated; provided, however, that:
(i) Parent and the Company shall share equally all fees and
expenses, other than attorneys' fees, accounting fees, and financial advisory
fees, incurred in connection with (A) the filing, printing and mailing of the
Offer Documents and the Proxy Statement and any amendments or supplements
thereto and (B) the filing of any notice or other document under any applicable
antitrust law or regulation; and
(ii) if this Agreement is terminated by Parent pursuant to Section
8.1(c) (and following the date hereof and prior to the termination of this
Agreement an Acquisition Proposal shall have been disclosed, announced,
commenced, submitted or made), Section 8.1(d) (and following the date hereof and
prior to the termination of this Agreement an Acquisition Proposal shall have
been disclosed, announced, commenced, submitted or made), Section 8.1(e),
Section 8.1(f) or Section 8.1(i), or if this Agreement is terminated by the
Company pursuant to Section 8.1(c) (and following the date hereof and prior to
the termination of this Agreement an Acquisition Proposal shall have been
disclosed, announced, commenced, submitted or made), Section 8.1(d) (and
following the date hereof and prior to the termination of this Agreement an
Acquisition Proposal shall have been disclosed, announced, commenced, submitted
or made) or Section 8.1(h), then (without limiting any obligation of the Company
to pay any fee payable pursuant to Section 8.3(c)), the Company shall make a
nonrefundable cash payment to Parent, at the time specified in Section 8.3(b),
in an amount equal to the aggregate amount of all reasonable fees and expenses
(including all reasonable attorneys' fees, accountants' fees, financial advisory
fees and all filing fees) that have been paid or that may become payable by or
on behalf of Parent in connection with the due diligence review of the Company
by Parent, Acquisition Sub and their respective Representatives, the preparation
and negotiation of this Agreement and otherwise in connection with the Offer,
the Merger or any of the other transactions contemplated by this Agreement but
which amount in no event shall exceed $500,000.
(b) In the case of termination of this Agreement by the Company
pursuant to Section 8.1(c), Section 8.1(d), Section 8.1(h) or Section 8.1(i),
any nonrefundable expense reimbursement payment required to be made pursuant to
clause "(ii)" of the proviso to Section 8.3(a) shall be made by the Company
prior to the time of such termination if the Company has been advised of such
amount or two business days following the time that the Company has been
advised of such amount; and in the case of termination of this Agreement by
Parent pursuant to Section 8.1(c), Section 8.1(d), Section 8.1(e) or
Section 8.1(f), any nonrefundable expense reimbursement payment required to be
made pursuant to clause "(ii)" of the proviso to Section 8.3(a) shall be made
by the Company within two business days after such termination if the Company
has been advised of such amount or two business days following the time that
the Company is advised of such amount.
41
(c) If (i) this Agreement is terminated by Parent or the Company
pursuant to Section 8.1(c) or Section 8.1(d) and at or prior to the time of the
termination of this Agreement an Acquisition Proposal shall have been disclosed,
announced, commenced, submitted or made, (ii) this Agreement is terminated by
Parent pursuant to Section 8.1(e), (iii) this Agreement is terminated by Parent
pursuant to Section 8.1(f) and at or prior to the time of the termination of
this Agreement an Acquisition Proposal shall have been disclosed, announced,
commenced, submitted or made and within one year from the date of termination
the Company enters into an agreement with respect to, approves, recommends, or
consummates, an Acquisition Proposal or agrees or resolves to do any of the
foregoing, (iv) this Agreement is terminated by the Company pursuant to Section
8.1(h), or (v) this Agreement is terminated by Parent pursuant to Section 8.1(i)
and at or prior to the time of termination of this Agreement an Acquisition
Proposal shall have been disclosed, announced, commenced, submitted or made,
then the Company shall pay to Parent, in cash at the time specified in the next
sentence (and in addition to the amounts payable pursuant to Section 8.3(a)), a
nonrefundable fee in the amount equal to $4,000,000 (the "Termination Fee"). In
the case of termination of this Agreement by the Company pursuant to Section
8.1(c) or Section 8.1(d), the Termination Fee shall be paid by the Company prior
to the time of such termination; in the case of termination of this Agreement by
Parent pursuant to Section 8.1(c), Section 8.1(d), Section 8.1(e) or Section
8.1(i), the Termination Fee shall be paid by the Company within two business
days after such termination; in the case of termination of this Agreement by
Parent pursuant to Section 8.1(f), the Termination Fee shall be paid by the
Company within two business days after the earlier of such date as the Company
enters into an agreement with respect to, approves, recommends, or consummates,
an Acquisition Proposal or agrees or resolves to do any of the foregoing; and in
the case of termination of this Agreement by the Company pursuant to Section
8.1(h), the Termination Fee shall be paid by the Company at or prior to the time
of such termination. Notwithstanding the foregoing, no Termination Fee shall be
required to be paid pursuant to clause (i) or (v) of the first sentence of this
Section 8.3(c) if, within five business days after the Acquisition Proposal
shall have been publicly disclosed, announced or commenced or publicly or
non-publicly submitted, made or communicated to the Company's board of
directors, the Company's board of directors (A) determines that such Acquisition
Proposal does not constitute a Superior Proposal, (B) so notifies, in writing,
Parent and the Person or Persons that made the Acquisition Proposal and (C) in
the case of an Acquisition Proposal that has been publicly disclosed, within
five business days thereafter files with the SEC, and mails to the Company's
stockholders, a supplement to the Company's Schedule 14d-9 describing such
determination and reaffirming the Company's recommendation of the Offer and the
Merger, provided, however, that if at any time prior to the date one year after
the date of any such termination pursuant to Section 8.1(c), Section 8.1(d) or
Section 8.1(i), the Company enters into an agreement with respect to, approves
or recommends or consummates, an Acquisition Proposal, or agrees or resolves to
do any of the foregoing, the Company shall pay the Termination Fee required
pursuant to this Section 8.3(c).
(d) If the Company fails to pay when due any amount payable under this
Section 8.3, then (i) the Company shall reimburse Parent for all costs and
expenses (including fees and disbursements of counsel) incurred in connection
with the collection of such overdue amount and the enforcement by Parent of its
rights under this Section 8.3, and (ii) the Company shall pay to Parent interest
on such overdue amount (for the period commencing as of the date such overdue
amount was originally required to be paid and ending on the date such overdue
amount is actually paid to Parent in full) at a rate per annum equal to the
"prime rate" (as announced by Bank of America or any successor thereto) in
effect on the date such overdue amount was originally required to be paid.
Payment of the Termination Fee and expense reimbursement, if any, as the case
may be, shall be Parent's and Acquisition Sub's exclusive
42
remedy for any termination of this Agreement in accordance with this Section 8,
and there shall be no further liability to the Company as a result of such
termination, except in all cases in the event of (i) fraud or (ii) an
intentional or willful breach of this Agreement by the Company or its
Representatives.
Section 9: MISCELLANEOUS PROVISIONS
9.1 Amendment. Subject to Section 1.3, this Agreement may be amended with
the approval of the respective boards of directors of the Company and Parent at
any time. This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto.
9.2 Waiver. No failure on the part of any party to exercise any power,
right, privilege or remedy under this Agreement, and no delay on the part of any
party in exercising any power, right, privilege or remedy under this Agreement,
shall operate as a waiver of such power, right, privilege or remedy; and no
single or partial exercise of any such power, right, privilege or remedy shall
preclude any other or further exercise thereof or of any other power, right,
privilege or remedy. No party shall be deemed to have waived any claim arising
out of this Agreement, or any power, right, privilege or remedy under this
Agreement, unless the waiver of such claim, power, right, privilege or remedy is
expressly set forth in a written instrument duly executed and delivered on
behalf of such party; and any such waiver shall not be applicable or have any
effect except in the specific instance in which it is given.
9.3 No Survival of Representations and Warranties. None of the
representations and warranties contained in this Agreement or in any certificate
delivered pursuant to this Agreement shall survive the Merger; provided however
that this Section 9.3 shall not limit any covenant or agreement of the parties
hereto which by its terms provides for performance after the Effective Time or
after termination of this Agreement.
9.4 Entire Agreement; Counterparts; No Third Party Beneficiaries. This
Agreement (together with the Company Disclosure Letter) and the other agreements
referred to herein constitute the entire agreement and supersede all prior
agreements and understandings, both written and oral, among or between any of
the parties with respect to the subject matter hereof and thereof; provided,
however, that the confidentiality provisions of the Confidentiality Agreement
shall not be superseded and shall remain in full force and effect. This
Agreement may be executed in several counterparts, each of which shall be deemed
an original and all of which shall constitute one and the same instrument. No
provision of this Agreement is intended to confer upon any Person other than the
parties hereto any rights or remedies hereunder except for Indemnified Persons
pursuant to Section 6.5 hereof.
9.5 Applicable Law; Jurisdiction. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof or any other jurisdiction. In any action between any of the parties
arising out of or relating to this Agreement or any of the transactions
contemplated by this Agreement: (a) each of the parties irrevocably and
unconditionally consents and submits to the exclusive jurisdiction and venue of
the state and federal courts located in the State of Delaware (and agrees not to
commence any such action except in such courts) and irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action brought in such court has been brought in an inconvenient forum;
(b) if any such action is commenced in a state court, then, subject to
applicable law, no party shall object to the removal of such action to any
federal court located in the State of Delaware; (c) each of the parties
irrevocably waives the right to trial by jury; and (d)
43
each of the parties irrevocably consents to service of process by first class
certified mail, return receipt requested, postage prepaid, to the address at
which such party is to receive notice in accordance with Section 9.9.
9.6 Headings. The section, paragraph and other headings contained in this
Agreement are inserted for convenience of reference only and shall not affect in
any way the meaning of this Agreement.
9.7 Attorneys' Fees. In any action at law or suit in equity to enforce this
Agreement or the rights of any of the parties hereunder, the prevailing party in
such action or suit shall be entitled to receive a reasonable sum for its
attorneys' fees and all other reasonable costs and expenses incurred in such
action or suit.
9.8 Assignability. This Agreement shall be binding upon, and shall be
enforceable by and inure solely to the benefit of, the parties hereto and their
respective successors and assigns; provided, however, that neither this
Agreement nor any of the Company's rights hereunder maybe assigned by the
Company without the prior written consent of Parent, and any attempted
assignment of this Agreement or any of such rights by the Company without such
consent shall be void and of no effect; provided, further, that Parent may
assign this Agreement to any direct or indirect subsidiary of Parent, but any
such assignment shall not relieve Parent of any of its obligations hereunder.
Other than Section 6.5 (which is intended to be for the benefit of the
Indemnified Parties and may be enforced by the Indemnified Parties), nothing in
this Agreement, express or implied, is intended to or shall confer upon any
Person (other than the parties hereto) any right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement. Any assignment
prohibited under this Section 9.8 shall be null and void.
9.9 Notices. All notices, demands, consents, requests, instructions and
other communications to be given or delivered or permitted under or by reason of
the provisions of this Agreement, or in connection with the transactions
contemplated hereby and thereby shall be in writing and shall be deemed to be
delivered and received by the intended recipient as follows: (a) if personally
delivered, on the business day after it is sent (as evidenced by the receipt of
the personal delivery service); (b) if mailed by certified or registered mail
return receipt requested, four (4) business days after the aforesaid mailing;
(c) if delivered by overnight courier (with all charges having been prepaid), on
the second business day after it is sent (as evidenced by the receipt of the
overnight courier service of recognized standing); or (d) if delivered by
facsimile transmission, on the business day of such delivery if confirmed within
48 hours thereafter by a signed original sent in one of the manners set forth in
(a) through (c) above. If any notice, demand, consent, request, instruction or
other communication cannot be delivered because of a changed address of which no
notice was given (in accordance with this Section 9.9), or the refusal to accept
same, the notice shall be deemed received on the business day the notice is sent
(as evidenced by a sworn affidavit of the sender). All such notices, demands,
consents, requests, instructions and other communications will be sent to the
following addresses or facsimile numbers as applicable: (i) if to Parent or
Acquisition Sub: at Parent's address stated on page one of this Agreement to the
attention of General Counsel (fax # 000-000-0000), with a copy sent
simultaneously to the same address, to the attention of its Chief Financial
Officer (fax # 000-000-0000) and (ii) if to Company, to the address stated on
page one of this Agreement to the attention of the President and CEO (fax
#000-000-0000), with a copy to Irell & Xxxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxx,
Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxxx X. Xxxx, Esq. (fax
# 000-000-0000).
9.10 Cooperation. Each party to this Agreement agrees to reasonably
cooperate with the other parties and to execute and deliver such further
documents, certificates,
44
agreements and instruments and to take such other actions as may be reasonably
requested by the other parties to evidence or reflect the transactions
contemplated by this Agreement and to carry out the intent and purposes of this
Agreement.
9.11 Severability. Any term or provision of this Agreement that is held by
a court of competent jurisdiction or other authority to be invalid, void or
unenforceable in any situation in any jurisdiction shall not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any other situation or
in any other jurisdiction. If the final judgment of a court of competent
jurisdiction or other authority declares that any term or provision hereof is
invalid, void or unenforceable, the parties agree that the court making such
determination shall have the power to reduce the scope, duration, area or
applicability of the term or provision, to delete specific words or phrases, or
to replace any invalid, void or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision.
9.12 Interpretation of Representations. Each representation and warranty
made in this Agreement or pursuant hereto is independent of all other
representations and warranties made by the same parties, whether or not covering
related or similar matters, and must be independently and separately satisfied.
9.13 Reliance by Parent and Acquisition Sub. Notwithstanding the right of
Parent and Acquisition Sub to investigate the business, Assets and financial
condition of the Acquired Companies, and notwithstanding any knowledge obtained
or obtainable by Parent and Acquisition Sub as a result of such investigation,
Parent and Acquisition Sub have the unqualified right to rely upon, and have
relied upon, each of the representations and warranties made by Company in this
Agreement or pursuant hereto.
9.14 Bankruptcy Qualification. Each representation or warranty made in or
pursuant to this Agreement regarding the enforceability of any Contract shall be
qualified to the extent that such enforceability may be affected by bankruptcy,
insolvency and other similar Laws or equitable principles (but not those
concerning fraudulent conveyance) generally affecting creditors' rights and
remedies.
9.15 Construction.
(a) For purposes of this Agreement, whenever the context requires: the
singular number shall include the plural, and vice versa; the masculine gender
shall include the feminine and neuter genders; the feminine gender shall include
the masculine and neuter genders; and the neuter gender shall include masculine
and feminine genders.
(b) The parties hereto agree that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
be applied in the construction or interpretation of this Agreement.
(c) Except as otherwise indicated, all references in this Agreement to
"Sections," "Exhibits" and "Annexes" are intended to refer to Sections of this
Agreement and Exhibits or Annexes to this Agreement.
45
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first above written.
SUNGARD DATA SYSTEMS INC.
By:
-----------------------
Name:
Title:
RAPID RESOURCES INC.
By:
-----------------------
Name:
Title:
CAMINUS CORPORATION
By:
-----------------------
Name:
Title:
46
EXHIBIT A
DEFINITIONS
For purposes of the Agreement (including this Exhibit A, Exhibit B and
Annex I):
401(k) Termination Date shall have the meaning set forth in Section 6.4(b)
of this Agreement.
Acquired Companies shall mean the Company and each of its Subsidiaries;
except that, for purposes of Section 3 of this Agreement, "Acquired Companies"
shall also be deemed to include any Entity that has been merged into or
consolidated with the Company or any Subsidiary of the Company or any
predecessor Entity of the Company or any Subsidiary of the Company.
Acquisition Proposal shall have the meaning set forth in Section 5.3(d) of
this Agreement.
Agreement shall mean the Agreement and Plan of Merger to which this Exhibit
A is attached, as it may be amended from time to time.
Annexes shall have the meaning set forth in Section 9.15(c) of
this Agreement.
Asset shall mean any real, personal, mixed, tangible or intangible property
of any nature, including cash on hand, cash in bank or other accounts, readily
marketable securities, other cash-equivalent liquid assets of any nature,
prepayments, deposits, escrows, accounts receivable (or other receivable),
Tangible Property, Real Property, Software, Contract Rights, Intangibles and
goodwill, and claims, causes of action and other legal rights and remedies.
Assumed Options shall have the meaning set forth in Section 6.3(b) of this
Agreement.
Assumed Option Exchange Ratio shall have the meaning set forth in
Section 6.3(b) of the Company Disclosure Letter.
Cash Amount shall have the meaning set forth in Section 6.3(a) of this
Agreement.
Certificates shall have the meaning set forth in Section 2.6(b) of this
Agreement.
Closing shall have the meaning set forth in Section 2.3 of this Agreement.
Closing Date shall have the meaning set forth in Section 2.3 of this
Agreement.
Code shall mean the Internal Revenue Code of 1986, as amended.
Commercially Available Software shall mean the following: ready-to-use,
pre-packaged Software which is (i) commercially available to the public, and
(ii) not embedded in, otherwise included in, or necessary to provide any of the
products or services provided by the Acquired Companies, and (iii) replaceable
without material delay for less than $50,000.
Company 401(k) Plan shall have the meaning set forth in Section 6.4(a) of
this Agreement.
Company Board Recommendation shall have the meaning set forth in Section
1.2(a) of this Agreement.
Company Common Stock shall have the meaning set forth in the Background
section of this Agreement.
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Company Disclosure Letter shall mean the disclosure schedule that has been
prepared by the Company and that has been delivered by the Company to Parent on
the date of the Agreement.
Company's Employee Benefit Plans shall have the meaning set forth in
Section 3.15 of this Agreement.
Company Intangibles shall have the meaning set forth in Section 3.12 (a) of
this Agreement.
Company Options shall have the meaning set forth in Section 3.2(b) of this
Agreement.
Company Real Property shall have the meaning set forth in Section 3.10 of
this Agreement.
Company SEC Documents shall have the meaning set forth in Section 3.5(a) of
this Agreement.
Company's Stock Option Plans shall have the meaning set forth in Section
3.2(b) of this Agreement.
Company Stockholders' Meeting shall have the meaning set forth in Section
6.1(a) of this Agreement.
Confidentiality Agreement shall mean the Confidentiality Agreement, dated
November 6, 2002, between the Company and Parent.
Consent shall mean any consent, approval, order or authorization (including
any Governmental Authorization) of, or any declaration, filing or registration
with, or any application, notice or report to, or any waiver by, or any other
action (whether similar or dissimilar to any of the foregoing) of, by or with,
any Person, which is necessary in order to take a specified action or actions in
a specified manner and/or to achieve a specified result.
Continuing Directors shall have the meaning set forth in Section 1.3(a) of
this Agreement.
Continuing Employees shall have the meaning set forth in Section 6.4(a) of
this Agreement.
Contract shall mean any written or oral contract, agreement, instrument,
order, arrangement, commitment or understanding of any nature, including sales
orders, purchase orders, leases, subleases, data processing agreements,
maintenance agreements, license agreements, sublicense agreements, loan
agreements, promissory notes, instruments, security agreements, pledge
agreements, deeds, mortgages, guaranties, indemnities, warranties, employment
agreements, consulting agreements, sales representative agreements, joint
venture agreements, buy-sell agreements, options or warrants.
Contract Right shall mean any right, power or remedy of any nature under
any Contract, including rights to receive property or services or otherwise
derive benefits from the payment, satisfaction or performance of another party's
Obligations, rights to demand that another party accept property or services or
take any other actions, and rights to pursue or exercise remedies or options.
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DGCL shall have the meaning set forth in Section 1.2(a) of this Agreement.
Effective Time shall have the meaning set forth in Section 2.3 of this
Agreement.
Employee Benefit Plan shall mean any employee benefit plan as defined in
Section 3(3) of ERISA, and any other plan, program, policy or arrangement for or
regarding bonuses, commissions, incentive compensation, severance, vacation,
deferred compensation, pensions, profit sharing, retirement, payroll savings,
stock options, stock purchases, stock awards, stock ownership, phantom stock,
stock appreciation rights, medical/dental expense payment or reimbursement,
disability income or protection, sick pay, group insurance, self insurance,
death benefits, employee welfare or fringe benefits of any nature; but not
including employment Contracts with individual employees.
Encumbrance shall mean any lien, pledge, easement, Obligation,
hypothecation, charge, mortgage, security interest, encumbrance, claim,
infringement, interference, option, right of first refusal, preemptive right,
community property interest, understanding or arrangement imposing restrictions
on title or use or other restrictions of any nature whatsoever (including any
restriction on the voting of any security, any restriction on the transfer of
any security or other asset, any restriction on the receipt of any income
derived from any asset, any restriction on the use of any asset and any
restriction on the possession, exercise or transfer of any other attribute of
ownership of any asset).
Entity shall mean any corporation (including any non-profit corporation),
general partnership, limited partnership, limited liability partnership, joint
venture, estate, trust, company (including any company limited by shares,
limited liability company or joint stock company), firm, society or other
enterprise, association, organization or entity.
Environmental Laws shall mean all applicable Law (including consent
decrees, administrative orders and common laws) relating to the public health
and safety and protection of the environment, including those governing the use,
generation, handling, storage and disposal or cleanup of Hazardous Substances,
all as amended.
ERISA shall mean the Employee Retirement Income Security Act of 1974, as
amended.
ERISA Affiliate shall mean any business or Entity that is a member of a
"controlled group of corporations" under "common control" or an "affiliated
service group" with a company or Entity within the meaning of any of Sections
414(b), (c), or (m) of the Code, or that is required to be aggregated with a
company or Entity under Section 414(o) of the Code, or that is under "common
control" with a company or Entity within the meaning of Section 4001(a)(14) of
ERISA.
Exchange Act shall mean the Securities Exchange Act of 1934, as amended.
Excluded Laws shall have the meaning set forth in Section 3.25 of this
Agreement.
Exhibits shall have the meaning set forth in Section 9.15(c) of this
Agreement.
Formation Date shall mean April 29, 1998, the date of formation of Caminus
LLC.
Fully Diluted Number of Company Shares shall mean the sum of (i) the
aggregate number of shares of Company Common Stock outstanding immediately prior
to the acceptance of shares of Company Common Stock pursuant to the Offer, plus
(ii) the aggregate number of shares of Company Common Stock issuable upon the
exercise of any option, warrant, other
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right to acquire capital stock of the Company or other security exercisable or
convertible for shares of Company Common Stock or other capital stock of the
Company outstanding immediately prior to the acceptance of shares of Company
Common Stock pursuant to the Offer.
GAAP shall mean generally accepted accounting principles under current
United States accounting rules and regulations, consistently applied throughout
the periods covered. In no event shall the consistent application of the
historical accounting policies used by the Company have priority over GAAP,
regardless of materiality.
Governmental Authorization shall mean any: (a) Permit, license,
certificate, franchise, permission, variance, clearance, registration,
qualification or authorization issued, granted, given or otherwise made
available by or under the authority of any Governmental Body or pursuant to any
Law; or (b) right under any Contract with any Governmental Body.
Governmental Body shall mean any: (a) nation, state, commonwealth,
province, territory, county, municipality, district or other jurisdiction of any
nature; (b) federal, state, local, municipal, foreign or other government; or
(c) governmental or quasi-governmental authority of any nature (including any
governmental division, department, agency, commission, self-regulatory
organization, instrumentality, official, ministry, fund, foundation, center,
organization, unit, body or Entity and any court or other tribunal).
Hazardous Substances shall mean any substance, waste, contaminant,
pollutant or material that has been determined by any United States federal
government authority, or any state or local government authority having
jurisdiction over any Real Property, to be capable of posing a risk of injury or
damage to health, safety, property or the environment, including (a) all
substances, wastes, contaminants, pollutants and materials defined, designated
or regulated as hazardous, dangerous or toxic pursuant to any Law of any state
in which any Real Property is located or any United States Law, and (b)
asbestos, polychlorinated biphenyls, petroleum, petroleum products and urea
formaldehyde, and mold.
HSR Act shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act of 1976,
as amended.
Include and Including shall mean including but not limited to.
Indemnified Persons shall have the meaning set forth in Section 6.5(a) of
this Agreement.
Insurance Policy shall mean any public liability, product liability,
general liability, comprehensive, property damage, vehicle, life, hospital,
medical, dental, disability, worker's compensation, key man, fidelity bond,
theft, forgery, errors and omissions, directors' and officers' liability, or
other insurance policy of any nature.
Intangible shall mean any name, corporate name, fictitious name, trademark,
trademark application, service xxxx, service xxxx application, trade name, brand
name, product name, slogan, trade secret, know-how, patent, patent application,
copyright, copyright application, design, logo, formula, invention, product
right, technology or other intangible asset of any nature, whether in use, under
development or design, or inactive.
IRS shall have the meaning set forth in Section 3.15 of this Agreement.
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Judgment shall mean any order, writ, injunction, citation, award, decree or
other judgment of any nature of any Governmental Body.
to the knowledge of the Company or similar phrases shall mean that none of
the directors or officers of any of the Acquired Companies has any actual
knowledge or implied knowledge that the statement made is incorrect. For this
purpose, "implied knowledge" means all information that any of the directors or
executive officers of any of the Acquired Companies should reasonably be
expected to have actual knowledge of in the course of operating and managing the
business and affairs of the Acquired Companies.
Latest Balance Sheet shall have the meaning set forth in Section 3.5(b) of
this Agreement.
Law shall mean any federal, state, local, municipal, foreign or other law,
statute, charter, constitution, treaty, principle of common law, resolution,
ordinance, code, edict, decree, rule, regulation, guidelines, ruling or
requirement issued, enacted, adopted, promulgated, implemented or otherwise put
into effect by or under the authority of any Governmental Body (or under the
authority of the Nasdaq National Market System or NYSE).
Material Adverse Effect shall mean an event, occurrence, violation,
inaccuracy, circumstance or other matter will be deemed to have a "Material
Adverse Effect" if such event, occurrence, violation, inaccuracy, circumstance
or other matter (considered alone or together with any other matter or matters)
had or would reasonably be expected to have a material adverse effect on (i) the
business, condition (financial or otherwise), capitalization, assets,
liabilities, operations, revenues, results of operations, cash flows, financial
performance or prospects of the Acquired Companies taken as a whole, (ii) the
ability of the Company to consummate the Merger or any of the other transactions
contemplated by the Agreement or to perform any of its obligations under the
Agreement, or (iii) Parent's or Acquisition Sub's ability to vote, receive
dividends with respect to or otherwise exercise ownership rights with respect to
the stock of the Company or the Surviving Corporation; provided, however, that
in determining whether there has been a Material Adverse Effect, any adverse
effects directly resulting from or directly attributable to (A) general economic
conditions or general conditions in the industry in which the Acquired Companies
do business which conditions do not affect the Company and its Subsidiaries in a
materially disproportionate manner, or (B) the public announcement of the
transactions contemplated by this Agreement (including, without limitation, loss
of customers, cancellation of orders by customers, deferral of purchasing
decisions by customers, or other adverse effects on the Acquired Companies'
Contracts or business relationships held by the Acquired Companies, or loss of
employees or other service providers) shall be disregarded.
Merger shall have the meaning set forth in the Background section of this
Agreement.
Merger Consideration shall have the meaning set forth in Section
2.5(a)(iii) of this Agreement.
Minimum Condition shall have the meaning set forth in Section 1.1(b) of
this Agreement.
NASD shall mean the National Association of Securities Dealers, Inc.
NYSE shall mean the New York Stock Exchange, Inc.
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Obligation shall mean any debt, liability or obligation of any nature,
whether secured, unsecured, recourse, nonrecourse, liquidated, unliquidated,
accrued, absolute, fixed, contingent, ascertained, unascertained, known, unknown
or otherwise.
Offer shall have the meaning set forth in the Background section of this
Agreement.
Offer Closing Date shall have the meaning set forth in Section 7.3 of this
Agreement.
Offer Documents shall have the meaning set forth in Section 1.1(d) of this
Agreement.
Offer Statement shall have the meaning set forth in Section 1.1(d) of this
Agreement.
Option Tender Offer shall have the meaning set forth in Section 6.3(b) of
this Agreement.
Owned Company Intangibles shall have the meaning set forth in Section
3.12(b) of this Agreement.
Owned Company Software shall have the meaning set forth in Section 3.12(a)
of this Agreement.
Parent 401(k) Plan shall have the meaning set forth in Section 6.4(a) of
this Agreement.
Parent Common Stock shall have the meaning set forth in Section 6.3(b) of
this Agreement.
Parent Employee Benefit Plans shall have the meaning set forth in Section
6.4(a) of this Agreement.
Parent-Owned Shares shall have the meaning set forth in Section 1.1(b) of
this Agreement.
Paying Agent shall have the meaning set forth in Section 2.6(a) of this
Agreement.
Permit shall mean any license, permit, approval, waiver, order,
authorization, right or privilege of any nature, granted, issued, approved or
allowed by any Governmental Body.
Permitted Encumbrances shall mean Encumbrances (i) for Taxes, governmental
charges, assessments or levies, provided that such Taxes, governmental charges,
assessments or levies are not yet due or are being contested in good faith by
appropriate proceedings; (ii) deposits, Encumbrances or pledges to secure
payments of workmen's compensation, public liability, unemployment and other
similar insurance, (iii) mechanics', workmen's materialmen's, repairmen's,
warehousemen's, vendors' or carriers' Encumbrances, or other similar
Encumbrances arising in the ordinary course of business consistent with past
practices and securing sums which are not past due or are being contested in
good faith by appropriate proceedings; (iv) purchase money Encumbrances upon any
fixed or capital assets; (v) restrictions on transfers of securities imposed by
Federal and state securities laws; and (vi) Encumbrances that do not materially
detract from the value or interfere with the use by the Acquired Companies of
their Assets.
Person shall mean any individual, Entity or Governmental Body.
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Per Share Amount shall have the meaning set forth in the Background section
of this Agreement.
Pre-Closing Period shall have the meaning set forth in Section 5.1 of this
Agreement.
Proceeding shall mean any demand, claim, suit, action, litigation,
investigation, arbitration, administrative hearing, audit or other proceeding of
any nature (including any civil, criminal, administrative, investigative, or
appellate proceeding).
Proxy Statement shall mean the proxy or information statement of the
Company to be sent to the Company's stockholders in connection with the Company
Stockholders' Meeting.
Real Property shall mean any real estate, land, building, condominium, town
house, structure or other real property of any nature, all shares of stock or
other ownership interests in cooperative or condominium associations or other
forms of ownership interest through which interests in real estate may be held,
and all appurtenant and ancillary rights thereto, including easements,
covenants, water rights, sewer rights and utility rights.
Representatives shall have the meaning set forth in Section 5.3(a) of this
Agreement.
Required Company Stockholder Vote shall have the meaning set forth in
Section 3.24 of this Agreement.
Schedule 14D-9 shall have the meaning set forth in Section 1.2(b) of this
Agreement.
SEC shall mean the United States Securities and Exchange Commission.
Securities Act shall mean the Securities Act of 1933, as amended.
Sections shall have the meaning set forth in Section 9.15(c) of this
Agreement.
Short Form Merger shall have the meaning set forth in Section 6.1(c) of
this Agreement.
Software shall mean any computer program, operating system, applications
system, firmware or software of any nature, including all object code, source
code, technical manuals, user manuals and other documentation therefor, whether
in machine-readable form, programming language or any other language or symbols,
and whether stored, encoded, recorded or written on disk, tape, film, memory
device, paper or other media of any nature.
SOX shall mean the Xxxxxxxx-Xxxxx Act of 2002.
Specified Contracts shall have the meaning set forth in Section 3.13 of
this Agreement.
Subsidiary shall mean the following: an entity shall be deemed to be a
"Subsidiary" of another Person if such Person directly or indirectly owns or
purports to own, beneficially or of record, (a) an amount of voting securities
of other interests in such Entity that is sufficient to enable such Person to
elect at least a majority of the members of such Entity's board of directors or
other governing body, or (b) at least 50% of the outstanding equity or financial
interests of such Entity.
Superior Proposal shall have the meaning set forth in Section 5.3(d) of
this Agreement.
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Surviving Corporation shall have the meaning set forth in Section 2.1 of
this Agreement.
Tail Policy shall have the meaning set forth in Section 6.5(b) of this
Agreement.
Takeover Laws shall have the meaning set forth in Section 3.22 of this
Agreement.
Tangible Property shall mean any furniture, fixtures, leasehold
improvements, vehicles, office equipment, computer equipment, other equipment,
machinery, tools, forms, supplies or other tangible personal property of any
nature.
Tax shall mean (a) any foreign, federal, state or local income, earnings,
profits, gross receipts, franchise, capital stock, net worth, sales, use, value
added, occupancy, general property, real property, personal property, intangible
property, transfer, fuel, excise, payroll, withholding, unemployment
compensation, social security, retirement or other tax of any nature; (b) any
foreign, federal, state or local organization fee, qualification fee, annual
report fee, filing fee, occupation fee, assessment, sewer rent or other fee or
charge of any nature; or (c) any deficiency, interest or penalty imposed with
respect to any of the foregoing.
Tax Return shall mean any report, return (including any information
return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information filed
with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection
or payment of any Tax or in connection with the administration, implementation
or enforcement of or compliance with any Law relating to any Tax, including,
without limitation, combined, unitary or consolidated returns for any group of
entities.
Tender and Voting Agreement shall have the meaning set forth in the
Background section of this Agreement.
Termination Fee shall have the meaning set forth in Section 8.3(c) of this
Agreement.
Triggering Event. A "Triggering Event" shall be deemed to have occurred if:
(i) the board of directors of the Company shall have failed to recommend that
the Company's stockholders accept the Offer and tender their shares of Company
Common Stock pursuant to the Offer or vote to adopt the Agreement, or shall have
withdrawn or modified in a manner adverse to Parent the Company Board
Recommendation; (ii) the Company shall have failed to include in the Schedule
14D-9 the Company Board Recommendation or a statement to the effect that the
board of directors of the Company has determined and believes that the Offer and
the Merger are in the best interests of the Company's stockholders; (iii) the
board of directors of the Company fails to reaffirm the Company Board
Recommendation, or fails to reaffirm its determination that the Offer and the
Merger are in the best interests of the Company's stockholders, within five
business days after Parent requests in writing that such recommendation or
determination be reaffirmed; (iv) the board of directors of the Company shall
have approved, endorsed, recommended or taken a neutral position with respect to
any Acquisition Proposal; (v) the Company shall have entered into any letter of
intent or similar document or any Contract relating to any Acquisition Proposal
(other than a confidentiality agreement that is entered into in accordance with
Section 5.3(a)) ; (vi) a tender or exchange offer relating to securities of the
Company shall have been commenced and the Company shall not have sent to its
securityholders, within ten business days after the commencement of such tender
or exchange offer, a statement disclosing that the Company recommends rejection
of such tender or exchange offer; (vii) an Acquisition Proposal is publicly
announced, disclosed or
A-8
commenced or submitted, made or publicly communicated to the Company's board of
directors and the Company fails to comply with the requirements of Section 8.3;
or (viii) any of the Acquired Companies or any Representative of any of the
Acquired Companies shall have breached or taken any action inconsistent with any
of the provisions set forth in Section 5.3.
A-9
Exhibit B
List of Persons Entering into Tender and Voting Agreement
OCM Principal Opportunities Fund, X.X.
Xxx Associates, Inc.
Xxxxx X. Xxxxxxx and Xxxxxxx Xxxxx, jointly
Xxxxxxx Xxxxx
Xxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
Xxxx X. Xxxxxx
RIT Capital Partners Plc
GFI Two LLC
XX Xxxxxxxx and CMJ Spottiswoode Accumulation and Maintenance
Trust Dtd
Clare X. X. Xxxxxxxxxxxx
B-1
ANNEX I
CONDITIONS OF THE OFFER
Capitalized terms used but not defined herein shall have the meanings set
forth in the Agreement and Plan of Merger (the "Agreement") of which this Annex
I is a part. Notwithstanding any other provision of the Offer, Acquisition Sub
shall not be required to accept for payment or, subject to any applicable rules
and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act
(relating to Acquisition Sub's obligation to pay for or return tendered shares
of Company Common Stock promptly after termination or withdrawal of the Offer),
pay for, and may delay the acceptance for payment of or, subject to any
applicable rules and regulations of the SEC, the payment for, any tendered
shares of Company Common Stock, and may amend the Offer consistent with the
terms of the Agreement or terminate the Offer and not accept for payment any
tendered shares of Company Common Stock, if (i) the Minimum Condition shall not
have been satisfied at the time of expiration of the Offer, as it may be
extended, or (ii) on any scheduled expiration date any of the following events
or circumstances shall occur or exist or shall be reasonably determined by
Parent or Acquisition Sub to have occurred or exist:
(a) any waiting period under any applicable antitrust Law or regulation
(including the HSR Act) or other Law shall not have expired or been terminated
or any Consent required under any applicable antitrust Law or regulation or
other Law shall not have been obtained;
(b) (i)(x) any representations and warranties of the Company set forth
in Section 3.1, 3.2, 3.5(a), 3.5(b), 3.22, 3.23, 3.24, 3.26, 3.27 (first
sentence only), 3.28,or 3.29(c) of the Agreement shall not be true and correct
in any material respect as of such time (determined without regard to any
knowledge or materiality qualifications therein), except to the extent such
representations and warranties are qualified by a Material Adverse Effect
qualification, in which case they shall not be true and correct in any respect
as of such time (other than to the extent such representations and warranties
expressly relate to an earlier date, in which case such representations and
warranties shall not be true and correct in any material respect as of such
earlier date, determined without regard to any knowledge or materiality
qualifications therein, except to the extent such representations and warranties
are qualified by Material Adverse Effect, in which case they shall not be true
and correct in any respect as of such earlier date), or (y) the representations
and warranties of the Company set forth in the Agreement shall not be true and
correct (determined without regard to any knowledge qualifications or any
materiality or Material Adverse Effect qualifications therein), as of such time
(other than to the extent such representations and warranties expressly relate
to an earlier date, in which case such representations and warranties shall not
be true and correct as of such earlier date, determined without regard to any
knowledge qualifications or any materiality or Material Adverse Effect
qualifications therein), except for purposes of this subclause (y), to the
extent the failure of such representations or warranties to be true and correct,
taken together in their entirety, would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect or (ii) the Company
shall not have performed and complied, in all material respects, with each
material covenant or agreement contained in the Agreement and required to be
performed or complied with by it;
(c) since the date of the Agreement, there shall have occurred any
Material Adverse Effect, or any event shall have occurred or circumstance shall
exist that, in combination with any other events or circumstances, could
reasonably be expected to have a Material Adverse Effect;
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(d) [Intentionally Left Blank];
(e) any temporary restraining order, preliminary or permanent
injunction or other order preventing the consummation of the Offer or the Merger
or any of the other transactions contemplated by the Agreement shall have been
issued by any court of competent jurisdiction and remain in effect, or there
shall be any Law enacted or deemed applicable by a Governmental Body to the
Offer or the Merger or any of the other transactions contemplated by the
Agreement that makes consummation of the Offer, the Merger or any of the other
transactions contemplated by the Agreement illegal;
(f) there shall be pending or threatened any Proceeding in which a
Governmental Body is or is threatened to become a party or is otherwise involved
or either Parent or the Company shall have received a communication from any
Governmental Body in which such Governmental Body indicates the intention of
commencing any Proceeding or taking any other action: (i) challenging or seeking
to restrain or prohibit the consummation of the Offer or the Merger or any of
the other transactions contemplated by the Agreement; (ii) relating to the Offer
or the Merger or any of the other transactions contemplated by the Agreement and
seeking to obtain from Parent or any of the Acquired Companies, any damages or
other relief that may be material to Parent or the Acquired Companies; (iii)
seeking to prohibit or limit in any material respect Parent's or Acquisition
Sub's ability to vote, receive dividends with respect to or otherwise exercise
ownership rights with respect to the stock of the Company or the Surviving
Corporation; (iv) that could materially and adversely affect the right of Parent
or any of the Acquired Companies to own the assets or operate the business of
the Acquired Companies; or (v) seeking to compel any of the Acquired Companies,
Parent or any Subsidiary of Parent to dispose of or hold separate any material
assets as a result of the Offer or the Merger or any of the other transactions
contemplated by the Agreement;
(g) there shall be pending any Proceeding in which, in the reasonable
judgment of Parent, there is a reasonable possibility of an outcome that could
have a Material Adverse Effect or a material adverse effect on Parent: (i)
challenging or seeking to restrain or prohibit the consummation of the Offer or
the Merger or any of the other transactions contemplated by the Agreement; (ii)
relating to the Offer or the Merger or any of the other transactions
contemplated by the Agreement and seeking to obtain from Parent or any of the
Acquired Companies, any damages or other relief that may be material to Parent
or the Acquired Companies; (iii) seeking to prohibit or limit in any material
respect Parent's or Acquisition Sub's ability to vote, receive dividends with
respect to or otherwise exercise ownership rights with respect to the stock of
the Company or the Surviving Corporation; (iv) that would materially and
adversely affect the right of Parent or any of the Acquired Companies, to own
the assets or operate the business of any of the Acquired Companies; or (v)
seeking to compel any of the Acquired Companies, Parent or any Subsidiary of
Parent to dispose of or hold separate any material assets as a result of the
Offer or the Merger or any of the other transactions contemplated by the
Agreement.
(h) there shall have occurred and be continuing: (i) (A) any general
suspension of trading in, or limitation on prices for, securities on The Nasdaq
Stock Market or NYSE for a period equal to or in excess of 24 hours (excluding
any organized halt triggered solely as a result of a specified decrease in a
market index or suspensions or limitations resulting solely from physical
damage, technological or software breakdowns or malfunctions or interference
with such exchange not related to market conditions) or (B) any decline in any
of the Dow Xxxxx Industrial Average, the Standard & Poors Index of 500
Industrial Companies, the Nasdaq Composite Index or the Nasdaq Computer and Data
Processing Index in excess of 25% measured from the close of business on the
date of the Agreement; (ii) a declaration by a
2
Governmental Body of a banking moratorium or any suspension of payments in
respect of banks in the United States; (iii) an act of terrorism or a
commencement of a war, armed hostilities or other international or national
calamity directly or indirectly involving the United States, which in any case
would reasonably be expected to have a Material Adverse Effect or could
materially adversely affect Parent's or Acquisition Sub's ability to consummate
the Offer or the Merger; (iv) any extraordinary limitation (whether or not
mandatory) by any Governmental Body on the extension of credit generally by
banks or other financial institutions; or (v) a change in general financial,
bank or capital market conditions which materially and adversely affects the
ability of financial institutions in the United States to extend credit or
syndicate loans;
(i) the Agreement shall have been terminated in accordance with its
terms;
(j) a Triggering Event shall have occurred; or
(k) any Person or "group" (as defined in the Exchange Act and the rules
promulgated thereunder) of Persons directly or indirectly acquires or agrees to
acquire beneficial or record ownership of securities representing more than 20%
of the outstanding securities of any class of voting securities of the Company;
which in the sole good faith judgment of Parent or Acquisition Sub, in any such
case, and regardless of the circumstances (including any action or inaction by
Parent or Acquisition Sub other than an action or inaction by Parent or
Acquisition Sub constituting a material breach of the Agreement) giving rise to
such event or circumstance, makes it inadvisable to proceed with the Offer
and/or with such acceptance for payment of or payment for shares of Company
Common Stock.
The foregoing conditions are for the sole benefit of Parent and Acquisition
Sub and (except for the Minimum Condition) may be waived by Parent and
Acquisition Sub, in whole or in part at any time and from time to time, in the
sole discretion of Parent and Acquisition Sub. The failure by Parent or
Acquisition Sub at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right and each such right shall be deemed an ongoing
right which may be asserted at any time and from time to time.
3
