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APPENDIX A-1
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is entered
into as of January 13, 1997, by and among VERITAS Software Corporation, a
California corporation ("VERITAS"), VERITAS Software Corporation, a Delaware
corporation ("Newco"), and OpenVision Technologies, Inc., a Delaware corporation
("OpenVision").
RECITALS
A. The parties intend that, subject to the terms and conditions of this
Agreement, VERITAS and OpenVision will each become a subsidiary of a new
Delaware corporation referred to herein as Newco which has been formed by
VERITAS solely for the purpose of the transactions contemplated hereunder (the
"Merger"). To effect the Merger, (i) Newco will form two new Delaware
corporations ("VERITAS Sub" and "OpenVision Sub", respectively) as wholly-owned
subsidiaries of Newco, (ii) VERITAS Sub will merge with and into VERITAS, with
VERITAS to be the surviving corporation of such merger (the "VERITAS Merger"),
and (iii) OpenVision Sub will merge with and into OpenVision, with OpenVision to
be the surviving corporation of such merger (the "OpenVision Merger"), all
pursuant to the terms and conditions of this Agreement, the Agreements of Merger
substantially in the forms of Exhibit A and Exhibit B hereto (the "Agreements of
Merger") and the applicable provisions of the Delaware General Corporation Law
(the "Delaware Law") and the California General Corporation Law (the "CGCL").
Upon the effectiveness of the Merger, all of the outstanding capital stock of
VERITAS and all of the outstanding capital stock of OpenVision will be converted
into Common Stock of Newco (the "Newco Common Stock"). Newco will assume all
outstanding options, warrants and rights to purchase shares of Common Stock of
both VERITAS and OpenVision, as provided in this Agreement and the Agreements of
Merger. The Newco Common Stock issued in the Merger will be registered under the
Securities Act of 1933, as amended (the "Securities Act"), pursuant to a Newco
registration statement.
B. The Merger is intended to be treated as (i) a tax-free reorganization
pursuant to the provisions of Section 368 of the Internal Revenue Code of 1986,
as amended (the "Code"), and (ii) a "pooling of interests" for accounting
purposes.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. PLAN OF REORGANIZATION
1.1 THE ORGANIZATION OF NEWCO, VERITAS SUB AND OPENVISION SUB. VERITAS has
formed Newco under the laws of the State of Delaware for the purposes of the
transactions contemplated by the Merger. Newco currently has no outstanding
securities and will not issue any securities prior to the Effective Time (as
defined below), will conduct no business or operations, will have no assets and
will enter into no agreements or obligations except as required or contemplated
by this Agreement or necessary to perform its obligations hereunder. As soon as
practicable after the date of this Agreement, Newco shall form a wholly-owned
subsidiary named VERITAS Sub, Inc. and a wholly-owned subsidiary named
OpenVision Sub, Inc. under the laws of Delaware.
1.2 THE VERITAS MERGER. Subject to the terms and conditions of this
Agreement, Newco will cause VERITAS Sub to execute and deliver an Agreement of
Merger substantially in the form of Exhibit A hereto (the "VERITAS Agreement of
Merger") providing for the merger of VERITAS Sub with and into VERITAS (the
"VERITAS Merger"), with VERITAS being the surviving corporation upon the
effectiveness of the VERITAS Merger and thereby becoming a wholly-owned
subsidiary of Newco, pursuant to this Agreement, the VERITAS Agreement of Merger
and in accordance with applicable provisions of the Delaware Law and the CGCL as
follows:
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(a) Conversion of VERITAS Shares. Each share of the Common Stock of
VERITAS ("VERITAS Common Stock"), that is issued and outstanding immediately
prior to the Effective Time (as defined below) will by virtue of the VERITAS
Merger and at the Effective Time, and without any further action on the part of
VERITAS, Newco or any holder of VERITAS Common Stock, be converted into one
share (the "VERITAS Applicable Ratio") of validly issued, fully paid and
nonassessable Common Stock, $0.001 par value of Newco ("Newco Common Stock").
1.3 THE OPENVISION MERGER. Subject to the terms and conditions of this
Agreement, and simultaneously with the VERITAS Merger, Newco will cause
OpenVision Sub to execute and deliver an Agreement of Merger substantially in
the form of Exhibit B hereto (the "OpenVision Agreement of Merger") providing
for the merger of OpenVision Sub with and into OpenVision (the "OpenVision
Merger"), with OpenVision being the surviving corporation upon the effectiveness
of the OpenVision Merger and thereby becoming a wholly-owned subsidiary of
Newco, pursuant to this Agreement, the OpenVision Agreement of Merger and in
accordance with applicable provisions of the Delaware law as follows:
(a) Conversion of OpenVision Shares. Each share of Common Stock of
OpenVision, $0.001 par value, and each share of Class B Common Stock of
OpenVision, $0.001 par value, (collectively "OpenVision Common Stock"), that is
issued and outstanding immediately prior to the Effective Time (as defined
below) will by virtue of the OpenVision Merger and at the Effective Time, and
without any further action on the part of OpenVision, Newco or any holder of
OpenVision Common Stock, be converted into a fraction of a share of validly
issued, fully paid and nonassessable Newco Common Stock, equal to a fraction,
the numerator of which is 7,500,000 and the denominator of which is 73,000, plus
the total number of shares of OpenVision Common Stock outstanding, plus the
total number of shares of OpenVision Common Stock issuable upon exercise of the
OpenVision Options and OpenVision Warrants (as both terms are defined in Section
1.9 hereof), in each case as of the Effective Time (the "OpenVision Applicable
Ratio" and collectively with the VERITAS Applicable Ratio, the "Applicable
Ratios"). The "Effective Time" shall mean the effective time and date that both
Agreements of Merger have been filed with the Secretary of State of the State of
Delaware in accordance with the relevant provisions of Delaware law and the
VERITAS Agreement of Merger has been filed with the Secretary of State of the
State of California in accordance with the relevant provisions of the CGCL.
1.4 CANCELLATION OF VERITAS-OWNED AND OPENVISION-OWNED STOCK. Each share
of OpenVision Common Stock held in the treasury of OpenVision and each share of
VERITAS Common Stock held in the treasury of VERITAS or any of which are owned
by Newco, VERITAS, OpenVision or any direct or indirect wholly-owned subsidiary
of Newco, VERITAS or OpenVision immediately prior to the Effective Time shall be
canceled and extinguished without any conversion thereof.
1.5 ADJUSTMENTS FOR CAPITAL CHANGES. If, prior to the Effective Time,
either VERITAS or OpenVision recapitalizes through a subdivision of its
outstanding shares into a greater number of shares, or a combination of its
outstanding shares into a lesser number of shares, or reorganizes, reclassifies
or otherwise changes its outstanding shares into the same or a different number
of shares of other classes, or declares a dividend on its outstanding shares
payable in shares of its capital stock or securities convertible into shares of
its capital stock, then the Applicable Ratios will be adjusted appropriately so
as to maintain the relative proportionate interests of the holders of VERITAS
Common Stock and the holders of the OpenVision Common Stock in Newco securities.
1.6 DISSENTING SHARES. Holders of shares of OpenVision Common Stock who
dissent from the OpenVision Merger are not entitled to rights of appraisal under
Section 262 of the Delaware Law. Holders of shares of VERITAS Common Stock who
dissent from the VERITAS Merger are not entitled to dissenters' rights under
Chapter 13 of the CGCL provided, however, that (i) if demands for payment under
Chapter 13 of the CGCL are filed with respect to 5% or more of the outstanding
shares of VERITAS Common Stock by the holders of shares which voted against the
VERITAS Merger, then such holders of VERITAS Common Stock shall be entitled to
exercise dissenters' rights to the extent available under Chapter 13 of the CGCL
with respect to the shares for which such demand has been filed in accordance
with Chapter 13 of the CGCL; and (ii) any shares of VERITAS Common Stock whose
transfer is restricted by law or regulation or by
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XXXXXXX and that are voted against the VERITAS Merger shall be entitled to
exercise dissenters' rights to the extent available under Chapter 13 of the
CGCL.
1.7 FRACTIONAL SHARES. No fractional shares of Newco Common Stock will be
issued in connection with the Merger, but in lieu thereof each holder of VERITAS
Common Stock and of OpenVision Common Stock who would otherwise be entitled to
receive a fraction of a share of Newco Common Stock will receive from the
Exchange Agent (as hereinafter defined), at such time as such holder shall
receive a certificate representing shares of Newco Common Stock as contemplated
by Section 6.2, an amount of cash (rounded up to the nearest whole cent) equal
to the per share market value of VERITAS Common Stock (based on the average of
the Closing sale prices of VERITAS Common Stock as quoted on the Nasdaq Stock
Market during the ten day trading period ending on the Closing Date (as defined
in Section 6.1) as reported in the Wall Street Journal) (the "Average Price")
multiplied by the fraction of a share of Newco Common Stock to which such holder
would otherwise be entitled. The fractional interests of each VERITAS
shareholder and of each OpenVision stockholder will be aggregated such that no
VERITAS shareholder or OpenVision stockholder will receive cash in an amount
equal to or greater than the value of one full share of Newco Common Stock.
Newco shall provide sufficient funds to the Exchange Agent to make the payments
contemplated by this Section 1.7.
1.8 VERITAS OPTIONS AND WARRANTS.
(a) Conversion. At the Effective Time, each of the then outstanding
options to purchase shares of VERITAS Common Stock (collectively, the "VERITAS
Options") (consisting of all outstanding options granted under VERITAS' 1985
Stock Option Plan, 1991 Executive Stock Option Plan, 1993 Equity Incentive Plan
and 1993 Director Stock Option Plan (collectively, and with the VERITAS Stock
Purchase Plan referred to in Section 1.8(b) below, the "VERITAS Plans"), and any
individual non-Plan options) and each of the then outstanding warrants to
purchase shares of VERITAS Common Stock (the "VERITAS Warrants") will by virtue
of the Merger, and without any further action on the part of any holder thereof,
be assumed and converted into an option (or warrant, as the case may be) to
purchase an equivalent number of shares of Newco Common Stock at an exercise
price per share equal to the per share exercise price of the VERITAS Option (or
VERITAS Warrant, as the case may be) in effect at the Effective Time. The term,
exercisability, vesting schedule, status as an "incentive stock option" under
Section 422 of the Code, if applicable, and all other terms and conditions of
the VERITAS Options and VERITAS Warrants will be unchanged and all references in
any option or warrant agreement governing such option or warrant to VERITAS
shall be deemed to refer to Newco, where appropriate. Continuous service as an
employee or consultant with VERITAS or any of the VERITAS Subsidiaries (as
hereinafter defined) will be credited to an optionee of VERITAS for purposes of
determining the number of shares of Newco Common Stock subject to exercise under
a converted VERITAS Option after the Effective Time.
(b) At the Effective Time, each of the then outstanding options to
purchase shares of VERITAS Common Stock (collectively, the "VERITAS Stock
Purchase Plan Options"), consisting of all outstanding options to purchase
shares under VERITAS' 1993 Employee Stock Purchase Plan (the "VERITAS Stock
Purchase Plan"), will by virtue of the Merger, and without any further action on
the part of any holder thereof, be assumed and converted into an option to
purchase the same number of shares of Newco Common Stock on the next Purchase
Date (as such term is defined in the VERITAS Stock Purchase Plan) following the
Effective Time at a purchase price per share determined in accordance with the
VERITAS Stock Purchase Plan.
1.9 OPENVISION OPTIONS AND WARRANTS.
(a) Conversion. At the Effective Time, each of the then outstanding
options to purchase OpenVision Common Stock (collectively, the "OpenVision
Options") (consisting of all outstanding options granted under OpenVision's 1992
Stock Plan and 1996 Director Option Plan (collectively the "OpenVision Plans"),
and any individual non-Plan options) and each of the then outstanding warrants
to purchase OpenVision Common Stock (the "OpenVision Warrants") will by virtue
of the Merger, and without any further action on the part of any holder thereof,
be assumed and converted into an option (or warrant, as the case may be) to
purchase that number of shares of Newco Common Stock determined by multiplying
the number of shares of
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OpenVision Common Stock subject to such OpenVision Option or OpenVision Warrant
at the Effective Time by the OpenVision Applicable Ratio, at an exercise price
per share of Newco Common Stock equal to the exercise price per share of such
OpenVision Option or OpenVision Warrant immediately prior to the Effective Time
divided by the Applicable Ratio rounded up to the nearest cent. If the foregoing
calculation results in an assumed OpenVision Option or OpenVision Warrant being
exercisable for a fraction of a share of Newco Common Stock, then the number of
shares of Newco Common Stock subject to such option (or warrant, as the case may
be) will be rounded down to the nearest whole number of shares, with no cash
being payable for such fractional share. The term, exercisability, vesting
schedule, status as an "incentive stock option" under Section 422 of the Code,
if applicable, and all other terms and conditions of the OpenVision Options and
OpenVision Warrants will otherwise be unchanged. Continuous service as an
employee or consultant with OpenVision or any of the OpenVision Subsidiaries (as
hereinafter defined) will be credited to an optionee of OpenVision for purposes
of determining the number of shares of Newco Common Stock subject to exercise
under a converted OpenVision Option after the Effective Time.
(b) At the Effective Time, the OpenVision 1996 Employee Stock Purchase
Plan (the "OpenVision Stock Purchase Plan") will be assumed by Newco solely with
respect to outstanding options, and the securities reserved thereunder shall
become shares of Newco Common Stock, determined by multiplying (i) the number of
shares reserved thereunder and not issued thereunder prior to the Effective Time
by (ii) the OpenVision Applicable Ratio. Except for an increase to the reserve
by 100,000 shares necessary to honor existing OpenVision Stock Purchase Plan
Options, which increase is to be approved by the OpenVision Stockholders at the
OpenVision Stockholders Meeting, no additional shares shall be reserved under
the OpenVision Stock Purchase Plan before or after its assumption by Newco. At
the Effective Time, each then outstanding "option" to purchase OpenVision Common
Stock under the OpenVision Stock Purchase Plan for the open offering period that
runs from October 31, 1996 until October 30, 1998 (the "OpenVision Stock
Purchase Plan Options") will by virtue of the Merger, and without any further
action on the part of any holder thereof, be assumed and converted into a right
to purchase shares of Newco Common Stock on the same terms and conditions as set
forth in the OpenVision Stock Purchase Plan except that (i) each OpenVision
Stock Purchase Plan Option shall thereafter be exercisable for Newco Common
Stock, and (ii) the exercise price per share for the number of whole shares of
Newco Common Stock issuable upon exercise of each the OpenVision Stock Purchase
Option shall be determined in accordance with the formula set forth in the
OpenVision Stock Purchase Plan, except that the "fair market value" of the Newco
Common Stock subject to purchase pursuant to the OpenVision Stock Purchase Plan
Options (A) on the first day of an "Offering Period" under the OpenVision Stock
Purchase Plan shall be the quotient resulting from the division of the last sale
price of OpenVision Common Stock as reported on the Nasdaq Stock Market on the
trading day immediately prior to such date by the OpenVision Applicable Ratio
rounded up to the nearest cent; and (B) on the last day of any "Purchase Period"
under the OpenVision Stock Purchase Plan shall be the last sale price of Newco
Common Stock as reported on the Nasdaq Stock Market on the trading day
immediately prior to such date. No new "Offering Periods" (as defined in the
OpenVision Stock Purchase Plan) will be commenced. OpenVision shall take all
action that may be necessary (under the OpenVision Stock Purchase Plan and
otherwise) to effectuate the provisions of this Section 1.9(b) and to ensure
that, from and after the Effective Time, holders of OpenVision Stock Purchase
Plan Options and employees of OpenVision participating in the OpenVision Stock
Purchase Plan after the Effective Time have no rights with respect to the
OpenVision Stock Purchase Plan that are inconsistent with this Section 1.9(b).
1.10 NEWCO PLANS. Newco shall assume, effective as of the Effective Time,
the OpenVision Stock Purchase Plan, the VERITAS 1993 Equity Incentive Plan, its
1993 Director Stock Option Plan and its 1993 Employee Stock Purchase Plan and
shall have reserved 107,810, 4,100,000, 250,000 and 1,000,000 shares,
respectively, for issuance thereunder (collectively, the "Newco Plans"). Newco
shall also reserve a sufficient number of shares of Newco Common Stock for
issuance pursuant to the assumption of the Stock Rights (as defined below)
provided for in Sections 1.8 and 1.9 above. Upon the Effective Time, and subject
to assumption of such Stock Rights, the OpenVision Plans shall be terminated in
accordance with their respective terms.
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1.11 REGISTRATION. VERITAS will cause Newco to cause the Newco Common
Stock issuable upon exercise of the assumed OpenVision Stock Purchase Plan
Options, VERITAS Options, VERITAS Stock Purchase Plan Options, and OpenVision
Options (collectively, the "Stock Rights") and the shares reserved for issuance
pursuant to future awards under the Newco Plans to be registered on Form S-8
(the "Form S-8") promulgated by the Securities and Exchange Commission (the
"SEC") within 5 days after the Effective Time and will use its reasonable best
efforts to maintain the effectiveness of such registration statement or
registration statements for so long as any such assumed Stock Rights shall
remain outstanding. With respect to those individuals who subsequent to the
Merger will be subject to the reporting requirements under Section 16(a) of the
Exchange Act (as hereinafter defined), Newco shall administer the Stock Rights
assumed pursuant to Sections 1.8 and 1.9 (including the provisions of the
VERITAS Plans, and the OpenVision Plans incorporated in the Stock Rights) in a
manner that complies with Rule 16b-3 promulgated by the SEC under the Exchange
Act.
1.12 EFFECTS OF THE MERGER. At the Effective Time: (a) the separate
existence of VERITAS Sub will cease and VERITAS Sub will be merged with and into
VERITAS, with VERITAS being the surviving corporation of the VERITAS Merger (the
"VERITAS Surviving Corporation"), pursuant to the terms of this Agreement and
the VERITAS Agreement of Merger; (b) the separate existence of OpenVision Sub
will cease and OpenVision Sub will be merged with and into OpenVision, with
OpenVision being the surviving corporation of the OpenVision Merger (the
"OpenVision Surviving Corporation"), pursuant to the terms of this Agreement and
the OpenVision Agreement of Merger, (c) the Articles of Incorporation of the
VERITAS Surviving Corporation shall be in the form attached as Exhibit A to the
VERITAS Agreement of Merger, and the Certificate of Incorporation of the
OpenVision Surviving Corporation shall be in the form attached as Exhibit A to
the OpenVision Agreement of Merger; (d) the Bylaws of VERITAS immediately prior
to the Effective Time will be the Bylaws of the VERITAS Surviving Corporation
and the Bylaws of OpenVision Sub immediately prior to the Effective Time will be
the Bylaws of the OpenVision Surviving Corporation; (e) the directors and
officers of VERITAS immediately prior to the Effective Time will be the
directors and officers of the VERITAS Surviving Corporation; (f) the director of
the OpenVision Surviving Corporation shall be Xxxx Xxxxxx and the officers of
the OpenVision Surviving Corporation shall be Xxxx Xxxxxx as President,
Treasurer, Secretary and Chief Financial Officer, (g) each share of the Common
Stock of VERITAS Sub outstanding immediately prior to the Effective Time will be
converted into one share of Common Stock of the VERITAS Surviving Corporation;
(h) each share of the Common Stock of OpenVision Sub outstanding immediately
prior to the Effective Time will be converted into one share of Common Stock of
the OpenVision Surviving Corporation; (i) each share of VERITAS Common Stock,
OpenVision Common Stock, and each Stock Right outstanding immediately prior to
the Effective Time will be converted as provided in Sections 1.2, 1.3, 1.8 and
1.9; (j) the OpenVision Stock Purchase Plan and the VERITAS Plans shall be
assumed by Newco; and (k) the Merger will, from and after the Effective Time,
have all of the effects provided by applicable law, including, without
limitation, the CGCL and the Delaware Law.
1.13 REGISTRATION ON FORM S-4. The Newco Common Stock to be issued in the
Merger shall be registered under the Securities Act on the Form S-4 (as
hereinafter defined). As promptly as practicable after the date of this
Agreement, VERITAS, Newco and OpenVision shall prepare and file with the SEC a
Form S-4 registration statement (the "Form S-4"), together with the
prospectus/joint proxy statement to be included therein (the "Prospectus/Proxy
Statement") and any other documents required by the Securities Act or the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), in connection
with the Merger. Each of VERITAS, Newco and OpenVision shall use its reasonable
best efforts to respond promptly to any comments of the SEC and to have the Form
S-4 declared effective under the Securities Act as promptly as practicable after
such filing. VERITAS and Newco shall also take any action required to be taken
under any applicable state securities or "blue sky" laws and regulations of the
Nasdaq Stock Market in connection with the issuance of the Newco Common Stock
pursuant to the Merger. OpenVision shall promptly furnish to VERITAS all
information concerning OpenVision and the OpenVision stockholders as may be
reasonably required in connection with any action contemplated by this Section
1.13. Each of VERITAS, Newco and OpenVision will notify the other 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 Form S-4 or
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the Prospectus/Proxy Statement or for additional information and will supply the
other with copies of all correspondence with the SEC or its staff with respect
to the Form S-4 or the Prospectus/Proxy Statement. Whenever any event occurs
which should be set forth in an amendment or supplement to the Form S-4 or the
Prospectus/Proxy Statement, VERITAS and Newco or OpenVision, as the case may be,
shall promptly inform the other of such occurrence and cooperate in filing with
the SEC or its staff, and/or mailing to stockholders of VERITAS and OpenVision,
such amendment or supplement.
1.14 TAX FREE REORGANIZATION. The parties intend to adopt this Agreement
and the Merger as a tax-free plan of reorganization under Section 368(a)(1)(A)
of the Code by virtue of the provisions of Section 368(a)(2)(E) of the Code. The
Newco Common Stock issued in the Merger will be issued solely in exchange for
the VERITAS Common Stock and the OpenVision Common Stock, and no other
transaction other than the Merger represents, provides for or is intended to be
an adjustment to the consideration paid for either the VERITAS Common Stock or
the OpenVision Common Stock. Except for cash paid in lieu of fractional shares
of any VERITAS Common Stock or OpenVision Common Stock, no consideration that
could constitute "other property" within the meaning of Section 356(b) of the
Code is being transferred by Newco for either the VERITAS Common Stock or the
OpenVision Common Stock in the Merger. The parties shall not take a position on
any tax return inconsistent with this Section 1.14. In addition, Newco hereby
represents, and will represent as of the Closing Date, that it intends to
continue both VERITAS' and OpenVision's historic businesses or use a significant
portion of VERITAS' and OpenVision's business assets in a trade or business.
1.15 POOLING OF INTERESTS. The parties intend that the Merger be treated
as a "pooling of interests" for accounting purposes. The parties shall use their
reasonable best efforts to cause their respective affiliates to execute and
deliver Affiliates Agreements, as contemplated by Sections 4.5 and 5.5 below, to
ensure compliance by such affiliates with the restrictions required to allow
such accounting treatment to be utilized. In addition, Newco hereby represents
and warrants that it shall not after the Closing Date take any action that will
cause the Merger not to qualify as a "pooling of interests" for accounting
purposes.
1.16 XXXX-XXXXX-XXXXXX FILINGS. VERITAS and Newco will, and OpenVision
shall use its reasonable best efforts to cause Warburg, Xxxxxx Investors, L.P.
("Warburg") to, promptly prepare and file the applicable notices (if any)
required to be filed by them under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act (the "HSR Act"), and comply promptly with any requests to any of them from
the Federal Trade Commission or United States Department of Justice for
additional information.
1.17 BOARD OF DIRECTORS AND OFFICERS OF NEWCO. At the Effective Time, the
directors of Newco shall be Xxxx Xxxxxx, Xxxx Xxxxxx, Xxxxxx Xxxxx, Xxxxxx
Xxxxxx, Xxxx van den Bosch, Xxxxxxxx Xxxxxx and Xxxxxxx Xxxxxxx. At the
Effective Time, the following individuals shall be elected to the following
offices of Newco:
NAME OFFICE
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Xxxx Xxxxxx President, CEO and Co-Chairman of Board
Xxxxxxxx Xxxxxx Co-Chairman of Board and Executive Vice
President
Xxxx van den Bosch Senior Vice President, Engineering
Xxxxx Xxxxxx Vice President, Marketing
Xxxx Xxxxx Vice President, International and OEM Sales
Xxxx Xxxxxxxxxx Vice President, North American Sales
Xxxxxxx Xxxxxxx Chief Financial Officer and Vice President,
Finance
Xxx Xxxxx Vice President, General Counsel and Secretary
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2. REPRESENTATIONS AND WARRANTIES OF OPENVISION
Except as set forth in a letter dated the date of this Agreement, delivered
by OpenVision to VERITAS concurrently herewith, and certified by an officer of
OpenVision, on behalf of OpenVision, to be true, accurate and complete to the
best of his knowledge (the "OpenVision Disclosure Letter"), OpenVision hereby
represents and warrants to VERITAS that:
2.1 ORGANIZATION; GOOD STANDING; QUALIFICATION AND POWER. OpenVision, and
each of its subsidiaries set forth in Section 2.1 of the OpenVision Disclosure
Letter (the "OpenVision Subsidiaries") (the OpenVision Subsidiaries being the
only subsidiaries of OpenVision), is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now being conducted, and
is duly qualified and in good standing to do business in each jurisdiction in
which the nature of its business or the ownership or leasing of its properties
makes such qualification necessary, other than in such jurisdictions where the
failure so to qualify would not have a Material Adverse Effect on OpenVision (as
defined below). The OpenVision Disclosure Letter sets forth a correct and
complete list of the OpenVision Subsidiaries, the holders of record of each
OpenVision Subsidiary's outstanding equity, and a correct and complete list of
each jurisdiction in which each of OpenVision and the OpenVision Subsidiaries is
duly qualified and in good standing to do business. OpenVision has delivered to
VERITAS or its counsel complete and correct copies of the Certificate of
Incorporation and Bylaws of OpenVision and will deliver to VERITAS or its
counsel prior to the Closing Date the equivalent charter documents for each of
the OpenVision Subsidiaries, in each case as amended to the date of this
Agreement. Other than the OpenVision Subsidiaries, OpenVision does not own,
directly or indirectly, any capital stock or other equity interest of any
corporation or have any direct or indirect equity or ownership interest in any
other business, whether organized as a corporation, partnership, joint venture
or otherwise.
In this Agreement, any reference to the term "Material Adverse Effect on
OpenVision" means any event, change or effect which would have a material
adverse effect on the business, assets (including intangible assets), financial
condition, results of operations, or prospects of OpenVision and the OpenVision
Subsidiaries, taken as a whole. In addition, any reference to the terms "to
OpenVision's knowledge" or "known to OpenVision" refers to the current actual
knowledge of any officer of OpenVision.
2.2 CAPITAL STRUCTURE.
(a) Stock and Options. The authorized capital stock of OpenVision
consists of 50,000,000 shares of OpenVision Common Stock, $0.001 par value,
3,400,000 of which are designated Class B Common Stock, and 5,000,000 shares of
Preferred Stock, $0.01 par value (the "OpenVision Preferred Stock"). At the
close of business on January 10, 1997, 15,475,774 shares of OpenVision Common
Stock were issued and outstanding, 3,247,142 shares of OpenVision Class B Common
Stock were issued and outstanding, no shares of OpenVision Common Stock were
held by OpenVision in its treasury, 2,186,673 shares of OpenVision Common Stock
were reserved for issuance upon the exercise of outstanding OpenVision Options,
910,082 shares of OpenVision Common Stock were available for the grant of
additional awards under the OpenVision Plans, 12,500 shares of OpenVision Common
Stock were reserved for issuance upon exercise of outstanding OpenVision
Warrants, and 200,808 shares of OpenVision Common Stock were reserved for
issuance pursuant to the OpenVision Stock Purchase Plan. No shares of OpenVision
Preferred Stock are issued or outstanding. All outstanding shares of OpenVision
Common Stock are validly issued, fully paid and nonassessable and not subject to
preemptive rights by statute, the Certificate of Incorporation or Bylaws of
OpenVision, or any agreement or document to which OpenVision is a party or by
which it is bound. All outstanding shares of the capital stock of each of the
OpenVision Subsidiaries are validly issued, fully paid and nonassessable and are
owned by OpenVision or one of the OpenVision Subsidiaries free and clear of any
liens, security interests, pledges, agreements, claims, charges or encumbrances.
OpenVision has delivered to VERITAS a correct and complete list of each
OpenVision Option and OpenVision Warrant outstanding as of the date hereof,
including the name of the holder of such OpenVision Option or OpenVision
Warrant, the OpenVision Plan pursuant to which such OpenVision Option was
issued, the number of shares covered by such OpenVision Option or OpenVision
Warrant, the per share exercise price of such OpenVision Option or OpenVision
Warrant and the vesting
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commencement date and vesting schedule applicable to each such
OpenVision Option, including the number of shares vested as of the date of this
Agreement. OpenVision has further delivered to VERITAS a correct and complete
list of the employees currently enrolled in the current Offering Period of the
OpenVision Stock Purchase Plan, the amount of the periodic payroll deduction
from each such employee's compensation with respect to such plan, the aggregate
amount of payroll deductions with respect to the current Purchase Period of such
plan for each such employee to date, and the fair market value (as determined in
accordance with the OpenVision Stock Purchase Plan) of the OpenVision Common
Stock on the date of commencement of the current Offering Period. OpenVision has
also delivered to VERITAS a correct and complete list of OpenVision Common Stock
outstanding as of the date hereof purchased pursuant to Restricted Stock Awards
under OpenVision's 1992 Stock Plan which are subject to a right of OpenVision to
repurchase such shares, including the name of the holder of such stock, the
purchase price of such stock and the vesting commencement date and vesting
schedule relating to such stock providing for the lapse of OpenVision's
repurchase rights, including the number of shares vested as of the date of this
Agreement.
(b) No Other Commitments. Except for the OpenVision Options, OpenVision
Warrants and OpenVision Stock Purchase Plan Options disclosed in Section 2.2(a)
above, a list of which has been provided to VERITAS, there are no options,
warrants, calls, rights, commitments, conversion rights or agreements of any
character to which OpenVision or any of the OpenVision Subsidiaries is a party
or by which OpenVision or any of the OpenVision Subsidiaries is bound obligating
OpenVision or any of the OpenVision Subsidiaries to issue, deliver or sell, or
cause to be issued, delivered or sold, any shares of capital stock of OpenVision
or any of the OpenVision Subsidiaries or securities convertible into or
exchangeable for shares of capital stock of OpenVision or any of the OpenVision
Subsidiaries, or obligating OpenVision or any of the OpenVision Subsidiaries to
grant, extend or enter into any such option, warrant, call, right, commitment,
conversion right or agreement. There are no voting trusts or other agreements or
understandings to which OpenVision is a party with respect to the voting of the
capital stock of OpenVision or any of the OpenVision Subsidiaries.
(c) Registration Rights. OpenVision is not under any obligation to
register under the Securities Act any of its presently outstanding securities or
any securities that may be subsequently issued, except as disclosed in the
OpenVision Disclosure Letter.
2.3 AUTHORITY.
(a) Corporate Action. Subject to approval of this Agreement and the
Merger by the stockholders of OpenVision, OpenVision has all requisite corporate
power and authority to enter into this Agreement and the OpenVision Agreement of
Merger, to perform its obligations hereunder and to consummate the Merger and
the other transactions contemplated by this Agreement. The execution and
delivery of this Agreement and the OpenVision Agreement of Merger by OpenVision
and, subject to approval of this Agreement and the Merger by the stockholders of
OpenVision, the filing and recordation of the OpenVision Agreement of Merger
pursuant to Delaware Law and the consummation by OpenVision of the Merger and
the other transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of OpenVision. This Agreement has been,
and upon the Closing Date the OpenVision Agreement of Merger will have been,
duly executed and delivered by OpenVision and this Agreement is, and the
OpenVision Agreement of Merger as of the Effective Time will be, valid and
binding obligations of OpenVision, enforceable in accordance with their terms,
except as enforceability may be limited by bankruptcy and other similar laws and
general principles of equity.
(b) No Conflict. Neither the execution, delivery and performance of this
Agreement or the OpenVision Agreement of Merger, nor the consummation of the
transactions contemplated hereby or thereby nor compliance with the provisions
hereof or thereof will: (i) conflict with, or result in any violations of, or
cause a default (with or without notice or lapse of time, or both) under, or
give rise to a right of termination, amendment, cancellation or acceleration of
any obligation contained in, or the loss of any material benefit under, or
result in the creation of any lien, security interest, charge or encumbrance
upon any of the material properties or assets of OpenVision or any of the
OpenVision Subsidiaries under, any term, condition or provision of (x) the
Certificate of Incorporation or Bylaws of OpenVision or the equivalent
organizational documents of any of the OpenVision Subsidiaries or (y) any loan
or credit agreement, note, bond, mortgage,
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indenture, lease or other material agreement, judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to OpenVision or any of the
OpenVision Subsidiaries or their respective properties or assets, other than any
such conflicts, violations, defaults, rights, losses, liens, security interests,
charges or encumbrances which, individually or in the aggregate, would not have
a Material Adverse Effect on OpenVision; or (ii) require the affirmative vote of
the holders of greater than a majority of the issued and outstanding shares of
OpenVision Common Stock.
(c) Governmental Consents. No consent, approval, order or authorization
of, or registration, declaration or filing with, any court, administrative
agency or commission or other governmental authority or instrumentality,
domestic or foreign (each a "Governmental Entity"), is required to be obtained
by OpenVision or any of the OpenVision Subsidiaries in connection with the
execution and delivery of this Agreement or the OpenVision Agreement of Merger,
or the consummation of the transactions contemplated hereby or thereby, except
for: (i) the filing with the SEC, and the effectiveness, of the Form S-4, and
the filing of the Prospectus/Proxy Statement relating to the meeting of the
stockholders of OpenVision (the "OpenVision Stockholders Meeting") to be held
with respect to the approval by OpenVision's stockholders of this Agreement and
the Merger, and the filing of such reports and information under the Exchange
Act, and the rules and regulations promulgated by the SEC thereunder, as may be
required in connection with this Agreement and the transactions contemplated
hereby; (ii) the filing of the OpenVision Agreement of Merger with the Secretary
of State of the State of Delaware and appropriate documents with the relevant
authorities of other states in which OpenVision is qualified to do business;
(iii) such filings, authorizations, orders and approvals as may be required
under state "control share acquisition," "anti-takeover," "blue sky" or other
similar statutes and regulations (collectively, "State Takeover Laws"); (iv)
such filings and notifications as may be necessary under the HSR Act; and (v)
such other filings, authorizations, orders and approvals which, if not obtained
or made, would not have a Material Adverse Effect on OpenVision or VERITAS or
have a material adverse effect on the ability of the parties to consummate the
Merger.
2.4 SEC DOCUMENTS.
(a) SEC Reports. OpenVision has delivered to VERITAS or its counsel
correct and complete copies of each report, schedule, registration statement and
definitive proxy statement filed by OpenVision with the SEC on or after May 7,
1996 (the "OpenVision SEC Documents"), which are all the documents (other than
preliminary material) that OpenVision was required to file with the SEC on or
after May 7, 1996. As of their respective dates or, in the case of registration
statements, their effective dates, none of the OpenVision SEC Documents
(including all exhibits and schedules thereto and documents incorporated by
reference therein) 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 light of the circumstances under which they were
made, not misleading, and there is no requirement under the Securities Act or
the Exchange Act, as the case may be, to have amended any such filing. The
OpenVision SEC Documents complied, when filed, in all material respects with the
then applicable requirements of the Securities Act or the Exchange Act, as the
case may be, and the rules and regulations promulgated by the SEC thereunder.
OpenVision has filed all documents and agreements which were required to be
filed as exhibits to the OpenVision SEC Documents.
(b) Financial Statements. The financial statements of OpenVision
included in the OpenVision SEC Documents complied as to form in all material
respects with the then applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, were prepared in
accordance with generally accepted accounting principles ("GAAP") applied on a
consistent basis during the periods involved (except as may have been indicated
in the notes thereto) and fairly present (subject, in the case of the unaudited
statements, to normal year-end audit adjustments) the consolidated financial
position of OpenVision and its consolidated OpenVision Subsidiaries as at the
respective dates thereof and the consolidated results of their operations and
cash flows for the respective periods then ended.
2.5 INFORMATION SUPPLIED. None of the information supplied or to be
supplied by OpenVision for inclusion or incorporation by reference in the Form
S-4 and Prospectus/Proxy Statement will, at the time the Form S-4 is declared
effective, at the date the Prospectus/Proxy Statement is mailed to the
stockholders of OpenVision and at the time of the OpenVision Stockholders
Meeting contain, after giving effect to any
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supplement or amendment thereto, 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. The Prospectus/Proxy Statement will comply as to form in all
material respects with the provisions of the Exchange Act and the rules and
regulations promulgated by the SEC thereunder. Notwithstanding the foregoing,
OpenVision makes no representation or warranty with respect to any information
supplied by VERITAS or Newco which is contained in any of the foregoing
documents.
2.6 COMPLIANCE WITH APPLICABLE LAWS. Except as disclosed in the OpenVision
SEC Documents filed prior to the date of this Agreement, the businesses of
OpenVision and the OpenVision Subsidiaries are not being conducted in violation
of any law, ordinance, regulation, rule or order of any Governmental Entity
where such violation would have a Material Adverse Effect on OpenVision. Except
as disclosed in the OpenVision SEC Documents filed prior to the date of this
Agreement, OpenVision has not been notified in writing by any Governmental
Entity that any investigation or review with respect to OpenVision or any of the
OpenVision Subsidiaries is pending or threatened, nor has any Governmental
Entity notified OpenVision in writing of its intention to conduct the same,
which investigation or review could reasonably be expected to have a Material
Adverse Effect on OpenVision. OpenVision and the OpenVision Subsidiaries have
all permits, licenses and franchises from Governmental Entities required to
conduct their businesses as now being conducted, except for those whose absence
would not have a Material Adverse Effect on OpenVision.
2.7 LITIGATION. Except as disclosed in the OpenVision SEC Documents filed
prior to the date of this Agreement, or as would not reasonably be expected to
have a Material Adverse Effect on OpenVision, there is no suit, action,
arbitration, demand, claim or proceeding pending or, to the knowledge of
OpenVision, threatened against OpenVision or any of the OpenVision Subsidiaries;
nor is there any judgment, decree, injunction, ruling or order of any
Governmental Entity or arbitrator or settlement agreement outstanding against
OpenVision or any of the OpenVision Subsidiaries. OpenVision has delivered or
made available to VERITAS or its counsel correct and complete copies of all
correspondence prepared by its counsel for OpenVision's auditors in connection
with the last two completed audits of OpenVision's financial statements and any
such correspondence since the date of the last such audit. Neither OpenVision
nor any of the OpenVision Subsidiaries is a party to any decree, order or
arbitration award (or agreement entered into in any administrative, judicial or
arbitration proceeding with any governmental authority) with respect to its
properties, assets, personnel or business activities which could reasonably be
expected to have a Material Adverse Effect on OpenVision. OpenVision is not in
violation of, or delinquent in respect of, any decree, order or arbitration
award naming OpenVision or a OpenVision Subsidiary as a party or otherwise known
to it, or law, ordinance, statute, or governmental authority to which its
properties, assets, personnel or business activities are subject or to which
OpenVision or a OpenVision Subsidiary is subject, including, without limitation,
laws, rules and regulations relating to occupational health and safety, equal
employment opportunities, fair employment practices, and sex, race, religious
and age discrimination, except for such violations as would not have a Material
Adverse Effect on OpenVision.
2.8 ERISA AND OTHER COMPLIANCE.
(a) The OpenVision Disclosure Letter lists all the employees of
OpenVision and of any OpenVision Subsidiary and their salaries or base wage as
of December 31, 1996. The OpenVision Disclosure Letter also identifies each
"employee benefit plan," as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), currently or previously
maintained, contributed to or entered into by OpenVision or any of the
OpenVision Subsidiaries under which OpenVision or any of the OpenVision
Subsidiaries or any ERISA Affiliate (as defined below) thereof has any present
or future obligation or liability (collectively, the "OpenVision Employee
Plans"). For purposes of this Section 2.8, "ERISA Affiliate" shall mean any
entity which is a member of (A) a "controlled group of corporations," as defined
in Section 414(b) of the Code, (B) a group of entities under "common control,"
as defined in Section 414(c) of the Code, or (C) an "affiliated service group,"
as defined in Section 414(m) of the Code, or treasury regulations promulgated
under Section 414(o) of the Code, any of which includes OpenVision or any of the
OpenVision Subsidiaries. Copies of all OpenVision Employee Plans (and, if
applicable, related trust agreements) and all amendments thereto and written
interpretations thereof (including summary plan descriptions) have been
delivered to VERITAS or its counsel, together with the three most recent annual
reports (Form 5500,
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including, if applicable, the auditor's reports and any Schedule B thereto)
prepared in connection with any such OpenVision Employee Plan. All OpenVision
Employee Plans which individually or collectively would constitute an "employee
pension benefit plan," as defined in Section 3(2) of ERISA (collectively, the
"OpenVision Pension Plans"), are identified as such in the OpenVision Disclosure
Letter. All OpenVision Employee Plans which individually or collectively would
constitute an "employee welfare benefit plan," as defined in Section 3(1) of
ERISA are identified as such in the OpenVision Disclosure Letter. All
contributions or premiums due from OpenVision or any of the OpenVision
Subsidiaries with respect to any of the OpenVision Employee Plans have been made
as required under ERISA or have been accrued on OpenVision's or any such
OpenVision Subsidiary's financial statements as of September 30, 1996, or will
be made prior to the Closing. Each OpenVision Employee Plan has been maintained
in compliance with its terms and with the requirements prescribed by any and all
statutes, orders, rules and regulations, including, without limitation, ERISA
and the Code, which are applicable to such OpenVision Employee Plans, except as
would not have a Material Adverse Effect on OpenVision.
(b) No OpenVision Pension Plan constitutes, or has since the enactment
of ERISA constituted, a "multiemployer plan," as defined in Section 3(37) of
ERISA. No OpenVision Pension Plans are subject to Title IV of ERISA. No
"prohibited transaction," as defined in Section 406 of ERISA or Section 4975 of
the Code, has occurred with respect to any OpenVision Employee Plan which is
covered by Title I of ERISA which would result in a material liability to
OpenVision or any of the OpenVision Subsidiaries taken individually, excluding
transactions effected pursuant to a statutory or administrative exemption.
Nothing done or omitted to be done and no transaction or holding of any asset
under or in connection with any OpenVision Employee Plan has or will make
OpenVision or any employee, officer or director of OpenVision subject to any
material liability under Title I of ERISA or liable for any material Tax (as
defined in Section 2.14) or penalty pursuant to Sections 4972, 4975, 4976, 4977
or 4979 of the Code or Section 502 of ERISA.
(c) With respect to each OpenVision Pension Plan that is intended to be
qualified under Section 401(a) of the Code (a "OpenVision 401(a) Plan"), either
(i) a favorable determination letter has been received from the Internal Revenue
Service ("IRS") as to the qualification of the OpenVision 401(a) Plan under the
Code as in effect immediately after the Tax Reform Act of 1986, or (ii) the
OpenVision 401(a) Plan has been established under a standardized prototype plan
for which an Internal Revenue Service opinion letter has been obtained and upon
which the OpenVision 401(a) Plan may rely. OpenVision has delivered to VERITAS
or its counsel a complete and correct copy of the most recent Internal Revenue
Service determination letter with respect to each OpenVision 401(a) Plan.
(d) No OpenVision Employee Plan provides or ever has provided death,
medical or health benefits (whether or not insured) with respect to current or
former employees after any such employee's retirement or other termination of
service (other than benefit coverage mandated by applicable law, including,
without limitation, coverage provided pursuant to Section 4980B of the Code).
(e) The OpenVision Disclosure Letter lists each employment, severance,
compensation or other similar contract, arrangement or policy and each plan or
arrangement (written or oral) providing for insurance coverage (including any
self-insured arrangements), workers' benefits, vacation benefits, severance
benefits, disability benefits, death benefits, hospitalization benefits,
retirement benefits, deferred compensation, profit-sharing, bonuses, stock
options, stock purchase, phantom stock, stock appreciation or other forms of
incentive compensation or post-retirement insurance, compensation or benefits
for employees, consultants or directors (other than workers compensation,
unemployment compensation and other government mandated programs) which (A) is
not a OpenVision Employee Plan, (B) is entered into, maintained or contributed
to, as the case may be, by OpenVision or any of the OpenVision Subsidiaries, and
(C) covers any employee or former employee of OpenVision or any of the
OpenVision Subsidiaries. Such contracts, plans and arrangements as are described
in this Section 2.8(e) are herein referred to collectively as the "OpenVision
Benefit Arrangements." Each OpenVision Benefit Arrangement has been maintained
in substantial compliance with its terms and with the requirements prescribed by
any and all statutes, orders, rules and regulations which are applicable to such
OpenVision Benefit Arrangement. OpenVision has delivered to VERITAS or its
counsel a complete and
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correct copy of each OpenVision Benefit Arrangement document or, if such
OpenVision Benefit Arrangement is unwritten, a description thereof.
(f) There has been no amendment to, written interpretation or
announcement (whether or not written) by OpenVision or any of the OpenVision
Subsidiaries relating to any OpenVision Employee Plan or OpenVision Benefit
Arrangement that would increase materially the expense of maintaining such
OpenVision Employee Plan or OpenVision Benefit Arrangement above the level of
the expense incurred in respect thereof for the year ended June 30, 1996.
(g) OpenVision has timely provided, or will have provided prior to the
Closing (as defined in Section 6.1), to individuals entitled thereto all
required notices and coverage pursuant to Section 4980B of the Code and the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"),
with respect to any "qualifying event" (as defined in Section 4980B(f)(3) of the
Code). OpenVision will timely provide to individuals entitled thereto all
required notices and coverage pursuant to Code Section 4980B and COBRA with
respect to any "qualifying event" (as defined in Section 4980B(f)(3) of the
Code) occurring prior to and including the Closing Date. No material Tax payable
on account of Section 4980B of the Code has been incurred with respect to any
current or former employees (or their beneficiaries) of OpenVision or any of the
OpenVision Subsidiaries.
(h) No benefit payable or which may become payable by OpenVision or any
of the OpenVision Subsidiaries pursuant to any OpenVision Employee Plan or any
OpenVision Benefit Arrangement or as a result of or arising under this Agreement
shall constitute an "excess parachute payment" (as defined in Section 280G(b)(1)
of the Code) which is subject to the imposition of an excise Tax under Section
4999 of the Code or which would not be deductible by reason of Section 280G of
the Code.
(i) OpenVision and each OpenVision Subsidiary is in compliance in all
material respects with all applicable laws, agreements and contracts relating to
employment, employment practices, wages, hours, and terms and conditions of
employment, including, but not limited to, employee compensation matters, but
not including ERISA.
(j) OpenVision and each OpenVision Subsidiary has good labor relations
and has no knowledge of any facts indicating that the consummation of the
transactions contemplated hereby will have a material adverse effect on labor
relations, and has no knowledge that any of its key employees intends to leave
its or their employ.
2.9 ABSENCE OF UNDISCLOSED LIABILITIES. Neither OpenVision nor any of the
OpenVision Subsidiaries has any liabilities or obligations of any nature
(matured or unmatured, fixed or contingent) which are, individually or in the
aggregate, of a nature required to be disclosed on the face of a balance sheet
prepared in accordance with GAAP and are material to the business of OpenVision
and the OpenVision Subsidiaries, taken as a whole, except for such liabilities
or obligations as (i) were accrued or fully reserved against in the consolidated
balance sheet of OpenVision at September 30, 1996 (the "OpenVision Balance
Sheet") or (ii) are of a normally recurring nature and were incurred after
September 30, 1996 (the "OpenVision Balance Sheet Date") in the ordinary course
of business consistent with past practice. As of the OpenVision Balance Sheet
Date, there were no material loss contingencies (as such term is used in
Statement of Financial Accounting Standards No. 5 issued by the Financial
Accounting Standards Board in March 1975) which are not adequately provided for
in the OpenVision Balance Sheet as required by said Statement No. 5.
2.10 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed herein or
in the OpenVision SEC Documents filed prior to the date of this Agreement, since
the OpenVision Balance Sheet Date there has not occurred:
(a) any change not identified below that could reasonably be expected to
have a Material Adverse Effect on OpenVision;
(b) any amendments or changes in the Certificate of Incorporation or
Bylaws of OpenVision;
(c) any damage, destruction or loss, whether covered by insurance or
not, materially and adversely affecting any of the material properties or the
business of OpenVision;
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(x) any redemption, repurchase or other acquisition of shares of
OpenVision Common Stock by OpenVision (other than pursuant to arrangements with
terminated employees or consultants), or any declaration, setting aside or
payment of any dividend or other distribution (whether in cash, stock or
property) with respect to OpenVision Common Stock;
(e) any increase in or modification of the compensation or benefits
payable or to become payable by OpenVision to any of its directors or employees,
except in the ordinary course of business, consistent with past practice;
(f) other than as required by applicable statute or regulation, any
increase in or modification of any bonus, pension, insurance or OpenVision
Employee Plan or OpenVision Benefit Arrangement (including, but not limited to,
the granting of stock options, restricted stock awards or stock appreciation
rights) made to, for or with any of its employees, other than (a) in the
ordinary course of business, consistent with past practice, and (b) after the
date of this Agreement, which is authorized, if required, pursuant to Section
4.3 below;
(g) any acquisition or sale of a material amount of property or assets
of OpenVision, other than in the ordinary course of business, consistent with
past practice;
(h) any alteration in any term of any outstanding security of OpenVision
including, but not limited to, acceleration of the vesting or any change in the
terms of any outstanding stock options;
(i) other than in the ordinary course of business, consistent with past
practice, the total amount of which is not material, any (A) incurrence,
assumption or guarantee by OpenVision of any debt for borrowed money; (B)
issuance or sale of any securities convertible into or exchangeable for debt
securities of OpenVision; or (C) issuance or sale of options or other rights to
acquire from OpenVision, directly or indirectly, debt securities of OpenVision
or any securities convertible into or exchangeable for any such debt securities;
(j) any creation or assumption by OpenVision of any mortgage, pledge,
security interest, lien or other encumbrance on any asset, other than in the
ordinary course of business, consistent with past practice, not in excess of
$100,000 in the aggregate;
(k) any making of any loan, advance or capital contribution to or
investment in any person other than (i) loans, advances or capital contributions
made in the ordinary course of business of OpenVision and (ii) other loans and
advances, where the aggregate amount of all such items outstanding at any time
does not exceed $50,000;
(l) any entering into, amendment of, relinquishment, termination or
non-renewal by OpenVision of any material contract, lease transaction,
commitment or other right or obligation other than in the ordinary course of
business;
(m) any transfer or grant of a right under the OpenVision IP Rights (as
defined in Section 2.15 below), other than those transferred or granted in the
ordinary course of business, consistent with past practices, except for any
grant of a right to OpenVision source code or the grant of any exclusive rights
to any OpenVision IP Rights, each of which shall be set forth in the OpenVision
Disclosure Letter;
(n) any labor dispute or charge of unfair labor practice (other than
routine individual grievances), any activity or proceeding by a labor union or
representative thereof to organize any employees of OpenVision or, to
OpenVision's knowledge, any campaign being conducted to solicit authorization
from employees to be represented by such labor union; or
(o) any agreement by OpenVision or, to OpenVision's knowledge, any
officer or employee thereof, to take any of the actions described in the
preceding clauses (a) through (n) (other than negotiations with VERITAS and its
representatives regarding the transactions contemplated by this Agreement).
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2.11 AGREEMENTS. The OpenVision Disclosure Letter sets forth a list of any
of the following currently effective contracts, agreements and other instruments
to which OpenVision or any OpenVision Subsidiary is a party, copies of each of
which have been delivered to VERITAS or its counsel:
(a) contract with or commitment to any labor union;
(b) continuing contract for the future purchase, sale or manufacture of
products, material, supplies, equipment or services requiring payment to or from
OpenVision or any OpenVision Subsidiary of an amount in excess of $100,000 per
annum which is not terminable on 120 days' or less notice without cost or other
liability at, or at any time after, the Effective Time or in which OpenVision or
such OpenVision Subsidiary has granted or received manufacturing rights, most
favored nations pricing provisions or exclusive marketing rights relating to any
product, group of products or territory, provided, however, that only purchase
orders for the top ten (10) vendors of OpenVision (as measured by calendar year
1996 OpenVision purchases) are listed in the OpenVision Disclosure Letter;
(c) contract providing for the development of technology for OpenVision
which technology is used or incorporated in any products currently distributed
by OpenVision or is anticipated to be used or incorporated in any planned
products of OpenVision or which requires OpenVision to perform specified
development work for a third party;
(d) joint venture contract or agreement or other agreement which has
involved, or is reasonably expected to involve, a sharing of profits or losses
in excess of $25,000 per annum with any other party;
(e) contract or commitment for the employment of any officer, employee
or consultant, or any other type of contract or understanding with any officer,
employee or consultant, which is not immediately terminable without cost, notice
or other liability (except for normal severance benefits available to employees
generally as set forth in any OpenVision Benefit Arrangement and except to the
extent general principles of wrongful termination law may limit OpenVision's or
any of OpenVision Subsidiaries' ability to terminate employees at will);
(f) indenture, mortgage, promissory note, loan agreement, guarantee or
other agreement or commitment for the borrowing of money, for a line of credit
or for a leasing transaction of a type required to be capitalized in accordance
with Statement of Financial Accounting Standards No. 13 of the Financial
Accounting Standards Board (other than equipment leases entered into in the
ordinary course of business pursuant to which payments by OpenVision do not
exceed $100,000 in the aggregate);
(g) lease or other agreement under which OpenVision or any OpenVision
Subsidiary is lessee of or holds or operates any items of tangible personal
property or real property owned by any third party and under which payments to
such third party exceed $60,000 per annum;
(h) agreement or arrangement for the sale of any assets, properties or
rights having a value in excess of $25,000, other than in the ordinary course of
business consistent with past practice;
(i) agreement which restricts OpenVision or any OpenVision Subsidiary
from engaging in any aspect of its business or competing in any line of business
in any geographic area (including any agreement pursuant to which OpenVision has
granted exclusive rights to a third party);
(j) OpenVision IP Rights Agreement (as defined in Section 2.15 below),
other than standard form license agreements with end users (copies of which have
been delivered to VERITAS or its counsel), and, in any event, any agreement that
grants rights or access to any source code included in the OpenVision IP Rights;
or
(k) agreement between or among OpenVision or any OpenVision Subsidiary
regarding inter company loans, revenue or cost sharing, ownership or license of
OpenVision IP Rights, inter company royalties or dividends or similar matters.
The OpenVision Disclosure Letter further includes a schedule of the
outstanding maintenance and support obligations to be performed by OpenVision
pursuant to any contract or other arrangement, including a description of such
obligations, the names of the customers for whom such obligations must be
performed, the
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expiration date of such obligations and the fees payable to OpenVision in
respect of performance of such obligations.
2.12 NO DEFAULTS. Except as disclosed in the OpenVision SEC Documents
filed prior to the date of this Agreement, to OpenVision's knowledge, neither it
nor any of the OpenVision Subsidiaries is in default under, and there exists no
event, condition or occurrence which, after notice or lapse of time, or both,
would constitute such a default by OpenVision or any of the OpenVision
Subsidiaries under, any contract or agreement to which OpenVision or any of the
OpenVision Subsidiaries is a party and which would, if terminated or modified,
have a Material Adverse Effect on OpenVision.
2.13 CERTAIN AGREEMENTS. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will (i)
result in any payment (including, without limitation, severance, unemployment
compensation, golden parachute, bonus or otherwise) becoming due to any director
or employee of OpenVision or any of the OpenVision Subsidiaries from OpenVision
or any of the OpenVision Subsidiaries, under any OpenVision Employee Plan,
OpenVision Benefit Arrangement or otherwise, (ii) materially increase any
benefits otherwise payable under any OpenVision Employee Plan or OpenVision
Benefit Arrangement or (iii) result in the acceleration of the time of payment
or vesting of any such benefits.
2.14 TAXES. OpenVision and each of the OpenVision Subsidiaries have filed,
or caused to be filed, all Tax (as defined below) returns required to be filed
by them (all of which returns were true, correct and complete in all material
respects) and have paid or withheld, or caused to be paid or withheld, all Taxes
that are shown on such Tax returns as due and payable, other than such Taxes as
are being contested in good faith and for which adequate reserves have been
established on the OpenVision Balance Sheet and other than where the failure to
so file, pay or withhold would not have a Material Adverse Effect on OpenVision.
All Taxes required to have been paid or accrued by OpenVision and the OpenVision
Subsidiaries for all periods prior to the OpenVision Balance Sheet Date have
been fully paid or are adequately provided for or reflected in the OpenVision
Balance Sheet. Since the OpenVision Balance Sheet Date, no material Tax
liability has been assessed, proposed to be assessed, incurred or accrued other
than in the ordinary course of business. Neither OpenVision nor any OpenVision
Subsidiary has received any notification that any material issues have been
raised (and are currently pending) by the Internal Revenue Service or any other
taxing authority, including, without limitation, any sales tax authority, in
connection with any of the Tax returns referred to in the first sentence of this
Section 2.14, and no waivers of statutes of limitations have been given or
requested with respect to OpenVision or any of the OpenVision Subsidiaries. No
taxing authority is currently conducting an audit of any Tax returns of
OpenVision or, to OpenVision's knowledge, about to conduct such an audit. Any
deficiencies asserted or assessments (including interest and penalties) made as
a result of any examination by the Internal Revenue Service or by appropriate
national, state or departmental authorities of the Tax returns of or with
respect to OpenVision or any of the OpenVision Subsidiaries have been fully paid
or are adequately provided for in the OpenVision Balance Sheet and no material
proposed (but unassessed) additional Taxes have been asserted and no Tax liens
have been filed other than for Taxes not yet due and payable. None of OpenVision
or any of the OpenVision Subsidiaries (i) has made an election to be treated as
a "consenting corporation" under Section 341(f) of the Code or (ii) is a
"personal holding company" within the meaning of Section 542 of the Code.
As used in this Agreement, "Tax" means any of the Taxes and "Taxes" means,
with respect to any entity, (A) all income taxes (including any tax on or based
upon net income, gross income, income as specially defined, earnings, profits or
selected items of income, earnings or profits) and all gross receipts, sales,
use, ad valorem, transfer, franchise, license, withholding, payroll, employment,
excise, severance, stamp, occupation, premium, property or windfall profits
taxes, alternative or add-on minimum taxes, customs duties or other taxes, fees,
assessments or charges of any kind whatsoever, together with any interest and
any penalties or additional amounts imposed by any taxing authority (domestic or
foreign) on such entity, and (B) any liability for the payment of any amount of
the type described in the immediately preceding clause (A) as a result of being
a "transferee" (within the meaning of Section 6901 of the Code or of any other
applicable law) of another entity or a member of an affiliated or combined
group.
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2.15 INTELLECTUAL PROPERTY.
(a) The OpenVision Disclosure Letter contains a complete and accurate
list of all United States and foreign: (i) patents; (ii) copyright registrations
and mask work registrations; (iii) trademarks registrations and trademark
intent-to-use registrations; (iv) registered user licenses; (v) all
applications, provisional applications or other filings for or to obtain any of
the foregoing, and (vi) any other similar registrations or applications for
Intellectual Property Rights (as defined below) owned by, or filed by or on
behalf of, OpenVision or any of the OpenVision Subsidiaries anywhere in the
world (all of the foregoing, "OpenVision Registered Intellectual Property").
(b) The OpenVision Disclosure Letter contains a complete and accurate
list of all material software programs and other products sold or licensed by
OpenVision or any of the OpenVision Subsidiaries.
(c) All OpenVision Intellectual Property Rights are owned free and clear
of any liens, encumbrances or security interests.
(d) OpenVision and the OpenVision Subsidiaries own, or have the right to
use, sell or license such Intellectual Property Rights (as defined below) as are
necessary or required for the conduct of their respective businesses as
presently conducted (such Intellectual Property Rights being hereinafter
collectively referred to as the "OpenVision IP Rights") and such ownership or
rights to use, sell or license are reasonably sufficient for such conduct of
their respective businesses, except for any failure to own or have the right to
use, sell or license that would not have a Material Adverse Effect on
OpenVision;
(e) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not constitute a
material breach of any material instrument or material agreement in respect of
any Intellectual Property Rights licensed by or to OpenVision (the "OpenVision
IP Rights Agreements"), will not cause the forfeiture or termination or give
rise to a right of forfeiture or termination of any OpenVision IP Right or
materially impair the right of OpenVision and the OpenVision Subsidiaries or the
OpenVision Surviving Corporation to use, sell or license any OpenVision IP Right
or portion thereof (except where such breach, forfeiture, termination or
impairment would not have a Material Adverse Effect on OpenVision);
(f) There are no royalties, honoraria, fees or other payments payable by
OpenVision to any person by reason of the ownership, use, license, purchase,
sale, disposition or acquisition of the OpenVision IP Rights (other than as set
forth in the OpenVision IP Rights Agreements listed in the OpenVision Disclosure
Letter);
(g) To OpenVision's knowledge, no third party is infringing or
misappropriating any Intellectual Property Rights, including OpenVision
Registered Intellectual Property, owned by OpenVision or any of the OpenVision
Subsidiaries.
(h) Neither the manufacture, marketing, license, sale nor the intended
use of any product currently licensed or sold by OpenVision or any of the
OpenVision Subsidiaries or currently under development by OpenVision or any of
the OpenVision Subsidiaries violates any license or agreement between OpenVision
or any of the OpenVision Subsidiaries and any third party or infringes any
Intellectual Property Right of any other party; and there is no pending or, to
OpenVision's knowledge, threatened claim or litigation contesting the validity,
ownership or right to use, sell, license or dispose of any OpenVision IP Right,
nor has OpenVision received any notice asserting that any OpenVision IP Right or
the proposed use, sale, license or disposition thereof conflicts or will
conflict with the rights of any other party, except for any violations,
infringements, claims or litigation that would not have a Material Adverse
Effect on OpenVision, nor, to OpenVision's knowledge, is there any basis for any
such assertion; and
(i) OpenVision has taken reasonable and practicable steps designed to
safeguard and maintain the secrecy and confidentiality of, and its proprietary
rights in, all material trade secrets or other confidential information
constituting OpenVision IP Rights. To OpenVision's knowledge, no current or
prior officers, employees or consultants of OpenVision or of any of the
OpenVision Subsidiaries claim an ownership interest in any OpenVision IP Rights
as a result of having been involved in the development of such property while
employed by or consulting to OpenVision or of any of the OpenVision
Subsidiaries, or otherwise. All officers
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and development employees and, to OpenVision's knowledge, all other employees
and consultants of OpenVision or any of the OpenVision Subsidiaries have
executed and delivered to OpenVision or the OpenVision Subsidiary an agreement
regarding the protection of proprietary information and the assignment to
OpenVision or the OpenVision Subsidiary of all Intellectual Property Rights
arising from the services performed for OpenVision or the OpenVision Subsidiary
by such persons.
As used herein, the term "Intellectual Property Rights" shall mean all
industrial, intellectual property or other rights of a person in, to, or arising
out of: (i) any United States or foreign patent or any application therefor and
any and all reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof; (ii) inventions (whether patentable or not in any
country), invention disclosures, industrial designs, improvements, trade
secrets, proprietary information, know-how, technology and technical data; (iii)
copyrights, mask works, copyright registrations, mask work registrations, and
applications therefor in the United States or any foreign country, and all other
rights corresponding thereto throughout the world; (iv) United States or foreign
registered or common law trademarks, service marks, trade dress, trade names,
logos, intent-to-use registrations or notices, and applications to register or
use any of the foregoing anywhere in the world; and (v) any other proprietary
rights in technology, including software, all source and object code,
algorithms, architecture, structure, display screens, layouts, inventions,
development tools and all documentation and media constituting, describing or
relating to the above, including, without limitation, manuals, memoranda,
records, business information, or trade marks, trade dress or names, anywhere in
the world.
2.16 FEES AND EXPENSES. Except for the fees and expenses set forth in
OpenVision's engagement letter with Alex. Xxxxx & Sons Incorporated, a copy of
which has been provided to VERITAS (the "Alex. Xxxxx Engagement Letter"),
neither OpenVision nor any of the OpenVision Subsidiaries has paid or become
obligated to pay any fee or commission to any broker, finder or intermediary in
connection with the transactions contemplated by this Agreement.
2.17 INSURANCE. OpenVision and the OpenVision Subsidiaries maintain fire
and casualty, general liability, business interruption, directors and officers,
product liability and sprinkler and water damage insurance that OpenVision
believes to be reasonably prudent for its business. Correct and complete copies
of all such insurance policies presently in effect have been provided to VERITAS
or its counsel.
2.18 OWNERSHIP OF PROPERTY. Except (a) as disclosed in the OpenVision SEC
Documents filed prior to the date of this Agreement, (b) for liens for current
Taxes not yet delinquent or (c) for liens imposed by law and incurred in the
ordinary course of business for obligations not yet due to carriers,
warehousemen, laborers, material men and the like, OpenVision and each of the
OpenVision Subsidiaries owns its real and personal property free and clear of
all security interests, mortgages, liens, charges, claims, options and
encumbrances. All real and personal property of OpenVision and each of the
OpenVision Subsidiaries is in generally good repair and is operational and
usable in the operations of OpenVision, subject to ordinary wear and tear.
Neither OpenVision nor any OpenVision Subsidiary is in violation of any zoning,
building or safety ordinance, regulation or requirement or other law or
regulation applicable to the operation of owned or leased properties (the
violation of which would have a Material Adverse Effect on OpenVision), or has
received any notice of violation with which it has not complied, except where
such violation would not have a Material Adverse Effect on OpenVision.
2.19 ENVIRONMENTAL MATTERS.
(a) During the period that OpenVision and the OpenVision Subsidiaries
have leased or owned their respective properties or owned or operated any
facilities, there have been, to OpenVision's knowledge, no disposals, releases
or threatened releases of Hazardous Materials (as defined below) on, from or
under such properties or facilities. OpenVision has no knowledge of any
presence, disposals, releases or threatened releases of Hazardous Materials on,
from, under or about any of such properties or facilities, which may have
occurred prior to OpenVision or any of the OpenVision Subsidiaries having taken
possession of any of such properties or facilities. For the purposes of this
Agreement, the terms "disposal," "release," and "threatened release" shall have
the definitions assigned thereto by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. sec. 9601 et seq., as amended
("CERCLA"). For the purposes of this Agreement "Hazardous Materials" shall mean
any hazardous or toxic substance, material or waste which is or
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becomes prior to the Closing regulated under, or defined as a "hazardous
substance," "pollutant," "contaminant," "toxic chemical," "hazardous materials,"
"toxic substance" or "hazardous chemical" under, (1) CERCLA; (2) any similar
international, federal, state or local law; or (3) regulations promulgated under
any of the above laws or statutes.
(b) None of the properties or facilities of OpenVision or the OpenVision
Subsidiaries is or has been in violation of any federal, state or local law,
ordinance, regulation or order relating to industrial hygiene or to the
environmental conditions on, above, under or about such properties or
facilities, including, but not limited to, air, soil, ground water or surface
water condition ("Environmental Violation"), except for such violations as would
not, individually or in the aggregate, have a Material Adverse Effect on
OpenVision. During the time that OpenVision or the OpenVision Subsidiaries have
owned or leased their respective properties and facilities, neither OpenVision,
nor any of the OpenVision Subsidiaries, nor, to OpenVision's knowledge, any
third party, has used, generated, manufactured or stored on, under or about such
properties or facilities or transported to or from such properties or facilities
any Hazardous Materials (except those Hazardous Materials associated with
general office use or janitorial supplies).
(c) During the time that OpenVision or the OpenVision Subsidiaries have
owned or leased their respective properties and facilities, there has been no
litigation brought or, to OpenVision's knowledge, threatened against OpenVision
or any of the OpenVision Subsidiaries by, or any settlement reached by
OpenVision or any of the OpenVision Subsidiaries with, any party or parties
alleging the presence, disposal, release or threatened release of any Hazardous
Materials on, from or under any of such properties or facilities or relating to
any alleged Environmental Violation.
2.20 INTERESTED PARTY TRANSACTIONS. Except as disclosed in the OpenVision
SEC Documents filed prior to the date of this Agreement, no officer or director
of OpenVision or any "affiliate" or "associate" (as those terms are defined in
Rule 405 promulgated under the Securities Act) of any such person has had,
either directly or indirectly, a material interest in: (i) any person or entity
which purchases from or sells, licenses or furnishes to OpenVision or any of the
OpenVision Subsidiaries any goods, property, technology or intellectual or other
property rights or services; or (ii) any contract or agreement to which
OpenVision or any of the OpenVision Subsidiaries is a party or by which it may
be bound or affected.
2.21 BOARD APPROVAL. The Board of Directors of OpenVision has unanimously
(i) approved this Agreement and the Merger, and (ii) determined that the Merger
is in the best interests of the stockholders of OpenVision and the terms of the
Merger are fair to such stockholders.
2.22 VOTE REQUIRED. The affirmative vote of at least a majority of the
votes that holders of the outstanding shares of OpenVision Common Stock are
entitled to cast is the only vote of the holders of any class or series of
OpenVision's capital stock necessary to approve this Agreement and the Merger.
2.23 DISCLOSURE. No representation or warranty made by OpenVision in this
Agreement, nor any document, written information, statement, financial
statement, certificate or exhibit prepared and furnished or to be prepared and
furnished by OpenVision or its representatives pursuant hereto or in connection
with the transactions contemplated hereby, when taken together, contains any
untrue statement of a material fact, or omits to state a material fact necessary
to make the statements or facts contained herein or therein not misleading in
light of the circumstances under which there were furnished.
2.24 FAIRNESS OPINION. OpenVision's Board of Directors has received an
opinion as of the date hereof from Alex. Xxxxx & Sons Incorporated to the effect
that, as of the date hereof, the OpenVision Applicable Ratio is fair to
OpenVision's stockholders from a financial point of view.
3. REPRESENTATIONS AND WARRANTIES OF VERITAS AND NEWCO
Except as set forth in a letter dated the date of this Agreement, delivered
by VERITAS and Newco to OpenVision concurrently herewith, and certified by an
officer of VERITAS and Newco, on behalf of
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VERITAS and Newco, to be true, accurate and complete to the best of his
knowledge (the "VERITAS Disclosure Letter"), VERITAS and Newco hereby represent
and warrant to OpenVision that:
3.1 ORGANIZATION; GOOD STANDING; QUALIFICATION AND POWER. VERITAS, Newco
and each of VERITAS' subsidiaries set forth in Section 3.1 of the VERITAS
Disclosure Letter (the "VERITAS Subsidiaries") (the VERITAS Subsidiaries being
the only subsidiaries of VERITAS), is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now being conducted, and
is duly qualified and in good standing to do business in each jurisdiction in
which the nature of its business or the ownership or leasing of its properties
makes such qualification necessary, other than in such jurisdictions where the
failure so to qualify would not have a Material Adverse Effect on VERITAS (as
defined below). The VERITAS Disclosure Letter sets forth a correct and complete
list of the VERITAS Subsidiaries and a correct and complete list of each
jurisdiction in which each of VERITAS, Newco and the VERITAS Subsidiaries is
duly qualified and in good standing to do business. VERITAS has delivered to
OpenVision or its counsel complete and correct copies of the Articles of
Incorporation and Bylaws of VERITAS, the Certificate of Incorporation and Bylaws
of Newco and will deliver to OpenVision or its counsel prior to the Closing Date
the equivalent charter documents of each of the VERITAS Subsidiaries, in each
case as amended to the date of this Agreement. Newco does not own and, except
for the VERITAS Subsidiaries, VERITAS does not own, directly or indirectly, any
capital stock or other equity interest of any corporation or have any direct or
indirect equity or ownership interest in any other business, whether organized
as a corporation, partnership, joint venture or otherwise.
In this Agreement, any reference to the term "Material Adverse Effect on
VERITAS" means any event, change or effect which would have a material adverse
effect on the business, assets (including intangible assets), financial
condition, results of operations or prospects of VERITAS, Newco and the VERITAS
Subsidiaries, taken as a whole. In addition, any reference to the terms "to
VERITAS' knowledge" or "known to VERITAS" refers to the current actual knowledge
of any officer of VERITAS.
3.2 CAPITAL STRUCTURE.
(a) Stock and Options. The authorized capital stock of VERITAS consists
of 25,000,000 shares of VERITAS Common Stock, no par value, and 10,000,000
shares of Preferred Stock, no par value (the "VERITAS Preferred Stock"). At the
close of business on January 10, 1997, 13,543,926 shares of VERITAS Common Stock
were issued and outstanding, no shares of VERITAS Common Stock were held by
VERITAS in its treasury, 1,838,379 shares of VERITAS Common Stock were reserved
for issuance upon the exercise of outstanding VERITAS Options, 239,793 shares of
VERITAS Common Stock were available for the grant of additional awards under the
1993 Equity Incentive Plan, 55,000 shares of VERITAS Common Stock were available
for the grant of additional awards under the 1993 Director Stock Option Plan,
and 383,835 shares of VERITAS Common Stock were reserved for issuance upon the
exercise of VERITAS Stock Purchase Plan Options. No shares of VERITAS Preferred
Stock are issued or outstanding. All outstanding shares of VERITAS Common Stock
are validly issued, fully paid and nonassessable and not subject to preemptive
rights by statute, the Articles of Incorporation or Bylaws of VERITAS, or any
agreement or document to which VERITAS is a party or by which it is bound. All
outstanding shares of the capital stock of each of the VERITAS Subsidiaries are
validly issued, fully paid and nonassessable and are owned by VERITAS or one of
the VERITAS Subsidiaries free and clear of any liens, security interests,
pledges, agreements, claims, charges or encumbrances. VERITAS has delivered to
OpenVision a correct and complete list of each VERITAS Option outstanding as of
the date hereof, including the name of the holder of such VERITAS Option, the
VERITAS Plan pursuant to which such VERITAS Option was issued (if applicable),
the number of shares covered by such VERITAS Option, the per share exercise
price of such VERITAS Option, and the vesting schedule applicable to each such
VERITAS Option, including the number of shares vested as of the date of this
Agreement. VERITAS has also delivered to OpenVision a correct and complete list
of the employees currently enrolled in the current Offering Period (as defined
in the VERITAS Stock Purchase Plan), the amount of the periodic payroll
deduction from each such employee's compensation with respect to such plan, the
aggregate amount of payroll deductions with respect to the current Purchase
Period (as defined in the VERITAS Stock Purchase Plan) for each such employee to
date and the fair market
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value (as determined in accordance with the VERITAS Stock Purchase Plan) of the
VERITAS Common Stock on the date of commencement of the current Offering Period.
(b) Newco Capital. The authorized capital stock of Newco will consist of
75,000,000 shares of Newco Common Stock, $0.001 par value, and 10,000,000 shares
of Newco Preferred Stock, $0.001 par value, none of which shall be outstanding
immediately prior to the Effective Time. Immediately prior to the Effective
Time, Newco shall have reserved shares of Newco Common Stock for
issuance pursuant to OpenVision's Stock Purchase Plan, 4,100,000 shares of Newco
Common Stock for issuance pursuant to Newco's 1993 Equity Incentive Plan,
250,000 shares of Newco Common Stock for issuance pursuant to Newco's 1993
Director Stock Option Plan and 1,000,000 shares of Newco Common Stock for
issuance pursuant to Newco's 1993 Employee Stock Purchase Plan, under which
Newco Plans there shall be no Newco options or purchase rights outstanding.
(c) No Other Commitments. Except for the VERITAS Options and VERITAS
Stock Purchase Plan Options disclosed in Section 3.2(a) above, a list of which
has been provided to OpenVision, and except as provided in this Agreement, there
are no options, warrants, calls, rights, commitments, conversion rights or
agreements of any character to which VERITAS, Newco or any of the VERITAS
Subsidiaries is a party or by which VERITAS, Newco or any of the VERITAS
Subsidiaries is bound obligating VERITAS, Newco or any of the VERITAS
Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, any shares of capital stock of VERITAS, Newco or any of the VERITAS
Subsidiaries or securities convertible into or exchangeable for shares of
capital stock of VERITAS, Newco or any of the VERITAS Subsidiaries, or
obligating VERITAS, Newco or any of the VERITAS Subsidiaries to grant, extend or
enter into any such option, warrant, call, right, commitment, conversion right
or agreement. There are no voting trusts or other agreements or understandings
to which VERITAS or Newco is a party with respect to the voting of the capital
stock of VERITAS or Newco or any of the VERITAS Subsidiaries.
(d) Registration Rights. Neither VERITAS nor Newco is under any
obligation to register under the Securities Act any of its presently outstanding
securities or any securities that may be subsequently issued, except as
disclosed in the VERITAS Disclosure Letter.
3.3 AUTHORITY.
(a) Corporate Action. Subject to approval of this Agreement and the
Merger by the shareholders of VERITAS, VERITAS has all requisite corporate power
and authority to enter into this Agreement and the VERITAS Agreement of Merger,
and Newco has, or will have, all requisite corporate power and authority to
enter into this Agreement and the Agreements of Merger, to perform their
respective obligations hereunder and thereunder and to consummate the Merger and
the other transactions contemplated by this Agreement. The execution and
delivery of this Agreement and the VERITAS Agreement of Merger by VERITAS, and
the execution and delivery of this Agreement and the Agreements of Merger by
Newco, and, subject to approval of this Agreement and the Merger by the
shareholders of VERITAS, the filing and recordation of the Agreements of Merger
pursuant to CGCL and the Delaware Law and the consummation by VERITAS and Newco
of the Merger and the other transactions contemplated hereby and thereby, have
been duly authorized by all necessary corporate action on the part of VERITAS
and Newco, respectively. This Agreement has been, and upon the Closing the
VERITAS Agreement of Merger will have been, duly executed and delivered by
VERITAS and this Agreement is, and the VERITAS Agreement of Merger as of the
Effective Time will be, the valid and binding obligations of VERITAS enforceable
in accordance with their terms, except as enforceability may be limited by
bankruptcy and other similar laws and general principles of equity. This
Agreement has been, and upon the Closing the Agreements of Merger will have
been, duly executed and delivered by Newco, and this Agreement is, and the
Agreements of Merger as of the Effective Time will be, the valid and binding
obligations of Newco, enforceable in accordance with their terms, except as
enforceability may be limited by bankruptcy and other similar laws and general
principles of equity.
(b) No Conflict. Neither the execution, delivery and performance of this
Agreement, the VERITAS Agreement of Merger in the case of VERITAS, or the
Agreements of Merger in the case of Newco, nor the consummation of the
transactions contemplated hereby or thereby nor compliance with the provisions
hereof or thereof will: (i) conflict with, or result in any violations of, or
cause a default (with or without notice
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or lapse of time, or both) under, or give rise to a right of termination,
amendment, cancellation or acceleration of any obligation contained in, or the
loss of any material benefit under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the material properties or
assets of VERITAS, Newco or any of the VERITAS Subsidiaries under, any term,
condition or provision of (x) the Articles of Incorporation or Bylaws of
VERITAS, the Certificate of Incorporation or Bylaws of Newco, or the equivalent
organizational documents of any of the VERITAS Subsidiaries or (y) any loan or
credit agreement, note, bond, mortgage, indenture, lease or other material
agreement, judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to VERITAS, Newco or any of the VERITAS Subsidiaries or their
respective properties or assets, other than any such conflicts, violations,
defaults, rights, losses, liens, security interests, charges or encumbrances
which, individually or in the aggregate, would not have a Material Adverse
Effect on VERITAS; or (ii) require the affirmative vote of the holders of
greater than a majority of the issued and outstanding shares of VERITAS Common
Stock.
(c) Governmental Consents. No consent, approval, order or authorization
of, or registration, declaration or filing with, any Governmental Entity is
required to be obtained by VERITAS, Newco or any of the VERITAS Subsidiaries in
connection with the execution and delivery of this Agreement or the Agreements
of Merger, or the consummation of the transactions contemplated hereby or
thereby, except for: (i) the filing with the SEC, and the effectiveness, of the
Form S-4, the filing of the Prospectus/Proxy Statement relating to the meeting
of the shareholders of VERITAS (the "VERITAS Shareholders Meeting") to be held
with respect to the approval by VERITAS' shareholders of this Agreement and the
Merger, and the filing of the Form S-8, and such reports and information under
the Exchange Act and the rules and regulations promulgated by the SEC
thereunder, including, but not limited to, the filing of a Form 8A by Newco with
the SEC, as may be required in connection with this Agreement and the
transactions contemplated hereby; (ii) the filing of the Agreements of Merger
with the Secretary of State of the State of California and the Secretary of
State of the State of Delaware and appropriate documents with the relevant
authorities of other states in which VERITAS or Newco is qualified to do
business; (iii) such filings, authorizations, orders and approvals as may be
required under State Takeover Laws; (iv) such filings and notifications as may
be necessary under the HSR Act; (v) such filings as may be required by the
Nasdaq Stock Market with respect to the Newco Common Stock to be issued in
connection with the Merger and the Stock Rights to be assumed by Newco in the
Merger; and (vi) such other filings, authorizations, orders and approvals which
if not obtained or made, would not have a Material Adverse Effect on VERITAS or
OpenVision or have a material adverse effect on the ability of the parties to
consummate the Merger.
3.4 SEC DOCUMENTS.
(a) SEC Reports. VERITAS has delivered to OpenVision or its counsel
correct and complete copies of each report, schedule, registration statement and
definitive proxy statement filed by VERITAS with the SEC on or after January 1,
1995 (the "VERITAS SEC Documents"), which are all the documents (other than
preliminary material) that VERITAS was required to file with the SEC on or after
January 1, 1995. As of their respective dates or, in the case of registration
statements, their effective dates, none of the VERITAS SEC Documents (including
all exhibits and schedules thereto and documents incorporated by reference
therein) 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 light of the circumstances under which they were made,
not misleading, and there is no requirement under the Securities Act or the
Exchange Act, as the case may be, to have amended any such filing. The VERITAS
SEC Documents complied, when filed, in all material respects with the then
applicable requirements of the Securities Act or the Exchange Act, as the case
may be, and the rules and regulations promulgated by the SEC thereunder. VERITAS
has filed all documents and agreements which were required to be filed as
exhibits to the VERITAS SEC Documents.
(b) Financial Statements. The financial statements of VERITAS included
in the VERITAS SEC Documents complied as to form in all material respects with
the then applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, were prepared in accordance with
GAAP applied on a consistent basis during the periods involved (except as may
have been indicated in the notes thereto) and fairly present (subject, in the
case of the unaudited statements, to normal year-end audit adjustments) the
consolidated financial position of VERITAS and its consolidated VERITAS
Subsidiaries as
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at the respective dates thereof and the consolidated results of their operations
and cash flows for the respective periods then ended.
3.5 INFORMATION SUPPLIED. None of the information supplied or to be
supplied by VERITAS or Newco for inclusion or incorporation by reference in the
Form S-4 and Prospectus/Proxy Statement will, at the time the Form S-4 is
declared effective, at the date the Prospectus/Proxy Statement is mailed to the
stockholders of VERITAS and at the time of the VERITAS Shareholders Meeting,
contain, after giving effect to any supplement or amendment thereto, 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. The Prospectus/Proxy
Statement will comply as to form in all material respects with the provisions of
the Exchange Act and the rules and regulations promulgated by the SEC
thereunder. Notwithstanding the foregoing, VERITAS and Newco make no
representation or warranty with respect to any information supplied by
OpenVision which is contained in any of the foregoing documents.
3.6 COMPLIANCE WITH APPLICABLE LAWS. Except as disclosed in the VERITAS
SEC Documents filed prior to the date of this Agreement, the businesses of
VERITAS and the VERITAS Subsidiaries are not being conducted in violation of any
law, ordinance, regulation, rule or order of any Governmental Entity where such
violation would have a Material Adverse Effect on VERITAS. Except as disclosed
in the VERITAS SEC Documents filed prior to the date of this Agreement, VERITAS
has not been notified in writing by any Governmental Entity that any
investigation or review with respect to VERITAS or any of the VERITAS
Subsidiaries is pending or threatened, nor has any Governmental Entity notified
VERITAS in writing of its intention to conduct the same, which investigation or
review could reasonably be expected to have a Material Adverse Effect on
VERITAS. VERITAS, Newco and the VERITAS Subsidiaries have all material permits,
licenses and franchises from Governmental Entities required to conduct their
businesses as now being conducted, except for those whose absence would not have
a Material Adverse Effect on VERITAS.
3.7 LITIGATION. Except as disclosed in the VERITAS SEC Documents filed
prior to the date of this Agreement, or as would not reasonably be expected to
have a Material Adverse Effect on VERITAS, there is no suit, action,
arbitration, demand, claim or proceeding pending or, to VERITAS' knowledge,
threatened against VERITAS, Newco or any of the VERITAS Subsidiaries; nor is
there any judgment, decree, injunction, ruling or order of any Governmental
Entity or arbitrator or settlement agreement outstanding against VERITAS, Newco
or any of the VERITAS Subsidiaries. VERITAS has delivered or made available to
OpenVision or its counsel correct and complete copies of all correspondence
prepared by its counsel for VERITAS auditors in connection with the last two
completed audits of VERITAS' financial statements and any such correspondence
since the date of the last such audit. Neither VERITAS, Newco nor any of the
VERITAS Subsidiaries is a party to any decree, order or arbitration award (or
agreement entered into in any administrative, judicial or arbitration proceeding
with any governmental authority) with respect to its properties, assets,
personnel or business activities which could reasonably be expected to have a
Material Adverse Effect on VERITAS. Neither VERITAS nor Newco is in violation
of, or delinquent in respect of, any decree, order or arbitration award naming
VERITAS, Newco or a VERITAS Subsidiary as a party or otherwise known to them, or
law, ordinance, statute, or governmental authority to which their properties,
assets, personnel or business activities are subject or to which VERITAS, Newco
or a VERITAS Subsidiary is subject, including, without limitation, laws, rules
and regulations relating to occupational health and safety, equal employment
opportunities, fair employment practices, and sex, race, religious and age
discrimination, except for such violations as would not have a Material Adverse
Effect on VERITAS.
3.8 ERISA AND OTHER COMPLIANCE.
(a) The VERITAS Disclosure Letter lists all the employees of VERITAS and
any VERITAS Subsidiaries and their salaries or base wage as of December 31,
1996. The VERITAS Disclosure Letter also identifies each "employee benefit
plan," as defined in Section 3(3) of ERISA, currently or previously maintained,
contributed to or entered into by VERITAS or any of the VERITAS Subsidiaries
under which VERITAS or any of the VERITAS Subsidiaries or any ERISA Affiliate
(as defined below) thereof has any present or future obligation or liability
(collectively, the "VERITAS Employee Plans"). For purposes of this Section 3.8,
"ERISA Affiliate" shall mean any entity which is a member of (A) a "controlled
group of
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corporations," as defined in Section 414(b) of the Code, (B) a group of entities
under "common control," as defined in Section 414(c) of the Code, or (C) an
"affiliated service group," as defined in Section 414(m) of the Code, or
treasury regulations promulgated under Section 414(o) of the Code, any of which
includes VERITAS or any of the VERITAS Subsidiaries. Copies of all VERITAS
Employee Plans (and, if applicable, related trust agreements) and all amendments
thereto and written interpretations thereof (including summary plan
descriptions) have been delivered to OpenVision or its counsel, together with
the three most recent annual reports (Form 5500, including, if applicable, the
auditor's report and any Schedule B thereto) prepared in connection with any
such VERITAS Employee Plan. All VERITAS Employee Plans which individually or
collectively would constitute an "employee pension benefit plan," as defined in
Section 3(2) of ERISA (collectively, the "VERITAS Pension Plans"), are
identified as such in the VERITAS Disclosure Letter. All VERITAS Employee Plans
which individually or collectively would constitute an "employee welfare benefit
plan," as defined in Section 3(1) of ERISA are identified as such in the VERITAS
Disclosure Letter. All contributions or premiums due from VERITAS or any of the
VERITAS Subsidiaries with respect to any of the VERITAS Employee Plans have been
made as required under ERISA or have been accrued on VERITAS or any such VERITAS
Subsidiary's financial statements as of September 30, 1996, or will be made
prior to the Closing. Each VERITAS Employee Plan has been maintained in
compliance with its terms and with the requirements prescribed by any and all
statutes, orders, rules and regulations, including, without limitation, ERISA
and the Code, which are applicable to such VERITAS Employee Plans, except as
would not have a Material Adverse Effect on VERITAS.
(b) No VERITAS Pension Plan constitutes, or has since the enactment of
ERISA constituted, a "multiemployer plan," as defined in Section 3(37) of ERISA.
No VERITAS Pension Plans are subject to Title IV of ERISA. No "prohibited
transaction," as defined in Section 406 of ERISA or Section 4975 of the Code,
has occurred with respect to any VERITAS Employee Plan which is covered by Title
I of ERISA which would result in a material liability to VERITAS or any of the
VERITAS Subsidiaries taken individually, excluding transactions effected
pursuant to a statutory or administrative exemption. Nothing done or omitted to
be done and no transaction or holding of any asset under or in connection with
any VERITAS Employee Plan has or will make VERITAS or any employee, officer or
director of VERITAS subject to any material liability under Title I of ERISA or
liable for any material Tax or penalty pursuant to Sections 4972, 4975, 4976,
4977 or 4979 of the Code or Section 502 of ERISA.
(c) With respect to each VERITAS Pension Plan that is intended to be
qualified under Section 401(a) of the Code (a "VERITAS 401(a) Plan"), either (i)
a favorable determination letter has been received from the IRS as to the
qualification of the VERITAS 401(a) Plan under the Code as in effect immediately
after the Tax Reform Act of 1986, or (ii) the VERITAS 401(a) Plan has been
established under a standardized prototype plan for which an Internal Revenue
Service opinion letter has been obtained and upon which the VERITAS 401(a) Plan
may rely. VERITAS has delivered to OpenVision or its counsel a complete and
correct copy of the most recent Internal Revenue Service determination letter
with respect to each VERITAS 401(a) Plan.
(d) No VERITAS Employee Plan provides or ever has provided death,
medical or health benefits (whether or not insured) with respect to current or
former employees after any such employee's retirement or other termination of
service (other than benefit coverage mandated by applicable law, including,
without limitation, coverage provided pursuant to Section 4980B of the Code).
(e) The VERITAS Disclosure Letter lists each employment, severance,
compensation or other similar contract, arrangement or policy and each plan or
arrangement (written or oral) providing for insurance coverage (including any
self-insured arrangements), workers' benefits, vacation benefits, severance
benefits, disability benefits, death benefits, hospitalization benefits,
retirement benefits, deferred compensation, profit-sharing, bonuses, stock
options, stock purchase, phantom stock, stock appreciation or other forms of
incentive compensation or post-retirement insurance, compensation or benefits
for employees, consultants or directors (other than workers' compensation,
unemployment compensation and other governmental mandated programs) which (A) is
not a VERITAS Employee Plan, (B) is entered into, maintained or contributed to,
as the case may be, by VERITAS or any of the VERITAS Subsidiaries, and (C)
covers any employee or former employee of VERITAS or any of the VERITAS
Subsidiaries. Such contracts, plans and arrangements as are
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described in this Section 3.8(e) are herein referred to collectively as the
"VERITAS Benefit Arrangements." Each VERITAS Benefit Arrangement has been
maintained in substantial compliance with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations which are
applicable to such VERITAS Benefit Arrangement. VERITAS has delivered to
OpenVision or its counsel a complete and correct copy of each VERITAS Benefit
Arrangement document or, if such VERITAS Benefit Arrangement is unwritten, a
description thereof.
(f) There has been no amendment to, written interpretation or
announcement (whether or not written) by VERITAS or any of the VERITAS
Subsidiaries relating to any VERITAS Employee Plan or VERITAS Benefit
Arrangement that would increase materially the expense of maintaining such
VERITAS Employee Plan or VERITAS Benefit Arrangement above the level of the
expense incurred in respect thereof for the year ended December 31, 1996.
(g) VERITAS has timely provided, or will have provided prior to the
Closing (as defined in Section 6.1), to individuals entitled thereto all
required notices and coverage pursuant to Section 4980B of COBRA with respect to
any "qualifying event" (as defined in Section 4980B(f)(3) of the Code). VERITAS
will timely provide to individuals entitled thereto all required notices and
coverage pursuant to Code Section 4890B and COBRA with respect to any
"qualifying event" (as defined in Section 4980B(f)(3) of the Code) occurring
prior to and including the Closing Date. No material Tax payable on account of
Section 4980B of the Code has been incurred with respect to any current or
former employees (or their beneficiaries) of VERITAS or any of the VERITAS
Subsidiaries.
(h) No benefit payable or which may become payable by VERITAS or any of
the VERITAS Subsidiaries pursuant to any VERITAS Employee Plan or any VERITAS
Benefit Arrangement or as a result of or arising under this Agreement shall
constitute an "excess parachute payment" (as defined in Section 280G(b)(1) of
the Code) which is subject to the imposition of an excise Tax under Section 4999
of the Code or which would not be deductible by reason of Section 280G of the
Code.
(i) VERITAS and each VERITAS Subsidiary is in compliance in all material
respects with all applicable laws, agreements and contracts relating to
employment, employment practices, wages, hours and terms and conditions of
employment, including, but not limited to, employee compensation matters, but
not including ERISA.
(j) VERITAS and each VERITAS Subsidiary has good labor relations and has
no knowledge of any facts indicating that the consummation of the transactions
contemplated hereby will have a material adverse effect on labor relations, and
has no knowledge that any of its key employees intends to leave its or their
employ.
3.9 ABSENCE OF UNDISCLOSED LIABILITIES. Neither VERITAS, Newco nor any of
the VERITAS Subsidiaries has any liabilities or obligations of any nature
(matured or unmatured, fixed or contingent) which are, individually or in the
aggregate, of a nature required to be disclosed on the face of a balance sheet
prepared in accordance with GAAP and are material to the business of VERITAS and
the VERITAS Subsidiaries, taken as a whole, except for such liabilities or
obligations as (i) were accrued or fully reserved against in the consolidated
balance sheet of VERITAS at September 30, 1996 (the "VERITAS Balance Sheet") or
(ii) are of a normally recurring nature and were incurred after September 30,
1996 (the "VERITAS Balance Sheet Date") in the ordinary course of business
consistent with past practice. As of the VERITAS Balance Sheet Date, there were
no material loss contingencies (as such term is used in Statement of Financial
Accounting Standards No. 5 issued by the Financial Accounting Standards Board in
March 1975) which are not adequately provided for in the VERITAS Balance Sheet
as required by said Statement No. 5.
3.10 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed herein or
in the VERITAS SEC Documents filed prior to the date of this Agreement, since
the VERITAS Balance Sheet Date there has not occurred:
(a) any change not identified below that could reasonably be expected to
have a Material Adverse Effect on VERITAS;
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(b) any amendments or changes in the Articles of Incorporation or Bylaws
of VERITAS;
(c) any damage, destruction or loss, whether covered by insurance or
not, materially and adversely affecting any of the material properties or the
business of VERITAS;
(d) any redemption, repurchase or other acquisition of shares of VERITAS
Common Stock by VERITAS (other than pursuant to arrangements with terminated
employees or consultants), or any declaration, setting aside or payment of any
dividend or other distribution (whether in cash, stock or property) with respect
to VERITAS Common Stock;
(e) any increase in or modification of the compensation or benefits
payable or to become payable by VERITAS to any of its directors or employees,
except in the ordinary course of business, consistent with past practice;
(f) other than as required by applicable statute or regulation, any
increase in or modification of any bonus, pension, insurance or VERITAS Employee
Plan or VERITAS Benefit Arrangement (including, but not limited to, the granting
of stock options, restricted stock awards or stock appreciation rights) made to,
for or with any of its employees, other than (a) in the ordinary course of
business, consistent with past practice, and (b) after the date of this
Agreement, which is authorized, if required, pursuant to Section 5.3 below;
(g) any acquisition or sale of a material amount of property or assets
of VERITAS, other than in the ordinary course of business, consistent with past
practice;
(h) any alteration in any term of any outstanding security of VERITAS,
including, but not limited to, acceleration of the vesting or any change in the
terms of any outstanding stock options;
(i) other than in the ordinary course of business, consistent with past
practice, the total amount of which is not material, any (A) incurrence,
assumption or guarantee by VERITAS of any debt for borrowed money; (B) issuance
or sale of any securities convertible into or exchangeable for debt securities
of VERITAS; or (C) issuance or sale of options or other rights to acquire from
VERITAS, directly or indirectly, debt securities of VERITAS or any securities
convertible into or exchangeable for any such debt securities;
(j) any creation or assumption by VERITAS of any mortgage, pledge,
security interest, lien or other encumbrance on any asset other than in the
ordinary course of business, consistent with past practice, not in excess of
$100,000 in the aggregate;
(k) any making of any loan, advance or capital contribution to or
investment in any person other than (i) loans, advances or capital contributions
made in the ordinary course of business of VERITAS, and (ii) other loans and
advances, where the aggregate amount of all such items outstanding at any time
does not exceed $50,000;
(l) any entering into, amendment of, relinquishment, termination or
non-renewal by VERITAS of any material contract, lease transaction, commitment
or other right or obligation other than in the ordinary course of business;
(m) any transfer or grant of a right under the VERITAS IP Rights (as
defined in Section 3.15 below), other than those transferred or granted in the
ordinary course of business, consistent with past practices, except for any
grant of a right to VERITAS source code or grant of any exclusive rights to any
VERITAS IP Rights, each of which shall be set forth in the VERITAS Disclosure
letter;
(n) any labor dispute or charge of unfair labor practice (other than
routine individual grievances), any activity or proceeding by a labor union or
representative thereof to organize any employees of VERITAS or, to VERITAS'
knowledge, any campaign being conducted to solicit authorization from employees
to be represented by such labor union; or
(o) any agreement by VERITAS, or to VERITAS' knowledge, any officer or
employee thereof, to take any of the actions described in the preceding clauses
(a) through (n) (other than negotiations with OpenVision and its representatives
regarding the transactions contemplated by this Agreement.)
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3.11 AGREEMENTS. The VERITAS Disclosure Letter sets forth a list of any of
the following currently effective contracts, agreements and other instruments to
which VERITAS, Newco or any VERITAS Subsidiary is a party, copies of each of
which have been delivered to OpenVision or its counsel:
(a) contract with or commitment to any labor union;
(b) continuing contract for the future purchase, sale or manufacture of
products, material, supplies, equipment or services requiring payment to or from
VERITAS, Newco or any VERITAS Subsidiary in an amount in excess of $100,000 per
annum which is not terminable on 120 days' or less notice without cost or other
liability at, or at any time after, the Effective Time or in which VERITAS,
Newco or such VERITAS Subsidiary has granted or received manufacturing rights,
most favored nations pricing provisions or exclusive marketing rights relating
to any product, group of products or territory, provided, however, that only
purchase orders for the top ten (10) vendors of VERITAS (as measured by 1996
VERITAS purchases) are listed in the VERITAS Disclosure Letter;
(c) contract providing for the development of technology for VERITAS
which technology is used or incorporated in any products currently distributed
by VERITAS or is anticipated to be used or incorporated in any planned products
of VERITAS or which requires VERITAS to perform specified development work for a
third party;
(d) joint venture contract or agreement or other agreement which has
involved or is reasonably expected to involve a sharing of profits or losses in
excess of $25,000 per annum with any other party;
(e) contract or commitment for the employment of any officer, employee
or consultant or any other type of contract or understanding with any officer,
employee or consultant which is not immediately terminable without cost, notice
or other liability (except for normal severance benefits available to employees
generally as set forth in any VERITAS Benefit Arrangement and except to the
extent general principles of wrongful termination laws may limit VERITAS' or any
of VERITAS' Subsidiaries ability to terminate employees at will);
(f) indenture, mortgage, promissory note, loan agreement, guarantee or
other agreement or commitment for the borrowing of money, for a line of credit
or for a leasing transaction of a type required to be capitalized in accordance
with Statement of Financial Accounting Standards No. 13 of the Financial
Accounting Standards Board (other than equipment leases entered into in the
ordinary course of business pursuant to which payments by VERITAS or Newco do
not exceed $100,000 in the aggregate);
(g) lease or other agreement under which VERITAS, Newco or any VERITAS
Subsidiary is lessee of or holds or operates any items of tangible personal
property or real property owned by any third party and under which payments to
such third party exceed $60,000 per annum;
(h) agreement or arrangement for the sale of any assets, properties or
rights having a value in excess of $25,000, other than in the ordinary course of
business consistent with past practice;
(i) agreement which restricts VERITAS, Newco or any VERITAS Subsidiary
from engaging in any aspect of its business or competing in any line of business
in any geographic area; including any agreement pursuant to which VERITAS has
granted exclusive rights to a third party;
(j) VERITAS IP Rights Agreement (as defined in Section 3.15 below),
other than standard form license agreements with end users (copies of which have
been delivered to OpenVision or its counsel) and, in any event, any agreement
that grants rights or access to any source code included in the VERITAS IP
Rights; or
(k) agreement between or among VERITAS or any VERITAS Subsidiary
regarding inter company loans, revenue or cost sharing, ownership or license of
VERITAS IP Rights, inter company royalties or dividends or similar matters.
The VERITAS Disclosure Letter further includes a schedule of the
outstanding maintenance and support obligations to be performed by VERITAS
pursuant to any contract or other arrangement, including a description of such
obligations, the names of the customers for whom such obligations must be
performed, the
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expiration date of such obligations and the fees payable to VERITAS in respect
of performance of such obligations.
3.12 NO DEFAULTS. Except as disclosed in the VERITAS SEC Documents filed
prior to the date of this Agreement, to VERITAS' knowledge, neither it, Newco
nor any of the VERITAS Subsidiaries is in default under, and there exists no
event, condition or occurrence which, after notice or lapse of time, or both,
would constitute such a default by VERITAS, Newco or any of the VERITAS
Subsidiaries under, any contract or agreement to which VERITAS, Newco or any of
the VERITAS Subsidiaries is a party and which would, if terminated or modified,
have a Material Adverse Effect on VERITAS.
3.13 CERTAIN AGREEMENTS. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will (i)
result in any payment (including, without limitation, severance, unemployment
compensation, golden parachute, bonus or otherwise) becoming due to any director
or employee of VERITAS or any of the VERITAS Subsidiaries from VERITAS or any of
the VERITAS Subsidiaries, under any VERITAS Employee Plan, VERITAS Benefit
Arrangement or otherwise, (ii) materially increase any benefits otherwise
payable under any VERITAS Employee Plan or VERITAS Benefit Arrangement or (iii)
result in the acceleration of the time of payment or vesting of any such
benefits.
3.14 TAXES. VERITAS and each of the VERITAS Subsidiaries have filed, or
caused to be filed, all Tax returns required to be filed by them (all of which
returns were true, correct and complete in all material respects) and have paid
or withheld, or caused to be paid or withheld, all Taxes that are shown on such
Tax returns as due and payable, other than such Taxes as are being contested in
good faith and for which adequate reserves have been established on the VERITAS
Balance Sheet and other than where the failure to so file, pay or withhold would
not have a Material Adverse Effect on VERITAS. All Taxes required to have been
paid or accrued by VERITAS and the VERITAS Subsidiaries for all periods prior to
the VERITAS Balance Sheet Date have been fully paid or are adequately provided
for or reflected in the VERITAS Balance Sheet. Since the VERITAS Balance Sheet
Date, no material Tax liability has been assessed, proposed to be assessed,
incurred or accrued other than in the ordinary course of business. Neither
VERITAS nor any VERITAS Subsidiary has received any notification that any
material issues have been raised (and are currently pending) by the Internal
Revenue Service or any other taxing authority, including, without limitation,
any sales tax authority, in connection with any of the Tax returns referred to
in the first sentence of Section 3.14, and no waivers of statutes of limitations
have been given or requested with respect to VERITAS or any of the VERITAS
Subsidiaries. No taxing authority is currently conducting an audit of any Tax
returns of VERITAS or, to VERITAS' knowledge, about to conduct such an audit.
Any deficiencies asserted or assessments (including interest and penalties) made
as a result of any examination by the Internal Revenue Service or by appropriate
state or departmental authorities of the Tax returns of or with respect to
VERITAS or any of the VERITAS Subsidiaries have been fully paid or are
adequately provided for in the VERITAS Balance Sheet and no material proposed
(but unassessed) additional Taxes have been asserted and no Tax liens have been
filed other than for Taxes not yet due and payable. None of VERITAS or any of
the VERITAS Subsidiaries (i) has made an election to be treated as a "consenting
corporation" under Section 341(f) of the Code or (ii) is a "personal holding
company" within the meaning of Section 542 of the Code.
3.15 INTELLECTUAL PROPERTY.
(a) The VERITAS Disclosure Letter contains a complete and accurate list
of all United States and foreign: (i) patents; (ii) copyright registrations and
mask work registrations; (iii) trademarks registrations and trademark
intent-to-use registrations; (iv) registered user licenses; (v) all
applications, provisional applications or other filings for or to obtain any of
the foregoing, and (vi) any other similar registrations or applications for
Intellectual Property rights (as defined below) owned by, or filed by, or on
behalf of, VERITAS or any of the VERITAS Subsidiaries anywhere in the world (all
of the foregoing, "VERITAS Registered Intellectual Property").
(b) The VERITAS Disclosure Letter contains a complete and accurate list
of all material software programs and other products sold or licensed by VERITAS
or any of the VERITAS Subsidiaries.
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(c) All VERITAS Intellectual Property Rights are owned free and clear of
any liens, encumbrances or security interests.
(d) VERITAS and the VERITAS Subsidiaries own, or have the right to use,
sell or license such Intellectual Property Rights (as defined below) as are
necessary or required for the conduct of their respective businesses as
presently conducted (such Intellectual Property Rights being hereinafter
collectively referred to as the "VERITAS IP Rights") and such ownership or
rights to use, sell or license are reasonably sufficient for such conduct of
their respective businesses, except for any failure to own or have the right to
use, sell or license that would not have a Material Adverse Effect on VERITAS;
(e) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not constitute a
material breach of any material instrument or material agreement in respect of
any Intellectual Property Rights licensed by or to VERITAS (the "VERITAS IP
Rights Agreements"), will not cause the forfeiture or termination or give rise
to a right of forfeiture or termination of any VERITAS IP Right or materially
impair the right of VERITAS and the VERITAS Subsidiaries or the VERITAS
Surviving Corporation to use, sell or license any VERITAS IP Right or portion
thereof (except where such breach, forfeiture, termination or impairment would
not have a Material Adverse Effect on VERITAS);
(f) There are no royalties, honoraria, fees or other payments payable by
VERITAS to any person by reason of the ownership, use, license, purchase, sale
or disposition or acquisition of the VERITAS IP Rights (other than as set forth
in the VERITAS IP Rights Agreements listed in the VERITAS Disclosure Letter);
(g) To VERITAS' knowledge, no third party is infringing or
misappropriating any Intellectual Property Rights, including VERITAS Registered
Intellectual Property, owned by VERITAS or any of the VERITAS Subsidiaries.
(h) Neither the manufacture, marketing, license, sale or intended use of
any product currently licensed or sold by VERITAS or any of the VERITAS
Subsidiaries or currently under development by VERITAS or any of the VERITAS
Subsidiaries violates any license or agreement between VERITAS or any of the
VERITAS Subsidiaries and any third party or infringes any Intellectual Property
Right of any other party; and there is no pending or, to VERITAS' knowledge,
threatened claim or litigation contesting the validity, ownership or right to
use, sell, license or dispose of any VERITAS IP Right, nor has VERITAS received
any notice asserting that any VERITAS IP Right, or the proposed use, sale,
license or disposition thereof, conflicts or will conflict with the rights of
any other party, except for any violations, infringements, claims or litigation
that would not have a Material Adverse Effect on VERITAS, nor, to VERITAS'
knowledge, is there any basis for any such assertion; and
(i) VERITAS has taken reasonable and practicable steps designed to
safeguard and maintain the secrecy and confidentiality of, and its proprietary
rights in, all material trade secrets or other confidential information
constituting VERITAS IP Rights. To VERITAS' knowledge, no current or prior
officers, employees or consultants of VERITAS claim an ownership interest in any
VERITAS IP Rights as a result of having been involved in the development of such
property while employed by or consulting with VERITAS or any of the VERITAS
Subsidiaries, or otherwise. All officers and development employees and, to
VERITAS' knowledge, all other employees and consultants of VERITAS or any of the
VERITAS Subsidiaries have executed and delivered to VERITAS or the VERITAS
Subsidiary an agreement regarding the protection of proprietary information and
the assignment to VERITAS or the VERITAS Subsidiary of all Intellectual Property
Rights arising from the services performed for VERITAS or the VERITAS Subsidiary
by such persons.
3.16 FEES AND EXPENSES. Except for the fees and expenses set forth in
VERITAS' engagement letter with Xxxxx & Company and a letter agreement dated
December 1, 1996 with Xxxxxx Xxxxxx, copies of which have been provided to
OpenVision, neither VERITAS, Newco nor any of the VERITAS Subsidiaries has paid
or become obligated to pay any fee or commission to any broker, finder or
intermediary in connection with the transactions contemplated by this Agreement.
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3.17 INSURANCE. VERITAS and the VERITAS Subsidiaries maintain fire and
casualty, general liability, business interruption, directors and officers,
product liability and sprinkler and water damage insurance that VERITAS believes
to be reasonably prudent for its business. Correct and complete copies of all
such insurance policies presently in effect have been provided to OpenVision and
its counsel.
3.18 OWNERSHIP OF PROPERTY. Except (a) as disclosed in the VERITAS SEC
Documents filed prior to the date of this Agreement, (b) for liens for current
taxes not yet delinquent or (c) for liens imposed by law and incurred in the
ordinary course of business for obligations not yet due to carriers,
warehousemen, laborers, material men and the like, VERITAS and each of the
VERITAS Subsidiaries owns its real and personal property free and clear of all
security interests, mortgages, liens, charges, claims, options and encumbrances.
All real and personal property of VERITAS and each of the VERITAS Subsidiaries
is in generally good repair and is operational and usable in the operations of
VERITAS, subject to ordinary wear and tear. Neither VERITAS nor any VERITAS
Subsidiary is in violation of any zoning, building or safety ordinance,
regulation or requirement or other law or regulation applicable to the operation
of owned or leased properties (the violation of which would have a Material
Adverse Effect on VERITAS), or has received any notice of violation with which
it has not complied, except where such violation would not have a Material
Adverse Effect on VERITAS.
3.19 ENVIRONMENTAL MATTERS.
(a) During the period that VERITAS and the VERITAS Subsidiaries have
leased or owned their respective properties or owned or operated any facilities,
there have been, to VERITAS' knowledge, no disposals, releases or threatened
releases of Hazardous Materials on, from, under or about such properties or
facilities. VERITAS has no knowledge of any presence, disposals, releases or
threatened releases of Hazardous Materials on, from, under or about any of such
properties or facilities, which may have occurred prior to VERITAS or any of the
VERITAS Subsidiaries having taken possession of any of such properties or
facilities.
(b) None of the properties or facilities of VERITAS or the VERITAS
Subsidiaries is or has been the subject of an Environmental Violation. During
the time that VERITAS or the VERITAS Subsidiaries have owned or leased their
respective properties and facilities, neither VERITAS nor any of the VERITAS
Subsidiaries nor, to VERITAS' knowledge, any third party, has used, generated,
manufactured or stored on, under or about such properties or facilities or
transported to or from such properties or facilities any Hazardous Materials
(except those Hazardous Materials associated with general office use or
janitorial supplies).
(c) During the time that VERITAS or the VERITAS Subsidiaries have owned
or leased their respective properties and facilities, there has been no
litigation brought or, to VERITAS' knowledge, threatened against VERITAS or any
of the VERITAS Subsidiaries by, or any settlement reached by VERITAS or any of
the VERITAS Subsidiaries with, any party or parties alleging the presence,
disposal, release or threatened release of any Hazardous Materials on, from or
under any of such properties or facilities or relating to any alleged
Environmental Violation.
3.20 INTERESTED PARTY TRANSACTIONS. Except as disclosed in the VERITAS SEC
Documents filed prior to the date of this Agreement, no officer or director of
VERITAS or any "affiliate" or "associate" (as those terms are defined in Rule
405 promulgated under the Securities Act) of any such person has had, either
directly or indirectly, a material interest in: (i) any person or entity which
purchases from or sells, licenses or furnishes to VERITAS or any of the VERITAS
Subsidiaries any goods, property, technology or intellectual or other property
rights or services; or (ii) any contract or agreement to which VERITAS or any of
the VERITAS Subsidiaries is a party or by which it may be bound or affected.
3.21 BOARD APPROVAL. The Board of Directors of VERITAS and Newco have each
unanimously approved this Agreement and the Merger, and the Board of Directors
of VERITAS has determined that the Merger is in the best interests of the
shareholders of VERITAS and the terms of the Merger are fair to such
shareholders.
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3.22 VOTE REQUIRED. The affirmative vote of at least a majority of the
votes that holders of the outstanding shares of VERITAS Common Stock are
entitled to cast is the only vote of the holders of any class or series of
VERITAS capital stock necessary to approve this Agreement and the Merger.
3.23 INTERIM OPERATIONS OF NEWCO AND NEWCO SUBSIDIARIES. Newco, VERITAS
Sub and OpenVision Sub will be formed for the purpose of engaging in the
transactions contemplated hereby, will engage in no other business activities
and will conduct their operations only as contemplated hereby.
3.24 DISCLOSURE. No representation or warranty made by VERITAS or Newco in
this Agreement, nor any document, written information, statement, financial
statement, certificate or exhibit prepared and furnished or to be prepared and
furnished by VERITAS, Newco or their respective representatives pursuant hereto
or in connection with the transactions contemplated hereby, when taken together,
contains any untrue statement of a material fact, or omits to state a material
fact necessary to make the statements or facts contained herein or therein not
misleading in light of the circumstances under which they were furnished.
3.25 FAIRNESS OPINION. VERITAS' Board of Directors has received an opinion
as of the date hereof from Xxxxx & Company to the effect that, as of the date
hereof, the terms of the Merger are fair to VERITAS' shareholders from a
financial point of view.
4. OPENVISION COVENANTS
4.1 ADVICE OF CHANGES. During the period from the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement in
accordance with its terms, OpenVision will promptly advise VERITAS in writing,
(a) of any event occurring subsequent to the date of this Agreement that would
reasonably be likely to render any representation or warranty of OpenVision or
VERITAS contained in this Agreement, if made on or as of the date of such event
or the Closing Date, untrue or inaccurate in any material respect, (b) of any
event that would reasonably be likely to have a Material Adverse Effect on
OpenVision, and (c) of any material breach by OpenVision of any covenant or
agreement contained in this Agreement. To ensure compliance with this Section
4.1, OpenVision shall use its reasonable best efforts to deliver to VERITAS as
soon as practicable but in any event within thirty days after the end of each
monthly accounting period ending after the date of this Agreement and before the
earlier of the Closing Date or the termination of this Agreement in accordance
with its terms, an unaudited consolidated balance sheet, statement of operations
and statement of cash flows for OpenVision, which financial statements shall be
prepared in the ordinary course of business, in accordance with OpenVision's
books and records and GAAP and shall fairly present the consolidated financial
position of OpenVision as of their respective dates and the results of
OpenVision's operations for the periods then ended except that footnotes, as
required by GAAP, for interim financial statements may be omitted.
4.2 MAINTENANCE OF BUSINESS. During the period from the date of this
Agreement until the earlier of the Effective Time or the termination of this
Agreement in accordance with its terms, OpenVision will use its best efforts (i)
to carry on and preserve its business and its relationships with customers,
suppliers, employees and others in substantially the same manner as it has prior
to the date hereof and, (ii) to execute on its existing operating plan through
the date of the Closing. If OpenVision becomes aware of any material
deterioration in the relationship with any customer, supplier or key employee,
it will promptly bring such information to the attention of VERITAS in writing
and, if requested by VERITAS, will exert its reasonable best efforts to restore
the relationship.
4.3 CONDUCT OF BUSINESS. During the period from the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement in
accordance with its terms, OpenVision will continue to conduct its business and
maintain its business relationships in the ordinary and usual course and, except
as otherwise disclosed herein, it will not, without the prior written consent of
the President of VERITAS, which consent shall not be unreasonably withheld:
(a) borrow any money except for amounts that are not in the aggregate
material to the financial condition of OpenVision and the OpenVision
Subsidiaries, taken as a whole;
(b) enter into any transaction not in the ordinary course of its
business;
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(c) encumber or permit to be encumbered any of its assets except in the
ordinary course of its business consistent with past practice and to an extent
which is not material;
(d) dispose of any of its assets except in the ordinary course of
business, consistent with past practice;
(e) enter into any material lease or contract for the purchase or sale
or license of any property, real or personal, except in the ordinary course of
business, consistent with past practice (which shall include renewal of
agreements relating to OpenVision's principal offices);
(f) fail to maintain its equipment and other assets in good working
condition and repair according to the standards it has maintained to the date of
this Agreement, subject only to ordinary wear and tear;
(g) pay (or make any oral or written commitments or representations to
pay) any bonus, increased salary or special remuneration to any officer,
employee or consultant (except for bonuses in amounts consistent with past
practices and normal salary increases consistent with past practices not to
exceed 10% per year and that are not inconsistent with the Xxxxxxx Compensation
Survey for software companies and except pursuant to existing arrangements
previously disclosed to VERITAS) or enter into or vary the terms of any
employment, consulting or severance agreement with any such person, pay any
severance or termination pay (other than payments in amounts consistent with
past practice or made in accordance with plans or agreements existing on the
date hereof), grant any stock option (except for normal grants to employees
consistent with past practices) or issue any restricted stock, or enter into or
modify any agreement or plan or increase benefits of the type described in
Section 2.8;
(h) except as required by GAAP, change accounting methods;
(i) declare, set aside or pay any cash or stock dividend or other
distribution in respect of capital stock, or redeem or otherwise acquire any of
its capital stock (other than pursuant to arrangements with terminated employees
or consultants in the ordinary course of business, consistent with past
practice);
(j) amend or terminate any contract, agreement or license to which it is
a party except those amended or terminated in the ordinary course of its
business, consistent with past practice, and which are not material in amount or
effect;
(k) lend any amount to any person or entity, other than (i) advances for
travel and expenses which are incurred in the ordinary course of business,
consistent with past practice, not material in amount and documented by receipts
for the claimed amounts, or (ii) any loans pursuant to any OpenVision Section
401(a) Plan;
(l) guarantee or act as a surety for any obligation except for
obligations of OpenVision Subsidiaries in amounts that are not material to the
financial condition of OpenVision and the OpenVision Subsidiaries, taken as a
whole;
(m) waive or release any right or claim except for the waiver or release
of non-material claims in the ordinary course of business, consistent with past
practice, or the waiver or release of rights or claims described in the
OpenVision Disclosure Letter;
(n) issue or sell any shares of its capital stock of any class (except
upon the exercise of an option, stock purchase right or warrant currently
outstanding or permitted to be granted under Section 4.3(g)), or any other of
its securities, or issue or create any warrants, obligations, subscriptions,
options (except as expressly permitted under Section 4.3(g)), convertible
securities or other commitments to issue shares of capital stock, or accelerate
the vesting or change any other term of any outstanding option or other
security;
(o) split or combine the outstanding shares of its capital stock of any
class or enter into any recapitalization or agreement affecting the number or
rights of outstanding shares of its capital stock of any class or affecting any
other of its securities;
(p) merge, consolidate or reorganize with, or acquire any entity, except
as set forth in the OpenVision Disclosure Letter;
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(q) amend its Certificate of Incorporation or Bylaws;
(r) license any OpenVision IP Rights except in the ordinary course of
business, consistent with past practice, or grant any exclusive rights (other
than to Sun Microsystems, Inc.) or agree to do any development projects with
respect to the OpenVision IP Rights;
(s) agree to any audit assessment by any Tax authority;
(t) materially change any insurance coverage or issue any certificates
of insurance except in the ordinary course of business consistent with past
practice;
(u) take any action, or permit any action within OpenVision's control,
which would (i) prevent the Merger from qualifying as a tax-free reorganization
under Section 368(a)(1)(A) of the Code, (ii) prevent the Merger from qualifying
for accounting as a pooling of interests, or fail to use its reasonable best
efforts to prevent any of its officers or directors from taking or permitting
any such action or (iii) result in a failure to maintain the trading of
OpenVision Common Stock on the Nasdaq Stock Market without causing such stock to
be listed on the New York Stock Exchange or the American Stock Exchange at or
prior to the termination of its trading on the Nasdaq Stock Market, or fail to
use its reasonable best efforts to prevent its officers or directors from taking
or permitting such action;
(v) provide or publish to its stockholders any material which might
constitute an unauthorized "prospectus" within the meaning of the Securities
Act; or
(w) agree to take, or permit any OpenVision Subsidiary to take or agree
to take, or enter into negotiations with respect to, any of the actions
described in the preceding clauses in this Section 4.3.
4.4 STOCKHOLDER APPROVAL. OpenVision will call the OpenVision Stockholders
Meeting, to be held within 45 days after the Form S-4 shall have been declared
effective by the SEC, to submit this Agreement, the Merger and related matters
for the consideration and approval of the OpenVision stockholders. Subject to
the fiduciary obligations of OpenVision's directors and officers and to
OpenVision's legal disclosure obligations, the Prospectus/Proxy Statement will
include a statement to the effect that OpenVision's Board of Directors has
recommended that OpenVision stockholders vote for the Merger. Such meeting will
be called, held and conducted, and any proxies will be solicited, in compliance
with applicable law.
4.5 OPENVISION AFFILIATE AGREEMENTS.
(a) Affiliate Agreement. Concurrently with the execution of this
Agreement, OpenVision shall cause each of those persons who may be deemed to be,
in OpenVision's reasonable judgment, an "affiliate" (within the meaning of Rule
145 of the rules and regulations promulgated by the SEC under the Securities Act
("Rule 145")) of OpenVision, which persons are all listed on Exhibit 4.5(a)
hereto, to sign and deliver to VERITAS and Newco an Affiliate Agreement in the
form of Exhibit 4.5(b) hereto (the "OpenVision Affiliate Agreements") agreeing
that such persons (a) will have no present intent to dispose of more than fifty
percent (50%) of the Newco Common Stock received in the Merger; and (b) will
make no disposition of OpenVision Common Stock, or the Newco Common Stock
received in exchange therefor: (i) in the 30 day period prior to the Closing
Date; (ii) after the Closing Date until Newco shall have publicly released its
first report of quarterly financial statements that include the combined
financial results of Newco, OpenVision and VERITAS for a period of at least 30
days of combined operations; or (iii) except in compliance with SEC Rule 145(d),
pursuant to another available exemption from the registration requirements under
the Securities Act or in a registered offering. Newco shall be entitled to place
legends on the certificates evidencing any Newco Common Stock to be received by
such OpenVision affiliates pursuant to the terms of this Agreement and the
OpenVision Agreement of Merger, and to issue appropriate stop transfer
instructions to the transfer agent for Newco Common Stock, consistent with the
terms of such OpenVision Affiliate Agreements, whether or not such OpenVision
Affiliate Agreements are actually delivered to VERITAS.
(b) Voting Agreement. Concurrently with the execution of this Agreement,
Warburg, Xxxxxxx X. Xxxxxx and Xxxxxxxx X. Xxxxxx will sign and deliver to
VERITAS and Newco a Voting Agreement in the form of Exhibit 4.5(c) hereto (the
"Voting Agreement") agreeing that such persons will vote in favor of the Merger
at the OpenVision Stockholder Meeting.
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4.6 LETTERS OF OPENVISION'S ACCOUNTANTS.
(a) OpenVision shall use its reasonable best efforts to cause to be
delivered a letter of Ernst & Young LLP, OpenVision's independent auditors,
dated a date within five business days following the date of this Agreement,
stating that firm's written concurrence with the VERITAS management's and the
OpenVision management's conclusions, respectively, as to the appropriateness of
pooling of interests accounting for the Merger under Accounting Principles Board
Opinion No. 16, if closed and consummated in accordance with this Agreement.
(b) OpenVision shall use its reasonable best efforts to cause to be
delivered to VERITAS a letter of Ernst & Young LLP dated a date within two
business days before the date on which the Form S-4 shall become effective and
addressed to VERITAS, in form and substance reasonably satisfactory to VERITAS
and customary in scope and substance for letters delivered by independent public
accountants in connection with registration statements similar to the Form S-4.
4.7 PROSPECTUS/PROXY STATEMENT. OpenVision will mail to its stockholders
in a timely manner, for the purpose of considering and voting upon the Merger at
the OpenVision Stockholders Meeting, the Prospectus/Proxy Statement in the Form
S-4. OpenVision will promptly provide to VERITAS all information relating to its
business or operations necessary for inclusion in the Prospectus/Proxy Statement
to satisfy all requirements of applicable state and federal securities laws.
None of the information relating to OpenVision (or, to OpenVision's knowledge,
any other person, contained in any document, certificate or other writing
furnished or to be furnished by OpenVision) included in (i) the Prospectus/Proxy
Statement at the time the Proxy Statement is mailed or at the time of the
meeting of OpenVision's stockholders to vote on the Merger or at the Effective
Time, as then amended or supplemented, or (ii) the Form S-4 at the time the Form
S-4 becomes effective or at the Effective Time, as then amended or supplemented,
will contain any untrue statement of a material fact or will omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading
or necessary to correct any statement which has become false or misleading in
any earlier communication with respect to the solicitation of proxies for the
VERITAS and OpenVision stockholder meetings. The Prospectus/Proxy Statement, as
it relates to OpenVision, will comply as to form in all material respects with
the requirements of the Exchange Act and the rules and regulations thereunder in
effect at the time the Prospectus/Proxy Statement is mailed.
4.8 REGULATORY APPROVALS. OpenVision will promptly execute and file, or
join in the execution and filing, of any application or other document that may
be necessary in order to obtain the authorization, approval or consent of any
governmental body, federal, state, local or foreign, which may be reasonably
required, or which VERITAS or Newco may reasonably request, in connection with
the consummation of the transactions contemplated by this Agreement. OpenVision
will use its reasonable best efforts to promptly obtain all such authorizations,
approvals and consents. In addition, OpenVision shall use its reasonable best
efforts to cause Warburg, as promptly as practicable after the execution of this
Agreement, to file with the Federal Trade Commission (the "FTC") and the
Antitrust Division of the Department of Justice (the "DOJ"), a pre-merger
notification report under the HSR Act.
4.9 NECESSARY CONSENTS. OpenVision will use its reasonable best efforts to
obtain such written consents and to take such other actions as may be necessary
or appropriate in addition to those set forth in Section 4.8 to allow the
consummation of the transactions contemplated hereby and to allow the OpenVision
Surviving Corporation to carry on OpenVision's business after the Effective
Time.
4.10 ACCESS TO INFORMATION. OpenVision will allow VERITAS and its agents
reasonable access to the files, books, records, technology and offices of
OpenVision and each OpenVision Subsidiary, including, without limitation, any
and all information relating to OpenVision's Taxes, commitments, contracts,
leases, licenses and real, personal, intellectual and intangible property and
financial condition. OpenVision will use its reasonable best efforts to cause
its accountants to cooperate with VERITAS and its agents in making available to
VERITAS all financial information reasonably requested, including, without
limitation, the right to examine all working papers pertaining to all Tax
returns and financial statements prepared or audited by such accountants.
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4.11 SATISFACTION OF CONDITIONS PRECEDENT. OpenVision will use its
reasonable best efforts to satisfy or cause to be satisfied all the conditions
precedent that are set forth in Section 8 and to cause the Merger and the other
transactions contemplated by this Agreement to be consummated.
4.12 NO OTHER NEGOTIATIONS. From and after the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement in
accordance with its terms, OpenVision shall not, directly or indirectly, (a)
solicit or initiate discussions, or, except to the extent that OpenVision has
received a Superior Proposal (as defined below), engage in negotiations with any
person or, except to the extent that OpenVision has received a Superior Proposal
(as defined below), take any other action intended, designed or reasonably
likely to facilitate the efforts of any person, other than VERITAS and Newco,
relating to the possible acquisition of OpenVision or any of the OpenVision
Subsidiaries (whether by way of merger, purchase of capital stock, purchase of
assets or otherwise) or any material portion of its or their capital stock or
assets, (b) except to the extent that OpenVision has received a Superior
Proposal, and provided that OpenVision has required the party submitting the
Superior Proposal to execute a non-disclosure agreement comparable to the one
referred to in Section 9.3 hereof, provide non-public information with respect
to OpenVision or any of the OpenVision Subsidiaries to any person, other than
VERITAS and Newco, relating to the possible acquisition of OpenVision or any of
the OpenVision Subsidiaries (whether by way of merger, purchase of capital
stock, purchase of assets or otherwise) or any material portion of its or their
capital stock or assets, (c) enter into an agreement with any person, other than
VERITAS and Newco, providing for the possible acquisition of OpenVision or any
of the OpenVision Subsidiaries (whether by way of merger, purchase of capital
stock, purchase of assets or otherwise) or any material portion of its or their
capital stock or assets, or (d), except to the extent that OpenVision has
received a Superior Proposal, make or authorize any statement, recommendation or
solicitation in support of any possible acquisition of OpenVision or any of the
OpenVision Subsidiaries (whether by way of merger, purchase of capital stock,
purchase of assets or otherwise) or any material portion of its or their capital
stock or assets by any person, other than by VERITAS and Newco. A "Superior
Proposal" shall mean a written, unsolicited proposal relating to the possible
acquisition of OpenVision or any of the OpenVision Subsidiaries (whether by way
of merger, purchase of capital stock, purchase of assets or otherwise) or any
material portion of its or their capital stock or assets by any person other
than by VERITAS or Newco, which proposal is, in the reasonable good faith
judgment of the Board, after consultation with its legal and financial advisors,
on financial and other terms more favorable to the stockholders of OpenVision
than the terms of the Merger and which is made by a party that can reasonably be
expected to consummate the transaction on the terms proposed. If OpenVision or
any of its Subsidiaries receives any offer or proposal to enter negotiations
relating to any of the above, OpenVision shall, as promptly as practicable,
notify VERITAS or Newco thereof, including information as to the identity of the
party making any such offer or proposal and the specific terms of such offer or
proposal, as the case may be and (b) provide VERITAS or Newco with the same
information (if any) OpenVision provides to the party making the Superior
Proposal. Nothing contained in this Agreement (but subject to the terms hereof)
will prevent the Board of Directors of OpenVision, if OpenVision has received a
Superior Proposal, from recommending such Superior Proposal to OpenVision's
stockholders, if the Board determines that such action is required by its
fiduciary duties under applicable law. In such case, the Board of Directors of
OpenVision may withdraw or modify its recommendation concerning the approval of
this Agreement and the Merger.
5. VERITAS AND NEWCO COVENANTS
5.1 ADVICE OF CHANGES. During the period from the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement in
accordance with its terms, VERITAS will promptly advise OpenVision in writing
(a) of any event occurring subsequent to the date of this Agreement that would
reasonably be likely to render any representation or warranty of VERITAS, Newco
or OpenVision contained in this Agreement, if made on or as of the date of such
event or the Closing Date, untrue or inaccurate in any material respect, (b) of
any event that would reasonably be likely to have a Material Adverse Effect on
VERITAS, and (c) of any material breach by VERITAS or Newco of any covenant or
agreement contained in this Agreement. To ensure compliance with this Section
5.1, VERITAS shall use its reasonable best efforts to deliver to OpenVision as
soon as practicable but in any event within thirty days after the end of each
monthly accounting period ending after the date of this Agreement and before the
earlier of the Closing Date
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or the termination of this Agreement in accordance with its terms, an unaudited
consolidated balance sheet, statement of operations and statement of cash flows
for VERITAS, which financial statements shall be prepared in the ordinary course
of business, in accordance with VERITAS books and records and GAAP and shall
fairly present the consolidated financial position of VERITAS as of their
respective dates and the results of VERITAS operations for the periods then
ended except that footnotes, as required by GAAP for interim financial
statements, may be omitted.
5.2 MAINTENANCE OF BUSINESS. During the period from the date of this
Agreement until the earlier of the Effective Time or the termination of this
Agreement in accordance with its terms, VERITAS will use its best efforts (i) to
carry on and preserve its business and its relationships with customers,
suppliers, employees and others in substantially the same manner as it has prior
to the date hereof, and (ii) to execute on its existing operating plan through
the date of Closing. If VERITAS becomes aware of any material deterioration in
the relationship with any customer, supplier or key employee, it will promptly
bring such information to the attention of OpenVision in writing and, if
requested by OpenVision, will exert its reasonable best efforts to restore the
relationship.
5.3 CONDUCT OF BUSINESS. During the period from the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement in
accordance with its terms, VERITAS will continue to conduct its business and
maintain its business relationships in the ordinary and usual course and, except
as otherwise disclosed herein, it will not, without the prior written consent of
OpenVision, which consent shall not be unreasonably withheld:
(a) borrow any money except for amounts that are not in the aggregate
material to the financial condition of VERITAS, Newco and the VERITAS
Subsidiaries, taken as a whole;
(b) enter into any transaction not in the ordinary course of its
business, except for those transactions described in the VERITAS Disclosure
Letter;
(c) encumber or permit to be encumbered any of its assets except in the
ordinary course of its business, consistent with past practice, and to an extent
which is not material;
(d) dispose of any of its assets, except in the ordinary course of
business, consistent with past practice (which shall include renewal of
agreements relating to VERITAS' principal offices);
(e) enter into any material lease or contract for the purchase or sale
or license of any property, real or personal, except in the ordinary course of
business, consistent with past practice;
(f) fail to maintain its equipment and other assets in good working
condition and repair according to the standards it has maintained to the date of
this Agreement, subject only to ordinary wear and tear;
(g) pay (or make any oral or written commitments or representations to
pay) any bonus, increased salary or special remuneration to any officer,
employee or consultant (except for bonuses in amounts consistent with past
practices, and normal salary increases consistent with past practices not to
exceed 10% per year and that are not inconsistent with the Xxxxxxx Compensation
Survey of software companies and except pursuant to existing arrangements
previously disclosed to OpenVision) or enter into or vary the terms of any
employment, consulting or severance agreement with any such person, pay any
severance or termination pay (other than payments in amounts consistent with
past practices or made in accordance with plans or agreements existing on the
date hereof), grant any stock option (except for normal grants to employees
consistent with past practices) or issue any restricted stock, or enter into or
modify any agreement or plan of the type described in Section 3.8, (except for
amendments to the VERITAS Plans to increase the number of shares reserved
thereunder to the number set forth in Section 3.2(b) hereof and to accommodate
the assumption of such Plans by Newco in the Merger);
(h) except as required by GAAP, change accounting methods;
(i) declare, set aside or pay any cash or stock dividend or other
distribution in respect of capital stock, or redeem or otherwise acquire any of
its capital stock (other than pursuant to arrangements with terminated employees
or consultants in the ordinary course of business, consistent with past
practice);
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(j) amend or terminate any contract, agreement or license to which it is
a party except those amended or terminated in the ordinary course of its
business, consistent with past practice, and which are not material in amount or
effect;
(k) lend any amount to any person or entity, other than (i) advances for
travel and expenses which are incurred in the ordinary course of business,
consistent with past practice, not material in amount and documented by receipts
for the claimed amounts, or (ii) any loans pursuant to any VERITAS Section
401(a) Plan;
(l) guarantee or act as a surety for any obligation except for
obligations of Newco or any of the VERITAS Subsidiaries in amounts that are not
material to the financial condition of VERITAS, Newco and the VERITAS
Subsidiaries, taken as a whole;
(m) waive or release any right or claim except for the waiver or release
of non-material claims in the ordinary course of business, consistent with past
practice, or the waiver or release of rights or claims described in the VERITAS
Disclosure Letter;
(n) except in connection with the any transaction described in the
VERITAS Disclosure Letter, issue or sell any shares of its capital stock of any
class (except upon the exercise of an option or warrant currently outstanding or
permitted to be granted by Section 5.3(g)), or any other of its securities, or
issue or create any warrants, obligations, subscriptions, options (except as
expressly permitted by Section 5.3(g)), convertible securities or other
commitments to issue shares of capital stock, or accelerate the vesting or
change any other term of any outstanding option or other security;
(o) split or combine the outstanding shares of its capital stock of any
class or enter into any recapitalization or agreement affecting the number or
rights of outstanding shares of its capital stock of any class or affecting any
other of its securities;
(p) merge, consolidate or reorganize with, or acquire any entity that
would preclude or interfere with the Merger;
(q) amend its Articles of Incorporation or Bylaws, or amend the
Certificate of Incorporation or Bylaws of Newco, except in connection with any
transaction described in the VERITAS Disclosure Letter;
(r) license any VERITAS IP Rights except in the ordinary course of
business, consistent with past practice;
(s) agree to any audit assessment by any Tax authority;
(t) materially change any insurance coverage or issue any certificates
of insurance except in the ordinary course of business consistent with past
practices;
(u) take any action, or permit any action within VERITAS' control, which
would (i) prevent the Merger from qualifying as a tax-free reorganization under
Section 368(a)(1)(A) of the Code, (ii) prevent the Merger from qualifying for
accounting as a pooling of interests, or fail to use its reasonable best efforts
to prevent any of its officers or directors from taking or permitting any such
action or (iii) result in a failure to maintain the trading of VERITAS Common
Stock on the Nasdaq Stock Market without causing such stock to be listed on the
New York Stock Exchange or the American Stock Exchange at or prior to the
termination of its trading on the Nasdaq Stock Market, or fail to use its
reasonable best efforts to prevent its officers or directors from taking or
permitting such action;
(v) provide or publish to its shareholders any material which might
constitute an unauthorized "prospectus" within the meaning of the Securities
Act; or
(w) agree to take, or permit Newco or any VERITAS Subsidiary to take or
agree to take, or enter into negotiations with respect to, any of the actions
described in the preceding clauses in this Section 5.3.
5.4 SHAREHOLDER APPROVAL. VERITAS will call the VERITAS Shareholders
Meeting, to be held within 45 days after the Form S-4 shall have been declared
effective by the SEC, to submit the Merger and related matters for the
consideration and approval of the VERITAS shareholders. Subject to the fiduciary
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obligations of VERITAS' directors and officers and to VERITAS' legal disclosure
obligations, the Prospectus/Proxy Statement will include a statement to the
effect that VERITAS' Board of Directors has recommended that VERITAS
shareholders vote in favor of the Merger. Such meeting will be called, held and
conducted, and any proxies will be solicited, in compliance with applicable law.
5.5 VERITAS AFFILIATE AGREEMENTS.
(a) Affiliate Agreement. Concurrently with the execution of this
Agreement, VERITAS shall cause each of those persons who may be deemed to be, in
VERITAS' reasonable judgment, an "affiliate" (within the meaning of Rule 145 of
the rules and regulations promulgated by the SEC under the Securities Act ("Rule
145")) of VERITAS, which persons are all listed on Exhibit 5.5(a) hereto, to
sign and deliver to OpenVision an Affiliate Agreement in the form of Exhibit
5.5(b) hereto (the "VERITAS Affiliate Agreements") agreeing that such persons
(a) will have no present intent to dispose of more than fifty percent (50%) of
the Newco Common Stock received in the Merger; and (b) will make no disposition
of VERITAS Common Stock, or the Newco Common Stock received in exchange
therefor: (i) in the 30 day period prior to the Closing Date; (ii) after the
Closing Date until Newco shall have publicly released its first report of
quarterly financial statements that include the combined financial results of
Newco, OpenVision and VERITAS for a period of at least 30 days of combined
operations; or (iii) except in compliance with SEC Rule 145(d), pursuant to
another available exemption from the registration requirements under the
Securities Act or in a registered offering. Newco shall be entitled to place
legends on the certificates evidencing any Newco Common Stock to be received by
such VERITAS affiliates pursuant to the terms of this Agreement and the VERITAS
Agreement of Merger, and to issue appropriate stop transfer instructions to the
transfer agent for Newco Common Stock, consistent with the terms of such VERITAS
Affiliate Agreements, whether or not such VERITAS Affiliate Agreements are
actually delivered to OpenVision.
(b) Voting Agreement. Concurrently with the execution of this Agreement,
each of the persons listed in Exhibit 5.5(a) will sign and deliver to OpenVision
a Voting Agreement in the form of Exhibit 5.5(c) hereto (the "VERITAS Voting
Agreement") agreeing that such persons will vote in favor of the Merger at the
VERITAS Stockholder Meeting.
5.6 LETTER OF VERITAS' ACCOUNTANTS.
(a) VERITAS shall use its reasonable best efforts to cause to be
delivered a letter of Ernst & Young LLP, VERITAS' independent auditors, dated a
date within five business days following the date of this Agreement, stating
that firm's written concurrence with VERITAS management's and the OpenVision
management's conclusions, respectively, as to the appropriateness of pooling of
interests accounting for the Merger under Accounting Principles Board Opinion
No. 16, if closed and consummated in accordance with this Agreement.
(b) VERITAS shall use its reasonable best efforts to cause to be
delivered to OpenVision a letter of Ernst & Young LLP, dated a date within two
business days before the date on which the Form S-4 shall become effective and
addressed to OpenVision, in form and substance reasonably satisfactory to
OpenVision and customary in scope and substance for letters delivered by
independent public accountants in connection with registration statements
similar to the Form S-4.
5.7 PROSPECTUS/PROXY STATEMENT. VERITAS will mail to its shareholders in a
timely manner, for the purpose of considering and voting upon the Merger at the
VERITAS Shareholders Meeting, the Prospectus/Proxy Statement in the Form S-4.
VERITAS and Newco will prepare and file the Proxy Statement/Prospectus with the
SEC as promptly as practicable, and each will use its respective best reasonable
efforts to cause the Form S-4 to become effective as soon after such filing as
practicable. In this regard, VERITAS and Newco will advise OpenVision promptly
as to the time at which the Form S-4 becomes effective and of the issuance by
the SEC of any stop order suspending the effectiveness of the Form S-4 or the
initiation of any proceedings for such purpose and each will use its respective
reasonable best efforts to prevent the issuance of any stop order and to obtain
as soon as possible the lifting thereof, if issued. Until the Effective Time,
VERITAS and Newco will advise OpenVision promptly of any requirement of the SEC
for any amendment or supplement of the Form S-4 or for additional information,
and will not at any time file any
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amendment of or supplement to the prospectus contained therein (or to the
prospectus filled pursuant to Rule 424(b) of the SEC) (the "Prospectus") which
shall not have been previously submitted to OpenVision in reasonable time prior
to the proposed filing thereof or to which OpenVision shall reasonably object or
which is not in compliance in all material respects with the Securities Act and
the rules and regulations issued by the SEC thereunder. None of the information
relating to VERITAS or Newco (or, to VERITAS' or Newco's knowledge, any other
person, contained in any document, certificate or other writing furnished or to
be furnished by VERITAS) included in (i) the Prospectus/Proxy Statement at the
time the Prospectus/Proxy Statement is mailed or at the time of the meeting of
VERITAS shareholders to vote on the Merger or at the time of the meeting of the
stockholders of OpenVision to vote on the Merger or at the Effective Time, as
then amended or supplemented, or (ii) the Form S-4 at the time the Form S-4
becomes effective or at the Effective Time, as then amended or supplemented,
will contain any untrue statement of a material fact or will omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading
or necessary to correct any statement which has become false or misleading in
any earlier communication with respect to the solicitation of proxies for the
OpenVision and VERITAS stockholder meetings. From and after the date the Form
S-4 becomes effective and until the Effective Time, if any event known to
VERITAS or Newco occurs as a result of which the Prospectus would include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading, or
if it is necessary at any time to amend the Form S-4 or the Prospectus to comply
with the Securities Act, VERITAS and Newco will promptly notify OpenVision and
will prepare an amended or supplemented Form S-4 or Prospectus which will
correct such statement or omission and will use its reasonable best efforts to
cause any such amendment to become effective as promptly as possible. The
Prospectus/Proxy Statement, as it relates to VERITAS and Newco, will comply as
to form in all material respects with the requirements of the Exchange Act and
the rules and regulations thereunder in effect at the time the Prospectus/Proxy
Statement is mailed.
5.8 STATE SECURITIES LAW COMPLIANCE. VERITAS and Newco shall use their
respective reasonable best efforts to (i) qualify the Newco Common Stock to be
issued pursuant to the Merger under the state securities or "blue sky" laws of
every jurisdiction of the United States in which (a) any registered stockholder
of OpenVision has an address on the records of OpenVision's transfer agent on
the record date for determining the OpenVision stockholders entitled to notice
of and to vote on the Merger, (b) any registered shareholder of VERITAS has an
address on the records of VERITAS' transfer agent on the record date for
determining the VERITAS shareholders entitled to notice of and to vote on the
Merger, and (c) a Nasdaq Stock Market or other exemption from the qualification
requirements under such laws is unavailable, and (ii) qualify the Stock Rights
to be assumed by VERITAS pursuant to Sections 1.8 and 1.9 hereof under the state
securities or "blue sky" laws of every jurisdiction of the United States in
which (a) the records of VERITAS or OpenVision, as of the Closing Date, indicate
that a holder of such Stock Rights resides and (b) a Nasdaq Stock Market or
other exemption from the qualification requirements under such laws is
unavailable;
5.9 REGULATORY APPROVALS. VERITAS and Newco will promptly execute and
file, or join in the execution and filing, of any application or other document
that may be necessary in order to obtain the authorization, approval or consent
of any governmental body, federal, state, local or foreign which may be
reasonably required, or which OpenVision may reasonably request, in connection
with the consummation of the transactions contemplated by this Agreement.
VERITAS and Newco will each use its respective reasonable best efforts to
promptly obtain all such authorizations, approvals and consents. Without
limiting the generality of the foregoing, as promptly as practicable after the
execution of this Agreement, VERITAS and Newco shall file with the FTC and the
DOJ a pre-merger notification report under the HSR Act.
5.10 NECESSARY CONSENTS. VERITAS and Newco will each use its respective
reasonable best efforts to obtain such written consents and to take such other
actions as may be necessary or appropriate in addition to those set forth in
Section 5.9 to allow the consummation of the transactions contemplated hereby
and to allow the VERITAS Surviving Corporation to carry on VERITAS' business
after the Effective Time.
5.11 ACCESS TO INFORMATION. VERITAS will allow OpenVision and its agents
reasonable access to the files, books, records and offices of VERITAS, Newco and
each VERITAS Subsidiary, including, without limitation, any and all information
relating to VERITAS Taxes, commitments, contracts, leases, licenses and
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real, personal and intangible property and financial condition. VERITAS will use
its reasonable best efforts to cause its accountants to cooperate with
OpenVision and its agents in making available to OpenVision all financial
information reasonably requested, including, without limitation, the right to
examine all working papers pertaining to all Tax returns and financial
statements prepared or audited by such accountants.
5.12 SATISFACTION OF CONDITIONS PRECEDENT. VERITAS and Newco will each use
its respective reasonable best efforts to satisfy or cause to be satisfied all
the conditions precedent that are set forth in Section 7 and to cause the Merger
and the other transactions contemplated by this Agreement to be consummated.
5.13 OPENVISION EMPLOYEE PLANS AND BENEFIT ARRANGEMENTS; SEVERANCE. The
OpenVision Employee Plans and OpenVision Benefit Arrangements listed in the
OpenVision Disclosure Letter that are in effect at the date of this Agreement
shall, to the extent practicable, remain in effect until OpenVision employees
are allowed to participate in comparable VERITAS Employee Plans and VERITAS
Benefit Arrangements. Newco will use reasonable efforts to arrange that, as soon
as practicable after the Effective Time, the VERITAS Benefit Arrangements and
VERITAS Employee Plans provide the same or a comparable benefit or plan to each
employee of OpenVision as is provided to VERITAS' employees who are similarly
situated. The VERITAS Benefit Arrangements and VERITAS Employee Plans shall give
full credit for each participant's period of service with OpenVision and each
ERISA Affiliate prior to the Effective Time for all purposes for which such
service was recognized under OpenVision Benefit Arrangements or OpenVision
Employee Plans prior to the Effective Time. From and after the Effective Time,
Newco shall provide all employees of OpenVision and its ERISA Affiliates with
the opportunity to participate in any employee stock option or other incentive
compensation plan of Newco and its ERISA Affiliates on substantially the same
terms and subject to substantially the same conditions as are available to
similarly situated employees of VERITAS.
5.14 INDEMNIFICATION AND INSURANCE.
(a) OpenVision Rights.
(i) The Certificate of Incorporation and Bylaws of the OpenVision
Surviving Corporation shall contain the provisions with respect to
indemnification and limitation of liability for monetary damages set forth in
the Certificate of Incorporation and Bylaws of OpenVision on the date of this
Agreement, which provisions shall not be amended, repealed or otherwise modified
for a period of ten years from the Effective Time in any manner that would
adversely affect the rights thereunder of individuals who at the Effective Time
were directors, officers, employees or agents of OpenVision, unless such
modification is required by law.
(ii) From and after the Effective Time, Newco and the OpenVision
Surviving Corporation shall honor, in all respects, all of the indemnity
agreements entered into prior to the date hereof by OpenVision with its
respective officers and directors, copies of which have been provided to VERITAS
or to its counsel, whether or not such persons continue in their positions with
Newco or the OpenVision Surviving Corporation following the Effective Time.
Following the Effective Time, VERITAS' form of indemnification agreement shall
be adopted as the form of indemnification agreement for Newco and the OpenVision
Surviving Corporation and all continuing officers and directors of Newco or the
OpenVision Surviving Corporation shall be afforded the opportunity to enter into
such indemnification agreement, and shall be covered by such directors' and
officers' liability insurance policies as Newco shall have in effect from time
to time.
(iii) After the Effective Time, Newco and the OpenVision Surviving
Corporation will, jointly and severally, to the fullest extent permitted under
applicable law, indemnify and hold harmless, each present and former director or
officer of OpenVision or any OpenVision subsidiary (collectively, for purposes
of Section 5.14(a), the "Indemnified Parties") against any costs or expenses
(including attorneys' fees), judgments, fines, losses, claims, damages,
liabilities and amounts paid in settlement in connection with any claim, action,
suit, proceeding or investigation, whether civil, criminal administrative or
investigative, to the extent arising out of or pertaining to any action or
omission in his or her capacity as a director or officer of OpenVision arising
out of or pertaining to the transactions contemplated by this Agreement for a
period of six years after the date hereof. In the event of any such claim,
action, suit, proceeding or investigation (whether
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arising before or after the Effective Time), (a) any counsel retained for the
defense of the Indemnified Parties for any period after the Effective Time will
be reasonably satisfactory to the Indemnified Parties, (b) after the Effective
Time, the OpenVision Surviving Corporation will pay the reasonable fees and
expenses of such counsel promptly after statements therefor are received, and
(c) the OpenVision Surviving Corporation will cooperate in the defense of any
such matter; provided, however, that the OpenVision Surviving Corporation will
not be liable for any settlement effected without its written consent (which
consent will not be unreasonably withheld); and provided, further, that, in the
event that any claim or claims for indemnification are asserted or made within
such six-year period, all rights to indemnification in respect of any such claim
or claims will continue until the disposition of any and all such claims. The
Indemnified Parties as a group may be defended by only one law firm (in addition
to local counsel) with respect to any single action unless there is, under
applicable standards of professional conduct, a conflict on any significant
issue between the positions of any two or more Indemnified Parties.
(iv) For the entire period from and after the Effective Time until at
least six years after the Effective Time, Newco will cause the OpenVision
Surviving Corporation to use its commercially reasonable efforts to maintain in
effect directors' and officers' liability insurance covering those persons who
are currently covered by OpenVision's directors' and officers' liability
insurance policy (a copy of which has been heretofore delivered to VERITAS) of
at least the same coverage and amounts, containing terms that are no less
advantageous with respect to claims arising at or before the Effective Time than
OpenVision's policies in effect immediately prior to the Effective Time to those
applicable to the then current directors and officers of Newco and the VERITAS
Surviving Corporation; provided, however, that in no event shall Newco or the
OpenVision Surviving Corporation be required to expend in excess of 150% of the
annual premium currently paid by OpenVision for such coverage in which event
Newco shall purchase such coverage as is available for such 150% of such annual
premium.
(v) Newco and the OpenVision Surviving Corporation shall pay all
expenses, including attorneys' fees, that may be incurred by any Indemnified
Parties in enforcing the indemnity and other obligations provided for in this
Section 5.14(a).
(b) VERITAS Rights.
(i) The Articles of Incorporation and Bylaws of the VERITAS Surviving
Corporation shall contain the provisions with respect to indemnification and
limitation of liability for monetary damages set forth in the Articles of
Incorporation and Bylaws of VERITAS on the date of this Agreement, which
provisions shall not be amended, repealed or otherwise modified for a period of
ten years from the Effective Time in any manner that would adversely affect the
rights thereunder of individuals who at the Effective Time were directors,
officers, employees or agents of VERITAS, unless such modification is required
by law.
(ii) From and after the Effective Time, Newco and the VERITAS
Surviving Corporation shall honor, in all respects, all of the indemnity
agreements entered into prior to the date hereof by VERITAS with its respective
officers and directors, whether or not such persons continue in their positions
with Newco or the VERITAS Surviving Corporation following the Effective Time.
Following the Effective Time, VERITAS' form of indemnification agreement shall
be adopted as the form of indemnification agreement for Newco and the VERITAS
Surviving Corporation and all continuing officers and directors of Newco or the
VERITAS Surviving Corporation shall be afforded the opportunity to enter into
such indemnification agreement, and shall be covered by such directors' and
officers' liability insurance policies as Newco shall have in effect from time
to time.
(iii) After the Effective Time, Newco and the VERITAS Surviving
Corporation will, jointly and severally, to the fullest extent permitted under
applicable law, indemnify and hold harmless, each present and former director or
officer of VERITAS or any of its subsidiaries (collectively, for purposes of
Section 5.14(b), the "Indemnified Parties") against any costs or expenses
(including attorneys' fees), judgments, fines, losses, claims, damages,
liabilities and amounts paid in settlement in connection with any claim, action,
suit, proceeding or investigation, whether civil, criminal administrative or
investigative, to the extent arising out of or pertaining to any action or
omission in his or her capacity as a director or officer of VERITAS arising out
of or pertaining to the transactions contemplated by this Agreement for a period
of six
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years after the date hereof. In the event of any such claim, action, suit,
proceeding or investigation (whether arising before or after the Effective
Time), (a) any counsel retained for the defense of the Indemnified Parties for
any period after the Effective Time will be reasonably satisfactory to the
Indemnified Parties, (b) after the Effective Time, the VERITAS Surviving
Corporation will pay the reasonable fees and expenses of such counsel, promptly
after statements therefor are received, and (c) the VERITAS Surviving
Corporation will cooperate in the defense of any such matter; provided, however,
that the VERITAS Surviving Corporation will not be liable for any settlement
effected without its written consent (which consent will not be unreasonably
withheld); and provided, further, that, in the event that any claim or claims
for indemnification are asserted or made within such six-year period, all rights
to indemnification in respect of any such claim or claims will continue until
the disposition of any and all such claims. The Indemnified Parties as a group
may be defended by only one law firm (in addition to local counsel) with respect
to any single action unless there is, under applicable standards of professional
conduct, a conflict on any significant issue between the positions of any two or
more Indemnified Parties.
(iv) For the entire period from and after the Effective Time until at
least six years after the Effective Time, Newco will cause the VERITAS Surviving
Corporation to use its commercially reasonable efforts to maintain in effect
directors' and officers' liability insurance covering those persons who are
currently covered by VERITAS' directors' and officers' liability insurance
policy (a copy of which has been heretofore delivered to OpenVision) of at least
the same coverage and amounts, containing terms that are no less advantageous
with respect to claims arising at or before the Effective Time than VERITAS'
policies in effect immediately prior to the Effective Time to those applicable
to the then current directors and officers of Newco and the VERITAS Surviving
Corporation; provided, however, that in no event shall Newco or the VERITAS
Surviving Corporation be required to expend in excess of 150% of the annual
premium currently paid by VERITAS for such coverage in which event Newco shall
purchase such coverage as is available for such 150% of such annual premium.
(v) Newco and the VERITAS Surviving Corporation shall pay all
expenses, including attorneys' fees, that may be incurred by any Indemnified
Parties in enforcing the indemnity and other obligations provided for in this
Section 5.14(b).
(c) In the event Newco, the OpenVision Surviving Corporation or the
VERITAS Surviving Corporation or any of their respective successors or assigns
(a) consolidates with or merges into any other person or entity and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger, or (b) transfers or conveys all or a substantial portion of its
properties or assets to any person or entity, then, and in each such case, to
the extent necessary to effectuate the purposes of this Section 5.14(c), proper
provision shall be made so that the successors and the assigns of Newco, the
OpenVision Surviving Corporation and the VERITAS Surviving Corporation assume
the obligations set forth in this Section 5.14.
(d) The provisions of this Section 5.14 shall survive the Effective Time
and are intended to be for the benefit of, and shall be enforceable by, each
officer and director of OpenVision or VERITAS described in Sections 5.14(a)(i)
and 5.14(b)(i) and his or her heirs and representatives.
5.15 REGISTRATION RIGHTS AGREEMENT. Prior to the Effective Time, Newco,
OpenVision and the stockholders of OpenVision listed under Section 5.15 of the
OpenVision Disclosure Letter shall enter into a Registration Rights Agreement in
the form attached hereto as Exhibit 5.15 (the "Registration Rights Agreement").
5.16 EMPLOYEE MATTERS. Prior to the Effective Time, VERITAS, Newco and
OpenVision shall mutually agree upon an integration plan relating to the Merger
which shall include, among other things, provisions relating to compensation and
other equity incentives for employees of OpenVision.
5.17 BOARD REPRESENTATION. Newco shall appoint Xxxxxxxx X. Xxxxxx and
Xxxxxxx X. Xxxxxxx to Newco's Board of Directors as of the Effective Time. In
addition, at the Effective Time, Newco shall execute a Nomination Agreement in
the form attached hereto as Exhibit 5.17 (the "Nomination Agreement") providing
for the following rights of Warburg:
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(a) provided that Warburg holds a number of shares of Newco Common Stock
in excess of fifteen percent (15%) of the outstanding Common Stock of Newco,
Newco shall nominate, in connection with each stockholder solicitation relating
to the election of directors, two candidates selected by Warburg, consisting of
one representative of Warburg and one independent person reasonably acceptable
to Newco; or
(b) provided that Warburg holds a number of shares of Newco Common Stock
equal to or less than fifteen percent (15%) but exceeding five percent (5%) of
the outstanding Common Stock of Newco, Newco shall nominate one candidate
selected by Warburg.
At such time as Warburg ceases to hold in excess of five percent (5%) of
the outstanding Common Stock of Newco, the Nomination Agreement will terminate
and will have no further force or effect.
6. CLOSING MATTERS
6.1 THE CLOSING. Subject to the termination of this Agreement as provided
in Section 9 below, the Closing of the transactions contemplated by this
Agreement (the "Closing") will take place at the offices of Fenwick & West, Two
Xxxx Xxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000 on a date (the "Closing Date") and
at a time to be mutually agreed upon by the parties, which date shall be as soon
as practicable after the OpenVision Stockholders Meeting and the VERITAS
Shareholders Meeting and, in any event, no later than the third business day
after all conditions to Closing set forth herein shall have been satisfied or
waived, unless another place, time and date is mutually selected by OpenVision
and VERITAS. Concurrently with the Closing, the Agreements of Merger will be
filed in the offices of the Secretary of the State of Delaware and the VERITAS
Agreement of Merger shall be filed in the offices of the Secretary of State of
the State of California.
6.2 EXCHANGE OF CERTIFICATES.
(a) Exchange Agent. ChaseMellon Shareholder Services LLC shall act as
exchange agent (the "Exchange Agent") in the Merger. Promptly after the
Effective Time, Newco shall deposit with the Exchange Agent, for the benefit of
the holders of shares of VERITAS Common Stock and OpenVision Common Stock, for
exchange in accordance with this Agreement and the Agreements of Merger,
certificates representing the shares of Newco Common Stock (such shares of Newco
Common Stock, together with any dividends or distributions with respect thereto,
being hereinafter referred to as the "Exchange Fund") issuable pursuant to this
Agreement and the Agreements of Merger, and cash in an amount sufficient for
payment in lieu of fractional shares pursuant to Section 1.7, in exchange for
outstanding shares of VERITAS Common Stock and OpenVision Common Stock.
(b) Exchange Procedures. As soon as practicable after the Effective
Time, Newco shall cause the Exchange Agent to mail to each holder of record of a
certificate or certificates which immediately prior to the Effective Time
represented issued and outstanding shares of OpenVision Common Stock (including
persons who purchase OpenVision Common Stock prior to the Effective Time upon
exercise of OpenVision Stock Purchase Plan Options in accordance with Section
1.9(b)) (collectively, the "Certificates"), (i) a letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Exchange
Agent and shall be in such form and have such other provisions as VERITAS and
OpenVision may reasonably specify) and (ii) instructions for use in effecting
the surrender of the Certificates in exchange for certificates representing
Newco Common Stock. Upon surrender of a Certificate for cancellation to the
Exchange Agent, together with a duly executed letter of transmittal and such
other documents as may be reasonably required by the Exchange Agent, the holder
of such Certificate shall be entitled to receive in exchange therefor a
certificate representing that number of whole shares of Newco Common Stock and
cash in lieu of fractional shares which such holder has the right to receive
pursuant to the provisions of this Agreement and the Agreements of Merger, and
the Certificate so surrendered shall forthwith be canceled. Certificates which
immediately prior to the Effective Time represented issued and outstanding
shares of VERITAS Common Stock do not need to be delivered to the Exchange Agent
and from and after the Effective Time, such certificates shall be deemed to
evidence the ownership of an equal number of full shares of Newco Common Stock.
In the event of a transfer of ownership of shares of OpenVision Common Stock
which is not registered on the transfer records of VERITAS or
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OpenVision, respectively, a certificate representing the proper number of shares
of Newco Common Stock may be issued to a transferee if the Certificate
representing such VERITAS Common Stock or OpenVision Common Stock is presented
to the Exchange Agent, accompanied by all documents required to evidence and
effect such transfer and by evidence that any applicable stock transfer taxes
have been paid. Until surrendered as contemplated by this Section 6.2 and the
Agreements of Merger, each Certificate shall be deemed, on and after the
Effective Time, to evidence the ownership of the number of full shares of Newco
Common Stock into which such shares of OpenVision Common Stock shall have been
so converted and the right to receive an amount in lieu of any fractional shares
of Newco Common Stock as contemplated by Section 1.7, the Agreements of Merger
and the Delaware Law.
(c) Distributions with Respect to Unsurrendered Certificates. No
dividends or other distributions declared or made after the Effective Time with
respect to Newco Common Stock with a record date after the Effective Time shall
be paid to the holder of any unsurrendered Certificate with respect to the
shares of Newco Common Stock represented thereby, and no cash payment in lieu of
fractional shares shall be paid to any such holder pursuant to Section 1.7 and
the OpenVision Agreement of Merger, until the holder of record of such
Certificate shall surrender such Certificate. Subject to the effect of
applicable laws, following surrender of any such Certificate, there shall be
paid to the record holder of the certificates representing whole shares of Newco
Common Stock issued in exchange therefor, without interest, (i) at the time of
such surrender, the amount of any cash payable in lieu of a fractional share of
Newco Common Stock to which such holder is entitled pursuant to Section 1.7 and
the OpenVision Agreement of Merger and the amount of dividends or other
distributions with a record date after the Effective Time theretofore paid with
respect to such whole shares of Newco Common Stock, and (ii) at the appropriate
payment date, the amount of dividends or other distributions with a record date
after the Effective Time but prior to surrender and a payment date subsequent to
surrender payable with respect to such whole shares of Newco Common Stock.
(d) No Further Ownership Rights in OpenVision Common Stock. All shares
of Newco Common Stock issued upon the surrender for exchange of shares of
OpenVision Common Stock in accordance with the terms of this Agreement and the
OpenVision Agreement of Merger (including any cash paid pursuant to Section 1.7
and Section 6.2(c)) shall be deemed to have been issued in full satisfaction of
all rights pertaining to such shares of OpenVision Common Stock. After the
Effective Time there shall be no further registration of transfers on the stock
transfer books of (i) the VERITAS Surviving Corporation of the shares of VERITAS
Common Stock, or (ii) the OpenVision Surviving Corporation of the shares of
OpenVision Common Stock, which were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are presented to the
OpenVision Surviving Corporation for any reason, they shall be canceled and
exchanged as provided in this Section 6.2 and the Agreements of Merger.
(e) Termination of Exchange Fund. Any portion of the Exchange Fund which
remains undistributed to the stockholders of OpenVision six months after the
Effective Time shall be delivered to Newco, upon demand, and any former
stockholders of OpenVision who have not theretofore complied with this Section
6.2 and the OpenVision Agreement of Merger shall thereafter look only to Newco
for payment of their claim for Newco Common Stock, any cash in lieu of
fractional shares of Newco Common Stock and any dividends or distributions with
respect to Newco Common Stock.
(f) No Liability. Neither the Exchange Agent, Newco, VERITAS or
OpenVision shall be liable to any holder of shares of OpenVision Common Stock or
Newco Common Stock, as the case may be, for any amount delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
(g) Lost, Stolen or Destroyed Certificates. In the event any
Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall
issue in exchange for such lost, stolen or destroyed Certificates, upon the
making of an affidavit of that fact by the holder thereof and the posting of
reasonable bond therefor, such shares of Newco Common Stock, cash for fractional
shares, if any, as may be required pursuant to Section 1.7 and any dividends or
distributions payable pursuant to Section 6.2(c).
6.3 ASSUMPTION OF OPTIONS. Promptly after the Effective Time, Newco shall
(a) notify in writing each holder of a Stock Right of the assumption of such
Stock Right by Newco, the number of shares of Newco Common Stock that are then
subject to such Stock Right and the exercise price or purchase price of such
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Stock Right, as determined pursuant to Sections 1.8 and 1.9 hereof, and (b) file
the Form S-8 to register the Stock Rights.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF OPENVISION
The obligations of OpenVision hereunder are subject to the fulfillment or
satisfaction on or before the Closing of each of the following conditions (any
one or more of which may be waived by OpenVision, but only in a writing signed
by OpenVision):
7.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of VERITAS and Newco set forth in Section 3 (as qualified by the
VERITAS Disclosure Letter) shall be true and accurate on and as of the Closing
Date, except for changes contemplated by this Agreement and except for those
representations and warranties that address matters only as of a particular date
(which shall remain true and correct as of such particular date), with the same
force and effect as if they had been made at the Closing, except, in all such
cases, where such breaches of such representations and warranties, individually
or in the aggregate, have not resulted in, nor reasonably would be expected to
result in liabilities amounting in the aggregate to in excess of $5,000,000 or,
have not substantially impaired nor reasonably would be expected to
substantially impair, VERITAS' ability after the Closing to continue to develop,
produce, sell and distribute the products and services that are material to
VERITAS' business in substantially the same manner as it has prior to the date
of this Agreement, and OpenVision shall receive certificates to such effect
executed by each of VERITAS' Chief Executive Officer and Newco's Chief Executive
Officer.
7.2 COVENANTS. VERITAS and Newco shall have performed and complied in all
material respects with all of their respective covenants contained in Section 5
on or before the Closing, and OpenVision shall receive certificates to such
effect executed by each of VERITAS' Chief Executive Officer and Newco's Chief
Executive Officer.
7.3 ABSENCE OF SUBSTANTIAL MATERIAL ADVERSE CHANGE. There shall not have
been any Substantial Material Adverse Change since the date of this Agreement.
"Substantial Material Adverse Change" shall be deemed to have occurred only in
the event that, prior to the Effective Time, there shall occur any event or
change which, individually or in the aggregate of all such events or changes,
have resulted, or reasonably would be expected to result in, a substantial
impairment to VERITAS' ability after the Closing to continue to develop,
produce, sell and distribute the products and services that are material to
VERITAS' business in substantially the same manner as it has prior to the date
of this Agreement.
7.4 COMPLIANCE WITH LAW. There shall be no order, decree or ruling by any
governmental agency which would prohibit or render illegal the transactions
contemplated by this Agreement.
7.5 CONSENTS. There shall have been obtained on or before the Closing the
permits and authorizations listed on Exhibit 7.5 hereto, and VERITAS shall have
received the written consents, assignments, waivers, authorizations and other
certificates also listed on Exhibit 7.5.
7.6 FORM S-4. The Form S-4 shall have become effective under the
Securities Act and shall not be the subject of any stop-order or proceedings
seeking a stop-order and the Prospectus/Proxy Statement shall on the Closing
Date not be subject to any proceedings commenced or overtly threatened by the
SEC.
7.7 OPINION OF VERITAS AND NEWCO'S COUNSEL. OpenVision shall have received
from Fenwick & West LLP, counsel to VERITAS and Newco, an opinion substantially
in the form of Exhibit 7.7.
7.8 OPENVISION STOCKHOLDER APPROVAL. The principal terms of this Agreement
and the Merger shall have been approved and adopted by the OpenVision
stockholders in accordance with applicable law and OpenVision's Certificate of
Incorporation and Bylaws.
7.9 VERITAS SHAREHOLDER APPROVAL. The principal terms of this Agreement
and the Merger shall have been approved and adopted by the VERITAS shareholders
in accordance with applicable law and VERITAS' Articles of Incorporation and
Bylaws. Holders of no more than 5% of the outstanding shares of VERITAS Common
Stock shall be eligible to exercise dissenter's rights under Chapter 13 of the
CGCL.
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7.10 NO LEGAL ACTION. No temporary restraining order, preliminary
injunction or permanent injunction or other order preventing the consummation of
the Merger shall have been issued by any federal or state court and remain in
effect.
7.11 TAX OPINION. Each of VERITAS and OpenVision shall have received an
opinion in form and substance satisfactory to them from their respective
counsel, to the effect that the Merger will be treated for Federal income tax
purposes as a tax-free reorganization within the meaning of Section 368 of the
Code, provided that if the respective counsel to VERITAS or OpenVision does not
render such opinion, this condition shall nonetheless be deemed satisfied with
respect to such party if counsel to the other party renders such opinion to such
party. The parties shall make representations related to the VERITAS and
OpenVision tax opinions, which representations counsel may rely upon.
7.12 ELECTION OF OPENVISION DESIGNEES TO THE BOARD OF DIRECTORS OF
NEWCO. The Board of Directors of Newco shall have taken appropriate action to
elect Xxxxxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxxx to the Board of Directors of
Newco, effective upon the Effective Time.
7.13 POOLING OPINION. OpenVision shall have received from Ernst & Young
LLP an opinion, in form and substance satisfactory to OpenVision, dated as of
the Closing that the Merger will be treated as a "pooling of interests" in
accordance with GAAP and all published rules, regulations and policies of the
SEC.
7.14 NASDAQ LISTING. The Newco Common Stock to be issued in the Merger
shall have been approved for quotation on the Nasdaq Stock Market, subject to
notice of issuance.
7.15 INCORPORATION OF NEW DELAWARE COMPANIES. Newco shall have formed
VERITAS Sub and OpenVision Sub prior to the Closing Date, which corporations
shall be duly organized, validly existing and in good standing under the laws of
Delaware and which corporations shall have been formed solely for the purpose of
the transactions hereunder and shall not have engaged in any business activities
during the period from incorporation to the Closing Date. OpenVision shall
receive a certificate to such effect signed by Newco's Chief Executive Officer.
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF VERITAS AND NEWCO
The obligations of VERITAS and Newco hereunder are subject to the
fulfillment or satisfaction on or before the Closing of each of the following
conditions (any one or more of which may be waived by VERITAS, but only in a
writing signed by VERITAS):
8.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of OpenVision set forth in Section 2 (as qualified by the OpenVision
Disclosure Letter) shall be true and accurate on and as of the Closing Date,
except for changes contemplated by this Agreement and except for those
representations and warranties that address matters only as of a particular date
(which shall remain true and correct as of such particular date) with the same
force and effect as if they had been made at the Closing, except in all such
cases, where such breaches of such representations and warranties, individually
or in the aggregate, have not resulted in, nor reasonably would be expected to
result in, liabilities amounting in the aggregate to in excess of $5,000,000, or
have not substantially impaired, nor reasonably would be expected to
substantially impair, OpenVision's ability after the Closing to continue to
develop, produce, sell and distribute the products and services that are
material to OpenVision's business in substantially the same manner as it has
prior to the date of this Agreement, and VERITAS shall receive a certificate to
such effect executed by OpenVision's Chief Executive Officer and Chief Financial
Officer.
8.2 COVENANTS. OpenVision shall have performed and complied in all
material respects with all of its covenants contained in Section 4 on or before
the Closing, and VERITAS shall receive a certificate to such effect signed by
OpenVision's Chief Executive Officer and Chief Financial Officer.
8.3 ABSENCE OF SUBSTANTIAL MATERIAL ADVERSE CHANGE. There shall not have
been any Substantial Material Adverse Change since the date of the Agreement.
"Substantial Material Adverse Change" shall be deemed to have occurred only in
the event that prior to the Effective Time there shall occur any event or change
which, individually or in the aggregate of all such events or changes, have
resulted, or reasonably
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would be expected to result in, a substantial impairment to OpenVision's ability
after the Closing to continue to develop, produce, sell and distribute the
products and services that are material to OpenVision's business in
substantially the same manner as it has prior to the date of this Agreement.
8.4 COMPLIANCE WITH LAW. There shall be no order, decree or ruling by any
court or governmental agency which would prohibit or render illegal the
transactions contemplated by this Agreement.
8.5 CONSENTS. There shall have been obtained on or before the Closing the
permits and authorizations listed on Exhibit 8.5 hereto, and OpenVision shall
have received the written consents, assignments, waivers, authorizations and
other certificates also listed on Exhibit 8.5.
8.6 FORM S-4. The Form S-4 shall have become effective under the
Securities Act and shall not be the subject of any stop-order or proceedings
seeking a stop-order and the Prospectus/Proxy Statement shall on the Closing
Date not be subject to any proceedings commenced or overtly threatened by the
SEC.
8.7 OPINION OF OPENVISION'S COUNSEL. VERITAS shall have received from
Wilson, Sonsini, Xxxxxxxx & Xxxxxx, P.C., counsel to OpenVision, an opinion
substantially in the form of Exhibit 8.7.
8.8 VERITAS SHAREHOLDER APPROVAL. The principal terms of this Agreement
and the Merger shall have been approved and adopted by the VERITAS shareholders
in accordance with applicable law and VERITAS' Articles of Incorporation and
Bylaws. Holders of no more than five percent of the outstanding shares of
VERITAS Common Stock shall be eligible to exercise dissenters' rights.
8.9 OPENVISION STOCKHOLDER APPROVAL. The principal terms of this Agreement
and the Merger shall have been approved and adopted by the OpenVision
stockholders in accordance with applicable law and OpenVision's Certificate of
Incorporation and Bylaws.
8.10 NO LEGAL ACTION. No temporary restraining order, preliminary
injunction or permanent injunction or other order preventing the consummation of
the Merger shall have been issued by any federal or state court and remain in
effect.
8.11 TAX OPINION. Each of VERITAS and OpenVision shall have received an
opinion in form and substance satisfactory to them from their respective counsel
to the effect that the Merger will be treated for Federal income tax purposes as
a tax-free reorganization within the meaning of Section 368 of the Code,
provided that if the respective counsel to VERITAS or OpenVision does not render
such opinion, this condition shall nonetheless be deemed satisfied with respect
to such party if counsel to the other party renders such opinion to such party.
The parties shall make representations related to the VERITAS and OpenVision tax
opinions, which representations counsel may rely upon.
8.12 POOLING OPINION. VERITAS shall have received from Ernst & Young LLP
an opinion, in form and substance satisfactory to VERITAS, dated as of the
Closing that the Merger will be treated as a "pooling of interests" in
accordance with GAAP and all published rules, regulations and policies of the
SEC.
9. TERMINATION OF AGREEMENT
9.1 TERMINATION. This Agreement may be terminated at any time prior to the
Effective Time, whether before or after approval of the Merger by the
stockholders of VERITAS or OpenVision:
(a) by mutual written agreement of OpenVision and VERITAS;
(b) by OpenVision, if there has been a breach by VERITAS or Newco of any
representation or warranty set forth in this Agreement on the part of VERITAS or
Newco, and, as a result of such breach, the conditions set forth in Section 7.1
would not then be satisfied, and which VERITAS or Newco fails to cure within ten
(10) business days after notice thereof from OpenVision (except that no cure
period shall be provided for a breach by VERITAS or Newco which by its nature
cannot be cured);
(c) by OpenVision, if there has been a breach by VERITAS or Newco of any
covenant or agreement set forth in this Agreement on the part of VERITAS or
Newco and as a result of such breach, the conditions set forth in Section 7.2
would not then be satisfied, and which VERITAS or Newco fails to cure
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within ten (10) business days after notice thereof from OpenVision (except that
no cure period shall be provided for a breach by VERITAS or Newco which by its
nature cannot be cured);
(d) by VERITAS, if there has been a breach by OpenVision of any
representation or warranty set forth in this Agreement on the part of
OpenVision, and as a result of such breach, the conditions set forth in Section
8.1 would not then be satisfied, and which OpenVision fails to cure within ten
(10) business days after notice thereof from VERITAS (except that no cure period
shall be provided for a breach by OpenVision which by its nature cannot be
cured);
(e) by VERITAS, if there has been a breach by OpenVision of any covenant
or agreement set forth in this Agreement on the part of OpenVision, and as a
result of such breach, the conditions set forth in Section 8.2 would not then be
satisfied, and which OpenVision fails to cure within ten (10) business days
after notice thereof from VERITAS (except that no cure period shall be provided
for a breach by OpenVision which by its nature cannot be cured);
(f) by VERITAS or OpenVision, if all the conditions for Closing the
Merger shall not have been satisfied or waived on or before the Final Date (as
defined below) other than as a result of a breach of this Agreement by the
terminating party;
(g) by VERITAS or OpenVision, if a permanent injunction or other order
by any federal or state court which would make illegal or otherwise restrain or
prohibit the consummation of the Merger shall have been issued and shall have
become final and nonappealable;
(h) by VERITAS or OpenVision, if the stockholders of OpenVision do not
approve the Merger contemplated by this Agreement at the OpenVision stockholders
meeting (a "OpenVision Stockholder Rejection");
(i) by VERITAS or OpenVision, if the shareholders of VERITAS do not
approve the Merger contemplated by this Agreement at the VERITAS shareholders
meeting (a "VERITAS Shareholder Rejection");
(j) by VERITAS, if (i) the OpenVision Board of Directors recommends a
Superior Proposal or withdraws or modifies in any manner adverse to the
consummation of the Merger, its unanimous recommendation to the OpenVision
stockholders that they approve the Merger, or (ii) the condition to Closing set
forth in Sections 7.13 or 8.12 is not met for any reason related to OpenVision;
(k) by OpenVision, if (i) the VERITAS Board of Directors withdraws, or
changes in any manner adverse to the consummation of the Merger, its unanimous
recommendation to the VERITAS shareholders that they approve the Merger, or (ii)
the condition to Closing set forth in Sections 7.13 or 8.12 is not met for any
reason related to VERITAS;
(l) by OpenVision, if the average closing price of VERITAS Common Stock,
as presently constituted, as quoted on the Nasdaq Stock Market and reported in
the Wall Street Journal, over the ten (10) trading days immediately preceding
the date of the VERITAS Shareholder Meeting is less than $33.00 per share.
As used herein, the Final Date shall be April 30, 1997, except that if the
FTC or the DOJ issues a "second request" under the HSR Act, then the Final Date
shall be extended to July 31, 1997; and except that if a temporary, preliminary
or permanent injunction or other order by any Federal or state court which would
prohibit or otherwise restrain consummation of the Merger shall have been issued
and shall remain in effect on April 30, 1997, and such injunction shall not have
become final and nonappealable, either party, by giving the other written notice
thereof on or prior to April 30, 1997, may extend the time for consummation of
the Merger up to and including the earlier of the date such injunction shall
become final and non-appealable or July 31, 1997, so long as such party shall,
at its own expense, use its reasonable best efforts to have such injunction
dissolved.
9.2 NOTICE OF TERMINATION. Any termination of this Agreement under Section
9.1 above will be effective by the delivery of notice of the terminating party
to the other party hereto.
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9.3 NO LIABILITY. Except as provided in Section 9.4 below, any termination
of this Agreement in accordance with this Section 9 will be without further
obligation or liability upon any party in favor of the other parties hereto
other than the obligations contained in the Amended and Restated Mutual
Confidential Nondisclosure Agreement dated December 11, 1996 between OpenVision
and VERITAS (the "Nondisclosure Agreement"), which will survive termination of
this Agreement; provided, however, that nothing herein will relieve any party
from liability for any willful breach of this Agreement.
9.4 BREAKUP FEES.
(a) If this Agreement is terminated by OpenVision or VERITAS as a result
of a OpenVision Stockholder Rejection or by VERITAS pursuant to Section
9.1(j)(i), then OpenVision shall pay to VERITAS (by wire transfer or cashier's
check) a nonrefundable fee of $10,000,000 within ten (10) days of the delivery
of the notice of termination to or by VERITAS pursuant to Section 9.2.
(b) If this Agreement is terminated by OpenVision or VERITAS as a result
of a VERITAS Shareholder Rejection or by OpenVision pursuant to Section
9.1(k)(i), then VERITAS shall pay to OpenVision (by wire transfer or cashier's
check) a nonrefundable fee of $10,000,000 within ten (10) days of the delivery
of the notice of termination to or by OpenVision pursuant to Section 9.2.
10. SURVIVAL OF REPRESENTATIONS
10.1 NO SURVIVAL OF REPRESENTATIONS. All representations, warranties and
covenants of the parties contained in this Agreement will remain operative and
in full force and effect, regardless of any investigation made by or on behalf
of the parties to this Agreement, until the earlier of the termination of this
Agreement or the Closing Date, whereupon such representations, warranties and
covenants will expire (except for covenants that by their terms survive for a
longer period).
11. MISCELLANEOUS
11.1 GOVERNING LAW. The internal laws of the State of California
(irrespective of its choice of law principles) will govern the validity of this
Agreement, the construction of its terms and the interpretation and enforcement
of the rights and duties of the parties hereto, except that the fiduciary duties
of the directors of OpenVision and Newco shall be governed by the Delaware Law.
11.2 ASSIGNMENT; BINDING UPON SUCCESSORS AND ASSIGNS. None of the parties
hereto may assign any of its rights or obligations hereunder without the prior
written consent of the other parties hereto. This Agreement will be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
11.3 SEVERABILITY. If any provision of this Agreement, or the application
thereof, will for any reason and to any extent be invalid or unenforceable, the
remainder of this Agreement and application of such provision to other persons
or circumstances will be interpreted so as reasonably to effect the intent of
the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the greatest extent possible, the economic, business and
other purposes of the void or unenforceable provision.
11.4 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will be an original as regards any party whose
signature appears thereon and all of which together will constitute one and the
same instrument. This Agreement will become binding when one or more
counterparts hereof, individually or taken together, will bear the signatures of
all the parties reflected hereon as signatories.
11.5 OTHER REMEDIES. Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby or by law on such party,
and the exercise of any one remedy will not preclude the exercise of any other.
11.6 AMENDMENT AND WAIVERS. Any term or provision of this Agreement may be
amended, and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively)
only by a writing signed by the party or parties to be bound thereby. The
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waiver by a party of any breach hereof or default in the performance hereof will
not be deemed to constitute a waiver of any other default or any succeeding
breach or default. The Agreement may be amended by the parties hereto at any
time before or after approval of the OpenVision stockholders or the VERITAS
shareholders, but, after such approval, no amendment will be made which by
applicable law requires the further approval of the OpenVision stockholders or
the VERITAS shareholders without obtaining such further approval.
11.7 EXPENSES. In the event that the Merger is consummated, the expenses
and fees of both parties with respect to this Agreement and the transactions
contemplated hereby will be borne by Newco. In the event that the Merger is not
consummated, each party will bear its respective fees and expenses incurred with
respect to this Agreement and the transactions contemplated hereby; provided,
however, that OpenVision and VERITAS shall share equally all fees and expenses,
other than attorneys', accountants' and financial advisors' fees, incurred in
connection with the printing and filing of the Form S-4 (including financial
statements and exhibits) and any amendment or supplements thereto.
11.8 ATTORNEYS' FEES. Should suit be brought to enforce or interpret any
part of this Agreement, the prevailing party will be entitled to recover, as an
element of the costs of suit and not as damages, reasonable attorneys' fees to
be fixed by the court (including, without limitation, costs, expenses and fees
on any appeal). The prevailing party will be entitled to recover its costs of
suit, regardless of whether such suit proceeds to final judgment.
11.9 NOTICES. All notices and other communications pursuant to this
Agreement shall be in writing and deemed to be sufficient if contained in a
written instrument and shall be deemed given if delivered personally,
telecopied, sent by nationally-recognized overnight courier or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at the following address (or at such other address for a party as shall
be specified by like notice):
If to OpenVision to: OpenVision Technologies, Inc.
0000 Xxxx Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Chief Executive Officer
Telecopier: (000) 000-0000
With a copy to: Wilson, Sonsini, Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxx, Esq.
Telecopier: (000) 000-0000
And if to VERITAS or VERITAS Software Corporation
Newco to: 0000 Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
Attention: Chief Executive Officer
Telecopier: (000) 000-0000
With a copy to: Fenwick & West LLP
Xxx Xxxx Xxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attention: Xxxxxxxxxx X. Xxxxx, Esq.
Telecopier: (000) 000-0000
All such notices and other communications shall be deemed to have been
received (a) in the case of personal delivery, on the date of such delivery, (b)
in the case of a telecopy, when the party receiving such copy shall have
confirmed receipt of the communication, (c) in the case of delivery by
nationally-recognized overnight courier, on the business day following dispatch,
and (d) in the case of mailing, on the third business day following such
mailing.
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11.10 CONSTRUCTION OF AGREEMENT. This Agreement has been negotiated by the
respective parties hereto and their attorneys and the language hereof will not
be construed for or against either party. A reference to a Section or an exhibit
will mean a Section in, or exhibit to, this Agreement unless otherwise
explicitly set forth. The titles and headings herein are for reference purposes
only and will not in any manner limit the construction of this Agreement which
will be considered as a whole.
11.11 NO JOINT VENTURE. Nothing contained in this Agreement will be deemed
or construed as creating a joint venture or partnership between any of the
parties hereto. No party is by virtue of this Agreement authorized as an agent,
employee or legal representative of any other party. No party will have the
power to control the activities and operations of any other and their status is,
and at all times, will continue to be, that of independent contractors with
respect to each other. No party will have any power or authority to bind or
commit any other. No party will hold itself out as having any authority or
relationship in contravention of this Section.
11.12 FURTHER ASSURANCES. Each party agrees to cooperate fully with the
other parties and to execute such further instruments, documents and agreements
and to give such further written assurances as may be reasonably requested by
any other party to evidence and reflect the transactions described herein and
contemplated hereby and to carry into effect the intents and purposes of this
Agreement.
11.13 ABSENCE OF THIRD PARTY BENEFICIARY RIGHTS. Except as otherwise
provided in Sections 5.13, 5.14, 5.15, 5.17 and 11.7, no provisions of this
Agreement are intended, nor will be interpreted, to provide or create any third
party beneficiary rights or any other rights of any kind in any client,
customer, affiliate, stockholder, partner or any party hereto or any other
person or entity unless specifically provided otherwise herein, and, except as
so provided, all provisions hereof will be personal solely between the parties
to this Agreement.
11.14 PUBLIC ANNOUNCEMENT. Upon execution of this Agreement, VERITAS and
OpenVision promptly will issue a joint press release approved by both parties
announcing the Merger. Thereafter, VERITAS or OpenVision may issue such press
releases, and make such other disclosures regarding the Merger, as it determines
(after consultation with legal counsel) are required under applicable securities
laws or NASD rules; provided that VERITAS or OpenVision shall, to the extent
practicable, obtain the approval of the other party (which approval shall not be
unreasonably withheld) prior to any such release or disclosure.
11.15 ENTIRE AGREEMENT. This Agreement and the exhibits hereto constitute
the entire understanding and agreement of the parties hereto with respect to the
subject matter hereof and supersede all prior and contemporaneous agreements or
understandings, inducements or conditions, express or implied, written or oral,
between the parties with respect hereto other than the Nondisclosure Agreement,
which shall remain in full force and effect. The express terms hereof control
and supersede any course of performance or usage of the trade inconsistent with
any of the terms hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement and
Plan of Reorganization as of the date first above written.
VERITAS SOFTWARE CORPORATION, OPENVISION TECHNOLOGIES, INC.,
a California corporation a Delaware corporation
By: By:
----------------------------------------- -----------------------------------------
Xxxx Xxxxxx Xxxxxxxx X. Xxxxxx
President and Chief Executive Officer President and Chief Executive Officer
VERITAS SOFTWARE CORPORATION,
a Delaware corporation
By:
-----------------------------------------
Xxxx Xxxxxx
President
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF REORGANIZATION]
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