Exhibit 4.(A)3
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (together will all Exhibits
hereto, the "Agreement"), dated as of February 25, 2002 among iMedeon Inc., a
Georgia corporation (the "Company"), the stockholders of the Company ("Company
Stockholders"), ViryaNet Ltd., an Israeli company ("Parent"), and ViyraNet
Acquisition, Inc. ("Merger Sub"), a Georgia corporation and a subsidiary of
ViryaNet, Inc., the US subsidiary of Parent. Capitalized terms not otherwise
defined herein shall have the meanings ascribed to such terms in Annex I
attached hereto.
RECITALS
WHEREAS, the respective boards of directors of each of Parent
and Merger Sub have approved the merger of Merger Sub with and into the Company
(the "Merger") and approved the Merger upon the terms and subject to the
conditions set forth in this Agreement; and
WHEREAS, the board of directors of the Company has submitted
this Agreement to the Company Stockholders in accordance with the requirements
of the Georgia Business Corporation Code (the "GCL"); and
WHEREAS, all of the Company Stockholders have approved the
Merger and all other transactions contemplated under this Agreement; and
WHEREAS, the Company, Company Stockholders, Parent and Merger
Sub desire to make certain representations, warranties, covenants and agreements
in connection with the Merger.
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto agree as follows:
1. The Merger; Closing; Effective Time; Deliveries Upon Signing
1.1. The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, at the Effective Time (as defined in
Section 1.3) Merger Sub shall be merged with and into the
Company and the separate corporate existence of Merger Sub
shall thereupon cease. The Company shall be the surviving
corporation in the Merger (sometimes hereinafter referred to
as the "Surviving Corporation"), and the separate corporate
existence of the Company with all its rights, privileges,
immunities, powers and franchises shall continue unaffected
by the Merger, except as set forth herein. The Merger shall
have the effects specified in the GCL.
1.2. Closing. The closing of the Merger (the "Closing") shall take
place concurrently with the signature of this Agreement at
the offices of Parent (the "Closing Date").
1.3. Effective Time. Concurrently with the Closing, the Company
and Merger Sub will cause a Certificate of Merger (the
"Georgia Certificate of Merger") to be executed, acknowledged
and filed with the Secretary of State of Georgia as provided
in Section 14-2-1105 of the GCL. The Merger shall become
effective when the
Georgia Certificate of Merger has been duly filed with the
Secretary of State of Georgia (the "Effective Time").
1.4. Deliveries Upon Signing. Prior to signing the Agreement the
parties shall deliver each other the deliverables set forth
in Section 9 below.
2. Articles of Incorporation and By-Laws of the Surviving Corporation
2.1. Articles of Incorporation. The Articles of Incorporation of
Merger Sub, as in effect immediately prior to the Effective
Time, shall be at the Effective Time, the Articles of
Incorporation of the Surviving Corporation until thereafter
amended as provided by law.
2.2. The By-Laws. The Bylaws of Merger Sub, as in effect
immediately prior to the Effective Time, shall be, at the
Effective Time, the Bylaws of the Surviving Corporation
until thereafter amended as provided therein or by
applicable law.
3. Officers and Directors of the Surviving Corporation
3.1. Directors. The directors of Merger Sub at the Effective Time
shall, from and after the Effective Time, be the directors
of the Surviving Corporation until their successors have
been duly elected or appointed and qualified or until their
earlier death, resignation or removal in accordance with the
Charter and the By-Laws.
3.2. Officers. The officers of Merger Sub at the Effective Time
shall, from and after the Effective Time, be the officers of
the Surviving Corporation until their successors have been
duly elected or appointed and qualified or until their
earlier death, resignation or removal in accordance with the
Charter and the By-Laws.
4. Effect of the Merger on Capital Stock; Exchange of Certificates
4.1 Conversion of Outstanding Shares. At the Effective Time, as
a result of the Merger and without any action on the part of
the holder of any capital stock of the Company, the shares
of Common Stock, Series A Preferred Stock and Series B
Preferred Stock of the Company (each as defined in Section
5.3) issued and outstanding immediately prior to the
Effective Time (each a "Share" or, collectively, the
"Shares") which are held by the Company Stockholders shall
be converted into, and become exchangeable for, (A) such
number of Ordinary Shares, par value NIS 0.1 per share, of
Parent ("Parent Ordinary Shares") set forth next to such
Company Stockholder's name and below the column "First
Closing" on Schedule 4.1 attached hereto (the "Initial
Consideration") (B) such amount of cash or other immediately
available funds set forth next to the Company Stockholder's
name and below the column "First Closing" on Schedule 4.1
attached hereto (the "Cash Consideration") and (C) the right
to receive additional consideration ("Additional
Consideration"). The Additional Consideration shall be
delivered in accordance with Section 4.7 (the "Additional
Consideration Payment") and shall be either (i) an amount of
cash equal to $462,474, or (ii) subject to the requisite
approval of the shareholders of Parent, 905,037 Parent
Ordinary Shares (the "Additional Consideration Shares"). The
Initial Consideration, the Cash Consideration and the
Additional Consideration shall hereinafter be referred to
collectively as the "Merger
Consideration." At the Effective Time, all Shares shall no
longer be outstanding and shall be canceled and retired and
shall cease to exist, and each certificate (a "Certificate")
formerly representing any of such Shares shall thereafter
represent only the right to the Merger Consideration.
4.1.1 Parent agrees that at the Effective Time, it shall
issue to each of the persons listed on Schedule 4.1
attached hereto the ("Management Stockholders") the
number of Parent Ordinary Shares set forth next to
each person named as a Management Stockholder on
Schedule 4.1. In addition, Parent acknowledges and
agrees that at the Effective Time, it shall issue
to the "Company Optionholders" identified on
Schedule 4.1, options exercisable for such number
of Parent Ordinary Shares set forth next to each
Company Optionholder's name, such options to have
an exercise price per share equal to the closing
price per share of Parent Ordinary Shares on The
NASDAQ National Market ("NASDAQ") on the date
immediately preceding the Closing Date and no
requirement of vesting.
4.1.2 The Management Stockholders and Company
Optionholders shall be entitled to receive
Additional Consideration pursuant to the terms set
forth in Section 4.7.
4.2. Non-Transferability. Additional Consideration Payments or
delivery of Additional Consideration Shares, as the case may
be, will be delivered only to Company Stockholders who were
stockholders of record of the Company as of the Closing Date
(or, in the event of the death of any Company Stockholder, to
any of their spouses or lineal descendants or other estate
planning devices created or implemented for the purposes of
providing the economic benefits of the Shares to such spouses
or lineal descendants upon the death of the Company
Stockholder), the persons listed as Management Stockholders
on Schedule 4.1 (or, in the event of the death of any
Management Stockholder, to any of their spouses or lineal
descendants or other estate planning devices created or
implemented for the purposes of providing the economic
benefits of the Shares to such spouses or lineal descendants
upon the death of the Management Stockholder) and persons
listed as Company Optionholders on Schedule 4.1 (or, in the
event of the death of any Company Optionholder, to any of
their spouses or lineal descendants or other estate planning
devices created or implemented for the purposes of providing
the economic benefits of the Shares to such spouses or lineal
descendants upon the death of the Company Optionholder). The
right to receive any such Additional Consideration Payments
or Additional Consideration Shares, as the case may be, shall
be non-transferable and any purported transfer of such right
shall be void and of no force and effect, except the right to
receive any such Additional Consideration Payments or
Additional Consideration Shares, as the case may be, may be
transferable in the event of the death of any Company
Stockholder, Management Stockholder or Company Optionholder
to any of their spouses or lineal descendants or other estate
planning devices created or implemented for the purposes of
providing the economic benefits
of the Shares to such spouses or lineal descendants upon the
death of the Company Stockholder, Management Stockholder or
Company Optionholder.
4.3. Deleted.
4.4. Merger Sub. At the Effective Time, each share of Common
Stock, par value $1.00 per share, of Merger Sub that is
issued and outstanding immediately prior to the Effective
Time shall be converted into one share of common stock of the
Surviving Corporation.
4.5. Cancellation of Stock Options and Warrants and Stock Plans.
At the Effective Time, each outstanding option to purchase
Shares (a "Company Option") under the Stock Plans, whether
vested or unvested, shall be canceled without further action
and each outstanding warrant or similar security or right
exercisable or exchangeable for Shares (a "Company Warrant")
shall be canceled without further action. On or prior to the
Effective Time, the Company shall take all corporate action
necessary to cancel, concurrent with the Merger, the Stock
Plans and any agreements between any holders of Company
Options or Company Warrants and the Company; provided,
however, the effectiveness of such actions by the Company may
be conditioned upon the Closing.
4.6. Delivery of Certificates. As of the Closing Date, the Company
shall cause all Certificates to be delivered to the location
where the Closing will occur. Each Certificate shall be
delivered with its stock power executed in favor of Parent.
Parent shall cancel the Certificates, and, on or immediately
after the Effective Time, Parent shall mail or cause to be
mailed to the previous holders of the Certificates, at the
addresses designated by such holders, certificates
representing that number of whole Parent Ordinary Shares that
such holders are entitled to receive pursuant to payment of
the Initial Consideration.
4.7. Delivery of Additional Consideration. Subject to satisfaction
or waiver of the relevant provisions of Section 10 below, the
Additional Consideration shall be delivered to the Company
Stockholders, Management Stockholders and Company
Optionholders pursuant to a second closing (the "Second
Closing") to be held no later than 90 days after the Closing
Date. Unless Parent is unable to obtain any required approval
of its shareholders for the issuance of the Additional
Consideration Shares, Parent shall deliver the Additional
Consideration Shares as the Additional Consideration,
provided that if Parent delivers Additional Consideration
Shares as the Additional Consideration, the Additional
Consideration Shares which would otherwise be deliverable to
a Company Optionholder pursuant to this Section 4.7 shall be
delivered in the form of options exercisable for such number
of Parent Ordinary Shares which have an exercise price equal
to the closing price per share of Parent Ordinary Shares on
NASDAQ on the date immediately preceding the Second Closing
and no requirement of vesting. Parent covenants and agrees
that following the Closing, it will submit to its
shareholders, as quickly as possible, the matter of the
issuance of the Additional Consideration Shares for approval
and will use its best efforts to obtain such approval. The
delivery of the Additional Consideration at the Second
Closing shall be made by Parent to the
Company Stockholders, the Management Stockholders and the
Company Optionholders. Any cash payments made by Parent to
the Company Stockholders, Management Stockholders and Company
Optionholders at the Second Closing shall be made by wire
transfer to a previously designated account of such Company
Stockholder, Management Stockholder or Company Optionholder.
The Additional Consideration to be delivered to each Company
Stockholder, Management Stockholder and Company Optionholder
shall equal (subject to any reduction by reason of Section
5.24) the amount of cash or number of Parent Ordinary Shares
set beside each Person's name and below the column Second
Closing on Scheulde 4.1.
4.8. Legends. It is understood that the certificates evidencing
the Parent Ordinary Shares issued to the holders of Shares in
return for the surrender of their Certificates shall bear one
or all of the following legends:
4.8.1. "These securities have not been registered under
the Securities Act of 1933. They may not be sold,
offered for sale, pledged or hypothecated in the
absence of a registration statement in effect with
respect to the securities under such Act or an
opinion of counsel satisfactory to the Company that
such registration is not required."
4.8.2. "The holder of this security registered with the
Company is that which is noted on the face of this
security. Such holder has entered into an agreement
with the Company in which such holder has agreed
not to sell, offer to sell, pledge, hypothecate or
otherwise transfer the shares represented by this
security for a limited period of time."
4.8.3. Any legend required by the "blue sky" or securities
laws of any state.
4.9. Dissenters' Rights. Pursuant to Section 8.6, each Company
Stockholder shall agree that it waives any rights or claims
relating to any dissenters' or similar rights in connection
with the Merger and that it will not have a right to exercise
any dissenters' or similar rights in connection with such
Merger.
4.10. Tax Treatment. The parties acknowledge and agree that they
intend for the Merger to be a taxable transaction for U.S.
federal income tax purposes. The parties note that the use of
a second tier subsidiary by Parent for purposes of
effectuating the transaction, and the payment of a portion of
the consideration in cash were done with the intention that
such actions would cause the transaction to become taxable
for US income tax purposes and cause the transaction not to
qualify as a "reorganization" within the meaning to Sec. 368
of the Internal Revenue Code of 1986 (the "Code"). The
parties also acknowledge that each "five-percent transferee
shareholder" within the meaning of Treasury Regulations
section 1.367(a)-3(c)(5)(ii) does not intend to file a gain
recognition agreement (as described in Treasury Regulations
section 1.367(a)-8) and that such failure to file such gain
recognition agreement was intentional on the part of each
such five-percent transferee shareholder and with the
expectation that the transaction would be taxable to each
such five-percent transferee shareholder. The parties agree
to file U.S. federal income tax returns in a manner
consistent with the treatment of the Merger as a taxable
transaction for U.S. federal income tax purposes, unless
otherwise advised in writing by (i) a Governmental Authority,
or (ii) such party's tax and/or legal advisors, that
under applicable law, such returns should be filed in a
manner inconsistent with such treatment. Each party agrees to
use reasonable efforts to notify the other parties to the
Agreement in writing promptly if such party is notified in
writing by a Governmental Authority or by its tax and/or
legal advisor that the Governmental Authority or such tax
and/or legal advisor is asserting or concluding that the
Merger is a reorganization under the Code and is, therefore,
not currently taxable and will take reasonable efforts to
consult with the other parties to this Agreement as to
whether and how to respond to such advice prior to filing any
such return or amending any previously filed returns. Each of
the Company and the Company Stockholders (i) acknowledges and
agrees that it is not relying upon Parent, Merger Sub, the
Company or any Representative thereof as to any opinion
regarding the tax treatment or tax consequences of the
Merger, and (ii) for good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged, on
behalf of itself and each of its Representatives, releases
and forever discharges the Parent, Merger Sub, the Company or
any Representative thereof from any and all claims, demands,
proceedings or causes of action relating to any actions by
the Parent, Merger Sub, the Company or any Representative
taken in accordance with this Section 4.10
5. Representations and Warranties of the Company
The Company hereby represents and warrants, to and for the benefit of
Parent and Merger Sub, (any reference to the Company shall be also
deemed to include the Subsidiaries, as defined in Section 5.1.5 below)
that the statements contained in this Section 5 are correct and
complete as of the date of this Agreement, except as set forth in the
disclosure schedule attached hereto as Schedule 5 (the "Disclosure
Schedule"). The Disclosure Schedule shall be deemed adequate to
disclose an exception to a representation or warranty made only to the
extent that the Disclosure Schedule identifies the exception with
particularity and describes the relevant facts in reasonable detail,
provided that an item adequately described on a Schedule shall be
adequately described by any cross-reference to such Schedule.
5.1. Due Organization; Subsidiaries; Etc.
5.1.1. The Company is duly organized, validly existing and
in good standing under the laws of the State of
Georgia. The Company has all requisite corporate
power and authority to conduct its business in the
manner in which its business is currently being
conducted and to own and use its assets in the
manner in which its assets are currently owned and
used.
5.1.2. The Company has not conducted any business under or
otherwise used, for any purpose or in any
jurisdiction, any fictitious name, assumed name,
trade name or other name, other than the name
"iMedeon" or "Future Horizons".
5.1.3. The Company is not and has not been required to be
qualified, authorized, registered or licensed to do
business as a foreign corporation in any
jurisdiction, except where the failure to be so
qualified, authorized, registered or licensed has
not had and will not have a Material Adverse Effect
on the Company.
5.1.4. Part 5.1.4 of the Disclosure Schedule accurately
sets forth (i) the names of the members of the
Company's board of directors, (ii) the names of the
members of each committee of the Company's board of
directors, and (iii) the names and titles of the
Company's officers.
5.1.5. The Company does not own, directly or indirectly,
any controlling interest in any entity and the
Company has never owned, beneficially or otherwise,
any shares or other securities of, or any direct or
indirect equity interest in, any entity (a
"Subsidiary"). Each of the Subsidiaries is duly
organized, validly existing and in good standing
under the laws of the state of its incorporation
and has all requisite corporate power and authority
to conduct its business in the manner in which its
business is currently being conducted and to own
and use its assets in the manner in which its
assets are currently owned and used. The Company
owns, beneficially and of record, all of the issued
and outstanding share capital of each Subsidiary
and all rights thereto free and clear of liens,
claims, charges and other encumbrances and all
rights, options to purchase, proxies, voting
agreements, calls or commitments of every kind. The
Company has not agreed and is not obligated to make
any future investment in or capital contribution to
the Subsidiaries or any entity. The Company has not
guaranteed and is not responsible or liable for any
obligation of the Subsidiaries or any of the
entities in which it owns or has owned any equity
interest. All issued and outstanding share capital
of each Subsidiary was duly authorized and is
validly issued and outstanding, fully paid and
non-assessable.
5.2. Charter Documents; Records. The Company has delivered to
Parent accurate and complete copies of: (A) Charter documents
of the Company, including all amendments thereto; (B) the
stock records of the Company; and (C) the minutes and other
records of the meetings and other proceedings (including any
actions taken by written consent or otherwise without a
meeting) of the stockholders of the Company, the board of
directors of the Company and all committees of the board of
directors of the Company. There have been no formal meetings
or other proceedings of the stockholders of the Company, the
board of directors of the Company or any committee of the
board of directors of the Company that are not fully
reflected in such minutes or other records. Except as set
forth in Part 5.2 of the Disclosure Schedule, there has not
been any violation of any of the provisions of the Company's
Charter documents, nor has the Company taken any action that
is inconsistent with any resolution adopted by the Company's
stockholders, the Company's board of directors or any
committee of the Company's board of directors, which would
have a Material Adverse Effect on the Company. Except as set
forth in Part 5.2 of the Disclosure Schedule, the books of
account, stock records, minute books and other records of the
Company are accurate, up-to-date and complete in all material
respects, and have been maintained in accordance with prudent
business practices.
5.3. Capitalization. The authorized share capital of the Company
immediately prior to the Closing shall be 28,112,968
consisting of (i) 20,588,186 shares of Common Stock no par
value per share, of which 5,918,730 shares are issued and
outstanding (the "Common Stock"), (ii) 577,186 share of
Series A Convertible Participating Preferred Stock, no par
value per share, of which 448,552 are issued and outstanding
(the "Series A Preferred Stock"), and (iii) 6,197,596 shares
of Series B Redeemable Convertible Participating Preferred
Stock, no par value per share, of which 5,084,524 are issued
and outstanding (the "Series B Preferred Stock" and,
collectively with the Common Stock and the Series A Preferred
Shares, the "Company Shares"). All issued and outstanding
Company Shares were duly authorized and are validly issued
and outstanding, fully paid and non-assessable. The issued
and outstanding share capital of the Company, on a fully
diluted and as-converted basis taking into consideration all
convertible or exchangeable securities and other interests in
the Company is set forth in Part 5.3 of the Disclosure
Schedule. Except as set forth in Part 5.3 of the Disclosure
Schedule, at the Closing Date, there are not any outstanding
or authorized subscriptions, options, warrants, calls,
rights, commitments, convertible securities, or any other
agreements of any character directly or indirectly obligating
the Company to issue any of its shares or any securities
convertible into, or exchangeable for, or evidencing the
right to subscribe for, any shares of the Company.
5.4. Financial Statements.
5.4.1. The Company has delivered to Parent the following
financial statements and notes (collectively, the
"Company Financial Statements"):
5.4.1.1. The consolidated audited balance sheets
of the Company as of December 31, 1999,
and 2000, and the related audited
statements of operations and statements
of stockholders' equity of the Company
for the years then ended, together with
the notes thereto and the unqualified
report and opinion of a recognized firm
of independent certified accountants
relating thereto;
5.4.1.2. the unaudited balance sheet of the
Company as of December 31, 2001 (the
"Unaudited Balance Sheet"), and the
related unaudited statement of operations
of the Company for the twelve months then
ended; and
5.4.1.3. A trial balance sheet dated as of
January 31, 2002 (the "Trial Balance
Sheet").
5.4.2. The Company Financial Statements are accurate and
complete in all material respects and present
fairly the financial position of the Company as of
the respective dates thereof and the results of
operations of the Company for the periods covered
thereby. The Company Financial Statements have been
prepared in accordance with US generally accepted
accounting principles consistently applied
throughout the periods covered and comply with the
requirements of all applicable US regulations,
except
that the Unaudited Balance Sheet and the Trial
Balance Sheet may not contain all footnotes
required by generally accepted accounting
principles or normal year-end adjustments.
5.4.3. All proper and necessary books of account, minute
books, registers and records have been maintained
by the Company, are in its possession and contain
accurate information relating to all material
transactions to which the Company has been a party,
except where the failure to maintain such books of
account, minute books, registers and records would
not have a Material Adverse Effect on the Company.
5.4.4. A complete list of the Company's debts and loan
facilities as of the date of the Balance Sheet, is
set forth in Part 5.4.4 of the Disclosure Schedule.
5.5. Absence of Changes. Except as set forth in Part 5.5 of the
Disclosure Schedule, since December 31, 2001:
5.5.1. there has not been any material adverse change in
the Company's business, prospects, operations,
assets, liabilities, debts, work force or its
condition (financial or otherwise) and no event has
occurred that will, or could reasonably be expected
to, have a Material Adverse Effect on the Company;
5.5.2. there has not been any material loss, damage or
destruction to, or any material interruption in the
use of, any of the Company's assets (whether or not
covered by insurance);
5.5.3. the Company has not declared, accrued, set aside or
paid any dividend or made any other distribution in
respect of any shares of capital stock, and has not
repurchased, redeemed or otherwise reacquired any
shares of capital stock or other securities;
5.5.4. except as set forth in Part 5.3 of the Disclosure
Schedule, the Company has not sold, issued or
authorized the issuance of (i) any capital stock or
other security, (ii) any option or right to acquire
any capital stock or any other security or (iii)
any instrument convertible into or exchangeable for
any capital stock or other security;
5.5.5. the Company has not amended or waived any of its
rights under, or permitted the acceleration of
vesting under, (i) any provision of employee
options plans (written or oral), (ii) any provision
of any agreement evidencing any outstanding Option,
or (iii) any restricted stock purchase agreement;
5.5.6. except as required by this Agreement, there has
been no amendment to the Company's charter
documents, and the Company has not effected or been
a party to any recapitalization, reclassification
of shares, stock split, reverse stock split or
similar transaction;
5.5.7. the Company has not formed any subsidiary or
acquired any equity interest or other interest in
any other Entity;
5.5.8. the Company has not made any capital expenditure
which, when added to all other capital expenditures
made on behalf of the Company since such date,
exceeds $10,000;
5.5.9. the Company has not (i) entered into or permitted
any of the assets owned or used by it to become
bound by any Contract that is or would constitute a
Material Agreement (as defined in Section 5.10), or
(ii) amended or prematurely terminated, or waived
any material right or remedy under, any such
Contract;
5.5.10. the Company has not (i) acquired, leased or
licensed any right or other asset from any other
Person, (ii) sold or otherwise disposed of, or
leased or licensed, any right or other asset to any
other Person, or (iii) waived or relinquished any
right, except for immaterial rights or other
immaterial assets acquired, leased, licensed or
disposed of in the ordinary course of business and
consistent with the Company's past practices;
5.5.11. the Company has not written off as uncollectible,
or established any extraordinary reserve with
respect to, any account receivable or other
indebtedness;
5.5.12. the Company has not made any pledge of any of its
assets or otherwise permitted any of its assets to
become subject to any Encumbrance, except for
pledges of immaterial assets made in the ordinary
course of business and consistent with the
Company's past practices;
5.5.13. the Company has not (i) lent money to any Person,
or (ii) incurred or guaranteed any indebtedness for
borrowed money;
5.5.14. the Company has not (i) established or adopted any
employee benefit plan, (ii) paid any bonus or made
any profit-sharing or similar payment to, or
increased the amount of the wages, salary,
commissions, fringe benefits or other compensation
or remuneration payable to, any of its directors,
officers or employees, or (iii) hired any new
employees;
5.5.15. there has been no resignation or termination of
employment of any officer or key employee of the
Company;
5.5.16. the Company has not changed any of its methods of
accounting or accounting practices in any respect;
5.5.17. the Company has not made any Tax election;
5.5.18. the Company has not commenced or settled any Legal
Proceeding;
5.5.19. the Company has not entered into any transaction or
taken any other action outside the ordinary course
of business or inconsistent with its past
practices; and
5.5.20. the Company has not agreed or committed to take any
of the actions referred to in clauses 5.5.3 through
5.5.19 above.
5.6. Properties and Assets. Full and accurate details of the
Company's material properties and assets are contained in
Part 5.6 of the Disclosure Schedule. Except as disclosed in
Part 5.6 of the Disclosure Schedule or in the notes to the
Company Financial Statements, the Company has good title to
its assets, including without limitation those reflected in
the Company Financial Statements, free and clear of any
right, interest or equity of any individual or entity
(including any right to acquire, option, or right of
preemption) or any mortgage, charge, pledge, Lien, or
assignment, or any other encumbrance or security interest or
arrangement of whatsoever nature over or in the relevant
property ("Security Interests"). With respect to the assets
that are leased, the Company is in compliance with all
material provisions of such leases, such leases are valid and
binding, and, to the best of its knowledge, the Company holds
leasehold interests in such assets free and clear of all
Security Interests, except for Security Interests that, both
individually and in the aggregate, would not have a material
adverse effect on the Company.
5.7. Bank Accounts; Receivables.
5.7.1. Part 5.7.1 of the Disclosure Schedule provides
accurate information with respect to each account
maintained by or for the benefit of the Company at
any bank or other financial institution.
5.7.2. Part 5.7.2 of the Disclosure Schedule provides an
accurate and complete breakdown of all accounts
receivable, notes receivable and other receivables
of the Company as of February 7, 2002. Except as
set forth in Part 5.7.2 of the Disclosure Schedule,
all existing accounts receivable of the Company
(including those accounts receivable reflected on
the Unaudited Balance Sheet that have not yet been
collected and those accounts receivable that have
arisen since February 7, 2002 and have not yet been
collected) (i) represent valid obligations of
customers of the Company arising from bona fide
transactions entered into in the ordinary course of
business, (ii) are current and, to the Company's
best knowledge, will be collected in full when due,
without any counterclaim or set off.
5.8. Equipment; Leasehold.
5.8.1. All material items of equipment and other tangible
assets owned by or leased to the Company are
adequate for the uses to which they are being put,
are in good condition and repair (ordinary wear and
tear excepted) and are adequate for the conduct of
the Company's business in the manner in which such
business is currently being conducted.
5.8.2. The Company does not own any real property or any
interest in real property, except for the leasehold
created under the real property lease identified in
Part 5.10 of the Disclosure Schedule.
5.9. Intellectual Property and Other Intangible Assets.
5.9.1. As used herein, the term "Company Intellectual
Property" shall mean all registered patents,
designs, copyrights and trademarks, all
applications for registration thereof, and all
computer programs including, but not
limited to, computer programs embodied in
semiconductor chips, and related flow-charts,
programmer notes, updates and data, whether in
object or source code form, developed, or used in
connection with the business of the Company, and
all hardware, algorithms, utilities flowcharts,
logic, documentation, processes, formulations,
data, experimental methods, or results,
descriptions, business or scientific plans,
depictions, customer lists and any other written,
printed or electronically stored materials or
information, including specifications, pricing
plans, market research or data, potential marketing
strategies, prospective users and distribution
channels, engineering drawings, information
concerning specialized suppliers, specifications
for products and/ or processes and/or software,
test protocols, and all other materials relating
thereto, and copies thereof in any storage media,
and all other works of authorship, inventions,
concepts, ideas, and discoveries developed,
discovered, conceived, created, made, reduced to
practice, or used by the Company and all
intellectual property rights therein, including,
without limitation, all copyrights in the United
States and elsewhere, including all rights of
registration and publication, rights to create
derivative works, and all other rights incident to
copyright ownership, for the residue now unexpired
of the present term of any and all such copyrights
and any term thereafter granted during which such
information is entitled to copyright, and all
inventions (patentable or unpatentable), trade
secrets, know-how, ideas and confidential
information embodied or reflected in such
information, including any shop rights, for the
longest period of protection accorded to such
interests under applicable law.
5.9.2. Except as specifically set forth in Part 5.9.2 of
the Disclosure Schedule, (i) the Company owns or
has the right to use, free and clear of all Liens,
claims and restrictions the Company Intellectual
Property used in the conduct of its business or
deemed by the Company necessary for use in the
conduct of its business as presently conducted,
(ii) to the best of the Company's knowledge, such
Company Intellectual Property does not infringe
upon or violate any right, lien, or claim of
others, including without limitation, its present
or former employees or the former employers of all
such persons. Except as set forth in Part 5.9.2 of
the Disclosure Schedule, the Company is not
currently obligated or under any liability
whatsoever to make any payments by way of
royalties, fees or otherwise to any owner or
licensee of, or other claimant to, any patent,
trademark, service xxxx, trade name, copyright or
other intangible asset, with respect to the use
thereof or in connection with the conduct of its
business or otherwise.
5.9.3. Any and all Company Intellectual Property of any
kind which has been developed or is currently being
developed by any of the Company or any employees of
the Company (but as to employees including only
Company Intellectual Property which is developed by
such employees while such
employees are employed by the Company and which is
developed by such employees within the scope of
their employment with the Company) shall be the
property solely of the Company. The Company has
taken security measures to protect the secrecy and
confidentiality of all the Company Intellectual
Property, which measures are reasonable and
customary in the industry in which the Company
operates. Each person who, either alone or in
concert with others, developed, invented,
discovered, derived, programmed or designed the
Company Intellectual Property, or who has knowledge
of or access to information about the Company
Intellectual Property, has entered into a written
non-disclosure agreement with the Company regarding
ownership and treatment of the Company Intellectual
Property, in a form reasonably satisfactory to the
Company.
5.9.4. Neither the Company nor any of its directors,
officers or employees has received any
communications alleging that the Company has
violated or by conducting its business as currently
conducted, would violate, any of the patents,
trademarks, service marks, trade names, copyrights
or trade secrets or other proprietary rights of any
other person or entity. Neither the Company nor any
of its directors, officers or employees has
received notice nor is it otherwise aware of any
infringement of or conflict with asserted rights of
others, with respect to any of the Company
Intellectual Property, or of any facts, or
assertion of any facts, which would render any of
the Company Intellectual Property invalid or
unenforceable.
5.9.5. To the best knowledge of the Company, none of the
Company's employees, officers or directors are
obligated under any contract (including licenses,
covenants or commitments of any nature) or other
agreement, or subject to any judgment, decree or
order of any court or administrative agency, that
would interfere with the use of such persons' best
efforts to promote the interests of the Company or
that would conflict with the Company's business as
conducted and as proposed to be conducted. To the
best knowledge of the Company, neither the
execution nor delivery of the Agreement, nor the
carrying on of the Company's business by employees
of the Company, nor the conduct of the Company's
business as proposed to be conducted, will
materially conflict with or result in a material
breach of the terms, conditions or provisions of,
or constitute a material default under, any
contract, covenant or instrument under which any of
the Company's employees, officers or directors is
now obligated. It is not currently anticipated to
become, necessary to utilize any inventions, and
specifically, patent applications, of any of the
Company's employees (or people the Company
currently intends to hire) made prior to their
employment by the Company other than those that
have been assigned to the Company pursuant to valid
and legally binding instruments of assignment.
5.9.6. The Company Intellectual Property owned by the
Company constitutes all of the Company Intellectual
Property necessary to enable the Company to
conduct its business in the manner in which such
business has been and is being conducted. Except as
set forth in Part 5.9.6 of the Disclosure Schedule,
the Company has not licensed any of the Company
Intellectual Property to any Person on an exclusive
basis, nor has the Company entered into any
covenant not to compete or Contract limiting its
ability to exploit fully any of its Company
Intellectual Property or to transact business in
any market or geographical area or with any Person.
5.10. Agreements and Trading.
5.10.1 All the material agreements to which the Company is
a party (including instruments, leases, licenses,
arrangements, or undertakings of any nature,
written or oral) (the "Material Agreements") are
listed in Part 5.10.1 of the Disclosure Schedule.
5.10.2 To the best of the Company's knowledge, and except
as set forth in Part 5.10.2 of the Disclosure
Schedule, all the Material Agreements are in full
force and effect and the Company has no knowledge
of the invalidity of or grounds for rescission,
avoidance or repudiation of any of the Material
Agreements and, except as set forth in Part 5.10.2
of the Disclosure Schedule, the Company has not
received any notice of any intention to terminate
any such agreement.
5.10.3 To the best of the Company's knowledge and other
than as set forth in Part 5.10.3 of the Disclosure
Schedule, the Company and all third parties with
whom it has transacted business have performed in
all respects all of their material obligations
under the Material Agreements, except for such
non-performance that, both individually and in the
aggregate, would not have a Material Adverse Effect
on the Company. To the best of the Company's
knowledge, and except as set forth in Part 5.10.3
of the Disclosure Schedule, no party to any of the
Material Agreements is in breach or in default in
any respect of its material obligations thereunder.
Except as set forth in Part 5.10.3 of the
Disclosure Schedule, no party to any of the
material Agreements has made a claim of which the
Company is aware to the effect that the Company has
failed to perform a material obligation thereunder.
5.10.4. Except as set forth in Part 5.10.4 of the
Disclosure Schedule, there are no agreements,
promises or understandings in force restricting the
competitive freedom of the Company to provide and
take goods and services by such means and from and
to such individuals or entities as it may from time
to time think fit.
5.10.5. The Company has delivered to Parent accurate and
complete copies of all written Material Agreements
identified in Part 5.10.5 of the Disclosure
Schedule, including all amendments thereto. Part
5.10.5 of the Disclosure Schedule provides an
accurate description of the terms of each Material
Agreement that is not in written form. Each
Material Agreement identified in Part 5.10.1 of the
Disclosure Schedule is valid and in full
force and effect, and, to the Company's best
knowledge, is enforceable by the Company in
accordance with its terms, subject to (i) laws of
general application relating to bankruptcy,
insolvency and the relief of debtors, and (ii)
rules of law governing specific performance,
injunctive relief and other equitable remedies.
5.10.6. Except as set forth in Part 5.10.6 of the
Disclosure Schedule:
5.10.6.1. the Company has not violated or breached,
or committed any material default under,
any Material Agreement, and, to the
Company's best knowledge, no other Person
has violated or breached, or committed
any material default under, any Material
Agreement;
5.10.6.2. no event has occurred, and no
circumstance or condition exists, that
(with or without notice or lapse of time)
will, or could reasonably be expected to,
(A) result in a material violation or
breach of any of the provisions of any
Material Agreement, (B) give any Person
the right to declare a material default
or exercise any remedy under any Material
Agreement, (C) give any Person the right
to accelerate the maturity or performance
of any Material Agreement, or (D) give
any Person the right to cancel, terminate
or modify any Material Agreement;
5.10.6.3. the Company has not received any notice
or other communication regarding any
actual or possible material violation or
breach of, or material default under, any
Material Agreement; and
5.10.6.4. the Company has not waived any of its
rights under any Material Agreement.
5.10.7. No Person is renegotiating, or has a right pursuant
to the terms of any Material Agreement to
re-negotiate, any amount paid or payable to the
Company under any Material Agreement or any other
material term or provision of any Material
Agreement.
5.10.8. The Material Agreements identified in Part 5.10.1
of the Disclosure Schedule collectively constitute
all of the Contracts necessary to enable the
Company to conduct its business in the manner in
which its business is currently being conducted.
5.10.9. Part 5.10.9 of the Disclosure Schedule identifies
and provides a brief description of each material
proposed Contract as to which any bid, offer,
award, written proposal, term sheet or similar
document has been submitted or received by the
Company regarding the business of the Company since
June 30, 2001, or which is otherwise still pending.
5.10.10. Part 5.10.10 of the Disclosure Schedule provides an
accurate description and breakdown of the Company's
backlog under Material Agreements.
5.11. Capital Expenditure and Commitments. Except as disclosed in
Part 5.11 of the Disclosure Schedule or in the Company
Financial Statements:
5.11.1. The Company has not undertaken to make any
material capital commitment, expenditure or
purchase in excess of $10,000.
5.11.2. The Company is not a party to any material hire,
hire purchase, credit sale or conditional sale
agreement or any contract providing for payment
on deferred terms in respect of assets purchased
by the Company.
5.11.3. The Company is not in breach of any material
obligation under any material deed, agreement or
transaction to which it is a party, and to the
best of its knowledge, no third party that has
transacted business with the Company is in
breach of any of its material obligations under
any material deed, agreement, or transaction
with the Company to which it is a party.
5.11.4. The Company is not aware of any Security Interest
on, over or affecting the issued or unissued
share capital of the Company and there is no
agreement or commitment to give or create any
such Security Interest and no claim has been
made by any Person to be entitled to any such
Security Interest.
5.11.5. The Company has not given any guarantee,
indemnity or security for, or otherwise agreed to
become directly or contingently liable for, any
obligation of any other individual or entity,
except in its ordinary course of business, and to
the best of its knowledge, no individual or
entity has given any guaranty of or security for
any of the Company's obligations.
5.11.6. There are in force no powers of attorney given by
the Company with respect to any asset or business
of the Company, and no individual or entity, as
agent, representative, distributor or otherwise,
is entitled or authorized to bind or commit the
Company to any obligation not in the ordinary
course of the Company's business.
5.11.7. The Company has not applied for or received any
grant or allowance from any governmental
authority.
5.12. Compliance with Legal Requirements.
5.12.1. To the best of its knowledge, information and
belief, the Company has carried on its business
and affairs in all material respects in
accordance with all applicable laws and
regulations, to the extent material to the
Company's business or assets, including, inter
alia, in accordance with the provisions of the
GCL, and in accordance with the Company's charter
documents, and, the Company is not aware of any
material violation or default with respect to any
statute, regulation, order, decree, or judgment
of any court or any governmental agency which
could have a material adverse effect upon the
Company's assets or business, and the Company has
been granted and there are now in force all
material approvals, consents, and licenses
necessary for the carrying on of its business in
the places and in the manner in which it is now
carried on, and, the Company
is not aware of any circumstances which evidence
or indicate that any such approvals, consents or
licenses, to the extent material to the
Company's business or assets, are likely to be
suspended, canceled, revoked or not renewed.
5.12.2. The copy of each of the charter documents of the
Company provided to Parent, is complete, true
and accurate and has not been amended or
repealed.
5.12.3. All documents required to be filed with or
delivered to the applicable Georgia or federal
authorities in respect of the Company have been
properly filed or delivered in a timely manner,
except for such non compliance that, both
individually and in the aggregate, would not
have a Material Adverse Effect on the Company.
5.13. Governmental Authorizations. Part 5.13 of the Disclosure
Schedule identifies each material Governmental Authorization
held by the Company, and the Company has delivered to Parent
accurate and complete copies of all Governmental
Authorizations identified in Part 5.13 of the Disclosure
Schedule. The Governmental Authorizations identified in Part
5.13 of the Disclosure Schedule are valid and in full force
and effect, and collectively constitute all Governmental
Authorizations necessary to enable the Company to conduct its
business in the manner in which its business is currently
being conducted. Except as set forth in Part 5.13 of the
Disclosure Schedule, the Company is and has been in
substantial compliance with the terms and requirements of the
respective Governmental Authorizations identified in Part
5.13 of the Disclosure Schedule. The Company has not received
any notice or other communication from any Governmental Body
regarding (a) any actual or possible violation of or failure
to comply with any term or requirement of any Governmental
Authorization, or (b) any actual or possible revocation,
withdrawal, suspension, cancellation, termination or
modification of any Governmental Authorization.
5.14. Tax Matters.
5.14.1. To the best of the Company's knowledge, the
Company Financial Statements make full
provisions for all Taxes for which the Company
was then or thereafter became or may hereafter
become liable or accountable in respect of or by
reference to any income, profit, receipt, gain,
transaction, agreement, distribution or event
which was earned, accrued, received, or
realized, entered into, and the Company promptly
paid or fully provided in its books of account
for all Taxes for which it has or may hereafter
become liable or accountable in the period from
the date of its incorporation to the Closing
Date.
5.14.2. To the best of the Company's knowledge, the
Company has at all times and within the
requisite time limits promptly, fully and
accurately observed, performed and complied with
all material obligations or conditions imposed
on it, or to which any claim, deduction,
allowance or relief made, claimed by or afforded
to it was made subject, under any
legislation relating to Taxes, except for such
non-compliance that, both individually and in
the aggregate, would not have a Material Adverse
Effect on the Company.
5.14.3. The Company is not aware of any circumstances
which will or may, whether by lapse of time or
the issue of any notice of assessment or
otherwise, give rise to any dispute with any
relevant Government Body in relation to its
liability or accountability for Taxes, any claim
made by it, any relief, deduction, or allowance
afforded to it, or in relation to the status or
character of the Company or any of its
enterprises under or for the purpose of any
provision of any legislation relating to Taxes,
except for such dispute or claim that, both
individually and in the aggregate, would not
have a Material Adverse Effect on the Company.
5.15. Employees.
5.15.1. Full particulars of all the officers, employees
and consultants of the Company (each, an
"Employee"), including their present
compensation packages, are disclosed in Part
5.15.1 of the Disclosure Schedule, which
particulars show all material benefits
including, without limitation, salaries,
directors' fees, social benefits, bonuses,
commissions, profit shares, automobile,
reimbursement of expenses and benefits in kind
("Benefits") payable or which the Company is
bound to provide (whether now or in the future)
to each officer, employee and consultant of the
Company and are true, accurate and complete.
None of the Employees is entitled to any bonuses
(whether in cash or otherwise) in connection
with his/her employment during 2001 and the
Company did not undertake, whether in writing or
otherwise, to grant any of the Employees bonuses
in connection with 2001.
5.15.2. Except as set forth in Part 5.15.2 of the
Disclosure Schedule, no key employee of the
Company has been dismissed in the last six
months or has given notice of termination of his
employment.
5.15.3. Subject to the provisions of any applicable
Georgia law and binding custom and except as set
forth in Part 5.15.1 of the Disclosure Schedule,
there are no agreements or arrangements (whether
legally enforceable or not) for the payment of
any pensions, allowances, lump sums, or other
like benefits on retirement or on death or
termination or during periods of sickness or
disablement for the benefit of any officer or
former officer or employee or former employee of
the Company or for the benefit of the dependents
of any such individual in operation at the date
hereof.
5.15.4. Except as set forth in Part 5.15.3, all the
Benefits to which any officer or former officer
or employee or former employee of the Company is
or may be entitled including, inter alia,
severance pay, leave and health, have been paid
or adequately provided for in the Company
Financial Statements.
5.15.5. A complete list of all of the options granted to
employees, directors, officers or consultants of
the Company, and their respective vesting
schedules, is set forth in Part 5.15.5 of the
Disclosure Schedule. Except as set forth
therein, the Company does not operate any share
incentive scheme, share option scheme or profit
sharing scheme for the benefit of any of its
directors, officers, employees or consultants.
5.15.6. Except as set forth in Part 5.15.3 of the
Disclosure Schedule, neither the execution,
delivery or performance of this Agreement, nor
the consummation of any of the other
transactions contemplated by this Agreement,
will result in any payment (including any bonus,
golden parachute or severance payment) to any
current or former Employee or director of the
Company (whether or not under any option plan
(written or oral), or materially increase the
benefits payable under any option plan (written
or oral) or result in any acceleration of the
time of payment or vesting of any such benefits,
except as provided therein.
5.15.7. Part 5.15.1 of the Disclosure Schedule contains
a list of all salaried employees of the Company
as of the date of this Agreement, and correctly
reflects, in all material respects, their
salaries, any other compensation payable to them
(including compensation payable pursuant to
bonus, deferred compensation or commission
arrangements), their dates of employment and
their positions.
5.15.8. No Employee is not fully available to perform
work because of disability or other leave.
5.15.9. The Company is in compliance in all material
respects with all applicable Legal Requirements
and Contracts relating to employment, employment
practices, wages, bonuses and terms and
conditions of employment, including employee
compensation matters.
5.15.10. The Company is not aware of any organizational
campaigns, petitions or other unionization
activities seeking recognition of a collective
bargaining unit which could affect the Company;
nor is the Company aware of any controversies,
strikes, slowdowns or work stoppages pending or
threatened between the Company and any of its
employees. To the Company's best knowledge, the
consummation of any of the transactions
contemplated by this Agreement will not have a
material adverse effect on the Company's labor
relations, and none of the Company's key
employees has notified the Company of any
intention to terminate his or her employment
with the Company.
5.16. Insurance.
5.16.1. Full and accurate details of the Company's
insurance policies are contained in Part 5.16.1
of the Disclosure Schedule, including such
policies as are required under the Company's
agreements with its customers.
5.16.2. The Company has the benefit of adequate
insurance against all risks and losses usually
insured against by companies carrying on the
same or a similar business and (without
prejudice to the generality of the foregoing)
for the full replacement or reinstatement value
of all its assets of an insurable nature and
against accident, damage, injury, third party
loss (including product liability) and loss of
profits with a well established and reputable
insurer.
5.16.3. The Company has not done anything or suffered
any damage which has rendered or might render
any policies of insurance taken out by it void
or voidable or which might result in an increase
in premiums and the Company has complied with
all conditions attached to such policies.
5.16.4. There is no claim outstanding under any of such
policies nor, to the best of the Company's
knowledge, are there any circumstances likely to
give rise to such a claim.
5.17. Related Party Transactions. Except as set forth in Part 5.17
of the Disclosure Schedule: (a) no Related Party has, and no
Related Party has at any time since December 31, 1998 had,
any direct or indirect interest in any material asset used in
or otherwise relating to the business of the Company; (b) no
Related Party is, or has at any time since December 31, 1998
been, indebted to the Company; (c) since December 31, 1998,
no Related Party has entered into, or has had any direct or
indirect financial interest in, any Material Agreement,
transaction or business dealing involving the Company; (d) no
Related Party is competing, or has at any time since December
31, 1998 competed, directly or indirectly, with the Company;
and (e) no Related Party has any claim or right against the
Company (other than rights under Options and rights to
receive compensation for services performed as an employee of
the Company). For purposes of this Section 5.17 each of the
following shall be deemed to be a "Related Party": (i) each
of the Company Stockholders if such person owns, or has at
any time in the past owned, an aggregate of five percent (5%)
or more of the capital stock of the Company; (ii) each
individual who is, or who has at any time since December 31,
1998 been, an officer of the Company; (iii) each member of
the immediate family of each of the individuals referred to
in clauses `(i)' and `(ii)' above; and (iv) any trust or
other Entity (other than the Company) in which any one of the
individuals referred to in clauses `(i)' `(ii)' and `(iii)'
above holds (or in which more than one of such individuals
collectively hold), beneficially or otherwise, a material
voting, proprietary or equity interest, provided, however,
that the Parent and Merger Sub acknowledge that the Company
Stockholders that are not natural Persons have made and shall
continue to make investments and participate in the
businesses, in the ordinary course of their business, in
Persons/Entities that may compete, directly or indirectly,
with the Company and the Parent, and the Parent and Merger
Sub agree that such activities shall not constitute a breach
of the representations and warranties contained in this
Section 5.17.
5.18. Legal Proceedings; Orders.
5.18.1. The Company is not involved in pending Legal
Proceeding, and, to the Company's best knowledge,
no Person has threatened to commence any Legal
Proceeding: (i) that involves the Company or any
of the assets owned or used by the Company or any
Person whose liability the Company has or may have
retained or assumed, either contractually or by
operation of law; or (ii) that challenges, or that
may have the effect of preventing, delaying,
making illegal or otherwise interfering with, any
of the transactions contemplated by this
Agreement. To the Company's best knowledge, no
event has occurred, and no claim, dispute or other
condition or circumstance exists, that will, or
that could reasonably be expected to, give rise to
or serve as a basis for the commencement of any
such Legal Proceeding.
5.18.2. Except as set forth in Part 5.18.2 of the
Disclosure Schedule, no Legal Proceeding has ever
been commenced by or has ever been pending against
the Company.
5.18.3. There is no order, writ, injunction, judgment or
decree to which the Company, or any of the assets
owned or used by the Company, is subject. To the
Company's best knowledge, no officer or other
employee of the Company is subject to any order,
writ, injunction, judgment or decree that
prohibits such officer or other employee from
engaging in or continuing any conduct, activity or
practice relating to the Company's business.
5.19. Authority; Binding Nature of Agreement. The Company has the
------------------------------------------------
absolute and unrestricted right, power and authority to enter
into and to perform its obligations under this Agreement; and
the execution, delivery and performance by the Company of
this Agreement have been duly authorized by all necessary
action on the part of the Company, its board of directors and
stockholders. This Agreement constitutes the legal, valid and
binding obligation of the Company, enforceable against the
Company in accordance with its terms, subject to (i) laws of
general application relating to bankruptcy, insolvency and
the relief of debtors, and (ii) rules of law governing
specific performance, injunctive relief and other equitable
remedies.
5.20. Non-Contravention; Consents. Neither (1) the execution,
-------------------------------------
delivery or performance of this Agreement, nor (2) the
consummation of any of the transactions contemplated by this
Agreement, will directly or indirectly (with or without
notice or lapse of time):
5.20.1. contravene, conflict with or result in a violation
of (i) any of the provisions of the Company's
charter documents, or (ii) any resolution adopted
by the Company's stockholders, the Company's board
of directors or any committee of the Company's
board of directors;
5.20.2. contravene, conflict with or result in a violation
of, or give any Governmental Body or other Person
the right to challenge any of the transactions
contemplated by this Agreement or to exercise any
remedy or obtain any relief under, any Legal
Requirement or any order, writ,
injunction, judgment or decree to which the
Company, or any of the assets owned or used by
the Company, is subject;
5.20.3. contravene, conflict with or result in a violation
of any of the terms or requirements of, or give
any Governmental Body the right to revoke,
withdraw, suspend, cancel, terminate or modify,
any Governmental Authorization that is held by the
Company or that otherwise relates to the Company's
business or to any of the assets owned or used by
the Company;
5.20.4. contravene, conflict with or result in a material
violation or breach of, or result in a material
default under, any provision of any Material
Agreement that is or would constitute a Material
Agreement, or give any Person the right to (i)
declare a default or exercise any remedy under any
such Material Agreement, (ii) accelerate the
maturity or performance of any such Material
Agreement, or (iii) cancel, terminate or modify
any such Material Agreement; or
5.20.5. result in the imposition or creation of any Lien
or Encumbrance upon or with respect to any asset
owned or used by the Company (except for minor
liens that will not, in any case or in the
aggregate, materially detract from the value of
the assets subject thereto or materially impair
the operations of the Company).
Except for the Georgia Certificate of Merger, the Company is
not and will not be required to make any filing with or give
any notice to, or to obtain any Consent from, any Person in
connection with (x) the execution, delivery or performance
of this Agreement or any of the other agreements referred to
in this Agreement, or (y) the consummation of any of the
transactions contemplated by this Agreement, other than such
filings or Consents that the lack of which can not be
reasonably expected to have a Material Adverse Effect on the
Company and the Merger.
5.21. No Conflicting Interest. Except as set forth in Part 5.21 of
---------------------------------
the Disclosure Schedule, the Company is not aware that any
director, officer, key employee or Related Party of the
Company has any interest in any corporation, partnership, or
other entity that is engaged in a business which is in
competition with that of the Company, is a supplier or
customer of the Company, or is a party to any contract which
may have any effect on the business of the Company;
provided, however, that the Parent and Merger Sub
acknowledge that the Company Stockholders that are not
natural Persons have made and shall continue to make
investments and participate in the businesses, in the
ordinary course of their business, in Persons/Entities that
may compete, directly or indirectly, with the Company and
the Parent, and the Parent and Merger Sub agree that such
activities shall not constitute a breach of the
representations and warranties contained in this Section
5.21.
5.22. Brokers. No broker, finder or investment banker, for which
-----------------
the Company or Parent may be liable, is entitled to any
brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based
upon
arrangements made by or on behalf of the Company or any of
its directors, officers, employees or agents or any of the
Company Stockholders.
5.23. Full Disclosure. This Agreement (including the Disclosure
-------------------------
Schedule) does not, (i) contain any representation, warranty
or information that is false or misleading with respect to
any material fact, or (ii) omit to state any material fact
necessary in order to make the representations, warranties
and information contained and to be contained herein and
therein (in the light of the circumstances under which such
representations, warranties and information were or will be
made or provided) not false or misleading.
5.24. Survival/Remedies. The representations and warranties
---------------------------
contained in this Section 5 shall survive the Closing Date
and shall continue in full force and effect until the
consummation of the Second Closing. Except for cases of
fraud, the sole and exclusive remedy of Parent after the
Closing with respect to any claim, loss, liability, damage,
deficiency, cost or expense (a "Loss") resulting from the
breach of representation or warranty by the Company pursuant
to this Agreement shall be to offset the amount of such Loss
against any Additional Consideration otherwise deliverable
to the Company Stockholders, Management Stockholders and
Company Optionholders; provided that such offset shall not
exceed an amount (either in cash or Parent Ordinary Shares,
as may be applicable to the Second Closing) equal to 50% of
the Additional Consideration (deducted from each Company
Stockholder, Management Stockholder and Company Optionholder
pro rata, provided that each Person's obligation hereunder
shall be limited to 50% of the Additional Consideration set
forth opposite such Person's name on Schedule 4.1). In
furtherance of the foregoing, Parent hereby waives, from and
after the Second Closing, any and all rights, claims and
causes of action it may have against the Company, or the
Company Stockholders, or any of their respective affiliates,
directors, officers or employees with respect to all Losses
arising under or based upon any law, common law, equity or
otherwise.
In the event that the Parent shall have the right to offset a
Loss in accordance with the above paragraph, and such Loss
shall be offset from the Additional Consideration Shares, the
price per each of the Additional Consideration Shares to be
offset shall be measured in accordance with a value of $0.511
per share (the "Average Closing Price").
6. Representations and Warranties of the Company Stockholders.
Each of the Company Stockholders, severally and not jointly,
represents and warrants as to itself and not as to any other Company
Stockholder, to and for the benefit of Parent and Merger Sub, that the
statements contained in this Section 6 are correct and complete as of
the date of this Agreement
6.1. Authority; Binding Nature of Agreement. Such Company
------------------------------------------------
Stockholder has the absolute and unrestricted right, power
and authority to enter into and to perform its obligations
under this Agreement; and the execution, delivery and
performance by
the Company of this Agreement have been duly authorized by
all necessary action on the part of the Stockholder. This
Agreement constitutes the legal, valid and binding
obligation of the Company Stockholder enforceable against it
in accordance with its terms, subject to (i) laws of general
application relating to bankruptcy, insolvency and the
relief of debtors, and (ii) rules of law governing specific
performance, injunctive relief and other equitable remedies.
6.2. Title to Stock. Such Company Stockholder has good title to
------------------------
its Shares and such Shares are not subject to any Security
Interests or Lien of any kind.
6.3. Investment. Such Company Stockholder (A) understands that
--------------------
the Parent Ordinary Shares have not been, and may not be in
the near future, registered under the Securities Act, or
under any state securities laws, and are being offered and
sold in reliance upon federal and state exemptions for
transactions not involving any public offering, (B) is
acquiring Parent Ordinary Shares solely for his or its own
account for investment purposes, and not with a view to the
distribution thereof, (C) is a sophisticated investor with
knowledge and experience in business and financial matters,
(D) has received certain information concerning Parent and
has had the opportunity to obtain additional information as
desired in order to evaluate the merits and the risks
inherent in holding Parent Ordinary Shares, (E) is able to
bear the economic risk and lack of liquidity inherent in
holding Parent Ordinary Shares, and (F) is an Accredited
Investor within the meaning of Regulation D promulgated
under the Securities Act.
6.4. Risk Factors. Such Company Stockholder has reviewed all of
----------------------
the risk factors detailed in the Parent SEC Documents (as
such a term is defined in Section 7.2.1 below).
6.5. No Other Representations. Except for the representations and
----------------------------------
warranties made in this Section 6, no CompanyStockholder
makes any representation or warranty as to itself or the
Company.
6.6. Survival. Except for the representations contained in
------------------
Sections 6.1 and 6.2, the representations and warranties
contained in this Section 6 shall expire on and be
terminated as of the Closing Date. Notwithstanding the
above, in the event of a fraud by a Company Stockholder
relating to the matters specified in Sections 6.1 and 6.2
above, the remedy of the Parent shall be limited to the
Parent Ordinary Shares received by the Company Stockholder
responsible for such fraud. In addition, the Parent
acknowledges that no Company Stockholder shall be liable to
any act of fraud by another Company Stockholder.
In determining the number of Ordinary Shares recoverable
from a Company Stockholder by Parent pursuant to this
Section 6.6, the value per share of each Ordinary Share
received by such Company Stockholder shall be measured in
accordance with the Average Closing Price.
7. Representations and Warranties of Parent
Parent represents and warrants to the Company that the statements
contained in this Section 7 are correct and complete as of the date of
this Agreement.
7.1. Due Organization; Subsidiaries; Etc.
---------------------------------------------
7.1.1. Parent is duly organized and validly existing
under the laws of the State of Israel. Parent has
all requisite corporate power and authority to
conduct its business in the manner in which its
business is currently being conducted and to own
and use its assets in the manner in which its
assets are currently owned and used. Merger Sub is
duly organized, validly existing and in good
standing under the laws of the State of Georgia.
Merger Sub has all requisite corporate power and
authority to conduct its business in the manner in
which its business is currently being conducted
and to own and use its assets in the manner in
which its assets are currently owned and used.
7.1.2. Except as set forth in Part 7.1.2 of the Parent
Disclosure Schedule, Parent has not conducted any
business under or otherwise used, for any purpose
or in any jurisdiction, any fictitious name,
assumed name, trade name or other name, other than
the name "ViryaNet" and "RTS".
7.1.3. Parent is not and has not been required to be
qualified, authorized, registered or licensed to
do business as a foreign corporation in any
jurisdiction, except where the failure to be so
qualified, authorized, registered or licensed has
not had and will not have a Material Adverse
Effect on Parent.
7.1.4. Part 7.1.4 of the Parent Disclosure Schedule
accurately sets forth (i) the names of the members
of Parent's board of directors, (ii) the names of
the members of each committee of the Company's
board of directors, and (iii) the names and titles
of Parent's officers.
7.1.5. Except for Merger Sub and Parent's subsidiary(ies)
set forth in Part 7.1.5 of the Parent Disclosure
Schedule (collectively, the "Parent
Subsidiaries"), Parent does not own, directly or
indirectly, any controlling interest in any entity
and Parent has never owned, beneficially or
otherwise, any shares or other securities of, or
any direct or indirect equity interest in, any
entity. Each of the Parent Subsidiaries is duly
organized, validly existing and in good standing
under the laws of the state of its incorporation
and has all requisite corporate power and
authority to conduct its business in the manner in
which its business is currently being conducted
and to own and use its assets in the manner in
which its assets are currently owned and used.
Parent owns, beneficially and of record, all of
the issued and outstanding share capital of each
Parent Subsidiary and all rights thereto free and
clear of liens, claims, charges and other
encumbrances and all rights, options to purchase,
proxies, voting agreements, calls or commitments
of every kind. Parent has not agreed and is not
obligated to make any future investment in or
capital contribution to the Parent Subsidiaries or
any entity. The Parent
has not guaranteed and is not responsible or
liable for any obligation of the Parent
Subsidiaries or any of the entities in which it
owns or has owned any equity interest. All issued
and outstanding share capital of each Parent
Subsidiary was duly authorized and is validly
issued and outstanding, fully paid and
non-assessable.
7.2. SEC Filings; Financial Statements.
-------------------------------------------
7.2.1. Parent has timely filed all required forms,
reports and documents with the SEC since becoming
a SEC reporting company on September 19, 2000,
each of which has complied in all material
respects with all applicable requirements of the
Securities Act and the Exchange Act and the rules
and regulations promulgated thereunder, each as in
effect on the dates such forms, reports, and
documents were filed. Parent has made available to
the Company and each of the Company Stockholders
accurate and complete copies (excluding copies of
exhibits) of each report, registration statement
and definitive proxy statement filed by Parent
with the SEC between such date and the date of
this Agreement (the "Parent SEC Documents"). As of
the time it was filed with the SEC (or, if amended
or superseded by a filing prior to the date of
this Agreement, then on the date of such filing)
each of the Parent SEC Documents, including any
financial statements or schedules included or
incorporated by reference therein, complied in all
material respects with the applicable requirements
of the Securities Act or the Exchange Act and the
rules and regulations promulgated thereunder (as
the case may be).
7.2.2. The consolidated financial statements contained in
the Parent SEC Documents: (i) complied as to form
in all material respects with the published rules
and regulations of the SEC applicable thereto;
(ii) were prepared in accordance with US generally
accepted accounting principles applied on a
consistent basis throughout the periods covered;
and (iii) fairly present the consolidated
financial position of Parent and its subsidiaries
as of the respective dates thereof and the
consolidated results of operations of Parent and
its subsidiaries for the periods covered thereby.
7.3. Authority; Binding Nature of Agreement. Each of Parent and
------------------------------------------------
Merger Sub has the absolute and unrestricted right, power
and authority to perform its obligations under this
Agreement. The execution, delivery and performance by each
of Parent and Merger Sub of this Agreement (including, in
relation to Parent, the contemplated issuance of Parent
Ordinary Shares as part of the Merger Consideration in
accordance with this Agreement) have been duly authorized by
all necessary action on the part of Parent and its board of
directors and by Merger Sub and its board of directors and
stockholders. Other than the issuance of the Additional
Consideration Shares pursuant to Section 4.1 above, no vote
of Parent's shareholders is needed to approve any of the
transactions contemplated by this Agreement. This Agreement
constitutes the legal, valid and binding obligation of
Parent, enforceable against it in accordance with its terms,
subject to (i) laws of general application relating to
bankruptcy, insolvency and the relief of debtors, and (ii)
rules of law governing specific performance, injunctive
relief and other equitable remedies.
7.4. Valid Issuance. The Parent Ordinary Shares to be issued in
------------------------
the transactions contemplated by this Agreement as part of
the Merger Consideration will, when and if issued in
accordance with the provisions of this Agreement, be validly
issued, fully paid and nonassessable.
7.5. Consents and Approvals. Except as set forth on Part 7.5 of
--------------------------------
the Parent Disclosure Schedule, no filing or registration
with, no notice to and no permit, authorization, consent or
approval of any third party or any Governmental Body is
necessary for the consummation by Parent of the transactions
contemplated by this Agreement.
7.6. No Violation. Neither the execution and delivery of this
----------------------
Agreement by Parent, the performance by Parent of its
obligations hereunder nor the consummation by Parent of the
transactions contemplated hereby will (a) violate, conflict
with or result in any breach of any provision of the
Articles or Memorandum of Association of Parent, (b) violate
any order, writ, judgment, injunction, decree, statute, rule
or regulation of any court or domestic or foreign
Governmental Body applicable to Parent, or (c) violate,
conflict with or result in any breach of any provisions of
any material Contract of Parent, which such violation can be
reasonably expected to have a Material Adverse Effect on the
Parent.
7.7. Legal Proceedings. Except as set forth in the Parent SEC
---------------------------
Documents or in Part 7.7 of the Parent Disclosure Schedule,
Parent is not aware of any pending Legal Proceeding, and, to
Parent's best knowledge, no Person has threatened to
commence any Legal Proceeding: (i) that involves Parent or
any of the assets owned or used by Parent or any Person
whose liability Parent has or may have retained or assumed,
either contractually or by operation of law; or (ii) that
challenges, or that may have the effect of preventing,
delaying, making illegal or otherwise interfering with, any
of the transactions contemplated by this Agreement. To
Parent's best knowledge, no event has occurred, and no
claim, dispute or other condition or circumstance exists,
that will, or that could reasonably be expected to, give
rise to or serve as a basis for the commencement of any such
Legal Proceeding.
7.8. Receipt of Information. Parent has been afforded the
--------------------------------
opportunity to ask questions of and receive answers from
duly authorized officers or other representatives of the
Company concerning the Company's business, assets and
financial position. The provisions of this Section 7.8 shall
not be deemed to derogate in any manner from the Company's
and the Company Stockholders' representations and warranties
set forth in Sections 5 and 6 above.
7.9. Non-Contravention; Consents. Except as set forth in Part 7.9
-------------------------------------
execution, delivery or performance of this Agreement, nor
(2) the consummation of any of the transactions contemplated
by this Agreement, will directly or indirectly (with or
without notice or lapse of time):
7.9.1. contravene, conflict with or result in a violation
of (i) any of the provisions of Parent's or Merger
Sub's charter documents, or (ii) any
resolution adopted by Parent's or Merger Sub's
stockholders, Parent's or Merger Sub's board of
directors or any committee of Parent's or Merger
Sub's board of directors;
7.9.2. contravene, conflict with or result in a violation
of, or give any Governmental Body or other Person
the right to challenge any of the transactions
contemplated by this Agreement or to exercise any
remedy or obtain any relief under, any Legal
Requirement or any order, writ, injunction,
judgment or decree to which Parent or Merger Sub,
or any of the assets owned or used by Parent or
Merger Sub, is subject;
7.9.3. contravene, conflict with or result in a violation
of any of the terms or requirements of, or give
any Governmental Body the right to revoke,
withdraw, suspend, cancel, terminate or modify,
any Governmental Authorization that is held by
Parent or Merger Sub or that otherwise relates to
Parent's business or to any of the assets owned or
used by Parent;
7.9.4. contravene, conflict with or result in a material
violation or breach of, or result in a material
default under, any provision of any Contract of
Parent that is or would constitute a material
Contract of Parent, or give any Person the right
to (i) declare a default or exercise any remedy
under any such Contract, (ii) accelerate the
maturity or performance of any such Contract, or
(iii) cancel, terminate or modify any such
Contract; or
7.9.5. result in the imposition or creation of any Lien
or Encumbrance upon or with respect to any asset
owned or used by Parent (except for minor liens
that will not, in any case or in the aggregate,
materially detract from the value of the assets
subject thereto or materially impair the
operations of Parent).
Except as set forth in Part 7.9 of the Parent Disclosure
Schedule, the Company is not and will not be required to
make any filing with or give any notice to, or to obtain any
material Consent from, any Person in connection with (x) the
execution, delivery or performance of this Agreement or any
of the other agreements referred to in this Agreement, or
(y) the consummation of any of the transactions contemplated
by this Agreement.
7.10. Absence of Changes. Except as provided in the Parent SEC
----------------------------
Documents or as set forth in Part 7.13 of the Parent
Disclosure Schedule, since December 31, 2001:
7.10.1. there has not been any material adverse change in
Parent's business, prospects, operations, assets,
liabilities, debts, work force or its condition
(financial or otherwise) and no event has occurred
that will, or could reasonably be expected to,
have a Material Adverse Effect on Parent;
7.10.2. there has not been any material loss, damage or
destruction to, or any material interruption in
the use of, any of Parent's assets (whether or not
covered by insurance);
7.10.3. Parent has not declared, accrued, set aside or
paid any dividend or made any other distribution
in respect of any shares of capital stock, and has
not repurchased, redeemed or otherwise reacquired
any shares of capital stock or other securities;
7.10.4. except as set forth in the Parent SEC Documents or
any issuance of incentives under Parent's stock
incentive plan, Parent has not sold, issued or
authorized the issuance of (i) any capital stock
or other security, (ii) any option or right to
acquire any capital stock or any other security or
(iii) any instrument convertible into or
exchangeable for any capital stock or other
security;
7.10.5. Parent has not amended or waived any of its rights
under, or permitted the acceleration of vesting
under, (i) any provision of employee options plans
(written or oral), (ii) any provision of any
agreement evidencing any outstanding option
exercisable into Parent Ordinary Shares, or (iii)
any restricted stock purchase agreement;
7.10.6. except as required by this Agreement, there has
been no amendment to Parent's charter documents,
and Parent has not effected or been a party to any
recapitalization, reclassification of shares,
stock split, reverse stock split or similar
transaction;
7.10.7. Parent has not changed any of its methods of
accounting or accounting practices in any respect;
7.10.8. Parent has not made any Tax election;
7.10.9. Parent has not amended or prematurely terminated,
or waived any material right or remedy under any
material Contract of Parent.
7.10.10. Parent has not made any pledge of any of its
assets or otherwise permitted any of its assets to
become subject to any Encumbrance, except for
pledges of assets made in the ordinary course of
business consistent with Parent's past practices;
and
7.10.11. Parent has not agreed or committed to take any of
the actions referred to in clauses 7.10.3 through
7.10.10 above.
7.11. Properties and Assets. Except as disclosed in Part 7.11 of
-------------------------------
the Parent Disclosure Schedule or in Parent's SEC Documents,
Parent has good title to its assets, including without
limitation those reflected in Parent SEC Documents, free and
clear of any Security Interests.
7.12. NASDAQ Listing. Parent Ordinary Shares are listed and trade
------------------------
on NASDAQ under the symbol "VRYA." Other than as set forth
in the Parent SEC Documents, Parent has not received notice
from Nasdaq (1) that it has or will suspend trading of
Parent Ordinary Shares for any reason or (2) that Parent is
not in compliance with any applicable Nasdaq Marketplace
Rules and is subject to delisting if it does not comply with
such NASDAQ Marketplace Rules.
7.13 Full Disclosure. This Agreement (including the Parent
-------------------------
Disclosure Schedule) does not, (i) contain any
representation, warranty or information that is false or
misleading with respect to any material fact, or (ii) omit
to state any material fact necessary in order to make the
representations, warranties and information contained and to
be contained herein and therein (in the light of the
circumstances under which such representations, warranties
and information were or will be made or provided) not false
or misleading.
7.14 Brokers. Except as disclosed in Part 7.14 of the Parent
-----------------
Disclosure Schedule, no broker, finder or investment banker,
for which the Company or Parent may be liable, is entitled
to any brokerage, finder's or other fee or commission in
connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of
Parent, Merger Sub or any of their respective directors,
officers, employees or agents.
7.15 Intellectual Property. Parent owns all right, title and
-------------------------------
interest to, or has the right to use pursuant to a valid and
enforceable written license, all industrial and intellectual
property rights, in any jurisdiction throughout the world,
including patents, patent applications and patent
disclosures; trademarks, trade names, service marks and
Internet domain names, and registrations and applications;
copyrights, copyright registrations and copyright
applications; know-how, trade secrets, proprietary processes
and formulae, specifications, flow charts, inventions,
instructions, marketing materials and all documentation and
media constituting, describing or relating to the foregoing,
including manuals, memoranda and records; and, computer
software (including source code and object code, data,
databases and documentation) ("Intellectual Property
Rights") necessary for its business as currently conducted
(the "Parent Intellectual Property Rights"). Parent has not
received any written notice (including any cease and desist
letters or offers to license) of infringement of or conflict
with asserted rights of others with respect to the use of
Intellectual Property Rights. To the knowledge of Parent,
all patents and other registrations for Parent Intellectual
Property Rights are valid and enforceable and none of the
Parent Intellectual Property Rights has been misused, and
except as set forth in Part 7.15 of the Disclosure Schedule,
no claim by any third party contesting the validity,
enforceability, use or ownership of the Parent Intellectual
Property Rights has been made or is currently pending or to
the knowledge of Parent threatened and there are no grounds
for same. No loss or expiration of any patents or
registrations included in the Parent Intellectual Property
Rights is pending or threatened (except for patents expiring
at the end of their statutory terms and not due to Parent's
failure to pay maintenance fees). Parent has performed all
acts and has paid all required fees and taxes to maintain
all patents, registrations and applications of such Parent
Intellectual Property Rights in full force and effect,
except for such non-performance which can not be reasonably
expected to have a Material Adverse Effect on the Parent. To
its knowledge, Parent does not and shall not in the conduct
of its business as now conducted infringe or conflict with
any right of any third party where such infringement or
conflict would reasonably be expected to result in any
Material Adverse Effect. Parent is not, and will not be as a
result of the execution and delivery of this Agreement or
the performance of any obligations hereunder, in breach of
any license or other agreement relating to any Intellectual
Property Rights. To the knowledge of Parent, no
third party is infringing or has infringed any Parent
Intellectual Property Rights and Parent is not aware of any
facts indicating a likelihood of the foregoing.
7.16 Compliance With Legal Requirements. Parent holds all
--------------------------------------------
material licenses, certificates, permits, franchises and
rights from all appropriate foreign, federal, state or other
public authorities necessary for the conduct of its business
and the use of its assets, other than such licenses,
certificates, permits or franchises that the lack of which
can not be reasonably expected to have a Material Adverse
Effect on the Parent. Parent is presently conducting its
business so as to comply in all material respects with all
applicable statutes, ordinances, rules, regulations and
orders of any governmental authority other than such
non-compliances which can not be reasonably expected to have
a Material Adverse Effect on the Parent. Further, except as
set forth in the Parent SEC Documents, Parent is not
presently charged with or, to the knowledge of Parent, under
governmental investigation with respect to, any actual or
alleged violation of any statute, ordinance, rule or
regulation. Parent is presently not the subject of any
pending or, to its knowledge, threatened adverse proceeding
by any regulatory authority having jurisdiction over its
business, properties or operations. None of the execution
and delivery of this Agreement and the consummation of the
transactions contemplated hereby will result in the
termination of any such license, certificate, permit,
franchise or right held by Parent.
7.17 Survival. The representations and warranties contained in
------------------
this Section 7 shall survive until the expiration of the one
hundred twenty (120) day period immediately following the
Closing Date.
8. Further Actions.
8.1. Public Announcements. The Company and Company Stockholders
------------------------------
shall not (and the Company shall not permit any of its
Representatives to) issue any press release or make any
public statement regarding this Agreement, or regarding any
of the transactions contemplated by this Agreement, without
Parent's prior written consent, and Parent shall not (and
shall not permit any of its Representatives to) issue any
press release or make any public statement regarding this
Agreement, or regarding any of the transactions contemplated
by this Agreement, without the Company's prior written
consent. Notwithstanding the provisions of the preceding
sentence, each party shall be permitted to issue any press
release or make any public statement as such party is
advised by counsel is legally required to be issued or made
under any applicable laws. Except as is legally required
under applicable law, no party shall make a public
announcement or press release referencing or mentioning GE
Capital Equity Investments, Inc. ("GE") or any affiliate of
GE without the express prior written consent of GE.
8.2. Lock-Up. Concurrently with the execution and delivery of
-----------------
this Agreement, the Company Stockholders, Management
Stockholders and Company Optionholders shall execute a
Lock-up Agreement in form attached hereto as Exhibit 8.2
(the "Lock-Up Agreement"). "Locked-Up" shall mean the
commitment and obligation of the Company Stockholders not to
sell, transfer, offer for sale, pledge, dispose of, encumber
or undertake to do any of the foregoing with respect to any
applicable
Initial Consideration and the Additional Consideration
Shares (if issued). Notwithstanding the foregoing, in the
event that within six (6) months following the Closing Date,
Parent issues any of its securities as part of a private
placement, and the Lock-Up obligations agreed with the
purchasers of such securities are more favorable to such
purchasers (compared to the Lock-Up obligations set forth
above) then the Lock-Up obligations imposed on the Company
Stockholders, Management Stockholders and Company
Optionholders shall be automatically amended to be equal to
those agreed with such new purchasers.
8.3. Registration of Shares. Parent and the Company Stockholders
--------------------------------
shall, as of the Closing Date, enter into a Registration
Rights Agreement (the "Registration Rights Agreement")
relating to the registration of the Parent Ordinary Shares,
in the form attached as Exhibit 8.3 of this Agreement.
8.4. Employees. As soon as practicable after the Closing Date,
-------------------
Parent shall provide to all employees of the Company who
shall remain in the employ of the Company (the "Continuing
Employees") such employee benefits plans, programs and
arrangements as are generally made available to employees of
Parent's US subsidiary (the "US Subsidiary"), provided,
however, that (a) nothing in this Section 8.4 or elsewhere
in this Agreement shall limit the right of Parent or the
Surviving Corporation to amend or terminate any such health
and/or welfare benefit plan at any time, and (b) if Parent
or the Surviving Corporation terminates any such health
and/or welfare benefit plan, then, subject to any
appropriate transition period, the Continuing Employees
shall be eligible to participate in US Subsidiary's health,
vacation and other non-equity based employee benefit plans,
to substantially the same extent as similarly situated
employees of the US Subsidiary. The Continuing Employees
shall be given, to the extent consistent with US
Subsidiary's benefit plans and with applicable Legal
Requirements, service credit under US Subsidiary's benefit
plans, for purposes of eligibility and vesting, equal to the
service credit currently provided to such Continuing
Employees under comparable US Subsidiary Employee Plans.
Nothing in this Section 8.4 or elsewhere in this Agreement
shall be construed to create a right in any employee to
employment with Parent, the US Subsidiary, the Surviving
Corporation or any Subsidiary of the Surviving Corporation
and, subject to any other binding agreement between an
employee and Parent, the US Subsidiary, the Surviving
Corporation or any Subsidiary of the Surviving Corporation,
the employment of each Continuing Employee shall be "at
will" employment.
8.5. Tax Liability. Each party shall be responsible for all its
-----------------------
respective tax obligations deriving from the transactions
contemplated in this Agreement.
8.6. Waiver of Dissenters' Rights. Each of the Company
--------------------------------------
Stockholders, by its execution of this Agreement, agrees
that it will not exercise any dissenters' or similar rights
in connection with the Merger and acknowledges that such
Company Stockholder hereby waives any and all dissenting or
similar rights, under any and all applicable laws, in
connection with the transactions contemplated under this
Agreement.
8.7. Right to appoint a Board member and observer to Parent's
------------------------------------------------------------------
Board. GE shall have the right, starting from the annual
------
meeting of Parent's shareholders in 2002 and until the
annual meeting of Parent's shareholder in 2003, to nominate
one director (the "GE Designee"), who shall be Xxxxxxx
Xxxxxxxx. In addition, upon the election of the GE Designee
and so long as such GE Designee serves as a member of
Parent's board of directors, GE shall have the right to
appoint a non-voting observer to the Board of Directors (or
to nominate one person for election to Parent's Board of
Directors, if and when agreed with Parent). The Board of
Directors of Parent shall recommend to the shareholders of
Parent to vote for the election of such director and Parent
will use its best efforts to cause such election.
8.8. Further Assurances. If, at any time after the Closing Date,
----------------------------
Parent shall consider or be advised that any deeds, bills of
sale, assignments or assurances or any other acts or things
are reasonably necessary, desirable or proper to carry out
the purposes of this Agreement, Parent shall so advise the
Company Stockholders in writing, and the Company
Stockholders thereupon shall execute and deliver all such
deeds, bills of sale, assignments and assurances and do all
such other acts and things reasonably necessary, desirable
or proper to vest, perfect or confirm its right, title or
interest in, to or under the Shares, and otherwise to carry
out the purposes of this Agreement.
8.9. Approval of Parent Shareholders. Parent agrees that it will
-----------------------------------------
submit to its shareholders for a vote or approval prior to
the date of the Second Closing, the issuance of the
Additional Consideration Shares to the Company Stockholder,
Management Stockholders and Company Optionholders as the
Additional Consideration Payment.
9. Deliverables: Prior to the signature of this Agreement, each of the
----------------------
parties shall have delivered to the other party the following
deliverables:
9.1 The Company and the Company Stockholders shall
have delivered to the Parent:
9.1.1. A legal opinion of Xxxxxx, Xxxxxxx & Xxxxxx,
L.L.P., counsel for the Company, in the form
attached as Exhibit 9.1.1 hereto, addressed to
Parent and dated as of the Closing Date;
9.1.2. A certificate, in the form attached as Exhibit
9.1.2, executed by two Officers of the Company
certifying that each of the representations and
warranties set forth in Section 5 is accurate in
all material respects as of the Closing Date, and
that the conditions set forth in such certificate
have been duly satisfied (the "Company Closing
Certificate");
9.1.3. A certificate of good standing of the Company from
the Secretary of State of Georgia dated no earlier
than one day prior to the date of the Agreement;
9.1.4. The executed Lock-Up Agreements, signed by all of
the Company Stockholders;
9.1.5. Duly executed written resolutions of the Company's
Stockholders approving and adopting the Merger, in
the form attached as Exhibit 9.1.5.
9.1.6. Written resignations of all directors of the
Company and all members of the Audit Committee and
Compensation Committee of the Company, effective
as of the Closing Date;
9.1.7. Certificates representing all the Shares,
accompanied by share transfer deeds duly executed.
9.1.8 The executed consent of the landlord of the
Company's premises in Atlanta to the sub-lease of
such premises to any third party who shall sign
the sub-lease agreement in the form attached to
such consent.
9.1.9 A executed release, in the form of Exhibit 9.1.10,
signed by each of the Company Stockholders.
9.1.10 Duly executed written resolutions of the Company's
Board of Directors approving and adopting the
Merger and the other transactions under this
Agreement, in the form attached as Exhibit 9.1.10.
9.1.11 Duly executed undertaking letters by the Company
Stockholders in the form attached as Exhibit
9.1.11.
9.1.12 Executed copy of the Georgia Certificate of
Merger.
9.2 The Parent shall have delivered to the Company:
9.2.1 A legal opinion of Meitar, Liquornik, Geva & Co.,
Israeli attorneys to the Parent, in form attached
as Exhibit 9.2.1 hereto, addressed to the Company
and dated as of the Closing Date;
9.2.2 A legal opinion of Xxxxx, Xxxxxxx & Xxxxxxxxx,
LLP, U.S. attorneys to the Parent, in form
attached as Exhibit 9.2.2 hereto, addressed to the
Company and dated as of the Closing Date;
9.2.3 a certificate in the form attached as Exhibit
9.2.3 hereto executed by an Officer of Parent
certifying that each of the representations and
warranties set forth in Section 7 is accurate in
all material respects as of the Closing Date and
that the conditions set forth in such certificate
have been duly satisfied.
9.2.4 Executed Registration Rights Agreement.
9.2.5 A Voting Agreement signed by Xxxxxx XxXxxxx, in the form
---------
attached as Exhibit 9.2.5 hereto.
10. The Second Closing:
The consummation of the Second Closing shall be subject to the
satisfaction, at or prior to the Second Closing, of each of the
following conditions, any or all of which may be waived in writing by
Parent:
10.1 No Restraints. No temporary restraining order, preliminary
----------------------- or permanent injunction or other
order preventing the consummation of the transactions
contemplated by this Agreement shall have been issued by any
court of competent jurisdiction and remain in effect, and
there shall not be any Legal Requirement enacted or deemed
applicable to the transactions contemplated by this
Agreement that makes consummation of the transactions
contemplated by this Agreement illegal, which Legal
Requirement shall not have been removed within thirty (30)
days of enactment.
10.2 No Legal Proceedings. No Person (excluding Parent and its
------------------------------
affiliates) shall have commenced or taken substantial steps
towards any Legal Proceeding seeking to enjoin the
consummation of the Merger or the Second Closing.
11. Miscellaneous Provisions
11.1. Each of Parent and the Company shall bear and pay all fees,
----------
costs and expenses (including legal fees and
accounting fees) that have been incurred or that are
incurred by such party (and, in the case of the Company
Stockholders, also by the Company) in connection with the
transactions contemplated by this Agreement, including all
fees, costs and expenses incurred by such party in
connection with or by virtue of (a) the investigation and
review conducted by Parent and its Representatives with
respect to the Company's business (and the furnishing of
information to Parent and its Representatives in connection
with such investigation and review), provided, that any
audit of the Company's financial statements for 2001 shall
be a cost of Parent and not the Company (b) the negotiation,
preparation and review of this Agreement (including the
Disclosure Schedule) and all agreements, certificates,
opinions and other instruments and documents delivered or to
be delivered in connection with the transactions
contemplated by this Agreement, and (c) the preparation and
submission of any filing or notice required to be made or
given in connection with any of the transactions
contemplated by this Agreement, and the obtaining of any
Consent required to be obtained in connection with any of
such transactions; provided, however, that the Company's
legal and all other expenses with respect to the
transactions contemplated under this Agreement shall not
exceed an aggregate amount of $100,000. For the avoidance of
doubt, each of Parent on the one hand, and the Company on
the other hand, shall bear and pay for all such fees, costs
and expenses incurred by such party in connection with the
transactions contemplated by this Agreement. In addition, it
is agreed and understood that each of the Company
Stockholders shall pay its own expenses in connection with
the transactions contemplated by this Agreement.
11.2 Further Assurances. Each party hereto shall execute and
----------------------------
cause to be delivered to each other party hereto such
instruments and other documents, and shall take such other
actions, as such other party may reasonably request (prior
to, at or after the Closing) for the purpose of carrying out
or evidencing any of the transactions contemplated by this
Agreement.
11.3. Notices. Any notice or other communication required or
-----------------
permitted to be delivered to any party under this Agreement
shall be in writing and shall be deemed properly
delivered,given and received when delivered (by hand, by
registered mail, by courier or express delivery service or
by facsimile) to the address or facsimile telephone number
set forth beneath the name of such party below (or to such
other address or facsimile telephone number as such party
shall have specified in a written notice given to the other
parties hereto):
if to Parent or Merger Sub:
ViryaNet Limited
0 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX, 00000
Attention: Win Xxxxx, Chief Executive Officer
Meitar, Liquornik, Geva & Co.
00 Xxxx Xxxxxx Xxxxxx Xx.
Xxxxx Xxx, 00000
Israel
Attention: Xxx Xxxx, Adv.
if to the Company:
00000 Xxxxxx Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxx Xxxxxxxxx
with a copy to:
Xxxxxx, Xxxxxxx & Xxxxxx, L.L.P.
1600 Atlanta Financial Center
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Xx.
If to the Company Stockholders:
at such address listed on Exhibit 11.3 attached
hereto ------------
11.4. Headings. The boldface headings contained in this Agreement
------------------
are for convenience of reference only, shall not be deemed
to be a part of this Agreement and shall not be referred to
in connection with the construction or interpretation of
this Agreement.
11.5. Counterparts. This Agreement may be executed in several
----------------------
counterparts, each of which shall constitute an original and
all of which, when taken together, shall constitute one
agreement.
11.6. Governing Law. This Agreement shall be construed in
-----------------------
accordance with, and governed in all respects by, the
internal laws of the State of New York (without giving
effect to principles of conflicts of laws). Each party to
this Agreement consents to the exclusive jurisdiction and
venue of the courts of the State of New York.
11.7. Successors and Assigns. This Agreement shall be binding upon
--------------------------------
the Company, each of the Company Stockholders and their
respective successors and assigns (if any), Parent, Merger
Sub and their successors and assigns (if any). Neither party
may assign any of its rights under this Agreement to any
other Person without obtaining the consent or approval of
the other parties hereto.
11.8. Specific Performance. The parties to this Agreement agree
------------------------------
that, in the event of any breach or threatened breach by any
party to this Agreement of any covenant, obligation or other
provision set forth in this Agreement for the benefit of any
other party to this Agreement, such other party shall be
entitled to (a) a decree or order of specific performance or
mandamus to enforce the observance and performance of such
covenant, obligation or other provision, and (b) an
injunction restraining such breach or threatened breach.
11.9. Amendments. This Agreement may not be amended, modified,
--------------------
altered or supplemented other than by means of a written
instrument duly executed and delivered on behalf of all of
the parties hereto.
11.10. Severability. In the event that any provision of this
----------------------
Agreement, or the application of any such provision to any
Person or set of circumstances, shall be determined to be
invalid, unlawful, void or unenforceable to any extent, the
remainder of this Agreement, and the application of such
provision to Persons or circumstances other than those as to
which it is determined to be invalid, unlawful, void or
unenforceable, shall not be impaired or otherwise affected
and shall continue to be valid and enforceable to the
fullest extent permitted by law.
11.11. Entire Agreement. This Agreement sets forth the entire
--------------------------
understanding of the parties hereto relating to the subject
matter hereof and thereof and supersedes all prior
agreements and understandings among or between any of the
parties relating to the subject matter hereof and thereof,
including the Non-Binding Term Sheet between the Company and
the Parent dated January 18, 2002.
11.12. Construction.
----------------------
11.12.1. For purposes of this Agreement, whenever the
context requires: the singular number shall
include the plural, and vice versa; the masculine
gender shall include the feminine and neuter
genders; the feminine gender shall include the
masculine and neuter genders; and the neuter
gender shall include the masculine and feminine
genders.
11.12.2. The parties hereto agree that any rule of
construction to the effect that ambiguities are to
be resolved against the drafting party shall not
be applied in the construction or interpretation
of this Agreement.
11.12.3. As used in this Agreement, the words "include" and
"including" and variations thereof, shall not be
deemed to be terms of limitation, but rather shall
be deemed to be followed by the words "without
limitation".
11.12.4 Except as otherwise indicated, all references in
this Agreement to "Sections", "Schedules" and
"Exhibits" are intended to refer to Sections of
this Agreement and Schedules and Exhibits to this
Agreement.
11.13 Consent to Jurisdiction. EACH PARTY TO THIS AGREEMENT HEREBY
----------------------------------
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS
PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF NEW
YORK STATE SITTING IN THE COUNTY OF NEW YORK OR ANY FEDERAL
COURT OF THE UNITED STATES OF AMERICA SITTING IN THE
SOUTHERN DISTRICT OF NEW YORK IN ANY SUIT, ACTION OR
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR
IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED THEREBY. NO PARTY TO THIS AGREEMENT MAY MOVE TO
(I) TRANSFER ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH NEW YORK COURT OR FEDERAL COURT TO ANOTHER
JURISDICTION, (II) CONSOLIDATE ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH NEW YORK COURT OR FEDERAL COURT
WITH A SUIT, ACTION OR PROCEEDING IN ANOTHER JURISDICTION OR
(III) DISMISS ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH NEW YORK COURT OR FEDERAL COURT FOR THE PURPOSE OF
BRINGING THE SAME IN ANOTHER JURISDICTION. EACH PARTY AGREES
THAT A FINAL JUDGMENT IN ANY SUCH SUIT, ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER
JURISDICTION BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. EACH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY
AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN
ANY NEW YORK COURT SITTING IN THE COUNTY OF NEW YORK OR ANY
FEDERAL COURT SITTING IN THE SOUTHERN DISTRICT OF NEW YORK.
EACH PARTY CONSENTS TO THE SERVICE OF PROCESS IN ANY SUCH
SUIT, ACTION OR PROCEEDING BY NOTICE IN THE MANNER SPECIFIED
IN SECTION 11.3.
11.14 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
-------------------------------
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION
OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER]
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date set forth above.
VIRYANET LTD.
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER]
VIRYANET ACQUISITION, INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER]
IMEDEON, INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER]
GE CAPITAL EQUITY INVESTMENTS, INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER]
ECTMI TRUTTA HOLDINGS LP
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER]
AETHER SYSTEMS INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER]
VALENTIS INVESTORS LLC
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER]
IMPRIMIS SB, L.P.
By: Imprimis SB G.P. LLC
Its General Partner
By:
----------------------------
Name:
------------------------
Title:
-----------------------
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER]
INSIGHT CAPITAL PARTNERS II, L.P.
By: InSight Venture Associates II, L.L.C.
Its General Partner
By:
--------------------------------
Name:
------------------------------
Title: Its Managing Member
-----------------------------
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER]
INSIGHT CAPITAL PARTNERS
(CAYMAN) II, L.P.
By: InSight Venture Associates II, LLC
Its General Partner
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER]
---------------------------------
XXXXXX MEDIATE
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER]
MEDIATE INVESTMENTS, LLLP
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
ANNEX I
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Annex I):
"Consent" shall mean any approval, consent, ratification, permission,
waiver or authorization (including any Governmental Authorization).
"Contract" shall mean any written, oral or other agreement, contract,
subcontract, lease, understanding, instrument, note, warranty, insurance policy,
benefit plan or legally binding commitment or undertaking of any nature.
"Disclosure Schedule" shall mean the schedule (dated as of the date of the
Agreement) delivered to Parent on behalf of the Company.
"Encumbrance" shall mean any lien, pledge, hypothecation, charge, mortgage,
security interest, encumbrance, claim, infringement, interference, option, right
of first refusal, preemptive right, community property interest or restriction
of any nature (including any restriction on the voting of any security, any
restriction on the transfer of any security or other asset, any restriction on
the receipt of any income derived from any asset, any restriction on the use of
any asset and any restriction on the possession, exercise or transfer of any
other attribute of ownership of any asset).
"Entity" shall mean any corporation (including any non-profit corporation),
general partnership, limited partnership, limited liability partnership, joint
venture, estate, trust, company (including any limited liability company or
joint stock company), firm or other enterprise, association, organization or
entity.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Governmental Authorization" shall mean any: (a) permit, license,
certificate, franchise, permission, clearance, registration, qualification or
authorization issued, granted, given or otherwise made available by or under the
authority of any Governmental Body or pursuant to any Legal Requirement; or (b)
right under any Contract with any Governmental Body.
"Governmental Body" or "Governmental Authority" shall mean any: (a) nation,
state, commonwealth, province, territory, county, municipality, district or
other jurisdiction of any nature; (b) federal, state, local, municipal, foreign
or other government; or (c) governmental or quasi-governmental authority of any
nature (including any governmental division, department, agency, commission,
instrumentality, official, organization, unit, body or Entity and any court or
other tribunal).
"Liens" shall mean all mortgages, pledges, liens, security interests,
conditional and installment sale agreements, encumbrances, charges or other
claims of third parties of any kind.
"Legal Proceeding" shall mean any action, suit, litigation, arbitration,
proceeding (including any civil, criminal, administrative, investigative or
appellate proceeding), hearing, inquiry, audit, examination or investigation
commenced, brought, conducted or heard by or before, or otherwise involving, any
court or other Governmental Body or any arbitrator or arbitration panel.
"Legal Requirement" shall mean any federal, state, local, municipal,
foreign or other law, statute, constitution, principle of common law,
resolution, ordinance, code, edict, decree, rule, regulation, ruling or
requirement issued, enacted, adopted, promulgated, implemented or otherwise put
into effect by or under the authority of any Governmental Body.
"Material Adverse Effect" A violation or other matter will be deemed to
have a "Material Adverse Effect" if such violation or other matter can be
reasonably expected to have a material adverse effect on the business,
condition, assets, liabilities, operations or financial performance or
prospects.
"Person" shall mean any individual, Entity or Governmental Body.
"Representatives" shall mean officers, directors, employees, agents,
attorneys, accountants, advisors and representatives.
"SEC" shall mean the United States Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Stock Plans" shall mean the iMedeon Stock Incentive Plan, as amended, or
any other plan or program used by Company to grant Company Options.
"Tax" shall mean any tax (including any income tax, franchise tax, capital
gains tax, gross receipts tax, value-added tax, surtax, excise tax, transfer
tax, stamp tax, sales tax, use tax, property tax, business tax, withholding tax
or payroll tax), levy, assessment, tariff, duty (including any customs duty),
deficiency or fee, and any related charge or amount (including any fine, penalty
or interest), imposed, assessed or collected by or under the authority of any
Governmental Body.
"Tax Returns" shall mean returns, reports and information statements with
respect to Tax required to be filed by or on behalf of the Company with any
taxing authority, domestic or foreign.
