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EXHIBIT (c)(1)
AGREEMENT AND PLAN OF MERGER
AMONG
COOPERATIVE COMPUTING, INC.,
CCI ACQUISITION CORP.
AND
TRIAD SYSTEMS CORPORATION
DATED OCTOBER 17, 1996
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TABLE OF CONTENTS
Section Page
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ARTICLE I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
THE OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 The Offer. . . . . . . . . . . . . . . . . . . . . 2
1.2 Offer Documents. . . . . . . . . . . . . . . . . . 3
1.3 Company Actions . . . . . . . . . . . . . . . . . . 3
1.4 Directors . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.1 The Merger . . . . . . . . . . . . . . . . . . . . 6
2.2 Closing . . . . . . . . . . . . . . . . . . . . . . 6
2.3 Effective Time of the Merger . . . . . . . . . . . 6
2.4 Effects of the Merger . . . . . . . . . . . . . . . 7
ARTICLE III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF
THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES . . . . . 7
3.1 Effect on Capital Stock . . . . . . . . . . . . . . 7
3.2 Conversion of Securities. . . . . . . . . . . . . . 8
3.3 Payment for Shares . . . . . . . . . . . . . . . . 8
3.4 Stock Transfer Books . . . . . . . . . . . . . . . 10
3.5 Company Stock Plans . . . . . . . . . . . . . . . . 11
3.6 Dissenting Shares . . . . . . . . . . . . . . . . . 11
ARTICLE IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 12
4.1 Representations and Warranties of the Company . . . 12
4.2 Representations and Warranties of Parent and
Sub . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
COVENANTS RELATING TO CONDUCT OF BUSINESS . . . . . . . . . . . . 32
5.1 Covenants of the Company . . . . . . . . . . . . . 32
ARTICLE VI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . 37
6.1 Preparation of the Proxy Statement; Company
Stockholders Meeting; Merger without a
Company Stockholders Meeting . . . . . . . . . . . 37
6.2 Access to Information . . . . . . . . . . . . . . . 38
6.3 Settlements . . . . . . . . . . . . . . . . . . . . 38
6.4 Fees and Expenses . . . . . . . . . . . . . . . . . 38
6.5 Brokers or Finders . . . . . . . . . . . . . . . . 39
6.6 Indemnification; Directors' and Officers'
Insurance . . . . . . . . . . . . . . . . . . . . . 40
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6.7 Best Efforts . . . . . . . . . . . . . . . . . . . 41
6.8 Conduct of Business of Sub . . . . . . . . . . . . 42
6.9 Publicity . . . . . . . . . . . . . . . . . . . . . 42
6.10 Spin-Off of Certain Real Estate . . . . . . . . . . 42
ARTICLE VII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . 45
7.1 Conditions to Each Party's Obligation to
Effect the Merger . . . . . . . . . . . . . . . . . 45
ARTICLE VIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
TERMINATION AND AMENDMENT . . . . . . . . . . . . . . . . . . . . 46
8.1 Termination . . . . . . . . . . . . . . . . . . . . 46
8.2 Effect of Termination . . . . . . . . . . . . . . . 47
8.3 Amendment . . . . . . . . . . . . . . . . . . . . . 47
8.4 Extension; Waiver . . . . . . . . . . . . . . . . . 47
ARTICLE IX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . 47
9.1 Nonsurvival of Representations,
Warranties and Agreements . . . . . . . . . . . 47
9.2 Notices . . . . . . . . . . . . . . . . . . . . . . 47
9.3 Interpretation . . . . . . . . . . . . . . . . . . 49
9.4 Counterparts . . . . . . . . . . . . . . . . . . . 49
9.5 Entire Agreement; No Third Party
Beneficiaries; Rights of Ownership . . . . . . . . 49
9.6 Governing Law . . . . . . . . . . . . . . . . . . . 49
9.7 No Remedy in Certain Circumstances . . . . . . . . 49
9.8 Assignment . . . . . . . . . . . . . . . . . . . . 50
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GLOSSARY OF DEFINED TERMS
1989 Resolutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
1990 ESPP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Acquisition Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Board Percentage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
CERCLA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Certificate of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Company Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Company Intangible Property . . . . . . . . . . . . . . . . . . . . . . . . 25
Company Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Company Order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Company Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Company Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 4
Company SEC Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Company Stockholder Approval . . . . . . . . . . . . . . . . . . . . . . . 16
Company Voting Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Confidentiality Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 38
Constituent Corporations . . . . . . . . . . . . . . . . . . . . . . . . . 6
Continuing Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
CSD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Designated Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Designated Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Designated Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
DGCL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Dissenting Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Employee Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Environmental Costs and Liabilities . . . . . . . . . . . . . . . . . . . . 26
Environmental Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Final Purchase Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Gains and Transfer Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 16
Governmental Entity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Hazardous Material . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Indemnified Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Indemnified Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Injunction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
IRSA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Merger Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Offer Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Offer Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Option Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
OSHA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Payment Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Permitted Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Real Property Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Remedial Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Representatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Schedule 14D-1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Schedule 14D-9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Spin-Off Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Spinco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Stock Option Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Stockholders Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Sub . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Surviving Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Trigger Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of October 17, 1996
(the "Agreement"), is made and entered into by Cooperative Computing, Inc., a
Texas corporation ("Parent"), CCI Acquisition Corp., a Delaware corporation
("Sub"), and Triad Systems Corporation, a Delaware corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent, Sub and
the Company have unanimously approved the acquisition of the Company by Parent,
by means of the merger of Sub with and into the Company, upon the terms and
subject to the conditions set forth in the Agreement;
WHEREAS, to effectuate the acquisition, Parent and the Company
each desire that Sub commence a cash tender offer to purchase all of the
outstanding shares of common stock, par value $.001 per share, of the Company
("Shares" or "Company Common Stock"), upon the terms and subject to the
conditions set forth in this Agreement and the Offer Documents (as defined in
Section 1.2), and the Board of Directors of the Company has unanimously
approved such tender offer and agreed to recommend to its stockholders that
they accept the tender offer and tender their Company Common Stock pursuant
thereto;
WHEREAS, the holders of the issued and outstanding common stock
of Sub will contribute that stock to Parent prior to the consummation of the
Offer, as a result of which, Sub will become a wholly-owned subsidiary of
Parent;
WHEREAS, Parent and Sub are unwilling to enter into this
Agreement (and effect the transactions contemplated hereby) unless,
contemporaneously with the execution and delivery hereof, certain beneficial
and record holders of the Company Common Stock enter into agreements
(collectively, the "Stockholders Agreement") providing for certain matters with
respect to their Shares (including the tender of their Shares and certain other
actions relating to the Offer (as defined in Section 1.1)) and the other
transactions contemplated by this Agreement and in order to induce Parent and
Sub to enter into this Agreement, the Company has approved the execution and
delivery by Parent and such stockholders of the Stockholders Agreement, and
such stockholders have agreed to execute and deliver the Stockholders
Agreement; and
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger and also to prescribe various conditions to consummation
thereof;
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements herein
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contained, the parties hereto, intending to be legally bound, hereby agree as
follows:
ARTICLE I
THE OFFER
1.1 The Offer. (a) Provided that none of the events set
forth in Exhibit A hereto shall have occurred and be continuing, as promptly as
practicable (but in any event not later than five business days after the
public announcement of the execution and delivery of this Agreement), Sub shall
commence (within the meaning of Rule 14d-2 under the Securities Exchange Act of
1934, as amended (the "Exchange Act")), an offer to purchase (the "Offer") all
outstanding shares of the Company Common Stock (together with the associated
Rights (as hereinafter defined)) at a price of $9.25 per share, net to the
seller in cash (the "Offer Consideration"). As used in this Agreement,
"Rights" shall mean the Common Stock Purchase Rights issued pursuant to the
Company Rights Agreement (as defined below). Except where the context
otherwise requires, all references herein to the shares of Common Stock shall
include the associated Rights. The obligation of Parent and Sub to commence
the Offer, consummate the Offer, accept for payment and to pay for shares of
Company Common Stock validly tendered in the Offer and not withdrawn shall be
subject only to those conditions set forth in Exhibit A hereto.
(b) Parent and Sub expressly reserve the right to amend or
modify the terms of the Offer, except that, without the prior written consent
of the Company, Sub shall not (and Parent shall not cause Sub to) (i) decrease
the Offer Consideration or the form of consideration therefor or decrease the
number of Shares sought pursuant to the Offer, (ii) change, in any material
respect, the conditions to the Offer, (iii) impose additional material
conditions to the Offer, (iv) waive the condition that there shall be validly
tendered and not withdrawn prior to the time the Offer expires a number of
shares of Company Common Stock which constitutes at least 51% of the Shares
outstanding on a fully-diluted basis on the date of purchase ("on a
fully-diluted basis" having the following meaning, as of any date: the number
of shares of Company Common Stock outstanding, together with Shares which the
Company may be required to issue pursuant to obligations outstanding at that
date under employee stock option or similar benefit plans, or otherwise), (v)
extend the expiration date of the Offer (except that Sub may extend the
expiration date of the Offer (a) as required by law, (b) for up to ten (10)
business days after the initial expiration date or for longer periods (not to
exceed 90 calendar days from the date of commencement) in the event that any
condition to the Offer is not satisfied, or (c) for one or more times for an
aggregate period of up to 15 days (not to exceed 90 calendar days from the date
of commencement) for any reason other than those specified in the immediately
preceding clause (a) or clause (b)), or (vi) amend any term of the Offer in any
manner materially adverse to
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holders of shares of Company Common Stock; provided, however, that, except as
set forth above, Sub may waive any other condition to the Offer in its sole
discretion; and provided further, that the Offer may be extended in connection
with an increase in the consideration to be paid pursuant to the Offer so as to
comply with applicable rules and regulations of the United States Securities
and Exchange Commission (the "SEC"). Assuming the prior satisfaction or waiver
of the conditions to the Offer, Sub shall accept for payment, and pay for, in
accordance with the terms of the Offer, all shares of Company Common Stock
validly tendered and not withdrawn pursuant to the Offer as soon as practicable
after the expiration date thereof.
1.2 Offer Documents. As soon as practicable on the date of
commencement of the Offer, Parent and Sub shall file or cause to be filed with
the SEC a Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-1") with
respect to the Offer which shall contain the offer to purchase and related
letter of transmittal and other ancillary Offer documents and instruments
pursuant to which the Offer will be made (collectively with any supplements or
amendments thereto, the "Offer Documents") and shall contain (or shall be
amended in a timely manner to contain) all information which is required to be
included therein in accordance with the Exchange Act and the rules and
regulations thereunder and any other applicable law, and shall conform in all
material respects with the requirements of the Exchange Act and any other
applicable law; provided, however, that no agreement or representation hereby
is made or shall be made by Parent or Sub with respect to information supplied
by the Company expressly for inclusion in, or with respect to Company
information derived from the Company's public SEC filings that is included or
incorporated by reference in, the Offer Documents. Parent, Sub and the Company
each agree promptly to correct any information provided by them for use in the
Offer Documents if and to the extent that it shall have become false or
misleading in any material respect and Sub further agrees to take all lawful
action necessary to cause the Offer Documents as so corrected to be filed
promptly with the SEC and to be disseminated to holders of Company Common
Stock, in each case as and to the extent required by applicable law. In
conducting the Offer, Parent and Sub shall comply in all material respects with
the provisions of the Exchange Act and any other applicable law. The Company
and its counsel shall be given the opportunity to review and comment on the
Offer Documents and any amendments thereto prior to the filing thereof with the
SEC.
1.3 Company Actions. The Company hereby consents to the Offer
and represents that (a) its Board of Directors (at a meeting duly called and
held) has unanimously (i) determined that each of this Agreement, the Offer and
the Merger are fair to and in the best interests of the stockholders of the
Company, (ii) approved the execution, delivery and performance of this
Agreement and the Stockholders Agreement and the consummation of the
transactions contemplated hereby and thereby, including the
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Offer and the Merger, and such approval constitutes approval of the foregoing
for purposes of Section 203 of the Delaware General Corporation Law, as amended
(the "DGCL"), (iii) resolved to recommend acceptance of the Offer, approval and
adoption of this Agreement and the Stockholders Agreement and approval of the
Merger by the holders of Company Common Stock, (iv) taken all action necessary
in respect of the Amended and Restated Rights Agreement, dated as of December
6, 1993, between the Company and Chemical Trust Company of California, as
Rights Agent (the "Company Rights Agreement"), so as to render the Company
Rights Agreement inapplicable to any and all of the execution, delivery and
performance of this Agreement and the Stockholders Agreement and the
consummation of the transactions contemplated hereby and thereby, including the
Offer and the Merger (such necessary action to include, without limitation,
taking action to provide that none of Parent and its affiliates will become an
"Acquiring Person" and that no "Stock Acquisition Date" or "Distribution Date"
(as such terms are defined in the Company Rights Agreement) will occur as a
result of such execution, delivery and performance or such consummation), and
(v) adopted the resolutions described in Section 4.1(i)(xiii) regarding certain
employee severance benefits, and (b) Xxxxxxxxx & Xxxxx, LLP has delivered to
the Board of Directors of the Company its written opinion that the Offer
Consideration to be received by the holders of Company Common Stock in the
Offer is fair, from a financial point of view, to such holders. The Board of
Directors of the Company may withdraw, modify or amend its approval or
recommendation of the Offer, this Agreement, the Stockholders Agreement or the
Merger only if the Board of Directors of the Company, in good faith and based
upon the advice of outside counsel, deems it necessary to do so in order to
properly fulfill such Board's fiduciary obligations. The Company hereby
consents to the inclusion in the Offer Documents of the recommendation referred
to in this Section 1.3. The Company hereby agrees to file with the SEC
simultaneously with the filing by Parent and Sub of the Schedule 14D-1, a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with all
amendments and supplements thereto, the "Schedule 14D-9") containing such
recommendations of the Board of Directors of the Company in favor of the Offer
and the Merger and otherwise complying with Rule 14d-9 under the Exchange Act.
The Schedule 14D-9 shall comply in all material respects with the Exchange Act
and any other applicable law and shall contain (or shall be amended in a timely
manner to contain) all information which is required to be included therein in
accordance with the Exchange Act and the rules and regulations thereunder and
any other applicable law. The Company, Parent and Sub each agree promptly to
correct any information provided by them for use in the Schedule 14D-9 if and
to the extent that it shall have become false or misleading in any material
respect and the Company further agrees to take all lawful action necessary to
cause the Schedule 14D-9 as so corrected to be filed promptly with the SEC and
disseminated to the holders of Company Common Stock, in each case as and to the
extent required by applicable
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law. Parent, Sub and their counsel shall be given an opportunity to review and
comment on the Schedule 14D-9 and any amendments thereto prior to the filing
thereof with the SEC. In connection with the Offer, the Company shall promptly
furnish, or cause its transfer agent to furnish, Parent with mailing labels,
security position listings and all available listings or computer files
containing the names and addresses of the record holders of the Company Common
Stock as of the latest practicable date and shall furnish, or cause its
transfer agent to furnish, Parent with such information and assistance
(including updated lists of stockholders, mailing labels and lists of security
positions) as Parent or its agents may reasonably request in communicating the
Offer to the record and beneficial holders of Company Common Stock. Subject to
the requirements of applicable law, and except for such actions as are
necessary to disseminate the Offer Documents and any other documents necessary
to consummate the Offer and the Merger, Parent and Sub and each of their
affiliates, associates, partners, employees, agents and advisors shall hold in
confidence the information contained in such labels and lists, shall use such
information only in connection with the Offer and the Merger, and, if this
Agreement is terminated, in accordance with its terms, shall deliver promptly
to the Company all copies of such information then in their possession.
1.4 Directors. (a) Promptly upon the purchase by Parent
or any of its subsidiaries of such number of shares of Company Common Stock
which represents at least 51% of the outstanding shares of Company Common Stock
(on a fully diluted basis), and from time to time thereafter, Parent shall be
entitled to designate such number of directors, rounded up to the next whole
number (but in no event more than one less than the total number of directors
on the Board of Directors of the Company) as will give Parent, subject to
compliance with Section 14(f) of the Exchange Act, representation on the Board
of Directors of the Company equal to the product of (x) the number of directors
on the Board of Directors of the Company (giving effect to any increase in the
number of directors pursuant to this Section 1.4) and (y) the percentage that
such number of Shares so purchased bears to the aggregate number of Shares
outstanding (such number being, the "Board Percentage"), and the Company shall,
upon request by Parent, promptly satisfy the Board Percentage by (i) increasing
the size of the Board of Directors of the Company or (ii) using its best
efforts to secure the resignations of such number of directors as is necessary
to enable Parent's designees to be elected to the Board of Directors of the
Company and shall cause Parent's designees promptly to be so elected, provided
that no such action shall be taken which would result in there being, prior to
the consummation of the Merger, less than two directors of the Company that are
not affiliated with Parent. At the request of Parent, the Company shall take,
at the Company's expense, all lawful action necessary to effect any such
election, including, without limitation, mailing to its stockholders the
information required by Section
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14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, unless such
information has previously been provided to the Company's stockholders in the
Schedule 14D-9.
(b) Following the election or appointment of Parent's
designees pursuant to this Section 1.4 and prior to the Effective Time of the
Merger, any amendment or termination of this Agreement, extension for the
performance or waiver of the obligations or other acts of Parent or Sub or
waiver of the Company's rights thereunder shall require the concurrence of a
majority of directors of the Company then in office who are "Continuing
Directors". The term "Continuing Director" shall mean (i) each member of the
board of directors on the date hereof who voted to approve this Agreement and
(ii) any successor to any Continuing Director that was recommended to succeed
such Continuing Director by a majority of the Continuing Directors then on the
board of directors.
ARTICLE II
THE MERGER
2.1 The Merger. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the DGCL, Sub shall be
merged with and into the Company at the Effective Time. At the Effective Time,
the separate corporate existence of Sub shall cease, and the Company shall
continue as the surviving corporation and a direct wholly owned subsidiary of
Parent (Sub and the Company are sometimes hereinafter referred to as
"Constituent Corporations" and, as the context requires, the Company is
sometimes hereinafter referred to as the "Surviving Corporation"), and shall
continue under the name "Triad Systems Corporation."
2.2 Closing. Unless this Agreement shall have been terminated
and the transactions herein contemplated shall have been abandoned pursuant to
Section 8.1, and subject to the satisfaction or waiver of the conditions set
forth in Article VII, the closing of the Merger (the "Closing") shall take
place at 10:00 a.m., New York time, on the second business day after
satisfaction of the conditions set forth in Section 7.1 (or as soon as
practicable thereafter following satisfaction or waiver of the conditions set
forth in Sections 7.2 and 7.3) (the "Closing Date"), at the offices of Weil,
Gotshal & Xxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, unless
another date, time or place is agreed to in writing by the parties hereto.
2.3 Effective Time of the Merger. Subject to the provisions
of this Agreement, the parties hereto shall cause the Merger to be consummated
by filing a certificate of merger (the "Certificate of Merger") with the
Secretary of State of the State of Delaware, as provided in the DGCL, as soon
as practicable on or after the Closing Date. The Merger shall become effective
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upon such filing or at such time thereafter as is provided in the Certificate
of Merger (the "Effective Time").
2.4 Effects of the Merger. (a) The Merger shall have
the effects as set forth in the applicable provisions of the DGCL.
(b) The directors of Sub and the officers of the Company
immediately prior to the Effective Time shall, from and after the Effective
Time, be the initial directors and 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 Surviving
Corporation's Certificate of Incorporation and Bylaws.
(c) The Certificate of Incorporation of the Company shall be
amended and restated in its entirety as set forth on Exhibit B hereto and, from
and after the Effective Time, such amended and restated Certificate of
Incorporation shall be the Certificate of Incorporation of the Surviving
Corporation, until duly amended in accordance with the terms thereof and the
DGCL.
(d) The Bylaws of the Company shall be amended and restated in
their entirety as set forth on Exhibit C hereto and, from and after the
Effective Time, such amended and restated Bylaws shall be the Bylaws of the
Surviving Corporation until thereafter amended as provided by applicable law,
the Certificate of Incorporation or the Bylaws.
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF
THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
3.1 Effect on Capital Stock. At the Effective Time, by virtue
of the Merger and without any action on the part of the holder of any shares of
Company Common Stock or the holder of any capital stock of Sub:
(a) Capital Stock of Sub. Each share of the capital stock of
Sub issued and outstanding immediately prior to the Effective Time shall be
converted into and become one fully paid and nonassessable share of Common
Stock, par value $.01 per share, of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned Stock.
Each share of Company Common Stock and all other shares of capital stock of the
Company that are owned by the Company and all shares of Company Common Stock
and other shares of capital stock of the Company owned by Parent or Sub shall
be canceled and retired and shall cease to exist and no consideration shall be
delivered or deliverable in exchange therefor.
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3.2 Conversion of Securities. At the Effective Time, by
virtue of the Merger and without any action on the part of Sub, the Company or
the holders of any of the shares thereof:
(a) (i) Subject to the other provisions of this
Section 3.2, each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time (excluding shares owned, directly or
indirectly, by the Company or any Subsidiary (as defined below) of the Company
or by Parent, Sub or any other Subsidiary of Parent and Dissenting Shares (as
defined in Section 3.6)) shall be converted into the right to receive the Offer
Consideration, payable to the holder thereof, without any interest thereon,
less any required withholding taxes (the "Merger Consideration"), upon
surrender and exchange of the Certificates (as defined in Section 3.3). As
used in this Agreement, the word "Subsidiary", with respect to any party, means
any corporation, partnership, joint venture or other organization, whether
incorporated or unincorporated, of which: (i) such party or any other
Subsidiary of such party is a general partner; (ii) voting power to elect a
majority of the Board of Directors or others performing similar functions with
respect to such corporation, partnership, joint venture or other organization
is held by such party or by any one or more of its Subsidiaries, or by such
party and any one or more of its Subsidiaries; or (iii) at least 25% of the
equity, other securities or other interests is, directly or indirectly, owned
or controlled by such party or by any one or more of its Subsidiaries, or by
such party and any one or more of its Subsidiaries.
(ii) All such shares of Company Common Stock,
when converted as provided in Section 3.2(a)(i), no longer shall be outstanding
and shall automatically be canceled and retired and shall cease to exist, and
each Certificate previously evidencing such Shares shall thereafter represent
only the right to receive the Merger Consideration. The holders of
Certificates previously evidencing Shares outstanding immediately prior to the
Effective Time shall cease to have any rights with respect to the Company
Common Stock except as otherwise provided herein or by law and, upon the
surrender of Certificates in accordance with the provisions of Section 3.3,
shall only represent the right to receive for their Shares, the Merger
Consideration, without any interest thereon.
3.3 Payment for Shares. (a) Paying Agent. Prior to the
Effective Time, Sub shall appoint a United States bank or trust company
reasonably acceptable to the Company to act as paying agent (the "Paying
Agent") for the payment of the Merger Consideration, and Sub shall deposit or
shall cause to be deposited with the Paying Agent in a separate fund
established for the benefit of the holders of shares of Company Common Stock,
for payment in accordance with this Article III, through the Paying Agent (the
"Payment Fund"), immediately available funds in
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amounts necessary to make the payments pursuant to Section 3.2(a)(i) and this
Section 3.3 to holders (other than the Company or any Subsidiary of the Company
or Parent, Sub or any other Subsidiary of Parent, or holders of Dissenting
Shares). The Paying Agent shall, pursuant to irrevocable instructions, pay the
Merger Consideration out of the Payment Fund.
The Paying Agent shall invest portions of the Payment Fund as
Parent directs in obligations of or guaranteed by the United States of America,
in commercial paper obligations receiving the highest investment grade rating
from both Xxxxx'x Investors Services, Inc. and Standard & Poor's Corporation,
or in certificates of deposit, bank repurchase agreements or banker's
acceptances of commercial banks with capital exceeding $1,000,000,000
(collectively, "Permitted Investments"); provided, however, that the maturities
of Permitted Investments shall be such as to permit the Paying Agent to make
prompt payment to former holders of Company Common Stock entitled thereto as
contemplated by this Section. The Surviving Corporation shall cause the
Payment Fund to be promptly replenished to the extent of any losses incurred as
a result of Permitted Investments. All earnings on Permitted Investments shall
be paid to the Surviving Corporation. If for any reason (including losses) the
Payment Fund is inadequate to pay the amounts to which holders of shares of
Company Common Stock shall be entitled under this Section 3.3, the Surviving
Corporation shall in any event be liable for payment thereof. The Payment Fund
shall not be used for any purpose except as expressly provided in this
Agreement.
(b) Payment Procedures. As soon as reasonably practicable
after the Effective Time, the Surviving Corporation shall instruct the Paying
Agent to mail to each holder of record (other than the Company or any
Subsidiary of the Company or Parent, Sub or any other Subsidiary of Parent) of
a Certificate or Certificates which, immediately prior to the Effective Time,
evidenced outstanding shares of Company Common Stock (the "Certificates"), (i)
a form of letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall pass, only upon
proper delivery of the Certificates to the Paying Agent, and shall be in such
form and have such other provisions as the Surviving Corporation reasonably may
specify) and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for payment therefor. Upon surrender of a Certificate
for cancellation to the Paying Agent together with such letter of transmittal,
duly executed, and such other customary documents as may be required pursuant
to such instructions, the holder of such Certificate shall be entitled to
receive in respect thereof cash in an amount equal to the product of (x) the
number of shares of Company Common Stock represented by such Certificate and
(y) the Merger Consideration, and the Certificate so surrendered shall
forthwith be canceled. Absolutely no interest shall be paid or accrued on the
Merger Consideration payable upon the surrender of
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any Certificate. If payment is to be made to a person other than the person in
whose name the surrendered Certificate is registered, it shall be a condition
of payment that the Certificate so surrendered shall be promptly endorsed or
otherwise in proper form for transfer and that the person requesting such
payment shall pay any transfer or other taxes required by reason of the payment
to a person other than the registered holder of the surrendered Certificate or
established to the satisfaction of the Surviving Corporation that such tax has
been paid or is not applicable. Until surrendered in accordance with the
provisions of this Section 3.3(b), each Certificate (other than Certificates
representing Shares owned by Parent or any subsidiary of Parent or held in the
treasury of the Company) shall represent for all purposes only the right to
receive the Merger Consideration.
(c) Termination of Payment Fund; Interest. Any portion of the
Payment Fund which remains undistributed to the holders of Company Common Stock
for 180 days after the Effective Time shall be delivered to the Surviving
Corporation, upon demand, and any holders of Company Common Stock who have not
theretofore complied with this Article III and the instructions set forth in
the letter of transmittal mailed to such holder after the Effective Time shall
thereafter look only to the Surviving Corporation for payment of the Merger
Consideration to which they are entitled. All interest accrued in respect of
the Payment Fund shall inure to the benefit of and be paid to the Surviving
Corporation.
(d) No Liability. Neither Parent nor the Surviving
Corporation shall be liable to any holder of shares of Company Common Stock for
any cash from the Payment Fund delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
(e) Withholding Rights. The Surviving Corporation shall be
entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of shares of Company Common Stock such
amounts as the Surviving Corporation is required to deduct and withhold with
respect to the making of such payment under the Internal Revenue Code of 1986,
as amended (the "Code"), or any provision of state, local or foreign tax law.
To the extent that amounts are so withheld by the Surviving Corporation, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of the shares of Company Common Stock in respect of
which such deduction and withholding was made by the Surviving Corporation.
3.4 Stock Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed and there shall be no further
registration of transfers of shares of Company Common Stock thereafter on the
records of the Company.
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On or after the Effective Time, any certificates presented to the Paying Agent
or Parent for any reason shall be converted into the Merger Consideration.
3.5 Company Stock Plans. (a) At the Effective Time, each
holder of a then outstanding option to purchase Shares under the Company's 1982
Amended and Restated Stock Option Plan, 1990 Stock Option Plan, and Amended and
Restated Outside Directors Stock Option Plan (collectively, the "Stock Option
Plans"), whether or not then exercisable (the "Options"), shall, in settlement
thereof, receive for each Share subject to such Option an amount (subject to
any applicable withholding tax) in cash equal to the difference between the
Offer Consideration and the per Share exercise price of such Option to the
extent such difference is a positive number (such amount being hereinafter
referred to as, the "Option Consideration"); provided, however, that with
respect to any person subject to Section 16(a) of the Exchange Act, any such
amount shall be paid as soon as practicable after the first date payment can be
made without liability to such person under Section 16(b) of the Exchange Act.
Upon receipt of the Option Consideration, the Option shall be canceled. The
surrender of an Option to the Company in exchange for the Option Consideration
shall be deemed a release of any and all rights the holder had or may have had
in respect of such Option. Prior to the Effective Time, the Company shall
obtain all necessary consents or releases from holders of Options under the
Stock Option Plans and take all such other lawful action as may be necessary to
give effect to the transactions contemplated by this Section 3.5. All Stock
Option Plans shall terminate as of the Effective Time and the provisions in any
other plan, program or arrangement providing for the issuance or grant of any
other interest in respect of the capital stock of the Company or any Subsidiary
thereof shall be canceled as of the Effective Time, and the Company shall take
all action necessary to ensure that following the Effective Time no participant
in any Stock Option Plan or other plans, programs or arrangements shall have
any right thereunder to acquire equity securities of the Company, the Surviving
Corporation or any Subsidiary thereof and to terminate all such plans.
(b) The Company shall take all actions reasonably necessary to
cause the last day of the current "Offering Period" (as such term is defined in
the Company's 1990 Employee Stock Purchase Plan (as amended to date, the "1990
ESPP")) to be the date immediately following the last payday occurring prior to
the expiration date of the Offer and apply the funds within the participant's
withholdings account on such expiration date to the purchase of whole Shares in
accordance with the terms of the 1990 ESPP. The Company shall cause the 1990
ESPP to be terminated effective as of the Final Purchase Date.
3.6 Dissenting Shares. Notwithstanding any other
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provisions of this Agreement to the contrary, shares of Company Common Stock
that are outstanding immediately prior to the Effective Time and which are held
by stockholders who shall have not voted in favor of the Merger or consented
thereto in writing and who shall have demanded properly in writing appraisal
for such shares in accordance with Section 262 of the DGCL (collectively, the
"Dissenting Shares") shall not be converted into or represent the right to
receive the Merger Consideration. Such stockholders instead shall be entitled
to receive payment of the appraised value of such shares of Company Common
Stock held by them in accordance with the provisions of such Section 262,
except that all Dissenting Shares held by stockholders who shall have failed to
perfect or who effectively shall have withdrawn or lost their rights to
appraisal of such shares of Company Common Stock under such Section 262 shall
thereupon be deemed to have been converted into and to have become
exchangeable, as of the Effective Time, for the right to receive, without any
interest thereon, the Merger Consideration upon surrender in the manner
provided in Section 3.3, of the Certificate or Certificates that, immediately
prior to the Effective Time, evidenced such shares of Company Common Stock.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of the Company. The
Company represents and warrants to Parent and Sub as follows:
(a) Organization, Standing and Power. Each of the Company and
its Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation, has
all requisite power and authority to own, lease and operate its properties and
to carry on its business as now being conducted, and is duly qualified and in
good standing to conduct business in each jurisdiction in which the business it
is conducting, or the operation, ownership or leasing of its properties, makes
such qualification necessary, other than in such jurisdictions where the
failure so to qualify would not have a Material Adverse Effect (as defined
below) with respect to the Company. The Company has heretofore made available
to Parent complete and correct copies of its and its Subsidiaries' respective
Certificates of Incorporation and Bylaws. All Subsidiaries of the Company and
their respective jurisdictions of incorporation or organization are identified
on Schedule 4.1(a). As used in this Agreement: a "Material Adverse Effect"
shall mean, with respect to any party, the result of one or more events,
changes or effects which, individually or in the aggregate, would have a
material adverse effect on the business, operations, assets or condition
(financial or otherwise) of such party and its Subsidiaries, taken as a whole.
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(b) Capital Structure. As of the date hereof, the authorized
capital stock of the Company consists of 50,000,000 Shares and 1,000,000 shares
of Preferred Stock, $.01 par value ("Preferred Stock"). At the close of
business on September 30, 1996: (i) 17,749,158 Shares were issued and
outstanding; (ii) no shares of Preferred Stock were issued and outstanding;
(iii) 1,838,190 Shares were reserved for issuance pursuant options outstanding
under the Stock Option Plans; (iv) 290,219 Shares remain available for issuance
pursuant to the 1990 ESPP, (v) except for the issuance of Shares pursuant to
the exercise of the Options, there are no employment, executive termination or
similar agreements providing for the issuance of Shares; (vi) 645,184 Shares
were held by the Company; and (vii) no bonds, debentures, notes or other
instruments or evidence of indebtedness having the right to vote (or
convertible into, or exercisable or exchangeable for, securities having the
right to vote) on any matters on which the Company stockholders may vote
("Company Voting Debt") were issued or outstanding. Since September 30, 1996,
no additional Shares have been made available for issuance under the 1990 ESPP.
As of September 30, 1996, the total amount of funds on deposit in all
participants' withholdings accounts for the current Offer Period under the 1990
ESPP was $416,000. All outstanding Shares are validly issued, fully paid and
nonassessable and are not subject to preemptive or other similar rights. No
Shares are owned by any Subsidiary of the Company. Except as set forth on
Schedule 4.1(b), all outstanding shares of capital stock of the Subsidiaries of
the Company are owned by the Company or a direct or indirect Subsidiary of the
Company, free and clear of all liens, charges, encumbrances, claims and options
of any nature. Except as set forth in this Section 4.1(b) and except for
changes since September 30, 1996 resulting from the exercise of employee stock
options granted prior to such date pursuant to the Stock Option Plans or from
the issuance of Shares under the 1990 ESPP as contemplated by Section 3.5(b) of
this Agreement and except for the potential issuance of options to purchase up
to 75,000 Shares that may be granted in connection with an offer of employment
outstanding on the date of this Agreement, there are outstanding: (i) no
shares of capital stock, Company Voting Debt or other voting securities of the
Company; (ii) no securities of the Company or any Subsidiary of the Company
convertible into, or exchangeable or exercisable for, shares of capital stock,
Company Voting Debt or other voting securities of the Company or any Subsidiary
of the Company; and (iii) no options, warrants, calls, rights (including
preemptive rights), commitments or agreements to which the Company or any
Subsidiary of the Company is a party or by which it is bound, in any case
obligating the Company or any Subsidiary of the Company to issue, deliver,
sell, purchase, redeem or acquire, or cause to be issued, delivered, sold,
purchased, redeemed or acquired, additional shares of capital stock or any
Company Voting Debt or other voting securities of the Company or of any
Subsidiary of the Company, or obligating the Company or any Subsidiary of the
Company to grant, extend or
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enter into any such option, warrant, call, right, commitment or agreement.
Since September 30, 1996, the Company has not (i) granted any options, warrants
or rights to purchase shares of Company Common Stock (except for the potential
issuance of options to purchase up to 75,000 Shares that may be granted in
connection with an offer of employment outstanding on the date of this
Agreement), or (ii) amended or repriced any Option or Stock Option Plans, and
set forth on Schedule 4.1(b) is a list of all outstanding options, warrants and
rights to purchase shares of Company Common Stock and the exercise prices
relating thereto. Except for the Stockholders Agreement and the Unit Purchase
Agreement, dated as of July 7, 1992, between the Company, Xxxxxxx X. Xxxx &
Associates, Inc., and certain investors, as amended by the First Amendment to
Unit Purchase Agreement, dated as of August 3, 1992, and the Exchange Agreement
and Second Amendment to Unit Purchase Agreement, dated as of March 31, 1995,
there are not as of the date hereof and there will not be at the Effective Time
any stockholder agreements, voting trusts or other agreements or understandings
to which the Company is a party or by which it is bound relating to the voting
of any shares of the capital stock of the Company which will limit in any way
the solicitation of proxies by or on behalf of the Company from, or the casting
of votes by, the stockholders of the Company with respect to the Merger. There
are no restrictions on the Company to vote the stock of any of its
Subsidiaries.
(c) Authority; No Violations; Consents and Approvals.
(i) The Company has all requisite corporate power and
authority to enter into this Agreement and, subject to the Company Stockholder
Approval (as defined in Section 4.1(c)(iii)), to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of the Company, subject, if
required with respect to consummation of the Merger, to the Company Stockholder
Approval. This Agreement has been duly executed and delivered by the Company
and, subject, if required with respect to consummation of the Merger, to the
Company Stockholder Approval, and assuming that this Agreement constitutes the
valid and binding agreement of Parent and Sub, constitutes a valid and binding
obligation of the Company enforceable in accordance with its terms except that
the enforcement hereof may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws now or
hereafter in effect relating to creditors' rights generally and (b) general
principles of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity).
(ii) Except as set forth on Schedule 4.1(c)(ii), the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by the Company will not
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conflict with, or result in any violation of, or default (with or without
notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration (including pursuant to any put right)
of any obligation or the loss of a material benefit under, or the creation of a
lien, pledge, security interest or other encumbrance on assets or property, or
right of first refusal with respect to any asset or property (any such
conflict, violation, default, right of termination, cancellation or
acceleration, loss, creation or right of first refusal, a "Violation"),
pursuant to (A) any provision of the Certificate of Incorporation or Bylaws of
the Company or any of its Subsidiaries or (B) except as to which requisite
waivers or consents have been obtained and assuming the consents, approvals,
authorizations or permits and filings or notifications referred to in paragraph
(iii) of this Section 4.1(c) are duly and timely obtained or made and, if
required, the Company Stockholder Approval has been obtained, result in any
Violation of (1) any loan or credit agreement, note, mortgage, deed of trust,
indenture, lease, Company Employee Benefit Plan (as defined in Section 4.1(i)),
Company Permit (as defined in Section 4.1(f)), or any other agreement,
obligation, instrument, concession, franchise, or license, except for any
Violations that, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect on the Company and except that each
holder of the Company's 12.25% Senior Notes due 1999 shall have the right, at
such holder's option and in the manner provided in the Indenture, dated August
1, 1992, between the Company and Security Pacific National Trust Company (New
York) to require the Company to redeem all or any portion of such holder's
Senior Notes and except that no representation is made as to that certain
Revolving Credit Loan Agreement, dated as of June 30, 1992, by and between the
Company and Comerica Bank-California, as amended to date, and that certain
First Deed of Trust and Assignment of Rents, Security Agreement and Fixture
Filing, dated August 23, 1988, by 0000 Xxxxx Xx. Corp. and Xxxxx-XxXxxxxx
Financial Corporation, as Trustee, for the benefit of The Variable Annuity Life
Insurance Company, or (2) any judgment, order, decree, statute, law, ordinance,
rule or regulation applicable to the Company or any of its Subsidiaries or
their respective properties or assets (collectively, "Laws"). The Board of
Directors of the Company has taken all actions necessary under the DGCL,
including approving the transactions contemplated by this Agreement and the
Stockholders Agreement, to ensure that Section 203 of the DGCL does not, and
will not, apply to the transactions contemplated in this Agreement or the
Stockholders Agreement.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, notice to, or permit from any court,
administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign (a "Governmental Entity"), is required by
or with respect to the Company or any of its domestic Subsidiaries, and to the
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best knowledge of either of the Company's Chief Executive Officer and the
Company's Chief Financial Officer (the "Designated Officers") with respect to
any of the Company's foreign Subsidiaries, in connection with the execution and
delivery of this Agreement by the Company or the consummation by the Company of
the transactions contemplated hereby, except for: (A) the filing of a
premerger notification and report form by the Company under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act") and the expiration or termination of the applicable waiting period
thereunder; (B) the filing with the SEC of (x) a proxy statement (if required
by applicable law) in definitive form relating to a meeting of the holders of
Company Common Stock to approve the Merger (such proxy statement as amended or
supplemented from time to time being hereinafter referred to as the "Proxy
Statement"), (y) the Schedule 14D-9 in connection with the Offer, and (z) such
reports under and such other compliance with the Exchange Act and the rules and
regulations thereunder as may be required in connection with this Agreement and
the transactions contemplated hereby; (C) the filing of the Certificate of
Merger with the Secretary of State of the State of Delaware; (D) such filings
and approvals as may be required by any applicable state securities, "blue sky"
or takeover laws; (E) such filings and approvals as may be required by any
foreign pre-merger notification, securities, corporate or other law, rule or
regulation; (F) such filings in connection with any state or local tax which is
attributable to the beneficial ownership of the Company's or its Subsidiaries'
real property, if any (collectively, the "Gains and Transfer Taxes"); (G) such
other such filings and consents as may be required under any environmental,
health or safety law or regulation pertaining to any notification, disclosure
or required approval necessitated by the Merger or the transactions
contemplated by this Agreement; and (H) the approval of this Agreement and the
Merger by the holders of a majority of the outstanding Shares ("Company
Stockholder Approval") .
(d) SEC Documents. The Company has made available to Parent a
true and complete copy of each report, schedule, registration statement and
definitive proxy statement filed by the Company with the SEC since January 1,
1993 and prior to the date of this Agreement (the "Company SEC Documents"),
which are all the documents (other than preliminary material) that the Company
was required to file with the SEC since such date. As of their respective
dates, the Company SEC Documents complied in all material respects with the
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
or the Exchange Act, as the case may be, and the rules and regulations of the
SEC thereunder applicable to such Company SEC Documents, and none of the
Company SEC Documents contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading. The financial statements of the Company included in
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the Company SEC Documents complied as to form in all material respects with the
published rules and regulations of the SEC with respect thereto, were prepared
in accordance with generally accepted accounting principles ("GAAP") applied on
a consistent basis during the periods involved (except as may be indicated in
the notes thereto or, in the case of the unaudited statements, as permitted by
Rule 10-01 of Regulation S-X of the SEC) and fairly present in accordance with
applicable requirements of GAAP (subject, in the case of the unaudited
statements, to normal, recurring adjustments, which will not be material,
either individually or in the aggregate) the consolidated financial position of
the Company and its consolidated Subsidiaries as of their respective dates and
the consolidated results of operations and the consolidated cash flows of the
Company and its consolidated Subsidiaries for the periods presented therein.
(e) Information Supplied. None of the information supplied or
to be supplied by the Company for inclusion or incorporation by reference in
(i) any of the Offer Documents will, at the time the Offer Documents are first
published, sent or given to holders of Company Common Stock, and at any time
they are amended or supplemented, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading, and (ii) the Proxy Statement will, on the
date it is first mailed to the holders of the Company Common Stock or at the
time of the Company's Stockholders Meeting, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. If at any time prior
to the expiration date of the Offer or the Effective Time any event with
respect to the Company or any of its Subsidiaries, or with respect to other
information supplied by the Company for inclusion in the Offer Documents or the
Proxy Statement, shall occur which is required to be described in an amendment
of, or a supplement to, the Offer Documents or the Proxy Statement, as the case
may be, such event shall be so described, and such amendment or supplement
shall be promptly filed with the SEC and, as required by law, disseminated to
the stockholders of the Company. The Proxy Statement, insofar as it relates to
the Company or its Subsidiaries or other information supplied by the Company
for inclusion therein will comply as to form, in all material respects, with
the provisions of the Exchange Act or the rules and regulations thereunder.
(f) Compliance with Applicable Laws. The Company and its
Subsidiaries hold all permits, licenses, variances, exemptions, orders,
franchises and approvals of all Governmental Entities necessary for the lawful
conduct of their respective businesses (the "Company Permits"), except where
the failure to hold any such Company Permits could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect on the
Company. The Company and its Subsidiaries are in compliance with the terms of
the Company Permits, except where the failure to be in compliance could not
reasonably be expected,
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individually or in the aggregate, to have a Material Adverse Effect on the
Company. Except as disclosed in the Company SEC Documents, the businesses of
the Company and its Subsidiaries are not being conducted in violation of any
law, ordinance or regulation of any Governmental Entity. As of the date of
this Agreement, no investigation or review by any Governmental Entity with
respect to the Company or any of its Subsidiaries is pending or, to the
knowledge of the Company, threatened.
(g) Litigation. Except as disclosed in the Company SEC
Documents, there is no suit, action or proceeding pending or, to the knowledge
of the Company, threatened against or affecting the Company or any Subsidiary
of the Company ("Company Litigation"), nor is there any material judgment,
decree, injunction, rule or order of any Governmental Entity or arbitrator
outstanding against the Company or any Subsidiary of the Company ("Company
Order"). In addition, except as set forth on Schedule 4.1(g), the aggregate
amount of all claims and judgments pending, or to the knowledge of the Company,
threatened pursuant to all Company Litigation and Company Orders, excluding
individual, unrelated claims or judgments of less than $100,000 each, does not
exceed $2,500,000.
(h) Taxes. Except as set forth on Schedule 4.1(h) hereto:
(i) All Tax Returns required to be filed by or with
respect to the Company and each of its Subsidiaries have been duly and
timely filed, and all such Tax Returns are true, correct and complete in
all material respects. The Company and each of its Subsidiaries has
duly and timely paid (or there has been paid on its behalf) all Taxes
that are due, or claimed or asserted by any taxing authority to be due,
from or with respect to it. With respect to any period for which Taxes
are not yet due with respect to the Company or any Subsidiary, the
Company and each of its Subsidiaries has made due and sufficient current
accruals for such Taxes in accordance with GAAP in the most recent
financial statements contained in the Company SEC Documents. The
Company and each of its Subsidiaries has made (or there has been made on
its behalf) all required estimated Tax payments sufficient to avoid any
material underpayment penalties. The Company and each of its
Subsidiaries has withheld and paid all Taxes required by all applicable
laws to be withheld or paid in connection with any amounts paid or owing
to any employee, creditor, independent contractor or other third party.
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(ii) There are no outstanding agreements, waivers, or
arrangements extending the statutory period of limitation applicable to
any claim for, or the period for the collection or assessment of,
material Taxes due from or with respect to the Company or any of its
Subsidiaries for any taxable period. No audit or other proceeding by
any court, governmental or regulatory authority, or similar person is
pending or threatened in regard to any Taxes due from or with respect to
the Company or any of the Subsidiaries or any Tax Return filed by or
with respect to the Company or any Subsidiary, other than normal and
routine audits by non-federal governmental authorities. No material
assessment of Taxes is proposed against the Company or any of its
Subsidiaries or any of their assets.
(iii) No election under Section 338 of the Code has been
made or filed by or with respect to the Company or any of its
Subsidiaries. No consent to the application of Section 341(f)(2) of the
Code (or any predecessor provision) has been made or filed by or with
respect to the Company or any of its Subsidiaries or any of their
assets. None of the Company or any of its Subsidiaries has agreed to
make any adjustment pursuant to Section 481(a) of the Code (or any
predecessor provision) by reason of any change in any accounting method,
and there is no application pending with any taxing authority requesting
permission for any changes in any accounting method of the Company or
any of its Subsidiaries. None of the assets of the Company or any of
its Subsidiaries is or will be required to be treated as being owned by
any person (other than the Company or its Subsidiaries) pursuant to the
provisions of Section 168(f)(8) of the Internal Revenue Code of 1954, as
amended and in effect immediately before the enactment of the Tax Reform
Act of 1986.
(iv) None of the Company or any of its Subsidiaries is a
party to, is bound by, or has any obligation under, any Tax sharing
agreement, Tax allocation agreement or similar contract.
(v) There is no contract, agreement, plan or
arrangement covering any person that, individually or collectively,
could give rise to the payment of any amount that would not be
deductible by the Company or any of its Subsidiaries by reason of
Section 280G of the Code.
(vi) Schedule 4.1(h) accurately sets forth (i) the
amount of all deferred intercompany gains for purposes of Treasury
Regulation section 1.1502-13 (including any predecessor regulation) with
respect to the Company and its Subsidiaries; and (ii) the amount of any
excess loss account with respect to the stock of each of the
Subsidiaries for
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purposes of Treasury Regulation section 1.1502-19 (including any
predecessor regulation).
(vii) "Code" shall mean the Internal Revenue Code of
1986, as amended. "Taxes" shall mean all taxes, charges, fees, levies,
or other similar assessments or liabilities, including without
limitation (a) income, gross receipts, ad valorem, premium, excise, real
property, personal property, sales, use, transfer, withholding,
employment, payroll, and franchise taxes imposed by the United States of
America, or by any state, local, or foreign government, or any
subdivision, agency, or other similar person of the United States or any
such government; and (b) any interest, fines, penalties, assessments, or
additions to taxes resulting from, attributable to, or incurred in
connection with any Tax or any contest, dispute, or refund thereof.
"Tax Returns" shall mean any report, return, or statement required to be
supplied to a taxing authority in connection with Taxes.
(i) Pension And Benefit Plans; ERISA.
(i) To the best knowledge of the Designated Officers,
Schedule 4.1(i)(i) sets forth a complete and correct list of:
(A) all "employee benefit plans", as defined in Section
3(3) of ERISA, under which Company or any of its
Subsidiaries has any obligation or liability, contingent
or otherwise ("Benefit Plans"); and
(B) all employment or consulting agreements, bonus or
other incentive compensation, deferred compensation,
salary continuation during any absence from active
employment for disability or other reasons, severance,
sick days, stock award, stock option, stock purchase,
tuition assistance, club membership, employee discount,
employee loan, or vacation pay agreements, policies or
arrangements which Company or any of its Subsidiaries
maintains or has any obligation or liability (contingent
or otherwise) with respect to any current officer,
director or employee of Company or any of its Subsidiaries
which individual arrangement has a cost to the Company or
any of its Subsidiaries in excess of $10,000 per year (the
"Employee Arrangements").
(ii) With respect to each Benefit Plan and Employee
Arrangement, a complete and correct copy of each of the following
documents (if applicable) has been provided to Purchaser: (i) the most
recent plan and related trust
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documents, and all amendments thereto; (ii) the most recent summary plan
description, and all related summaries of material modifications
thereto; (iii) the most recent Form 5500 (including schedules and
attachments); (iv) the most recent IRS determination letter; (v) the
most recent actuarial reports (including for purposes of Financial
Accounting Standards Board report no. 87, 106 and 112).
(iii) Company and its Subsidiaries have not during the
preceding six years had any obligation or liability (contingent or
otherwise) with respect to a Benefit Plan which is described in Section
3(37), 4(b)(4), 4063 or 4064 of ERISA.
(iv) To the best knowledge of the Designated Officers,
the Benefit Plans and their related trusts intended to qualify under
Sections 401 and 501(a) of the Code, respectively, are qualified under
such sections. To the best knowledge of the Designated Officers, any
voluntary employee benefit association which provides benefits to
current or former employees of the Company and its Subsidiaries, or
their beneficiaries, is and has been qualified under Section 501(c)(9)
of the Code.
(v) All contributions or other payments required to
have been made by Company and its Subsidiaries to or under any Benefit
Plan or Employee Arrangement by applicable law or the terms of such
Benefit Plan or Employee Arrangement (or any agreement relating thereto)
have been timely and properly made.
(vi) To the best knowledge of the Designated Officers,
the Benefit Plans and Employee Arrangements have been maintained and
administered in all material respects in accordance with their terms and
applicable laws.
(vii) Except as disclosed in Schedule 4.1(i)(vii), there
are no pending or, to the best knowledge of the Designated Officers,
threatened actions, claims or proceedings against or relating to any
Benefit Plan or Employee Arrangement other than routine benefit claims
by persons entitled to benefits thereunder.
(viii) Except as disclosed in Schedule 4.1(i)(viii),
Company and its Subsidiaries do not maintain or have an obligation to
contribute to retiree life or retiree health plans which provide for
continuing benefits or coverage for current or former officers,
directors or employees of the Company or any of its Subsidiaries except
(i) as may be required under Part 6 of Title I of ERISA) and at the sole
expense of the participant or the participant's beneficiary or (ii) a
medical expense reimbursement account plan pursuant to Section 125 of
the Code.
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(ix) Except as disclosed in Schedule 4.1(i)(ix), none of
the assets of any Benefit Plan is stock of the Company or any of its
affiliates, or property leased to or jointly owned by the Company or any
of its affiliates.
(x) Except as disclosed in Schedule 4.1(i)(x) or in
connection with equity compensation, neither the execution and delivery
of this Agreement nor the consummation of the transactions contemplated
hereby will (i) result in any payment becoming due to any employee
(current, former or retired) of Company and its Subsidiaries, (ii)
increase any benefits under any Benefit Plan or Employee Arrangement or
(iii) result in the acceleration of the time of payment of, vesting of
or other rights with respect to any such benefits.
(xi) Company and its Subsidiaries have no liability
(contingent or otherwise) under Section 4069 of ERISA by reason of a
transfer of an underfunded pension plan.
(xii) The representations and warranties set forth in the
immediately preceding clauses (i) through (xi) shall apply to the
Benefit Plans and Employee Arrangements of Computer System Dynamics,
Inc. ("CSD") that were in existence at the time of the acquisition of
CSD by the Company pursuant to that certain Stock Purchase Agreement,
dated June 14, 1996, subject to the following qualifications: (A) each
such representation and warranty that is not otherwise qualified as
being "to the best knowledge of the Designated Officers" shall be deemed
so qualified and (B) each such representation and warranty shall be
subject to the exceptions disclosed with respect to the particular
representation and warranty on Schedule 4.1(i)(xii) hereto.
(xiii) Schedule 4.1(i)(xiii)(a) sets forth a true, correct
and complete copy of certain resolutions of the board of directors of
the Company duly adopted at the meeting thereof held on January 4, 1989
(the "1989 Resolutions"); prior to the adoption of the resolutions
identified in the next sentence, the 1989 Resolutions had not been
amended, modified or repealed in any respect and were in full force and
effect; neither the Company, any of its Subsidiaries, nor any of their
respective employees, agents or representatives, has made any
representation, warranty, covenant or agreement that the 1989
Resolutions would not, or could not, be amended, modified or repealed
solely by the Company; from and after the adoption of the resolutions
referenced in the next succeeding sentence, the 1989 Resolutions have
ceased to be of any force or effect; and no written or oral agreements
have been entered into pursuant to the authority granted in the 1989
Resolutions or
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otherwise evidencing any of the matters referenced in the 1989
Resolutions. The board of directors of the Company has unanimously
adopted resolutions rescinding the 1989 Resolutions, retroactive to the
date of the adoption of the 1989 Resolutions, and adopting a severance
pay policy the terms of which are to consist of the arrangements
described in the 1989 Resolutions, modified as follows:
(A) Employees (other than executive officers) shall be
eligible for severance benefits in accordance with such policy
only if they are involuntarily terminated without cause by the
Company and its subsidiaries within six (6) months following a
change in control (as defined in the 1989 Resolutions).
(B) Executive officers of the Company shall be eligible
for severance benefits in accordance with such policy only if
they are involuntarily terminated by the Company and its
subsidiaries within twelve (12) months following a change in
control (defined as described above) of the Company.
(C) The Board of Directors of the Company shall have the
right to clarify the terms of such severance policy at any time
and from time to time, including, but not limited to, resolving
any ambiguities or supplying any omission in such severance
policy.
(D) The Board of Directors of the Company shall have the
right to amend or terminate such severance policy in its sole
discretion at any time and from time to time, except no such
amendment or termination which materially and adversely affects
the rights of any employee of the Company or any of its
subsidiaries under the severance policy shall be effective with
respect to: (i) any person whose employment with the Company and
its subsidiaries has terminated prior to the date of such
amendment or termination, (ii) any such employee for a period of
six months beginning on the date of a change in control (defined
as described above) of the Company and (iii) any executive
officer of the Company for a period of twelve months beginning on
the date of a change in control (defined as described above).
(E) For all purposes of the severance policy, the date
of a change in control of the Company involving a person or an
affiliated group of persons shall be the date of the earliest to
occur of any of the events defined in the 1989 Resolutions with
respect to such person or affiliated group of persons.
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(j) Absence of Certain Changes or Events. Except as disclosed
in the Company SEC Documents filed after September 30, 1995, as set forth on
Schedule 4.1(j), or as contemplated by this Agreement, since September 30,
1995, the business of the Company and its Subsidiaries has been carried on only
in the ordinary and usual course and there has not been any material adverse
changes (either individually or in the aggregate) in the business, operations
or financial condition of the Company.
(k) No Undisclosed Material Liabilities. To the best
knowledge of the Designated Officers, except as specifically and individually
set forth on Schedule 4.1(k) or the other schedules hereto (specific reference
to which shall be made on Schedule 4.1(k)), there are no liabilities of the
Company or any Subsidiary of any kind whatsoever, whether accrued, contingent,
absolute, determined, determinable or otherwise, that are material to the
Company and its Subsidiaries considered as a whole other than: (i) liabilities
reflected on the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1996; and (ii) liabilities under this Agreement.
(l) Opinion of Financial Advisor. The Company has received
the opinion of Xxxxxxxxx & Xxxxx LLP, dated October 16, 1996, to the effect
that, as of the date hereof, the Offer Consideration to be received by the
holders of Company Common Stock in the Offer and the Merger Consideration to be
received by the holders of Company Common Stock in the Merger is fair from a
financial point of view to such holders, a signed, true and complete copy of
which opinion shall be delivered to Parent, and such opinion has not been
withdrawn or modified.
(m) Vote Required. In the event that Section 253 of the DGCL
is inapplicable and unavailable to effectuate the Merger, the affirmative vote
of the holders of a majority of the outstanding shares of Company Common Stock
is the only vote of the holders of any class or series of the Company's capital
stock necessary (under applicable law or otherwise) to approve the Merger and
this Agreement and the transactions contemplated hereby.
(n) Labor Matters.
(i) Neither the Company nor any of its Subsidiaries is
a party to any labor or collective bargaining agreement, and no
employees of Company or any of its Subsidiaries are represented by any
labor organization. Within the preceding three years, there have been
no representation or certification proceedings, or petitions seeking a
representation proceeding, pending or, to the knowledge of the Company,
threatened in writing to be brought or filed with the National Labor
Relations Board or any other labor relations tribunal or authority.
Within the preceding three years, to the knowledge of Company, there
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have been no organizing activities involving Company and its
Subsidiaries with respect to any group of employees of Company or any of
its Subsidiaries.
(ii) There are no strikes, work stoppages, slowdowns,
lockouts, material arbitrations or material grievances or other material
labor disputes pending or threatened in writing against or involving
Company or any of its Subsidiaries. There are no unfair labor practice
charges, grievances or complaints pending or, to the knowledge of
Company, threatened in writing by or on behalf of any employee or group
of employees of Company or any of its Subsidiaries.
(iii) There are no complaints, charges or claims against
Company or any of its Subsidiaries pending or, to the knowledge of
Company, threatened to be brought or filed with any governmental
authority, arbitrator or court based on, arising out of, in connection
with, or otherwise relating to the employment or termination of
employment of any individual by Company or any of its Subsidiaries.
(iv) Each of the Company and its Subsidiaries is in
material compliance with all laws, regulations and orders relating to
the employment of labor, including all such laws, regulations and orders
relating to wages, hours, WARN, collective bargaining, discrimination,
civil rights, safety and health, workers' compensation and the
collection and payment of withholding and/or social security taxes and
any similar tax except for immaterial non-compliance.
(v) There has been no "mass layoff" or "plant closing"
as defined by the Worker Adjustment Retraining and Notification Act, as
amended, with respect to Company and its Subsidiaries within the six (6)
months prior to Closing.
(o) Intangible Property. To the best knowledge of the
Designated Officers, each of the Company and its Subsidiaries own or have a
right to use each trademark, trade name, patent, service xxxx, brand xxxx,
brand name, computer program, database, industrial design and copyright owned,
used or useful in connection with the operation of the businesses of each of
the Company and its Subsidiaries as well as a list of all registrations thereof
and pending applications therefor, and each license or other contract relating
thereto (collectively, the "Company Intangible Property") necessary for the
operation of its respective business, free and clear of any and all liens,
claims or encumbrances, except where the failure to own or have a right to use
such property could not reasonably be expected to have a Material Adverse
Effect on the Company. Except to the extent that such could not reasonably be
expected to have a Material Adverse Effect on the Company, the use of the
Company Intangible Property by the Company or its Subsidiaries does not
conflict
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with, infringe upon, violate or interfere with or constitute an appropriation
of any right, title, interest or goodwill, including, without limitation, any
intellectual property right, trademark, trade name, patent, service xxxx, brand
xxxx, brand name, computer program, database, industrial design, copyright or
any pending application therefor of any other person.
(p) Environmental Matters.
(i) For purposes of this Agreement:
(A) "Environmental Costs and Liabilities" means any and
all losses, liabilities, obligations, damages, fines, penalties,
judgments, actions, claims, costs and expenses (including,
without limitation, fees, disbursements and expenses of legal
counsel, experts, engineers and consultants and the costs of
investigation and feasibility studies and clean up, remove,
treat, or in any other way address any Hazardous Materials)
arising from or under any Environmental Law.
(B) "Environmental Law" means any applicable law
regulating or prohibiting Releases into any part of the natural
environment, or pertaining to the protection of natural
resources, the environment and public and employee health and
safety including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act
("CERCLA") (42 U.S.C. Section 9601 et seq.), the Hazardous
Materials Transportation Act (49 U.S.C. Section 1801 et seq.),
the Resource Conservation and Recovery Act (42 U.S.C. Section
6901 et seq.), the Clean Water Act (33 U.S.C. Section 1251 et
seq.), the Clean Air Act (33 U.S.C. Section 7401 et seq.), the
Toxic Substances Control Act (15 U.S.C. Section 7401 et seq.),
the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C.
Section 136 et seq.), and the Occupational Safety and Health Act
(29 U.S.C. Section 651 et seq.) ("OSHA") and the regulations
promulgated pursuant thereto, and any such applicable state or
local statutes, including, without limitation, the Industrial
Site Recovery Act ("IRSA"), and the regulations promulgated
pursuant thereto, as such laws have been and may be amended or
supplemented through the Closing Date;
(C) "Hazardous Material" means any substance, material
or waste which is regulated by any public or governmental
authority in the jurisdictions in which the applicable party or
its Subsidiaries conducts business, or the United States,
including, without limitation, any material or substance which is
defined as a "hazardous waste," "hazardous material," "hazardous
substance," "extremely hazardous waste" or
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"restricted hazardous waste," "contaminant," "toxic waste" or
"toxic substance" under any provision of Environmental Law and
shall also include, without limitation, petroleum, petroleum
products, asbestos, polychlorinated biphenyls and radioactive
materials;
(D) "Release" means any release, spill, effluent,
emission, leaking, pumping, injection, deposit, disposal,
discharge, dispersal, leaching, or migration into the indoor or
outdoor environment, or into or out of any property; and
(E) "Remedial Action" means all actions, including,
without limitation, any capital expenditures, required by a
governmental entity or required under any Environmental Law, or
voluntarily undertaken to (I) clean up, remove, treat, or in any
other way ameliorate or address any Hazardous Materials or other
substance in the indoor or outdoor environment; (II) prevent the
Release or threat of Release, or minimize the further Release of
any Hazardous Material so it does not endanger or threaten to
endanger the public health or welfare of the indoor or outdoor
environment; (III) perform pre-remedial studies and
investigations or post-remedial monitoring and care pertaining or
relating to a Release; or (IV) bring the applicable party into
compliance with any Environmental Law.
(ii) The operations of the Company and its Subsidiaries
have been and, as of the Closing Date, will be, in compliance in all
material respects with all Environmental Laws;
(iii) The Company and its Subsidiaries have obtained and
will, as of the Closing Date, maintain all permits required under
applicable Environmental Laws for the continued operations of their
respective businesses, except such permits the lack of which would not
materially impair the ability of the Company and its Subsidiaries to
continue operations;
(iv) The Company and its Subsidiaries are not subject to
any outstanding written orders or material contracts with any
Governmental Entity or other person respecting (A) Environmental Laws,
(B) Remedial Action or (C) any Release or threatened Release of a
Hazardous Material;
(v) The Company and its Subsidiaries have not received
any written communication alleging, with respect to any such party, the
violation of or liability under any
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Environmental Law, which violation or liability is outstanding;
(vi) Neither the Company nor any of its Subsidiaries has
any contingent liability in connection with the Release of any Hazardous
Material into the indoor or outdoor environment (whether on-site or
off-site) which would be reasonably likely to result in the Company and
its Subsidiaries incurring Environmental Costs and Liabilities in excess
of $100,000;
(vii) The operations of the Company or its Subsidiaries
do not involve the transportation, treatment, storage or disposal of
hazardous waste, as defined and regulated under 40 C.F.R. Parts 260-270
(in effect as of the date of this Agreement) or any state equivalent;
(viii) There is not now, nor to the knowledge of the
Company has there been in the past, on or in any property of the Company
or its Subsidiaries any of the following: (A) any underground storage
tanks or surface impoundments, (B) any asbestos-containing materials, or
(C) any polychlorinated biphenyls;
(ix) No judicial or administrative proceedings are
pending or, to the knowledge of the Company, threatened against the
Company and its Subsidiaries alleging the violation of or seeking to
impose liability pursuant to any Environmental Law and there are no
investigations pending or, to the knowledge of the Company, threatened
against the Company or any of its Subsidiaries under Environmental Laws;
and
(x) None of the exceptions set forth on Schedule 4.1(p)
are reasonably likely to result in the Company and its Subsidiaries
incurring Environmental Costs and Liabilities in excess of $100,000
individually or in the aggregate.
(q) Real Property.
(i) Schedule 4.1(q)(i) sets forth all of the real
property owned in fee by the Company and its Subsidiaries. Each of the
Company and its Subsidiaries has good and marketable title to each
parcel of real property owned by it free and clear of all mortgages,
pledges, liens, encumbrances and security interests, except (1) those
reflected or reserved against in the balance sheet of the Company dated
as of June 30, 1996 and (2) taxes and general and special assessments
not in default and payable without penalty and interest.
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(ii) Each lease, sublease or other agreement
(collectively, the "Real Property Leases") under which the Company or
any of its Subsidiaries uses or occupies or has the right to use or
occupy, now or in the future, any real property is valid, binding and in
full force and effect, all rent and other sums and charges payable by
the Company and its Subsidiaries as tenants thereunder are current, no
termination event or condition or uncured default of a material nature
on the part of the Company or any such Subsidiary or, to the Company's
knowledge, the landlord, exists under any Real Property Lease. Each of
the Company and its Subsidiaries has a good and valid leasehold interest
in each parcel of real property leased by it free and clear of all
mortgages, pledges, liens, encumbrances and security interests, except
(i) those reflected or reserved against in the balance sheet of the
Company dated as of June 30, 1996 and (ii) taxes and general and special
assessments not in default and payable without penalty and interest.
(r) Board Recommendation. The Board of Directors of the
Company, at a meeting duly called and held, has by the vote of those directors
present (who constituted 100% of the directors then in office) (i) determined
that this Agreement and the transactions contemplated hereby, including the
Offer and the Merger, and the execution and delivery of the Stockholders
Agreement and the transactions contemplated thereby, taken together, are fair
to and in the best interests of the stockholders of the Company and has
approved the same, and (ii) resolved to recommend that the holders of the
shares of Company Common Stock approve this Agreement and the transactions
contemplated herein, including the Merger, and accept the Offer and tender
their shares of Company Common Stock pursuant thereto.
(s) Material Contracts. Each contract, agreement or other
document or instrument to which the Company or any of its Subsidiaries is a
party that was required to be filed as an exhibit to the Company's annual
report on Form 10-K for the year ended September 30, 1995 was so filed and,
from and after September 30, 1995, neither the Company nor any of its
Subsidiaries has entered into any contract, agreement or other document or
instrument (other than this Agreement) that is required to be filed with the
SEC that has not been so filed on or before the date of this Agreement or any
amendment, modification or waiver under any contract, agreement or other
document or instrument that was previously so filed, which amendment,
modification or waiver is required to be so filed. Neither the Company nor any
of its Subsidiaries is a party to an employment agreement.
(t) Related Party Transactions. No director, officer,
"affiliate" or "associate" (as such terms are defined in Rule 12b-2 under the
Exchange Act) of the Company or any of its Subsidiaries (i) has borrowed any
monies from or has outstanding
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any indebtedness or other similar obligations to the Company or any of its
Subsidiaries; (ii) owns any direct or indirect interest of any kind in, or is a
director, officer, employee, partner, affiliate or associate of, or consultant
or lender to, or borrower from, or has the right to participate in the
management, operations or profits of, any person or entity which is (1) a
competitor, supplier, customer, distributor, lessor, tenant, creditor or debtor
of the Company or any of its Subsidiaries, (2) engaged in a business related to
the business of the Company or any of its Subsidiaries or (3) participating in
any transaction to which the Company or any of its Subsidiaries is a party or
(iii) is otherwise a party to any contract, arrangement or understanding with
the Company or any of its Subsidiaries.
(u) Indebtedness. Except as set forth in the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1996,
neither the Company nor any of its Subsidiaries has any outstanding
indebtedness for borrowed money or representing the deferred purchase price of
property or services or similar liabilities or obligations, including any
guarantee in respect thereof ("Indebtedness"), or is a party to any agreement,
arrangement or understanding providing for the creation, incurrence or
assumption thereof.
(v) Liens. Except as set forth on Schedule 4.1(v), neither
the Company nor any of its Subsidiaries has granted, created or suffered to
exist with respect to any of its assets, any mortgage, pledge, charge,
hypothecation, collateral assignment, lien (statutory or otherwise),
encumbrance or security agreement of any kind or nature whatsoever.
4.2 Representations and Warranties of Parent and Sub. Parent and Sub
represent and warrant to the Company as follows:
(a) Organization, Standing and Power. Each of Parent and Sub is a
corporation duly organized, validly existing and in good standing under the
laws of its state of incorporation or organization, has all requisite power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted, and is duly qualified and in good standing to conduct
business in each jurisdiction in which the business it is conducting, or the
operation, ownership or leasing of its properties, makes such qualification
necessary, other than in such jurisdictions where the failure so to qualify
would not have a Material Adverse Effect with respect to Parent. Parent and
Sub have heretofore made available to the Company complete and correct copies
of their respective Certificates of Incorporation and Bylaws.
(b) Authority; No Violations; Consents and Approvals.
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(i) Each of Parent and Sub has all requisite corporate
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part
of Parent and Sub. This Agreement has been duly executed and delivered
by each of Parent and Sub and assuming this Agreement constitutes the
valid and binding agreement of the Company, constitutes a valid and
binding obligation of Parent and Sub enforceable in accordance with its
terms except that the enforcement hereof may be limited by (a)
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws now or hereafter in effect relating to
creditors' rights generally and (b) general principles of equity
(regardless of whether enforceability is considered in a proceeding at
law or in equity).
(ii) The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby by each of
Parent and Sub will not result in any Violation (as defined in Section
4.1(c)(ii)) pursuant to any provision of the respective Articles or
Certificates of Incorporation or Bylaws of Parent or Sub or, except as
to which requisite waivers or consents have been obtained and assuming
the consents, approvals, authorizations or permits and filings or
notifications referred to in paragraph (iii) of this Section 4.2(b) are
duly and timely obtained or made and, if required, the Company
Stockholder Approval has been obtained, result in any Violation of any
loan or credit agreement, note, mortgage, indenture, lease, or other
agreement, obligation, instrument, concession, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Parent or Sub or their respective properties or assets,
which would have a Material Adverse Effect with respect to Parent.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, notice to, or permit from any
Governmental Entity, is required by or with respect to Parent or Sub in
connection with the execution and delivery of this Agreement by each of
Parent and Sub or the consummation by each of Parent or Sub of the
transactions contemplated hereby, except for: (A) filings under the HSR
Act; (B) the filing with the SEC of (x) the Schedule 14D-1 in connection
with the commencement and consummation of the Offer and (y) such reports
under and such other compliance with the Exchange Act and the rules and
regulations thereunder, as may be required in connection with this
Agreement and the transactions contemplated hereby; (C) the filing of
the Certificate of Merger with the Secretary of State of the State of
Delaware; (D) such
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filings and approvals as may be required by any applicable state
securities, "blue sky" or takeover laws; (E) such filings and approvals
as may be required by any foreign pre-merger notification, securities,
corporate or other law, rule or regulation; (F) such filings in
connection with any Gains and Transfer Taxes; and (G) such other such
filings and consents as may be required under any environmental, health
or safety law or regulation pertaining to any notification, disclosure
or required approval necessitated by the Merger or the transactions
contemplated by this Agreement.
(c) Information Supplied. None of the information supplied or
to be supplied by Parent or Sub for inclusion or incorporation by reference in
(i) the Schedule 14D-9 will, at the time the Schedule 14D-9 is filed with the
SEC, and at any time it is amended or supplemented, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading, and (ii) the Proxy
Statement will, at the date it is first mailed to the Company's stockholders or
at the time of the Company Stockholders Meeting, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. If at any time prior
to the Effective Time any event with respect to Parent or Sub, or with respect
to information supplied by Parent or Sub for inclusion in the Schedule 14D-9 or
the Proxy Statement, shall occur which is required to be described in an
amendment of, or a supplement to, such documents, such event shall be so
described to the Company.
(d) Board Recommendation. The Board of Directors of the
Parent, at a meeting duly called and held, has by the vote of those directors
present determined that each of the Offer and the Merger is fair to and in the
best interests of Parent and has approved the same.
(e) Financing. Parent and Sub have delivered to the Company
true and complete copies of commitments obtained by Parent and Sub from
financially responsible third parties in respect of the debt and equity
financing for the transactions contemplated hereby.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
5.1 Covenants of the Company. During the period from the date
of this Agreement and continuing until the Effective Time, the Company agrees
as to the Company and its Subsidiaries that (except as expressly contemplated
or permitted by this
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Agreement, or to the extent that Parent shall otherwise consent in writing):
(a) Ordinary Course. The Company and its Subsidiaries shall
carry on its businesses in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted and shall use all
reasonable efforts to preserve intact its present business organizations, keep
available the services of its current officers and employees and preserve its
relationships with customers, suppliers and others having business dealings
with it to the end that its goodwill and ongoing business shall not be impaired
in any material respect at the Effective Time.
(b) Dividends; Changes in Stock. The Company shall not, nor
shall it permit any of its Subsidiaries to: (i) declare or pay any dividends
on or make other distributions in respect of any of its capital stock; (ii)
split, combine or reclassify any of its capital stock or issue or authorize or
propose the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock; or (iii) repurchase or otherwise
acquire, or permit any Subsidiary to purchase or otherwise acquire, any shares
of its capital stock, except as required by the terms of its securities
outstanding on the date hereof, as contemplated by this Agreement or as
contemplated by employee benefit and dividend reinvestment plans as in effect
on the date hereof.
(c) Issuance of Securities. The Company shall not, nor shall
it permit any of its Subsidiaries to, (i) grant any options, warrants or
rights, to purchase shares of Company Common Stock, (ii) amend or reprice any
Option or Stock Option Plan, (iii) amend the 1990 ESPP, permit any person not a
participant in the 1990 ESPP on the date of this Agreement to become a
participant in the 1990 ESPP, or permit any participant in the 1990 ESPP to
increase such participant's current payroll deductions with respect to the 1990
ESPP, or (iv) issue, deliver or sell, or authorize or propose to issue, deliver
or sell, any shares of its capital stock of any class or series, any Company
Voting Debt or any securities convertible into, or any rights, warrants or
options to acquire, any such shares, Company Voting Debt or convertible
securities, other than: (A) the issuance of Shares upon the exercise of
Options granted under Stock Option Plans which are outstanding on the date
hereof, or in satisfaction of stock grants or stock based awards made prior to
the date hereof pursuant to Stock Option Plans or based upon any individual
agreements such as employment agreements or executive termination agreements
(in each such case, as in effect on the date hereof), or the issuance of
Options to purchase up to 75,000 Shares in connection with an offer of
employment outstanding on the date of this Agreement; and (B) issuances by a
wholly-owned Subsidiary of its capital stock to its parent.
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(d) Governing Documents. The Company shall not amend or
propose to amend its Certificate of Incorporation or Bylaws.
(e) No Solicitation. From and after the date hereof until the
termination of this Agreement, neither the Company or any of its Subsidiaries,
nor any of their respective officers, directors, employees, representatives,
agents or affiliates (including, without limitation, any investment banker,
attorney or accountant retained by the Company or any of its Subsidiaries)
(such officers, directors, employees, representatives, agents, affiliates,
investment bankers, attorneys and accountants being referred to herein,
collectively, as "Representatives"), will, directly or indirectly, initiate,
solicit or encourage (including by way of furnishing information or
assistance), or take any other action to facilitate, any inquiries or the
making of any proposal that constitutes, or may reasonably be expected to lead
to, any Acquisition Proposal (as defined below), or enter into or maintain or
continue discussions or negotiate with any person or entity in furtherance of
such inquiries or to obtain an Acquisition Proposal or agree to or endorse any
Acquisition Proposal, and neither the Company nor any of its Subsidiaries will
authorize or permit any of its Representatives to take any such action, and the
Company shall notify Parent orally (within one business day) and in writing (as
promptly as practicable) of all of the relevant details relating to, and all
material aspects of, all inquiries and proposals which it or any of its
Subsidiaries or any of their respective Representatives may receive relating to
any of such matters and, if such inquiry or proposal is in writing, the Company
shall deliver to Parent a copy of such inquiry or proposal promptly; provided,
however, that nothing contained in this Section 5.1(e) shall prohibit the Board
of Directors of the Company from:
(i) furnishing information to, or entering into
discussions or negotiations with, any person or entity that makes an
unsolicited written, bona fide Acquisition Proposal and in respect of
which such person or entity has the necessary funds or commitments
therefor if, and only to the extent that, (A) the Board of Directors of
the Company, after consultation with and based upon the advice of
independent legal counsel (who may be the Company's regularly engaged
independent legal counsel), determines in good faith that such action is
necessary for the Board of Directors of the Company to comply with its
fiduciary duties to stockholders under applicable law, (B) prior to
taking such action, the Company (x) provides reasonable prior notice to
Parent to the effect that it is taking such action and (y) receives from
such person or entity an executed confidentiality agreement in
reasonably customary form, and (C) the Company shall promptly and
continuously advise Parent as to all of the relevant details relating
to, and all material aspects, of any such discussions or negotiations,
or
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(ii) failing to make or withdrawing or modifying its
recommendation referred to in Section 4.1 if there exists an Acquisition
Proposal and the Board of Directors of the Company, after consultation
with and based upon the advice of independent legal counsel (who may be
the Company's regularly engaged independent counsel), determines in good
faith that such action is necessary for the Board of Directors of the
Company to comply with its fiduciary duties to stockholders under
applicable law.
For purposes of this Agreement, "Acquisition Proposal" shall mean any of the
following (other than the transactions between the Company, Parent and Sub
contemplated hereunder) involving the Company or any of its Subsidiaries: (i)
any merger, consolidation, share exchange, recapitalization, business
combination, or other similar transaction; (ii) any sale, lease, exchange,
mortgage, pledge, transfer or other disposition of 15% or more of the assets
(other than real property) of the Company and its Subsidiaries, taken as a
whole, in a single transaction or series of transactions; (iii) any tender
offer or exchange offer for 15% or more of the outstanding shares of capital
stock of the Company or the filing of a registration statement under the
Securities Act in connection therewith; or (iv) any public announcement of a
proposal, plan or intention to do any of the foregoing or any agreement to
engage in any of the foregoing.
(f) No Acquisitions. The Company shall not, nor shall it
permit any of its Subsidiaries to, acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial equity interest in or a
substantial portion of the assets of, or by any other manner, any business or
any corporation, partnership, association or other business organization or
division thereof.
(g) No Dispositions. Other than: (i) dispositions of real
property or (ii) dispositions in the ordinary course of business consistent
with past practice which are not material, individually or in the aggregate, to
such party and its Subsidiaries taken as a whole, the Company shall not, nor
shall it permit any of its Subsidiaries to, sell, lease, encumber or otherwise
dispose of, or agree to sell, lease (whether such lease is an operating or
capital lease), encumber or otherwise dispose of, any of its assets.
(h) SEC Filings. The Company shall promptly provide Parent
(or its counsel) with copies of all filings made by the Company with the SEC or
any other state or federal Governmental Entity in connection with this
Agreement and the transactions contemplated hereby.
(i) No Dissolution, Etc. Except as otherwise permitted or
contemplated by this Agreement, the Company shall not authorize, recommend,
propose or announce an intention to
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adopt a plan of complete or partial liquidation or dissolution of the Company
or any of its Subsidiaries.
(j) Other Actions. Except as contemplated by this Agreement,
the Company will not nor will it permit any of its Subsidiaries to take or
agree or commit to take any action that is reasonably likely to result in any
of the Company's representations or warranties hereunder being untrue in any
material respect or in any of the Company's covenants hereunder or any of the
conditions to the Merger not being satisfied in all material respects.
(k) Certain Employee Matters. The Company and its
Subsidiaries shall not (without the prior written consent of Parent): (i)
grant any increases in the compensation of any of its directors, officers or
key employees, other than in the ordinary course of business and consistent
with past practice; (ii) pay or agree to pay any pension, retirement allowance
or other employee benefit not required or contemplated by any of the existing
Company Benefit Plans or Company Pension Plans as in effect on the date hereof
to any such director, officer or key employee, whether past or present; (iii)
enter into any new, or materially amend any existing, employment or severance
or termination agreement with any such director, officer or key employee; or
(iv) except as may be required to comply with applicable law, become obligated
under any new Company Employee Benefit Plan or Company Pension Plan, which was
not in existence on the date hereof, or amend any such plan or arrangement in
existence on the date hereof if such amendment would have the effect of
materially enhancing any benefits thereunder. The foregoing shall not prohibit
the Company from lending funds to its respective employees that hold Options to
fund all or a portion of the exercise price under the Options held by such
employees in order that such employees may tender the Shares issuable upon the
exercise of such Options in the Offer. Each such loan shall be limited to an
amount no greater than the aggregate exercise price under such employee's
Options, shall bear interest at the prime rate announced from time to time by
Chase Manhattan Bank, and shall be due and payable upon the consummation of the
Offer.
(l) Indebtedness; Agreements.
(i) Except as set forth on Schedule 5.1(l)(i), the
Company shall not, nor shall the Company permit any of its Subsidiaries
to, assume or incur (which shall not be deemed to include entering into
credit agreements, lines of credit or similar arrangements until
borrowings are made under such arrangements) any indebtedness for
borrowed money or guarantee any such indebtedness or issue or sell any
debt securities or warrants or rights to acquire any debt securities of
such party or any of its Subsidiaries or guarantee any debt securities
of others or enter into any
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lease (whether such lease is an operating or capital lease) or create
any mortgages, liens, security interests or other encumbrances on the
property of the Company or any of its Subsidiaries in connection with
any indebtedness thereof, or enter into any "keep well" or other
agreement or arrangement to maintain the financial condition of another
person.
(ii) The Company shall not, nor shall the Company permit
any of its Subsidiaries to, enter into any contract, agreement or other
document or instrument that would be required to be filed as an exhibit
to an annual report on Form 10-K for the Company and the Company shall
not, nor shall the Company permit any of its Subsidiaries to, enter into
any amendment, modification or waiver under any contract, agreement or
other document or instrument that was previously filed with the SEC,
which amendment, modification or waiver would be required to be so
filed. The Company shall not, nor shall the Company permit any of its
Subsidiaries to, enter into any employment agreement.
(m) Accounting. The Company shall not take any action, other
than in the ordinary course of business, consistent with past practice or as
required by the SEC or by law, with respect to accounting policies, procedures
and practices.
(n) Capital Expenditures; Product Development Costs. The
Company and its Subsidiaries shall not incur any capital expenditures in excess
of $2,000,000. The Company and its Subsidiaries shall not incur any product or
software development costs in excess of $4,000,000 in the aggregate.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Preparation of the Proxy Statement; Company Stockholders
Meeting; Merger without a Company Stockholders Meeting.
(a) As soon as practicable following the date hereof, the
Company and Parent shall prepare and file with the SEC the Proxy Statement.
The Company shall use its best efforts to respond to all SEC comments with
respect to the Proxy Statement and to cause the Proxy Statement to be mailed to
the Company's stockholders at the earliest practicable date.
(b) The Company will, as soon as practicable following the
acceptance for payment of and payment for shares of Company Common Stock by Sub
in the Offer, duly call, give notice of, convene and hold the Company
Stockholders Meeting for the purpose of approving this Agreement and the
transactions contemplated hereby. At the Company Stockholders Meeting, Parent
shall cause all of the shares of Company Common Stock then owned by Parent
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and Sub and any of their Subsidiaries or affiliates to be voted in favor of the
Merger.
(c) Notwithstanding the foregoing clauses (a) and (b), in the
event that Parent or any Subsidiary of Parent shall acquire at least 90% of the
outstanding shares of Company Common Stock in the Offer, the parties hereto
agree, at the request of Sub, to take all necessary and appropriate action to
cause the Merger to become effective, as soon as practicable after the
expiration of the Offer, without a meeting of stockholders of the Company, in
accordance with Section 253 of the DGCL.
(d) Sub shall promptly submit this Agreement and the
transactions contemplated hereby for approval and adoption by its stockholders
by written consent of such stockholders.
6.2 Access to Information. Upon reasonable notice, each of
the Company or Parent, as the case may be, shall (and shall cause each of its
Subsidiaries to) afford to the officers, employees, accountants, counsel and
other representatives of the other party (including, in the case of Parent and
Sub, potential financing sources and their employees, accountants, counsel and
other representatives), access, during normal business hours during the period
prior to the Effective Time, to all its properties, books, contracts,
commitments and records and, during such period, such party shall (and shall
cause each of its Subsidiaries to) furnish promptly to the other party, (a) a
copy of each report, schedule, registration statement and other document filed
or received by it during such period pursuant to SEC requirements and (b) all
other information concerning its business, properties and personnel as such
other party may reasonably request. The Confidentiality Agreement, dated as of
October 8, 1996, between Parent and the Company (the "Confidentiality
Agreement") shall apply with respect to information furnished thereunder or
hereunder and any other activities contemplated thereby.
6.3 Settlements. Neither the Company nor any of its
Subsidiaries shall effect any settlements of any legal proceedings arising out
of or related to the execution, delivery or performance of this Agreement or
the Stockholders Agreement or the consummation of any of the transactions
contemplated hereby or thereby without the consent of Parent.
6.4 Fees and Expenses. (a) Except as otherwise provided in
this Section 6.4 and except with respect to claims for damages incurred as a
result of the breach of this Agreement, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such expense.
(b) The Company agrees to pay Parent a fee in immediately
available funds equal to $4,000,000 upon the
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termination of this Agreement under Section 8.1, if any of the events set forth
below occurs (each, a "Trigger Event"):
(i) the Board of Directors of the Company shall have withdrawn
or adversely modified, or taken a public position materially
inconsistent with, its approval or recommendation of the Offer, the
Merger, this Agreement or the Stockholders Agreement; or
(ii) an Acquisition Proposal has been recommended or accepted
by the Company or the Company shall have entered into an agreement
(other than a confidentiality agreement as contemplated by Section
5.1(e)) with respect to an Acquisition Proposal.
(c) In the event (i) this Agreement shall be terminated in
accordance with its terms, (ii) at or prior to such termination, any person or
group of persons shall have made an Acquisition Proposal (each such person or
member of a group of such persons being referred to herein as a "Designated
Person"), and (iii) either (A) a transaction contemplated by the term
"Acquisition Proposal" shall be consummated, on or before the 90th day
following the termination of this Agreement, with any Designated Person or any
affiliate of any Designated Person or (B) the Company or any of its
Subsidiaries shall enter into an agreement, on or before the 90th day following
the termination of this Agreement, with respect to an Acquisition Proposal with
any Designated Person or any affiliate of any Designated Person and a
transaction contemplated by the term "Acquisition Proposal" shall thereafter be
consummated with such Designated Person or affiliate thereof, then the Company
shall pay to Parent a fee in immediately available funds equal to $4,000,000,
such fee to be paid contemporaneously with the consummation of the contemplated
transaction.
(d) Any amounts due under this Section 6.4 that are not paid
when due shall bear interest at the rate of 9% per annum from the date due
through and including the date paid.
6.5 Brokers or Finders. (a) The Company represents, as to
itself, its Subsidiaries and its affiliates, that no agent, broker, investment
banker, financial advisor or other firm or person is or will be entitled to any
broker's or finders fee or any other commission or similar fee in connection
with any of the transactions contemplated by this Agreement, except Xxxxxxxxx &
Xxxxx LLP, whose fees and expenses will be paid by the Company in accordance
with the Company's agreements with such firm (copies of which have been
delivered by the Company to Parent prior to the date of this Agreement).
(b) Parent represents, as to itself, its Subsidiaries and its
affiliates, that no agent, broker, investment banker, financial advisor or
other firm or person is or will be entitled
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to any broker's or finders fee or any other commission or similar fee in
connection with any of the transactions contemplated by this Agreement, except
for affiliates of Parent.
6.6 Indemnification; Directors' and Officers' Insurance.
(a) The Company shall, and from and after the Effective Time, the Surviving
Corporation shall, indemnify, defend and hold harmless each person who is now,
or has been at any time prior to the date hereof or who becomes prior to the
Effective Time, an officer or director of the Company or any of its
Subsidiaries (the "Indemnified Parties") against all losses, claims, damages,
costs, expenses (including attorneys' fees and expenses), liabilities or
judgments or amounts that are paid in settlement with the approval of the
indemnifying party (which approval shall not be unreasonably withheld) of or in
connection with any threatened or actual claim, action, suit, proceeding or
investigation based in whole or in part on or arising in whole or in part out
of the fact that such person is or was a director or officer of the Company or
any of its Subsidiaries whether pertaining to any matter existing or occurring
at or prior to the Effective Time and whether asserted or claimed prior to, or
at or after, the Effective Time ("Indemnified Liabilities"), including all
Indemnified Liabilities based in whole or in part on, or arising in whole or in
part out of, or pertaining to this Agreement or the transactions contemplated
hereby, in each case to the full extent a corporation is permitted under the
DGCL to indemnify its own directors or officers as the case may be (and Parent
and the Surviving Corporation, as the case may be, will pay expenses in advance
of the final disposition of any such action or proceeding to each Indemnified
Party to the full extent permitted by law). Without limiting the foregoing, in
the event any such claim, action, suit, proceeding or investigation is brought
against any Indemnified Parties (whether arising before or after the Effective
Time), (i) the Indemnified Parties may retain counsel satisfactory to them and
the Company (or them and the Surviving Corporation after the Effective Time)
and the Company (or after the Effective Time, the Surviving Corporation) shall
pay all fees and expenses of such counsel for the Indemnified Parties promptly
as statements therefor are received; and (ii) the Company (or after the
Effective Time, the Surviving Corporation) will use all reasonable efforts to
assist in the vigorous defense of any such matter, provided that neither the
Company nor the Surviving Corporation shall be liable for any settlement
effected without its prior written consent which consent shall not unreasonably
be withheld. Any Indemnified Party wishing to claim indemnification under this
Section 6.6, upon learning of any such claim, action, suit, proceeding or
investigation, shall notify the Company (or after the Effective Time, the
Surviving Corporation) (but the failure so to notify shall not relieve a party
from any liability which it may have under this Section 6.6 except to the
extent such failure prejudices such party), and shall deliver to the Company
(or after the Effective Time, the Surviving Corporation) the
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undertaking contemplated by Section 145(e) of the DGCL. The Indemnified
Parties as a group may retain only one law firm to represent them with respect
to each such matter unless there is, under applicable standards of professional
conduct, a conflict on any significant issue between the positions of any two
or more Indemnified Parties. The Company and Sub agree that all rights to
indemnification, including provisions relating to advances of expenses incurred
in defense of any action or suit, existing in favor of the Indemnified Parties
with respect to matters occurring through the Effective Time, shall survive the
Merger and shall continue in full force and effect for a period of not less
than six years from the Effective Time; provided, however, that all rights to
indemnification in respect of any Indemnified Liabilities asserted or made
within such period shall continue until the disposition of such Indemnified
Liabilities.
(b) For a period of three years after the Effective Time, the
Surviving Corporation shall cause to be maintained in effect the current
policies of directors' and officers' liability insurance maintained by the
Company and its Subsidiaries (provided that Parent may substitute therefor
policies of at least the same coverage and amounts containing terms and
conditions which are no less advantageous in any material respect to the
Indemnified Parties) with respect to matters arising before the Effective Time,
provided that Parent shall not be required to pay an annual premium for such
insurance in excess of 175% of the last annual premium paid by the Company
prior to the date hereof, but in such case shall purchase as much coverage as
possible for such amount. The last annual premium paid by the Company was
$169,100.
(c) The provisions of this Section 6.6 shall be in addition
to, and shall not limit, the indemnification agreements entered into between an
indemnified party and the Company prior to the date hereof, all of which
agreements are identified on Schedule 6.6 hereof and true and correct copies of
which have previously been delivered to Parent. The provisions of this Section
6.6 are intended to be for the benefit of, and shall be enforceable by, each
Indemnified Party, his heirs and his personal representatives and shall be
binding on all successors and assigns of Sub, the Company and the Surviving
Corporation.
6.7 Best Efforts. Subject to the terms and conditions of this
Agreement, each of the parties hereto agrees to use its best efforts to take,
or cause to be taken, all action and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement
and the Stockholders Agreement, subject, as applicable, to the Company
Stockholder Approval, including cooperating fully with the other party,
including by provision of information and making of all necessary filings in
connection with, among other things, approvals under the HSR Act. In case at
any time after the
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Effective Time, any further action is necessary or desirable to carry out the
purposes of this Agreement or to vest the Surviving Corporation with full title
to all properties, assets, rights, approvals, immunities and franchises of
either of the Constituent Corporations, the proper officers and directors of
each party to this Agreement shall take all such necessary action.
6.8 Conduct of Business of Sub. During the period of time
from the date of this Agreement to the Effective Time, Sub shall not engage in
any activities of any nature except as provided in or contemplated by this
Agreement.
6.9 Publicity. The parties will consult with each other and
will mutually agree upon any press release or public announcement pertaining to
the Offer and the Merger and shall not issue any such press release or make any
such public announcement prior to such consultation and agreement, except as
may be required by applicable law or by obligations arising under the Company's
listing agreement with Nasdaq, in which case the party proposing to issue such
press release or make such public announcement shall use reasonable efforts to
consult in good faith with the other party before issuing any such press
release or making any such public announcement.
6.10 Spin-Off of Certain Real Estate. Immediately prior to the
acceptance of Shares in the Offer, the Company shall declare a dividend,
payable to then record holders of Shares, consisting of ownership interests in
an entity ("Spinco") that will own, directly or indirectly, the assets
specified on Schedule 6.10(a) hereto (the "Designated Assets"), the payment of
such dividend to be contingent upon the consummation of the Offer and subject
to compliance with all applicable laws. The form of entity that will be used
for Spinco, all transactions related to such dividend (including, without
limitation, any intercompany transfers) and all documents, agreements and
instruments related to such dividend and related transactions (including,
without limitation, any agreements between Spinco and the Company or any of its
Subsidiaries providing for the allocation of expenses or liabilities and
indemnification) (the "Spin-Off Documents"), shall be in form and substance
reasonably acceptable to Parent and the Company. Notwithstanding the
foregoing, it is agreed that (i) all indebtedness of the Company or any of its
Subsidiaries (other than the Company's Revolving Credit Loan Agreement with
Comerica Bank-California) secured, in whole or in part, by any of the
Designated Assets shall be assumed by Spinco and shall be paid, when due, by
Spinco and the Company shall be released from any liability with respect
thereto, (ii) all costs and expenses solely attributable to the transactions
related to such dividend (including, without limitation, any necessary and
reasonable fees and expenses of counsel, accountants and advisors and any
filing fees), whether before or after the consummation of the Offer, shall be
paid by Spinco when such amounts are due, (iii) Spinco shall indemnify and hold
the Company and its
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Subsidiaries harmless from and against any loss, cost, damage or expense
(including, without limitation, the reasonable fees and expenses of counsel)
arising out of or related to any failure of Spinco to discharge the obligations
specified in clause (i) or clause (ii), (iv) Spinco shall indemnify and hold
Parent, the Company and its Subsidiaries harmless from and against any Taxes
(and any fees, costs and expenses with respect to such Taxes or any dispute
thereof) attributable to, arising out of or relating to (a) Spinco, (b) the
formation of Spinco, (c) the transfer of the Designated Assets to Spinco by the
Company or any of its Subsidiaries, (d) the assumption or refinancing of any
liabilities with respect to the Designated Assets, (e) the sale, exchange,
distribution, dividend or other distribution of any assets by Spinco, (f) the
sale, exchange, distribution, dividend or other disposition of interests in
Spinco by the Company or any of its Subsidiaries, and (g) any steps which are
attendant to or necessary in connection with any of the foregoing transactions,
which indemnification obligations shall survive until sixty days after the
expiration of the applicable statute of limitations with respect to the
assessment of Taxes relating to the foregoing transactions, and which
indemnification obligations shall be due and payable at such times as Taxes
(including estimated Taxes) become due and payable (plus interest from the date
of unreimbursed payment by the Company at a rate of 9% per annum) (with the
filing of Tax Returns and calculation of the "Estimated Tax Amount" being based
upon an appraisal of the Designated Assets by an independent appraiser mutually
acceptable to Parent and the Company and a certification of the adjusted bases
of the Designated Assets provided by Price Waterhouse & Co. or such other "big
six" accounting firm as may be agreed to by Parent and the Company, the costs
of which appraisal and certification will be paid by Spinco) and at such time
as there is a final determination of a deficiency with respect to such reported
Taxes (plus interest from the date of unreimbursed payment by the Company at a
rate of 9% per annum), (v) with respect to the Taxes identified in the
immediately preceding clause (iv), the Company will not agree, without Spinco's
consent, to any extension of the applicable statute of limitations, which
consent will not be unreasonably withheld, and such consent will not be
required if the failure to agree to such extension may reasonably be expected
to result in the proposed assessment of a deficiency for material Taxes
unrelated to Spinco or in liability for indemnified Taxes which exceeds
Spinco's cash, notes receivable from real property sales and cash equivalent
assets at such time, and (vi) any indemnification under this Section 6.10 shall
be made on an after-tax basis and shall be adjusted to take into account any
Tax benefits and Tax detriments attributable to the indemnified loss and to the
receipt or accrual of an indemnification payment hereunder (including any
additional payments pursuant to this clause (vi)). The Company will use its
best efforts to facilitate the dividend and shall seek all consents necessary
(including, without limitation, the consent of the Company's lenders) to
consummate the dividend and related transactions.
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It is understood and agreed that prior to payment of the
dividend, the current lease agreement with respect to the home office building
will be amended to provide for (1) continuation of the current rent for two
years; (2) adjustment of the rental for the succeeding three years at the
current market rental rate at the beginning of such succeeding three years; and
(3) adjustment of the term of the lease to five years with a five year option
to renew at a rental equal to the current market rental rate at the beginning
of such renewal term. It is understood and agreed that the "current market
rental rate" shall be determined by the Company and Spinco, each selecting an
appraiser to make such determination, and that if such appraisers cannot agree,
then they shall select a third appraiser whose determination shall be final and
binding on all parties. Each party shall bear the cost of its appraiser and
the cost of the third appraiser, if necessary, shall be split evenly between
the parties. Finally, under no circumstances shall the rental rate referred to
in (2) above be less than the rental rate in effect prior to such adjustment or
more than 1.2 multiplied by the rental rate in effect prior to such adjustment.
In addition, the lease agreement shall be amended to provide that the Company
may sublease the property with the consent of the landlord, which consent will
not be unreasonably withheld, and that in the event the Company shall sublease
the property and shall receive in rent thereunder an amount in excess of the
rent payable under the lease, such excess shall be paid to the landlord.
In order to facilitate the orderly management of Spinco,
following payment of the dividend for a period of one year Company will provide
(at no cost to Spinco) at least two cubicles of office space, telephone and
secretarial support to two employees of Spinco and will give such Spinco
employees reasonable access to such other office equipment as is reasonable and
necessary. Furthermore, at the time of payment of the dividend, Spinco shall
have at least $100,000 in cash or cash equivalent assets available to it (any
such amounts that do not represent proceeds from the sale of Designated Assets
shall be subject to repayment by Spinco). All funds received in respect of
sales of Designated Assets from the date hereof through the date of the payment
of the dividend shall be credited to the account of Spinco, but shall be
available to satisfy the obligations of Spinco to Company hereunder.
Company shall not be required to pay the dividend until such time
as Spinco has either (i) paid all amounts owed by it to Company with respect to
the Estimated Tax Amount, third party costs related to the dividend or related
transactions or similar matters for which Spinco has agreed to pay or for which
there are existing indemnity claims which it has agreed to indemnify the
Company or (ii) have made adequate and commercially reasonable provision for
the prompt payment of any such amounts from time to time in the future as such
amounts are paid or become due and payable by the Company. The parties
understand and agree that
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terms and provisions with respect to the dividend and related transactions, in
addition to those set forth herein, will be necessary and appropriate in
connection with the transactions contemplated by this Section 6.10. Such
additional terms and provisions, when negotiated by the parties, shall,
together with the provisions of this Section 6.10, be set forth in customary
documentation with respect to spin-off transactions, all of which shall be
finalized by the parties prior to the closing of the Offer.
ARTICLE VII
CONDITIONS PRECEDENT
7.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each party to effect the Merger shall be
subject to the satisfaction prior to the Closing Date of the following
conditions:
(a) Stockholder Approval. This Agreement and the Merger shall
have been approved and adopted by the affirmative vote of the holders of a
majority of the Shares entitled to vote thereon if such vote is required by
applicable law; provided that the Parent and Sub shall vote all Shares
purchased pursuant to the Offer or the Stockholders Agreement in favor of the
Merger.
(b) HSR Act. The waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated or shall
have expired.
(c) No Injunctions or Restraints. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court
of competent jurisdiction or other legal restraint or prohibition (an
"Injunction") preventing the consummation of the Merger shall be in effect;
provided, however, that prior to invoking this condition, each party shall use
all commercially reasonable efforts to have any such decree, ruling, injunction
or order vacated.
(d) Statutes; Consents. No statute, rule, order, decree or
regulation shall have been enacted or promulgated by any government or
governmental agency or authority which prohibits the consummation of the
Merger.
(e) Payment for Shares. Sub shall have accepted for payment
and paid for the shares of Company Common Stock tendered in the Offer such
that, after such acceptance and payment, Parent and its affiliates shall own,
at consummation of the Offer, a majority of the outstanding shares of the
Company Common Stock; provided that this condition shall be deemed to have been
satisfied if Sub fails to accept for payment and pay for Shares pursuant to the
Offer in violation of the terms and conditions of the Offer.
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ARTICLE VIII
TERMINATION AND AMENDMENT
8.1 Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, whether before
or after approval of the matters presented in connection with the Merger by the
stockholders of the Company or Parent:
(a) by mutual written consent of the Company and Parent, or by
mutual action of their respective Boards of Directors;
(b) by either the Company or Parent (i) prior to the
consummation of the Offer if there has been a breach of any representation,
warranty, covenant or agreement on the part of the other set forth in this
Agreement which breach has not been cured within three business days following
receipt by the breaching party of notice of such breach, or (ii) if any
permanent injunction or other order of a court or other competent authority
preventing the consummation of the Merger shall have become final and
non-appealable;
(c) by either the Company or Parent, so long as such party has
not breached its obligations hereunder, if the Merger shall not have been
consummated on or before February 18, 1997; provided, that the right to
terminate this Agreement under this Section 8.1(c) shall not be available to
any party whose failure to fulfill any obligation under this Agreement has been
the cause of or resulted in the failure of the Merger to occur on or before
such date;
(d) by Parent or Company in the event that a Trigger Event has
occurred under Section 6.4(b);
(e) by Parent in the event an Acquisition Proposal has been
made to the Company and the Company shall fail to reaffirm its approval or
recommendation of the Offer, the Merger, this Agreement and the Stockholders
Agreement on or before the fifth business day following the date on which such
Acquisition Proposal shall have been made;
(f) by Parent, if the Offer terminates, is withdrawn,
abandoned or expires by reason of the failure to satisfy any condition set
forth in Exhibit A hereto; or
(g) by the Company, if the Offer shall have expired or have
been withdrawn, abandoned or terminated without any shares of Company Common
Stock being purchased by Sub thereunder on or prior to the 90th day after the
date of commencement of the Offer pursuant to Section 1.2 hereof.
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8.2 Effect of Termination. In the event of termination of
this Agreement by either the Company or Parent as provided in Section 8.1, this
Agreement shall forthwith become void and there shall be no liability or
obligation on the part of Parent, Sub or the Company or their respective
affiliates, officers, directors or shareholders except (i) with respect to this
Section 8.2, the second sentence of Section 6.2, and Section 6.4, and (ii) to
the extent that such termination results from the material breach by a party
hereto of any of its representations or warranties, or of any of its covenants
or agreements, in each case, as set forth in this Agreement except as provided
in Section 9.7.
8.3 Amendment. Subject to applicable law, this Agreement may
be amended, modified or supplemented only by written agreement of Parent, Sub
and the Company at any time prior to the Effective Date with respect to any of
the terms contained herein; provided, however, that, after this Agreement is
approved by the Company's stockholders, no such amendment or modification shall
reduce the amount or change the form of consideration to be delivered to the
stockholders of the Company.
8.4 Extension; Waiver. At any time prior to the Effective
Time, the parties hereto, by action taken or authorized by their respective
Boards of Directors, may, to the extent legally allowed: (i) extend the time
for the performance of any of the obligations or other acts of the other
parties hereto; (ii) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto; and
(iii) waive compliance with any of the agreements or conditions contained
herein. Any agreement on the part of a party hereto to any such extension or
waiver shall be valid only if set forth in a written instrument signed on
behalf of such party. The failure of any party hereto to assert any of its
rights hereunder shall not constitute a waiver of such rights.
ARTICLE IX
GENERAL PROVISIONS
9.1 Nonsurvival of Representations, Warranties and Agreements.
None of the representations, warranties and agreements in this Agreement or in
any instrument delivered pursuant to this Agreement shall survive the Effective
Time, except for the agreements contained in Article III, and Section 6.6
hereof. The Confidentiality Agreement shall survive the execution and delivery
of this Agreement, and the provisions of the Confidentiality Agreement shall
apply to all information and material delivered by any party hereunder.
9.2 Notices. Any notice or communication required or permitted
hereunder shall be in writing and either delivered personally, telegraphed or
telecopied or sent by certified or
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registered mail, postage prepaid, and shall be deemed to be given, dated and
received when so delivered personally, telegraphed or telecopied or, if mailed,
five business days after the date of mailing to the following address or
telecopy number, or to such other address or addresses as such person may
subsequently designate by notice given hereunder:
(a) if to Parent or Sub, to:
Cooperative Computing, Inc. or
CCI Acquisition Corp.
0000 Xxx Xxxx Xxxx
Xxxxxx, Xxxxx 00000-0000
Attn: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Weil, Gotshal & Xxxxxx
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Attn: Xxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
and
Hicks, Muse, Xxxx & Xxxxx Incorporated
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Attn: Xxxxxxxx X. Xxxxxx, Xx.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(b) if to the Company, to:
Triad Systems Corporation
0000 Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with copies to:
McCutchen, Doyle, Xxxxx & Enersen, LLP
00 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxxx Xxxxxxxxx
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Telephone: (000) 000-0000
Telecopy: (000) 000-0000
9.3 Interpretation. When a reference is made in this
Agreement to Sections, such reference shall be to a Section of this Agreement
unless otherwise indicated. The table of contents, glossary of defined terms
and headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.
Whenever the word "include", "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation". The phrase "made available" in this Agreement shall mean that the
information referred to has been made available if requested by the party to
whom such information is to be made available.
9.4 Counterparts. This Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when two or more counterparts have been signed by
each of the parties and delivered to the other parties, it being understood
that all parties need not sign the same counterpart.
9.5 Entire Agreement; No Third Party Beneficiaries; Rights of
Ownership. This Agreement (together with the Confidentiality Agreement, the
Stockholders Agreement and any other documents and instruments referred to
herein) constitutes the entire agreement and supersedes all prior agreements
and understandings, both written and oral, among the parties with respect to
the subject matter hereto and, except as provided in Section 6.6, is not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.
9.6 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Delaware, without giving
effect to the principles of conflicts of law thereof.
9.7 No Remedy in Certain Circumstances. Each party agrees
that, should any court or other competent authority hold any provision of this
Agreement or part hereof to be null, void or unenforceable, or order any party
to take any action inconsistent herewith or not to take an action consistent
herewith or required hereby, the validity, legality and enforceability of the
remaining provisions and obligations contained or set forth herein shall not in
any way be affected or impaired thereby, unless the foregoing inconsistent
action or the failure to take an action constitutes a material breach of this
Agreement or makes the Agreement impossible to perform in which case this
Agreement shall terminate pursuant to Article VIII hereof. Except as otherwise
contemplated by this Agreement, to the extent that a party hereto took an
action inconsistent
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herewith or failed to take action consistent herewith or required hereby
pursuant to an order or judgment of a court or other competent authority, such
party shall incur no liability or obligation unless such party did not in good
faith seek to resist or object to the imposition or entering of such order or
judgment.
9.8 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties, except that Sub may assign, in its sole
discretion, any or all of its rights, interests and obligations hereunder to
any newly-formed direct wholly-owned Subsidiary of Parent. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit
of and be enforceable by the parties and their respective successors and
assigns.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be signed by their respective officers thereunto duly authorized, all as of
the date first written above.
COOPERATIVE COMPUTING, INC.
By: /s/ XXXXX X. XXXXXX
--------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------
Title: President
-----------------------------
CCI ACQUISITION CORP.
By: /s/ XXXXXXX X. XXXXX
--------------------------------
Name: Xxxxxxx X. XxXxx
------------------------------
Title: Vice President
-----------------------------
TRIAD SYSTEMS CORPORATION
By: /s/ XXXXX X. XXXXXX
--------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------
Title: President and Chief
-----------------------------
Executive Officer
-----------------------------
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EXHIBIT A
The capitalized terms used in this Exhibit A shall have the
respective meanings given to such terms in the Agreement and Plan of Merger,
dated as of October 17, 1996, among Cooperative Computing, Inc. ("Parent"), CCI
Acquisition Corp. ("Sub") and Triad Systems Corporation ("Company") (the
"Merger Agreement") to which this Exhibit A is attached.
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer, Sub shall not
be required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) under the Exchange Act
(relating to Sub's obligation to pay for or return tendered Shares promptly
after expiration or termination of the Offer), to pay for any Shares tendered,
and may postpone the acceptance for payment or, subject to the restriction
referred to above, payment for any Shares tendered, and may amend or terminate
the Offer (whether or not any Shares have theretofore been purchased or paid
for), if (i) there have not been validly tendered and not withdrawn prior to
the time the Offer shall otherwise expire a number of Shares which constitutes
51% of the Shares outstanding on a fully-diluted basis on the date of purchase
("on a fully-diluted basis" having the following meaning, as of any date: the
number of Shares outstanding, together with Shares the Company may be required
to issue pursuant to obligations outstanding at that date under employee stock
option or other benefit plans, or otherwise); (ii) any applicable waiting
periods under the HSR Act shall not have expired or been terminated prior to
the expiration of the Offer; (iii) the debt financing sources for Sub shall not
have provided the applicable debt financing to Sub pursuant to the financing
commitment with respect thereto previously delivered to the Company by Sub; or
(iv) at any time on or after the date of the Merger Agreement and before
acceptance for payment of, or payment for, such Shares any of the following
events shall occur or shall reasonably be deemed by Sub to have occurred:
(A) there shall have been any statute, rule or regulation
enacted, entered or enforced or deemed applicable, or any decree, order
or injunction entered or enforced by any government or governmental
authority in the United States or by any court in the United States
that: (1) restrains or prohibits the making or consummation of the
Offer or the Merger, (2) makes the purchase of or payment for some or
all of the Shares pursuant to the Offer or the Merger illegal, (3)
imposes material limitations on the ability of Sub, the Company or any
of their respective
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affiliates or Subsidiaries effectively to acquire or hold, or requiring
Sub, the Company or any of their respective affiliates or Subsidiaries
to dispose of or hold separate, any material portion of the assets or
the business of the Company and its Subsidiaries taken as a whole, or
imposes limitations on the ability of Sub, the Company or any of their
respective affiliates or Subsidiaries to continue to conduct, own or
operate, as heretofore conducted, owned or operated, all or any material
portion of the businesses or assets of the Company and its Subsidiaries
taken as a whole, (4) imposes or results in material limitations on the
ability of Sub or any of its affiliates to exercise full rights of
ownership of the Shares purchased by them, including, without
limitation, the right to vote the Shares purchased by them on all
matters properly presented to the stockholders of the Company; or (5)
prohibits or restricts in a material manner the financing of the Offer;
(B) any change (or any condition, event or development involving
a prospective change) shall have occurred in the business, operations,
assets or condition (financial or otherwise) of the Company and its
Subsidiaries taken as a whole;
(C) there shall have occurred (1) any general suspension of
trading in, or limitation on prices for, securities on any national
securities exchange or in the over-the-counter market in the United
States for a period in excess of five hours, (2) the declaration of a
banking moratorium or any suspension of payments in respect of banks in
the United States, (3) any material adverse change in United States
currency exchange rates or a suspension of, or a limitation on, the
markets therefor, (4) the commencement of a war, armed hostilities or
other international or national calamity, directly or indirectly
involving the United States, (5) any limitations (whether or not
mandatory) imposed by any governmental authority on the nature or
extension of credit or further extension of credit by banks or other
lending institutions, or (6) in the case of any of the foregoing, a
material acceleration or worsening thereof;
(D) the representations and warranties of the Company contained
in the Merger Agreement (without giving effect to any "Material Adverse
Effect", "materiality" or similar qualifications contained therein)
shall not be true and correct in all material respects as of the date of
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59
consummation of the Offer as though made on and as of such date except
(1) for changes specifically permitted by the Merger Agreement and (2)
that those representations and warranties which address matters only as
of a particular date shall remain true and correct as of such date;
(E) the obligations of the Company contained in the Merger
Agreement (without giving effect to any "Material Adverse Effect",
"materiality" or similar qualifications contained therein) shall not
have been performed or complied with in all material respects by the
Company;
(F) the Merger Agreement shall have been terminated in
accordance with its terms;
(G) prior to the purchase of Shares pursuant to the Offer, an
Acquisition Proposal for the Company exists and the Board shall have
withdrawn or materially modified or changed (including by amendment of
the Schedule 14D-9) in a manner adverse to Sub its recommendation of
the Offer, the Merger Agreement or the Merger; or
(H) Parent, Sub and the Company shall not have reached
agreement as to the documents and transactions described in Section 6.10
in accordance with such Section 6.10.
The foregoing conditions are for the sole benefit of Sub and its
affiliates and may be asserted by Sub regardless of the circumstances
(including, without limitation, any action or inaction by Sub or any of its
affiliates) giving rise to any such condition or may be waived by Sub, in whole
or in part, from time to time in its sole discretion, except as otherwise
provided in the Agreement. The failure by Sub at any time to exercise any of
the foregoing rights shall not be deemed a waiver of any such right and each
such right shall be deemed an ongoing right and may be asserted at any time and
from time to time. Any determination by Sub concerning any of the events
described herein shall be final and binding.
A-3
