EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
THIS AGREEMENT AND PLAN OF MERGER AND REORGANIZATION is made and entered
into as of June 10, 2001 by and among Peregrine Systems, Inc., a Delaware
corporation ("PARENT"), Rose Acquisition Corporation, a Delaware corporation and
a wholly owned subsidiary of Parent ("MERGER SUB"), and Remedy Corporation, a
Delaware corporation (the "COMPANY").
RECITALS
A. Upon the terms and subject to the conditions set forth in this Agreement,
and in accordance with the Delaware Law, Parent and the Company have agreed to
enter into a business combination transaction.
B. Each of the respective Boards of Directors of Parent, Merger Sub and the
Company have (i) determined that this Agreement is advisable, (ii) determined
that the Merger and the other transactions contemplated hereby are fair to and
in the best interests of their respective stockholders, and (iii) approved this
Agreement, the Merger and the other transactions contemplated hereby, all upon
the terms and subject to the conditions set forth in this Agreement.
C. Concurrently with the execution of this Agreement, as a condition and
inducement to Parent's willingness to enter into this Agreement, (i) all
executive officers and directors of the Company and all of their respective
affiliates, in their capacity as stockholders of the Company, are entering into
Voting Agreements with Parent in substantially the form attached hereto as
Exhibit A (each, a "COMPANY VOTING AGREEMENT" and collectively, the "COMPANY
VOTING AGREEMENTS"), (ii) all of the affiliates of the Company are entering into
Company Affiliate Agreements with Parent in substantially the form attached
hereto as Exhibit B (each, a "COMPANY AFFILIATE AGREEMENT" and collectively, the
"COMPANY AFFILIATE AGREEMENTS"), and (iii) the Company and Computershare
Investor Services LLC (formerly Xxxxxx Trust Company of California) have amended
(the "RIGHTS PLAN AMENDMENT") the Rights Agreement, dated as of July 25, 1997,
as amended (the "COMPANY RIGHTS PLAN"), between the Company and Xxxxxx Trust
Company of California, as Rights Agent, so as to render the rights thereunder
inapplicable to the Merger and the other transactions contemplated by this
Agreement and the Company Voting Agreements.
D. The parties hereto intend, by executing this Agreement, to adopt a "plan
of reorganization" within the meaning of the Internal Revenue Code of 1986, as
amended.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, covenants and agreements herein contained, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged and accepted, and intending to be legally bound hereby,
Parent, Merger Sub and the Company hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 CERTAIN DEFINITIONS. For all purposes of and under this Agreement, the
following terms shall have the following respective meanings:
(a) "APPROVALS" means franchises, grants, authorizations, licenses,
permits, easements, consents, certificates, approvals and other orders.
(b) "CASH PORTION" means, subject to the terms of SECTION 2.7(c)
hereof, an amount in cash equal to Nine Dollars ($9.00).
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(c) "COBRA" means the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, and the rules and regulations promulgated thereunder, or
any successor statute, rules and regulations thereto.
(d) "CODE" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder, or any successor statute,
rules and regulations thereto.
(e) "COMPANY BOARD" means the Board of Directors of the Company.
(f) "COMPANY COMMON STOCK" means the Common Stock, par value $0.00005
per share, of the Company.
(g) "COMPANY EMPLOYEE" means any current or former or retired employee,
consultant or director of the Company or any Company Affiliate (as defined
in SECTION 3.12 hereof).
(h) "COMPANY EMPLOYEE PLAN" means any plan, program, policy, practice,
contract, agreement or other arrangement providing for compensation,
severance, termination pay, deferred compensation, performance awards, stock
or stock-related awards (whether payable in cash and/or shares), fringe
benefits or other employee benefits or remuneration of any kind, whether
written or unwritten or otherwise, funded or unfunded, including without
limitation, each "employee benefit plan," within the meaning of
Section 3(3) of ERISA which is or has been maintained, contributed to, or
required to be contributed to, by Company or any Affiliate for the benefit
of any Employee, or with respect to which Company or any Affiliate has or
may have any liability or obligation.
(i) "COMPANY EMPLOYMENT AGREEMENT" means each employment, severance,
consulting, relocation, repatriation, expatriation, visas, work permit or
other agreement or contract relating to provisions of services between the
Company or any Company Affiliate (as defined in SECTION 3.13 hereof) and any
Employee other than the Company's standard offer letter, proprietary
information and invention assignment agreement in the form furnished or made
available to Parent.
(j) "COMPANY INTELLECTUAL PROPERTY" means any Intellectual Property
that is owned by, or exclusively licensed to, the Company and/or any of it
subsidiaries.
(k) "COMPANY INTERNATIONAL EMPLOYEE PLAN" means each Company Employee
Plan that has been adopted or maintained by Company or any Company Affiliate
(as defined in SECTION 3.13 hereof), whether informally or formally, or with
respect to which Company or any Company Affiliate (as defined in
SECTION 3.13 hereof) will or may have any liability, for the benefit of
Company Employees who perform services outside the United States.
(l) "COMPANY MULTIEMPLOYER PLAN" means any Company Pension Plan which
is a "multiemployer plan," as defined in Section 3(37) of ERISA.
(m) "COMPANY PENSION PLAN" means any Company Employee Plan which is an
"employee pension benefit plan," within the meaning of Section 3(2) of
ERISA.
(n) "COMPANY PREFERRED STOCK" means the Preferred Stock, par value
$0.00005 per share, of the Company.
(o) "COMPANY REGISTERED INTELLECTUAL PROPERTY" means all of the
Registered Intellectual Property owned by, or filed in the name of, the
Company or any of its subsidiaries.
(p) "CONTRACT" means any contract, subcontract, agreement, commitment,
note, bond, mortgage, indenture, lease, license, sublicense, permit,
franchise or other instrument, obligation or binding arrangement or
understanding of any kind or character, whether oral or in writing.
(q) "DELAWARE LAW" means the DGCL and any other applicable law of the
State of Delaware.
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(r) "DGCL" means the General Corporation Law of the State of Delaware,
or any successor statute thereto.
(s) "DOJ" means the United States Department of Justice.
(t) "DOL" shall mean the United States Department of Labor.
(u) "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and the rules and regulations promulgated thereunder, or any
successor statue, rules and regulations thereto.
(v) "EXCHANGE ACT" means the Securities and Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder, or any
successor statute, rules and regulations thereto.
(w) "FMLA" means the Family Medical Leave Act of 1993, as amended, and
the rules and regulations promulgated thereunder, or any successor statute,
rules and regulations thereto.
(x) "FTC" means the United States Federal Trade Commission.
(y) "GAAP" means United States generally accepted accounting
principles.
(z) "GOVERNMENTAL ENTITY" means any government, any governmental
entity, department, commission, board, agency or instrumentality, and any
court, tribunal or judicial body, in each case whether federal, state,
county, provincial, and whether local or foreign.
(aa) "HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended, and the rules and regulations promulgated thereunder,
or any successor statute, rules and regulations thereto.
(bb) "INTELLECTUAL PROPERTY" means any or all of the following and all
worldwide common law and statutory rights in, arising out of, or associated
therewith: (i) U.S. and foreign patents and applications therefor and all
reissues, divisions, renewals, extensions, provisionals, continuations and
continuations-in-part thereof ("PATENTS"); (ii) inventions (whether
patentable or not), invention disclosures, improvements, trade secrets,
proprietary information, know how, technology, technical data and customer
lists, and all documentation relating to any of the foregoing;
(iii) copyrights, copyrights registrations and applications therefor, and
all other rights corresponding thereto throughout the world; (iv) domain
names, uniform resource locators ("URLS"), other names and locators
associated with the Internet, and applications or registrations therefor
("DOMAIN NAMES"); (v) industrial designs and any registrations and
applications therefor; (vi) trade names, logos, common law trademarks and
service marks, trademark and service xxxx registrations, related goodwill
and applications therefor throughout the world; (vii) all databases and data
collections and all rights therein; (viii) all moral and economic rights of
authors and inventors, however denominated, (ix) any works of authorship,
including, without limitation, computer programs, source code, executable
code, whether embodied in software, firmware or otherwise, documentation,
designs, files, records, data and mask works; and (x) any similar or
equivalent rights to any of the foregoing (as applicable).
(cc) "LEGAL REQUIREMENTS" means any federal, state, local, municipal,
foreign or other law, statute, constitution, principle of common law,
resolution, ordinance, code, edict, decree, rule, regulation, ruling or
requirement issues, enacted, adopted, promulgated, implemented or otherwise
put into effect by or under the authority of any Governmental Entity.
(dd) "LIEN" means any liens, pledges, hypothecations, charges,
mortgages, security interests, encumbrances, claims, infringements,
interferences, options, right of first refusals, preemptive rights,
community property interests or restrictions of any kind or character
(including any
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restriction on voting, transfer and possession), other than restrictions
imposed by federal or state securities laws.
(ee) "MATERIAL ADVERSE EFFECT" means any change or effect that,
individually or when taken together with all other such changes or effects
that have occurred prior to the date of determination of the occurrence of
the Material Adverse Effect, is or is reasonably likely to be materially
adverse to the business, assets (including intangible assets), financial
condition or results of operations of such entity and its Subsidiaries,
taken as a whole; PROVIDED, HOWEVER, that in no event shall any of the
following, alone or in combination, be deemed to constitute, nor shall any
of the following be taken into account in determining whether there has been
or will be, a Material Adverse Effect on any entity: (i) any change
resulting from compliance with the terms and conditions of this Agreement;
(ii) any change resulting from the pendency of the Merger or any other
transactions contemplated hereby (including, without limitation, any
cancellation or deferral of product or service orders by customers);
(iii) any change in such entity's stock price or trading volume or any
failure by such entity to meet internal projections or forecasts or
published revenue or earnings projections, in each case in and of itself;
(iv) any change or effect that results or arises from changes affecting any
of the industries in which such entity operates generally or the United
States economy generally (which changes or effects in each case do not
disproportionately affect such entity in any material respect); or (v) any
change or effect that results or arises from changes affecting general
worldwide economic or capital market conditions (which changes in each case
do not disproportionately affect such entity in any material respect);
PROVIDED, HOWEVER, that the party hereto asserting the exception in
clause (i), (ii), (iv) and/or (v) above shows by a preponderance of the
evidence that such change results from compliance with the terms and
conditions of this Agreement or the pendency of the Merger or any other
transactions contemplated hereby, as applicable.
(ff) "NASDAQ" means the Nasdaq National Market, or any successor
inter-dealer quotation system operated by the Nasdaq Stock Market, Inc. or
any successor thereto.
(gg) "PARENT BOARD" the Board of Directors of Parent.
(hh) "PARENT COMMON STOCK" means the Common Stock, par value $0.001 per
share, of Parent.
(ii) "PARENT PREFERRED STOCK" means the Preferred Stock, par value
$0.001 per share, of Parent.
(jj) "PERSON" means any individual, corporation (including any
non-profit corporation), general partnership, limited partnership, limited
liability partnership, joint venture, estate, trust, company (including any
limited liability company or joint stock company), firm or other enterprise,
association, organization, entity or Governmental Entity.
(kk) "REGISTERED INTELLECTUAL PROPERTY" means all United States,
international and foreign: (i) Patents, including applications therefor;
(ii) registered trademarks, applications to register trademarks, including
intent-to-use applications, or other registrations or applications related
to trademarks; (iii) copyrights registrations and applications to register
copyrights; (iv) registered mask works and applications to register mask
works; and (v) any other Intellectual Property that is the subject of an
application, certificate, filing, registration or other document issued by,
filed with, or recorded by, any private, state, government or other public
or quasi-public legal authority at any time.
(ll) "SEC" means the United States Securities and Exchange Commission,
or any successor agency thereto.
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(mm) "SECTION 16 AFFILIATE" means each individual who (x) immediately
prior to the Effective Time is a director or officer of the Company or
(y) at the Effective Time will become a director or officer of Parent,
Merger Sub or the Company.
(nn) "SECURITIES ACT" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder, or any successor statute,
rules and regulations thereto.
(oo) "STOCK PORTION" means, subject to the terms of Section 2.7(c)
hereof, a fraction of a share of Parent Common Stock equal to 0.9065.
(pp) "SUBSIDIARY" means, with respect to any person, any entity of
which securities or other ownership interests having ordinary voting power
to elect a majority of the board of directors or other persons performing
similar functions are at any time directly or indirectly owned by such
person.
(qq) "TAX" means (i) any and all federal, state, local and foreign
taxes, including taxes based upon or measured by gross receipts, income,
profits, sales, use and occupation, and value added, ad valorem, transfer,
franchise, withholding, payroll, recapture, employment, excise and property
taxes, together with all interest, penalties and additions imposed with
respect to such amounts, (ii) any liability for the payment of any amounts
of the type described in clause (i) as a result of being or ceasing to be a
member of an affiliated, consolidated, combined or unitary group for any
period (including, without limitation, any liability under Treasury
Regulation Section 1.1502-6 or any comparable provision of foreign, state or
local law), and (iii) any liability for the payment of any amounts of the
type described in clause (i) or (ii) as a result of any express or implied
obligation to indemnify any other person or as a result of any obligations
under any agreements or arrangements with any other person with respect to
such amounts and including any liability for taxes of a predecessor entity.
1.2 OTHER DEFINITIONS. For all purposes of and under this Agreement, the
following terms shall have the respective meanings ascribed thereto in the
respective Sections of this Agreement set forth opposite each respective term
below:
TERM SECTION
---- --------------------
401(k) Termination Date...................... 6.11(a)
Acquisition Proposal......................... 6.1(b)
Acquisition Transaction...................... 6.1(b)
Agreement.................................... Recital / 2.2
Certificate(s)............................... 2.8(c)
Certificate of Merger........................ 2.2
Closing...................................... 2.3
Closing Date................................. 2.3
Company...................................... Preamble
Company Acquisition.......................... 8.3(c)
Company Affiliate(s)......................... 3.13 / 6.15
Company Affiliate Agreement.................. Recitals
Company Charter Documents.................... 3.3
Company ESPP................................. 2.7(b)
Company Indemnified Parties.................. 6.13
Company Insurance Policy(ies)................ 3.20
Company Lease(s)............................. 3.15(b)
Company Option Plan(s)....................... 2.7(b)
Company Permits.............................. 3.8
Company Product.............................. 3.17
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TERM SECTION
---- --------------------
Company Rights Plan.......................... Recitals
Company Schedule............................. Article III Preamble
Company SEC Report(s)........................ 3.9
Company Stock Option(s)...................... 2.7(b)
Company Stockholder Meeting.................. 6.2(c)
Company Voting Agreement..................... Recitals
Confidentiality Agreement.................... 6.4
Delaware Secretary of State.................. 2.2
Dissenting Company Shares.................... 2.7(d)
Domain Names................................. 1.1(bb)
Effective Time............................... 2.2
Exchange Agent............................... 2.8(a)
Exchange Fund................................ 2.8(b)
Hazardous Material........................... 3.18(a)
Hazardous Materials Activities............... 3.18(b)
Material Company Contract.................... 3.19(b)
Merger....................................... 2.1
Merger Consideration......................... 2.7(a)
Merger Sub................................... Preamble
Merger Sub Common Stock...................... 2.7(a)
Option Exchange Ratio........................ 6.10(a)
Parent....................................... Preamble
Parent Charter Documents..................... 4.2
Parent Schedule.............................. Article IV Preamble
Parent SEC Report(s)......................... 4.6
Patents...................................... 1.1(bb)
Proxy Statement/Prospectus................... 6.3
Recommendations.............................. 8.1(d)
Registration Statement....................... 6.3
Requisite Company Stockholder Approval....... 3.5
Returns...................................... 3.16
Rights Plan Amendment........................ Recitals
Superior Proposal............................ 6.1(b)
Surviving Corporation........................ 2.1
Termination Date............................. 8.1(b)
Termination Fee Amount....................... 8.3(b)
Triggering Event............................. 8.1(d)
URL.......................................... 1.1(bb)
ARTICLE II
THE MERGER
2.1 THE MERGER. At the Effective Time and upon the terms and subject to
the conditions set forth in this Agreement (including, without limitation, the
terms of SECTION 2.12 hereof) and the applicable provisions of Delaware Law, the
Company shall be merged with and into Merger Sub (the "MERGER"), the separate
corporate existence of the Company shall cease and Merger Sub shall continue as
the surviving corporation of the Merger. Merger Sub, as the surviving
corporation of the Merger, is sometimes referred to herein as the "SURVIVING
CORPORATION."
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2.2 THE EFFECTIVE TIME. Upon the terms and subject to the conditions set
forth in this Agreement, as soon as practicable on or after the Closing Date,
Parent, Merger Sub and the Company shall cause the Merger to be effected under
Delaware Law by filing a certificate of merger in customary form with the
Secretary of State of the State of Delaware (the "DELAWARE SECRETARY OF STATE")
in accordance with the applicable provisions of the DGCL (the "CERTIFICATE OF
MERGER") (the time of such filing and acceptance by the Delaware Secretary of
State, or such later time as may be agreed in writing by the Company and Parent
and specified in the Certificate of Merger, being referred to herein as the
"EFFECTIVE TIME"). Unless the context otherwise requires, the term "AGREEMENT"
as used herein refers collectively to this Agreement and Plan of Merger and
Reorganization and the Certificate of Merger.
2.3 THE CLOSING. The closing of the Merger (the "CLOSING") shall take
place at the offices of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional
Corporation, 000 Xxxx Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx 00000, at a date and time
to be agreed upon by Parent, Merger Sub and the Company, which date shall be no
later than the second (2nd) business day after the satisfaction or waiver of the
conditions set forth in ARTICLE VII hereof, or at such other location, date and
time as Parent, Merger Sub and the Company shall mutually agree upon in writing
(the date and time upon which the Closing shall actually occur pursuant hereto
being referred to herein as the "CLOSING DATE").
2.4 EFFECT OF THE MERGER. At the Effective Time, the effect of the Merger
shall be as provided in this Agreement and the applicable provisions of Delaware
Law. Without limiting the generality of the foregoing, and subject thereto, at
the Effective Time all of the property, rights, privileges, powers and
franchises of the Company and Merger Sub shall vest in the Surviving
Corporation, and all debts, liabilities and duties of the Company and Merger Sub
shall become the debts, liabilities and duties of the Surviving Corporation.
2.5 CERTIFICATE OF INCORPORATION AND BYLAWS.
(a) CERTIFICATE OF INCORPORATION. At the Effective Time, subject to
the terms of SECTION 6.13 hereof, the Certificate of Incorporation of Merger
Sub, as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation of Surviving Corporation (except that the name
of Merger Sub shall be amended to be "Remedy Corporation") until thereafter
amended in accordance with the applicable provisions of Delaware Law and
such Certificate of Incorporation.
(b) BYLAWS. At the Effective Time, subject to the terms of
SECTION 6.13 hereof, the Bylaws of Merger Sub, as in effect immediately
prior to the Effective Time, shall be the Bylaws of the Surviving
Corporation until thereafter amended in accordance with the applicable
provisions of Delaware Law, the Certificate of Incorporation of the
Surviving Corporation and such Bylaws.
2.6 DIRECTORS AND OFFICERS.
(a) DIRECTORS. At the Effective Time, the initial directors of the
Surviving Corporation shall be the directors of Merger Sub immediately prior
to the Effective Time, each to hold office in accordance with the
Certificate of Incorporation and Bylaws of the Surviving Corporation until
their respective successors are duly elected or appointed and qualified.
(b) OFFICERS. At the Effective Time, the initial officers of the
Surviving Corporation shall be the officers of Merger Sub immediately prior
to the Effective Time, each to hold office in accordance with the
Certificate of Incorporation and Bylaws of the Surviving Corporation until
their respective successors are duly appointed.
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2.7 EFFECT ON CAPITAL STOCK.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, at the Effective Time, by virtue of the Merger and without any
action on the part of Parent, Merger Sub, the Company or the holders of any
of the following securities, the following shall occur:
(i) COMPANY COMMON STOCK. Each share of Company Common Stock issued
and outstanding immediately prior to the Effective Time (other than
(i) shares held by Parent, Merger Sub, the Company or any other
subsidiary of Parent, or (ii) Dissenting Company Shares) shall be
canceled and extinguished and automatically converted into the right to
receive (A) an amount of cash equal to the Cash Portion, without any
interest thereon, and (B) a fraction of a share of Parent Common Stock
equal to the Stock Portion (the Cash Portion and the Stock Portion, and
any cash paid in lieu of fractional shares pursuant to SECTION 2.8(g)
hereof, being collectively referred to herein as the "MERGER
CONSIDERATION"), upon surrender of the certificate representing such
share of Company Common Stock in the manner provided in SECTION 2.8
hereof (or in the case of a lost, stolen or destroyed certificate, upon
delivery of an affidavit (and bond, if required) in the manner provided
in SECTION 2.10 hereof). The Company shall take all action necessary to
ensure that, from and after the Effective Time, Parent shall be entitled
to exercise any such repurchase option or other right set forth in any
restricted stock purchase agreement or other similar agreement in respect
of any Parent Common Stock issued in exchange for shares of Company
Common Stock subject to any such restricted stock purchase agreement or
other similar agreement.
(ii) OWNED COMPANY COMMON STOCK. Each share of Company Common Stock
held by Parent, Merger Sub, the Company or any other subsidiary of Parent
immediately prior to the Effective Time shall be cancelled and
extinguished without any conversion thereof or consideration or
distribution paid therefor.
(iii) CAPITAL STOCK OF MERGER SUB. Each share of Common Stock, par
value $0.001 per share, of Merger Sub ("MERGER SUB COMMON STOCK") issued
and outstanding immediately prior to the Effective Time shall represent
one validly issued, fully paid and nonassessable share of Common Stock,
par value $0.001 per share, of the Surviving Corporation. Each
certificate evidencing ownership of shares of Merger Sub Common Stock
immediately prior to the Effective Time shall, as of the Effective Time,
continue to evidence ownership of such shares of capital stock of the
Surviving Corporation.
(b) STOCK OPTIONS; EMPLOYEE STOCK PURCHASE PLAN RIGHTS. At the
Effective Time: (i) each option to purchase Company Common Stock (each, a
"COMPANY STOCK OPTION" and collectively, the "COMPANY STOCK OPTIONS") then
outstanding under the Company's 1991 Stock Option/Stock Issuance Plan, 1995
Stock Option/Stock Issuance Plan, 1995 Non-Employee Directors Stock Option
Plan, 2000 Supplemental Stock Option Plan or other compensatory option plans
or agreements, including option plans or agreements assumed by the Company
pursuant to a merger or acquisition (each, a "COMPANY OPTION PLAN" and
collectively, the "COMPANY OPTION PLANS") shall be treated in accordance
with SECTION 6.10 hereof, and (ii) each purchase right outstanding under the
Company's Employee Stock Purchase Plan (the "COMPANY ESPP") shall be treated
as set forth in SECTION 6.10 hereof.
(c) ADJUSTMENTS TO THE STOCK PORTION AND THE CASH PORTION.
(i) Parent, Merger Sub and the Company hereby acknowledge and agree
that the Cash Portion and the Stock Portion have been determined based
upon the representations and warranties of the Company set forth in
SECTION 3.4 hereof. Accordingly, in the event that the representations
and warranties of the Company set forth in SECTION 3.4 hereof shall be
determined to be inaccurate in any respect prior to the Effective Time,
the Cash Portion and
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the Stock Portion shall be appropriately adjusted such that (i) the
aggregate amount of cash payable pursuant to the transactions
contemplated hereby shall not exceed the aggregate amount of cash that
otherwise would have been payable pursuant the transactions contemplated
hereby had such representations and warranties been accurate, and
(ii) the aggregate number of shares of Parent Common Stock issuable
pursuant to the transactions shall not exceed the aggregate number of
shares of Parent Common Stock that otherwise would have been issuable
pursuant the transactions contemplated hereby had such representations
and warranties been accurate.
(ii) The Stock Portion and the Cash Portion shall be adjusted
appropriately to reflect the effect of any stock split, reverse stock
split, stock dividend (including any dividend or distribution of
securities convertible into Company Common Stock), extraordinary cash
dividends, reorganization, recapitalization, reclassification,
combination, exchange of shares or other like change with respect to
Company Common Stock occurring on or after the date hereof and prior to
the Effective Time. The Stock Portion shall be adjusted appropriately to
reflect the effect of any stock split, reverse stock split, stock
dividend (including any dividend or distribution of securities
convertible into Parent Common Stock), extraordinary cash dividends,
reorganization, recapitalization, reclassification, combination, exchange
of shares or other like change with respect to the Parent Common Stock
occurring on or after the date hereof and prior to the Effective Time.
(d) DISSENTING COMPANY SHARES.
(i) Notwithstanding anything to the contrary set forth in this
Agreement, all Company Shares that are outstanding immediately prior to
the Effective Time which are held by stockholders who shall have neither
voted in favor of the Merger nor consented thereto in writing and who
shall have properly and validly exercised their dissenters' rights of
appraisal of such Company Shares in accordance with Section 262 of the
DGCL (collectively, "DISSENTING COMPANY SHARES") shall not be converted
into, or represent the right to receive, the Merger Consideration
pursuant to this SECTION 2.7. Such stockholders shall be entitled to
receive payment of the appraised value of such Dissenting Company Shares
in accordance with the provisions of Section 262 of the DGCL, except that
all Dissenting Company Shares held by stockholders who shall have failed
to perfect or who effectively shall have withdrawn or lost their rights
to appraisal of such Dissenting Company Shares under such Section 262 of
the DGCL shall thereupon be deemed to have been converted into, and to
have become exchangeable for, as of the Effective Time, the right to
receive the Merger Consideration, without any interest thereon, upon
surrender of the certificate or certificates that formerly evidenced such
Company Shares in the manner provided in SECTION 2.8 hereof.
(ii) The Company shall give Parent (i) prompt notice of any demands
for appraisal received by the Company, withdrawals of such demands, and
any other instruments served pursuant to Delaware Law and received by the
Company in respect of Dissenting Company Shares, and (ii) the opportunity
to direct all negotiations and proceedings with respect to demands for
appraisal under Delaware Law in respect of Dissenting Company Shares. The
Company shall not, except with the prior written consent of Parent, make
any payment with respect to any demands for appraisal or offer to settle
or settle any such demands in respect of Dissenting Company Shares.
2.8 EXCHANGE OF CERTIFICATES.
(a) EXCHANGE AGENT. Prior to the Effective Time, Parent shall select a
bank or trust company reasonably acceptable to the Company to act as the
exchange agent for the Merger (the "EXCHANGE AGENT").
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(b) EXCHANGE FUND. Promptly after the Effective Time and from time to
time thereafter (as applicable), Parent shall make available to the Exchange
Agent, for payment to the holders of shares of Company Common Stock in
accordance with this ARTICLE II, (i) an amount in cash equal to the product
obtained by multiplying (x) the Cash Portion, and (y) the aggregate number
of shares of Company Common Stock outstanding immediately prior to the
Effective Time (excluding Dissenting Company Shares and shares of Company
Common Stock held by Parent, Merger Sub, the Company or any other subsidiary
of Parent immediately prior to the Effective Time), (ii) a number of shares
of Parent Common Stock equal to the product obtained by multiplying (x) the
Stock Portion, by (y) the aggregate number of shares of Company Common Stock
outstanding immediately prior to the Effective Time (excluding Dissenting
Company Shares and shares of Company Common Stock held by Parent, Merger
Sub, the Company or any other subsidiary of Parent immediately prior to the
Effective Time), (iii) the cash amount payable in lieu of fractional shares
pursuant to SECTION 2.8(g) hereof, and (iv) any dividends and other
distributions payable pursuant to SECTION 2.11 hereof in respect of shares
of Parent Common Stock the certificates for which have not yet been issued
pursuant to this SECTION 2.8 (such cash, shares of Parent Common Stock, cash
in lieu of fractional shares and dividends and other distributions being
referred to herein as the "EXCHANGE FUND").
(c) PAYMENT PROCEDURES. Promptly after the Effective Time (but in no
event more than ten (10) business days thereafter), Parent shall cause the
Exchange Agent to mail to each holder of record (as of the Effective Time)
of a certificate or certificates (each, a "CERTIFICATE" and collectively,
the "CERTIFICATES") which immediately prior to the Effective Time
represented outstanding shares of Company Common Stock (i) a letter of
transmittal in customary form (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall pass, only
upon delivery of the Certificates to the Exchange Agent), and
(ii) instructions for use in effecting the surrender of the Certificates in
exchange for the Merger Consideration payable in respect of such
Certificates and any dividends and other distributions to which the holder
of such Certificates is entitled pursuant to SECTION 2.11 hereof. Upon
surrender of Certificates for cancellation to the Exchange Agent or to such
other agent or agents reasonably acceptable to the Company as may be
appointed by Parent, together with such letter of transmittal, duly
completed and validly executed in accordance with the instructions thereto,
and such other documents as may be required pursuant to such instructions,
the holder of each such Certificate shall be entitled to receive in exchange
therefor the Merger Consideration payable in respect of the Company Shares
represented by such Certificate and any dividends and other distributions to
which the holder of such Certificates is entitled pursuant to SECTION 2.11
hereof, and the Certificate so surrendered shall forthwith be cancelled. The
Exchange Agent shall accept such Certificates upon compliance with such
reasonable terms and conditions as the Exchange Agent may impose to effect
an orderly exchange thereof in accordance with normal exchange practices. No
interest shall be paid or accrued for the benefit of holders of the
Certificates on the cash payable upon the surrender of such Certificates
pursuant to this SECTION 2.8. Until so surrendered, outstanding Certificates
shall be deemed from and after the Effective Time to evidence only the right
to receive the Merger Consideration payable in respect of the Company Shares
formerly represented thereby pursuant to the terms of this ARTICLE II and
any dividends and other distributions to which the holder of such
Certificates is entitled pursuant to SECTION 2.11 hereof.
(d) TRANSFERS OF OWNERSHIP. In the event of a transfer of ownership of
Company Shares that is not registered in the stock transfer books of the
Company, the Merger Consideration and any dividends and other distributions
to which the holder of such Certificates is entitled pursuant to
SECTION 2.11 hereof may be paid in exchange therefor to a person other than
the person in whose name the Certificate so surrendered is registered if
such Certificate shall be properly endorsed or otherwise be in proper form
for transfer and the person requesting such payment shall pay any transfer
or other taxes required by reason of the payment of Merger Consideration to
a person
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other than the registered holder of such Certificate or establish to the
satisfaction of Parent that such tax has been paid or is not applicable.
(e) REQUIRED WITHHOLDING. Each of the Exchange Agent, Parent and the
Surviving Corporation shall be entitled to deduct and withhold from any
consideration payable or otherwise deliverable pursuant to this Agreement to
any holder or former holder of Company Common Stock, or to any holder of a
Company Stock Option, such amounts as may be required to be deducted or
withheld therefrom under United States federal or state, local or foreign
law. To the extent such amounts are so deducted or withheld, such amounts
shall be treated for all purposes under this Agreement as having been paid
to the person to whom such amounts would otherwise have been paid.
(f) NO LIABILITY. Notwithstanding anything to the contrary set forth
in this Agreement, none of the Exchange Agent, Parent, the Surviving
Corporation or any party hereto shall be liable to a holder of shares of
Parent Common Stock or Company Common Stock for any amount properly paid to
a public official pursuant to any applicable abandoned property, escheat or
similar law.
(g) NO FRACTIONAL SHARES. No fraction of a share of Parent Common
Stock will be issued in connection with the payment of the Stock Portion of
the Merger Consideration, but in lieu thereof each holder of a Certificate
who would otherwise be entitled to receive a fraction of a share of Parent
Common Stock (after aggregating all fractional shares of Parent Common Stock
that otherwise would be received by such holder) in the Merger shall receive
from Parent an amount of cash (rounded to the nearest whole cent), without
interest, equal to the product obtained by multiplying such fraction by the
closing price of one (1) share of Parent Common Stock on the date on which
the Effective Time occurs, as reported on the Nasdaq.
(h) DISTRIBUTION OF EXCHANGE FUND TO PARENT. Any portion of the
Exchange Fund which remains undistributed to the holders of the Certificates
on the date that is six (6) months after the Effective Time shall be
delivered to Parent upon demand, and any holders of Company Shares prior to
the Merger who have not theretofore surrendered their Certificates
evidencing such Company Shares for exchange pursuant to this SECTION 2.8
shall thereafter look for payment of the Merger Consideration payable in
respect of the Company Shares evidenced by such Certificates solely to
Parent, as general creditors thereof, for any claim to the applicable Merger
Consideration to which such holders may be entitled pursuant to this
ARTICLE II.
2.9 NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK. From and after
the Effective Time, all shares of Company Common Stock shall no longer be
outstanding and shall automatically be cancelled, retired and cease to exist and
each holder of a Certificate representing any such Company Shares shall cease to
have any rights with respect thereto, except the right to receive the Merger
Consideration payable therefor upon the surrender thereof in accordance with
SECTION 2.8 hereof. The Merger Consideration issued in accordance with the terms
hereof shall be deemed to have been issued in full satisfaction of all rights
pertaining to such Company Shares. There shall be no further registration of
transfers on the records of the Surviving Corporation of shares of Company
Common Stock which were outstanding immediately prior to the Effective Time. If,
after the Effective Time, Certificates are presented to the Surviving
Corporation for any reason, they shall be canceled and exchanged as provided in
this ARTICLE II.
2.10 LOST, STOLEN OR DESTROYED CERTIFICATES. In the event that any
Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall
issue in exchange for such lost, stolen or destroyed Certificates, upon the
making of an affidavit of that fact by the holder thereof, the Merger
Consideration pursuant to SECTION 2.7 hereof and any dividends and other
distributions to which the holder of such Certificates is entitled pursuant to
SECTION 2.11 hereof; provided, however, that Parent may, in its discretion and
as a condition precedent to the issuance of such Merger Consideration and any
dividends and other distributions to which the holder of such Certificates is
entitled pursuant to
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SECTION 2.11 hereof, require the owners of such lost, stolen or destroyed
Certificates to deliver a bond in such sum as it may reasonably direct as
indemnity against any claim that may be made against Parent, the Surviving
Corporation or the Exchange Agent with respect to the Certificates alleged to
have been lost, stolen or destroyed.
2.11 DIVIDENDS AND OTHER DISTRIBUTIONS. No dividends or other
distributions declared or made after the date of this Agreement with respect to
Parent Common Stock with a record date after the Effective Time will be paid to
the holders of any unsurrendered Certificates with respect to the shares of
Parent Common Stock represented thereby until the holders of record of such
Certificates shall surrender such Certificates. Subject to applicable law,
promptly following surrender of any such Certificates, the Exchange Agent shall
deliver to the record holders thereof, without interest, the amount of any such
dividends or other distributions with a record date after the Effective Time
payable with respect to such whole shares of Parent Common Stock.
2.12 MERGER STRUCTURE. At the election of Parent, the Merger may be
restructured such that, at the Effective Time and upon the terms and subject to
the conditions set forth in this Agreement and the applicable provisions of
Delaware Law, either (i) Merger Sub shall be merged with and into the Company,
the separate corporate existence of Merger Sub shall cease and the Company shall
continue as the surviving corporation of the Merger, or (ii) the Company shall
be merged with and into Parent, the separate corporate existence of the Company
shall cease and Parent shall continue as the surviving corporation of the
Merger; provided, however, that the Merger shall not be restructured pursuant to
this SECTION 2.12 if any such restructuring would cause the condition set forth
in SECTION 7.1(f) hereof to fail to be satisfied. In the event that the Merger
is restructured pursuant to this SECTION 2.12, all references in this
ARTICLE II and elsewhere in this Agreement to the Surviving Corporation shall be
deemed to be references to the Company as the surviving corporation of the
Merger in the case of clause (i) above, or Parent as the surviving corporation
of the Merger in the case of clause (ii) above. Notwithstanding any
restructuring of the Merger pursuant to this SECTION 2.12, the terms and
conditions of this Agreement shall remain in full force and effect, subject to
any changes or revisions that are or may be necessary or appropriate as a result
of such restructuring of the Merger.
2.13 TAX AND ACCOUNTING CONSEQUENCES.
(a) TAX. It is intended by the parties hereto that the Merger will
constitute a "reorganization" within the meaning of Section 368(a) of the
Code, and the parties hereto adopt this Agreement as a "plan of
reorganization" within the meaning of Section 1.368-2(g) and
Section 1.368-3(a) of the United States Income Tax Regulations. No party
hereto shall take any action that is inconsistent with such treatment.
(b) ACCOUNTING. It is intended by the parties that the Merger will be
accounted for as a purchase.
2.14 TAKING OF NECESSARY ACTION; FURTHER ACTION. If, at any time after the
Effective Time, any further action is necessary or desirable to carry out the
purposes or intent of this Agreement and to vest the Surviving Corporation with
full right, title and possession to all assets, property, rights, privileges,
powers and franchises of the Company and Merger Sub, the officers and directors
of the Company and Merger Sub will take all such lawful and necessary action.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Merger Sub, subject
to the information set forth in the disclosure letter delivered by the Company
to Parent and Merger Sub dated as of the date hereof (the "COMPANY SCHEDULE"),
as follows:
3.1 ORGANIZATION AND QUALIFICATION. Each of the Company and its
subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has the
requisite corporate power and authority to own, lease and operate its assets and
properties and to carry on its business as it is currently being conducted,
except as would not, individually or in the aggregate, have a Material Adverse
Effect on the Company. Each of the Company and its subsidiaries is in possession
of all Approvals necessary to own, lease and operate the properties it purports
to own, operate or lease and to carry on its business as it is currently being
conducted, except as would not, individually or in the aggregate, have a
Material Adverse Effect on the Company. Each of the Company and its subsidiaries
at all times has been, and currently is, in compliance with the terms of the
Approvals applicable to it, except where the failure would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect on
the Company. Each of the Company and its subsidiaries is qualified to do
business as a foreign corporation and is in good standing under the laws of each
jurisdiction where the nature of its business requires such qualification or to
be in good standing, except where the failure to be so qualified or in good
standing would not, individually or in the aggregate, have a Material Adverse
Effect on the Company.
3.2 SUBSIDIARIES. SECTION 3.2 of the Company Schedule contains a complete
and accurate list of each of the Company's subsidiaries, the jurisdiction of
incorporation of each such subsidiary, and Company's equity interest therein.
Neither the Company nor any of its subsidiaries has agreed, is obligated to
make, or is bound by, any Contract as of the date hereof or as may hereafter be
in effect, under which it may become obligated to make any future investment in
or capital contribution to any other entity. Other than the Company's interests
in its subsidiaries, neither the Company nor any of its subsidiaries directly or
indirectly owns any equity or similar interest in, or any interest convertible
into, or exchangeable or exercisable for, any equity or similar interest in, any
other person.
3.3 CERTIFICATE OF INCORPORATION AND BYLAWS. The Company has furnished or
made available to Parent a complete and correct copy of its Certificate of
Incorporation and Bylaws as amended to date and in effect as of the date hereof
(together, the "COMPANY CHARTER DOCUMENTS"). The Company Charter Documents and
equivalent organizational documents of each of its subsidiaries are in full
force and effect. The Company is not in violation of any of the provisions of
the Company Charter Documents, and no subsidiary of the Company is in violation
of its equivalent organizational documents, except as would not, individually or
in the aggregate, have a Material Adverse Effect on the Company.
3.4 CAPITALIZATION
(a) The authorized capital stock of the Company consists of 240,000,000
shares of Common Stock, par value $0.00005 per share, and 20,000,000 shares
of Preferred Stock, par value $0.00005 per share. As of the close of
business on June 7, 2001: (i) 30,746,992 shares (excluding treasury stock)
of Company Common Stock were issued and outstanding; (ii) 4,132,300 shares
of Company Common Stock were held by the Company as treasury stock;
(iii) no shares of Company Common Stock were held by any subsidiaries of the
Company; (iv) 2,442,270 shares of Company Common Stock were reserved for
future issuance under the Company ESPP; (v) 9,657,247 shares of Company
Common Stock were reserved for issuance upon the exercise of Company Stock
Options outstanding under the Company Option Plans; and (vi) no shares of
Company Preferred Stock were issued or outstanding. Other than pursuant to
the exercise of outstanding Company Stock
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Options, the Company has not issued any shares of its capital stock between
June 7, 2001 and the date hereof. Except as set forth in this
SECTION 3.4(a) or the Company Rights Plan, there are no securities of the
Company authorized, reserved for issuance, issued or outstanding. All of the
outstanding shares of Company Common Stock, and all outstanding shares of
capital stock of each subsidiary of the Company, are validly issued, fully
paid and nonassessable shares of Company Common Stock, and were issued in
compliance in all material respects with all applicable securities laws and
other applicable Legal Requirements and all applicable Contracts to which
the Company or any of its subsidiaries is a party or by which they are
bound.
(b) SECTION 3.4(b) of the Company Schedule sets forth the following
information with respect to each Company Stock Option outstanding as of the
close of business on June 7, 2001: (i) the name of the optionee; (ii) the
number of shares of Company Common Stock issuable upon the exercise of such
Company Stock Option; (iii) the exercise price of such Company Stock Option;
(iv) the date on which such Company Stock Option was granted; and (v) the
date on which such Company Stock Option will expire. As of the close of
business on June 7, 2001, an aggregate of 3,908,867 shares of Company Common
Stock are issuable upon the exercise of outstanding exercisable Company
Stock Options. Except for shares of Company Common Stock issuable upon the
exercise of Company Stock Options granted after the date hereof in
compliance with SECTION 5.1 hereof, as of December 31, 2001, an aggregate of
not in excess of 5,300,000 shares of Company Common Stock will be issuable
upon the exercise of outstanding then exercisable Company Stock Options. The
Company has delivered to Parent a complete and accurate copy of all Company
Option Plans and the form of all stock option agreements evidencing any
Company Stock Options granted thereunder. All shares of Company Common Stock
subject to issuance upon the exercise of any Company Stock Option will, upon
the valid issuance thereof on the terms and subject to the conditions set
forth in the instrument pursuant to which they are issuable, be duly
authorized, validly issued, fully paid and nonassessable shares of Company
Common Stock. All outstanding Company Stock Options have been granted in
compliance in all material respects with all applicable securities laws and
other applicable Legal Requirements and all applicable Contracts to which
the Company is a party or by which it is bound. There are no agreements of
any kind or character to which the Company is a party or by which it is
bound obligating the Company to accelerate the vesting of any Company Stock
Option as a result of or in connection with the Merger or any other
transaction contemplated hereby.
(c) Except for securities that the Company owns (free and clear of all
liens) directly or indirectly through one or more subsidiaries, and except
for shares of capital stock or other similar ownership interests of
subsidiaries of the Company that are owned by certain nominee equity holders
as required by the applicable law of the jurisdiction of organization of
such subsidiaries (which shares or other interests do not materially affect
the Company's control of such subsidiaries), there are no equity securities,
partnership interests or similar ownership interests of any subsidiary of
the Company, or any security convertible into, or exercisable or
exchangeable for, any equity securities, partnership interests or similar
ownership interests in any subsidiaries of the Company, issued, reserved for
issuance or outstanding. Except as set forth in SECTION 3.4(b) hereof, there
are no subscriptions, options, warrants, equity securities, partnership
interests or similar ownership interests, calls, rights (including
preemptive rights), commitments or agreements of any kind or character to
which the Company or any of its subsidiaries is a party or by which they are
bound obligating the Company or any of its subsidiaries to issue, deliver or
sell, or cause to be issued, delivered or sold, or repurchase, redeem or
otherwise acquire, or cause the repurchase, redemption or acquisition of,
any shares of capital stock, partnership interests or similar ownership
interests of the Company or any of its subsidiaries, or obligating the
Company or any of its subsidiaries to grant, extend, accelerate the vesting
of or enter into any such subscription, option, warrant, equity security,
call, right, commitment or agreement. There are no registration rights and,
except for the Company Voting Agreements and the Company Rights Plan, there
is no voting
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trust, proxy, rights plan, anti-takeover plan or other agreement or
understanding to which the Company or any of its subsidiaries is a party or
by which they are bound with respect to any equity security of the Company
or with respect to any equity security, partnership interest or similar
ownership interest of any of the subsidiaries of the Company.
3.5 AUTHORITY. The Company has all necessary corporate power and authority
to execute and deliver this Agreement, the Company Voting Agreements and the
Company Affiliate Agreements, to perform its obligations hereunder and
thereunder and, subject to the adoption and approval of this Agreement and the
Merger by the stockholders of the Company (if required under Delaware Law), to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement, the Company Voting Agreements and the Company
Affiliate Agreements by the Company, the performance by the Company of its
obligations hereunder and thereunder, and the consummation by the Company of the
transactions contemplated hereby and thereby, have been duly and validly
authorized by all necessary corporate action on the part of the Company, and no
other corporate proceedings on the part of the Company (other than the adoption
and approval of this Agreement and approval of the Merger by the holders of a
majority of the outstanding shares of Company Common Stock in accordance with
Delaware Law and the Company Charter Documents, if required (the "REQUISITE
COMPANY STOCKHOLDER APPROVAL")), are necessary to authorize the Company to
execute and deliver this Agreement, the Company Voting Agreements and the
Company Affiliate Agreements, to perform its obligations hereunder and
thereunder or to consummate the transactions contemplated hereby and thereby.
This Agreement, the Company Voting Agreements and the Company Affiliate
Agreements have been duly and validly executed and delivered by the Company and,
assuming the due authorization, execution and delivery by Parent and Merger Sub,
constitute the legal and binding obligations of the Company, enforceable against
the Company in accordance with their respective terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law).
3.6 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by the Company does
not, and the performance by the Company of its obligations hereunder and the
consummation by the Company of the transactions contemplated hereby will
not, (i) violate the Company Charter Documents or the equivalent
organizational documents of any of the Company's subsidiaries, (ii) subject
to obtaining the Requisite Company Stockholder Approval and the consents,
approvals, authorizations and permits, and making the filings and
notifications, set forth in SECTION 3.6(b) hereof, conflict with or violate
any law, rule, regulation, order, judgment or decree applicable to the
Company or any of its subsidiaries, or by which the Company, any of its
subsidiaries or any of their respective assets and properties are bound or
affected, or (iii) result in any breach of or constitute a default (or an
event that with notice or lapse of time, or both, would become a default)
under, or impair the rights of the Company or any of its subsidiaries under,
or alter the rights or obligations of any person under, or give to any
person any rights of termination, amendment, acceleration or cancellation
of, or result in the creation of a lien on any of the assets or properties
of the Company or any of its subsidiaries pursuant to, any material Contract
to which the Company or any of its subsidiaries is a party or by which the
Company, any of its subsidiaries or any of their respective assets and
properties are bound or affected, except, with respect to clause (ii) and
(iii) of this SECTION 3.6(a), for such conflicts, violations, breaches,
defaults or other occurrences that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company or a material adverse effect on the Company's ability to timely
perform its obligations under this Agreement or consummate the transactions
contemplated hereby.
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(b) The execution and delivery of this Agreement by the Company does
not, and the performance by the Company of its obligations hereunder and the
consummation by the Company of the transactions contemplated hereby will
not, require any consent, approval, authorization or permit of, or filing
with or notification to, any Governmental Entity, except (i) for applicable
requirements under the Exchange Act, the HSR Act, the applicable antitrust
or competition laws and regulations of foreign Governmental Entities, if
any, and the rules of the Nasdaq, (ii) for the filing and recordation of the
Certificate of Merger as required by Delaware Law and (iii) where the
failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications (A) would not prevent or materially delay
the parties hereto from performing their respective obligations under this
Agreement or consummating the transactions contemplated hereby, or
(B) would not, individually or in the aggregate, have a Material Adverse
Effect on Company.
3.7 COMPLIANCE WITH LAWS. Neither Company nor any of its subsidiaries is
in conflict with, or in default or violation under any law, rule, regulation,
order, judgment or decree applicable to the Company or any of its subsidiaries,
or by which the Company, any of its subsidiaries or any of their respective
assets and properties are bound or affected, except for any conflicts, defaults
or violations that would not, individually or in the aggregate, have a Material
Adverse Effect on the Company. No investigation or review by any Governmental
Entity is pending or, to the knowledge of Company, threatened against the
Company or any of its subsidiaries, nor has any Governmental Entity indicated to
the Company or any of its subsidiaries an intention to conduct the same.
3.8 PERMITS. The Company and its subsidiaries hold all permits, licenses,
variances, exemptions, orders, approvals and other authorizations from
Governmental Entities the absence of which would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company (collectively, the "COMPANY PERMITS"). The Company and its subsidiaries
have been and are in compliance in all material respects with the terms of the
Company Permits and any conditions placed thereon. No investigation or review by
any Governmental Entity is pending or, to the knowledge of Company, threatened
against the Company or any of its subsidiaries with respect to any of the
Company Permits or that could reasonably be expected to result in the revocation
or material limitation of the rights of the Company or any of its subsidiaries
under any of the Company Permits, nor has any Governmental Entity indicated to
the Company or any of its subsidiaries an intention to conduct the same.
3.9 SEC FILINGS; FINANCIAL STATEMENTS.
(a) The Company has made available to Parent a complete and accurate
copy of each report, schedule, registration statement, proxy and information
statements and other documents filed by the Company with the SEC since
December 31, 1997 (each, a "COMPANY SEC REPORT" and collectively, the
"COMPANY SEC REPORTS"), which are all the reports, schedules, registration
statements, proxy and information statements and other documents required to
be filed by the Company with the SEC since such date. As of their respective
dates, the Company SEC Reports (i) complied in all material respects with
the requirements of the Securities Act or the Exchange Act, as the case may
be, and (ii) did not at the time they were filed (or, if such Company SEC
Report was amended or superseded by another filing, then on the date of
filing of such amendment or superceding filing) contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. None of the
Company's subsidiaries is required to file any reports or other documents
with the SEC.
(b) As of their respective dates, each set of consolidated financial
statements (including, in each case, any related notes thereto) contained in
the Company SEC Reports, (i) complied as to form in all material respects
with the published rules and regulations of the SEC with respect
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thereto, (ii) was prepared in accordance with GAAP applied on a consistent
basis throughout the periods involved (except as may be indicated in the
notes thereto or, in the case of unaudited statements, for the absence of
footnotes as permitted by Form 10-Q promulgated under the Exchange Act), and
(iii) fairly presents in all material respects the consolidated financial
condition of the Company and its subsidiaries at the respective dates
thereof and the consolidated results of operations and cash flows of the
Company and its subsidiaries for the periods indicated, except that the
unaudited interim financial statements were or are subject to normal and
year-end recurring adjustments which were not or are not expected to be
material in amount or significance.
(c) The Company has furnished or made available to Parent a complete and
correct copy of any amendments or modifications, which have not yet been
filed with the SEC but which are required to be filed with the SEC, to
agreements, documents or other instruments which previously had been filed
by the Company with the SEC pursuant to the Securities Act or the Exchange
Act.
3.10 NO UNDISCLOSED LIABILITIES. Neither the Company nor any of its
subsidiaries has any liabilities (whether absolute, accrued, contingent or
otherwise) of a nature required to be disclosed on a balance sheet prepared in
accordance with GAAP which are, individually or in the aggregate, material to
the business, assets, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole, except (i) liabilities set forth
or reflected in the Company's balance sheet as of March 31, 2001 contained in
the Company SEC Reports, or (ii) liabilities incurred since March 31, 2001 in
the ordinary course of business, none of which is material to the business,
assets, financial condition or results of operations of the Company and its
subsidiaries, taken as a whole.
3.11 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as required by this
Agreement, since December 31, 2000, there has not been:
(a) any event, occurrence or condition that has had, or would reasonably
be expected to have, a Material Adverse Effect on the Company;
(b) any declaration, setting aside or payment of any dividend on, or
other distribution (whether in cash, stock or property) in respect of, any
of the capital stock of the Company or any of its subsidiaries, or any
purchase, redemption or other acquisition by the Company of any capital
stock of the Company or any other securities of the Company or any of its
subsidiaries, except for repurchases from Company Employees following their
termination pursuant to the terms of their pre-existing stock option or
purchase agreements with the Company, or any granting of any options,
warrants, calls or rights to acquire any shares of capital stock of the
Company or any other securities of the Company;
(c) any split, combination or reclassification of any of the capital
stock of the Company or any of its subsidiaries;
(d) any granting by the Company or any of its subsidiaries of any
increase in compensation or fringe benefits to any Company Employees, or any
payment by the Company or any of its subsidiaries of any bonus to any
Company Employees, or any granting by the Company or any of its subsidiaries
of any increase in severance or termination pay to any Company Employees, or
any entry by the Company or any of its subsidiaries into any currently
effective employment, severance, termination or indemnification agreement or
any agreement with any Company Employees (or former Company employees) the
benefits of which are contingent or the terms of which are materially
altered upon the occurrence of a transaction involving the Company of the
nature contemplated by this Agreement;
(e) the entry by the Company or any of its subsidiaries into any
material licensing or other agreement with regard to the acquisition or
disposition of any Intellectual Property other than licenses in the ordinary
course of business, or any amendment or consent with respect to any
licensing agreement filed or required to be filed by the Company with the
SEC;
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(f) any material change by the Company in its accounting methods,
principles or practices, except as required by concurrent changes in GAAP;
or
(g) any material revaluation by the Company of any of its assets,
including, without limitation, writing down the value of capitalized
inventory or writing off notes or accounts receivable or any sale of assets
of Company other than in the ordinary course of business.
3.12 ABSENCE OF LITIGATION.
(a) There are no claims, actions, suits or proceedings pending or, to
the knowledge of the Company, threatened against the Company, any of its
subsidiaries or any of their respective assets and properties before any
Governmental Entity that (i) if adversely determined against the Company
would, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on the Company, or (ii) seeks to delay or prevent
the consummation of the Merger or any other transaction contemplated by this
Agreement.
(b) SECTION 3.12(b) of the Company Schedule contains a complete and
accurate list of all claims, actions, suits or proceedings pending against
the Company involving claims in excess of $100,000.
3.13 EMPLOYEE AND EMPLOYEE BENEFIT MATTERS.
(a) DEFINITION. For all purposes of and under this SECTION 3.13, the
term "COMPANY AFFILIATE" shall mean any other person or entity under common
control with the Company within the meaning of Section 414(b), (c), (m) or
(o) of the Code.
(b) SCHEDULE. SECTION 3.13(b) of the Company Schedule contains an
accurate and complete list of each Company Employee Plan and Company
Employment Agreement. The Company does not have any plan or commitment to
establish any new Company Employee Plan or Company Employment Agreement, to
modify any Company Employee Plan or Company Employment Agreement (except to
the extent required by applicable law or to conform any such Company
Employee Plan or Company Employment Agreement to the requirements of any
applicable law, in each case as previously disclosed to Parent in writing,
or as required by this Agreement), or to adopt or enter into any Company
Employee Plan or Company Employment Agreement. SECTION 3.13(b) of the
Company Schedule contains a representation of the percentage of the
Company's employee base which falls within each of the following categories:
non-exempt employees, exempt employees and key employees; average employee
salary in each such category; and average tenure in each such category.
(c) DOCUMENTS. The Company has delivered to Parent a complete and
accurate copy of the following: (i) all documents embodying each Company
Employee Plan and Company Employment Agreement, including, without
limitation, all amendments thereto and all related trust documents,
administrative service agreements, group annuity contracts, group insurance
contracts and policies pertaining to fiduciary liability insurance covering
the fiduciaries for each Company Employee Plan and Company Employment
Agreement; (ii) the most recent annual actuarial valuations, if any,
prepared for each Company Employee Plan; (iii) the three (3) most recent
annual reports (Form Series 5500 and all schedules and financial statements
attached thereto), if any, required under ERISA or the Code in connection
with each Company Employee Plan; (iv) if Company Employee Plan is funded,
the most recent annual and periodic accounting of Company Employee Plan
assets; (v) the most recent summary plan description together with the
summary(ies) of material modifications thereto, if any, required under ERISA
with respect to each Company Employee Plan; (vi) the most recent IRS
determination letter, and all applications and correspondence to or from the
IRS or the DOL with respect to any such application or letter; (vii) all
written communications material to any Company Employee or Company Employees
relating to any Company Employee Plan and any proposed Company Employee
Plans, in each case, relating to
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any amendments, terminations, establishments, increases or decreases in
benefits, acceleration of payments or vesting schedules or other events
which would result in any material liability to the Company; (viii) all
material correspondence to or from any governmental agency relating to any
Company Employee Plan; (ix) all current model COBRA forms and related
notices (or such forms and notices as required under comparable law);
(x) the three (3) most recent plan years discrimination tests for each
Company Employee Plan; and (xi) all registration statements, annual reports
(Form 11-K and all attachments thereto) and prospectuses prepared in
connection with each Company Employee Plan.
(d) COMPANY EMPLOYEE PLAN COMPLIANCE. The Company has performed in all
material respects all obligations required to be performed by it under, is
not in material default or violation of, and has no knowledge of any
material default or violation by any other party to each Company Employee
Plan, and each Company Employee Plan has been established and maintained in
all material respects in accordance with its terms and in compliance with
all applicable laws, statutes, orders, rules and regulations, including but
not limited to ERISA or the Code. Each Company Employee Plan intended to
qualify under Section 401(a) of the Code and each related trust intended to
qualify under Section 501(a) of the Code has either received a favorable
determination, opinion, notification or advisory letter from the IRS with
respect to each such Company Employee Plan as to its qualified status under
the Code, including all amendments to the Code effected by the Tax Reform
Act of 1986 and subsequent legislation, or has remaining a period of time
under applicable Treasury regulations or IRS pronouncements in which to
apply for such a letter and make any amendments necessary to obtain a
favorable determination as to the qualified status of each such Company
Employee Plan. No "prohibited transaction," within the meaning of
Section 4975 of the Code or Sections 406 and 407 of ERISA, and not otherwise
exempt under Section 4975 of the Code or Section 408 of ERISA (or any
administrative class exemption issued thereunder), has occurred with respect
to any Company Employee Plan. All contributions required to be made by the
Company or Company Affiliate, to any Company Employee Plan have either been
made on or before their due dates or a reasonable amount has been paid or
accrued, in accordance with the Company's ordinary business procedures for
the current plan years; provided, however, that any contributions made to a
Company Employee Plan intended to be qualified under Code Section 401(k),
have been timely made in accordance with DOL regulation Section 2510.3-102.
There are no actions, suits or, to the knowledge of the Company, claims
pending or threatened (other than routine claims for benefits) against any
Company Employee Plan or against the assets of any Company Employee Plan.
Each Company Employee Plan (other than any stock option plan) can be
amended, terminated or otherwise discontinued after the Effective Time,
without material liability to Parent, the Company or any of the Company
Affiliates (other than benefits accrued to date and ordinary administration
expenses). There are no audits, inquiries or proceedings pending or, to the
knowledge of the Company, threatened by the IRS or DOL with respect to any
Company Employee Plan. Neither the Company nor any Company Affiliate is
subject to any penalty or tax with respect to any Company Employee Plan
under Section 502(i) of ERISA or Sections 4975 through 4980 of the Code.
(e) COMPANY PENSION PLANS. Neither the Company nor any Company
Affiliate has ever maintained, established, sponsored, participated in, or
contributed to, any Company Pension Plan which is subject to Title IV of
ERISA or Section 412 of the Code.
(f) COLLECTIVELY BARGAINED, MULTIEMPLOYER AND MULTIPLE EMPLOYER
PLANS. At no time within the six (6) year period ending on the date hereof,
has the Company or any Company Affiliate contributed to or been obligated to
contribute to any Company Multiemployer Plan or ever maintained,
established, sponsored, participated in, or contributed to any multiple
employer plan, or to any plan described in Section 413 of the Code.
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(g) NO POST-EMPLOYMENT OBLIGATIONS. No Company Employee Plan provides,
or reflects or represents any liability to provide retiree health insurance
coverage to any person for any reason, except as may be required by COBRA or
other applicable statute.
(h) HEALTH CARE COMPLIANCE. Neither the Company nor any Company
Affiliate has, prior to the Effective Time and in any material respect,
violated any of the health care continuation requirements of COBRA, the
requirements of FMLA, the requirements of the Health Insurance Portability
and Accountability Act of 1996, the requirements of the Women's Health and
Cancer Rights Act of 1998, the requirements of the Newborns' and Mothers'
Health Protection Act of 1996, or any amendment to each such act, or any
similar provisions of state law applicable to the Company Employees.
(i) EFFECT OF TRANSACTION.
(i) The execution and delivery of this Agreement by the Company did
not, the performance by the Company of its obligations hereunder and the
consummation by the Company of the transactions contemplated hereby will
not (either alone or upon the occurrence of any additional or subsequent
events), constitute an event under any Company Employee Plan, Company
Employment Agreement, trust or loan that will or may result in any
payment (whether of severance pay or otherwise), acceleration,
forgiveness of indebtedness, vesting, distribution, increase in benefits
or obligation to fund benefits with respect to any Company Employee.
(ii) No payment or benefit which will or may be made by the Company
or any Company Affiliates with respect to any Company Employee will be
characterized as a "parachute payment," within the meaning of
Section 280G(b)(2) of the Code.
(j) EMPLOYMENT MATTERS. To the knowledge of the Company, the Company:
(i) is in material compliance in all respects with all applicable foreign,
federal, state and local laws, rules and regulations respecting employment,
employment practices, terms and conditions of employment and wages and
hours, in each case, with respect to Company Employees; (ii) has withheld
and reported all amounts required by law or by agreement to be withheld and
reported with respect to wages, salaries and other payments to Company
Employees; (iii) is not liable for any arrears of wages or any taxes or any
penalty for failure to comply with any of the foregoing; and (iv) is not
liable for any payment to any trust or other fund governed by or maintained
by or on behalf of any Governmental Entity, with respect to unemployment
compensation benefits, social security or other benefits or obligations for
Company Employees (other than routine payments to be made in the normal
course of business and consistent with past practice). To the knowledge of
the Company, there are no pending, threatened or reasonably anticipated
claims or actions against the Company under any worker's compensation policy
or long-term disability policy (other than routine claims for benefits).
(k) LABOR MATTERS. No work stoppage or labor strike against the
Company is pending or, to the knowledge of the Company, threatened. The
Company does not know of any activities or proceedings of any labor union to
organize any Company Employees. There are no actions, suits, claims, labor
disputes or grievances pending, or, to the knowledge of the Company,
threatened or reasonably anticipated relating to any labor, safety or
discrimination matters involving any Company Employee, including, without
limitation, charges of unfair labor practices or discrimination complaints,
which, if adversely determined, would, individually or in the aggregate,
result in any material liability to the Company. Neither the Company nor any
of its subsidiaries has engaged in any unfair labor practices within the
meaning of the National Labor Relations Act. The Company is not presently,
nor has it been in the past, a party to, or bound by, any collective
bargaining agreement or union contract with respect to Company Employees and
no collective bargaining agreement is being negotiated by the Company.
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(l) COMPANY INTERNATIONAL EMPLOYEE PLANS. The Company has no knowledge of,
nor has the Company ever had the obligation to maintain, establish, sponsor,
participate in or contribute to, any Company International Employee Plan.
3.14 RESTRICTIONS ON BUSINESS ACTIVITIES. There is no Contract or
judgment, injunction, order or decree binding upon the Company or any of its
subsidiaries or to which the Company or any of its subsidiaries is a party which
has or could have the effect of prohibiting or materially impairing any material
business practice of the Company or any of its subsidiaries, any material
acquisition of property by the Company or any of its subsidiaries or the conduct
of business by the Company or any of its subsidiaries as currently conducted.
3.15 REAL PROPERTY MATTERS.
(a) REAL PROPERTY. Neither the Company nor any of its subsidiaries
owns any material real property. The Company and each of its subsidiaries
have good and marketable title to all of their owned real property, free and
clear of all liens except (i) for liens for taxes not yet due and payable,
(ii) as reflected in the financial statements contained in the Company SEC
reports, and (iii) for such liens or other imperfections of title, if any,
as do not materially interfere with the present use and enjoyment of the
property affected thereby.
(b) LEASED PROPERTY. SECTION 3.15 of the Company Schedule contains a
complete and accurate list of all real property currently leased by Company,
and with respect to each Company Lease, the aggregate monthly rental payable
thereunder and the expiration date thereof. The Company has furnished or
made available to Parent a complete and accurate copy of all leases (each, a
"COMPANY LEASE" and collectively, the "COMPANY LEASES") pursuant to which
the Company or any of its subsidiaries lease any real property. All of the
Company Leases are valid and enforceable in accordance with their respective
terms, and there is not, under any of the Company Leases, any existing
material default or event of default on the part of the Company or any of
its subsidiaries or, to the knowledge of the Company, on the part of any
other party to any such Company Lease (or any event which with notice or
lapse of time, or both, would constitute a material default and in respect
of which the Company or any of its subsidiaries has not taken adequate steps
to prevent such default from occurring). No term or condition of any Company
Lease has been modified, amended or waived except as shown in such documents
heretofore furnished or made available to Parent. Each Company Lease
constitutes the entire agreement of the landlord and the tenant thereunder,
and there are no other Contracts whatsoever relating to the Company's use or
occupancy of any of the premises described in the Company Leases. The
Company has not transferred or assigned any interest in any Company Lease,
nor has the Company subleased or otherwise granted rights of use or
occupancy of any of the premises described therein to any other person. As
of the date of this Agreement, to the knowledge of Company, the landlord
under each Company Lease has complied with all of the material requirements,
conditions, representations, warranties and covenants of the landlord
thereunder, including, without limitation, the timely completion of
construction of the leased premises in a good and workmanlike manner and
otherwise in accordance with the Company Leases.
3.16 TAX MATTERS.
(a) The Company and each of its subsidiaries have timely filed all
federal, state, local and foreign returns, estimates, information statements
and reports ("RETURNS") relating to Taxes required to be filed by the
Company and each of its subsidiaries with any Tax authority, except such
Returns which are not material to the Company. All such Returns were correct
and complete in all material respects. The Company and each of its
subsidiaries have paid all Taxes shown to be due on such Returns. Except to
the extent that an accrual or reserve for Taxes has been established on the
consolidated financial statements included in the Company SEC Reports or the
balance sheet of the Company included in the most recently filed Company SEC
Report, the
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Company has paid all Taxes payable as of the date of such consolidated
financial statements or balance sheet.
(b) The Company and each of its subsidiaries has withheld with respect
to its employees, independent contractors, creditors, stockholders, and all
other third parties all federal and state income taxes, Taxes pursuant to
the Federal Insurance Contribution Act, Taxes pursuant to the Federal
Unemployment Tax Act and other Taxes required to be withheld and have timely
paid over to the proper governmental authorities all amounts required to be
withheld and paid over under all applicable laws.
(c) Neither the Company nor any of its subsidiaries has executed any
unexpired waiver of any statute of limitations on or extending the period
for the assessment or collection of any Tax.
(d) To the knowledge of the Company, no audit or other examination of
any Return of the Company or any of its subsidiaries by any Tax authority is
presently in progress, nor has the Company or any of its subsidiaries been
notified in writing of any request for such an audit or other examination.
(e) No material adjustment relating to any Returns filed by the Company
or any of its subsidiaries (and no claim by a Tax authority in a
jurisdiction in which the Company or any of its subsidiaries does not file
Returns that the Company or any of its subsidiaries may be subject to
taxation by such jurisdiction) has been proposed in writing formally or
informally by any Tax authority to the Company or any of its subsidiaries.
(f) Neither the Company nor any of its subsidiaries has any liability
for any unpaid Taxes which has not been accrued for or reserved on the
Company Balance Sheet in accordance with GAAP, whether asserted or
unasserted, contingent or otherwise, other than any liability for unpaid
Taxes that may have accrued since March 31, 2001 in connection with the
operation of the business of the Company and its subsidiaries in the
ordinary course.
(g) There is no contract, agreement, plan or arrangement to which the
Company or any of its subsidiaries is a party as of the date of this
Agreement, including but not limited to the provisions of this Agreement,
covering any employee or former employee of the Company or any of its
subsidiaries that, individually or collectively, would reasonably be
expected to give rise to the payment of any amount that would not be
deductible pursuant to Sections 280G, 404 or 162(m) of the Code. There is no
contract, agreement, plan or arrangement to which the Company is a party or
by which it is bound to compensate any individual for excise taxes paid
pursuant to Section 4999 of the Code.
(h) Neither the Company nor any of its subsidiaries has filed any
consent agreement under Section 341(f) of the Code or agreed to have
Section 341(f)(2) of the Code apply to any disposition of a subsection
(f) asset (as defined in Section 341(f)(4) of the Code) owned by the Company
or any of its subsidiaries.
(i) Neither the Company nor any of its subsidiaries has constituted
either a "distributing corporation" or a "controlled corporation" in a
distribution of stock qualifying for tax-free treatment under Section 355 of
the Code (i) in the two years prior to the date of this Agreement or
(ii) in a distribution which could otherwise constitute part of a "plan" or
"series of related transactions" (within the meaning of Section 355(e) of
the Code) in conjunction with the Merger.
(j) The Company has not granted any power of attorney with respect to
Taxes.
(k) The Company is not, and has not been at any time, a "United States
real property holding corporation" within the meaning of section 897(c) of
the Code.
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3.17 INTELLECTUAL PROPERTY MATTERS.
(a) No Company Intellectual Property or product owned by the Company or
service offering of the Company or any of its subsidiaries (a "COMPANY
PRODUCT") is subject to any proceeding or outstanding decree, order,
judgment, or stipulation restricting in any material manner, or any Contract
restricting in any material manner the use, transfer, or licensing thereof
by the Company or any of its subsidiaries, or which may materially affect
the validity, use or enforceability of such Company Intellectual Property or
Company Product.
(b) Each material item of Company Registered Intellectual Property is
valid and subsisting, all necessary registration, maintenance and renewal
fees currently due in connection with such Company Registered Intellectual
Property have been made and all necessary documents, recordations and
certificates in connection with such Company Registered Intellectual
Property have been filed with the relevant patent, copyright, trademark or
other authorities in the United States or foreign jurisdictions, as the case
may be, for the purposes of prosecuting, perfecting and maintaining such
Company Registered Intellectual Property. The Company has not claimed any
status in the application for or registration of any Registered Intellectual
Property Rights, including "small business status," that would not be
applicable to Purchaser.
(c) In each case in which the Company has acquired any Intellectual
Property from any person, the Company has obtained a valid and enforceable
assignment sufficient to irrevocably transfer all rights in and to such
Intellectual Property (including the right to seek past and future damages
with respect thereto) to the Company sufficient for the Company to conduct
its business as currently conducted or proposed to be conducted. To the
maximum extent provided for by, and in accordance with, applicable laws and
regulations, the Company has recorded each such assignment of a Registered
Intellectual Property Right assigned to the Company with the relevant
Governmental Entity.
(d) All Company Intellectual Property will be fully transferable,
alienable or licensable by Surviving Corporation and/or Parent without
restriction and without payment of any kind to any person except for
ordinary course restrictions or payments that would apply to the Company had
the transactions contemplated by this Agreement not occurred.
(e) The Company owns, and has good and exclusive title to, each item of
Company Intellectual Property owned by it free and clear of any lien or
encumbrance (excluding non-exclusive licenses and related restrictions
granted in the ordinary course). Without limiting the foregoing: (i) the
Company is the exclusive owner of all trademarks and trade names purported
to be owned by the Company that are used in connection with the operation or
conduct of the business of the Company and its subsidiaries, including the
sale, distribution or provision of any Company Products by the Company or
its subsidiaries; (ii) the Company owns exclusively, and has good title to,
all copyrighted works that are Company Products or services or which the
Company or any of its subsidiaries otherwise purports to own; and (iii) to
the extent that any Patents would be infringed by any Company Products, to
the knowledge of the Company, the Company is the exclusive owner of such
Patents, or has secured appropriate rights through license or other
agreement.
(f) Within the past year, the Company has not (i) transferred ownership
of, or granted any exclusive license of or exclusive right to use, or
authorized the retention of any exclusive rights to use or joint ownership
of, material Company Intellectual Property that was or is currently
purported to be owned by the Company, to any other person, or
(ii) permitted the Company's rights in such material Company Intellectual
Property to lapse or enter the public domain.
(g) All Company Intellectual Property used in or necessary to the
conduct of the Company's business as presently conducted or reasonably
contemplated to be conducted by the Company was
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written and created solely by either (i) employees of the Company acting
within the scope of their employment or (ii) by third parties who have
exclusively licensed to the Company or validly and irrevocably assigned all
of their rights, including all Intellectual Property rights therein, to the
Company, and no such third party owns or has any rights to any of the
Company Intellectual Property purported to be owned by the Company.
(h) The Company Intellectual Property and other Intellectual Property
licensed by the Company constitutes all the Intellectual Property used in
and/or necessary to the conduct of the business of the Company as it
currently is conducted, and as it is reasonably planned or contemplated to
be conducted by the Company, including, without limitation, the design,
development, manufacture, use, import, sale and licensing of Company
Products.
(i) No person who has licensed any Intellectual Property to the Company
has ownership rights or license rights granted by the Company to
improvements made by or for the Company in such Intellectual Property.
(j) The Company has the right to use, pursuant to valid licenses, all
operating software (including software required to provide services offered
by the Company), software development tools, library functions, compilers
and all other third-party software that are used in the operation of the
Company or that are required to create, modify, compile, operate or support
any software that is Company Intellectual Property or is incorporated into
any Company Product. Without limiting the foregoing, no open source or
public library software, including any version of any software licensed
pursuant to any GNU public license, was used in the development or
modification of any software that is Company Intellectual Property.
(k) Any agreements between the Company and other persons for the
development or manufacture of a Company Product will permit the Company to
continue the development or manufacture of any such product notwithstanding
any termination or expiration of such agreement(s), without the payment of
any additional royalty, fee or other payment to any such other person (other
than accrued fees or payments).
(l) The Company has no knowledge of any information, materials, facts,
or circumstances, including any information or fact that would constitute
prior art, that would render any of the Company Registered Intellectual
Property invalid or unenforceable, or would materially affect any pending
application for any Company Registered Intellectual Property and the Company
has not knowingly misrepresented, or knowingly failed to disclose, any facts
or circumstances in any application for any Company Registered Intellectual
Property that would constitute fraud or a misrepresentation with respect to
such application or that would otherwise affect the validity or
enforceability of any Company Registered Intellectual Property.
(m) To the extent that any technology, software or Intellectual Property
has been developed or created independently or jointly by another person or
employee for the Company or any of its subsidiaries or is incorporated into
any of the Company Products, the Company has a written or electronic
agreement with such third party or employee with respect thereto and the
Company thereby either (i) has obtained ownership of, and is the exclusive
owner of, or (ii) has obtained a license (sufficient for the conduct of its
business as currently conducted and as proposed to be conducted) to such
person's Intellectual Property in such work, material or invention.
(n) SECTION 3.17(n) of the Company Schedule contains a complete and
accurate list of all material Contracts to which the Company or any of its
subsidiaries is a party (i) with respect to Company Intellectual Property
licensed or transferred to any third party (other than licenses or support
and maintenance agreements entered into in the ordinary course), or
(ii) pursuant to which a third party has licensed or transferred any
material Intellectual Property to the Company.
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(o) SECTION 3.17(o) of the Company Schedule contains a complete and
accurate list of all material contracts, licenses and agreements between the
Company and any other person wherein or whereby the Company has agreed to,
or assumed, any obligation or duty to warrant, indemnify, reimburse, hold
harmless, guaranty or otherwise assume or incur any obligation or liability
or provide a right of rescission with respect to the infringement or
misappropriation by the Company of the Intellectual Property Rights of any
person other than the Company, other than in the ordinary course of
business.
(p) All material Contracts relating to either (i) Company Intellectual
Property, or (ii) Intellectual Property of another person licensed to the
Company or any of its subsidiaries, including, without limitation, third
party licenses to the Company relating to or in any way permitting Company
Products, services or Company Intellectual Property to interoperate with
other products, systems or standards, are in full force and effect (other
than those which have expired by their terms). The execution and delivery of
this Agreement by the Company have not violated or resulted in, and the
performance by the Company of its obligations hereunder and the consummation
by the Company of the transactions contemplated hereby will not violate or
result in, the breach, modification, cancellation, termination or suspension
of such Contracts. Each of the Company and its subsidiaries is in material
compliance with, and has not materially breached any term of any such
Contracts and, to the knowledge of the Company, all other parties to such
contracts, licenses and agreements are in compliance with, and have not
materially breached any term of, such Contracts. Following the Effective
Time, the Surviving Corporation will be permitted to exercise all of the
Company's rights under such Contracts to the same extent the Company and its
subsidiaries would have been able to had the transactions contemplated by
this Agreement not occurred and without the payment of any additional
amounts or consideration other than ongoing fees, royalties or payments
which the Company would otherwise be required to pay. Neither this Agreement
nor the transactions contemplated by this Agreement will result in, by
virtue of the terms of any Contract to which the Company or any of its
subsidiaries is a party or by they are bound, (i) either the granting by
Parent or Merger Sub to any other person any right to or with respect to any
Intellectual Property right owned by, or licensed to, either of them (other
than Intellectual Property acquired pursuant to this Agreement),
(ii) either Parent's or the Merger Sub's being bound by, or subject to, any
non-compete or other material restriction on the operation or scope of their
respective businesses, or (iii) either Parent, Merger Sub or the Company, as
the case may be, being obligated to pay any royalties or other material
amounts to any third party in excess of those payable by Parent or the
Company, respectively, prior to the Effective Time.
(q) The operation of the business of the Company and its subsidiaries as
such business currently is conducted or is currently contemplated to be
conducted has not, does not and, to its knowledge, will not infringe or
misappropriate, the Intellectual Property of any third party or constitute
unfair competition or trade practices under the laws of any jurisdiction;
PROVIDED HOWEVER, that with respect to Patents, the foregoing representation
is made to the knowledge of the Company.
(r) Neither the Company nor any of its subsidiaries has received written
notice from any third party alleging that the operation of the business of
the Company or any of its subsidiaries or any act, product or service
(including Company Products, technology or service offerings currently under
development) of the Company or any of its subsidiaries, infringes or
misappropriates the Intellectual Property of any third party or constitutes
unfair competition or trade practices under the laws of any jurisdiction.
(s) To the knowledge of the Company, no person has or is infringing or
misappropriating any Company Intellectual Property.
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(t) The Company and each of its subsidiaries has taken reasonable steps
to protect the rights of the Company and its subsidiaries in the Company's
confidential information and trade secrets that it wishes to protect or any
trade secrets or confidential information of third parties provided to the
Company or any of its subsidiaries under an obligation of confidentiality,
and, without limiting the foregoing, each of the Company and its
subsidiaries has required each employee and contractor to execute a
proprietary information/confidentiality agreement and all current and former
employees and contractors of the Company and any of its subsidiaries have
executed such an agreement, except where the failure to do so is not
reasonably expected to be material to the Company.
3.18 ENVIRONMENTAL MATTERS.
(a) HAZARDOUS MATERIAL. Except as would not result in material
liability to the Company or any of its subsidiaries, no underground storage
tanks and no amount of any substance that has been designated by any
Governmental Entity or by applicable federal, state or local law to be
radioactive, toxic, hazardous or otherwise a danger to health or the
environment, including, without limitation, PCBs, asbestos, petroleum,
urea-formaldehyde and all substances listed as hazardous substances pursuant
to the Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, as amended, or defined as a hazardous waste pursuant to the United
States Resource Conservation and Recovery Act of 1976, as amended, and the
regulations promulgated pursuant to said laws, but excluding office and
janitorial supplies, (a "HAZARDOUS MATERIAL") are present (i) as a result of
the actions of the Company or any of its subsidiaries or any affiliate of
the Company, or (ii) to the knowledge of the Company, as a result of any
actions of any third party or otherwise, in, on or under any property,
including the land and the improvements, ground water and surface water
thereof, that the Company or any of its subsidiaries has at any time owned,
operated, occupied or leased.
(b) HAZARDOUS MATERIALS ACTIVITIES. Except as would not result in a
material liability to the Company (in any individual case or in the
aggregate) (i) neither the Company nor any of its subsidiaries has
transported, stored, used, manufactured, disposed of, released or exposed
its employees or others to Hazardous Materials in violation of any law in
effect on or before the Closing Date, and (ii) neither the Company nor any
of its subsidiaries has disposed of, transported, sold, used, released,
exposed its employees or others to or manufactured any product containing a
Hazardous Material (collectively "HAZARDOUS MATERIALS ACTIVITIES") in
violation of any rule, regulation, treaty or statute promulgated by any
Governmental Entity in effect prior to or as of the date hereof to prohibit,
regulate or control Hazardous Materials or any Hazardous Material Activity.
3.19 CONTRACTS.
(a) Neither the Company nor any of its subsidiaries is a party to or is
bound by any executory:
(i) Contract with any officer, director, Company Employee or member
of the Company Board, or any service, operating or management agreement
or arrangement with respect to any of its assets or properties (whether
leased or owned), other than those that are terminable by the Company or
any of its subsidiaries on no more than thirty (30) days' notice without
liability or financial obligation to the Company or any of its
subsidiaries;
(ii) Contract or plan (including, without limitation, any stock
option plan, stock appreciation right plan, equity based compensation
plan or stock purchase plan) any of the benefits of which will be
increased, or the vesting of benefits of which will be accelerated, by
the occurrence of any of the transactions contemplated by this Agreement,
or the value of any
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of the benefits of which will be calculated on the basis of any of the
transactions contemplated by this Agreement;
(iii) Contract of indemnification, guaranty or warranty other than any
Contract of indemnification, guaranty or warranty entered into in
connection with the sale, license or purchase of products or services in
the ordinary course of business;
(iv) Contract containing any covenant limiting in any respect the
right of the Company or any of its subsidiaries to engage in any line of
business or to compete with any person or entity or granting any
exclusive distribution rights;
(v) Contract currently in force relating to the disposition or
acquisition by the Company or any of its subsidiaries after the date of
this Agreement of a material amount of assets outside the ordinary course
of business, or pursuant to which the Company or any of its subsidiaries
has acquired any material ownership interest in any person other than
Company's subsidiaries;
(vi) dealer, distributor, joint marketing or development Contract
under which the Company or any of its subsidiaries has continuing
material obligations to jointly market any product, technology or service
and which may not be canceled without penalty upon notice of ninety
(90) days or less, or any material Contract pursuant to which the Company
or any of its subsidiaries has continuing material obligations to jointly
develop any Intellectual Property that will not be owned, in whole or in
part, by the Company or any of its subsidiaries and which may not be
canceled without penalty upon notice of ninety (90) days or less;
(vii) Contract to license any third party the right to manufacture or
reproduce (other than copies of licensed software) any Company Product,
service or technology or any Contract granting rights to a third party to
sell or publicly distribute any Company Products, service or technology
except agreements with distributors or sales representatives in the
normal course of business cancelable without penalty upon notice of
ninety (90) days or less and substantially in the form furnished or made
available to Parent;
(viii) Contract to provide source code to any third party for any
product or technology that is material to the Company and its
subsidiaries, taken as a whole;
(ix) mortgages, indentures, guarantees, loans or credit agreements,
security agreements or other agreements or instruments relating to the
borrowing of money or extension of credit;
(x) material settlement agreement under which the Company has ongoing
obligations; or
(xi) Contract with a customer of the Company involving payments to
the Company in excess of $500,000 in any individual case or in the
aggregate.
(b) Neither the Company nor any of its subsidiaries, nor to the
knowledge of the Company, any other party to a Material Company Contract (as
defined below), is in breach, violation or default under, and neither the
Company nor any of its subsidiaries has received written notice that it has
breached, violated or defaulted under, any of the terms or conditions of any
of the material Contracts to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries is bound
(including, without limitation, the Contracts that are required to be set
forth in the Company Schedule) (any such Contract, a "MATERIAL COMPANY
CONTRACT") in such a manner as would permit any other party to cancel or
terminate any such Material Company Contract, or would permit any other
party to seek material damages or other remedies (for any or all of such
breaches, violations or defaults, in the aggregate).
3.20 INSURANCE. The Company has furnished or made available to Parent a
complete and accurate copy of all insurance policies and fidelity bonds to which
the Company or any of its
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subsidiaries is a party, beneficiary or named insured (each a "COMPANY INSURANCE
POLICY" and collectively, the "COMPANY INSURANCE POLICIES"). The Company
believes that the Company Insurance Policies are of the type and in amounts
customarily carried by persons conducting businesses similar to those of the
Company and its subsidiaries. There is no material claim by the Company or any
of its subsidiaries pending under any of the Company Insurance Policies as to
which coverage has been questioned, denied or disputed by the underwriters of
such policies or bonds.
3.21 OPINION OF FINANCIAL ADVISOR. The Company Board has been advised by
its financial advisor, Xxxxxx Xxxxxxx & Co., Inc., that in such advisor's
opinion, as of the date of this Agreement, the Merger Consideration is fair to
the holders of Company Shares (other than Parent and its affiliates) from a
financial point of view, and the written confirmation of such opinion has been
delivered to Parent.
3.22 BROKERS. Except for fees payable to Xxxxxx Xxxxxxx & Co., Inc.
pursuant to an engagement letter, dated May 23, 2001, a complete and accurate
copy of which has been furnished to Parent, the Company has not incurred, nor
will it incur, directly or indirectly, any liability for brokerage or finders
fees or agent's commissions or any similar charges in connection with this
Agreement, the Merger or any transaction contemplated hereby.
3.23 STATE TAKEOVER STATUTES. The Company Board has approved this
Agreement, the Merger and the other transactions contemplated hereby, and the
Company Voting Agreements and the transactions contemplated thereby, and such
approval is sufficient to render inapplicable to this Agreement, the Merger and
the other transactions contemplated hereby, and to the Company Voting Agreements
and the transactions contemplated thereby, the provisions of Section 203 of the
DGCL to the extent, if any, Section 203 of the DGCL is applicable to this
Agreement, the Merger and the other transactions contemplated hereby, and to the
Company Voting Agreements and the transactions contemplated thereby. No other
state takeover statute or similar statute or regulation applies to or purports
to apply to this Agreement, the Merger or the other transactions contemplated
hereby, or to the Company Voting Agreements and the transactions contemplated
thereby.
3.24 BOARD APPROVAL. The Company Board, at a meeting duly called and held
on June 10, 2001 (i) unanimously determined that this Agreement is advisable,
(ii) unanimously determined that this Agreement and the transactions
contemplated hereby are fair to and in the best interests of the Company and its
stockholders; (iii) approved this Agreement and the transactions contemplated
hereby, and (iv) resolved to recommend that the stockholders of the Company
adopt and approve this Agreement and approve the Merger under Delaware Law.
3.25 REORGANIZATION. Neither the Company nor any of its subsidiaries has
taken any action that has caused, or would reasonably be expected to cause, the
Merger to fail to qualify a "reorganization" within the meaning of
Section 368(a) of the Code.
3.26 REGISTRATION STATEMENT; PROXY STATEMENT/PROSPECTUS. None of the
information supplied or to be supplied by the Company for inclusion or
incorporation by reference in the Registration Statement will, at the time the
Registration Statement is declared or ordered effective under the Securities
Act, 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. The Proxy Statement/Prospectus will not, as of the Effective Time,
on the date mailed to the Company's stockholders, and at the time of the Company
Stockholder 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. The Proxy Statement/Prospectus will comply as to form in
all material respects with the provisions of the Exchange Act and the rules and
regulations promulgated by the SEC thereunder. Notwithstanding the foregoing,
the Company makes no representation or warranty
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with respect to any information supplied by Parent or Merger Sub which is
contained in the Registration Statement or the Proxy Statement/Prospectus.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub hereby jointly and severally represent and warrant to
the Company, subject to the information set forth in the disclosure letter
delivered by Parent and Merger Sub to the Company dated as of the date hereof
(the "PARENT SCHEDULE"), as follows:
4.1 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES. Each of Parent and its
subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has the
requisite corporate power and authority to own, lease and operate its assets and
properties and to carry on its business as it is currently being conducted,
except as would not, individually or in the aggregate, have a Material Adverse
Effect on Parent. Each of Parent and its subsidiaries is in possession of all
Approvals necessary to own, lease and operate the properties it purports to own,
operate or lease and to carry on its business as it is currently being
conducted, except as would not, individually or in the aggregate, have a
Material Adverse Effect on Parent. Each of Parent and its subsidiaries at all
times has been, and currently is, in compliance with the terms of the Approvals
applicable to it, except where the failure would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on Parent.
Each of Parent and its subsidiaries is qualified to do business as a foreign
corporation and is in good standing under the laws of each jurisdiction where
the nature of its business requires such qualification or to be in good
standing, except where the failure to be so qualified or in good standing would
not, individually or in the aggregate, have a Material Adverse Effect on Parent.
4.2 CERTIFICATE OF INCORPORATION AND BYLAWS. Parent has delivered to the
Company complete and correct copies of its Certificate of Incorporation and
Bylaws as amended to date (together, the "PARENT CHARTER DOCUMENTS"). The Parent
Charter Documents and equivalent organizational documents of each of its
subsidiaries are in full force and effect, Parent is not in violation of any of
the provisions of the Parent Charter Documents, and no subsidiary of Parent is
in violation of any of its equivalent organizational documents, except as would
not, individually or in the aggregate, have a Material Adverse Effect on Parent.
4.3 CAPITALIZATION.
(a) The authorized capital stock of Parent consists of 500,000,000
shares of Common Stock, par value $0.001 per share, and 5,000,000 shares of
Preferred Stock, par value $0.001 per share. As of the close of business on
June 1, 2001: (i) 162,130,889 shares of Parent Common Stock were issued and
outstanding; (ii) 455,654 shares of Parent Common Stock were held by Parent
as treasury stock; (iii) no shares of Parent Common Stock were held by any
subsidiaries of Parent; (iv) 1,000,000 shares of Parent Common Stock were
reserved for future issuance under the employee stock purchase plan of
Parent; (v) 24,126,378 shares of Parent Common Stock were reserved for
issuance upon the exercise of stock options outstanding under Parent's stock
plans; (vi) 10,800,000 shares of Parent Common Stock were reserved for
issuance upon conversion of Parent's 5 1/2% convertible subordinated notes;
and (vii) no shares of Parent Preferred Stock were issued or outstanding.
Except as set forth in this SECTION 4.3(a), there are no securities of
Parent authorized, reserved for issuance, issued or outstanding. All of the
outstanding shares of Parent Common Stock, and all outstanding shares of
capital stock of each subsidiary of Parent, are validly issued, fully paid
and nonassessable shares of Parent Common Stock, and were issued in
compliance in all material respects with all applicable securities laws and
other applicable Legal Requirements and all applicable Contracts to which
Parent or any of its subsidiaries is a party or by which they are bound.
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(b) The shares of Parent Common Stock issued as part of the Merger
Consideration will, when issued, be duly authorized, validly issued, fully
paid and nonassessable shares of Parent Common Stock, and not subject to any
preemptive rights created by statute, Parent's Certificate of Incorporation
or Bylaws or any agreement to which Parent is a party or is bound, and will,
when issued, be registered under the Securities Act and the Exchange Act and
registered or qualified (or exempt from registration and qualification
requirements) under all applicable state "blue sky" securities laws.
4.4 AUTHORITY RELATIVE TO THIS AGREEMENT. Parent has all necessary
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by Parent, the performance
by Parent of its obligations hereunder, and the consummation by Parent of the
transactions contemplated hereby, have been duly and validly authorized by all
necessary corporate action (including any action of the Parent Board or Parent's
stockholders) on the part of Parent, and no other corporate proceedings on the
part of Parent, are necessary to authorize Parent to execute and deliver this
Agreement, to perform its obligations hereunder or to consummate the
transactions contemplated hereby, subject only to filing the Certificate of
Merger under the applicable provisions of Delaware Law. This Agreement has been
duly and validly executed and delivered by Parent and, assuming the due
authorization, execution and delivery by the Company, constitutes the legal and
binding obligation of Parent, enforceable against Parent in accordance with its
terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law).
4.5 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by Parent does not, and
the performance by Parent of its obligations hereunder and the consummation
by Parent of the transactions contemplated hereby will not, (i) violate the
Parent Charter Documents or the equivalent organizational documents of any
of Parent's subsidiaries, (ii) subject to obtaining the consents, approvals,
authorizations and permits, and making the filings and notifications, set
forth in SECTION 4.5(b) hereof, conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to Parent or any of its
subsidiaries, or by which Parent, any of its subsidiaries or any of their
respective assets and properties are bound or affected, or (iii) result in
any breach of or constitute a default (or an event that with notice or lapse
of time, or both, would become a default) under, or impair the rights of
Parent or any of its subsidiaries under, or alter the rights or obligations
of any person under, or give to any person any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of a
lien on any of the assets or properties of Parent or any of its subsidiaries
pursuant to, any material Contract to which Parent or any of its
subsidiaries is a party or by which Parent, any of its subsidiaries or any
of their respective assets and properties are bound or affected, except,
with respect to clause (ii) and (iii) of this SECTION 4.5(a), for such
conflicts, violations, breaches, defaults or other occurrences that would
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on Parent or a material adverse effect on Parent's
ability to timely perform its obligations under this Agreement or consummate
the transactions contemplated hereby.
(b) The execution and delivery of this Agreement by Parent does not, and
the performance by Parent of its obligations hereunder and the consummation
by Parent of the transactions contemplated hereby will not, require any
consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Entity, except (i) for applicable
requirements under the Securities Act, the Exchange Act, the HSR Act, the
applicable antitrust or competition laws and regulations of foreign
Governmental Entities, if any, and the rules of the Nasdaq, (ii) for the
filing
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and recordation of the Certificate of Merger as required by Delaware Law and
(iii) where the failure to obtain such consents, approvals, authorizations
or permits, or to make such filings or notifications (A) would not prevent
or materially delay the parties hereto from performing their respective
obligations under this Agreement or consummating the transactions
contemplated hereby, or (B) would not, individually or in the aggregate,
have a Material Adverse Effect on Parent.
4.6 SEC FILINGS; FINANCIAL STATEMENTS.
(a) Parent has made available to the Company a complete and accurate
copy of each report, schedule, registration statement, proxy and information
statements and other documents filed by Parent with the SEC since
December 31, 1997 (each, a "PARENT SEC REPORT" and collectively, the "PARENT
SEC REPORTS"), which are all the reports, schedules, registration
statements, proxy and information statements and other documents required to
be filed by Parent with the SEC since such date. The Parent SEC Reports
(i) were prepared in accordance with the requirements of the Securities Act
or the Exchange Act, as the case may be, and (ii) did not at the time they
were filed (or, if such Parent SEC Report was amended or superseded by
another filing, then on the date of filing of such amendment or superceding
filing) contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading. None of Parent's subsidiaries is required to file any
reports or other documents with the SEC.
(b) As of their respective dates, each set of consolidated financial
statements (including, in each case, any related notes thereto) contained in
the Parent SEC Reports, (i) complied as to form in all material respects
with the published rules and regulations of the SEC with respect thereto,
(ii) was prepared in accordance with GAAP applied on a consistent basis
throughout the periods involved (except as may be indicated in the notes
thereto or, in the case of unaudited statements, for the absence of
footnotes as permitted by Form 10-Q promulgated under the Exchange Act), and
(iii) fairly presents in all material respects the consolidated financial
condition of Parent and its subsidiaries at the respective dates thereof and
the consolidated results of operations and cash flows of Parent and its
subsidiaries for the periods indicated, except that the unaudited interim
financial statements were or are subject to normal year-end recurring
adjustments which were not or are not expected to be material in amount or
significance.
(c) Parent has previously delivered to the Company a complete and
correct copy of any amendments or modifications, which have not yet been
filed as of the date hereof with the SEC but which are required to be filed
as of the date hereof, to agreements, documents or other instruments which
previously had been filed by Parent with the SEC pursuant to the Securities
Act or the Exchange Act.
4.7 NO UNDISCLOSED LIABILITIES. Neither Parent nor any of its subsidiaries
has any liabilities (whether absolute, accrued, contingent or otherwise) of a
nature required to be disclosed on a balance sheet prepared in accordance with
GAAP which are, individually or in the aggregate, material to the business,
assets, financial condition or results of operations of Parent and its
subsidiaries, taken as a whole, except (i) liabilities set forth or reflected in
Parent's balance sheet as of December 31, 2001 contained in the Parent SEC
Reports, (ii) liabilities incurred since December 31, 2001 in the ordinary
course of business, none of which is material to the business, assets, financial
condition or results of operations of Parent and its subsidiaries, taken as a
whole, or (iii) liabilities published in Parent's press release dated April 26,
2001 (relating to Parent's fiscal fourth quarter and year-end financial
results). Parent and each of its subsidiaries has timely filed all Returns
relating to Taxes required to be filed by Parent and each of its subsidiaries
with any Tax authority, except such Returns which are not material to Parent.
Parent and each of its subsidiaries has paid all Taxes shown to be due on such
Returns.
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4.8 NO MATERIAL ADVERSE EFFECT. Except as require by this Agreement, since
December 31, 2000, there has not been any event, occurrence or condition that
has had, or would reasonably be expected to have, a Material Adverse Effect on
Parent.
4.9 ABSENCE OF LITIGATION. Except as set forth in the Parent SEC Documents
filed with the SEC prior to the date hereof, there are no claims, actions, suits
or proceedings pending or, to the knowledge of Parent, threatened against
Parent, any of its subsidiaries or any of their respective assets and properties
before any Governmental Entity that if adversely determined against Parent
would, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on Parent.
4.10 INTELLECTUAL PROPERTY. Except as would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on Parent,
Parent and its subsidiaries own or possess adequate licenses or other valid
rights to us all Intellectual Property used or held for use in connection with
the business of Parent and its subsidiaries as currently conducted. To the
knowledge of Parent, the conduct of the business of Parent and its subsidiaries
as currently conducted does not and will not conflict with any Intellectual
Property of any third party, except as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on Parent.
4.11 FUNDS. As of the Effective Time, Parent will have sufficient funds to
pay the Merger Consideration in connection with the Merger and all other fees
and expenses incurred in connection with the Merger.
4.12 MERGER SUB. Merger Sub was formed solely for the purpose of engaging
in the Merger and has not engaged in any business activities or conducted any
operations other than in connection with the Merger and the other transactions
contemplated by this Agreement. As of the Effective Time, all of the outstanding
capital stock of Merger Sub will be owned directly by Parent.
4.13 BROKERS. Except for fees payable to Banc of America Securities LLC,
Parent has not incurred nor will it incur, directly or indirectly, any liability
for brokerage or finders' fees or agents' commissions or any similar charges in
connection with this Agreement or any transaction contemplated hereby.
4.14 REGISTRATION STATEMENT; PROXY STATEMENT/PROSPECTUS. None of the
information supplied or to be supplied by Parent for inclusion or incorporation
by reference in the Registration Statement will, at the time the Registration
Statement is declared or ordered effective under the Securities Act, 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. The Proxy
Statement/Prospectus will not, as of the Effective Time, on the date it is
mailed to the Company's stockholders, and at the time of the Company Stockholder
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. The Registration Statement will comply as to form in all material
respects with the provisions of the Securities Act and the rules and regulations
promulgated by the SEC thereunder. Notwithstanding the foregoing, Parent makes
no representation or warranty with respect to any information supplied by the
Company which is contained in any of the Registration Statement or the Proxy
Statement/Prospectus .
ARTICLE V
INTERIM CONDUCT
5.1 CONDUCT OF BUSINESS BY THE COMPANY. Except as contemplated by this
Agreement or as otherwise approved by Parent in writing, during the period
commencing with the execution and delivery of this Agreement and continuing
until the earlier to occur of the termination of this Agreement pursuant to
ARTICLE VIII hereof or the Effective Time, the Company and each of its
subsidiaries shall,
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except to the extent that Parent shall otherwise consent in writing, (i) carry
on its business in the usual, regular and ordinary course and in substantially
the same manner as heretofore conducted and in material compliance with all
applicable laws and regulations, pay its debts and taxes when due subject to
good faith disputes over such debts or taxes, (ii) pay or perform other material
obligations when due, and (iii) use all commercially reasonable efforts
consistent with past practices and policies to (A) preserve intact its present
business organization, (B) keep available the services of its present officers
and employees, and (C) preserve its relationships with customers, suppliers,
distributors, licensors, licensees and other persons with which it has
significant business dealings. In addition to the foregoing, except (i) as
permitted by the terms of this Agreement, (ii) as set forth in SECTION 5.1 of
the Company Schedule, or (iii) as otherwise approved by Parent in writing (which
approval shall not be unreasonably withheld or delayed), at all times during the
period commencing with the execution and delivery of this Agreement and
continuing until the earlier to occur of the termination of this Agreement
pursuant to ARTICLE VIII hereof or the Effective Time, the Company shall not do
any of the following and shall not permit any of its subsidiaries to do any of
the following:
(a) waive any stock repurchase rights, accelerate, amend or change the
period of exercisability of Company Stock Options or restricted stock,
reprice Company Stock Options granted under any employee, consultant,
director or other Company Stock Option Plans, or authorize cash payments in
exchange for any Company Stock Options granted under any of such employee,
consultant, director or other Company Stock Option Plans;
(b) grant any severance or termination pay or benefits, or payments or
benefits triggered by a change of control or merger, to any officer or
employee of the Company, except pursuant to written agreements outstanding,
or written policies existing, on the date hereof and as previously disclosed
in writing or delivered to Parent, or adopt any new severance plan, or amend
or modify or alter in any manner any severance plan, agreement or
arrangement existing on the date hereof;
(c) other than in the ordinary course of business, transfer or license
to any person, or otherwise extend, amend or modify, any rights to the
Company Intellectual Property, or enter into grants to transfer or license
to any person future patent rights;
(d) declare, set aside or pay any dividends on or make any other
distributions (whether in cash, stock, equity securities or property) in
respect of any capital stock, or split, combine or reclassify any capital
stock or issue or authorize the issuance of any other securities in respect
of, in lieu of or in substitution for any capital stock;
(e) purchase, redeem or otherwise acquire, directly or indirectly, any
shares of capital stock, except repurchases of unvested shares at cost in
connection with the termination of the employment relationship with any
employee pursuant to a Company Stock Option or purchase agreements in effect
on the date hereof;
(f) issue, deliver, sell, authorize, pledge or otherwise encumber (or
propose any of the foregoing) any shares of capital stock or other
securities convertible into, or exercisable or exchangeable for, shares of
capital stock, or subscriptions, rights, warrants or options to acquire any
shares of capital stock or other securities convertible into, or exercisable
or exchangeable for, shares of capital stock, or enter into other Contract
obligating it to issue any such shares of capital stock or securities
convertible into, or exercisable or exchangeable for, shares of capital
stock, or issue or grant any other equity-based compensation award (whether
payable in cash and/or stock), other than (i) the issuance of shares of
Company Common Stock pursuant to the exercise of Company Stock Options and
Company Warrants outstanding as of the date hereof, (ii) the issuance of
shares of Company Common Stock issuable to participants in the Company ESPP
consistent with the terms thereof, or (iii) the granting of Company Stock
Options to newly-hired employees of the Company (other than directors,
officers and other executive level employees) in the ordinary course of
business consistent with past practice in an amount not to exceed 50,000
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shares of Company Common Stock in the aggregate, or 5,000 shares of Company
Common Stock in any individual case; PROVIDED, HOWEVER, that (x) none of
such Company Stock Options, pursuant to their respective terms, will vest or
be exercised prior to January 1, 2002, (y) the recipients of each such
Company Stock Option waives any and all rights to acceleration of the
vesting of such Company Stock Options under the applicable Company Option
Plan, and (z) the agreement pursuant to which each such Company Stock Option
is granted does not provide for acceleration in any circumstance;
(g) cause, permit or propose any amendments to the Company Charter
Documents or similar governing instruments of any of its subsidiaries;
(h) acquire or agree to acquire by merging or consolidating with, or by
purchasing any equity interest in or the assets of, or by any other manner,
any business or any person or division thereof, or otherwise acquire or
agree to enter into any joint ventures, strategic partnerships or alliances;
(i) sell, lease, license, encumber or otherwise dispose of any
properties or assets, except for sales of inventory in the ordinary course
of business or the sale, lease or disposition (other than through licensing
permitted by SECTION 5.1(c) hereof) of property or assets which are not
material, individually or in the aggregate, to the business of the Company
and its subsidiaries, taken as a whole;
(j) other than in the ordinary course of business, enter into, modify,
amend or terminate any existing lease, license or contract affecting the
use, possession or operation of any properties or assets, or grant or
otherwise create or consent to the creation of any lien on or affecting any
owned or leased property or any portion thereof, or convey, assign,
sublease, license or otherwise transfer all or any portion of any owned or
leased property or any interest or rights therein;
(k) incur any indebtedness for borrowed money, or guarantee any such
indebtedness of another person, or issue or sell any debt securities or
options, warrants, calls or other rights to acquire any debt securities of
the Company, or enter into any "keep well" or other agreement to maintain
any financial statement condition or enter into any arrangement having the
economic effect of any of the foregoing other than in connection with the
financing of working capital consistent with past practice;
(l) adopt or amend any employee benefit plan, policy or arrangement, any
employee stock purchase or employee stock option plan, or enter into any
employment contract or collective bargaining agreement (other than
(i) offer letters and letter agreements entered into in the ordinary course
of business consistent with past practice with employees who are terminable
"at will" and (ii) employment obligations to foreign employees under
applicable Legal Requirements), or pay any special bonus or special
remuneration to any director or employee, or increase the salaries or wage
rates or fringe benefits (including rights to severance or indemnification)
of its directors, officers, employees or consultants except, in each case,
as may be required by applicable law;
(m) pay, discharge, settle or satisfy any litigation (whether or not
commenced prior to the date hereof) or any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge, settlement or satisfaction,
in the ordinary course of business or in accordance with their terms, or
liabilities recognized or disclosed in the most recent consolidated
financial statements (or the notes thereto) of the Company included in the
Company SEC Reports or incurred since the date of such financial statements,
or waive the benefits of, agree to modify in any manner, terminate, release
any person from or knowingly fail to enforce any confidentiality or similar
agreement to which the Company or any of its subsidiaries is a party or of
which the Company or any of its subsidiaries is a beneficiary;
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(n) except in the ordinary course of business, modify, amend or
terminate any material contract or agreement to which the Company or any of
its subsidiary is a party, or waive, delay the exercise of, release or
assign any material rights or claims thereunder;
(o) except as required by GAAP, revalue any of its assets or make any
change in accounting methods, principles or practices;
(p) make any capital expenditures in excess of $50,000 in any individual
case, and $400,000 in the aggregate;
(q) incur or enter into any Contract requiring the Company or any of its
subsidiaries to pay in excess of $25,000 in any individual case;
(r) make any Tax election or accounting method change inconsistent with
past practice that, individually or in the aggregate, would adversely affect
in any material respect the Tax liability or Tax attributes of the Company
or any of its subsidiaries, taken as a whole, or settle or compromise any
material Tax liability, or consent to any extension or waiver of any
limitation period with respect to Taxes; or
(s) agree in writing or otherwise to take any of the actions referred to
in SECTION 5.1(a) through SECTION 5.1(r) hereof, inclusive.
5.2 ADDITIONAL RESTRICTION ON CONDUCT OF BUSINESS BY THE COMPANY. Except
(i) as permitted by the terms of this Agreement, or (ii) as otherwise approved
by Parent and Merger Sub in writing, at all times during the period commencing
with the execution and delivery of this Agreement and continuing until the
earlier to occur of the termination of this Agreement pursuant to ARTICLE VIII
hereof or the Effective Time, the Company shall not, and shall not permit any of
its subsidiaries to, take any action that would reasonably be expected to cause
the Merger to fail to qualify as a "reorganization" within the meaning of
Section 368(a) of the Code.
5.3 CONDUCT OF BUSINESS BY PARENT AND MERGER SUB. Except (i) as permitted
by the terms of this Agreement, (ii) as set forth in SECTION 5.3 of the Parent
Schedule, or (iii) as otherwise approved by the Company in writing, at all times
during the period commencing with the execution and delivery of this Agreement
and continuing until the earlier to occur of the termination of this Agreement
pursuant to ARTICLE VIII hereof or the Effective Time, Parent and Merger Sub
shall not, and shall not permit any of their respective subsidiaries to do any
of the following:
(a) declare, set aside or pay any dividends on or make any other
distributions (whether in cash, stock, equity securities or property) in
respect of any capital stock;
(b) effect any amendment to Parent's Certificate of Incorporation that
would have an adverse effect on the rights of holders of Parent Common Stock
(including, without limitation, the Parent Common Stock to be issued as part
of the Merger Consideration);
(c) acquire or agree to acquire, by merging or consolidating with, by
purchasing an equity interest in or a portion of the assets of, or by any
other manner, any business or any corporation, partnership, association or
other business organization or division thereof, or otherwise acquire or
agree to acquire any assets of any other person, or dispose of any assets,
which, in any case, would reasonably be expected to prevent or delay beyond
the Termination Date the consummation of the Merger or any other transaction
contemplated by this Agreement; or
(d) take any action that would reasonably be expected to cause the
Merger to fail to qualify as a "reorganization" within the meaning of
Section 368(a) of the Code.
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ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 NO SOLICITATION.
(a) From and after the execution and delivery of this Agreement until
the earlier to occur of the Effective Time or termination of this Agreement
pursuant to ARTICLE VIII hereof, the Company and its subsidiaries shall not,
nor will they authorize or permit any of their respective officers,
directors, controlled affiliates or employees or any investment banker,
attorney or other advisor or representative retained by any of them to,
directly or indirectly, (i) solicit, initiate, encourage or induce the
making, submission or announcement of an Acquisition Proposal (as defined
below), (ii) participate in any discussions or negotiations regarding, or
furnish to any person any information relating to the Company or any of its
subsidiaries, or afford access to the business, properties, assets, books or
records of the Company or any of its subsidiaries to any person that has
made, or take any other action intended to assist or facilitate any
inquiries or the making of any proposal that constitutes or would reasonably
be expected to lead to, an Acquisition Proposal, (iii) engage in discussions
or negotiations with any person with respect to an Acquisition Proposal,
(iv) approve, endorse or recommend an Acquisition Proposal, or (v) enter
into any letter of intent or similar Contract contemplating or otherwise
relating to an Acquisition Transaction (as defined below); PROVIDED,
HOWEVER, that notwithstanding the foregoing, prior to the Effective Time the
Company Board may, directly or indirectly through advisors, agents or other
intermediaries, subject to the Company's compliance with the terms of this
SECTION 6.1, (A) engage or participate in discussions or negotiations with
any person that has made (and not withdrawn) a BONA FIDE Acquisition
Proposal that the Company Board reasonably concludes in good faith (after
consultation with a financial advisor of nationally recognized reputation)
constitutes a Superior Proposal, and/or (B) furnish to such person nonpublic
information relating to the Company or any of its subsidiaries pursuant to a
confidentiality agreement with terms that in the aggregate are no less
favorable to the Company than those contained in the Confidentiality
Agreement, provided that in each case (1) none of the Company, any of its
subsidiaries or any representative of the Company or its subsidiaries shall
have violated any of the terms of this SECTION 6.1 in connection with such
Acquisition Proposal, (2) the Company Board reasonably concludes in good
faith, after consultation with its outside legal counsel, that in light of
such Superior Proposal such action is required in order for the Company
Board to comply with its fiduciary obligations to the Company's stockholders
under Delaware Law, (3) at least two (2) business days prior to engaging or
participating in any such discussions or negotiations with, such person, the
Company gives Parent written notice of the identity of such person and all
of the material terms and conditions of such Acquisition Proposal and of the
Company's intention to furnish nonpublic information to, or engage or
participate in discussions or negotiations with, such person, and
(4) contemporaneously with furnishing any such information to such person,
the Company furnishes such information to Parent (to the extent such
information has not been previously furnished by Company to Parent). The
Company and its subsidiaries shall immediately cease any and all existing
activities, discussions or negotiations with any persons conducted
heretofore with respect to any Acquisition Proposal. Without limiting the
foregoing, it is understood that any violation of the restrictions set forth
in this SECTION 6.1 by any officer, director or employee of the Company or
any of its subsidiaries or any investment banker, attorney or other advisor
or representative of the Company or any of its subsidiaries shall be deemed
to be a breach of this SECTION 6.1 by Company. The Company shall not be
entitled to enter into any letter of intent or similar document or any
Contract (other than a confidentiality agreement as permitted by this
SECTION 6.1) contemplating or otherwise relating to an Acquisition Proposal
unless and until this Agreement is terminated by its terms pursuant to
ARTICLE VIII hereof and the Company has paid all amounts due to Parent
pursuant to SECTION 8.4 hereof.
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(b) For all purposes of and under this Agreement, (i) the term
"ACQUISITION PROPOSAL" shall mean any offer or proposal (other than an offer
or proposal by Parent) relating to any Acquisition Transaction; (ii) the
term "ACQUISITION TRANSACTION" shall mean any transaction or series of
related transactions other than the transactions contemplated by this
Agreement involving: (A) any acquisition or purchase from the Company by any
person or "group" (as defined under Section 13d of the Exchange Act) of more
than a fifteen percent (15%) interest in the total outstanding voting
securities of the Company or any of its subsidiaries or any tender offer or
exchange offer that if consummated would result in any person or "group" (as
defined under Section 13(d) of the Exchange Act) beneficially owning fifteen
percent (15%) or more of the total outstanding voting securities of the
Company or any of its subsidiaries or any merger, consolidation, business
combination or similar transaction involving the Company pursuant to which
the stockholders of the Company immediately preceding such transaction hold
less than eighty five percent (85%) of the equity interests in the surviving
or resulting entity of such transaction; (B) any sale, lease (other than in
the ordinary course of business), exchange, transfer, license (other than in
the ordinary course of business), acquisition or disposition of more than
fifteen percent (15%) of the assets of the Company; or (C) any liquidation,
dissolution, recapitalization or other significant corporate reorganization
of the Company; and (iii) the term "SUPERIOR PROPOSAL" shall mean an
Acquisition Proposal involving the acquisition of at least a majority of the
outstanding voting securities of the Company with respect to which the
Company Board shall have reasonably determined in good faith (after
consultation with a financial advisor of a nationally recognized standing)
(A) taking into account, among other things, the legal, financial and
regulatory aspects of such Acquisition Proposal and the person making such
Acquisition Proposal, that the acquiring party is capable of consummating
the proposed Acquisition Transaction on the terms proposed (including,
without limitation, the acquiring person's ability to obtain any necessary
financing), and (B) that the proposed Acquisition Transaction would, if
consummated, be more favorable to the Company's stockholders (in their
capacities as such), from a financial point of view, than the transactions
contemplated by this Agreement.
(c) In addition to the obligations of Company set forth in
SECTION 6.1(a) hereof, the Company shall, as promptly as practicable, advise
Parent orally and in writing of any request for information which the
Company reasonably believes could lead to a BONA FIDE Acquisition Proposal
or of any Acquisition Proposal, or any inquiry with respect to or which the
Company reasonably believes could lead to any BONA FIDE Acquisition
Proposal, the material terms and conditions of such request, Acquisition
Proposal or inquiry, and the identity of the person making any such request,
Acquisition Proposal or inquiry. The Company shall keep Parent informed of
the status and details (including material amendments or proposed material
amendments) of any such request, Acquisition Proposal or inquiry. In
addition to the foregoing, the Company shall (i) provide Parent with at
least forty eight (48) hours prior written notice (or such lesser prior
notice as provided to the members of the Company Board) of any meeting of
the Company Board at which the Company Board is reasonably expected to
consider an Acquisition Proposal, and (ii) provide Parent with at least
twenty four (24) hours prior written notice of a meeting of the Company
Board at which the Company Board is reasonably expected to approve, endorse
or recommend a Superior Proposal to its stockholders, and together with such
notice a copy of the definitive documentation relating to such Superior
Proposal.
6.2 COMPANY STOCKHOLDER MEETING. Promptly after the date hereof, the
Company shall take all action necessary under Delaware Law and the Company
Charter Documents to call and hold a meeting of the stockholders of the Company
(the "COMPANY STOCKHOLDER MEETING") to be held as promptly as reasonably
practicable for the purpose of voting upon the adoption and approval of this
Agreement and the approval of the Merger, and the Company shall use all
commercially reasonable efforts to hold the Company Stockholder Meeting as
promptly as practicable after the date upon which the Registration Statement is
declared or ordered effective by the SEC. Notwithstanding anything to the
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contrary set forth in this Agreement, the Company may adjourn or postpone the
Company Stockholder Meeting to the extent necessary to ensure that any necessary
supplement or amendment to the Proxy Statement/Prospectus is provided to the
Company's stockholders in advance of a vote on this Agreement and the Merger at
the Company Stockholder Meeting or if, as of the time for which the Company
Stockholder Meeting (as set forth in the Proxy Statement/Prospectus), there are
insufficient shares of Company Common Stock represented (either in person or by
proxy) at the Company Stockholder Meeting to constitute a quorum necessary to
conduct business at the Company Stockholder Meeting. Subject to SECTION 6.3(c)
hereof, the Company shall use all commercially reasonable efforts to solicit
from its stockholders proxies in favor of the adoption and approval of this
Agreement and the approval of the Merger, and shall take all other commercially
reasonable action necessary or advisable to secure the Requisite Company
Stockholder Vote at the Company Stockholder Meeting. The Company shall ensure
that the Company Stockholder Meeting is called, noticed, convened, held and
conducted, and that all proxies solicited by the Company in connection with the
Company Stockholder Meeting, are solicited in compliance with Delaware Law, the
Company Charter Documents, the rules of the Nasdaq and all other applicable
Legal Requirements. Unless this Agreement shall be earlier terminated pursuant
to ARTICLE VIII hereof, the Company shall call and hold the Company Stockholder
Meeting for the purpose of voting upon the adoption and approval of this
Agreement and the approval of the Merger whether or not the Company Board at any
time subsequent to the date hereof determines that this Agreement is no longer
advisable or recommends that Company's stockholders reject it. Notwithstanding
anything to the contrary contained in this Agreement, the Company's obligation
to establish a record date for, call, give notice of, convene and hold the
Company Stockholder Meeting pursuant to this SECTION 6.2 shall not be limited to
or otherwise affected by the commencement, disclosure, announcement or
submission to the Company of any Acquisition Proposal.
6.3 PREPARATION AND FILING OF REGISTRATION STATEMENT AND PROXY
STATEMENT/PROSPECTUS; WITHDRAWAL OF COMPANY BOARD RECOMMENDATION.
(a) Promptly after the date hereof, Parent and the Company shall prepare
and the Company shall file with the SEC a proxy statement for use in
connection with the solicitation of proxies from the Company's stockholders
in favor of the adoption and approval of this Agreement and the approval of
the Merger at the Company Stockholder Meeting (the "PROXY
STATEMENT/PROSPECTUS"), and Parent and the Company shall prepare and Parent
shall file with the SEC a registration statement on Form S-4 (or any
successor form thereto) (the "REGISTRATION STATEMENT") for the offer and
sale of the Parent Common Stock pursuant to the Merger and in which the
Proxy Statement/ Prospectus will be included as a prospectus. Each of Parent
and the Company shall provide promptly to the other such information
concerning its business and financial statements and affairs as, in the
reasonable judgment of the providing party or its counsel, may be required
or appropriate for inclusion in the Proxy Statement/Prospectus and the
Registration Statement, or in any amendments or supplements thereto, and to
cause its counsel and auditors to cooperate with the other's counsel and
auditors in the preparation of the Proxy Statement/Prospectus and the
Registration Statement. Each of Parent and the Company shall use all
commercially reasonable efforts to have the Registration Statement declared
or ordered effective under the Securities Act as promptly as practicable
after such filing with the SEC. The Company shall use all commercially
reasonable efforts to cause the Proxy Statement/Prospectus to be mailed to
the Company's stockholders as promptly as practicable after the Registration
Statement is declared or ordered effective under the Securities Act. Parent
shall also take any action (other than qualifying to do business in any
jurisdiction in which it is not now so qualified or to file a general
consent to service of process) required to be taken under any applicable
state securities laws in connection with the issuance of Parent Common Stock
in the Merger and the Company shall furnish all information concerning the
Company and the holders of capital stock of the Company as may be reasonably
requested in connection with any such action and the preparation, filing and
distribution of the Proxy Statement/Prospectus. No filing of, or amendment
or supplement to, or
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correspondence to the SEC or its staff with respect to, the Registration
Statement will be made by Parent, or with respect to the Proxy
Statement/Prospectus will be made by Company, without providing the other
party hereto a reasonable opportunity to review and comment thereon. Parent
will advise the Company, promptly after it receives notice thereof, of the
time when the Registration Statement has become effective or any supplement
or amendment has been filed, the issuance of any stop order, the suspension
of the qualification of the Parent Common Stock issuable in connection with
the Merger for offering or sale in any jurisdiction, or any request by the
SEC for amendment of the Registration Statement or comments thereon and
responses thereto or requests by the SEC for additional information. The
Company shall advise Parent, promptly after it receives notice thereof, of
any request by the SEC for the amendment of the Proxy Statement/Prospectus
or comments thereon and responses thereto or requests by the SEC for
additional information. If at any time prior to the Effective Time any
information relating to Parent or the Company, or any of their respective
affiliates, officers or directors, should be discovered by Parent or the
Company which should be set forth in an amendment or supplement to either of
the Registration Statement or the Proxy Statement/Prospectus, so that any of
such documents would not include any misstatement of a material fact or omit
to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, the
party which discovers such information shall promptly notify the other party
or parties hereto, as applicable, and an appropriate amendment or supplement
to the Registration Statement and/or the Proxy Statement/Prospectus
describing such information shall be promptly filed with the SEC and, to the
extent required by applicable law, disseminated to the stockholders of the
Company. Each of the parties hereto shall cause the Proxy Statement/
Prospectus to comply as to form and substance to such party in all material
respects with the applicable requirements of the Exchange Act, the
Securities Act and the rules of the Nasdaq.
(b) Subject to the terms of SECTION 6.3(c) hereof, (i) the Company Board
shall recommend that the Company's stockholders vote in favor of the
adoption and approval of this Agreement and the approval of the Merger at
the Company Stockholder Meeting; PROVIDED, HOWEVER, that the Company Board
shall submit this Agreement to the Company's stockholders whether or not at
any time subsequent to the date hereof the Company Board determines that it
can no longer make such recommendation, (ii) the Proxy Statement/Prospectus
shall include a statement to the effect that the Company Board has
recommended that the Company's stockholders vote in favor of the adoption
and approval of this Agreement and the approval of the Merger at the Company
Stockholder Meeting, and (iii) neither the Company Board nor any committee
thereof shall withdraw, amend or modify, or propose or resolve to withdraw,
amend or modify, in a manner adverse to Parent, the recommendation of the
Company Board that the Company's stockholders vote in favor of the adoption
and approval of this Agreement and the approval of the Merger at the Company
Stockholder Meeting.
(c) Nothing in this Agreement shall prevent the Company Board from
withholding, withdrawing, amending or modifying its unanimous recommendation
in favor of the approval and adoption of this Agreement and approval of the
Merger if (i) a Superior Offer is made to the Company and is not withdrawn,
(ii) neither the Company nor any of its representatives shall have violated
any of the terms of SECTION 6.1 hereof, and (iii) the Company Board
concludes in good faith, after consultation with its outside counsel, that,
in light of such Superior Offer, the withholding, withdrawal, amendment or
modification of such recommendation is required in order for the Company
Board to comply with its fiduciary duties to the Company's stockholders
under Delaware Law; PROVIDED, HOWEVER, that prior to any commencement
thereof the Company shall have given Parent at least seventy two (72) hours
notice thereof. Nothing contained in this SECTION 6.3(c) shall limit the
Company's obligation to hold and convene the Company Stockholder Meeting
(regardless of whether the unanimous recommendation of the Company Board
shall have been withdrawn, amended or modified). Nothing in this
SECTION 6.3(c) shall prohibit the Company
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Board from (i) taking and disclosing to the Company's stockholders a
position contemplated by Rule 14e-2(a) promulgated under the Exchange Act,
(ii) complying with the provisions of Rule 14d-9 promulgated under the
Exchange Act, or (iii) making any disclosure that is required to comply with
the Company Board's duty of candor (including, without limitation, a change
of recommendation in favor of the adoption and approval of this Agreement
and the approval of the Merger by the Company's stockholders) to the
Company's stockholders under Delaware Law, provided that the Company Board
concludes in good faith, after consultation with its outside legal counsel,
that taking any of the actions referred to in the foregoing clauses (i),
(ii) or (iii) is required in order for the Company Board to comply with its
fiduciary obligations to the Company's stockholders under Delaware Law.
6.4 CONFIDENTIALITY. The parties acknowledge that Company and Parent have
previously executed a Confidentiality Agreement, dated as of June 1, 2001 (the
"CONFIDENTIALITY AGREEMENT"), which will continue in full force and effect in
accordance with its terms.
6.5 ACCESS TO INFORMATION. The Company and Parent shall afford each other
and their respective accountants, counsel and other representatives reasonable
access during normal business hours, upon reasonable notice, to their respective
properties, books, records and personnel during the period prior to the
Effective Time to obtain all information concerning their respective businesses,
including the status of product development efforts, properties, results of
operations and personnel, as either Parent or the Company may reasonably
request. No information or knowledge obtained by Parent or the Company in any
investigation pursuant to this SECTION 6.5 will affect or be deemed to modify
any representation or warranty contained herein or the conditions to the
obligations of the parties to consummate the Merger.
6.6 PUBLIC DISCLOSURE. Parent and the Company shall consult with each
other, and agree, before issuing any press release or otherwise making any
public statement with respect to this Agreement, the Merger, the other party or
parties hereto, or any Acquisition Proposal, and shall not issue any such press
release or make any such public statement prior to such consultation, except as
may be required by applicable law or any listing agreement with a national
securities exchange or the Nasdaq, in which case reasonable efforts to consult
with the other party will be made prior to any such release or public statement.
6.7 COMMERCIALLY REASONABLE EFFORTS. Upon the terms and subject to the
conditions set forth in this Agreement, each of Parent, Merger Sub and the
Company shall use its respective commercially reasonable efforts to take, or
cause to be taken, all reasonable actions, and to do, or cause to be done, and
to assist and cooperate with the other party or parties hereto in doing, all
things reasonably necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Merger and the other
transactions contemplated hereby, including, without limitation, to accomplish
the following: (i) causing of the conditions precedent set forth in ARTICLE VII
hereto be satisfied, (ii) the obtaining of all necessary actions or nonactions,
waivers, consents, approvals, orders and authorizations from Governmental
Entities and the making of all necessary registrations, declarations and filings
(including registrations, declarations and filings with Governmental Entities,
if any) and the taking of all commercially reasonable steps as may be necessary
to avoid any suit, claim, action, investigation or proceeding by any
Governmental Entity, (iii) the defending of any suits, claims, actions,
investigations or proceedings, whether judicial or administrative, challenging
this Agreement or the consummation of the Merger or any other transactions
contemplated hereby, including, without limitation, seeking to have any stay or
temporary restraining order entered by any court or other Governmental Entity
vacated or reversed; and (iv) the execution or delivery of any additional
instruments reasonably necessary to consummate the Merger or the other
transactions contemplated hereby, and to fully carry out the purposes and intent
of, this Agreement. In connection with and without limiting the foregoing, the
Company and the Company Board shall, if any state takeover statute or similar
statute or regulation is or becomes applicable to this Agreement or any of the
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transactions contemplated by this Agreement, use all commercially reasonable
efforts to take, or cause to be taken, all reasonable actions to ensure that the
transactions contemplated by this Agreement may be consummated as promptly as
practicable on the terms contemplated by this Agreement and otherwise to
minimize the effect of such statute or regulation on this Agreement and the
transactions contemplated hereby. Notwithstanding anything herein to the
contrary, nothing in this Agreement shall be deemed to require Parent, Merger
Sub or the Company or any subsidiary or affiliate thereof to agree to any
divestiture (including, without limitation, through a licensing arrangement) by
itself or any of its affiliates of shares of capital stock or of any business,
assets or property, or the imposition of any limitation on the ability of any of
them to conduct their business or to own or exercise control of such assets,
properties and stock.
6.8 NOTIFICATION. The Company shall give prompt notice to Parent upon
becoming aware that any representation or warranty made by it contained in this
Agreement has become materially untrue or inaccurate, or of any failure of the
Company to comply with or satisfy in any material respect any covenant,
condition or agreement to be complied with or satisfied by the Company under
this Agreement; PROVIDED, HOWEVER, that no such notification shall affect the
representations, warranties, covenants or agreements of the Company set forth in
this Agreement or the conditions to the obligations of the Company set forth in
this Agreement. Parent shall give prompt notice to the Company upon becoming
aware that any representation or warranty made by Parent or Merger Sub contained
in this Agreement has become materially untrue or inaccurate, or of any failure
of Parent or Merger Sub to comply with or satisfy in any material respect any
covenant, condition or agreement to be complied with or satisfied by Parent or
Merger Sub under this Agreement; PROVIDED, HOWEVER, that no such notification
shall affect the representations, warranties, covenants or agreements of Parent
or Merger Sub or the conditions to the obligations of Parent and Merger Sub
under this Agreement.
6.9 THIRD PARTY CONSENTS. As soon as practicable following the date
hereof, the Company shall use all commercially reasonable efforts to obtain all
consents, waivers and approvals set forth in SECTION 3.6 of the Company Schedule
that Parent has requested in writing that the Company obtain.
6.10 COMPANY STOCK OPTIONS; COMPANY ESPP.
(a) COMPANY STOCK OPTIONS.
(i) At the Effective Time, each Company Stock Option, whether or not
then vested or exercisable, shall be assumed by Parent. Each Company
Stock Option so assumed by Parent under this Agreement will continue to
have, and be subject to, the same terms and conditions of such options
immediately prior to the Effective Time (including, without limitation,
any repurchase rights or vesting provisions), except that (i) each
Company Stock Option will be exercisable (or will become exercisable in
accordance with its terms) for that number of whole shares of Parent
Common Stock equal to the product (rounded down to the nearest whole
number of shares of Parent Common Stock) of the number of shares of
Company Common Stock that were issuable upon exercise of such Company
Stock Option immediately prior to the Effective Time multiplied by the
Option Exchange Ratio and (ii) the per share exercise price for the
shares of Parent Common Stock issuable upon exercise of such assumed
Company Stock Option will be equal to the quotient (rounded up to the
nearest whole cent) determined by dividing the exercise price per share
of Company Common Stock at which such Company Stock Option was
exercisable immediately prior to Closing by the Option Exchange Ratio.
For purposes of this SECTION 6.10(a) the term "OPTION EXCHANGE RATIO"
shall mean the sum of (x) the Stock Portion, and (y) the quotient
determined by dividing the Cash Portion by the fair market value of one
(1) share of Parent Common Stock, as determined at the Effective Time.
(ii) As promptly as practicable (but in no event more than 30
calendar days) following the Effective Time, Parent shall file, if
available for use by Parent, a registration statement on
X-00
Xxxx X-0 to register under the Securities Act the issuance and resale of
all shares of Parent Common Stock issuable upon the exercise of the
Company Stock Options assumed by Parent pursuant to SECTION 6.9(a)
hereof.
(b) COMPANY ESPP. The Company shall take all steps necessary or
appropriate (as determined by Parent) to terminate the Company ESPP on
either (i) the day immediately prior to the Effective Time, or (ii) the last
day of the last full payroll period ending immediately prior to the
Effective Time.
6.11 EMPLOYEE MATTERS.
(a) The Company shall terminate, effective as of the day immediately
preceding the date the Company becomes a member of the same Controlled Group
of Corporations (as defined in Section 414(b) of the Code) as Parent (the
"401(K) TERMINATION DATE"), any and all 401(k) plans maintained by the
Company or any of its subsidiaries unless Parent shall provide notice to the
Company that any such 401(k) plan(s) shall not be terminated pursuant to
this SECTION 6.11. The Company shall provide Parent evidence that the 401(k)
plan(s) of the Company and its subsidiaries have been terminated pursuant to
resolutions of the Company Board or the board of directors of its
subsidiaries, as applicable (the form and substance of such resolutions
shall be subject to review and approval of Parent), effective as of the
401(k) Termination Date. All employees of the Company shall continue on
their existing benefit plans until such time as, in Parent's sole
discretion, an orderly transition can be accomplished to employee benefit
plans and programs maintained by Parent for its and its affiliates'
employees. Pending such action, Parent shall maintain the effectiveness of
the Company's benefit plans.
(b) To the extent permitted under applicable law, each employee of the
Company or its subsidiaries who shall become an employee of Parent in
connection with the Merger shall be given credit for all service with the
Company or its subsidiaries (or service credited by the Company or its
subsidiaries) under all employee benefit plans, programs, policies and
arrangements maintained by Parent or the Surviving Corporation (other than
sabbatical benefits, for which employees of the Company or its subsidiaries
will not receive any such past service credit) in which they participate or
in which they become participants for purposes of eligibility and vesting;
PROVIDED, HOWEVER, that no such credit shall be provided in any circumstance
that would result in duplicative benefits, and PROVIDED, FURTHER, HOWEVER,
that such insurance carriers, outside providers or the like are able to
honor such commitments or terms reasonably acceptable to Parent.
(c) The Company shall terminate any and all group severance, separation
or salary continuation plans, programs or arrangements maintained by the
Company or any of its subsidiaries, effective in each case as of the day
immediately preceding the Effective Time. The Company shall provide Parent
evidence that such plans have been terminated pursuant to resolutions of the
Company Board or the board of directors of its subsidiaries, as applicable
(the form and substance of which resolutions shall be subject to review and
approval of Parent).
6.12 RIGHTS PLAN AMENDMENT.
(a) From the date of this Agreement until the earlier to occur of the
termination Agreement pursuant ARTICLE VIII hereof or the Effective Time,
the Company and the Company Board shall not amend or modify, or take any
other action with regard to the Company Rights Plan in any manner, or take
any other action so as to (i) render the Company Rights Plan inapplicable to
any transaction other than the Merger and other transactions contemplated by
this Agreement and the Company Voting Agreements and the transactions
contemplated thereby, or (ii) permit any person (other than Parent, Merger
Sub or any of their affiliates) who would otherwise be an Acquiring Person
(as defined in the Company Rights Plan) not to be an Acquiring Person
thereunder, or (iii) provide that a Distribution Date or a Stock Acquisition
Date (as such terms are defined in the
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Company Rights Plan) or similar event does not occur as promptly as
practicable by reason of the execution of any agreement or transaction other
than this Agreement and the Company Voting Agreements and the Merger and the
agreements and transactions contemplated hereby and thereby, or (iv) except
as specifically contemplated by this Agreement, otherwise affect the rights
of holders of Company Rights, or (v) otherwise render the Company Rights
Plan applicable to Parent or its affiliates.
(b) In the event that this Agreement is terminated pursuant to
ARTICLE VIII hereof or otherwise (other than the termination of this
Agreement by the Company pursuant to SECTION 8.1(c)(I) hereof) the Company
shall not, for a period of six months from such termination, amend, modify,
terminate or otherwise rescind the Rights Plan Amendment without the prior
written consent of Parent.
6.13 DIRECTORS' AND OFFICERS' INDEMNIFICATION.
(a) For a period six (6) years from and after the Effective Time, Parent
shall cause the Surviving Corporation to fulfill and honor in all respects
the obligations of the Company under any indemnification agreements between
the Company and its directors and officers in effect immediately prior to
the Effective Time (the "COMPANY INDEMNIFIED PARTIES") and any
indemnification provisions under the Company Charter Documents as in effect
on the date hereof to the maximum extent permitted by applicable law. The
Certificate of Incorporation of the Surviving Corporation shall contain
provisions with respect to exculpation and indemnification that are at least
as favorable to the Company Indemnified Parties as those contained in the
Company Charter Documents as in effect on the date hereof, which provisions
shall not be amended, repealed or otherwise modified in any manner that
would adversely affect the rights thereunder of individuals who, immediately
prior to the Effective Time, were directors, officers, employees or agents
of the Company, unless such modification is required by applicable law.
(b) For a period of six (6) years from and after the Effective Time,
Parent shall cause the Surviving Corporation to maintain in effect, if
available, directors' and officers' liability insurance covering those
persons who are currently covered by the Company's directors' and officers'
liability insurance policy in an amount and on terms no less advantageous,
when taken as a whole, to those applicable to the current directors and
officers of the Company; PROVIDED, HOWEVER, that in no event shall Parent or
the Surviving Corporation be required to expend an annual premium for such
coverage in excess of 150% of the annual premium currently paid by the
Company under its directors' and officer's liability insurance policy in
effect as of the date hereof, and if the cost for such coverage is in excess
of such amount, the Surviving Corporation shall only be required to maintain
such coverage as is available for such amount; and PROVIDED FURTHER,
HOWEVER, that notwithstanding the foregoing, Parent may fulfill its
obligations under this SECTION 6.13(b) by purchasing a policy of directors'
and officers' insurance approved in advance by the Company, or a "tail"
policy under the Company's existing directors' and officers' insurance
policy, in either case which (i) has an effective term of six (6) years from
the Effective Time, (ii) covers only those persons who are currently covered
by the Company's directors' and officers' insurance policy in effect as of
the date hereof and only for actions and omissions occurring on or prior to
the Effective Time, (iii) contains terms and conditions (including, without
limitation, coverage amounts) that are no less advantageous, when taken as a
whole, to those applicable to the current directors and officers of the
Company.
(c) In the event the Surviving Corporation or any of their respective
successors or assigns (i) consolidates with or merges into any other person
and is not the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any person, proper provisions shall be made so that
the successors and
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assigns of the Surviving Corporation, assume or continue the obligations set
forth in this SECTION 6.13.
(d) The provisions of this SECTION 6.13 shall survive the consummation
of the Merger at the Effective Time and continue for the periods specified
in this SECTION 6.13 and are (i) intended to be for the benefit of, and
shall be enforceable by, each of the Indemnified Parties and their
respective heirs and representatives and (ii) in addition to, and not in
substitution for, any other rights to indemnification or contribution that
any such person may have by contract or otherwise.
6.14 REGULATORY FILINGS. As soon as may be reasonably practicable, the
Company and Parent each shall file with the FTC and the Antitrust Division of
the DOJ Notification and Report Forms relating to the transactions contemplated
herein as required by the HSR Act, as well as comparable pre-merger notification
filings and submissions with any foreign Governmental Entity as the parties may
agree in their best judgment are necessary, material or appropriate. The Company
and Parent each shall (i) cooperate and coordinate with one another in the
making of such filings, (ii) supply the other with any information which may be
required in order to effectuate such filings, and (iii) supply any additional
information which may be required by the FTC, the DOJ or the competition or
merger control authorities of any other Governmental Entity; PROVIDED, HOWEVER,
that Parent shall not be required to agree to any divestiture by Parent, the
Company or any of their respective subsidiaries or affiliates of shares of
capital stock or of any business, assets or property of Parent, the Company or
any of their respective subsidiaries or affiliates, or the imposition of any
limitation on the ability of any of the foregoing to conduct their respective
businesses or to own or exercise control of their respective assets, properties
and stock.
6.15 COMPANY AFFILIATE AGREEMENTS. SECTION 6.15 of the Company Schedule
contains a complete and accurate list of those persons who may be deemed to be,
in the Company's reasonable judgment, affiliates of the Company within the
meaning of Rule 145 promulgated under the Securities Act (each, a "COMPANY
AFFILIATE" and collectively, the "COMPANY AFFILIATES"). The Company shall
provide Parent with such information and documents as Parent reasonably requests
for purposes of reviewing and evaluating the foregoing schedule of Company
Affiliates. Parent will be entitled to place appropriate legends on the
certificates evidencing any Parent Common Stock to be issued to a Company
Affiliate pursuant to the terms of this Agreement, and to issue appropriate stop
transfer instructions to the transfer agent for the Parent Common Stock,
consistent with the terms of the Company Affiliate Agreements. The Company and
Parent will comply with each of their respective obligations and covenants under
each of the Company Affiliate Agreements.
6.16 NASDAQ LISTING. If required by applicable rules of the Nasdaq, Parent
shall cause the listing on the Nasdaq of the shares of Parent Common Stock
issuable, and those required to be reserved for issuance, pursuant to the Merger
and the other transactions contemplated hereby, subject to official notice of
issuance.
6.17 OBLIGATIONS OF MERGER SUB. Parent shall take all action necessary to
cause Merger Sub to perform its obligations under this Agreement and to
consummate the Merger and the other transactions contemplated by this Agreement
on the terms and subject to the conditions set forth in this Agreement.
6.18 PARENT BOARD DESIGNEE. At the Effective Time, the Company shall be
entitled to designate one (1) director (the "COMPANY DESIGNEE") on the Parent
Board, who shall serve for an initial term ending on the date of the next
succeeding annual meeting of stockholders of Parent. If Parent's next scheduled
annual meeting of stockholders is scheduled to occur within six (6) months of
the Effective Time, Parent shall take all commercially reasonable actions
necessary to cause the Company Designee to be so elected or appointed to the
Parent Board at or immediately after such next annual meeting of stockholders,
including, without limitation, at the option of Parent, by either increasing the
size of the Parent Board or seeking and accepting the resignations of such
number of then incumbent directors
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(subject to any limitations set forth in Parent's Certificate of Incorporation
or Bylaws) as is necessary to enable the Company Designee to be so elected or
appointed to the Parent Board.
6.19 SECTION 16 AFFILIATES. Parent, Merger Sub and the Company shall take
all such steps as may be required to provide that, with respect to each
Section 16 Affiliate, (i) the transactions contemplated by this Agreement, and
(ii) any other dispositions of Company equity securities (including derivative
securities) or other acquisitions of Parent equity securities (including
derivative securities) in connection with this Merger, shall be exempt under
Rule 16b-3 promulgated under the Exchange Act, in accordance with the terms and
conditions set forth in that certain No-Action Letter, dated January 12, 1999,
issued by the SEC to Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP.
ARTICLE VII
CONDITIONS TO THE MERGER
7.1 CONDITIONS TO OBLIGATIONS OF PARENT, MERGER SUB AND THE COMPANY. The
respective obligations of each of Parent, Merger Sub and the Company to
consummate the Merger and the other transactions contemplated hereby shall be
subject to the satisfaction or waiver, where permissible, of each of the
following conditions at or prior to the Effective Time:
(a) STOCKHOLDER APPROVAL. The Requisite Company Stockholder Approval
shall have been obtained.
(b) LITIGATION. No court or other Governmental Entity of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered
any statute, rule, regulation, executive order, judgment, decree, injunction
or other order (whether temporary, preliminary or permanent) which is in
effect and which has the effect of making the Merger illegal or otherwise
prohibiting the consummation of the Merger.
(c) REGULATORY APPROVALS. All waiting periods under the HSR Act
relating to the Merger and the other transactions contemplated hereby shall
have expired or been terminated early, and all material foreign antitrust
approvals required to be obtained prior to the consummation of the Merger in
connection with the transactions contemplated hereby shall have been
obtained, the failure of obtaining which would have the effect of making the
Merger illegal in such jurisdiction.
(d) NO STOP ORDERS. The Registration Statement shall have been
declared or ordered effective under the Securities Act by the SEC. No stop
order suspending the effectiveness of the Registration Statement shall have
been issued or be in effect, and no proceeding for such purpose, and no
similar proceeding in respect of the Proxy Statement/Prospectus, shall have
been initiated or threatened in writing by the SEC.
(e) NASDAQ LISTING. If required by applicable rules of the Nasdaq, the
shares of Parent Common Stock issuable to the Company's stockholders in
connection with the Merger pursuant to this Agreement, and such other shares
required to be reserved for issuance in connection with the Merger, shall
have been authorized for listing on the Nasdaq, subject to official notice
of issuance.
(f) TAX OPINIONS. Parent and the Company shall each have received
written opinions from their respective tax counsel (Xxxxxx Xxxxxxx
Xxxxxxxx & Xxxxxx, Professional Corporation, and Xxxxxxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxx Xxxxxxxx & Xxxxxxxxx, LLP, respectively), in form and substance
reasonably satisfactory to each of them, to the effect that the Merger will
constitute a "reorganization" within the meaning of Section 368(a) of the
Code and such opinions shall not have been withdrawn. Each of Parent, Merger
Sub and the Company shall make such customary representations as requested
by such counsel for the purpose of rendering such opinions.
7.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF THE COMPANY. The obligations
of the Company to consummate the Merger and the other transactions contemplated
hereby shall be subject to the
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satisfaction or waiver of each of the following conditions at or prior to the
Effective Time, any of which may be waived, in writing, exclusively by the
Company:
(a) REPRESENTATIONS AND WARRANTIES. Each representation and warranty
of Parent and Merger Sub set forth in this Agreement shall have been true
and correct as of the date hereof and shall be true and correct on and as of
the Closing Date with the same force and effect as if made on the Closing
Date, except (i) in each case, or in the aggregate, as does not constitute a
Material Adverse Effect on Parent, (ii) for changes contemplated by this
Agreement, and (iii) for those representations and warranties which address
matters only as of a particular date (which representations shall have been
true and correct (subject to the qualifications as set forth in the
preceding clause (i)) as of such particular date) (it being understood that,
for purposes of determining the accuracy of such representations and
warranties, (A) all "Material Adverse Effect" qualifications and other
qualifications based on the word "material" or similar phrases contained in
such representations and warranties shall be disregarded and (B) any update
of or modification to the Parent Schedule made or purported to have been
made after the date of this Agreement shall be disregarded). The Company
shall have received a certificate with respect to the foregoing signed on
behalf of each of Parent and Merger Sub by an authorized officer of each of
Parent and Merger Sub.
(b) AGREEMENTS AND COVENANTS. Parent and Merger Sub shall have
performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by
Parent and/or Merger Sub on or prior to the Closing Date, and the Company
shall have received a certificate to such effect signed on behalf of each of
Parent and Merger Sub by an authorized officer of each of Parent and Merger
Sub.
7.3 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF PARENT AND MERGER SUB. The
obligations of Parent and Merger Sub to consummate the Merger and the other
transactions contemplated hereby shall be subject to the satisfaction or waiver
of each of the following conditions at or prior to the Effective Time, any of
which may be waived, in writing, exclusively by Parent and Merger Sub:
(a) REPRESENTATIONS AND WARRANTIES. Each representation and warranty
of the Company set forth in this Agreement shall have been true and correct
as of the date hereof and shall be true and correct on and as of the Closing
Date with the same force and effect as if made on and as of the Closing
Date, except (i) in each case, or in the aggregate, as does not constitute a
Material Adverse Effect on the Company, (ii) for changes contemplated by
this Agreement and (iii) for those representations and warranties which
address matters only as of a particular date (which representations shall
have been true and correct (subject to the qualifications as set forth in
the preceding clause (i)) as of such particular date) (it being understood
that, for purposes of determining the accuracy of such representations and
warranties, (A) all "Material Adverse Effect" qualifications and other
qualifications based on the word "material" or similar phrases contained in
such representations and warranties shall be disregarded and (B) any update
of or modification to the Company Schedule made or purported to have been
made after the date of this Agreement shall be disregarded). Parent shall
have received a certificate with respect to the foregoing signed on behalf
of the Company by an authorized officer of the Company.
(b) AGREEMENTS AND COVENANTS. The Company shall have performed or
complied in all material respects with all agreements and covenants required
by this Agreement to be performed or complied with by it at or prior to the
Closing Date, and Parent shall have received a certificate to such effect
signed on behalf of the Company by the Chief Executive Officer and the Chief
Financial Officer of the Company.
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ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.1 TERMINATION. This Agreement may be terminated and the Merger may be
abandoned, at any time prior to the Effective Time (it being agreed that the
party hereto terminating this Agreement pursuant to this SECTION 8.1 shall give
prompt written notice of such termination to the other party or parties hereto):
(a) by mutual written agreement of Parent and the Company.
(b) by either Parent or the Company, if:
(i) the Merger shall not have been consummated on or before
October 31, 2001 (the "TERMINATION DATE"); PROVIDED, HOWEVER, that in the
event that the Merger shall not have been consummated on or before
October 31, 2001 solely as a result of the failure to obtain all
regulatory Approvals required to consummate the Merger, the Termination
Date shall be extended for two successive thirty (30) calendar day
periods (provided that in no event will the Termination Date be extended
beyond December 31, 2001); and PROVIDED FURTHER, HOWEVER, that the right
to terminate this Agreement pursuant to this SECTION 8.1(b)(I) shall not
be available to any party hereto whose failure to fulfill any obligation
under this Agreement has been the principal cause of, or resulted in the
failure of, the Merger to have been consummated on or before the
Termination Date and such action or failure to act constitutes a material
breach of this Agreement; or
(ii) the Requisite Company Stockholder Approval shall not have been
obtained by reason of the failure to obtain the required vote at a
meeting of the Company stockholders duly convened therefor or at any
adjournment thereof; PROVIDED, HOWEVER, that the right to terminate this
Agreement under this SECTION 8.1(b)(II) shall not be available to the
Company where the failure to obtain the Requisite Company Stockholder
Approval shall have been caused by the action or failure to act of the
Company and such action or failure to act constitutes a material breach
by the Company of this Agreement; or
(iii) there shall have been enacted, issued, promulgated or enforced
any law, rule or regulation that makes the consummation of the Merger
illegal, or any judgment, injunction, order or decree of any Governmental
Entity having competent jurisdiction permanently restraining, enjoining
or otherwise prohibiting Parent or the Company from consummating the
Merger, and such judgment, injunction, order or decree shall have become
final and nonappealable.
(c) by the Company:
(i) in the event of a material breach of any covenant or agreement on
the part of Parent or Merger Sub set forth in this Agreement, or in the
event that any representation or warranty of Parent and Merger Sub set
forth in this Agreement shall have been inaccurate when made or shall
have become inaccurate, in either case such that the condition set forth
in SECTION 7.2 hereof would not be satisfied as of the time of such
breach or as of the time such representation or warranty shall have
become untrue; PROVIDED, HOWEVER, that notwithstanding the foregoing, in
the event that such breach by Parent or Merger Sub or such inaccuracies
in the representations and warranties of Parent or Merger Sub are curable
by Parent or Merger Sub through the exercise of its commercially
reasonable efforts, then the Company shall not be permitted to terminate
this Agreement pursuant to this SECTION 8.1(c)(I) until the earlier to
occur of (A) the expiration of a thirty (30) calendar day period after
delivery of written notice from the Company to Parent of breach or
inaccuracy, as applicable, or (B) Parent or Merger Sub ceasing to
exercise commercially reasonable efforts to cure such breach or
inaccuracy,
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provided that Parent or Merger Sub continues to exercise commercially
reasonable efforts to cure such breach or inaccuracy (it being understood
that the Company may not terminate this Agreement pursuant to this
SECTION 8.1(c)(I) if such breach or inaccuracy by Parent or Merger Sub is
cured within such thirty (30) calendar day period); or
(ii) prior to entering into a definitive agreement with respect to an
Superior Proposal, provided that (A) the Company has not breached and is
not then in breach of the terms of SECTION 6.1 hereof, (B) subject to the
terms of this Agreement, the Company Board has authorized the Company to
enter into a definitive agreement for a transaction that constitutes a
Superior Proposal, (C) the Company has notified Parent in writing that
the Company has received an Acquisition Proposal that constitutes a
Superior Proposal and intends to enter into a definitive agreement with
respect to such Superior Proposal, which notice shall include the most
current version of such definitive agreement and the identity of the
person making such Superior Proposal, all with the purpose and intent of
enabling Parent and the Company to discuss in good faith a modification
of the terms and conditions of this Agreement so that the transactions
contemplated hereby may be effected, (D) Parent does not make, within
five (5) business days after receipt of the Company's written notice of
its intention to enter into a definitive agreement with respect to such
Superior Proposal, an offer that the Company Board reasonably determines
in good faith, after consultation with a financial advisor of nationally
recognized standing and its outside legal counsel, is at least as
favorable to Company's stockholders as such Superior Proposal, and
(E) concurrently with the termination of this Agreement, the Company pays
to Parent the Termination Fee set forth in SECTION 8.4 hereof and enters
into a definitive agreement with respect to such Superior Proposal.
(d) by Parent:
(i) in the event of a material breach of any covenant or agreement on
the part of the Company set forth in this Agreement, or in the event that
any representation or warranty of the Company set forth in this Agreement
shall have been inaccurate when made or shall have become inaccurate, in
either case such that the condition set forth in SECTION 7.3 hereof would
not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue; PROVIDED, HOWEVER,
that notwithstanding the foregoing, in the event that such breach by the
Company or such inaccuracies in the representations and warranties of the
Company are curable by the Company through the exercise of its
commercially reasonable efforts, then Parent shall not be permitted to
terminate this Agreement pursuant to this SECTION 8.1(d)(I) until the
earlier to occur of (A) the expiration of a thirty (30) calendar day
period after delivery of written notice from Parent to the Company of
such breach or inaccuracy, as applicable, or (B) the ceasing by the
Company to exercise commercially reasonable efforts to cure such breach
or inaccuracy, provided that the Company continues to exercise
commercially reasonable efforts to cure such breach or inaccuracy (it
being understood that Parent may not terminate this Agreement pursuant to
this SECTION 8.1(d)(I) if such breach or inaccuracy by the Company is
cured within such thirty (30) calendar day period); or
(ii) if a Triggering Event shall have occurred. For purposes of this
SECTION 8.1, a "TRIGGERING EVENT" shall be deemed to have occurred if,
prior to the Effective Time: (A) the Company Board or any committee
thereof shall for any reason have directly or indirectly withheld,
withdrawn, amended or modified its recommendation (including, without
limitation, by virtue of taking any position or making any disclosure
pursuant to the last sentence of SECTION 6.3(c) hereof) in favor of the
adoption and approval of this Agreement or the approval of the Merger by
the Company's stockholders (collectively, the "RECOMMENDATIONS");
(B) the Company shall have failed to include the Recommendations in the
Proxy Statement/ Prospectus; (C) the Company Board or any committee
thereof shall have approved, or
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recommended that the Company stockholders approve, an Acquisition
Proposal; (D) the Company shall have entered into any letter of intent or
similar document or a Contract (other than a confidentiality agreement as
permitted by SECTION 6.1 hereof) accepting an Acquisition Proposal; or
(E) a tender or exchange offer shall have been commenced by a person
unaffiliated with Parent, and the Company shall not have sent to its
stockholders pursuant to Rule 14e-2 promulgated under the Securities Act,
within ten (10) business days after such tender or exchange offer is
first published, sent or given to the Company's stockholders, a statement
reaffirming the Recommendations and recommending that the Company's
stockholders reject such tender or exchange offer.
8.2 NOTICE OF TERMINATION; EFFECT OF TERMINATION. Any termination of this
Agreement under SECTION 8.1 hereof will be effective immediately upon (or if
this Agreement is terminated is pursuant to SECTION 8.1(c)(I) or
SECTION 8.1(d)(I) hereof and the proviso is applicable, thirty (30) days after)
the delivery of written notice of the terminating party to the other party or
parties hereto, as applicable. In the event of the termination of this Agreement
pursuant to SECTION 8.1 hereof, this Agreement shall be of no further force or
effect without liability of any party (or any stockholder, director, officer,
employee, agent, consultant or representative of such party) to the other
parties hereto, except (i) as set forth in this SECTION 8.2, SECTION 8.3 and
ARTICLE IX hereof, each of which shall survive the termination of this
Agreement, and (ii) that nothing herein shall relieve any party from liability
for any intentional or willful breach of this Agreement. No termination of this
Agreement shall affect the obligations of the parties contained in the
Confidentiality Agreement, all of which obligations shall survive termination of
this Agreement in accordance with its terms.
8.3 FEES AND EXPENSES.
(a) GENERAL. Except as set forth in this SECTION 8.3, all fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the respective party incurring such
fees and expenses whether or not the Merger or any other transaction
contemplated hereby is consummated; PROVIDED, HOWEVER, that notwithstanding
the foregoing, Parent and the Company shall share equally (i) all fees and
expenses (other than attorneys' and accountants' fees and expenses) in
connection with the printing, filing and mailing of the Registration
Statement and the Proxy Statement/Prospectus (including any preliminary
materials related thereto and including the financial statements included
therein and exhibits thereto) and any amendments or supplements thereto, and
(ii) any filing fees required to be paid under the HSR Act or in connection
with any Foreign Filings.
(b) COMPANY PAYMENTS.
(i) In the event that this Agreement is terminated by Parent pursuant
to SECTION 8.1(d)(II) hereof, the Company shall pay to Parent a fee equal
to Forty Million Dollars ($40,000,000) by wire transfer of immediately
available funds to an account designated in writing by Parent (the
"TERMINATION FEE AMOUNT").
(ii) The Company shall pay to Parent a fee equal to the Termination
Fee Amount, by wire transfer of immediately available funds to an account
designated in writing by Parent, within one (1) business day after demand
by Parent, in the event that (A) this Agreement is terminated by Parent
or the Company pursuant to SECTION 8.1(b)(I) or SECTION 8.1(b)(II)
hereof, or (B) this Agreement is terminated by Parent pursuant to
SECTION 8.1(d)(I), and (x) following the execution and delivery of this
Agreement and prior to the termination of this Agreement, an Acquisition
Proposal shall have been publicly announced or shall have become publicly
known and shall not have been unconditionally and publicly withdrawn, and
(y) within twelve (12) months following the termination of this
Agreement, either a Company Acquisition (as defined below) is
consummated, or the Company enters into a letter of intent or Contract
providing for a Company Acquisition and any Company Acquisition is later
consummated.
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(iii) In the event that this Agreement is terminated by the Company
pursuant to SECTION 8.1(c)(II) hereof, as a condition and prior to such
termination, the Company shall pay to Parent a fee equal to the
Termination Fee Amount by wire transfer of immediately available funds to
an account designated in writing by Parent.
(c) DEFINITION OF COMPANY ACQUISITION. For purposes of this
SECTION 8.3, the term "COMPANY ACQUISITION" shall mean any of the following
transactions or a series of related transactions having any of the following
effects (other than the transactions contemplated by this Agreement): (i) a
merger, consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction involving the Company pursuant to which
the shareholders of Company immediately preceding such transaction hold less
than fifty percent (50%) of the aggregate equity interests in the surviving
or resulting entity of such transaction; (ii) a sale or other disposition by
the Company of assets representing in excess of fifty percent (50%) of the
aggregate fair market value of the Company's business immediately prior to
such sale; or (iii) the acquisition by any person or group (including by way
of a tender offer or an exchange offer or issuance by the Company), directly
or indirectly, of beneficial ownership or a right to acquire beneficial
ownership of shares representing in excess of fifty percent (50%) of the
voting power of the then outstanding shares of capital stock of the Company.
(d) ENFORCEABILITY. The Company hereby acknowledges that the
agreements set forth in this SECTION 8.3 are an integral part of the
transactions contemplated by this Agreement, and that, without such
agreements, Parent would not enter into this Agreement. Accordingly, if the
Company shall fail to pay in a timely manner the amounts due pursuant to
this SECTION 8.3, and, in order to obtain such payment, Parent makes a claim
that results in a judgment against the Company, the Company shall pay to
Parent its reasonable costs and expenses (including reasonable attorneys'
fees and expenses) in connection with such suit, together with interest on
the amounts set forth in this SECTION 8.3 at the base rate established by
Citibank, N.A. in effect on the date such payment was required to be made.
Payment of the fees set forth in this SECTION 8.3 shall not be in lieu of
damages incurred in the event of breach of this Agreement.
8.4 AMENDMENT. Subject to applicable law, this Agreement may be amended by
the parties hereto at any time by execution of an instrument in writing signed
on behalf of each of Parent, Merger Sub and Company.
8.5 EXTENSION; WAIVER. At any time prior to the Effective Time any party
hereto may, to the extent legally allowed and except as otherwise set forth
herein, (i) extend the time for the performance of any of the obligations or
other acts of the other parties hereto, (ii) waive any inaccuracies in the
representations and warranties made to such party contained herein or in any
document delivered pursuant hereto and (iii) waive compliance with any of the
agreements or conditions for the benefit of such party contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party. Delay in exercising any right under this Agreement shall not constitute a
waiver of such right.
ARTICLE IX
GENERAL PROVISIONS
9.1 SURVIVAL OF REPRESENTATIONS; WARRANTIES AND COVENANTS. The
representations, warranties and covenants of Parent, Merger Sub and the Company
set forth in this Agreement shall terminate at the Effective Time, and only the
covenants that by their terms survive the Effective Time (including, without
limitation, the terms of SECTION 6.19 hereof) shall survive the Effective Time.
9.2 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or sent via telecopy (receipt
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confirmed) to the parties at the following addresses or telecopy numbers (or at
such other address or telecopy numbers for a party as shall be specified by like
notice):
(a) if to Parent or Merger Sub, to:
Peregrine Systems, Inc
0000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 0
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Xxxxxxx X. Xxxxxxx, Esq.
Telecopy No.: (000) 000-0000
(b) if to Company, to:
Remedy Corporation
0000 Xxxxxx Xxxxx
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx Xxxxxxxx & Xxxxxxxxx, LLP
000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. X'Xxxxxx, Esq.
Xxxxxxxxxxx X. Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
9.3 INTERPRETATION. When a reference is made in this Agreement to
Exhibits, such reference shall be to an Exhibit to this Agreement unless
otherwise indicated. When a reference is made in this Agreement to Sections,
such reference shall be to a Section of this Agreement. Unless otherwise
indicated the words "include," "includes" and "including" when used herein shall
be deemed in each case to be followed by the words "without limitation." When
reference is made herein to "the business of" an entity, such reference shall be
deemed to include the business of all direct and indirect subsidiaries of such
entity. Reference to the subsidiaries of an entity shall be deemed to include
all direct and indirect subsidiaries of such entity.
9.4 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
9.5 HEADINGS. The table of contents and headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
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9.6 ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES. This Agreement and the
documents and instruments and other agreements among the parties hereto as
contemplated by or referred to herein, including the Company Schedule and the
Parent Schedule (a) constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, it being understood that the Confidentiality Agreement
shall continue in full force and effect until the Closing and shall survive any
termination of this Agreement; and (b) except with respect to the Indemnified
Parties pursuant to SECTION 6.12 and with respect to the Company Designee
pursuant to SECTION 6.18 hereof, are not intended to confer upon any other
person any rights or remedies hereunder.
9.7 SEVERABILITY. In the event that any provision of this Agreement, or
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
9.8 OTHER REMEDIES; SPECIFIC PERFORMANCE. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to seek an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity.
9.9 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws.
9.10 RULES OF CONSTRUCTION. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
9.11 ASSIGNMENT. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other parties. Subject to the preceding sentence, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
9.12 WAIVER OF JURY TRIAL. EACH OF PARENT, MERGER SUB AND THE COMPANY
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE ACTIONS OF PARENT, MERGER SUB OR THE COMPANY
IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT OF THIS
AGREEMENT.
9.13 CONSENT TO JURISDICTION. Each of the parties hereto irrevocably
consents to the exclusive jurisdiction and venue of any court within the State
of Delaware in connection with any matter based upon or arising out of this
Agreement or the matters contemplated herein, and hereby further agrees
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that process may be served upon each of them in any manner authorized by the
laws of the State of Delaware for such persons, and waives and covenants not to
assert or plead any objection which they might otherwise have to such
jurisdiction, venue and such process.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned parties have caused this Agreement to be
executed by their duly authorized respective officers as of the date first above
written.
PEREGRINE SYSTEMS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President and Secretary
ROSE ACQUISITION CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President and Chief Financial Officer
REMEDY CORPORATION
By: /s/ Xxxxxxxx Xxxxxxx
-----------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Chairman and Chief Executive Officer
* * * * * AGREEMENT AND PLAN OF MERGER AND REORGANIZATION * * * * *
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