AGREEMENT AND PLAN OF REORGANIZATION
BY AND BETWEEN
CORVU CORPORATION
AND
MINNESOTA AMERICAN, INC.
November 17, 1999
TABLE OF CONTENTS
ARTICLE 1. THE MERGER; CONVERSION OF SHARES....................................1
1.1 The Merger...................................................1
1.2 Effective Time...............................................1
1.3 Conversion of Shares.........................................2
1.4 CorVu Dissenters'Rights......................................2
1.5 MNAC Dissenters'Rights.......................................3
1.6 Exchange of CorVu Common Stock...............................3
1.7 Stock Options and Warrants...................................5
1.8 Capitalization Changes.......................................6
1.9 Articles of Incorporation of the Surviving Corporation.......6
1.10 Bylaws of the Surviving Corporation..........................7
1.11 Directors and Officers of the Surviving Corporation..........7
ARTICLE 2. CLOSING.............................................................7
2.1 Time and Place...............................................7
2.2 Filings at the Closing.......................................7
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF MNAC..............................7
3.1 Organization.................................................8
3.2 Authorization................................................8
3.3 Capitalization...............................................9
3.4 Financial Statements.........................................9
3.5 Absence of Undisclosed Liabilities...........................9
3.6 Consents and Approvals......................................10
3.7 Compliance with Laws........................................10
3.8 Litigation..................................................11
3.9 Absence of Material Adverse Changes.........................11
3.10 Officers, Directors and Employees...........................11
3.11 Taxes.......................................................11
3.12 Contracts...................................................12
3.13 Intellectual Property Rights................................13
3.14 Year 2000 Compliance........................................13
3.15 Benefit Plans...............................................14
3.16 Minute Books................................................15
3.17 No Finders..................................................15
3.18 Proxy Statement.............................................15
3.19 State Takeover Laws.........................................15
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF CORVU............................16
4.1 Organization................................................16
4.2 Authorization...............................................16
4.3 Capitalization..............................................17
4.4 Financial Statements........................................17
4.5 Absence of Undisclosed Liabilities..........................18
4.6 Consents and Approvals......................................18
4.7 Compliance with Laws........................................19
4.8 Litigation..................................................19
4.9 Absence of Material Adverse Changes.........................19
4.10 Officers, Directors and Employees...........................19
4.11 Taxes.......................................................20
4.12 Contracts...................................................20
4.13 Intellectual Property Rights................................21
4.14 Year 2000 Compliance........................................21
4.15 Benefit Plans...............................................21
4.16 Minute Books................................................23
4.17 No Finders..................................................23
ARTICLE 5. COVENANTS..........................................................23
5.1 Conduct of Business of MNAC.................................23
5.2 Conduct of Business of CorVu................................24
5.3 No Solicitation.............................................24
5.4 Access and Information......................................26
5.5 Approval of MNAC and CorVu Shareholders.....................27
5.6 Consents....................................................28
5.7 Further Actions.............................................28
5.8 Regulatory Approvals........................................29
5.9 Certain Notifications.......................................29
5.10 Securities Laws.............................................29
5.11 Disposition of MNAC Subsidiaries............................29
5.12 Resignations and Elections of Directors.....................29
5.13 Registration Rights Agreement..............................29
5.14 Plan of Reorganization......................................30
5.15 Directors and Officer Liability.............................30
ARTICLE 6. CLOSING CONDITIONS.................................................30
6.1 Conditions to Obligations of CorVu and MNAC.................30
6.2 Conditions to Obligations of CorVu..........................31
6.3 Conditions to Obligations of MNAC...........................32
ARTICLE 7. TERMINATION AND ABANDONMENT........................................33
7.1 Termination.................................................33
7.2 Effect of Termination.......................................36
ARTICLE 8. MISCELLANEOUS......................................................37
8.1 Amendment and Modification..................................37
8.2 Waiver of Compliance; Consents..............................37
8.3 Investigation; Survival of Representations and Warranties...37
8.4 Notices.....................................................37
8.5 Assignment..................................................38
8.6 Governing Law...............................................38
8.7 Counterparts................................................39
8.8 Knowledge...................................................39
8.9 Interpretation..............................................39
8.10 Publicity...................................................39
8.11 Entire Agreement............................................39
8.12 Severability................................................39
8.13 Specific Performance........................................39
8.14 Expenses....................................................40
EXHIBITS:
Exhibit A:........Plan of Merger
Exhibit B:........Form of Articles of Incorporation
Exhibit C:........Form of Bylaws
Exhibit D:........Form of Registration Rights Agreement
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is dated
as of November 17, 1999, by and between CorVu Corporation, a Minnesota
corporation ("CorVu") and Minnesota American, Inc., a Minnesota corporation (the
"MNAC").
WHEREAS, the Boards of Directors of CorVu and MNAC have approved the
merger of CorVu with and into MNAC (the "Merger") upon the terms and subject to
the conditions set forth herein; and
WHEREAS, for federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, the parties hereto desire to make certain representations,
warranties, and agreements in connection with the Merger and also to prescribe
various conditions to the Merger.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual representations, warranties, covenants, and agreements contained herein,
the parties hereto agree as follows:
ARTICLE 1.
THE MERGER; CONVERSION OF SHARES
1.1......The Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time (as defined in Section 1.2 hereof), CorVu shall
be merged with and into MNAC in accordance with the provisions of the Minnesota
Business Corporation Act (the "MBCA"), whereupon the separate corporate
existence of CorVu shall cease, and MNAC shall continue as the surviving
corporation (the "Surviving Corporation"). From and after the Effective Time,
the Surviving Corporation shall possess all the property, rights, privileges,
immunities, powers, and franchises and be subject to all the debts, liabilities,
obligations, restrictions, disabilities, and duties of CorVu and MNAC, all as
more fully described in the MBCA.
1.2......Effective Time. As soon as practicable after each of the
conditions set forth in Article 6 has been satisfied or, to the extent permitted
hereunder, waived on the Closing Date (as defined in Section 2.1), MNAC and
CorVu will file, or cause to be filed, with the Secretary of State of the State
of Minnesota, articles of merger for the Merger, which articles of merger shall
include the Plan of Merger attached hereto as Exhibit A and be in the form
required by and executed in accordance with the applicable provisions of the
MBCA. The Merger shall become effective at the time such filing is made or, if
agreed to by CorVu and MNAC, such later time or date set forth in the Articles
of Merger (the "Effective Time").
1.3......Conversion of Shares. At the Effective Time, by virtue of the
Merger and without any action on the part of CorVu or MNAC or any holder of any
share of capital stock of CorVu or MNAC:
(a) Each share of common stock of CorVu, $.01 par value per
share ("CorVu Common Stock"), issued and outstanding immediately prior
thereto (except for shares as to which the holders thereof have
asserted dissenters' rights pursuant to Sections 302A.471 and 302A.473
of the MBCA and pursuant to Section 1.4 below) shall be converted into,
subject to Section 1.6(f), the right to receive 1.125 (the "Conversion
Ratio") shares of common stock of MNAC, par value $.01 per share (the
"MNAC Common Stock").
(b) Each share of MNAC Common Stock and each share of MNAC
Preferred Stock issued and outstanding immediately prior to the
Effective Time shall (except for shares as to which the holders thereof
have asserted dissenters' rights pursuant to Sections 302A.471 and
302A.473 of the MBCA and pursuant to Section 1.5 below) remain issued
and outstanding and unaffected by the Merger.
1.4......CorVu Dissenters' Rights.
(a) Notwithstanding any provision of this Agreement to the
contrary, any shares of CorVu Common Stock held by a holder who has
properly asserted dissenters' rights pursuant to Sections 302A.471 and
302A.473 of the MBCA with respect to such shares and who, as of the
Effective Time, has not effectively withdrawn or lost such rights shall
not be converted into or represent a right to receive shares of MNAC
Common Stock pursuant to Section 1.3(a), but the holder thereof shall
only be entitled to such rights as are granted by the MBCA.
(b) Notwithstanding the provisions of subsection (a) of this
Section, if any holder of CorVu Common Stock who asserts dissenters'
rights with respect to such CorVu Common Stock under the MBCA
effectively withdraws or loses (through failure to perfect or
otherwise) such dissenters' rights then, as of the later of the
Effective Time or the occurrence of such event, such holder's CorVu
Common Stock shall automatically be converted into and represent only
the right to receive the shares of MNAC Common Stock as provided in
Section 1.3(a), without interest thereon, upon surrender of the
certificate or certificates representing such CorVu Common Stock.
(c) CorVu shall give MNAC (i) prompt notice of any notice of
intent to assert dissenters' rights with respect to any CorVu Common
Stock, withdrawals of such notices, and any other instruments served
pursuant to the MBCA and received by CorVu and (ii) the opportunity to
participate in all negotiations and proceedings with respect to
assertion of dissenters' rights with respect to CorVu Common Stock
under the MBCA. CorVu shall not, except with the prior written consent
of MNAC, voluntarily make any payment with respect to any assertion of
dissenters' rights with respect to CorVu Common Stock or offer to
settle or settle any such demands.
1.5 MNAC Dissenters' Rights
(a) Notwithstanding any provision of this Agreement to the
contrary, any shares of MNAC Common Stock or MNAC Preferred Stock held
by a holder who has properly asserted dissenters' rights pursuant to
Sections 302A.471 and 302A.473 of the MBCA with respect to such shares
and not otherwise withdrawn or lost such rights with respect thereto
shall not represent shares of Common Stock or Preferred Stock of the
Surviving Corporation, but the holder thereof shall only be entitled to
such rights as are granted by the MBCA.
(b) MNAC shall give CorVu (i) prompt notice of any notice of
intent to assert dissenters' rights with respect to any MNAC Common
Stock, withdrawals of such notices, and any other instruments served
pursuant to the MBCA and received by MNAC and (ii) the opportunity to
participate in all negotiations and proceedings with respect to
assertion of dissenters' rights with respect to MNAC Common Stock under
the MBCA. MNAC shall not, except with the prior written consent of
CorVu, voluntarily make any payment with respect to any assertion of
dissenters' rights with respect to MNAC Common Stock or offer to settle
or settle any such demands.
1.6 Exchange of CorVu Common Stock.
(a) At or prior to the Effective Time, MNAC shall cause MNAC's
stock transfer agent to act as exchange agent (the "Exchange Agent")
hereunder. As promptly as practicable after the Effective Time, with
respect to the shares of MNAC Common Stock into which shares of CorVu
Common Stock have been converted pursuant to Section 1.3(a), MNAC shall
deliver written instructions to the transfer agent instructing such
transfer agent to issue such shares of MNAC Common Stock pursuant to
the provisions of this Section 1.6. As promptly as practicable after
the Effective Time, MNAC shall cause the Exchange Agent to mail to each
holder of record of a certificate or certificates that immediately
prior to the Effective Time represented outstanding shares of CorVu
Common Stock ("CorVu Certificates"), who has not previously delivered
such CorVu Certificates to MNAC at the Closing, a form letter of
transmittal and instructions for such holder's use in effecting the
surrender of the CorVu Certificates in exchange for certificates
representing shares of MNAC Common Stock and cash in lieu of any
fractional shares.
(b) As soon as practicable after the Effective Time, the
Exchange Agent shall distribute to holders of shares of CorVu Common
Stock, upon surrender to the Exchange Agent of one or more CorVu
Certificates for cancellation, together with a duly executed letter of
transmittal, (i) one or more certificates representing the number of
whole shares of MNAC Common Stock into which the shares represented by
the CorVu Certificate(s) shall have been converted pursuant to Section
1.3(a), (ii) a bank check in the amount of cash into which the shares
represented by the CorVu Certificate(s) shall have been converted
pursuant to Section 1.6(f) (relating to fractional shares), and (iii)
any dividends or other distributions to which such holder is entitled
pursuant to Section 1.6(c), and the CorVu Certificate(s) so surrendered
shall be canceled. In the event of a transfer of ownership of CorVu
Common Stock that is not registered in the transfer records of CorVu,
it shall be a condition to the issuance of shares of MNAC Common Stock
that the CorVu Certificate(s) so surrendered shall be properly endorsed
or be otherwise in proper form for transfer and that such transferee
shall (i) pay to the Exchange Agent any transfer or other taxes
required or (ii) establish to the satisfaction of the Exchange Agent
that such tax has been paid or is not payable.
(c) Holders of CorVu Common Stock will be entitled to any
dividends or other distributions pertaining to the MNAC Common Stock
received in exchange therefor that become payable to persons who are
holders of record of MNAC Common Stock as of a record date that follows
the Effective Time, but only after they have surrendered their CorVu
Certificates for exchange. MNAC shall deposit with the Exchange Agent
any such dividend or other distributions, and subject to the effect, if
any, of applicable law, the Exchange Agent shall receive, hold, and
remit any such dividends or other distributions to each such record
holder entitled thereto, without interest, at the time that such CorVu
Certificates are surrendered to the Exchange Agent for exchange.
(d) All certificates evidencing shares of MNAC Common Stock
that are issued upon the surrender for exchange of CorVu Certificates
in accordance with the terms hereof, together with any cash paid for
fractional shares pursuant to Section 1.6(f) hereof, shall be deemed to
have been issued in full satisfaction of all rights pertaining to the
shares of CorVu Common Stock represented by the surrendered CorVu
Certificates. All certificates evidencing shares of MNAC Common Stock
that are issued in accordance with the terms hereof shall bear the
following legend:
"The securities represented by this certificate have not been
registered under the federal Securities Act of 1933, as
amended, or applicable state securities laws and may not be
sold, transferred, assigned, pledged, offered or otherwise
disposed in the absence of an effective registration statement
under applicable securities laws or an opinion of counsel
reasonably satisfactory to the issuer that such registration
is not required."
(e) After the Effective Time, there shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of the shares of CorVu Common Stock that were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
CorVu Certificates representing such shares are presented to the
Surviving Corporation, they shall be canceled and exchanged as provided
in this Article 1. As of the Effective Time, the holders of CorVu
Certificates representing shares of CorVu Common Stock shall cease to
have any rights as stockholders of CorVu, except such rights, if any,
as they may have pursuant to the MBCA or this Agreement. Except as
provided above, until such CorVu Certificates are surrendered for
exchange, each such CorVu Certificate shall, after the Effective Time,
represent for all purposes only the right to receive a certificate or
certificates evidencing the number of whole shares of MNAC Common Stock
into which the shares of CorVu Common Stock shall have been converted
pursuant to the Merger as provided in Section 1.3(a) hereof, the right
to receive the cash value of any fraction of a share of MNAC Common
Stock as provided in Section 1.6(f) hereof and the right to receive any
dividends or distributions as provided in Section 1.6(c).
(f) No fractional shares of MNAC Common Stock and no
certificates or scrip therefor, or other evidence of ownership thereof,
shall be issued in connection with the Merger, no dividend or other
distribution of MNAC shall relate to any fractional share, and such
fractional share interests shall not entitle the owner thereof to vote
or to any rights of a shareholder of MNAC. All fractional shares of
MNAC Common Stock to which a holder of CorVu Common Stock immediately
prior to the Effective Time would otherwise be entitled, at the
Effective Time, shall be aggregated if and to the extent multiple CorVu
Certificates of such holder are submitted together to the Exchange
Agent. If a fractional share results from such aggregation, then (in
lieu of such fractional share) the Exchange Agent shall pay to each
holder of shares of CorVu Common Stock who otherwise would be entitled
to receive such fractional share of MNAC Common Stock an amount of cash
(without interest) determined by multiplying (i) the average of the
closing "bid" and "ask" prices of a share of MNAC Common Stock as
reported by the Nasdaq OTC Bulletin Board on the Closing Date (or if no
prices are quoted for such Closing Date, the most recent trading day
preceding the Closing Date), by (ii) the fractional share of MNAC
Common Stock to which such holder would otherwise be entitled. MNAC
will make available to the Exchange Agent any cash necessary for this
purpose.
(g) In the event any CorVu Certificates shall have been lost,
stolen, or destroyed, the Exchange Agent shall issue in respect of such
lost, stolen, or destroyed CorVu Certificates, upon the holder thereof
making of an affidavit of such fact and agreeing to indemnify and hold
harmless MNAC from any costs and expenses of such lost certificate
later being presented for exchange, such shares of MNAC Common Stock,
cash for fractional shares, if any, and dividends or other
distributions, if any, as may be required pursuant to this Article 1.
1.7 Stock Options and Warrants.
(a) Each option or warrant to purchase shares of CorVu Common
Stock that is outstanding at the Effective Time, whether or not
exercisable and whether or not vested (a "CorVu Option"), shall,
without any action on the part of CorVu or the holder thereof, be
assumed by MNAC in such manner that MNAC (i) is a corporation "assuming
a stock option in a transaction to which Section 424(a) applies" within
the meaning of Section 424 of the Code and the regulations thereunder,
or (ii) to the extent that Section 424 of the Code does not apply to
any such CorVu Option, would be such a corporation if Section 424 of
the Code were applicable to such CorVu Option. MNAC shall assume
CorVu's 1996 Stock Option Plan (the "CorVu Option Plan"). From and
after the Effective Time, all references to CorVu in the CorVu Options
shall be deemed to refer to the Surviving Corporation. The CorVu
Options assumed by MNAC shall be exercisable upon the same terms and
conditions as under the CorVu Options (including provisions regarding
vesting and the acceleration thereof) except that (i) such CorVu
Options shall entitle the holder to purchase from the Surviving
Corporation the number of shares of MNAC Common Stock (rounded down to
the nearest whole number of such shares) that equals the product of the
Conversion Ratio multiplied by the number of shares of CorVu Common
Stock subject to such CorVu Option immediately prior to the Effective
Time, (ii) the option exercise price per share of MNAC Common Stock
shall be an amount (rounded up to the nearest full cent) equal to the
exercise price per share of CorVu Common Stock in effect immediately
prior to the Effective Time divided by the Conversion Ratio, and (iii)
the CorVu Options shall vest to the extent required pursuant to the
current terms of such CorVu Options or other agreements as described in
Section 4.3 of the CorVu Disclosure Schedule (as defined below). Except
to the extent required pursuant to the current terms of such CorVu
Options or other agreements as described in Section 4.3 of the CorVu
Disclosure Schedule, CorVu shall not take any action to accelerate the
vesting of any CorVu Options.
(b) As promptly as practicable after the Effective Time, the
Surviving Corporation shall issue to each holder of a CorVu Option a
written instrument informing such holder of the assumption by MNAC of
such CorVu Option. MNAC shall take all corporate action necessary to
reserve for issuance a sufficient number of shares of MNAC Common Stock
for delivery upon exercise of CorVu Options pursuant to the terms set
forth in this Section 1.7. MNAC shall use its commercially reasonable
efforts to cause those CorVu Options that qualified as incentive stock
options prior to the Effective Time to continue to qualify as incentive
stock options immediately after the Effective Time. As promptly as
practicable after the Surviving Corporation becomes subject to the
reporting obligations of Section 13 of the Securities Exchange Act of
1934 (the "1934 Act"), MNAC shall file a registration statement on Form
S-8 (or any successor form) with respect to the shares of MNAC Common
Stock subject to CorVu Options issued under the CorVu Option Plan and
shall use commercially reasonable efforts to maintain such registration
statement (or any successor form), including the current status of any
related prospectus or prospectuses, for so long as such CorVu Options
remain outstanding.
1.8 Capitalization Changes. If, between the date of this Agreement and
the Effective Time, the outstanding shares of MNAC Common Stock or CorVu Common
Stock shall have been changed into or exchanged in accordance with the terms of
Sections 5.1 or 5.2, respectively, for a different number of shares or a
different class by reason of any reorganization, reclassification, subdivision,
recapitalization, split-up, combination, exchange of shares, stock dividend or
other similar transaction, the Conversion Ratio and calculations set forth in
this Agreement shall be appropriately adjusted to reflect such reorganization,
reclassification, subdivision, recapitalization, split-up, combination, exchange
of shares, stock dividend or other similar transaction. This section shall not
constitute either party's consent to the other party effecting such
reorganization, reclassification, subdivision, recapitalization, split-up,
combination, exchange of shares, stock dividend or other similar transaction.
1.9 Articles of Incorporation of the Surviving Corporation. The
Articles of Incorporation of MNAC, as in effect immediately prior to the
Effective Time, shall be amended as of the Effective Time to read as set forth
on Exhibit B to this Agreement.
1.10 Bylaws of the Surviving Corporation. The Bylaws of MNAC, as in
effect immediately prior to the Effective Time, shall be amended as of the
Effective Time to read as set forth on Exhibit C to this Agreement.
1.11 Directors and Officers of the Surviving Corporation. As of the
Effective Time, the officers and directors of MNAC shall resign and be replaced
by such persons as are designated by CorVu; provided that CorVu agrees to (i)
designate an uneven number of members of the Surviving Corporation's Board of
Directors with a majority being outside directors, and (ii) designate two
members of the current MNAC Board of Directors to serve as directors of the
Surviving Corporation in accordance with the MBCA and the Articles of
Incorporation and Bylaws of the Surviving Corporation.
ARTICLE 2.
CLOSING
2.1 Time and Place. Subject to the satisfaction or waiver of the
provisions of Article 6, the closing of the Merger (the "Closing") shall take
place at 11:00 a.m., local time, on the date that the later of the Required MNAC
Shareholder Vote (as defined in Section 3.2) and the Required CorVu Shareholder
Vote (as defined in Section 4.2) is obtained, or as soon thereafter as is
reasonably practicable, and in any event no later than the second business day
after all conditions to Closing have been satisfied or waived, or on such other
date and/or at such other time as CorVu and MNAC may mutually agree. The date on
which the Closing actually occurs is herein referred to as the "Closing Date."
The Closing shall take place by telecopy exchange of signature pages with
originals to follow by overnight delivery, or in such other manner or at such
place as the parties hereto may agree.
2.2 Filings at the Closing. At the Closing, subject to the provisions
of Article 6, CorVu and MNAC shall cause the Articles of Merger to be filed in
accordance with the provisions of Section 302A.615 of the MBCA, and take any and
all other lawful actions and do any and all other lawful things necessary to
cause the Merger to become effective.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF MNAC
Except as set forth in a document of even date herewith and
concurrently delivered herewith, referring specifically to the representations
and warranties in this Agreement that identifies by section number to which such
disclosure relates (the "MNAC Disclosure Schedule"), MNAC hereby makes the
following representations and warranties to CorVu:
3.1 Organization. MNAC and each subsidiary of MNAC (referred to herein
as a "MNAC Subsidiary") is a corporation duly organized, validly existing, and,
to the extent applicable under the laws of such jurisdiction, in good standing
under the laws of its respective jurisdiction of incorporation and has all
requisite corporate power and authority to own, lease, and operate its
properties and to carry on its business as now being conducted, except where the
failure to be so organized, existing or in good standing or to have such
corporate power and authority would not, individually or in the aggregate, have
a MNAC Material Adverse Effect (as defined below). MNAC and each MNAC Subsidiary
is duly qualified and in good standing to do business in each jurisdiction in
which the property owned, leased, or operated by it or the nature of the
business conducted by it makes such qualification necessary, except where the
failure to be so qualified or in good standing would not, individually or in the
aggregate, reasonably be expected to have a MNAC Material Adverse Effect (as
defined below). "MNAC Material Adverse Effect" means an effect that is
materially adverse to (i) the business of MNAC and the MNAC Subsidiaries,
considered as a whole, (ii) MNAC's ability to perform any of its material
obligations under this Agreement or to consummate the Merger, or (iii) the
ability of the Surviving Corporation to conduct the business of the Surviving
Corporation following the Effective Time, except in each case for (x) any
occurrence or condition affecting MNAC's or the Surviving Corporation's industry
generally, or (y) any changes in general economic, regulatory or political
conditions. The jurisdictions in which MNAC and each MNAC Subsidiary are
incorporated are listed in the MNAC Disclosure Schedule. MNAC has heretofore
delivered or made available to CorVu or its advisers complete and accurate
copies of the Articles of Incorporation, Bylaws and other governing instruments
of MNAC and each MNAC Subsidiary, as currently in effect, and of the
organizational documents and agreements defining the rights of MNAC or any MNAC
Subsidiary with respect to any material joint ventures, partnerships or other
business in which MNAC owns a less-than-100% interest. Neither MNAC nor any MNAC
Subsidiary, directly or indirectly, owns or controls or has any equity,
partnership, or other ownership interest in any corporation, partnership, joint
venture, or other business association or entity that is material to MNAC and
its Subsidiaries, considered as a whole.
3.2 Authorization. MNAC has all necessary corporate power and authority
to execute and deliver this Agreement and, subject to obtaining the necessary
approval of its shareholders, to consummate the transactions contemplated
hereby. The execution and delivery by MNAC of this Agreement and the other
agreements contemplated hereby to which MNAC is a party, and the consummation by
MNAC of the transactions contemplated hereby and thereby, have been duly and
validly authorized and approved by MNAC's Board of Directors, no other action of
MNAC's Board of Directors or corporate proceeding on the part of MNAC or any
Subsidiary are necessary to authorize this Agreement, and, subject to obtaining
the approval and adoption of this Agreement and approval of the Merger by the
holders of a majority of the shares of MNAC Common Stock outstanding as of the
record date of MNAC's shareholder meeting (the "Required MNAC Shareholder
Vote"), no other action of MNAC's Board of Directors or corporate action on the
part of MNAC or any Subsidiary is necessary to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by MNAC and, assuming due execution and delivery by the other parties
hereto, constitutes the valid and binding obligation of MNAC, enforceable
against MNAC in accordance with its terms, subject to laws of general
application relating to bankruptcy, insolvency, and the relief of debtors and
rules of law governing specific performance, injunctive relief, or other
equitable remedies.
3.3 Capitalization. As of the date hereof, the authorized capital stock
of MNAC consists of (i) 10,000,000 shares of MNAC Common Stock, par value $.01
per share, of which 3,959,610 shares are issued and outstanding, and (ii)
1,000,000 shares of MNAC Preferred Stock, par value $10.00 per share, of which
39,226 are issued or outstanding. All issued and outstanding shares of capital
stock of each MNAC Subsidiary are owned, beneficially and of record, by MNAC,
free and clear of any mortgage, pledge, security interest, encumbrance, lien or
other charge of any kind ("Lien"). All issued and outstanding shares of MNAC
Common Stock and Preferred Stock have been, and the shares of MNAC Common Stock
to be issued pursuant to Article 1 will be, when issued, duly authorized,
validly issued, fully paid and nonassessable. Except for options and warrants to
purchase an aggregate 742,000 shares of MNAC Common Stock listed in the MNAC
Disclosure Schedule, as of the date of this Agreement, there are not any
outstanding or authorized subscriptions, options, warrants, calls, rights,
convertible securities, commitments, restrictions, arrangements, or any other
agreements of any character to which MNAC or any MNAC Subsidiary is a party
that, directly or indirectly, (i) obligate MNAC or any MNAC Subsidiary to issue
any shares of capital stock or any securities convertible into, or exercisable
or exchangeable for, or evidencing the right to subscribe for, any shares of
capital stock, (ii) call for or relate to the sale, pledge, transfer, or other
disposition or encumbrance by MNAC or any MNAC Subsidiary of any shares of its
capital stock, or (iii) to the knowledge of MNAC, relate to the voting or
control of such capital stock. The MNAC Disclosure Schedule sets forth a
complete and accurate list of all stock options, warrants, and other rights to
acquire MNAC Common Stock, including the name of the holder, the date of grant,
acquisition price, number of shares, exercisability schedule, and, in the case
of options, the type of option under the Code. None of such options, warrants or
other rights shall be subject to adjustment or modification as a result of the
Merger.
3.4 Financial Statements. MNAC's audited consolidated financial
statements at and for the year ended September 30, 1999 (the "MNAC 1999
Financials"), (i) were prepared in accordance with United States generally
accepted accounting principles ("US GAAP") applied on a consistent basis during
the periods involved (except as may be indicated therein or in the notes
thereto), and (ii) fairly present in all material respects the consolidated
financial position of MNAC as of the dates thereof and the income, cash flows,
and changes in shareholders' equity for the periods involved. The statements of
earnings included in the MNAC 1999 Financials do not contain any items of
special or nonrecurring income or any other income not earned in the ordinary
course of business required to be disclosed separately in accordance with US
GAAP, except as expressly specified in the applicable statement of operations or
notes thereto.
3.5 Absence of Undisclosed Liabilities. Neither MNAC nor any MNAC
Subsidiary has any liabilities or obligations of any nature (whether absolute,
accrued, contingent, or otherwise) except (a) liabilities or obligations that
are accrued or reserved against in the audited consolidated balance sheet of
MNAC as of September 30, 1999 contained in MNAC 1999 Financials (the "MNAC
Audited Balance Sheet") or in the notes thereto, (b) liabilities incurred since
September 30, 1999 in the ordinary course of business and of a type and in an
amount consistent with past practice, and (c) liabilities or obligations that
would not, individually or in the aggregate, reasonably be expected to have a
MNAC Material Adverse Effect.
3.6 Consents and Approvals. Except for (i) any applicable requirements
of the Securities Act of 1933 and regulations thereunder (the "1933 Act") and
state securities laws, (ii) obtaining the Required MNAC Shareholder Vote, and
(iii) the filing and recordation of appropriate merger documents as required by
the MBCA, the authorization and approval by MNAC's Board of Directors and the
execution and delivery by MNAC of this Agreement and the other agreements
contemplated hereby to which MNAC is a party and the consummation by MNAC of the
transactions contemplated hereby and thereby will not: (a) violate any provision
of the Articles of Incorporation or Bylaws of MNAC or any MNAC Subsidiary; (b)
violate any statute, law, rule, regulation, order, or decree of any federal,
state, local, or foreign governmental or regulatory body or authority (a
"Governmental Body") or any nongovernmental self-regulatory agency) by which
MNAC or any MNAC Subsidiary or any of their respective properties or assets may
be bound; (c) require any filing with or permit, consent, or approval to be
obtained from any Governmental Body or any nongovernmental self-regulatory
agency; or (d) result in any violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default under, result in the loss
of any material benefit under, or give rise to any right of termination,
cancellation, increased payments, or acceleration under, or result in the
creation of any Lien (as defined in Section 3.3) on any of the properties or
assets of MNAC or any MNAC Subsidiary under, any of the terms, conditions, or
provisions of any note, bond, mortgage, indenture, license, franchise, permit,
authorization, agreement, or other instrument or obligation to which MNAC or any
MNAC Subsidiary is a party, or by which it or any of its properties or assets
may be bound, except, in the case of clauses (b), (c) and (d), for any such
filings, permits, consents or approvals or violations, breaches, defaults, or
other occurrences that would not, individually or in the aggregate, reasonably
be expected to prevent or delay consummation of any of the transactions
contemplated hereby in any material respect, or otherwise prevent MNAC from
performing its obligations under this Agreement in any material respect, and
would not, individually or in the aggregate, reasonably be expected to have a
MNAC Material Adverse Effect. Section 3.6 of the MNAC Disclosure Schedule lists
each note, bond, mortgage, indenture, license, franchise, permit, authorization,
agreement, or other instrument or obligation to which MNAC or any MNAC
Subsidiary is a party, or by which it or any of its properties or assets may be
bound, under or with respect to which the transactions contemplated by this
Agreement will result in any violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default under, result in the loss
of any benefit under, or give rise to any right of termination, cancellation,
increased payments, or acceleration under, or result in the creation of any Lien
on any of the properties or assets of MNAC or any MNAC Subsidiary, except for
violations, defaults, losses, rights and Liens that would not, individually or
in the aggregate, reasonably be expected to have a MNAC Material Adverse Effect.
3.7 Compliance with Laws. To the best of MNAC's knowledge, neither MNAC
nor any MNAC Subsidiary is in default or violation of any applicable federal,
state, local, or foreign laws, ordinances, regulations, interpretations,
judgments, decrees, injunctions, permits, licenses, certificates, governmental
requirements, orders, or other similar items of any court or other Governmental
Body (and including those of any nongovernmental self-regulatory agency and
including environmental laws or regulations), except for such defaults or
violations that would not, individually or in the aggregate, reasonably be
expected to have a MNAC Material Adverse Effect.
3.8 Litigation. There are no claims, actions, suits, proceedings or, to
the knowledge of MNAC, investigations or reviews of any kind, pending or, to the
knowledge of MNAC, threatened in writing, against MNAC or any MNAC Subsidiary or
any asset or property of MNAC or any MNAC Subsidiary, except for such claims,
actions, suits, proceedings, investigations or reviews that would not,
individually or in the aggregate, reasonably be expected to have a MNAC Material
Adverse Effect.
3.9 Absence of Material Adverse Changes. Since September 30, 1999 there
has not been any (a) MNAC Material Adverse Effect; (b) damage, destruction, or
loss, not covered by insurance, that would, individually or in the aggregate,
reasonably be expected to have a MNAC Material Adverse Effect; or (c) material
change by MNAC or any MNAC Subsidiary in accounting methods or principles used
for financial reporting purposes, except as required by a change in applicable
law or generally accepted accounting principles and concurred with by MNAC's
independent public accountants.
3.10 Officers, Directors and Employees. Prior to the date hereof, MNAC
has provided to CorVu a list that completely and accurately sets forth the name
and current annual salary rate of each officer of MNAC or any MNAC Subsidiary
whose total remuneration for the last fiscal year was, or for the current fiscal
year is expected to be, in excess of $75,000, together with a summary of the
bonuses, commissions, additional compensation, and other like cash benefits, if
any, paid or payable to such persons for the last fiscal year and proposed for
the current fiscal year. The MNAC Disclosure Schedule completely and accurately
sets forth (i) the names of all former officers of MNAC or of any MNAC
Subsidiary whose employment with MNAC or any MNAC Subsidiary has terminated
either voluntarily or involuntarily during the preceding 12-month period; and
(ii) the names of the officers (with all positions and titles indicated) and
directors of MNAC and of each MNAC Subsidiary. Except as would not, individually
or in the aggregate, reasonably be expected to have a MNAC Material Adverse
Effect: (i) no unfair labor practice complaint against MNAC or any MNAC
Subsidiary is pending before the National Labor Relations Board, and there is no
labor strike, slowdown or stoppage pending or, to the knowledge of MNAC,
threatened in writing against or involving MNAC or any MNAC Subsidiary; (ii) no
unionizing efforts have, to the knowledge of MNAC, been made by employees of
MNAC or any MNAC Subsidiary, neither MNAC nor any MNAC Subsidiary is a party to
or subject to any collective bargaining agreement, and no collective bargaining
agreement is currently being negotiated by MNAC or any MNAC Subsidiary; and
(iii) there is no labor dispute pending or, to the knowledge of MNAC, threatened
in writing between MNAC or any MNAC Subsidiary and its employees.
3.11 Taxes. Except for such matters that, individually or in the
aggregate, would not have a MNAC Material Adverse Effect, (i) MNAC and each MNAC
Subsidiary have filed, or have obtained extensions to file (which extensions
have not expired without filing), all state, local, United States, foreign, or
other tax reports and returns required to be filed by any of them; (ii) MNAC and
each MNAC Subsidiary have duly paid, or accrued on their books of account, all
taxes (including estimated taxes) shown as due on such reports and returns (or
such extension requests), or assessed against them, other than taxes being
contested in good faith in proper proceedings and (iii) the liabilities and
reserves for taxes reflected on MNAC Audited Balance Sheet are adequate to cover
all taxes payable by MNAC or any MNAC Subsidiary for all taxable periods and
portions thereof ending on or before the dates thereof. To MNAC's knowledge, no
tax audits are pending against and no claims for taxes have been received in
writing by MNAC or any MNAC Subsidiary, other than audits and claims that,
individually and in the aggregate, are not reasonably expected to have a MNAC
Material Adverse Effect. Neither MNAC nor any MNAC Subsidiary has, with regard
to any assets or property held, acquired or to be acquired by any of them, filed
a consent to the application of Section 341(f)(2) of the Code. Neither MNAC nor
any MNAC Subsidiary has taken or agreed to take any action (other than actions
contemplated by this Agreement) that would prevent the Merger from constituting
a reorganization qualifying under Section 368(a) of the Code. MNAC is not aware
of any agreement, plan or other circumstance that would prevent the Merger from
so qualifying under Section 368(a) of the Code.
For the purposes of this Agreement, "tax" shall mean and include taxes,
duties, withholdings, assessments, and charges assessed or imposed by any
governmental authority (together with any interest, penalties and additions to
tax imposed with respect thereto), including but not limited to all federal,
state, county, local, and foreign income, profits, gross receipts, import, ad
valorem, real and personal property, franchise, license, sales, use, value
added, stamp, transfer, withholding, payroll, employment, excise, custom, duty,
and any other taxes, obligations and assessments of any kind whatsoever; "tax"
shall also include any liability for taxes arising as a result of being (or
ceasing to be) a member of any affiliated, consolidated, combined, or unitary
group as well as any liability for taxes under any tax allocation, tax sharing,
tax indemnity, or similar agreement.
3.12 Contracts. The MNAC Disclosure Schedule lists, and MNAC has
heretofore furnished to CorVu complete and accurate copies of (or, if oral, the
MNAC Disclosure Schedule states all material provisions of), (a) every
employment, material consulting, severance or change of control agreement or
arrangement for the benefit of any director, officer, employee, other person or
shareholder of MNAC or any MNAC Subsidiary or any affiliate thereof in effect as
of the date of this Agreement to which MNAC or any MNAC Subsidiary is a party or
by which MNAC or any MNAC Subsidiary or any of their properties or assets is
bound, and (b) every contract, agreement, or understanding to which MNAC or any
MNAC Subsidiary is a party that would reasonably be expected to involve payments
by or to MNAC or any MNAC Subsidiary in excess of $50,000 during MNAC's current
2000 fiscal year or in excess of $100,000 in the aggregate during MNAC's 2000
and 2001 fiscal years, or would have a MNAC Material Adverse Effect, or that is
material and was not made in the ordinary course of business. Neither MNAC nor
any MNAC Subsidiary is in material violation of or in default under any
contract, plan, agreement, understanding, arrangement or obligation that is
material to MNAC and the MNAC Subsidiaries considered as a whole, except for
such violations or defaults that would not, individually or in the aggregate,
reasonably be expected to have a MNAC Material Adverse Effect. As of the date of
this Agreement, neither MNAC nor any MNAC Subsidiary is a party to any contract,
plan, agreement, understanding, arrangement or obligation (i) that restricts
MNAC's, or after the Merger would restrict the Surviving Corporation's, ability
to conduct any line of business, or (ii) that imposes on MNAC or any MNAC
Subsidiary material obligations not reflected in the MNAC 1999 Financials.
3.13 Intellectual Property Rights. The MNAC Disclosure Schedule
contains a complete and accurate list of all material patents, trademarks, trade
names, service marks, copyrights, and all applications for or registrations of
any of the foregoing as to which MNAC or any MNAC Subsidiary is the owner or a
licensee (the "MNAC Intellectual Property"). MNAC and each MNAC Subsidiary owns,
free and clear of any Lien (as defined in Section 3.3), other than Liens granted
in connection with MNAC's credit facility and Liens that would not be reasonably
expected to have a MNAC Material Adverse Effect, or is licensed to use, all
patents, trademarks, trade names, service marks, copyrights, applications for or
registrations of any of the foregoing comprising MNAC Intellectual Property. No
claim has been asserted or, to the knowledge of MNAC, threatened in writing by
any person, with respect to the use of MNAC Intellectual Property or challenging
or questioning the validity or effectiveness of any license or agreement with
respect thereto, except for such claims that, individually or in the aggregate,
would not reasonably be expected to have a MNAC Material Adverse Effect. To the
knowledge of MNAC, neither the use of MNAC Intellectual Property by MNAC or any
MNAC Subsidiary in the present conduct of its business nor any product or
service of MNAC or any Subsidiary infringes on the valid intellectual property
rights of any person in a manner that, individually or in the aggregate, would
reasonably be expected to have a MNAC Material Adverse Effect. Except as would
not, individually or in the aggregate, reasonably be expected to have a MNAC
Material Adverse Effect, (i) all MNAC Intellectual Property listed in the MNAC
Disclosure Schedule has the status indicated therein and, unless provided
otherwise, all applications are still pending in good standing and have not been
abandoned, and (ii) to the knowledge of MNAC, the MNAC Intellectual Property is
valid and has not been challenged in any judicial or administrative proceeding.
To the knowledge of MNAC, no person or entity nor such person's or entity's
business or products has infringed, or misappropriated any MNAC Intellectual
Property, or currently is infringing, or misappropriating any MNAC Intellectual
Property, except as would not, individually or in the aggregate, reasonably be
expected to have a MNAC Material Adverse Effect.
3.14 Year 2000 Compliance. To the best of MNAC's knowledge, all
hardware and software used by MNAC in the ordinary course of business is Year
2000 Compatible. For purposes of this Agreement, "Year 2000 Compatible" means
that neither performance nor functionality is affected by dates prior to,
during, spanning or after January 1, 2000, and shall include, but not be limited
to: (i) accurately processing (including, but not limited to, calculating,
comparing and sequencing) date/time data from, into and between the twentieth
and twenty-first centuries and the years 1999 and 2000 and leap year
calculations; (ii) functioning without error, interruption or decreased
performance relating to such date/time data; (iii) accurately processing such
date/time data when used in combination with other Year 2000 Compatible
technology; (iv) accurate date/time data century recognition; (v) calculations
that accurately use same-century and multi-century formulas and date/time
values; (vi) date/time interface values that reflect the correct century; and
(vii) processing, storing, receiving and outputting all date/time data in a
format that accurately indicates the century of the date/time data.
3.15 Benefit Plans.
(a) Neither MNAC nor any MNAC Subsidiary sponsors, maintains,
contributes to, or has, within the past five years, sponsored,
maintained, or contributed to or been required to contribute to, any
"employee pension benefit plan" ("Pension Plan"), as such term is
defined in Section 3(2) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), including, solely for the purpose of
this subsection, a plan excluded from coverage by Section 4(b)(5) of
ERISA. Each such Pension Plan presently maintained by MNAC or any MNAC
Subsidiary is, in all material respects, in compliance with applicable
provisions of ERISA, the Code, and other applicable law and MNAC or
such MNAC Subsidiary has performed all of its obligations under such
Pension Plan except for such obligations that would not, individually
or in the aggregate, reasonably be expected to have a MNAC Material
Adverse Effect.
(b) Neither MNAC nor any MNAC Subsidiary sponsors, maintains,
contributes to, or has, within the past five years, sponsored,
maintained, or contributed to or been required to contribute to, any
Pension Plan that is subject to Title IV of ERISA.
(c) Neither MNAC nor any MNAC Subsidiary sponsors, maintains,
or contributes to any "employee welfare benefit plan" ("Welfare Plan"),
as such term is defined in Section 3(1) of ERISA, whether insured or
otherwise, and any such Welfare Plan presently maintained by MNAC or
any MNAC Subsidiary is, in all material respects, in compliance with
the provisions of ERISA, the Code, and all other applicable laws,
including, but not limited to, Section 4980B of the Code and the
regulations thereunder, and Part 6 of Title I of ERISA. Neither MNAC
nor any MNAC Subsidiary has established or contributed to any
"voluntary employees' beneficiary association" within the meaning of
Section 501(c)(9) of the Code.
(d) Neither MNAC nor any MNAC Subsidiary currently maintains
or contributes to any oral or written bonus, profit-sharing,
compensation (incentive or otherwise), commission, stock option, or
other stock-based compensation, retirement, severance, change of
control, vacation, sick or parental leave, dependent care, deferred
compensation, cafeteria, disability, hospitalization, medical, death,
retiree, insurance, or other benefit or welfare or other similar plan,
policy, agreement, trust, fund, or arrangement providing for the
remuneration or benefit of all or any MNAC employees, directors or any
other person, that is neither a Pension Plan nor a Welfare Plan
(collectively, the "MNAC Compensation Plans").
(e) With respect to the Pension Plans, Welfare Plans or MNAC
Compensation Plans, no event has occurred and, to the knowledge of
MNAC, there exists no condition or set of circumstances, in connection
with which MNAC or any MNAC Subsidiary would be subject to any
liability under the terms of such Plans (other than the payment of
benefits thereunder), ERISA, the Code or any other applicable law that
would, individually or in the aggregate, reasonably be expected to have
a MNAC Material Adverse Effect.
(f) The IRS has issued favorable determination letters with
respect to all MNAC and MNAC Subsidiary Pension Plans that are intended
to be qualified under Section 401(a) of the Code. MNAC has provided or
made available to CorVu summaries of all Pension Plans, Welfare Plans,
Compensation Plans, and related agreements, and complete and accurate
copies of all annual reports (Form 5500), favorable determination
letters, current summary plan descriptions, and all employee handbooks
or manuals. MNAC has provided or made available to CorVu (i) copies of
all employment agreements with officers of MNAC or any MNAC Subsidiary
(or copies of forms of agreements setting forth representative
employment terms and conditions); (ii) copies of all severance, bonus
or incentive agreements, programs and policies of MNAC or any MNAC
Subsidiary with or relating to any of its employees; and (iii) copies
of all plans, programs, agreements and other arrangements of MNAC or
any MNAC Subsidiary with or relating to any of its employees that
contain change in control provisions.
(g) The execution of, and performance of the transactions
contemplated in, this Agreement will not (either alone or upon the
occurrence of any additional or subsequent events) constitute an event
under any MNAC or MNAC Subsidiary Pension Plan, Welfare Plan,
Compensation Plan, or other arrangement 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.
3.16 Minute Books. MNAC has previously made available to CorVu or its
representatives all of the minutes of meetings of and corporate actions or
written consents by the shareholders, Boards of Directors, and committees of the
Boards of Directors of MNAC and each MNAC Subsidiary.
3.17 No Finders. No act of MNAC or any MNAC Subsidiary has given or
will give rise to any claim against any of the parties hereto for a brokerage
commission, finder's fee, or other like payment in connection with the
transactions contemplated herein, except payments in the amounts specified in
the MNAC Disclosure Schedule to those parties identified thereon who have acted
as a finder for MNAC or have been retained by MNAC as financial advisors
pursuant to the agreements or other documents described in the MNAC Disclosure
Schedule, copies of which have been provided or made available to CorVu or its
advisors prior to the date of this Agreement.
3.18 Proxy Statement. The MNAC Proxy Statement (as defined in Section
5.5 hereof) and any amendments or supplements thereto (i) will comply in all
material respects with all applicable laws, and (ii) not 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 were made, not misleading; provided, however,
that no representation or warranty is made by MNAC with respect to information
relating to CorVu or any affiliate of CorVu supplied by CorVu specifically for
inclusion in the Proxy Statement.
3.19 State Takeover Laws. The Board of Directors of MNAC has approved
the transactions contemplated by this Agreement, such that the provisions of
Section 302A.673 (entitled "Business Combinations") of the MBCA will not apply
to this Agreement or any of the transactions contemplated hereby.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF CORVU
Except as set forth in a document of even date herewith and
concurrently delivered herewith, referring specifically to the representations
and warranties in this Agreement that identifies by section number to which such
disclosure relates (the "CorVu Disclosure Schedule"), CorVu hereby makes the
following representations and warranties to MNAC:
4.1 Organization. CorVu and each subsidiary of CorVu (referred to
herein as a "CorVu Subsidiary") is a corporation duly organized, validly
existing, and, to the extent applicable under the laws of such jurisdiction, is
in good standing under the laws of its respective jurisdiction of incorporation
and has all requisite corporate power and authority to own, lease, and operate
its properties and to carry on its business as now being conducted, except where
the failure to be so organized, existing or in good standing or to have such
corporate power and authority would not, individually or in the aggregate, have
a CorVu Material Adverse Effect (as defined below). CorVu and each CorVu
Subsidiary is duly qualified and in good standing to do business in each
jurisdiction in which the property owned, leased, or operated by it or the
nature of the business conducted by it makes such qualification necessary,
except where the failure to be so qualified or in good standing would not,
individually or in the aggregate, reasonably be expected to have a CorVu
Material Adverse Effect (as defined below). "CorVu Material Adverse Effect"
means an effect that is materially adverse to (i) the business of CorVu and the
CorVu Subsidiaries, considered as a whole, (ii) CorVu's ability to perform any
of its material obligations under this Agreement or to consummate the Merger, or
(iii) the ability of the Surviving Corporation to conduct the business of the
Surviving Corporation following the Effective Time, except in each case for (x)
any occurrence or condition affecting CorVu's or the Surviving Corporation's
industry generally, or (y) any changes in general economic, regulatory or
political conditions. The jurisdictions in which CorVu and each CorVu Subsidiary
are incorporated are listed in the CorVu Disclosure Schedule. CorVu has
heretofore delivered or made available to MNAC or its advisers complete and
accurate copies of the Articles of Incorporation, Bylaws and other governing
instruments of CorVu and each CorVu Subsidiary, as currently in effect, and of
the organizational documents and agreements defining the rights of CorVu or any
CorVu Subsidiary with respect to any material joint ventures, partnerships or
other business in which CorVu owns a less-than-100% interest. Neither CorVu nor
any CorVu Subsidiary, directly or indirectly, owns or controls or has any
equity, partnership, or other ownership interest in any corporation,
partnership, joint venture, or other business association or entity that is
material to CorVu and its Subsidiaries, considered as a whole.
4.2 Authorization. CorVu has all necessary corporate power and
authority to execute and deliver this Agreement and, subject to obtaining the
necessary approval of its shareholders, to consummate the transactions
contemplated hereby. The execution and delivery by CorVu of this Agreement and
the other agreements contemplated hereby to which CorVu is a party, and the
consummation by CorVu of the transactions contemplated hereby and thereby, have
been duly and validly authorized and approved by CorVu's Board of Directors, no
other action of CorVu's Board of Directors or corporate proceeding on the part
of CorVu or any Subsidiary are necessary to authorize this Agreement, and,
subject to obtaining the approval and adoption of this Agreement and approval of
the Merger by the holders of a majority of the shares of CorVu Common Stock
outstanding as of the record date of CorVu's shareholder meeting (the "Required
CorVu Shareholder Vote"), no other action of CorVu's Board of Directors or
corporate action on the part of CorVu or any Subsidiary is necessary to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by CorVu and, assuming due execution and
delivery by the other parties hereto, constitutes the valid and binding
obligation of CorVu , enforceable against CorVu in accordance with its terms,
subject to laws of general application relating to bankruptcy, insolvency, and
the relief of debtors and rules of law governing specific performance,
injunctive relief, or other equitable remedies.
4.3 Capitalization. As of the date hereof, the authorized capital stock
of CorVu consists of (i) 25,000,000 shares of CorVu Common Stock, par value $.01
per share, of which 10,591,893 shares are issued and outstanding, and (ii)
25,000,000 shares of undesignated CorVu stock, par value $.01 per share, none of
which are issued or outstanding. All issued and outstanding shares of capital
stock of each CorVu Subsidiary are owned, beneficially and of record, by CorVu,
free and clear of any Lien. All issued and outstanding shares of CorVu Common
Stock have been validly issued, are fully paid and nonassessable. Except for
options and warrants to purchase an aggregate 3,599,500 shares of CorVu Common
Stock listed in CorVu Disclosure Schedule, as of the date of this Agreement
there are not any outstanding or authorized subscriptions, options, warrants,
calls, rights, convertible securities, commitments, restrictions, arrangements,
or any other agreements of any character to which CorVu or any CorVu Subsidiary
is a party that, directly or indirectly, (i) obligate CorVu or any CorVu
Subsidiary to issue any shares of capital stock or any securities convertible
into, or exercisable or exchangeable for, or evidencing the right to subscribe
for, any shares of capital stock, (ii) call for or relate to the sale, pledge,
transfer, or other disposition or encumbrance by CorVu or any CorVu Subsidiary
of any shares of its capital stock, or (iii) to the knowledge of CorVu, relate
to the voting or control of such capital stock. The CorVu Disclosure Schedule
sets forth a complete and accurate list of all stock options, warrants, and
other rights to acquire CorVu Common Stock, including the name of the holder,
the date of grant, acquisition price, number of shares, exercisability schedule,
and, in the case of options, the type of option under the Code. No consent of
holders of CorVu Options is required to carry out the provisions of Section 1.7.
4.4 Financial Statements. CorVu's audited consolidated financial
statements at and for the year ended June 30, 1999 and unaudited consolidated
financial statements at and for the quarter ended September 30, 1999
(collectively the "CorVu 1999 Financials"), (i) were prepared in accordance with
US GAAP applied on a consistent basis during the periods involved (except as may
be indicated therein or in the notes thereto or, in the case of unaudited
statements, as permitted by Form 10-QSB of the SEC), and (ii) fairly present in
all material respects the consolidated financial position of CorVu as of the
dates thereof and the income, cash flows, and changes in shareholders' equity
for the periods involved (subject, in the case of unaudited statements, to
normal and recurring year-end adjustments that were not and are not,
individually or in the aggregate, expected to have a CorVu Material Adverse
Effect). The statements of earnings included in the CorVu 1999 Financials do not
contain any items of special or nonrecurring income or any other income not
earned in the ordinary course of business required to be disclosed separately in
accordance with US GAAP, except as expressly specified in the applicable
statement of operations or notes thereto.
4.5 Absence of Undisclosed Liabilities. Neither CorVu nor any CorVu
Subsidiary has any liabilities or obligations of any nature (whether absolute,
accrued, contingent, or otherwise) except (a) liabilities or obligations that
are accrued or reserved against in the audited consolidated balance sheet of
CorVu as of June 30, 1999 contained in CorVu 1999 Financials (the "CorVu Audited
Balance Sheet") or in the notes thereto, (b) liabilities or obligations that are
accrued or reserved against in the unaudited balance sheet of CorVu as of
September 30, 1999 (the "CorVu Interim Balance Sheet"), (c) liabilities incurred
since September 30, 1999 in the ordinary course of business and of a type and in
an amount consistent with past practice, and (d) liabilities or obligations that
would not, individually or in the aggregate, reasonably be expected to have a
CorVu Material Adverse Effect.
4.6 Consents and Approvals. Except for (i) any applicable requirements
of the 1933 Act and state securities laws, (ii) obtaining the Required CorVu
Shareholder Vote, and (iii) the filing and recordation of appropriate merger
documents as required by the MBCA, the authorization and approval by CorVu's
Board of Directors and the execution and delivery by CorVu of this Agreement and
the other agreements contemplated hereby to which CorVu is a party and the
consummation by CorVu of the transactions contemplated hereby and thereby will
not: (a) violate any provision of the Articles of Incorporation or Bylaws of
CorVu or any CorVu Subsidiary; (b) violate any statute, law, rule, regulation,
order, or decree of any federal, state, local, or foreign governmental or
regulatory body or authority (a "Governmental Body") or any nongovernmental
self-regulatory agency) by which CorVu or any CorVu Subsidiary or any of their
respective properties or assets may be bound; (c) require any filing with or
permit, consent, or approval to be obtained from any Governmental Body or any
nongovernmental self-regulatory agency; or (d) result in any violation or breach
of, or constitute (with or without due notice or lapse of time or both) a
default under, result in the loss of any material benefit under, or give rise to
any right of termination, cancellation, increased payments, or acceleration
under, or result in the creation of any Lien (as defined in Section 4.3) on any
of the properties or assets of CorVu or any CorVu Subsidiary under, any of the
terms, conditions, or provisions of any note, bond, mortgage, indenture,
license, franchise, permit, authorization, agreement, or other instrument or
obligation to which CorVu or any CorVu Subsidiary is a party, or by which it or
any of its properties or assets may be bound, except, in the case of clauses
(b), (c) and (d), for any such filings, permits, consents or approvals or
violations, breaches, defaults, or other occurrences that would not,
individually or in the aggregate, reasonably be expected to prevent or delay
consummation of any of the transactions contemplated hereby in any material
respect, or otherwise prevent CorVu from performing its obligations under this
Agreement in any material respect, and would not, individually or in the
aggregate, reasonably be expected to have a CorVu Material Adverse Effect.
Section 4.6 of CorVu Disclosure Schedule lists each note, bond, mortgage,
indenture, license, franchise, permit, authorization, agreement, or other
instrument or obligation to which CorVu or any CorVu Subsidiary is a party, or
by which it or any of its properties or assets may be bound, under or with
respect to which the transactions contemplated by this Agreement will result in
any violation or breach of, or constitute (with or without due notice or lapse
of time or both) a default under, result in the loss of any benefit under, or
give rise to any right of termination, cancellation, increased payments, or
acceleration under, or result in the creation of any Lien on any of the
properties or assets of CorVu or any CorVu Subsidiary, except for violations,
defaults, losses, rights and Liens that would not, individually or in the
aggregate, reasonably be expected to have a CorVu Material Adverse Effect.
4.7 Compliance with Laws. To the best of CorVu's knowledge, neither
CorVu nor any CorVu Subsidiary is in default or violation of any applicable
federal, state, local, or foreign laws, ordinances, regulations,
interpretations, judgments, decrees, injunctions, permits, licenses,
certificates, governmental requirements, orders, or other similar items of any
court or other Governmental Body (and including those of any nongovernmental
self-regulatory agency and including environmental laws or regulations), except
for such defaults or violations that would not, individually or in the
aggregate, reasonably be expected to have a CorVu Material Adverse Effect.
4.8 Litigation. There are no claims, actions, suits, proceedings or, to
the knowledge of CorVu, investigations or reviews of any kind, pending or, to
the knowledge of CorVu, threatened in writing, against CorVu or any CorVu
Subsidiary or any asset or property of CorVu or any CorVu Subsidiary, except for
such claims, actions, suits, proceedings, investigations or reviews that would
not, individually or in the aggregate, reasonably be expected to have a CorVu
Material Adverse Effect.
4.9 Absence of Material Adverse Changes. Since September 30, 1999 there
has not been any (a) CorVu Material Adverse Effect; (b) damage, destruction, or
loss, not covered by insurance, that would, individually or in the aggregate,
reasonably be expected to have a CorVu Material Adverse Effect; or (c) material
change by CorVu or any CorVu Subsidiary in accounting methods or principles used
for financial reporting purposes, except as required by a change in applicable
law or generally accepted accounting principles and concurred with by CorVu's
independent public accountants.
4.10 Officers, Directors and Employees. Prior to the date hereof, CorVu
has provided to MNAC a list that completely and accurately sets forth the name
and current annual salary rate of each officer of CorVu or any CorVu Subsidiary
whose total remuneration for the last fiscal year was, or for the current fiscal
year is expected to be, in excess of $75,000, together with a summary of the
bonuses, commissions, additional compensation, and other like cash benefits, if
any, paid or payable to such persons for the last fiscal year and proposed for
the current fiscal year. The CorVu Disclosure Schedule completely and accurately
sets forth (i) the names of all former officers of CorVu or of any CorVu
Subsidiary whose employment with CorVu or any CorVu Subsidiary has terminated
either voluntarily or involuntarily during the preceding 12-month period; and
(ii) the names of the officers (with all positions and titles indicated) and
directors of CorVu and of each CorVu Subsidiary. Except as would not,
individually or in the aggregate, reasonably be expected to have a CorVu
Material Adverse Effect: (i) no unfair labor practice complaint against CorVu or
any CorVu Subsidiary is pending before the National Labor Relations Board, and
there is no labor strike, slowdown or stoppage pending or, to the knowledge of
CorVu, threatened in writing against or involving CorVu or any CorVu Subsidiary;
(ii) no unionizing efforts have, to the knowledge of CorVu, been made by
employees of CorVu or any CorVu Subsidiary, neither CorVu nor any CorVu
Subsidiary is a party to or subject to any collective bargaining agreement, and
no collective bargaining agreement is currently being negotiated by CorVu or any
CorVu Subsidiary; and (iii) there is no labor dispute pending or, to the
knowledge of CorVu, threatened in writing between CorVu or any CorVu Subsidiary
and its employees.
4.11 Taxes. Except for such matters that, individually or in the
aggregate, would not have a CorVu Material Adverse Effect, (i) CorVu and each
CorVu Subsidiary have filed, or have obtained extensions to file (which
extensions have not expired without filing), all state, local, United States,
foreign, or other tax reports and returns required to be filed by any of them;
(ii) CorVu and each CorVu Subsidiary have duly paid, or accrued on their books
of account, all taxes (including estimated taxes) shown as due on such reports
and returns (or such extension requests), or assessed against them, other than
taxes being contested in good faith in proper proceedings and (iii) the
liabilities and reserves for taxes reflected on the CorVu Audited Balance Sheet
or CorVu Interim Balance Sheet are adequate to cover all taxes payable by CorVu
or any CorVu Subsidiary for all taxable periods and portions thereof ending on
or before the dates thereof. To CorVu's knowledge, no tax audits are pending
against and no claims for taxes have been received in writing by CorVu or any
CorVu Subsidiary, other than audits and claims that, individually and in the
aggregate, are not reasonably expected to have a CorVu Material Adverse Effect.
Neither CorVu nor any CorVu Subsidiary has, with regard to any assets or
property held, acquired or to be acquired by any of them, filed a consent to the
application of Section 341(f)(2) of the Code. Neither CorVu nor any CorVu
Subsidiary has taken or agreed to take any action (other than actions
contemplated by this Agreement) that would prevent the Merger from constituting
a reorganization qualifying under Section 368(a) of the Code. CorVu is not aware
of any agreement, plan or other circumstance that would prevent the Merger from
so qualifying under Section 368(a) of the Code.
4.12 Contracts. The CorVu Disclosure Schedule lists, and CorVu has
heretofore furnished to MNAC complete and accurate copies of (or, if oral, the
CorVu Disclosure Schedule states all material provisions of), (a) every
employment, material consulting, severance or change of control agreement or
arrangement for the benefit of any director, officer, employee, other person or
shareholder of CorVu or any CorVu Subsidiary or any affiliate thereof in effect
as of the date of this Agreement to which CorVu or any CorVu Subsidiary is a
party or by which CorVu or any CorVu Subsidiary or any of their properties or
assets is bound, and (b) every contract, agreement, or understanding to which
CorVu or any CorVu Subsidiary is a party that would reasonably be expected to
involve payments by or to CorVu or any CorVu Subsidiary in excess of $50,000
during CorVu's current 2000 fiscal year or in excess of $100,000 in the
aggregate during CorVu's 2000 and 2001 fiscal years, or would have a CorVu
Material Adverse Effect, or that is material and was not made in the ordinary
course of business. Neither CorVu nor any CorVu Subsidiary is in material
violation of or in default under any contract, plan, agreement, understanding,
arrangement or obligation that is material to CorVu and the CorVu Subsidiaries
considered as a whole, except for such violations or defaults that would not,
individually or in the aggregate, reasonably be expected to have a CorVu
Material Adverse Effect. As of the date of this Agreement, neither CorVu nor any
CorVu Subsidiary is a party to any contract, plan, agreement, understanding,
arrangement or obligation (i) that restricts CorVu's, or after the Merger would
restrict the Surviving Corporation's, ability to conduct any line of business,
or (ii) that imposes on CorVu or any CorVu Subsidiary material obligations not
reflected in the CorVu 1999 Financials.
4.13 Intellectual Property Rights. The CorVu Disclosure Schedule
contains a complete and accurate list of all material patents, trademarks, trade
names, service marks, copyrights, and all applications for or registrations of
any of the foregoing as to which CorVu or any CorVu Subsidiary is the owner or a
licensee (the "CorVu Intellectual Property"). CorVu and each CorVu Subsidiary
owns, free and clear of any Lien (as defined in Section 3.3), other than Liens
granted in connection with CorVu's credit facility and Liens that would not be
reasonably expected to have a CorVu Material Adverse Effect, or is licensed to
use, all patents, trademarks, trade names, service marks, copyrights,
applications for or registrations of any of the foregoing comprising CorVu
Intellectual Property. No claim has been asserted or, to the knowledge of CorVu,
threatened in writing by any person, with respect to the use of CorVu
Intellectual Property or challenging or questioning the validity or
effectiveness of any license or agreement with respect thereto, except for such
claims that, individually or in the aggregate, would not reasonably be expected
to have a CorVu Material Adverse Effect. To the knowledge of CorVu, neither the
use of CorVu Intellectual Property by CorVu or any CorVu Subsidiary in the
present conduct of its business nor any product or service of CorVu or any
Subsidiary infringes on the valid intellectual property rights of any person in
a manner that, individually or in the aggregate, would reasonably be expected to
have a CorVu Material Adverse Effect. Except as would not, individually or in
the aggregate, reasonably be expected to have a CorVu Material Adverse Effect,
(i) all CorVu Intellectual Property listed in the CorVu Disclosure Schedule has
the status indicated therein and, unless provided otherwise, all applications
are still pending in good standing and have not been abandoned, and (ii) to the
knowledge of CorVu, the CorVu Intellectual Property is valid and has not been
challenged in any judicial or administrative proceeding. To the knowledge of
CorVu, no person or entity nor such person's or entity's business or products
has infringed, or misappropriated any CorVu Intellectual Property, or currently
is infringing, or misappropriating any CorVu Intellectual Property, except as
would not, individually or in the aggregate, reasonably be expected to have a
CorVu Material Adverse Effect.
4.14 Year 2000 Compliance. To the best of CorVu's knowledge, all
hardware and software used, and all software developed and sold, by CorVu in the
ordinary course of business is Year 2000 Compatible (as defined in Section
3.14).
4.15 Benefit Plans.
(a) Neither CorVu nor any CorVu Subsidiary sponsors,
maintains, contributes to, or has, within the past five years,
sponsored, maintained, or contributed to or been required to contribute
to, any "employee pension benefit plan" ("Pension Plan"), as such term
is defined in Section 3(2) of ERISA, including, solely for the purpose
of this subsection, a plan excluded from coverage by Section 4(b)(5) of
ERISA. Each such Pension Plan presently maintained by CorVu or any
CorVu Subsidiary is, in all material respects, in compliance with
applicable provisions of ERISA, the Code, and other applicable law and
CorVu or such CorVu Subsidiary has performed all of its obligations
under such Pension Plan except for such obligations that would not,
individually or in the aggregate, reasonably be expected to have a
CorVu Material Adverse Effect.
(b) Neither CorVu nor any CorVu Subsidiary sponsors,
maintains, contributes to, or has, within the past five years,
sponsored, maintained, or contributed to or been required to contribute
to, any Pension Plan that is subject to Title IV of ERISA.
(c) Neither CorVu nor any CorVu Subsidiary sponsors,
maintains, or contributes to any "employee welfare benefit plan"
("Welfare Plan"), as such term is defined in Section 3(1) of ERISA,
whether insured or otherwise, and any such Welfare Plan presently
maintained by CorVu or any CorVu Subsidiary is, in all material
respects, in compliance with the provisions of ERISA, the Code, and all
other applicable laws, including, but not limited to, Section 4980B of
the Code and the regulations thereunder, and Part 6 of Title I of
ERISA. Neither CorVu nor any CorVu Subsidiary has established or
contributed to any "voluntary employees' beneficiary association"
within the meaning of Section 501(c)(9) of the Code.
(d) Neither CorVu nor any CorVu Subsidiary currently maintains
or contributes to any oral or written bonus, profit-sharing,
compensation (incentive or otherwise), commission, stock option, or
other stock-based compensation, retirement, severance, change of
control, vacation, sick or parental leave, dependent care, deferred
compensation, cafeteria, disability, hospitalization, medical, death,
retiree, insurance, or other benefit or welfare or other similar plan,
policy, agreement, trust, fund, or arrangement providing for the
remuneration or benefit of all or any CorVu employees, directors or any
other person, that is neither a Pension Plan nor a Welfare Plan
(collectively, the "CorVu Compensation Plans").
(e) With respect to the Pension Plans, Welfare Plans or CorVu
Compensation Plans, no event has occurred and, to the knowledge of
CorVu, there exists no condition or set of circumstances, in connection
with which CorVu or any CorVu Subsidiary would be subject to any
liability under the terms of such Plans (other than the payment of
benefits thereunder), ERISA, the Code or any other applicable law that
would, individually or in the aggregate, reasonably be expected to have
a CorVu Material Adverse Effect.
(f) The IRS has issued favorable determination letters with
respect to all CorVu and CorVu Subsidiary Pension Plans that are
intended to be qualified under Section 401(a) of the Code. CorVu has
provided or made available to MNAC summaries of all Pension Plans,
Welfare Plans, Compensation Plans, and related agreements, and complete
and accurate copies of all annual reports (Form 5500), favorable
determination letters, current summary plan descriptions, and all
employee handbooks or manuals. CorVu has provided or made available to
MNAC (i) copies of all employment agreements with officers of any of
CorVu or any CorVu Subsidiary (or copies of forms of agreements setting
forth representative employment terms and conditions); (ii) copies of
all severance, bonus or incentive agreements, programs and policies of
any of CorVu or any CorVu Subsidiary with or relating to any of its
employees; and (iii) copies of all plans, programs, agreements and
other arrangements of any of CorVu or any CorVu Subsidiary with or
relating to any of its employees that contain change in control
provisions.
(g) The execution of, and performance of the transactions
contemplated in, this Agreement will not (either alone or upon the
occurrence of any additional or subsequent events) constitute an event
under any CorVu or CorVu Subsidiary Pension Plan, Welfare Plan,
Compensation Plan, or other arrangement 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.
4.16 Minute Books. CorVu has previously made available to MNAC or its
representatives all of the minutes of meetings of and corporate actions or
written consents by the stockholders, Boards of Directors, and committees of the
Boards of Directors of CorVu and each CorVu Subsidiary.
4.17 No Finders. No act of CorVu or any CorVu Subsidiary has given or
will give rise to any claim against any of the parties hereto for a brokerage
commission, finder's fee, or other like payment in connection with the
transactions contemplated herein, except payments to Xxx Xxxxx Financial Co.
L.L.P. ("JAF") as described in the CorVu Disclosure Schedule.
ARTICLE 5.
COVENANTS
5.1 Conduct of Business of MNAC. From the date of this Agreement to the
Effective Date, unless CorVu shall otherwise agree in writing or as otherwise
expressly contemplated or permitted by this Agreement, MNAC shall not, directly
or indirectly: (a) amend or propose to amend its Articles of Incorporation or
Bylaws; (b) issue, sell or grant any of equity securities, or securities
convertible into or exchangeable for MNAC equity securities, other than (i)
grants of stock options to purchase up to an aggregate 25,000 shares of MNAC
Common Stock (net of options terminated or forfeited during such period) at not
less than fair market value at the date of grant, and (ii) issuances of shares
of MNAC Common Stock pursuant to the exercise or conversion of stock options,
warrants or Series A Preferred Stock outstanding on the date of this Agreement
or granted pursuant to clause (i) above); (c) reclassify, subdivide or otherwise
change outstanding shares of capital stock of MNAC whether by stock dividend,
reverse stock split, distribution of securities convertible into MNAC capital
stock or otherwise; (d) acquire (by merger, exchange, consolidation, acquisition
of stock or assets or otherwise) any corporation, partnership, joint venture or
other business organization or division or assets thereof; (e) default in its
obligations under any material debt, contract or commitment which default
results in the acceleration of obligations due thereunder; (f) enter into or
propose to enter into, or modify or propose to modify, any agreement,
arrangement, or understanding with respect to any of the foregoing matters; (g)
declare or pay any dividend or distribution; or (h) conduct its business other
than in the ordinary course on an arm's length basis and in accordance in all
material respects with all applicable laws, rules and regulations and MNAC's
past custom and practice.
5.2 Conduct of Business of CorVu. From the date of this Agreement to
the Effective Date, unless MNAC shall otherwise agree in writing or as otherwise
expressly contemplated or permitted by this Agreement, CorVu shall not, directly
or indirectly: (a) amend or propose to amend its Articles of Incorporation or
Bylaws; (b) issue, sell or grant any of equity securities, or securities
convertible into or exchangeable for CorVu equity securities, other than the (i)
grants of stock options to purchase up to an aggregate 25,000 shares of CorVu
Common Stock (net of options terminated or forfeited during such period) at not
less than fair market value at the date of grant, (ii) the grant of CorVu shares
and warrants to JAF as described in Section 4.17 of the CorVu Disclosure
Schedule, (iii) completion of the proposed bridge financing described in Section
5.2 of the CorVu Disclosure Schedule, and (iv) issuances of shares of CorVu
Common Stock pursuant to the exercise of stock options or warrants outstanding
on the date of this Agreement or granted pursuant to clause (i) above); (c)
reclassify, subdivide or otherwise change outstanding shares of capital stock of
CorVu whether by stock dividend, reverse stock split, distribution of securities
convertible into CorVu capital stock or otherwise; (d) acquire (by merger,
exchange, consolidation, acquisition of stock or assets or otherwise) any
corporation, partnership, joint venture or other business organization or
division or assets thereof; (e) default in its obligations under any material
debt, contract or commitment which default results in the acceleration of
obligations due thereunder; (f) enter into or propose to enter into, or modify
or propose to modify, any agreement, arrangement, or understanding with respect
to any of the foregoing matters; (g) declare or pay any dividend or
distribution; or (h) conduct its business other than in the ordinary course on
an arm's length basis and in accordance in all material respects with all
applicable laws, rules and regulations and CorVu's past custom and practice.
5.3 No Solicitation. MNAC and CorVu shall not, and shall cause their
respective officers, directors, employees, representatives, agents, or
affiliates (including, but not limited to any investment banker, attorney, or
accountant), not to, directly or indirectly, solicit, knowingly encourage,
initiate, or participate in any way in discussions or negotiations with, or
knowingly provide any nonpublic information to, any corporation, partnership,
person, or other entity or group (other than a party to this Agreement)
concerning any proposed Alternative Transaction, or otherwise knowingly
facilitate any effort or attempt to make or implement an Alternative
Transaction. For purposes of this Agreement, "Alternative Transaction" shall
mean any of the following involving MNAC or CorVu, respectively: (i) any tender
offer, exchange offer, merger, consolidation, share exchange, business
combination or similar transaction involving capital stock of MNAC or CorVu,
respectively; (ii) any transaction or series of related transactions pursuant to
which any person or entity (or its shareholders), other than MNAC or CorVu or
their respective affiliates, (a "Third Party") acquires shares (or securities
exercisable for or convertible into shares) representing more than 50% of the
outstanding shares of any class of capital stock of MNAC or CorVu, respectively;
or (iii) any sale, lease, exchange, licensing, transfer or other disposition
pursuant to which a Third Party acquires control of more than 50% of the assets
(including, but not limited to, intellectual property assets) of MNAC or CorVu,
respectively (determined by reference to the fair market value of such assets),
in a single transaction or series of related transactions. MNAC and CorVu will
immediately cease and terminate all discussions, if any, that have taken place
prior to the date hereof with Third Parties concerning any proposed Alternative
Transaction, and will request that such Third Parties promptly return any
confidential information furnished by MNAC or CorVu, respectively. MNAC and
CorVu will not waive any provision of any confidentiality, standstill or similar
agreement entered into with any third party regarding any proposed Alternative
Transaction, and prior to the Closing shall enforce all such agreements in
accordance with their terms. MNAC and CorVu will promptly communicate to each
other the name of the person or entity submitting, and the terms and conditions
of, any proposal or written inquiry that it receives after the date hereof in
respect of any proposed Alternative Transaction or a reasonably detailed
description of any such information requested from it after the date hereof or
of any such negotiations or discussions being sought to be initiated or
continued with MNAC or CorVu, respectively, after the date hereof in respect of
a proposed Alternative Transaction; provided, however, that this Agreement shall
not prohibit the Board of Directors of MANC or CorVu from:
(i) prior to approval of the Merger by its respective shareholders,
furnishing nonpublic information to or affording access to its
properties, books or records, or entering into discussions or
negotiations with, any person or entity that makes an unsolicited
Superior Proposal (as defined below), if, and only to the extent that,
(a) the Board of Directors of MNAC or CorVu, as the case may
be, determines in good faith after consultation with its
independent legal counsel, that such action is so required
under applicable law in order for the Board of Directors or
MNAC or CorVu, as the case may be, to comply with its
applicable fiduciary duties to its shareholders imposed by
law,
(b) prior to first furnishing nonpublic information to, or
first entering into substantive discussions and negotiations
with, such person or entity after the date hereof, MNAC or
CorVu, as the case may be (x) provides at least 24 hours prior
written notice to the other party to the effect that it
intends to furnish information to, or enter into discussions
or negotiations with, such person or entity, and naming and
identifying the person or entity making the Superior Proposal,
and (y) receives from such person or entity an executed
confidentiality agreement to the effect that such Third Party
will not disclose any confidential information of MNAC or
CorVu, as the case may be; and
(c) MNAC or CorVu, as the case may be, concurrently provides
the other party with all non-public information to be provided
to such Third Party that such other party has not previously
received, and MNAC or CorVu, as the case may be, keeps the
other party informed, on a regular basis, of the status, terms
and conditions and all other material information with respect
to any such discussions or negotiations; or
(ii) to the extent applicable, complying with Rule 14e-2 promulgated
under the 1934 Act with regard to a proposed Alternative Transaction or
making such disclosure to its shareholders as in the reasonable
judgment of the Board of Directors of MNAC or CorVu, as the case may
be, with the advice of independent counsel, is required under
applicable law.
Nothing in this Section 5.3 shall (x) permit MNAC or CorVu to terminate this
Agreement (except as specifically provided in Article 7 hereof), or (y) permit
MNAC or CorVu to enter into any agreement providing for an Alternative
Transaction (other than the confidentiality agreement as provided, and in the
circumstances and under the conditions set forth, above) for as long as this
Agreement remains in effect. For purposes of this Agreement, a "Superior
Proposal" shall mean a proposal for an Alternative Transaction that the Board of
Directors of MNAC or CorVu, as the case may be, has reasonably and in good faith
determined (with the advice of its financial advisors and taking into account
all legal, financial and regulatory aspects of the likelihood of the
consummation of such Alternative Transaction, including, but not limited to, the
conditions to consummation and the consequences under such Alternative
Transaction proposal of any material adverse effects or changes in MNAC or
CorVu, as the case may be) to be more favorable to MNAC's or CorVu's,
respectively, shareholders than the transactions contemplated by this Agreement.
5.4 Access and Information.
(a) Except as required pursuant to any confidentiality
agreement or similar agreement or arrangement to which MNAC, CorVu or
any of their respective Subsidiaries is a party (in which case MNAC or
CorVu shall use all commercially reasonable efforts to provide
acceptable alternative arrangements, not in violation of such agreement
or arrangement, for disclosure to the other party) or pursuant to
applicable law, MNAC and CorVu shall afford to the other party, and to
the other party's accountants, officers, directors, employees, counsel,
and other representatives, reasonable access during normal business
hours upon reasonable prior notice, from the date hereof through the
Effective Time, to all of its properties, books, contracts,
commitments, and records, and, during such period, MNAC and CorVu shall
each furnish promptly to the other party all information concerning
MNAC's or CorVu's businesses, prospects, properties, liabilities,
results of operations, financial condition, officers, employees,
investigators, distributors, customers, and suppliers as the other
party may reasonably request and reasonable opportunity to contact and
obtain information from such officers, employees, investigators,
distributors, customers, and suppliers as the other party may
reasonably request. During the period from the date hereof to the
Effective Time, the parties shall in good faith meet and correspond on
a regular basis for mutual consultation concerning the conduct of
MNAC's and CorVu's businesses and, in connection therewith, CorVu and
MNAC shall be entitled, during normal business hours upon reasonable
prior notice and in a manner that does not unreasonably interfere with
the other party's business, to have employees or other representatives
present at the offices of the other party and its subsidiaries to
observe, and be kept informed concerning such other party's operations
and business planning.
(b) Prior to closing and if, for any reason, the transactions
contemplated by this Agreement are not consummated, neither MNAC nor
CorVu nor any of their officers, employees, attorneys, accountants and
other representatives, shall disclose to third parties or otherwise use
any confidential information received from the other party in the
course of investigating, negotiating, and performing the transactions
contemplated by this Agreement; provided, however, that nothing shall
be deemed to be confidential information which:
(i) is known to the party receiving the information
at the time of disclosure;
(ii) becomes publicly known or available without the
disclosure thereof by the party receiving the information in
violation of this Agreement; or
(iii) is rightfully received by the party receiving
the information from a third party.
This provision shall not prohibit the disclosure of information
required to be made under federal or state securities laws. If any
disclosure is so required, the party making such disclosure shall
consult with the other party prior to making such disclosure, and the
parties shall use all reasonable efforts, acting in good faith, to
agree upon a text for such disclosure which is satisfactory to both
parties.
5.5 Approval of MNAC and CorVu Shareholders.
(a) MNAC shall promptly take all action necessary in accordance with
the MBCA and MNAC's Articles of Incorporation and Bylaws to cause a
special meeting of MNAC's shareholders (the "MNAC Shareholders
Meeting") to be duly called and held as soon as reasonably practicable
following the date hereof for the purposes of (i) voting upon the
Merger and the adoption and approval of this Agreement (ii) amending
MNAC's Articles of Incorporation to increase the number of shares
authorized thereunder from 10,000,000 to 100,000,000, and (iii) to the
extent reasonably practicable, approving the sale of MNAC's LockerMate
Subsidiary if required by the MBCA. At such meeting, MNAC shall submit
such items to the vote of the MNAC shareholders and use its reasonable
best efforts to obtain the approval by MNAC's shareholders of each of
such three items. As soon as practicable after the date hereof, MNAC
shall prepare and mail a proxy statement (such proxy statement,
together with notice of meeting, form of proxy, and any letter or other
materials to MNAC's shareholders included therein are referred to in
this Agreement as the "MNAC Proxy Statement"). CorVu shall furnish to
MNAC all information concerning CorVu and its subsidiaries, officers,
directors and shareholders, and shall take such other action and
otherwise cooperate, as MNAC may reasonably request in connection with
such MNAC Proxy Statement. MNAC shall cause the MNAC Proxy Statement to
comply with all applicable laws and not to contain any untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements made therein, in
light of the circumstances under which they were made, not misleading.
The MNAC Proxy Statement shall include the recommendation of MNAC's
Board of Directors in favor of the Merger, unless the Board of
Directors of MNAC determines in good faith after consultation with its
independent legal counsel, that to do so would violate its applicable
fiduciary duties to its shareholders imposed by law. Unless and until
this Agreement is validly terminated pursuant to Article 7, nothing
herein shall limit or eliminate in any way MNAC's obligation to call,
give notice of, convene and hold the MNAC Shareholders Meeting and at
such meeting submit this Agreement and the Merger to a vote of MNAC's
shareholders (and not postpone or adjourn such meeting or the vote by
MNAC's shareholders upon this Agreement and the Merger to another date
without CorVu's approval).
(b) CorVu shall promptly take all action necessary in accordance with
the MBCA and CorVu's Articles of Incorporation and Bylaws to cause a
special meeting of CorVu's shareholders (the "CorVu Shareholders
Meeting") to be duly called and held as soon as reasonably practicable
following the date hereof for the purposes of (i) voting upon the
Merger and the adoption and approval of this Agreement, and (ii)
approving the increase in shares reserved under the CorVu Option Plan
from 1,500,000 to 3,500,000. At such meeting, CorVu shall submit such
items to the vote of the CorVu shareholders and use its best efforts to
obtain the approval by CorVu's shareholders of each of such items. As
soon as practicable after the date hereof, CorVu shall prepare and mail
a proxy statement (such proxy statement, together with notice of
meeting, form of proxy, and any letter or other materials to CorVu's
shareholders included therein are referred to in this Agreement as the
"CorVu Proxy Statement"). MNAC shall furnish to CorVu all information
concerning MNAC and its subsidiaries, officers, directors and
shareholders, and shall take such other action and otherwise cooperate,
as CorVu may reasonably request in connection with such CorVu Proxy
Statement. CorVu shall cause the CorVu Proxy Statement to comply with
all applicable laws and not to contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements made therein, in light of
the circumstances under which they were made, not misleading. The CorVu
Proxy Statement shall include the recommendation of CorVu's Board of
Directors in favor of the Merger, unless the Board of Directors of
CorVu determines in good faith after consultation with its independent
legal counsel, that to do so would violate its applicable fiduciary
duties to its shareholders imposed by law. Unless and until this
Agreement is validly terminated pursuant to Article 7, nothing herein
shall limit or eliminate in any way CorVu's obligation to call, give
notice of, convene and hold the CorVu Shareholders Meeting and at such
meeting submit this Agreement and the Merger to a vote of CorVu's
shareholders (and not postpone or adjourn such meeting or the vote by
CorVu's shareholders upon this Agreement and the Merger to another date
without MNAC's approval).
5.6 Consents. MNAC will, at its cost and expense, use all reasonable
efforts to obtain all approvals and consents of all third parties necessary on
the part of MNAC or any MNAC Subsidiary to consummate the transactions
contemplated hereby. CorVu agrees to cooperate with MNAC in connection with
obtaining such approvals and consents. CorVu will, at its cost and expense, use
all reasonable efforts to obtain all approvals and consents of all third parties
necessary on the part of CorVu or any CorVu Subsidiary to consummate the
transactions contemplated hereby. MNAC agrees to cooperate with CorVu in
connection with obtaining such approvals and consents.
5.7 Further Actions. Subject to the terms and conditions herein
provided and without being required to waive any conditions herein (whether
absolute, discretionary, or otherwise), each of the parties hereto agrees to use
its reasonable best efforts to take, or cause to be taken, all action, and to
do, or cause to be done, all things necessary, proper, or advisable to
consummate and make effective the transactions contemplated by this Agreement.
In case at any time after the Effective Time any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper officers and
directors of each party to this Agreement shall take all such necessary action.
5.8 Regulatory Approvals. MNAC and CorVu each agree to use commercially
reasonable efforts to take, or cause to be taken, all appropriate action, and
do, or cause to be done, all things as may be necessary under applicable laws or
regulations for the consummation of the Merger or any of the other transactions
contemplated hereby, and each party shall give the other information reasonably
requested by such other party pertaining to it and its subsidiaries and
affiliates to enable such other party to take such actions.
5.9 Certain Notifications. MNAC shall promptly notify CorVu in writing
of the occurrence of any event that will or could reasonably be expected to
result in the failure by MNAC or its affiliates to satisfy any of the conditions
specified in Section 6.1 or 6.2. CorVu shall promptly notify MNAC in writing of
the occurrence of any event that will or could reasonably be expected to result
in the failure by CorVu or its affiliates to satisfy any of the conditions
specified in Section 6.1 or 6.3.
5.10 Securities Laws. MNAC shall take any action required to be taken
under 1933 Act or state blue sky or securities laws in connection with the
issuance of MNAC Common Stock pursuant to the Merger.
5.11 Disposition of MNAC Subsidiaries. Prior to the Effective Time,
MNAC will sell, transfer or otherwise dispose of substantially all of the assets
or capital stock of LockerMate Corp., a Minnesota corporation and wholly-owned
subsidiary of MNAC ("LockerMate"). Prior to the Effective Time, MNAC will also
sell, transfer or otherwise dispose of substantially all of the assets or
capital stock of Favorite Memories, Inc., a Minnesota corporation and
wholly-owned subsidiary of MNAC ("Favorite Memories"). MNAC will use its
reasonable best efforts to maximize the present value (as calculated pursuant to
Section 6.2(c)) of the sales price or disposal value of each of LockerMate and
Favorite Memories.
5.12 Resignations and Elections of Directors. At the Effective Time,
MNAC will deliver the voluntary resignations of each officer of MNAC and each
director of MNAC who is not designated to be a director of the Surviving
Corporation in accordance with Section 1.11. The continuing MNAC directors shall
appoint the other persons designated by CorVu to be directors of the Surviving
Corporation upon the consummation of the Merger.
5.13 Registration Rights Agreement. At the Effective Date, MNAC shall
execute and deliver the Registration Rights Agreement in the form of the
attached Exhibit D.
5.14 Plan of Reorganization. This Agreement is intended to constitute a
"plan of reorganization" within the meaning of Section 1.368-2(g) of the income
tax regulations promulgated under the Code. From and after the date of this
Agreement, each party hereto shall use all reasonable efforts to cause the
Merger to qualify, and shall not, without the prior written consent of the other
parties hereto, knowingly take any actions or cause any actions to be taken that
could prevent the Merger from qualifying as a reorganization under the
provisions of Section 368(a) of the Code.
5.15 Directors and Officer Liability. For six years after the Effective
Time, the Surviving Corporation will indemnify and hold harmless the present and
former officers and directors of each of MNAC and CorVu in respect of acts or
omissions occurring prior to the Effective Time including, without limitation,
matters related to the transactions contemplated by this Agreement, to the
extent provided under MNAC's articles of incorporation and bylaws in effect on
the date hereof, provided that such indemnification shall be subject to any
limitation imposed from time to time under applicable law. For six years after
the Effective Time, the Surviving Corporation will use its best efforts to
provide officers' and directors' liability insurance in respect of acts or
omissions occurring prior to and including the Effective Time covering each such
person currently covered by MNAC's officers' and directors' liability insurance
policy, and each present and former officer or director of CorVu, on terms with
respect to coverage and amount no less favorable than those of MNAC's policy in
effect on the date hereof, provided that, in satisfying its obligation under
this Section, the Surviving Corporation shall not be obligated to pay premiums
in excess of 200% of the amount per annum MNAC paid in its last full fiscal
year, which amount has been disclosed to CorVu. It is understood that such
obligation to indemnify (but not to maintain insurance) shall apply to claims of
which the Surviving Corporation shall have been notified prior to the expiration
of such six-year period regardless of when such claims shall have been disposed
of.
ARTICLE 6.
CLOSING CONDITIONS
6.1 Conditions to Obligations of CorVu and MNAC. The respective
obligations of each party to consummate the Merger shall be subject to the
fulfillment at or prior to the Closing of the following conditions, any or all
of which may be waived, in whole or in part, to the extent permitted by
applicable law:
(a) No Injunction. Neither CorVu nor MNAC shall be subject to
any final order, decree, or injunction of a court of competent
jurisdiction within the United States that is then in effect and (i)
has the effect of making the Merger illegal or otherwise prohibiting
the consummation of the Merger, or (ii) would impose any material
limitation on the ability of the Surviving Corporation to effectively
operate the CorVu business.
(b) Shareholder Approval. The approval of the shareholders of
MNAC and CorVu referred to in Section 5.5 hereof shall have been
obtained, in accordance with the MBCA and MNAC's and CorVu's respective
Articles of Incorporation and Bylaws.
(c) Exemption From Registration. The issuance of the Merger
Shares shall be exempt from registration under the 1933 Act and
applicable state and foreign securities laws.
6.2 Conditions to Obligations of CorVu. The obligations of CorVu to
consummate the Merger shall be subject to the fulfillment at or prior to the
Closing of the following additional conditions, any or all of which may be
waived by CorVu, in whole or in part, to the extent permitted by applicable law:
(a) Representations and Warranties True. The representations
and warranties of MNAC contained in this Agreement, without regard to
any qualification or reference to "MNAC Material Adverse Effect," shall
be true and correct on the Closing Date as though such representations
and warranties were made on such date, except that those
representations and warranties that address matters only as of the date
hereof or another particular date shall remain true and correct as of
such date, and except in any case for any inaccuracies of
representations and warranties that, individually or in the aggregate,
have not had, or would not reasonably be expected to have, a MNAC
Material Adverse Effect. CorVu shall have received a certificate to the
foregoing effect signed by the Chief Executive Officer of MNAC.
(b) Performance. MNAC shall have performed and complied in all
material respects with all material covenants required by this
Agreement to be performed or complied with by it on or prior to the
Closing, and CorVu shall have received a certificate to such effect
signed by the Chief Executive Officer of MNAC.
(c) Minimum Consideration and Net Worth. MNAC shall have sold,
transferred or otherwise disposed of all or substantially all of the
assets and liabilities or capital stock of its two wholly-owned
subsidiaries, LockerMate and Favorite Memories, and, after giving
effect to such transactions, shall have as of the Closing (i) a
consolidated net worth of at least $1,000,000, (ii) cash of at least
$750,000, and (iii) cash, plus the discounted present value of accounts
and notes receivable and future contract payments, minus current
liabilities, minus any non-balance sheet liabilities, and minus any
severance or pension plan liabilities described in Section 3.15 of the
MNAC Disclosure Schedule, equal to or greater than in the aggregate
$1,000,000. For purposes of this Agreement, present value shall be
calculated as follows: (i) 25% annual discount rate for notes
receivable and unconditional contract payments, and 50% annual discount
rate for performance-related, conditional contract payments, using
zero-growth projections.
(d) Tax Opinion. CorVu shall have received an opinion of
Xxxxxxxxxx & Xxxxx, P.A., counsel to CorVu, addressed to CorVu, based
upon representations of CorVu and MNAC and normal assumptions, and
dated the Closing, to the effect that, subject to customary conditions
and representations, the Merger will be treated for federal income tax
purposes as a reorganization within the meaning of Section 368(a) of
the Code, and that each of CorVu and MNAC will be considered a party to
such reorganization. CorVu and MNAC hereby agree to provide to such
counsel certificates acceptable to such counsel setting forth the
customary representations which may be relied upon by such counsel in
rendering such opinion.
(e) MNAC Dissenting Shares. The percentage of outstanding
shares of MNAC Common Stock or Preferred Stock (on an as converted
basis) held by MNAC shareholders who have (i) asserted dissenters'
rights pursuant to Sections 302A.471 and 302A.473 of the MBCA and (ii)
as of the Effective Time, have not effectively withdrawn or lost such
rights, shall not exceed five percent (5%) of the issued and
outstanding shares of MNAC Common Stock.
(f) MNAC Financials. MNAC's audited financials for the year
ended September 30, 1999, if not delivered in final form to CorVu prior
to the date hereof, shall not contain any material adverse changes from
the preliminary version thereof previously delivered to CorVu.
6.3 Conditions to Obligations of MNAC. The obligation of MNAC to
consummate the Merger shall be subject to the fulfillment at or prior to the
Closing of the following additional conditions, any or all of which may be
waived by MNAC, in whole or in part, to the extent permitted by applicable law:
(a) Representations and Warranties True. The representations
and warranties of CorVu contained in this Agreement, without regard to
any qualification or reference to "CorVu Material Adverse Effect,"
shall be true and correct on the Closing Date as though such
representations and warranties were made on such date, except that
those representations and warranties that address matters only as of a
particular date shall remain true and correct as of such date, and
except in any case for any inaccuracies of representations and
warranties that, individually or in the aggregate, have not had, or
would not reasonably be expected to have, a CorVu Material Adverse
Effect. MNAC shall have received a certificate to the foregoing effect
signed by the Chief Executive Officer of CorVu.
(b) Performance. CorVu shall have performed and complied in
all material respects with all material covenants required by this
Agreement to be performed or complied with by it on or prior to the
Closing, and MNAC shall have received a certificate to such effect
signed by the Chief Executive Officer of CorVu.
(c) CorVu Dissenting Shares. The percentage of outstanding
shares of CorVu Common Stock held by CorVu shareholders who have (i)
asserted dissenters' rights pursuant to Sections 302A.471 and 302A.473
of the MBCA and (ii) as of the Effective Time, have not effectively
withdrawn or lost such rights, shall not exceed five percent (5%) of
the issued and outstanding shares of CorVu Common Stock.
(d) CorVu Financials. CorVu's audited financials for the year
ended June 30, 1999, if not delivered in final form to MNAC prior to
the date hereof, shall not contain any material adverse changes from
the preliminary version thereof previously delivered to MNAC.
ARTICLE 7.
TERMINATION AND ABANDONMENT
7.1 Termination. This Agreement may be terminated at any time prior to
the Effective Time, whether before or after approval by the shareholders of MNAC
and/or CorVu, only:
(a) by mutual written consent duly authorized by the Board of
Directors of CorVu and the Board of Directors of MNAC;
(b) by either CorVu or MNAC if the Merger shall not have been
consummated on or before January 15, 2000; provided, however, that the
terminating party shall not have breached in any material respect its
obligations under this Agreement in any manner that shall have been the
proximate cause of, or resulted in, the failure to consummate the
Merger by such date;
(c) by either CorVu or MNAC if a court of competent
jurisdiction or an administrative, governmental, or regulatory
authority has issued a final nonappealable order, decree, or ruling, or
taken any other action, having the effect of permanently restraining,
enjoining, or otherwise prohibiting the Merger;
(d) by either MNAC or CorVu if at the MNAC Shareholders
Meeting, the requisite vote of the shareholders of MNAC for approval
and adoption of this Agreement and the Merger is not obtained; provided
that the right to terminate this Agreement under this Section 7.1(d)
will not be available to any party whose failure to perform any
material obligation under this Agreement has been the proximate cause
of, or resulted in, the failure to obtain the requisite vote of the
shareholders of MNAC;
(e) by either MNAC or CorVu if at the CorVu Shareholders
Meeting, the requisite vote of the shareholders of CorVu for approval
and adoption of this Agreement and the Merger is not obtained; provided
that the right to terminate this Agreement under this Section 7.1(e)
will not be available to any party whose failure to perform any
material obligation under this Agreement has been the proximate cause
of, or resulted in, the failure to obtain the requisite vote of the
shareholders of CorVu;
(f) by CorVu if either (i) MNAC has breached its obligations
under Section 5.3 in any material respect (provided that for the
purposes of this clause (i), actions of representatives or agents of
MNAC who are not officers, directors or employees of MNAC which do not
result in a proposal for an Alternative Transaction shall not be deemed
to be a breach of Section 5.3 so long as MNAC has used commercially
reasonable efforts to cause such representatives and agents to comply
with Section 5.3), (ii) the Board of Directors of MNAC has recommended,
approved, or authorized MNAC's acceptance or execution of a definitive
agreement providing for, an Alternative Transaction, as defined in
Section 5.3, (iii) the Board of Directors of MNAC has modified in a
manner materially adverse to CorVu or withdrawn its approval or
recommendation of this Agreement and the Merger or its recommendation
that shareholders of MNAC adopt and approve this Agreement and the
Merger, (iv) MNAC has failed to call the MNAC Shareholders Meeting or
failed to mail the MNAC Proxy Statement to its shareholders within 30
days after the date of this Agreement or failed to include in such
statement the recommendation referred to above, or (v) a tender offer
or exchange offer for any outstanding shares of MNAC Common Stock is
commenced, and the Board of Directors of MNAC either (A) recommends in
favor of acceptance of such tender offer or exchange offer by its
shareholders, or (B) takes no position with respect to the acceptance
of such tender offer or exchange offer by its shareholders;
(g) by MNAC if either (i) CorVu has breached its obligations
under Section 5.3 in any material respect (provided that for purposes
of this clause (i), actions of representatives or agents of CorVu who
are not officers, directors or employees of CorVu which do not result
in a proposal for an Alternative Transaction shall not be deemed to be
a breach of Section 5.3 so long as CorVu has used commercially
reasonable efforts to cause such representatives and agents to comply
with Section 5.3), (ii) the Board of Directors of CorVu has
recommended, approved, or authorized CorVu's acceptance or execution of
a definitive agreement providing for, an Alternative Transaction, as
defined in Section 5.3, (iii) the Board of Directors of CorVu has
modified in a manner materially adverse to MNAC or withdrawn its
approval or recommendation of this Agreement and the Merger or its
recommendation that shareholders of CorVu adopt and approve this
Agreement and the Merger, (iv) CorVu has failed to call the CorVu
Shareholders Meeting or failed to mail the CorVu Proxy Statement to its
shareholders within 30 days after the date of this Agreement or failed
to include in such statement the recommendation referred to above, or
(v) a tender offer or exchange offer for any outstanding shares of
CorVu Common Stock is commenced, and the Board of Directors of CorVu
either (A) recommends in favor of acceptance of such tender offer or
exchange offer by its shareholders, or (B) takes no position with
respect to the acceptance of such tender offer or exchange offer by its
shareholders;
(h) by MNAC prior to approval of the Merger at the MNAC
Shareholder Meeting if (i) it is not in material breach of its
obligations under this Agreement and has complied with, and continues
to comply with, all requirements and procedures of Section 5.3 in all
material respects, (ii) the Board of Directors of MNAC has complied
with, and continues to comply with, all requirements and procedures of
Section 5.3 in all material respects and has authorized, subject to
complying with the terms of this Agreement, MNAC to enter into a
binding written agreement concerning a transaction that constitutes a
Superior Proposal and MNAC notifies CorVu in writing that it intends to
enter into such agreement, attaching the most current version of such
agreement to such notice, (iii) CorVu does not make, within five
business days after receipt of MNAC's written notice of its intention
to enter into a binding agreement for a Superior Proposal, any offer
that the Board of Directors of MNAC reasonably and in good faith
determines, after consultation with its financial and legal advisors,
is at least as favorable to the shareholders of MNAC as the Superior
Proposal and during such five business-day period MNAC reasonably
considers and discusses in good faith all proposals submitted by CorVu
and, without limiting the foregoing, meets with, and causes its
financial advisors and legal advisors to meet with, CorVu and its
advisors from time to time as requested by CorVu to reasonably consider
and discuss in good faith CorVu's proposals, and (iv) MNAC pays to
CorVu the fee required by Section 7.2(a) to be paid to CorVu in the
manner therein provided. MNAC agrees (x) that it will not enter into a
binding agreement referred to in clause (ii) above until at least the
sixth business day after CorVu has received the notice required by
clause (ii) above, and (y) to notify CorVu promptly if its intention to
enter into a binding agreement referred to in its notice to CorVu shall
change at any time after giving such notice;
(i) by CorVu prior to approval of the Merger at the CorVu
Shareholder Meeting if (i) it is not in material breach of its
obligations under this Agreement and has complied with, and continues
to comply with, all requirements and procedures of Section 5.3 in all
material respects, (ii) the Board of Directors of CorVu has complied
with, and continues to comply with, all requirements and procedures of
Section 5.3 in all material respects and has authorized, subject to
complying with the terms of this Agreement, CorVu proposes to enter
into a binding written agreement concerning a transaction that
constitutes a Superior Proposal and CorVu notifies MNAC in writing that
it intends to enter into such agreement, attaching the most current
version of such agreement to such notice, (iii) MNAC does not make,
within five business days after receipt of CorVu's written notice of
its intention to enter into a binding agreement for a Superior
Proposal, any offer that the Board of Directors of CorVu reasonably and
in good faith determines, after consultation with its financial and
legal advisors, is at least as favorable to the shareholders of CorVu
as the Superior Proposal and during such five business-day period CorVu
reasonably considers and discusses in good faith all proposals
submitted by MNAC and, without limiting the foregoing, meets with, and
causes its financial advisors and legal advisors to meet with, MNAC and
its advisors from time to time as requested by MNAC to reasonably
consider and discuss in good faith MNAC's proposals, and (iv) CorVu
pays to MNAC the fee required by Section 7.2(b) to be paid to MNAC in
the manner therein provided. CorVu agrees (x) that it will not enter
into a binding agreement referred to in clause (ii) above until at
least the sixth business day after MNAC has received the notice
required by clause (ii) above, and (y) to notify MNAC promptly if its
intention to enter into a binding agreement referred to in its notice
to MNAC shall change at any time after giving such notice;
(j) by CorVu, if (i) CorVu is not in material breach of its
obligations under this Agreement and (ii) there has been a material
breach by MNAC of any of its representations, warranties, or
obligations under this Agreement such that the conditions in Section
6.2 will not be satisfied ("Terminating MNAC Breach"); provided,
however, that, if such Terminating MNAC Breach is curable by MNAC
through the exercise of reasonable best efforts and such cure is
reasonably likely to be completed prior to the applicable date
specified in Section 7.1(b), then for so long as MNAC continues to
exercise reasonable best efforts, CorVu may not terminate this
Agreement under this Section 7.1(j); or
(k) by MNAC, if (i) MNAC is not in material breach of its
obligations under this Agreement and (ii) there has been a material
breach by CorVu of any of its representations, warranties, or
obligations under this Agreement such that the conditions in Section
6.3 will not be satisfied ("Terminating CorVu Breach"); provided,
however, that, if such Terminating CorVu Breach is curable by CorVu
through the exercise of reasonable best efforts and such cure is
reasonably likely to be completed prior to the applicable date
specified in Section 7.1(b), then for so long as CorVu continues to
exercise reasonable best efforts, MNAC may not terminate this Agreement
under this Section 7.1(k); or
7.2 Effect of Termination.
(a) In recognition of the time, efforts, and expenses expended
and incurred by CorVu with respect to MNAC and the opportunity that the
Merger presents to CorVu, if this Agreement is terminated pursuant to
Section 7.1(d) and within 12 months thereafter MNAC enters into an
agreement for an Alternative Transaction, or is terminated pursuant to
Sections 7.1(f) or 7.1(h) then, in any such event, MNAC will pay to
CorVu, upon the termination date, by wire transfer of immediately
available funds to an account designated by CorVu for such purpose), a
fee equal to $250,000.
(b) In recognition of the time, efforts, and expenses expended
and incurred by MNAC with respect to CorVu and the opportunity that the
Merger presents to MNAC, if this Agreement is terminated pursuant to
Section 7.1(e) and within 12 months thereafter CorVu enters into an
agreement for an Alternative Transaction, or is terminated pursuant to
Sections 7.1(g) or 7.1(i) then, in any such event, CorVu will pay to
MNAC, upon the termination date, by wire transfer of immediately
available funds to an account designated by MNAC for such purpose), a
fee equal to $250,000.
(c) MNAC and CorVu each acknowledges that the agreements
contained in this Section 7.2 are an integral part of the transactions
contemplated by this Agreement and are not a penalty, and that, without
these agreements, neither MNAC nor CorVu would not enter into this
Agreement. If either party fails to pay promptly the fee due pursuant
to this Section 7.2, such party shall also pay to the other party such
other party's costs and expenses (including legal fees and expenses) in
connection with any action, including the filing of any lawsuit or
other legal action, taken to collect payment, together with interest on
the amount of the unpaid fee under this section, accruing from its due
date, at an interest rate per annum equal to two percentage points in
excess of the prime commercial lending rate quoted by Norwest Bank
Minnesota, N.A. Any change in the interest rate hereunder resulting
from a change in such prime rate shall be effective at the beginning of
the day of such change in such prime rate.
(d) Except as provided in the next sentence of this paragraph,
in the event of the termination of this Agreement pursuant to any
paragraph of Section 7.1, the obligations of the parties to consummate
the Merger will expire, and none of the parties will have any further
obligations under this Agreement except pursuant to Sections 5.4, 7.2,
8.10 and 8.14; provided that nothing herein shall relieve any party
from liability for the breach of any of its representations,
warranties, covenants or agreements set forth herein occurring prior to
the date of termination.
ARTICLE 8.
MISCELLANEOUS
8.1 Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified, or supplemented only by written agreement of
CorVu, and MNAC at any time prior to the Effective Time with respect to any of
the terms contained herein; provided, however, that, after the approval of this
Agreement by the shareholders of CorVu, no amendment may be made that would
reduce the amount or change the type of consideration into which each share of
CorVu Common Stock shall be converted upon consummation of the Merger or which
would otherwise require stockholder approval under applicable law unless such
stockholder approval shall have been obtained. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto.
8.2 Waiver of Compliance; Consents. Any failure of CorVu on the one
hand, or MNAC on the other hand, to comply with any obligation, covenant,
agreement, or condition herein may be waived by MNAC or CorVu, respectively,
only by a written instrument signed by an officer of the party granting such
waiver, but such waiver or failure to insist upon strict compliance with such
obligation, covenant, agreement, or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing.
8.3 Investigation; Survival of Representations and Warranties. The
respective representations and warranties of CorVu and MNAC contained herein or
in any certificates or other documents delivered prior to or at the Closing
shall not be deemed waived or otherwise affected by any investigation made by
any party hereto. The representations and warranties set forth in Articles 3 and
4 and in any certificate delivered pursuant hereto shall terminate at the
Effective Time.
8.4 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given when delivered personally by commercial
courier service or otherwise, or by telecopier, or three days after such notice
is mailed by registered or certified mail (return receipt requested) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) if to CorVu to it at:
CorVu Corporation
Attention: Xxxxx Xxxxxxx
0000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxxxx, XX 00000
Fax: (000) 000-0000
with a copy to
Xxxxxxxxxx & Xxxxx, P.A.
Attention: Xxxx X. Xxxxx
1100 International Centre
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
Fax: (000) 000-0000
(b) If to MNAC, to it at:
Minnesota American, Inc.
Attention: Xxxxxx XxXxxxx
00000 Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxxxxxxx Xxxxx & Xxxxxxxx
Attention: Xxxxxxx X. Xxxxxx
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Fax: (000) 000-0000
8.5 Assignment. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests, or obligations hereunder shall be assigned by any of
the parties hereto without the prior written consent of the other parties.
Except for the provisions of Article I (the "Third Party Provisions"), this
Agreement is not intended to confer upon any other person, except the parties
hereto, any rights or remedies hereunder, and no third person shall be a third
party beneficiary of this Agreement. The Third Party Provisions may be enforced
by the beneficiaries thereof.
8.6 Governing Law. This Agreement shall be governed by the laws of the
State of Minnesota (regardless of the laws that might otherwise govern under
applicable Minnesota principles of conflicts of law).
8.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
8.8 Knowledge. As used in this Agreement or the instruments,
certificates or other documents required hereunder, the term "knowledge" of a
party hereto shall mean actual knowledge of the directors or executive officers
of such party.
8.9 Interpretation. The Table of Contents, article and section headings
contained in this Agreement are inserted for reference purposes only and shall
not affect the meaning or interpretation of this Agreement. This Agreement shall
be construed without regard to any presumption or other rule requiring the
resolution of any ambiguity regarding the interpretation or construction hereof
against the party causing this Agreement to be drafted.
8.10 Publicity. Upon execution of this Agreement by CorVu and MNAC, the
parties shall jointly issue a press release, as agreed upon by them. The parties
intend that all future statements or communications to the public or press
regarding this Agreement or the Merger will be mutually agreed upon by them,
except as provided in the following sentence. Neither party shall, without such
mutual agreement or the prior consent of the other, file any documents or issue
any statement or communication to the public or to the press regarding this
Agreement, or any of the terms, conditions, or other matters with respect to
this Agreement, except as required by law and then only (a) upon the advice of
such party's legal counsel; (b) to the extent required by law; and (c) following
prior notice to, and consultation with, the other party (which notice shall
include a copy of the proposed statement or communication to be issued to the
press or public). The foregoing shall not restrict CorVu's or MNAC's
communications with their employees or customers in the ordinary course of
business.
8.11 Entire Agreement. This Agreement, including the exhibits and
schedules hereto, embodies the entire agreement and understanding of the parties
hereto in respect of the subject matter contained herein. This Agreement
supersedes all prior agreements and the understandings between the parties with
respect to such subject matter.
8.12 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of Law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated by this Agreement is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in a mutually acceptable
manner in order that the transactions contemplated by this Agreement be
consummated as originally contemplated to the fullest extent possible.
8.13 Specific Performance. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
8.14 Expenses. Except as otherwise provided in this Agreement, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such costs
and expenses.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement and
Plan of Reorganization as of the date first above written.
CORVU CORPORATION
By: /s/ Xxxx Xxxxxxx
Its: Chief Financial Officer
MINNESOTA AMERICAN, INC.
By: /s/ Xxxxxx XxXxxxx
Xxxxxx XxXxxxx, Chairman and
Chief Executive Officer
