EXHIBIT (d)(1)
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AGREEMENT AND PLAN OF MERGER
dated as of
May 11, 2001
among
DIMENSION DATA HOLDINGS PLC,
PROXICOM, INC.
and
PUTTER ACQUISITION CORP.
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TABLE OF CONTENTS
Page
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ARTICLE 1 THE OFFER...............................................................1
SECTION 1.01. The Offer....................................................1
SECTION 1.02. Company Action...............................................2
SECTION 1.03. Directors....................................................3
ARTICLE 2 THE MERGER..............................................................4
SECTION 2.01. The Merger...................................................4
SECTION 2.02. Conversion of Shares.........................................4
SECTION 2.03. Surrender and Payment........................................4
SECTION 2.04. Dissenting Shares............................................5
SECTION 2.05. Stock Options................................................6
SECTION 2.06. Employee Stock Purchase Plan.................................6
SECTION 2.07. Adjustments..................................................7
SECTION 2.08. Withholding Rights...........................................7
SECTION 2.09. Lost Certificates............................................7
ARTICLE 3 THE SURVIVING CORPORATION...............................................7
SECTION 3.01. Certificate of Incorporation.................................7
SECTION 3.02. Bylaws.......................................................7
SECTION 3.03. Directors and Officers.......................................7
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY...........................8
SECTION 4.01. Corporate Existence and Power................................8
SECTION 4.02. Corporate Authorization......................................8
SECTION 4.03. Governmental Authorization...................................8
SECTION 4.04. Non-Contravention............................................9
SECTION 4.05. Capitalization...............................................9
SECTION 4.06. Subsidiaries.................................................9
SECTION 4.07. SEC Filings.................................................10
SECTION 4.08. Financial Statements........................................10
SECTION 4.09. Disclosure Documents........................................11
SECTION 4.10. Absence of Certain Changes..................................11
SECTION 4.11. No Undisclosed Material Liabilities.........................13
SECTION 4.12. Litigation..................................................13
SECTION 4.13. Taxes.......................................................13
SECTION 4.14. ERISA.......................................................14
SECTION 4.15. Compliance with Laws........................................16
SECTION 4.16. Finders' Fees...............................................16
SECTION 4.17. Patents and Other Proprietary Rights........................16
SECTION 4.18. Environmental Matters.......................................17
SECTION 4.19. Antitakeover Provisions.....................................18
SECTION 4.20. Rights Agreement or Plan....................................18
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ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF PARENT...............................18
SECTION 5.01. Corporate Existence and Power...............................18
SECTION 5.02. Corporate Authorization.....................................18
SECTION 5.03. Governmental Authorization..................................19
SECTION 5.04. Non-Contravention...........................................19
SECTION 5.05. Disclosure Documents........................................19
SECTION 5.06. Finders' Fees...............................................20
SECTION 5.07. Financing...................................................20
ARTICLE 6 COVENANTS OF THE COMPANY...............................................20
SECTION 6.01. Conduct of the Company......................................20
SECTION 6.02. Stockholder Meeting; Proxy Material.........................21
SECTION 6.03. Access to Information.......................................21
SECTION 6.04. Other Offers................................................21
SECTION 6.05. Section 16 Matters..........................................23
SECTION 6.06. Notice of Certain Events....................................23
ARTICLE 7 COVENANTS OF PARENT....................................................24
SECTION 7.01. Obligations of Merger Subsidiary............................24
SECTION 7.02. Director and Officer Liability..............................24
SECTION 7.03. Employees...................................................24
SECTION 7.04. Notice of Certain Events....................................25
ARTICLE 8 COVENANTS OF PARENT AND THE COMPANY....................................26
SECTION 8.01. Reasonable Best Efforts.....................................26
SECTION 8.02. Certain Filings.............................................26
SECTION 8.03. Public Announcements........................................26
SECTION 8.04. Merger Without Meeting of Stockholders......................26
ARTICLE 9 CONDITIONS TO THE MERGER...............................................27
SECTION 9.01. Conditions to the Obligations of Each Party.................27
ARTICLE 10 TERMINATION...........................................................27
SECTION 10.01. Termination.................................................27
SECTION 10.02. Effect of Termination.......................................28
ARTICLE 11 MISCELLANEOUS.........................................................29
SECTION 11.01. Notices.....................................................29
SECTION 11.02. Survival....................................................29
SECTION 11.03. Amendments; No Waivers......................................30
SECTION 11.04. Fees and Expenses...........................................30
SECTION 11.05. Successors and Assigns......................................30
SECTION 11.06. Governing Law...............................................31
SECTION 11.07. Jurisdiction................................................31
SECTION 11.08. WAIVER OF JURY TRIAL........................................31
SECTION 11.09. Counterparts; Effectiveness; Third Party Beneficiaries......31
SECTION 11.10. Entire Agreement............................................31
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SECTION 11.11. Severability................................................31
SECTION 11.12. Specific Performance........................................32
SECTION 11.13. Definitions.................................................32
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of May 11, 2001 among Dimension
Data Holdings plc, a corporation incorporated in England and Wales ("PARENT"),
Proxicom, Inc. , a Delaware corporation (the "COMPANY"), and Putter Acquisition
Corp., a Delaware corporation and an indirect wholly-owned subsidiary of Parent
("MERGER SUBSIDIARY").
WHEREAS, the Agreement and Plan of Merger dated as of April 26, 2001
among the Company, Compaq Computer Corporation and PFC Acquisition Corp. has
been terminated by the Company pursuant to the terms thereof and the Company has
paid to Compaq Computer Corporation the termination fee thereunder;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
THE OFFER
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SECTION 1.01. The Offer. (a) Provided that nothing shall have occurred
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that, had the Offer referred to below been commenced, would give rise to a right
to terminate the Offer pursuant to any of the conditions set forth in Annex I
hereto, within five business days after the date hereof, Merger Subsidiary shall
commence an offer (the "OFFER") to purchase all of the outstanding shares of
common stock, par value $0.01 per share, of the Company (the "COMPANY STOCK") at
a price of $7.50 per share, net to the seller in cash. The Offer shall be
subject to the condition that there shall be validly tendered in accordance with
the terms of the Offer, prior to the expiration date of the Offer and not
withdrawn, a number of shares of Company Stock that, together with the shares of
Company Stock then owned by Parent and its Affiliates, represents at least a
majority of the shares of Company Stock outstanding on a fully-diluted basis
(the "MINIMUM CONDITION") and to the other conditions set forth in Annex I
hereto. Merger Subsidiary expressly reserves the right to waive any of the
conditions to the Offer and to make any change in the terms of or conditions to
the Offer; provided that, without the prior written consent of the Company, (i)
the Minimum Condition may not be waived and (ii) no change may be made that
changes the form of consideration to be paid, decreases the price per share of
Company Stock or the number of shares of Company Stock sought in the Offer or
imposes conditions to the Offer in addition to those set forth in Annex I. If
any of the conditions to the Offer is not satisfied or waived on any scheduled
expiration date of the Offer, Merger Subsidiary shall extend the Offer from time
to time until such conditions are satisfied or waived; provided that Merger
Subsidiary shall not be required to extend the Offer beyond August 1, 2001. Any
individual extension of the Offer pursuant to the preceding sentence shall not
exceed 10 business days. If at the expiration of the Offer all of the conditions
to the Offer have been satisfied or waived, Merger Subsidiary may (and if the
number of shares of Company Stock validly tendered and not withdrawn pursuant to
the Offer equals 80% or more, but less than 90% of the outstanding shares of
Company Stock, shall) extend the Offer pursuant to an amendment to the Offer
providing for a "subsequent offering period" not to exceed 20 business days to
the extent permitted under, and in compliance with, Rule 14d-11 under the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"). Subject to the
foregoing and applicable law and upon the terms and subject to the conditions of
the Offer, Merger Subsidiary shall, and
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Parent shall cause it to, accept for payment, as promptly as permitted under
applicable securities laws, and pay for, as promptly as practicable after the
date on which Merger Subsidiary first accepts shares for payment pursuant to the
Offer (the "ACCEPTANCE DATE"), all shares of Company Stock validly tendered and
not withdrawn pursuant to the Offer.
(b) As soon as practicable on the date of commencement of the Offer,
Parent and Merger Subsidiary shall file with the Securities and Exchange
Commission (the "SEC") a Tender Offer Statement on Schedule TO (the "SCHEDULE
TO") with respect to the Offer (such Schedule TO and such documents included
therein pursuant to which the Offer will be made, together with any supplements
or amendments thereto, the "OFFER DOCUMENTS"). Parent, Merger Subsidiary and the
Company each agrees promptly to correct any information provided by it for use
in the Offer Documents if and to the extent that such information shall have
become false or misleading in any material respect. Parent and Merger Subsidiary
agree to take all steps necessary to cause the Schedule TO as so corrected to be
filed with the SEC and the other Offer Documents as so corrected to be
disseminated to holders of shares of Company Stock, in each case as and to the
extent required by applicable federal securities laws. The Company and its
counsel shall be given an opportunity to review and comment on the Offer
Documents prior to their being filed with the SEC or disseminated to the holders
of shares of Company Stock.
SECTION 1.02. Company Action. (a) The Company hereby consents to the
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Offer and represents that its Board of Directors, at a meeting duly called and
held has (i) determined that this Agreement and the transactions contemplated
hereby, including the Offer and the Merger, are fair to and in the best
interests of the Company's stockholders, (ii) approved and adopted this
Agreement and the transactions contemplated hereby, including the Offer and the
Merger, in accordance with the requirements of the Delaware General Corporation
Law (the "DELAWARE LAW") and (iii) subject to Section 6.04(b), resolved to
recommend acceptance of the Offer and adoption of this Agreement by its
stockholders. The Company further represents that Xxxxxxx, Xxxxx & Co. has
delivered to the Board of Directors of the Company its oral opinion (to be
subsequently confirmed in writing) to the effect that, as of the date of this
Agreement, the consideration to be received by the holders of shares of Company
Stock pursuant to the terms of the Offer and the Merger is fair to such holders
from a financial point of view. The Company will promptly furnish Parent with a
list of its stockholders, mailing labels and any available listing or computer
file containing the names and addresses of all record holders of shares of
Company Stock and lists of securities positions of shares of Company Stock held
in stock depositories, in each case true and correct as of the most recent
practicable date, and will provide to Parent such additional information
(including updated lists of stockholders, mailing labels and lists of securities
positions) and such other assistance as Parent may reasonably request in
connection with the Offer.
(b) As soon as practicable on the day that the Offer is commenced,
the Company shall file with the SEC and disseminate to holders of shares of
Company Stock, in each case as and to the extent required by applicable federal
securities laws, a Solicitation/Recommendation Statement on Schedule 14D-9
(together with any amendments or supplements thereto, the "SCHEDULE 14D-9")
that, subject to Section 6.04(b), shall reflect the recommendations of the Board
of Directors of the Company referred to above. Each of the Company, Parent and
Merger Subsidiary agrees promptly to correct any information provided by it for
use in the Schedule 14D-9 if and to the extent that it shall have become false
or misleading
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in any material respect. The Company agrees to take all steps necessary to cause
the Schedule 14D-9 as so corrected to be filed with the SEC and to be
disseminated to holders of shares of Company Stock, in each case as and to the
extent required by applicable federal securities laws. Parent and its counsel
shall be given an opportunity to review and comment on the Schedule 14D-9 prior
to its being filed with the SEC.
SECTION 1.03. Directors. (a) Effective upon the acceptance for
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payment of any shares of Company Stock pursuant to the Offer, Parent shall be
entitled to designate the number of directors, rounded up to the next whole
number, on the Board of Directors of the Company that equals the product of (i)
the total number of directors on the Board of Directors of the Company (giving
effect to the election of any additional directors pursuant to this Section) and
(ii) the percentage that the number of shares of Company Stock beneficially
owned by Parent and its Affiliates (including shares of Company Stock accepted
for payment) bears to the total number of shares of Company Stock outstanding,
and the Company shall take all action necessary to cause Parent's designees to
be elected or appointed to the Board of Directors of the Company, including
increasing the number of directors, and seeking and accepting resignations of
incumbent directors. At such time, subject to applicable law and applicable
stock exchange regulations, the Company will also use its reasonable best
efforts to cause individuals designated by Parent to constitute the number of
members, rounded up to the next whole number, on (i) each committee of the Board
and (ii) each board of directors of each Subsidiary of the Company (and each
committee thereof) that represents the same percentage as such individuals
represent on the Board of Directors of the Company.
(b) The Company's obligations to appoint Parent's designees to the
Board of Directors of the Company shall be subject to Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder. The Company shall promptly
take all actions, and shall include in the Schedule 14D-9 such information with
respect to the Company and its officers and directors, as Section 14(f) and Rule
14f-1 require in order to fulfill its obligations under this Section. Parent
shall supply to the Company in writing and be solely responsible for any
information with respect to itself and its nominees, officers, directors and
affiliates required by Section 14(f) and Rule 14f-1.
(c) Following the election or appointment of Parent's designees
pursuant to Section 1.03(a) and until the Effective Time, the approval of a
majority of the directors of the Company then in office who were not designated
by Parent shall be required to authorize (and such authorization shall
constitute the authorization of the Board of Directors of the Company and no
other action on the part of the Company, including any action by any other
director of the Company, shall be required to authorize) any amendment or
termination of this Agreement, any waiver of compliance with any of the
agreements or conditions contained herein for the benefit of the Company or any
action as to which the consent or agreement of the Company is required
hereunder. Following the election or appointment of Parent's designees pursuant
to Section 1.03(a) and until the Effective Time, the Company shall use its
reasonable best efforts to ensure that at least one of the directors of the
Company not designated by Parent shall remain a member of the Board of Directors
of the Company.
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ARTICLE 2
THE MERGER
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SECTION 2.01. The Merger. (a) At the Effective Time, Merger Subsidiary
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shall be merged (the "MERGER") into the Company in accordance with the Delaware
Law, whereupon the separate existence of Merger Subsidiary shall cease, and the
Company shall be the surviving corporation (the "SURVIVING CORPORATION").
(b) As soon as practicable after satisfaction or, to the extent
permitted hereunder, waiver of all conditions to the Merger, the Company and
Merger Subsidiary will file a certificate of merger with the Delaware Secretary
of State and make all other filings or recordings required by the Delaware Law
in connection with the Merger. The Merger shall become effective at the close of
business on the day on which the certificate of merger is duly filed with the
Delaware Secretary of State or at such later time as the Company and Parent may
agree and specify in the certificate of merger (the "EFFECTIVE TIME").
(c) From and after the Effective Time, the Surviving Corporation
shall possess all the rights, powers, privileges and franchises and be subject
to all of the obligations, liabilities, restrictions and disabilities of the
Company and Merger Subsidiary, all as provided under the Delaware Law.
SECTION 2.02. Conversion of Shares. At the Effective Time:
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(a) except as otherwise provided in Section 2.02(b) or Section 2.04,
each share of Company Stock outstanding immediately prior to the Effective Time
shall be converted into the right to receive $7.50 in cash, or such higher price
as is paid in the Offer, without interest (the "MERGER CONSIDERATION");
(b) each share of Company Stock held by the Company as treasury stock
or owned by Parent or any of its Subsidiaries immediately prior to the Effective
Time shall be canceled, and no payment shall be made with respect thereto; and
(c) each share of common stock of Merger Subsidiary outstanding
immediately prior to the Effective Time shall be converted into and become one
share of common stock of the Surviving Corporation with the same rights, powers
and privileges as the shares so converted and shall constitute the only
outstanding shares of capital stock of the Surviving Corporation.
SECTION 2.03. Surrender and Payment. (a) Prior to the Effective Time,
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Parent shall appoint an agent (the "EXCHANGE AGENT") for the purpose of
exchanging certificates representing shares of Company Stock (the
"CERTIFICATES") for the Merger Consideration. Parent will make available to the
Exchange Agent, as needed, the Merger Consideration to be paid in respect of the
shares of Company Stock. Promptly after the Effective Time, Parent will send, or
will cause the Exchange Agent to send, to each holder of shares of Company Stock
at the Effective Time a letter of transmittal and instructions (which shall
specify that the delivery shall be effected, and risk of loss and title shall
pass, only upon proper delivery of the Certificates to the Exchange Agent) for
use in such exchange.
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(b) Each holder of shares of Company Stock that have been converted
into the right to receive the Merger Consideration will be entitled to receive,
upon surrender to the Exchange Agent of a Certificate, together with a properly
completed letter of transmittal, the Merger Consideration payable for each share
of Company Stock represented by such Certificate. Until so surrendered, each
such Certificate shall represent after the Effective Time for all purposes only
the right to receive such Merger Consideration.
(c) If any portion of the Merger Consideration is to be paid to a
Person other than the Person in whose name the surrendered Certificate is
registered, it shall be a condition to such payment that the Certificate so
surrendered shall be properly endorsed or otherwise be in proper form for
transfer and that the Person requesting such payment shall pay to the Exchange
Agent any transfer or other taxes required as a result of such payment to a
Person other than the registered holder of such Certificate or establish to the
satisfaction of the Exchange Agent that such tax has been paid or is not
payable.
(d) After the Effective Time, there shall be no further registration
of transfers of shares of Company Stock. If, after the Effective Time,
Certificates are presented to the Surviving Corporation, they shall be canceled
and exchanged for the Merger Consideration provided for, and in accordance with
the procedures set forth, in this Article 2.
(e) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 2.03(a) (and any interest or other income
earned thereon) that remains unclaimed by the holders of shares of Company Stock
six months after the Effective Time shall be returned to Parent, upon demand,
and any such holder who has not exchanged shares of Company Stock for the Merger
Consideration in accordance with this Section 2.03 prior to that time shall
thereafter look only to Parent for payment of the Merger Consideration in
respect of such shares of Company Stock without any interest thereon.
Notwithstanding the foregoing, Parent shall not be liable to any holder of
shares of Company Stock for any amount paid to a public official pursuant to
applicable abandoned property, escheat or similar laws. Any amounts remaining
unclaimed by holders of shares of Company Stock two years after the Effective
Time (or such earlier date immediately prior to such time when the amounts would
otherwise escheat to or become property of any governmental authority) shall
become, to the extent permitted by applicable law, the property of Parent free
and clear of any claims or interest of any Person previously entitled thereto.
(f) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 2.03(a) to pay for shares of Company Stock
for which appraisal rights have been perfected shall be returned to Parent, upon
demand.
SECTION 2.04. Dissenting Shares. Notwithstanding Section 2.02, shares
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of Company Stock outstanding immediately prior to the Effective Time and held by
a holder who has not voted in favor of the Merger or consented thereto in
writing and who has demanded appraisal for such shares of Company Stock in
accordance with the Delaware Law shall not be converted into a right to receive
the Merger Consideration, unless such holder fails to perfect, withdraws or
otherwise loses its right to appraisal. If, after the Effective Time, such
holder fails to perfect, withdraws or loses its right to appraisal, such shares
of Company Stock shall be treated as if they had been converted as of the
Effective Time into a right to receive the Merger
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Consideration. The Company shall give Parent prompt notice of any demands
received by the Company for appraisal of shares of Company Stock, and Parent
shall have the right to participate in all negotiations and proceedings with
respect to such demands. Except with the prior written consent of Parent, the
Company shall not make any payment with respect to, or settle or offer to
settle, any such demands.
SECTION 2.05. Stock Options. (a) The Company shall take all actions
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necessary to provide that at the Effective Time, (i) each option to purchase
shares of Company Stock (a "COMPANY STOCK OPTION") granted under any plan or
arrangement of the Company providing for the grant of options to purchase shares
of Company Stock other than the Company ESPP (collectively, the "COMPANY OPTION
PLANS") shall be cancelled and (ii) in consideration of such cancellation, each
holder of a Company Stock Option shall receive a payment (the "OPTION PAYMENT")
in consideration thereof of an amount (subject to any applicable withholding
Tax) in cash equal to the product of (A) the excess, if any, of $7.50 (or such
higher price as is paid in the Offer) over the per share exercise price of such
Company Stock Option and (B) the number of shares of Company Stock subject to
such Company Stock Option. The Option Payment with respect to all Company Stock
Options which are vested at the Effective Time or become vested in connection
with the consummation of the transactions set forth in this Agreement (the
"VESTED OPTIONS") will be paid as soon as practicable following the Effective
Time. The Option Payment with respect to all Company Stock Options other than
the Vested Options will be paid at the same times that such Company Stock
Options would otherwise have become vested and exercisable in accordance with
their original terms including, without limitation, any provision requiring
continued employment or other service until each applicable vesting date. Any
Company Stock Option with a per share exercise price that is greater than or
equal to $7.50 (or such higher price as is paid in the Offer) shall be cancelled
without payment. The Company shall take all actions necessary to effectuate the
foregoing, including, without limitation, amending the Company Option Plans and
obtaining any necessary consents from holders of Company Stock Options.
(b) Except as may be otherwise agreed to by Parent or Merger
Subsidiary and the Company or as otherwise contemplated or required to
effectuate this Section 2.05, the Company Option Plans shall terminate as of the
Effective Time and the provisions in any other plan, program or arrangement
providing for the issuance or grant of any other interest in respect of the
capital stock of the Company or any of its Subsidiaries shall be deleted as of
the Effective Time.
(c) The Company shall take all necessary actions to provide that as
of the Effective Time no holder of Company Stock Options under the Company
Option Plans will have any right to receive shares of common stock of the
Surviving Corporation upon exercise of any such Company Stock Option.
SECTION 2.06. Employee Stock Purchase Plan. Each outstanding option to
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purchase shares of Company Stock under the Company's Employee Stock Purchase
Plan (the "COMPANY ESPP") shall be treated in accordance with the provisions of
the Company ESPP (including Section 19 thereof). Prior to the Acceptance Date,
the Company shall give any required notice to participants of the Company ESPP
in accordance with the provisions thereof. As of the Acceptance Date, the
Company ESPP shall be terminated in accordance with the
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provisions thereof. Notwithstanding the foregoing, the Company shall take all
actions necessary to ensure that no new participants enter the Company ESPP
after the date hereof and that no participants are allowed to increase their
rates of contributions to the Company ESPP after the date hereof.
SECTION 2.07. Adjustments. If, during the period between the date of
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this Agreement and the Effective Time, any change in the outstanding shares of
Company Stock shall occur, including by reason of any reclassification,
recapitalization, stock split or combination, exchange or readjustment of shares
of Company Stock, or stock dividend thereon with a record date during such
period, the cash payable pursuant to the Offer and the Merger shall be
appropriately adjusted.
SECTION 2.08. Withholding Rights. Each of the Surviving Corporation
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and Parent shall be entitled to deduct and withhold from the consideration
otherwise payable to any Person pursuant to this Article 2 such amounts as it is
required to deduct and withhold with respect to the making of such payment under
any provision of federal, state, local or foreign tax law. If the Surviving
Corporation or Parent, as the case may be, so deducts and withholds amounts,
such amounts shall be treated for all purposes of this Agreement as having been
paid to the holder of the shares of Company Stock in respect of which the
Surviving Corporation or Parent, as the case may be, made such deduction and
withholding.
SECTION 2.09. Lost Certificates. If any Certificate shall have been
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lost, stolen or destroyed, upon the making of an affidavit of that fact by the
Person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such Person of a bond, in
such reasonable amount as the Surviving Corporation may direct, as indemnity
against any claim that may be made against it with respect to such Certificate,
the Exchange Agent will pay, in exchange for such lost, stolen or destroyed
Certificate, the Merger Consideration to be paid in respect of the shares of
Company Stock represented by such Certificate, as contemplated by this Article
2.
ARTICLE 3
THE SURVIVING CORPORATION
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SECTION 3.01. Certificate of Incorporation. The certificate of
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incorporation of the Company in effect immediately prior to the Effective Time
shall be the certificate of incorporation of the Surviving Corporation from and
after the Effective Time until amended in accordance with applicable law.
SECTION 3.02. Bylaws. The bylaws of Merger Subsidiary in effect
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immediately prior to the Effective Time shall be the bylaws of the Surviving
Corporation from and after the Effective Time until amended in accordance with
applicable law.
SECTION 3.03. Directors and Officers. From and after the Effective
----------------------
Time, until successors are duly elected or appointed and qualified in accordance
with applicable law, (a) the directors of Merger Subsidiary immediately prior to
the Effective Time shall be the
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directors of the Surviving Corporation and (b) the officers of the Company
immediately prior to the Effective Time shall be the officers of the Surviving
Corporation.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
Except as set forth in the disclosure schedule delivered by the
Company to Parent prior to the execution of this Agreement (the "COMPANY
DISCLOSURE SCHEDULE"), the Company represents and warrants to Parent that:
SECTION 4.01. Corporate Existence and Power. The Company is a
-----------------------------
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has all corporate powers and all governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted, except for such licenses, authorizations, consents
and approvals the failure of which to have or obtain would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect. The
Company is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where the character of the property owned or
leased by it or the nature of its activities makes such qualification necessary,
except for those jurisdictions where the failure to be so qualified or in good
standing would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. The Company has heretofore made available to
Parent true and complete copies of the Company's certificate of incorporation
and bylaws as currently in effect.
SECTION 4.02. Corporate Authorization. The execution, delivery and
-----------------------
performance by the Company of this Agreement and the consummation by the Company
of the transactions contemplated hereby are within the corporate powers of the
Company and, except as set forth in the following sentence, have been duly
authorized by all necessary corporate action. The affirmative vote of the
holders of a majority of the shares of Company Stock in favor of adoption of
this Agreement is the only vote of the holders of the Company's capital stock
necessary to approve the transactions contemplated by this Agreement. This
Agreement constitutes a valid and binding agreement of the Company.
SECTION 4.03. Governmental Authorization. The execution, delivery and
--------------------------
performance by the Company of this Agreement and the consummation by the Company
of the transactions contemplated by this Agreement require no action by or in
respect of, or filing with, any governmental body, agency, official or authority
other than (a) the filing of a certificate of merger with respect to the Merger
with the Delaware Secretary of State; (b) compliance with any applicable
requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR ACT"); (c) compliance with any applicable requirements of the
Exchange Act; (d) compliance with the rules and regulations of The Nasdaq Stock
Market, Inc. (the "NASDAQ STOCK MARKET"); (e) filings or consents under the
competition laws of Germany; and (f) any other filings, approvals or
authorizations which, if not made or obtained, would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect or
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materially impair the ability of the Company to consummate the transactions
contemplated by this Agreement.
SECTION 4.04. Non-Contravention. The execution, delivery and
-----------------
performance by the Company of this Agreement and the consummation by the Company
of the transactions contemplated hereby do not and will not (a) contravene or
conflict with the certificate of incorporation or bylaws of the Company, (b)
assuming compliance with the matters referred to in Section 4.03, contravene or
conflict with or constitute a violation of any provision of any law, regulation,
judgment, injunction, order or decree binding upon or applicable to the Company
or any of its Subsidiaries, (c) constitute a default under or give rise to any
right of termination, cancellation or acceleration of any right or obligation of
the Company or any of its Subsidiaries or to a loss of any benefit to which the
Company or any of its Subsidiaries is entitled under any provision of any
agreement, contract or other instrument binding upon the Company or any of its
Subsidiaries or any license, franchise, permit or other similar authorization
held by the Company or any of its Subsidiaries or (d) result in the creation or
imposition of any Lien on any asset of the Company or any of its Subsidiaries,
except in the case of clauses (b) - (d) above, for such matters as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. For purposes of this Agreement, "LIEN" means, with respect to
any asset, any mortgage, lien, pledge, charge, security interest or encumbrance
of any kind in respect of such asset.
SECTION 4.05. Capitalization. The authorized capital stock of the
--------------
Company consists of 200,000,000 shares of Company Stock and 10,000,000 shares of
preferred stock, par value $0.01 per share ("PREFERRED STOCK"). As of April 10,
2001, there were outstanding (i) 56,985,969 shares of Company Stock, (ii) no
shares of Preferred Stock and (iii) other than stock options outstanding under
the Company ESPP, stock options to purchase an aggregate of 17,610,910 shares of
Company Stock (of which options to purchase an aggregate of 4,934,300 shares of
Company Stock are currently exercisable) at a weighted average exercise price of
$20.15 per share. All outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and nonassessable.
All shares of Company Stock issuable upon exercise of outstanding Company Stock
Options have been duly authorized and will have been validly issued and will be
fully paid and nonassessable. Except as set forth in this Section and except for
changes since April 10, 2001 resulting from the exercise of Company Stock
Options outstanding on such date, there are outstanding (a) no shares of capital
stock or other voting securities of the Company, (b) no securities of the
Company convertible into or exchangeable for shares of capital stock or voting
securities of the Company and (c) no options or other rights to acquire from the
Company, and no obligation of the Company to issue, any capital stock, voting
securities or securities convertible into or exchangeable for capital stock or
voting securities of the Company (the items in clauses (a), (b) and (c) being
referred to collectively as the "COMPANY SECURITIES"). There are no outstanding
obligations of the Company or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any Company Securities, except in connection with the cashless
exercise of Company Stock Options outstanding on April 10, 2001.
SECTION 4.06. Subsidiaries. (a) Each of the Company's Subsidiaries is
------------
a corporation or other entity duly incorporated or organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation or
organization and has all corporate or other
9
powers and all governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted, except for those licenses,
authorizations, consents and approvals the absence of which would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Each of the Company's Subsidiaries is duly qualified to do
business and is in good standing in each jurisdiction where the character of the
property owned or leased by it or the nature of its activities makes such
qualification necessary, except for those jurisdictions where the failure to be
so qualified or in good standing would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(b) All of the outstanding capital stock of, or other voting
securities or ownership interests in, each of the Company's Subsidiaries, is
owned by the Company, directly or indirectly, free and clear of any Lien and
free of any other limitation or restriction (including any restriction on the
right to vote, sell or otherwise dispose of such stock or other securities or
ownership interests). There are no outstanding (i) securities of the Company or
any of its Subsidiaries convertible into or exchangeable for shares of capital
stock or other voting securities or ownership interests in any of the Company's
Subsidiaries and (ii) options or other rights to acquire from the Company or any
of its Subsidiaries or other obligation of the Company or any of its
Subsidiaries to issue, any capital stock, voting securities or other ownership
interests in, or any securities convertible into or exchangeable for any capital
stock, voting securities or ownership interests in, any of the Company's
Subsidiaries (the items in clauses (i) and (ii) being referred to collectively
as the "SUBSIDIARY SECURITIES"). There are no outstanding obligations of the
Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire
any outstanding Subsidiary Securities.
SECTION 4.07. SEC Filings. (a) The Company has made available to
-----------
Parent (i) the Company's annual reports on Form 10-K for its fiscal years ended
December 31, 1999 and 2000, (ii) its proxy or information statements relating to
meetings of, or actions taken without a meeting by, the stockholders of the
Company held since December 31, 2000 and (iii) all of its other reports,
statements, schedules and registration statements filed with the SEC since
December 31, 2000 (the documents referred to in this Section 4.07(a) being
referred to collectively as the "COMPANY SEC FILINGS").
(b) As of its filing date, each such report or statement filed
pursuant to the Exchange Act did not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.
(c) Each such registration statement, as amended or supplemented, if
applicable, filed pursuant to the Securities Act of 1933, as amended, as of the
date such statement or amendment became effective did not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements made therein, in the light of
the circumstances under which they were made, not misleading.
SECTION 4.08. Financial Statements. The audited consolidated financial
--------------------
statements of the Company included in its annual reports on Form 10-K referred
to in Section 4.07 fairly present in all material respects, in conformity with
United States generally accepted
10
accounting principles applied on a consistent basis ("GAAP") (except as may be
indicated in the notes thereto), the consolidated financial position of the
Company and its consolidated subsidiaries as of the respective dates thereof and
their consolidated results of operations and cash flows for the respective
periods set forth therein. For purposes of this Agreement, "BALANCE SHEET" means
the consolidated balance sheet of the Company as of December 31, 2000 set forth
in the Company's annual report on Form 10-K for the fiscal year ended December
31, 2000 (the "COMPANY 10-K") and "BALANCE SHEET DATE" means December 31, 2000.
SECTION 4.09. Disclosure Documents. (a) Each document required to be
--------------------
filed by the Company with the SEC or required to be distributed or otherwise
disseminated to the Company's stockholders in connection with the transactions
contemplated by this Agreement (the "COMPANY DISCLOSURE DOCUMENTS"), including
the Schedule 14D-9 and the proxy or information statement of the Company (the
"PROXY STATEMENT"), if any, to be filed with the SEC in connection with the
Merger, and any amendments or supplements thereto, when filed, distributed or
disseminated, as applicable, will comply as to form in all material respects
with the applicable requirements of the Exchange Act.
(b) (i) The Proxy Statement, as supplemented or amended, if
applicable, at the time such Proxy Statement or any amendment or supplement
thereto is first mailed to stockholders of the Company and at the time such
stockholders vote on adoption of this Agreement, and (ii) any Company Disclosure
Document (other than the Proxy Statement), at the time of the filing of such
Company Disclosure Document or any supplement or amendment thereto and at the
time of any distribution or dissemination thereof, will not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. The representations and warranties
contained in this Section 4.09(b) will not apply to statements or omissions
included in the Company Disclosure Documents based upon information furnished to
the Company by Parent specifically for use therein.
(c) The information with respect to the Company or any of its
Subsidiaries that the Company furnishes to Parent specifically for use in the
Offer Documents, at the time of the filing thereof, at the time of any
distribution or dissemination thereof and at the time of the consummation of the
Offer, will not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading.
SECTION 4.10. Absence of Certain Changes. Since the Balance Sheet
--------------------------
Date, except as contemplated by this Agreement or as set forth in the Company
SEC Filings made prior to the date hereof, the Company and its Subsidiaries have
conducted their business in all material respects only in the ordinary course
and there has not been:
(a) any event, occurrence or development or state of circumstances or
facts which, individually or in the aggregate, has had or would reasonably be
expected to have a Material Adverse Effect;
(b) any declaration, setting aside or payment of any dividend or
other distribution with respect to any shares of capital stock of the Company,
or any repurchase,
11
redemption or other acquisition by the Company or any of its Subsidiaries of any
outstanding shares of capital stock or other securities of the Company or any of
its Subsidiaries other than in connection with the cashless exercise of a
Company Stock Option outstanding on April 10, 2001;
(c) any amendment of the certificate of incorporation or the bylaws
of the Company or any of its Subsidiaries;
(d) any incurrence, assumption or guarantee by the Company or any of
its Subsidiaries of any indebtedness for borrowed money outside of the ordinary
course of business;
(e) any creation or assumption by the Company or any of its
Subsidiaries of any material Lien on any material asset outside of the ordinary
course of business;
(f) any making of any loan, advance or capital contributions to or
investment in any Person by the Company or any of its Subsidiaries other than
loans, advances or capital contributions to or investments in wholly-owned
Subsidiaries of the Company not outside of the ordinary course of business;
(g) any material damage, destruction or other casualty loss (whether
or not covered by insurance) affecting the business or assets of the Company or
any of its Subsidiaries which would, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect;
(h) any transaction made, or any contract or agreement entered into,
by the Company or any of its Subsidiaries relating to its business or assets
(including the acquisition or disposition of any assets) or any relinquishment
by the Company or any of its Subsidiaries of any contract or other right, in
either case material to the Company and its Subsidiaries taken as a whole, other
than transactions in the ordinary course of business and those contemplated by
this Agreement;
(i) any change in any method of accounting or accounting practice by
the Company or any of its Subsidiaries, except for any such change required by
reason of a concurrent change in GAAP or in Regulation S-X promulgated under the
Exchange Act;
(j) any material Tax election made or changed, any annual Tax
accounting period changed, any method of Tax accounting adopted or changed, any
material amended Tax Returns or claims for material Tax refunds filed, any
material closing agreement entered into, any material Tax claim, audit or
assessment settled, or any right to claim a material Tax refund, offset or other
reduction in Tax liability surrendered, in each case by the Company or any of
its Subsidiaries; or
(k) except as required by contracts entered into prior to the date
hereof or by law, any (i) grant of any severance, termination or retention pay
to any employee, director or independent contractor of the Company or any of its
Subsidiaries, (ii) increase in benefits payable under any existing severance or
termination pay policies or agreements of the Company or any of its
Subsidiaries, (iii) entering into of any employment, deferred compensation or
other similar agreement (or any amendment to any such existing agreement) with
any employee, director or, except in the ordinary course of business,
independent contractor of the Company or
12
any of its Subsidiaries or (iv) increase in compensation, bonus or other
benefits payable to employees, directors or independent contractors of the
Company or any of its Subsidiaries, other than any such increases payable to
employees (other than directors or officers) or independent contractors in the
ordinary course of business.
SECTION 4.11. No Undisclosed Material Liabilities. There are no
-----------------------------------
material liabilities or obligations of the Company or any of its Subsidiaries
that would be required to be set forth in a balance sheet (or in the notes
thereto) prepared in accordance with GAAP, other than:
(a) liabilities or obligations disclosed or provided for in the
Balance Sheet or in the Company SEC Filings made prior to the date hereof;
(b) liabilities or obligations incurred since the Balance Sheet Date
which would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect; and
(c) liabilities or obligations in connection with this Agreement.
SECTION 4.12. Litigation. Except as set forth in the Company SEC
----------
Filings made prior to the date hereof, there is no action, suit, investigation
or proceeding pending, or to the knowledge of the Company threatened, against or
affecting the Company or any of its Subsidiaries or any of their respective
properties or any of their respective officers or directors in their capacity as
officers or directors of the Company before any court or arbitrator or before or
by any governmental body, agency or official which would, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect or that in
any manner challenges or seeks to prevent, enjoin, alter or materially delay
consummation of the transactions contemplated by this Agreement.
SECTION 4.13. Taxes. Except as set forth on the Company Balance Sheet
-----
(including the notes thereto) and except as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect:
(a) all Tax Returns required by applicable law to be filed with any
Taxing Authority by, or on behalf of, the Company or any of its
Subsidiaries have been filed when due in accordance with all applicable
laws, and all such Tax Returns are, or will be at the time of filing, true
and complete in all material respects;
(b) the Company and each of its Subsidiaries has paid (or has had
paid on its behalf) or has withheld and remitted to the appropriate Taxing
Authority, or, where payment is not yet due, has established (or has had
established on its behalf and for its sole benefit and recourse) in
accordance with GAAP an adequate accrual for all Taxes of the Company or
such Subsidiary, as the case may be, through the end of the last period for
which the Company and its Subsidiaries ordinarily record items on their
respective books;
(c) the income and franchise Tax Returns of Company and its
Subsidiaries through the Tax year ended December 31, 1996 have been
examined or are Returns with
13
respect to which the applicable period for assessment under applicable law,
after giving effect to extensions or waivers, has expired;
(d) there is no claim, audit, action, suit, proceeding or
investigation now pending or threatened in writing against or with respect
to Company or its Subsidiaries in respect of any Tax or Tax asset;
(e) during the five-year period ending on the date hereof, neither
the Company nor any of its Subsidiaries was a distributing corporation or a
controlled corporation in a transaction intended to be governed by Section
355 of the Code; and
(f) "TAX" means (i) any tax or other like assessment or charge of any
kind whatsoever (including, but not limited to, withholding on amounts paid
to or by any Person), together with any interest, penalty, addition to tax
or additional amount imposed by any governmental authority (a "TAXING
AUTHORITY") responsible for the imposition of any such tax (domestic or
foreign), and any liability for any of the foregoing as transferee, (ii) in
the case of the Company or any of its Subsidiaries, liability for the
payment of any amount of the type described in clause (i) as a result of
being or having been before the Effective Time a member of an affiliated,
consolidated, combined or unitary group (other than a group of which the
Company was the common parent), or a party to any agreement or arrangement,
as a result of which liability of the Company or any of its Subsidiaries to
a Taxing Authority is determined or taken into account with reference to
the activities of any Person other than the Company and its Subsidiaries,
and (iii) liability of the Company or any of its Subsidiaries for the
payment of any amount as a result of being party to any Tax sharing
agreement (other than such an agreement exclusively between the Company and
its Subsidiaries) or with respect to the payment of any amount imposed on
any person of the type described in (i) or (ii) as a result of any existing
agreement or arrangement (including, but not limited to, an indemnification
agreement or arrangement). "TAX RETURN" shall mean any report, return,
document, declaration or other information or filing required to be
supplied to any Taxing Authority with respect to Taxes, including
information returns, any documents with respect to or accompanying payments
of estimated Taxes, or with respect to or accompanying requests for the
extension of time in which to file any such report, return, document,
declaration or other information.
SECTION 4.14. ERISA. (a) Prior to the date hereof, the Company has
-----
made available to Parent a list identifying each material "employee benefit
plan", as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), and each material plan or arrangement (written or
oral) providing for compensation, bonuses, profit-sharing, stock option or other
stock-related rights or other forms of incentive or deferred compensation,
vacation benefits, insurance coverage (including any self-insured arrangements),
health, medical, dental or vision benefits, disability benefits, workers'
compensation, supplemental unemployment benefits, severance benefits and
post-employment or retirement benefits (including compensation, pension, health,
medical or life insurance benefits), in each case which is maintained,
administered or contributed to by the Company or any ERISA Affiliate thereof and
covers any employee, director or independent contractor or former employee,
director or independent contractor of the Company or any ERISA Affiliate thereof
or
14
under which the Company or any ERISA Affiliate thereof has any liability with
respect to current or former employees, directors or independent contractors of
the Company or any ERISA Affiliate thereof. Copies of such plans (and, if
applicable, related trust agreements) and all amendments thereto and written
interpretations thereof have been made available to Parent prior to the date
hereof together with the most recent annual report (Form 5500 including, if
applicable, Schedule B thereto) prepared in connection with any such plan. Such
plans are referred to collectively as the "EMPLOYEE PLANS". For purposes of this
Section, an "ERISA AFFILIATE" of any Person means any other Person which,
together with such Person, would be treated as a single employer under Section
414 of the Code. At no time has the Company or any Person who from time to time
is or was an ERISA Affiliate of the Company ever maintained an employee benefit
plan that is subject to Title IV of ERISA. Schedule 4.14 lists each employment,
retention, consulting, severance or similar contract that the Company or any of
its Subsidiaries has with any (x) officer or director of the Company or any of
its Subsidiaries, (y) other employee of the Company or any of its Subsidiaries
whose total compensation, on an annualized basis for the fiscal year ended
December 31, 2000, was $85,000 or more or (z) consultant to the Company or any
of its Subsidiaries who was or is a director, officer or other employee of the
Company or any of its Subsidiaries.
(b) Nothing done or omitted to be done and no transaction or holding
of any asset under or in connection with any Employee Plan has made or could
reasonably be expected to make the Company or any of its Subsidiaries or any
officer or director of the Company or any of its Subsidiaries subject to any
liability under Title I of ERISA or liable for any Tax pursuant to Section 4975
of the Code, except where such liability would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(c) Each Employee Plan which is intended to be qualified under
Section 401(a) of the Code has received a favorable determination letter from
the IRS that has not been revoked and no circumstances exist that could
adversely affect such qualified status during the period from the date of the
determination letter to date, and each trust forming a part thereof satisfies
the IRS requirements for exemption from tax pursuant to Section 501(a) of the
Code. The Company has made available to Parent copies of the most recent
Internal Revenue Service determination letters with respect to each such
Employee Plan. Each Employee Plan has been maintained in material compliance
with its terms and with the requirements prescribed by any and all applicable
statutes, orders, rules and regulations, including, without limitation, ERISA,
the Code and any applicable foreign law, except where failure to so comply would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(d) No employee of the Company or any of its Subsidiaries will become
entitled to any retirement, severance, retention or similar benefit or enhanced
or accelerated benefit solely as a result of the transactions contemplated
hereby. Without limiting the generality of the foregoing, no amount required to
be paid or payable to or with respect to any employee of the Company or any of
its Subsidiaries in connection with the transactions contemplated hereby (either
solely as a result thereof or as a result of such transactions in conjunction
with any other event) will, to the knowledge of the Company or any of its
Subsidiaries, be an "excess parachute payment" within the meaning of Section
280G of the Code.
15
(e) No Employee Plan provides post-retirement health, medical,
dental, vision, life or other insurance benefits for retired employees of the
Company or its ERISA Affiliates except such benefits as are required under the
health care continuation coverage requirements of Section 4980B of the Code or
any similar state law provision.
(f) There has been no amendment to, written interpretation or
announcement (whether or not written) by the Company or any of its ERISA
Affiliates relating to, or change in participation or coverage under, any
Employee Plan which would increase materially the expense of maintaining such
Employee Plan above the level of the expense incurred in respect thereof for the
twelve months ended on the Balance Sheet Date.
(g) Neither the Company nor any of its Subsidiaries is a party to or
subject to any union contract or works council or is currently negotiating any
new employment contract or arrangement with any employee, director or, except in
the ordinary course of business, independent contractor.
(h) Except as would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect, (i) each of the Company and its
Subsidiaries is, and at all times has been, in compliance with all applicable
statutes, orders, rules and regulations with respect to employment and
employment practices, terms and conditions of employment and wages and hours,
and has not and is not engaged in any unfair labor practice; (ii) no unfair
labor practice complaint against the Company or any of its Subsidiaries is
pending before the National Labor Relations Board; and (iii) there has not been
any labor strike, dispute, slowdown or stoppage or, to the Company's knowledge,
threatened against or involving the Company or any of its Subsidiaries.
SECTION 4.15. Compliance with Laws. Except as set forth in the Company
--------------------
SEC Filings made prior to the date hereof, each of the Company and its
Subsidiaries is and has been in compliance with all applicable laws, rules,
regulations, judgments, injunctions, orders or decrees, except where failure to
so comply would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
SECTION 4.16. Finders' Fees. Except for Xxxxxxx, Xxxxx & Co., there is
-------------
no investment banker, broker, finder or other intermediary which has been
retained by, or is authorized to act on behalf of, the Company or any of its
Subsidiaries who might be entitled to any fee or commission upon consummation of
the transactions contemplated by this Agreement.
SECTION 4.17. Patents and Other Proprietary Rights. The Company and
------------------------------------
its Subsidiaries have rights to use, whether through ownership, licensing or
otherwise, all patents, trademarks, service marks, trade names, copyrights,
trade secrets and other proprietary rights and processes of which the Company is
aware that are material to its business as now conducted (collectively the
"INTELLECTUAL PROPERTY RIGHTS"). Except for such matters as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, (a) the Company and its Subsidiaries have not assigned,
hypothecated or otherwise encumbered any of the Intellectual Property Rights and
(b) none of the licenses included in the Intellectual Property Rights purport to
grant sole or exclusive licenses to another Person, including, without
limitation, sole or exclusive licenses limited to specific fields of use. The
Company has no
16
knowledge of any infringement by any other party of any of the Intellectual
Property Rights, and the Company and its Subsidiaries have not, to the Company's
knowledge, entered into any agreement to indemnify any other party against any
charge of infringement of any Intellectual Property Rights. The Company and its
Subsidiaries have not knowingly violated or infringed, and are not knowingly
violating or infringing, any intellectual property right of any other Person,
and the Company and its Subsidiaries have not received any written communication
alleging that the Company or any of its Subsidiaries has violated or infringed,
or is violating or infringing, the intellectual property right of any other
Person. Neither the Company nor any of its Subsidiaries has been sued for
infringing any intellectual property right of any other Person. None of the
Intellectual Property Rights or other know-how relating to the business of the
Company and its Subsidiaries, the value of which to the Company is contingent
upon maintenance of the confidentiality thereof has been disclosed by the
Company or any of its Affiliates to any Person other than those Persons who are
bound to hold such information in confidence pursuant to confidentiality
agreements or by operation of law, except insofar as such disclosures would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Neither the Company nor any of its Subsidiaries are party to any
contract that restricts or otherwise limits the ability of the Company or such
Subsidiary to perform services for any other Person except as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Each employee of the Company and its Subsidiaries is a party to
an agreement substantially similar to the "Proxicom Employee Nonsolicitation and
Confidentiality Agreement" made available to Parent prior to the date hereof
except as would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
SECTION 4.18. Environmental Matters. (a) Except as would not,
---------------------
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect or as set forth in the Company SEC Filings made prior to the date
hereof:
(i) no notice, notification, demand, request for information,
citation, summons, complaint or order has been received by, or, to the knowledge
of the Company, is pending or threatened by any Person against, the Company or
any of its Subsidiaries nor has any penalty been assessed against the Company or
any of its Subsidiaries with respect to any (A) alleged violation of any
Environmental Law or liability thereunder, (B) alleged failure to have any
permit, certificate, license, approval, registration or authorization required
under any Environmental Law ("ENVIRONMENTAL PERMITS"), (C) generation,
treatment, storage, recycling, transportation or disposal of any Hazardous
Substance or (D) discharge, emission or release of any Hazardous Substance;
(ii) the Company has been and is in compliance with all
Environmental Laws and all Environmental Permits; and
(iii) there are no Environmental Liabilities.
(b) Neither the Company nor any of its Subsidiaries owns, leases or
operates or has owned, leased or operated any real property, or conducts or has
conducted any operations, in New Jersey or Connecticut.
17
(c) For purposes of this Section 4.18, the following terms shall have
the meanings set forth below:
"COMPANY" and "SUBSIDIARY" shall include any business or business
entity (including a corporation) which is, in whole or in part, a
predecessor of the Company or any of its Subsidiaries.
"ENVIRONMENTAL LAWS" means any federal, state, local or foreign law,
treaty, judicial decision, regulation, rule, judgment, order, decree,
injunction, permit, governmental restriction or requirement or any
agreement with any governmental agency or authority or third party relating
to human health, the environment or pollutants, contaminants, chemicals,
toxins, hazardous substances or wastes.
"ENVIRONMENTAL LIABILITIES" means any and all liabilities or
obligations of or relating to the Company and any of its Subsidiaries of
any kind whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, which (i) arise under or relate to matters
covered by Environmental Laws and (ii) relate to actions occurring or
conditions existing on or prior to the Effective Time.
"HAZARDOUS SUBSTANCE" means any toxic, radioactive, corrosive or
otherwise hazardous substance, including petroleum, its derivatives,
by-products and other hydrocarbons, or any substance having any constituent
elements displaying any of the foregoing characteristics, which in any
event is regulated under Environmental Laws.
SECTION 4.19. Antitakeover Provisions. The Board of Directors of the
-----------------------
Company has taken all action necessary to render Section 203 of the Delaware Law
inapplicable to the transactions contemplated by this Agreement.
SECTION 4.20. Rights Agreement or Plan. As of the date hereof, the
------------------------
Company is not a party to, and has no obligations under, any rights agreement or
similar stockholder rights plan.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PARENT
----------------------------------------
Parent represents and warrants to the Company that:
SECTION 5.01. Corporate Existence and Power. Each of Parent and Merger
-----------------------------
Subsidiary is a corporation duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its organization and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted. Since
the date of its incorporation, Merger Subsidiary has not engaged in any
activities other than in connection with or as contemplated by this Agreement.
SECTION 5.02. Corporate Authorization. The execution, delivery and
-----------------------
performance by Parent and Merger Subsidiary of this Agreement and the
consummation by
18
Parent and Merger Subsidiary of the transactions contemplated hereby are within
the corporate powers of Parent and Merger Subsidiary and have been duly
authorized by all necessary corporate action. This Agreement constitutes a valid
and binding agreement of each of Parent and Merger Subsidiary.
SECTION 5.03. Governmental Authorization. The execution, delivery and
--------------------------
performance by Parent and Merger Subsidiary of this Agreement and the
consummation by Parent and Merger Subsidiary of the transactions contemplated by
this Agreement require no action by or in respect of, or filing with, any
governmental body, agency, official or authority other than (a) the filing of a
certificate of merger with respect to the Merger with the Delaware Secretary of
State; (b) compliance with any applicable requirements of the HSR Act; (c)
compliance with any applicable requirements of the Exchange Act; (d) compliance
with the rules and regulations of the United Kingdom Listing Authority, the
London Stock Exchange plc or the JSE Securities Exchange South Africa; (e) such
filings and approvals as may be required by any applicable state securities or
"blue sky" laws; (f) filings or consents under the competition laws of Germany;
and (g) any other filings, approvals or authorizations which, if not made or
obtained, would not, individually or in the aggregate, reasonably be expected to
have a material adverse effect on Parent and its Subsidiaries, taken as a whole,
or materially impair the ability of Parent to consummate the transactions
contemplated by this Agreement.
SECTION 5.04. Non-Contravention. The execution, delivery and
-----------------
performance by Parent and Merger Subsidiary of this Agreement and the
consummation by Parent and Merger Subsidiary of the transactions contemplated
hereby do not and will not (a) contravene or conflict with the articles of
association or memorandum of association of Parent and the certificate of
incorporation or bylaws of Merger Subsidiary, (b) assuming compliance with the
matters referred to in Section 5.03, contravene or conflict with or constitute a
violation of any provision of any law, regulation, judgment, injunction, order
or decree binding upon or applicable to Parent or Merger Subsidiary or (c)
constitute a default under or give rise to any right of termination,
cancellation or acceleration of any right or obligation of Parent or Merger
Subsidiary or to a loss of any benefit to which Parent or Merger Subsidiary is
entitled under any provision of any agreement, contract or other instrument
binding upon Parent or Merger Subsidiary, except, in the case of (b) and (c),
for such matters as would not materially adversely affect the ability of Parent
and Merger Subsidiary to consummate the transactions contemplated by this
Agreement.
SECTION 5.05. Disclosure Documents. (a) The information with
--------------------
respect to Parent and any of its Subsidiaries that Parent furnishes to the
Company specifically for use in any Company Disclosure Document will not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading (i) in the case of the
Proxy Statement, as supplemented or amended, if applicable, at the time such
Proxy Statement or any amendment or supplement thereto is first mailed to
stockholders of the Company and at the time such stockholders vote on adoption
of this Agreement, and (ii) in the case of any Company Disclosure Document other
than the Proxy Statement, at the time of the filing of such Company Disclosure
Document or any supplement or amendment thereto and at the time of any
distribution or dissemination thereof.
19
(b) The Offer Documents, when filed, distributed or disseminated, as
applicable, will comply as to form in all material respects with the applicable
requirements of the Exchange Act and, at the time of the filing thereof, at the
time of any distribution or dissemination thereof and at the time of
consummation of the Offer, will not contain any untrue statement of a material
fact or omit to state any material fact necessary to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading; provided that this representation and warranty will not apply to
statements or omissions included in the Offer Documents based upon information
furnished to Parent or Merger Subsidiary by the Company specifically for use
therein.
SECTION 5.06. Finders' Fees. Except for Xxxxxxx Lynch, Pierce, Xxxxxx
-------------
& Xxxxx Incorporated and Deutsche Banc Alex. Xxxxx, whose fees will be paid by
Parent, there is no investment banker, broker, finder or other intermediary
which has been retained by, or is authorized to act on behalf of, Parent or any
of its Subsidiaries who might be entitled to any fee or commission upon
consummation of the transactions contemplated by this Agreement.
SECTION 5.07. Financing. Parent has sufficient funds available and
---------
will be able to utilize such funds to consummate the transactions contemplated
hereby.
ARTICLE 6
COVENANTS OF THE COMPANY
------------------------
SECTION 6.01. Conduct of the Company. From the date hereof until the
----------------------
Effective Time, the Company and its Subsidiaries shall conduct their business in
all material respects only in the ordinary course (provided that any significant
restructuring shall not be considered ordinary course) and shall use their
reasonable best efforts to preserve substantially intact their business
organizations and relationships with third parties with which the Company and
its Subsidiaries have significant business relations and to keep available the
services of their present officers and employees as a group. Without limiting
the generality of the foregoing, from the date hereof until the Effective Time,
except as expressly contemplated by this Agreement or as disclosed in the
Company Disclosure Schedule or unless Parent shall consent in writing:
(a) the Company will not adopt or propose any change to its
certificate of incorporation or bylaws;
(b) the Company will not adopt a stockholder rights plan or any other
similar plan that would apply to the transactions contemplated by this
Agreement;
(c) the Company will not, and will not permit any of its Subsidiaries
to, merge, consolidate or enter into any strategic alliance with any other
Person or acquire a material amount of assets of any other Person;
(d) the Company will not, and will not permit any of its Subsidiaries
to, sell, lease, license or otherwise dispose of any material assets,
securities or property except pursuant to existing contracts or commitments
or in the ordinary course of business;
20
(e) the Company will not, and will not permit any of its Subsidiaries
to, settle or compromise any suit or claim or threatened suit or claim
relating to the transactions contemplated hereby; and
(f) the Company will not, and will not permit any of its Subsidiaries
to, agree or commit to do any of the foregoing.
SECTION 6.02. Stockholder Meeting; Proxy Material. (a) The Company
-----------------------------------
shall (i) as promptly as practicable after consummation of the Offer duly call,
give notice of, convene and hold a meeting of its stockholders (the "COMPANY
STOCKHOLDER MEETING") for the purpose of voting on the adoption of this
Agreement, unless Delaware law does not require a vote of stockholders of the
Company for consummation of the Merger, and (ii) take all lawful action to
solicit the approval of its stockholders in favor of adoption of this Agreement.
(b) In connection with the Company Stockholder Meeting, the Company
shall (i) promptly prepare and file with the SEC the Proxy Statement and all
other proxy materials for the Company Stockholder Meeting, (ii) mail to its
stockholders the Proxy Statement and all other proxy materials for the Company
Stockholder Meeting a sufficient time prior to the Company Stockholder Meeting
as is necessary to comply with applicable law and (iii) otherwise comply in all
material respects with all legal requirements applicable to the Company
Stockholder Meeting.
(c) At the Company Stockholder Meeting, Parent shall, and shall cause
each of its Subsidiaries to, vote in favor of adoption of this Agreement all
shares of Company Stock owned by it, including all shares of Company Stock
purchased pursuant to the Offer.
SECTION 6.03. Access to Information. From the date hereof until the
---------------------
Effective Time, and subject to applicable law and the Confidentiality Agreement
dated as of February 9, 2001 between the Company and Parent (the
"CONFIDENTIALITY AGREEMENT"), upon reasonable notice, the Company will give the
officers, employees, accountants, counsel, financial advisors and other
representatives of Parent reasonable access during normal business hours to the
offices, properties, books and records of the Company and its Subsidiaries and
such financial and operating data and other information as such Persons may
reasonably request and will instruct the officers, employees, accountants,
counsel, financial advisors and other representatives of the Company to
cooperate with Parent in its investigation of the business of the Company and
its Subsidiaries; provided that no investigation pursuant to this Section 6.03,
shall affect any representation or warranty given by the Company to Parent
hereunder.
SECTION 6.04. Other Offers. (a) From the date hereof until the
------------
termination hereof, the Company and its Subsidiaries shall not, and the Company
shall use its reasonable best efforts to cause the officers, directors, key
employees, financial advisors or other agents or representatives of the Company
and its Subsidiaries not to, directly or indirectly, (i) take any action to
solicit, initiate, facilitate or encourage the making of any Acquisition
Proposal or any inquiry with respect thereto, (ii) disclose any nonpublic
information relating to the Company or any of its Subsidiaries to, or afford
access to the properties, books or records of the Company or any of its
Subsidiaries to, any Person that has made or is known to it to be considering
making an Acquisition Proposal or (iii) engage in any negotiations with any
Person with respect to any Acquisition Proposal. Notwithstanding anything to the
contrary in this Agreement, prior to the
21
Acceptance Date, the Company may (A) furnish such information and provide such
access to a Person who has made an unsolicited, bona fide Acquisition Proposal
and (B) engage in negotiations with such Person concerning such Acquisition
Proposal, if and only if, in the case of each of (A) and (B) above, (i) the
Board of Directors of the Company determines in good faith by a majority vote,
after receipt of the advice of its financial advisor and outside legal counsel,
that such Acquisition Proposal is reasonably likely to result in a Superior
Proposal, (ii) the Company complies with all of its obligations under Section
6.04(c) in respect of such Acquisition Proposal and (iii) as a condition of such
Person obtaining such non-public information or access (in the case of (A)
above) the Company receives from the Person making such Acquisition Proposal an
executed confidentiality agreement the material terms of which are no less
favorable to the Company than those contained in the Confidentiality Agreement;
provided that such confidentiality agreement need not contain any standstill
provisions.
(b) Notwithstanding anything to the contrary in this Agreement, the
Board of Directors of the Company shall recommend, and may not withdraw or,
subject to the next sentence, modify or change, in a manner adverse to Parent,
its approval or recommendation of, the Offer, the Merger or this Agreement
unless prior to the Acceptance Date the Board of Directors of the Company
determines in good faith by a majority vote that an Acquisition Proposal
constitutes a Superior Proposal. Nothing in this Agreement shall prevent the
Board of Directors of the Company from making any disclosure to its stockholders
if required by applicable law; provided that disclosures under this sentence
shall not be a basis, in themselves, for the Company to terminate this Agreement
pursuant to Section 10.01(h).
(c) The Company shall promptly (and in no event later than 12 hours
after receipt of the relevant Acquisition Proposal) notify (which notice shall
be provided orally and in writing, shall identify the Person making the relevant
Acquisition Proposal and shall set forth the material terms thereof) Parent
after the Company has received any Acquisition Proposal or any request for
nonpublic information relating to the Company or any of its Subsidiaries, or for
access to the properties, books or records of the Company or any of its
Subsidiaries, by any Person that the Company has knowledge may be considering
making, or has made, an Acquisition Proposal. The Company will keep Parent
informed of the status and material terms of (including all changes to the
status and material terms of) any such Acquisition Proposal or request.
(d) The Company (x) shall, and shall cause its Subsidiaries to, and
shall use its reasonable best efforts to cause its officers, directors, key
employees, consultants, financial advisors and other agents or representatives
to, cease immediately and cause to be terminated all activities, discussions or
negotiations, if any, with any Persons conducted prior to the date of this
Agreement with respect to any Acquisition Proposal and (y) shall promptly
request each Person, if any, that has executed a confidentiality agreement
within the 12 months prior to the date of this Agreement in connection with such
Person's consideration of any Acquisition Proposal to return or destroy all
confidential information heretofore furnished to such Person by or on behalf of
the Company or any of its Subsidiaries.
(e) For purposes of this Agreement, "ACQUISITION PROPOSAL" means any
offer or proposal with respect to a merger, reorganization, share exchange,
consolidation, business combination, recapitalization, liquidation, dissolution
or similar transaction involving,
22
or any purchase or sale of all or any significant portion of the assets or 10%
or more of the outstanding equity securities of, the Company or any of its
Subsidiaries, other than the transactions contemplated by this Agreement. For
purposes of this Agreement, "SUPERIOR PROPOSAL" means any unsolicited, bona
fide, written Acquisition Proposal which the Board of Directors of the Company
concludes in good faith (after receipt of the advice of its financial advisor
and outside legal counsel), taking into account all legal, financial,
regulatory, fiduciary and other aspects of the proposal and the Person making
such proposal, (i) would, if consummated, result in a transaction that is more
favorable to the Company's stockholders (in their capacities as stockholders),
from a financial point of view, than the transactions contemplated by this
Agreement and (ii) is reasonably capable of being completed (provided that for
purposes of this definition the term Acquisition Proposal shall have the meaning
assigned to such term above except that the reference to "10%" in the definition
of "Acquisition Proposal" shall be deemed to be a reference to "50%" and
"Acquisition Proposal" shall only be deemed to refer to a transaction involving
the Company, or with respect to assets (including the shares of any Subsidiary
of the Company) of the Company and its Subsidiaries, taken as a whole, and not
any of its Subsidiaries alone).
(f) The Company shall use its reasonable best efforts promptly to
inform its Subsidiaries and its officers, directors, key employees, financial
advisors and other agents or representatives of the obligations undertaken in
this Section 6.04.
SECTION 6.05. Section 16 Matters. Prior to the Effective Time, the
------------------
Company shall take all such steps as may be required to cause any dispositions
of Company Stock in the Merger by each individual who is subject to the
reporting requirements under Section 16(a) of the Exchange Act with respect to
the Company to be exempt under Rule 16b-3 promulgated under the Exchange Act.
SECTION 6.06. Notice of Certain Events. The Company shall promptly
------------------------
notify Parent of:
(a) any notice or other written communication from any Person
alleging that the consent of such Person is or may be required in connection
with the transactions contemplated by this Agreement, the failure to obtain
which consent, if required, would reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect or materially impair the ability
of the Company to consummate the transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions contemplated
by this Agreement;
(c) any actions, suits, claims, investigations or proceedings
commenced or, to its knowledge, threatened against, relating to or involving or
otherwise affecting the Company or any of its Subsidiaries that, if pending on
the date of this Agreement, would have been required to have been disclosed
pursuant to Section 4.12 or that relate to the consummation of the transactions
contemplated by this Agreement; and
23
(d) any occurrence, or failure to occur, of any event, which
occurrence or failure to occur would be likely to cause either (i) any
representation or warranty made by the Company in this Agreement to be untrue or
inaccurate at the Acceptance Date such that the condition set forth in clause
(ii)(a) of Annex I would not be satisfied or (ii) a Material Adverse Effect.
ARTICLE 7
COVENANTS OF PARENT
-------------------
SECTION 7.01. Obligations of Merger Subsidiary. Parent shall take all
--------------------------------
actions necessary to cause Merger Subsidiary to perform its obligations under
this Agreement and to consummate the Offer and the Merger on the terms and
conditions set forth in this Agreement.
SECTION 7.02. Director and Officer Liability. For six years after the
------------------------------
Effective Time, Parent shall indemnify, defend and hold harmless, and provide
advancement of expenses to, the present and former officers and directors of the
Company in respect of acts or omissions occurring prior to the Effective Time to
the fullest extent permitted or provided under the Company's certificate 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, Parent shall cause
the Surviving Corporation to use its best efforts to provide officers' and
directors' liability insurance in respect of acts or omissions occurring prior
to the Effective Time covering each such Person currently covered by the
Company's officers' and directors' liability insurance policy on terms with
respect to coverage and amount no less favorable than those of such policy in
effect on the date hereof; provided that in satisfying its obligation under this
Section, Parent shall not be obligated to cause the Surviving Corporation to pay
premiums in excess of 200% of the amount per annum the Company paid in the
twelve months ended December 31, 2000, which amount has been disclosed to
Parent; and provided, further, that if the annual premiums of such insurance
exceed such amount, the Surviving Corporation shall be obligated to obtain a
policy with the greatest coverage available for a cost not exceeding such
amount. The obligations of Parent under this Section 7.02 shall not be
terminated or modified in such a manner as to adversely affect any indemnitee to
whom this Section 7.02 applies without the consent of such affected indemnitee
(it being expressly agreed that the indemnitees to whom this Section 7.02
applies shall be third-party beneficiaries of this Section 7.02).
SECTION 7.03. Employees. (a) For a period of at least one year
---------
after the Effective Time, Parent shall, or shall cause the Surviving Corporation
to, maintain employee base salary amounts for the employees of the Company and
its Subsidiaries who continue as employees of the Surviving Corporation (the
"COMPANY EMPLOYEES") that are at least equal to amounts that they are currently
receiving with the Company and its Subsidiaries; after such year, employee base
salary amounts for Company Employees shall be, in the reasonable judgment of
Parent, no less favorable to them than the base salary amounts provided to
similarly situated employees of Parent's services business in the United States.
For a period of at least one year after the Effective Time, Parent shall, or
shall cause the Surviving Corporation to, maintain employee bonus opportunities
for Company Employees that are at least equal to opportunities to which they
were entitled with respect to the fiscal year ended December 31, 2000; after
such
24
year, employee bonus opportunities for Company Employees shall be, in the
reasonable judgment of Parent, no less favorable to them than the bonus
opportunity provided to similarly situated employees of Parent's services
business in the United States. Notwithstanding the foregoing two sentences, if
there is an across-the-board reduction in the base salaries or bonus
opportunities of all or substantially all of the employees of Parent's services
business in the United States, then the base salaries or bonus opportunities of
Company Employees may also be reduced as a part of that reduction effort. Until
Company Employees receive benefits under benefits arrangements provided to
similarly situated employees of Parent's services business in the United States
("PARENT PLANS"), Parent shall, or shall cause the Surviving Corporation, to
maintain the Employee Plans for the benefit of Company Employees. Parent shall,
or shall cause the Surviving Corporation to, give each Company Employee full
credit in respect of his or her employment with the Company or its Subsidiaries
prior to the Effective Time for purposes of eligibility, vesting, level of
benefits and service, other than benefit accrual under any defined benefit
plans, under any applicable Employee Plan (in accordance with the terms of such
Employee Plan) or Parent Plan (to the extent that the applicable Employee Plan
gave such credit); provided, however that solely to the extent necessary to
avoid duplication of benefits, amounts payable under the Parent Plans may be
reduced by amounts payable under the applicable Company Plans with respect to
the same periods of service.
(b) From and after the Effective Time, Parent shall, or shall cause
the Surviving Corporation to, (i) cause any pre-existing conditions or
limitations and eligibility waiting periods (only to the extent such limitations
or waiting periods did not apply to the Company Employees under the Employee
Plans) under any group health plans of Parent or the Surviving Corporation to be
waived with respect to the Company Employees and their eligible dependents and
(ii) give each Company Employee credit for the plan year in which the Effective
Time occurs toward applicable deductibles and annual out-of-pocket limits for
expenses incurred prior to the Effective Time.
(c) From and after the Effective Time, Parent shall, or shall cause
the Surviving Corporation, to honor, in accordance with their terms, all benefit
obligations to current and former employees and any contractual rights of such
current and former employees pursuant to any agreements (excluding any such
rights pursuant to agreements that such current and former employees terminate,
or agree to terminate, either before or after the date hereof).
SECTION 7.04. Notice of Certain Events. Parent shall promptly notify
------------------------
the Company of:
(a) any notice or other written communication from any Person
alleging that the consent of such Person is or may be required in connection
with the transactions contemplated by this Agreement, the failure to obtain
which consent, if required, would reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect or materially impair the ability
of Parent to consummate the transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions contemplated
by this Agreement; and
25
(c) any actions, suits, claims, investigations or proceedings
commenced or, to its knowledge, threatened against, relating to or involving or
otherwise affecting Parent that relate to the consummation of the transactions
contemplated by this Agreement.
ARTICLE 8
COVENANTS OF PARENT AND THE COMPANY
-----------------------------------
SECTION 8.01. Reasonable Best Efforts. Subject to the terms and
-----------------------
conditions of this Agreement, each party will use its reasonable best efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement as soon as
practicable after the date of this Agreement. Neither Parent nor the Company
shall, nor shall either of them permit any of their respective Subsidiaries to,
take any action or omit to take any action for the purpose of preventing,
delaying or impeding the consummation of the transactions contemplated by this
Agreement.
SECTION 8.02. Certain Filings. The Company and Parent shall cooperate
---------------
with one another (a) in connection with the preparation of the Offer Documents
and the Company Disclosure Documents, (b) in determining whether any action by
or in respect of, or filing with, any governmental body, agency or official, or
authority is required, or any actions, consents, approvals or waivers are
required to be obtained from parties to any material contracts, in connection
with the consummation of the transactions contemplated by this Agreement and (c)
in seeking timely to take any such actions, make any such filings and obtain any
such consents, approvals or waivers.
SECTION 8.03. Public Announcements. Parent and the Company will
--------------------
consult with each other before issuing any press release or making any public
statement with respect to this Agreement and the transactions contemplated
hereby and, except as may be required by applicable law or any listing agreement
with any national securities exchange or automated quotation system, will not
issue any such press release or make any such public statement prior to such
consultation.
SECTION 8.04. Merger Without Meeting of Stockholders. If Parent,
--------------------------------------
Merger Subsidiary or any other Subsidiary of Parent shall acquire at least 90%
of the outstanding shares of Company Stock pursuant to the Offer or otherwise,
the parties hereto agree to take all necessary and appropriate action to cause
the Merger to be effective as soon as practicable after the acceptance for
payment and purchase of shares of Company Stock pursuant to the Offer without a
meeting of stockholders of the Company in accordance with the Delaware Law.
26
ARTICLE 9
CONDITIONS TO THE MERGER
------------------------
SECTION 9.01. Conditions to the Obligations of Each Party. The
--------------------------------------------
respective obligations of the Company, Parent and Merger Subsidiary to
consummate the Merger are subject to the satisfaction of the following
conditions:
(a) if required by Delaware Law, this Agreement shall have been
adopted by the Company's stockholders in accordance with such Law;
(b) no provision of any applicable law or regulation and no judgment,
injunction, order or decree shall prohibit the consummation of the Merger; and
(c) Merger Subsidiary shall have purchased shares of Company Stock
pursuant to the Offer.
ARTICLE 10
TERMINATION
-----------
SECTION 10.01. Termination. This Agreement may be terminated and the
------------
Merger may be abandoned at any time prior to the Effective Time (notwithstanding
any approval of this Agreement by the stockholders of the Company):
(a) by mutual written consent of each of the Company and Parent;
(b) by either Parent or the Company, if the Offer shall not have been
consummated by August 1, 2001 (the "TERMINATION DATE"); provided that the right
to terminate this Agreement pursuant to this Section 10.01(b) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement has been the primary cause of, or resulted in, the failure of the
Offer to be consummated on or before such date;
(c) by either Parent or the Company, if after the date hereof a court
of competent jurisdiction or governmental entity shall have issued an order,
decree or ruling or taken any other action restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement, and such order,
decree, ruling or other action shall have become final and nonappealable;
provided, however, that the right to terminate this Agreement under this Section
10.01(c) shall not be available to any party whose failure to comply with
Section 8.02 has been the primary cause of such action;
(d) prior to the Acceptance Date, by either Parent or the Company, if
any Person or group (as defined in Section 13(d)(3) under the Exchange Act)
(other than Parent, Merger Subsidiary or any of their respective Affiliates)
shall have become the beneficial owner (as defined in Rule 13d-3 promulgated
under the Exchange Act) of at least a majority of the outstanding shares of
Company Stock;
(e) prior to the Acceptance Date, by (i) Parent, if the Company shall
have breached any of the representations, warranties, covenants and agreements
contained in this
27
Agreement such that the conditions specified in clause (ii)(a) or (b) of Annex I
are not capable of being satisfied on or prior to the Termination Date or (ii)
the Company, if Parent shall have breached any of its covenants or agreements
contained herein required to be performed by it prior to the Acceptance Date or
any of its representations and warranties contained in this Agreement, which
breach would reasonably be expected to materially impair the ability of Parent
to consummate the transactions contemplated by this Agreement;
(f) prior to the Acceptance Date, by Parent, if the Board of
Directors of the Company shall have failed to recommend or withdrawn, or
materially modified or changed in a manner adverse to Parent, its approval or
recommendation of the Offer, the Merger or this Agreement;
(g) prior to the Acceptance Date, by Parent, if the Company shall
have breached in any material respect the obligations imposed upon it by Section
6.04 and, to the extent such breach is capable of being cured, such breach shall
not have been cured within 72 hours' notice of such breach by Parent to the
Company; or
(h) prior to the Acceptance Date, by the Company, if the Board of
Directors of the Company has provided written notice to Parent that the Company
intends to enter into a binding written agreement for a Superior Proposal (with
such termination becoming effective upon the Company entering into such binding
written agreement); provided, however, that (i) the Company shall have complied
with Section 6.04 in all material respects; (ii) the Company shall have (A)
notified Parent in writing of its receipt of such Superior Proposal, (B) further
notified Parent in such writing that the Company intends to enter into a binding
agreement with respect to such Superior Proposal subject to clause (iii) below
and (C) attached the most current written version of such Superior Proposal (or
a summary containing all the material terms and conditions of such Superior
Proposal) to such notice, (iii) Parent does not make, within three Business Days
after receipt of the Company's written notice pursuant to clause (ii) above, an
offer that the Board of Directors of the Company shall have concluded in good
faith (following consultation with its financial advisor and outside legal
counsel) is as favorable to the stockholders of the Company as such Superior
Proposal and (iv) the Company pays the termination fee contemplated by Section
11.04(b) concurrently with entering into such binding written agreement.
The party desiring to terminate this Agreement pursuant to Sections
10.01(b)-(h) shall give written notice of such termination to the other party in
accordance with Section 11.01.
SECTION 10.02. Effect of Termination. In the event of termination of
----------------------
this Agreement as provided in Section 10.01, this Agreement shall forthwith
become void and there shall be no liability on the part of any of the parties
hereto or their respective officers or directors, except (a) as set forth in
Section 11.04 and (b) that nothing herein shall relieve any party from liability
for any willful breach hereof. The covenants and agreements set forth in Article
11 shall survive any termination of this Agreement.
28
ARTICLE 11
MISCELLANEOUS
-------------
SECTION 11.01. Notices. All notices, requests and other communications
-------
to any party hereunder shall be in writing (including telecopy or similar
writing) and shall be given,
if to Parent or Merger Subsidiary to:
Dimension Data Holdings plc
Oval 0 Xxxxxxxxxxx Xxxx
Xxxxx Xxxxx, Xxxxxxx 0000
Xxxxx Xxxxxx
Attn: Xxxxxxx Xxxxxxx
Fax: (00 00) 000-0000
with a copy to:
Xxxxx Xxxxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
if to the Company, to:
Proxicom, Inc.
00000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Att: Xxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Att: Xxxxxx X. Xxxxxxxxxx, Esq.
Fax: (000) 000-0000
or such other address or telecopy number as such party may hereafter specify for
the purpose by notice to the other parties hereto. Each such notice, request or
other communication shall be effective (a) if given by telecopy, when such
telecopy is transmitted to the telecopy number specified in this Section and the
appropriate telecopy confirmation is received or (b) if given by any other
means, when delivered at the address specified in this Section.
SECTION 11.02. Survival. The representations, warranties, covenants
--------
and agreements contained herein shall not survive the Effective Time except that
the covenants and
29
agreements that by their terms are to be performed or complied with in whole or
in part after the Effective Time shall survive the Effective Time.
SECTION 11.03. Amendments; No Waivers. (a) Any provision of this
----------------------
Agreement may be amended or waived prior to the Effective Time if, and only if,
such amendment or waiver is in writing and signed, in the case of an amendment,
by the Company, Parent and Merger Subsidiary or in the case of a waiver, by the
party against whom the waiver is to be effective; provided, however, that after
stockholder approval of this Agreement at the Company Stockholder Meeting (if
applicable), no amendment shall be made which by law requires further approval
by the stockholders of the Company without such further approval.
(b) No failure or delay by any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
SECTION 11.04. Fees and Expenses. (a) Except as otherwise provided
-----------------
in this Section, 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.
(b) The Company agrees to pay Parent a fee in immediately available
funds equal to $10,000,000 if:
(i) this Agreement is terminated pursuant to Section 10.01(d), (g) or (h);
or
(ii) (A) this Agreement shall have been terminated pursuant to Section
10.01(b) or (f), (B) at any time after the date of this Agreement and before
such termination an Acquisition Proposal shall have been publicly announced or
otherwise become communicated to the Board of Directors or stockholders of the
Company and (C) within twelve months of such termination the Company recommends,
enters into a definitive agreement with respect to, or consummates, any Business
Combination Proposal. For purposes of this Section 11.04, "BUSINESS COMBINATION
PROPOSAL" shall have the meaning assigned to the term "Acquisition Proposal",
except that the reference to "10%" in such definition shall be deemed to be a
reference to "50%" and shall only be deemed to refer to a transaction involving
the Company, or with respect to assets (including the shares of any Subsidiary
of the Company), of the Company and its Subsidiaries, taken as a whole, and not
any of its Subsidiaries alone.
(c) Any termination fee payable to Parent pursuant to Section
11.04(b)(i) shall be payable in cash no later than one Business Day following
the date of such termination (except that any termination fee payable upon
termination pursuant to Section 10.01(h) shall be payable as set forth in such
Section). Any termination fee payable to Parent pursuant to Section 11.04(b)(ii)
shall be payable in cash on the date the Company recommends, enters into an
agreement with respect to or consummates a Business Combination Proposal.
SECTION 11.05. Successors and Assigns. The provisions of this
----------------------
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns; provided that no party may assign,
delegate or otherwise transfer any of its rights or
30
obligations under this Agreement without the consent of the other parties
hereto, except that Merger Subsidiary may transfer or assign, in whole, its
rights under this Agreement to another wholly owned Subsidiary of Parent, but no
such transfer will relieve Merger Subsidiary of any of its obligations
hereunder.
SECTION 11.06. Governing Law. This Agreement shall be construed in
-------------
accordance with and governed by the laws of the State of Delaware, without
regard to the conflict of laws rules thereof.
SECTION 11.07. Jurisdiction. Each of the parties hereby (a) agrees
------------
that any suit, action or proceeding seeking to enforce any provision of, or
based on any matter arising out of or in connection with, this Agreement or the
transactions contemplated hereby shall be brought exclusively in any federal or
state court sitting in the State of Delaware, (b) consents to the jurisdiction
of such courts (and of the appropriate appellate courts therefrom) in any such
suit, action or proceeding and irrevocably waives, to the fullest extent
permitted by law, any objection that it may now or hereafter have to the
assertion of personal jurisdiction over any party by a Delaware court, or the
laying of the venue of any such suit, action or proceeding in any such court or
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum and agrees not to object to venue in such
courts or to claim that such forum is inconvenient and (c) agree that notice or
the service of process in any such proceeding may be served on any party
anywhere in the world, whether within or without the jurisdiction of any such
court and, without limiting the foregoing, shall be properly served or delivered
if delivered in the manner contemplated by Section 11.01 hereof.
SECTION 11.08. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
--------------------
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
SECTION 11.09. Counterparts; Effectiveness; Third Party Beneficiaries.
------------------------------------------------------
This Agreement may be signed in any number of counterparts, each of which shall
be an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument. This Agreement shall become effective when each
party hereto shall have received counterparts hereof signed by all of the other
parties hereto. Except for Section 7.02 hereof, no provision of this Agreement
is intended to confer upon any Person other than the parties hereto any rights
or remedies hereunder.
SECTION 11.10. Entire Agreement. This Agreement and the
----------------
Confidentiality Agreement constitute the entire agreement among Parent, Merger
Subsidiary and the Company with respect to the subject matter hereof and
supersede all prior agreements and understandings, both written and oral, among
Parent, Merger Subsidiary and the Company with respect to the subject matter
hereof.
SECTION 11.11. Severability. If any term, provision, covenant or
------------
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or
31
invalidated. Upon such a determination, the parties shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby may be consummated as originally contemplated
to the fullest extent possible.
SECTION 11.12. Specific Performance. The parties hereto agree that
--------------------
irreparable damage would occur if any provision of this Agreement were not
performed in accordance with the terms hereof and that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
or to enforce specifically the performance of the terms and provisions hereof in
any federal or state court located in the State of Delaware, in addition to any
other remedy to which they are entitled at law or in equity.
SECTION 11.13. Definitions. (a) For purposes of this Agreement:
-----------
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day
on which banks in New York, New York or London, England are permitted or
required to close.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the
business, assets, financial condition or results of operations of the Company
and its Subsidiaries, taken as a whole, except for any such effect reasonably
attributable to (x) general economic conditions in the countries in which the
Company and its Subsidiaries operate (including prevailing interest rate and
stock market levels), (y) general conditions in the e-integration business
conducted by Sapient Corporation, DiamondCluster International, Inc., Digitas
Inc. and Answerthink, Inc. or (z) the negotiation, announcement, execution,
delivery or consummation of the transactions contemplated by, or in compliance
with, this Agreement.
"PERSON" means an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.
"SUBSIDIARY" means, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at any time directly or indirectly owned by such Person.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
Term Section
---- -------
Acceptance Date 1.01
Acquisition Proposal 6.04
Balance Sheet 4.08
Balance Sheet Date 4.08
Business Combination Proposal 11.04
32
Term Section
---- -------
Certificates 2.03
Code 1.03
Company Preamble
Company 10-K 4.08
Company Disclosure Documents 4.09
Company Disclosure Schedule Article 4
Company Employees 7.03
Company ESPP 2.06
Company Option Plans 2.05
Company SEC Filings 4.07
Company Securities 4.05
Company Stock 1.01
Company Stock Option 2.05
Company Stockholder Meeting 6.02
Confidentiality Agreement 6.03
Delaware Law 1.02
Effective Time 2.01
Employee Plans 4.14
Environmental Laws 4.18
Environmental Liabilities 4.18
Environmental Permits 4.18
ERISA 4.14
ERISA Affiliate 4.14
Exchange Act 1.01
Exchange Agent 2.03
GAAP 4.08
Hazardous Substance 4.18
HSR Act 4.03
Intellectual Property Rights 4.17
Lien 4.04
Merger 2.01
Merger Consideration 2.02
Merger Subsidiary Preamble
Minimum Condition 1.01
Nasdaq Stock Market 4.03
Offer 1.01
Offer Documents 1.01
Option Payment 2.05
Parent Preamble
Parent Plans 7.03
Preferred Stock 4.05
Proxy Statement 4.09
Schedule 14D-9 1.02
Schedule TO 1.01
33
Term Section
---- -------
SEC 1.01
Subsidiary Securities 4.06
Superior Proposal 6.04
Surviving Corporation 2.01
Tax 4.13
Tax Return 4.13
Taxing Authority 4.13
Termination Date 10.01
Vested Options 2.05
34
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
DIMENSION DATA HOLDINGS PLC
By: /s/ X.X. Xxxxxxx
-------------------------------------------------
Name: X.X. Xxxxxxx
Title: Director
By: /s/ X.X. Xxx
-------------------------------------------------
Name: X.X. Xxx
Title: Chairman of Board and CEO
PROXICOM, INC.
By: /s/ Xxxx X. Xxxxxxxxx
-------------------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chairman & CEO
PUTTER ACQUISITION CORP.
By: /s/ X.X. Xxxxxxx
------------------------------------------------
Name: X.X. Xxxxxxx
Title: Director
35
ANNEX I
Notwithstanding any other provision of the Offer, Merger Subsidiary
shall not be required to accept for payment or pay for any shares of Company
Stock, and may, subject to Articles 1 and 10 of this Agreement, terminate the
Offer, if
(i) prior to the initial acceptance of shares of Company Stock
pursuant to the Offer, (A) the Minimum Condition shall not have been satisfied,
(B) the applicable waiting period under the HSR Act shall not have expired or
been terminated or the anticompetition regulations applicable to the Offer and
the Merger under German law shall not have been complied with or (C) all
consents, approvals or other actions by any governmental authority required in
connection with the consummation of the Offer and the Merger shall not have been
obtained and no Person (other than any governmental authority) whose consent is
or may be required in connection with the transactions contemplated by this
Agreement as set forth in the Company Disclosure Schedule shall have given
notice or otherwise indicated to the Company or Parent that such Person will not
grant the consent, except for such matters as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect or
(ii) at any time on or after the date of this Agreement and prior to
the initial acceptance of shares of Company Stock pursuant to the Offer, any of
the following conditions shall exist:
(a) (x) the representations and warranties of the Company contained in
Section 4.05, 4.07 or 4.08 of this Agreement shall not be true and correct in
all material respects immediately prior to the initial acceptance of the shares
of Company Stock pursuant to the Offer as though made on or as of such time
(except for those representations and warranties that address matters only as of
a particular date which need only be true and accurate as of such date) or (y)
the other representations and warranties of the Company contained in this
Agreement (disregarding all qualifications as to materiality or Material Adverse
Effect set forth in each of such other representations and warranties) shall not
be true and correct immediately prior to the initial acceptance of the shares of
Company Stock pursuant to the Offer as though made on or as of such time (except
for those representations and warranties that address matters only as of a
particular date which need only be true and accurate as of such date) except, in
the case of clause (y) only, where the failure of such representations and
warranties to be true and correct would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect;
(b) the Company shall have failed to perform in all material respects
any of its obligations under this Agreement required to be performed prior to
the initial acceptance of the shares of Company Stock pursuant to the Offer; or
(c) this Agreement shall have been terminated in accordance with its
terms.
I-1
