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AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
ROGUE WAVE SOFTWARE, INC.
RW ACQUISITION, INC.
AND
INMARK DEVELOPMENT CORPORATION
DATED AS OF SEPTEMBER 19, 1995
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TABLE OF CONTENTS
PAGE
ARTICLE 1
DESCRIPTION OF TRANSACTION . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Merger of RW Sub into Inmark . . . . . . . . . . . . . . . . . . . 1
1.2 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Effect of the Merger . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Conversion of Inmark Stock . . . . . . . . . . . . . . . . . . . . 2
1.5 Assumption of Stock Options. . . . . . . . . . . . . . . . . . . . 3
1.6 Conversion of RW Sub Stock . . . . . . . . . . . . . . . . . . . . 4
1.7 Closing of Inmark Transfer Books . . . . . . . . . . . . . . . . . 4
1.8 Exchange Procedures. . . . . . . . . . . . . . . . . . . . . . . . 4
1.9 Dissenting Shares. . . . . . . . . . . . . . . . . . . . . . . . . 5
1.10 No Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . 5
1.11 Cancellation of Stock Options, Etc.. . . . . . . . . . . . . . . . 6
1.12 Shareholders' Meeting and Notice of Appraisal Rights . . . . . . . 6
1.13 Market Stand-Off . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.14 Further Action . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.15 Articles of Incorporation and Bylaws; Directors and Officers . . . 6
1.16 Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . 7
1.17 Tax Consequences . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.18 Disclosure Statements. . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF INMARK . . . . . . . . . . . . . . . . . . 7
2.1 Organization and Related Matters . . . . . . . . . . . . . . . . . 7
2.2 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.3 Authority; Noncontravention; Approvals . . . . . . . . . . . . . . 8
2.4 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 9
2.5 Absence of Changes.. . . . . . . . . . . . . . . . . . . . . . . . 9
2.6 Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.7 Tax Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.8 Employee and Labor Matters.. . . . . . . . . . . . . . . . . . . . 14
2.9 Real and Personal Property . . . . . . . . . . . . . . . . . . . . 15
2.10 Proprietary Assets . . . . . . . . . . . . . . . . . . . . . . . . 16
2.11 Benefit Plans; ERISA.. . . . . . . . . . . . . . . . . . . . . . . 16
2.12 Proceedings; Orders. . . . . . . . . . . . . . . . . . . . . . . . 17
2.13 Environmental Provisions . . . . . . . . . . . . . . . . . . . . . 17
2.14 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.15 Receivables; Major Customers.. . . . . . . . . . . . . . . . . . . 18
2.16 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
i.
2.17 No Brokers or Finders. . . . . . . . . . . . . . . . . . . . . . . 19
2.18 Third Party Consents.. . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF ROGUE WAVE AND RW SUB. . . . . . . . . . . 19
3.1 Organization and Related Matters . . . . . . . . . . . . . . . . . 19
3.2 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.3 Authority; Noncontravention; Approvals . . . . . . . . . . . . . . 21
3.4 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 22
3.5 Absence of Changes.. . . . . . . . . . . . . . . . . . . . . . . . 22
3.6 Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.7 Tax Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.8 Employee and Labor Matters.. . . . . . . . . . . . . . . . . . . . 26
3.9 Real and Personal Property . . . . . . . . . . . . . . . . . . . . 27
3.10 Proprietary Assets . . . . . . . . . . . . . . . . . . . . . . . . 28
3.11 Benefit Plans; ERISA.. . . . . . . . . . . . . . . . . . . . . . . 29
3.12 Proceedings; Orders. . . . . . . . . . . . . . . . . . . . . . . . 29
3.13 Environmental Provisions . . . . . . . . . . . . . . . . . . . . . 30
3.14 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.15 Receivables; Major Customers.. . . . . . . . . . . . . . . . . . . 31
3.16 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.17 No Brokers or Finders. . . . . . . . . . . . . . . . . . . . . . . 32
3.18 Third Party Consents.. . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE 4
COVENANTS WITH RESPECT TO THE PERIOD PRIOR TO CLOSING. . . . . . . . . . . . 32
4.1 Access and Investigation.. . . . . . . . . . . . . . . . . . . . . 32
4.2 Operation of Business. . . . . . . . . . . . . . . . . . . . . . . 32
4.3 Filings and Consents.. . . . . . . . . . . . . . . . . . . . . . . 34
4.4 Notification; Updates to Disclosure. . . . . . . . . . . . . . . . 34
4.5 No Negotiation.. . . . . . . . . . . . . . . . . . . . . . . . . . 35
4.6 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . 35
4.7 Approval of Merger . . . . . . . . . . . . . . . . . . . . . . . . 35
4.8 Closing Documents. . . . . . . . . . . . . . . . . . . . . . . . . 35
4.9 Shareholder Certificates . . . . . . . . . . . . . . . . . . . . . 36
4.10 FIRPTA Letter. . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.11 Fairness Hearing and Permit. . . . . . . . . . . . . . . . . . . . 36
4.12 Expenses.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.13 Issuance of Shares.. . . . . . . . . . . . . . . . . . . . . . . . 36
ii.
ARTICLE 5
CONDITIONS OF MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.1 General Conditions . . . . . . . . . . . . . . . . . . . . . . . . 36
5.2 Conditions to Obligations of Rogue Wave and RW Sub.. . . . . . . . 37
5.3 Conditions to Obligations of Inmark. . . . . . . . . . . . . . . . 39
ARTICLE 6
TERMINATION OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.1 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.2 Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . 41
6.3 Extension of Time; Waivers . . . . . . . . . . . . . . . . . . . . 41
ARTICLE 7
COVENANTS TO BE PERFORMED AFTER THE CLOSING. . . . . . . . . . . . . . . . . 41
7.1 Reservation of Employee Pool.. . . . . . . . . . . . . . . . . . . 41
7.2 Employment Benefits. . . . . . . . . . . . . . . . . . . . . . . . 41
7.3 Severance Compensation.. . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE 8
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.1 Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.2 Entire Agreement; Counterparts; Applicable Law . . . . . . . . . . 41
8.3 Attorneys' Fees. . . . . . . . . . . . . . . . . . . . . . . . . . 42
8.4 Assignability. . . . . . . . . . . . . . . . . . . . . . . . . . . 42
8.5 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
8.6 Titles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
8.7 Cooperation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
EXHIBITS
Exhibit A Definitions
Exhibit B Agreement of Merger
Exhibit C Form of Opinion of Fenwick & West
Exhibit D Form of Opinion of Xxxxxx Godward Xxxxxx Xxxxxxxxx & Xxxxx
iii.
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is entered into
as of September 19, 1995, by and among ROGUE WAVE SOFTWARE, INC., an Oregon
corporation ("Rogue Wave"), RW ACQUISITION, INC., a Delaware corporation and
wholly owned subsidiary of Rogue Wave ("RW Sub"), and INMARK DEVELOPMENT
CORPORATION, a California corporation ("Inmark"). Capitalized terms used and
not otherwise defined herein shall have the meanings given them in Exhibit A
hereto.
RECITALS
A. Rogue Wave has formed RW Sub as a wholly owned subsidiary in order to
effect the merger of RW Sub with and into Inmark (the "Merger") in accordance
with the laws of the State of Delaware and the laws of the State of California
and in accordance with this Agreement, so that upon consummation of the Merger,
RW Sub will cease to exist and Inmark will become a wholly owned subsidiary of
Rogue Wave;
B. This Agreement has been approved by the respective Boards of Directors
of Rogue Wave, RW Sub, and Inmark, by Rogue Wave in its capacity as sole
stockholder of RW Sub, and will be submitted for approval by the shareholders of
Inmark; and
C. The Merger is intended to qualify as a tax-free reorganization within
the meaning of the provisions of Section 368 of the Internal Revenue Code of
1986, as it may be amended from time to time and to be accounted for as a
pooling of interests.
AGREEMENT
NOW, THEREFORE, in consideration of their mutual covenants, promises and
obligations contained in this Agreement, the mutual receipt and sufficiency of
which hereby are acknowledged, the parties hereto agree as follows:
ARTICLE 1
DESCRIPTION OF TRANSACTION
1.1 MERGER OF RW SUB INTO INMARK. Subject to the terms and conditions of
this Agreement, RW Sub shall be merged with and into Inmark and the separate
existence of RW Sub shall cease. Inmark shall be the surviving corporation in
the Merger under the corporate name Inmark Development Corporation, and Rogue
Wave shall own all of the issued and
1.
outstanding shares of capital stock of Inmark. Inmark, in its capacity as
the corporation surviving the Merger, is sometimes referred to herein as the
"Surviving Corporation."
1.2 CLOSING. Consummation of the transactions contemplated by this
Agreement (the "Closing") will take place at the offices of Xxxxxx Godward
Xxxxxx Xxxxxxxxx & Xxxxx, 0000 Xxxx Xxxx Xxxx, Xxxxxxxx 0, Xxxxx 000, Xxxxx
Xxxx, Xxxxxxxxxx 00000, at such time and date as Rogue Wave and Inmark may
mutually select (the "Closing Date"). At the Closing, RW Sub and Inmark will
each carry out the procedures specified under the applicable provisions of the
General Corporation Law of the State of Delaware (the "Delaware Law") and the
General Corporation Law of the State of California (the "California Law"),
including duly executing and filing an Agreement of Merger in the form attached
hereto as Exhibit B (the "Agreement of Merger") with the Secretary of State of
the State of Delaware and the Secretary of State of the State of California, to
the end that the Merger shall become effective. The Merger shall become
effective on the last to occur of (a) the date the Agreement of Merger is duly
filed with the Secretary of State of the State of California or (b) such later
date as may be specified in such Agreement of Merger (the "Effective Time").
1.3 EFFECT OF THE MERGER. The Merger shall have the effects set forth in
the Delaware Law and the California Law. Without limiting the generality of the
foregoing, the Surviving Corporation shall possess all the rights, privileges,
powers and franchises, of a public as well as a private nature, and be subject
to all the restrictions, disabilities and duties, of each of RW Sub and Inmark
(collectively, the "Constituent Corporations"). The Surviving Corporation shall
be vested with the rights, privileges, powers and franchises, all property
(real, personal, and mixed) and all debts due on whatever account and all other
things in action or belonging to, and all and every other interest of, each of
the Constituent Corporations. All debts, liabilities and duties of each of the
Constituent Corporations shall attach to the Surviving Corporation and may be
enforced against it to the same extent as if such debts, liabilities and duties
had been incurred or contracted by it.
1.4 CONVERSION OF INMARK STOCK. At the Effective Time, by virtue of the
Merger and without any action on the part of any holder of any capital stock of
Inmark:
(a) Each issued and then outstanding share of common stock, without
par value, of Inmark (the "Inmark Common Stock") (other than shares of Inmark
Common Stock to be canceled pursuant to Section 1.4(b) and shares of Inmark
Common Stock, if any, held by shareholders who have not voted such shares in
favor of the Merger) (the "Inmark Outstanding Shares") shall cease to be issued
and outstanding and shall become and be converted into that number of shares of
common stock, $0.001 par value, of Rogue Wave (the "Rogue Wave Common Stock")
equal to (i) the number of shares of Rogue Wave Common Stock equal to (A) the
number of shares of Rogue Wave Common Stock Equivalents (as defined below)
divided by .8, minus (B) the number of shares of Rogue Wave Common Stock
Equivalents (the differences of clause (A) minus clause (B) being referred to
herein as the "Merger Consideration"), divided by (ii) the number of shares of
Inmark Common Stock Equivalents (as defined below). The ratio pursuant to which
each share of Inmark Common Stock will be exchanged for shares of Rogue Wave
Common Stock, determined in accordance with the foregoing sentence, is
2.
hereinafter referred to as the "Exchange Ratio". For the purposes of this
Agreement, the term Rogue Wave Common Stock Equivalents shall be the sum of (A)
the number of shares of Rogue Wave Common Stock outstanding immediately prior to
the Effective Time, (B) the number of shares of Rogue Wave Common Stock into
which the then outstanding shares of Rogue Wave Preferred Stock could be
converted if fully converted immediately prior to the Effective Time, and (C)
the number of shares of Rogue Wave Common Stock which could be obtained through
the exercise or conversion of all other rights, option and convertible
securities (except Rogue Wave Preferred Stock) (whether or not exercisable or
convertible) immediately prior to the Effective Time. For the purposes of this
Agreement, the term Inmark Common Stock Equivalents shall be the sum of (A) the
number of shares of Inmark Common Stock outstanding immediately prior to the
Effective Time and (B) the number of shares of Inmark Common Stock which could
be obtained through the exercise or conversion of all other rights, option and
convertible securities (whether or not exercisable or convertible) immediately
prior to the Effective Time.
(b) Each share of Inmark Common Stock issued and outstanding
immediately prior to the Effective Time and held in the treasury of Inmark or
owned by Rogue Wave automatically shall be canceled at the Effective Time and no
conversion shall be made in respect thereof.
1.5 ASSUMPTION OF STOCK OPTIONS.
(a) At the Effective Time, each unexpired and unexercised option to
purchase shares of Inmark Common Stock (an "Inmark Option") granted under the
stock option plans and agreements of Inmark outstanding immediately prior to the
Effective Time shall be assumed by Rogue Wave (an "Assumed Option"). Schedule
2.2(a) of the Inmark Disclosure Statement sets forth a true and complete list as
of the date hereof of all holders of Inmark Options exercisable to purchase
shares of Inmark Common Stock, including the number of shares of Inmark Common
Stock subject to such options, a breakdown as between vested and unvested
options, the exercise price per share and the term of such options. Each Inmark
Option so assumed by Rogue Wave will continue to have, and be subject to,
substantially the same terms and conditions set forth in the documents governing
such Inmark Option immediately prior to the Effective Time, except that (A) such
Assumed Option will be exercisable for that number of whole shares of Rogue Wave
Common Stock equal to the product of the number of shares of Inmark Common Stock
that were purchasable under such Assumed Option immediately prior to the
Effective Time of the Merger multiplied by the Exchange Ratio, rounded down to
the nearest whole number of shares of Rogue Wave Common Stock, and (B) the per
share exercise price for the shares of Rogue Wave's Common Stock issuable upon
exercise of such Assumed Option will be equal to the quotient obtained by
dividing the exercise price per share of Inmark Common Stock at which such
Inmark Option was exercisable immediately prior to the Effective Time by the
Exchange Ratio, rounding up to the nearest whole cent. Consistent with the
terms of the Inmark Options and the documents governing such Inmark Options, the
Merger will not terminate or accelerate any Assumed Option (other than an
Assumed Option for one holder of an Inmark Option) or any right of exercise,
vesting or repurchase relating thereto with respect to shares of Rogue Wave
Common Stock acquired upon exercise of such Inmark Option.
3.
Holders of Inmark Options will not be entitled to acquire Inmark capital
stock following the Merger.
(b) Holders of vested Inmark Options may elect to exercise such
options prior to the Effective Time of the Merger and receive their pro rata
share of the Merger Consideration by providing notice of such exercise and
payment of the exercise price thereof to Inmark at any time prior to the
Effective Time. In the event that any holder of vested Inmark Options does not
exercise such Inmark Options prior to the Effective Time, such Inmark Options
shall become Assumed Options.
(c) As soon as practicable after the Effective Time, Rogue Wave shall
issue to each holder of an Assumed Option a document evidencing assumption by
Rogue Wave. Such document shall not contain a right of Rogue Wave to repurchase
any or all of the shares of Rogue Wave Common Stock that such holder owns or has
the right to acquire.
1.6 CONVERSION OF RW SUB STOCK. At the Effective Time, each issued and
outstanding share of common stock, $.01 par value, of RW Sub shall cease to be
an existing and issued share and shall become and be converted into one share of
common stock of the Surviving Corporation and the aggregate of such shares shall
constitute the only outstanding capital shares of the Surviving Corporation.
1.7 CLOSING OF INMARK TRANSFER BOOKS. On and after the Effective Time,
holders of certificates representing Inmark Outstanding Shares shall cease to
have any rights as shareholders of Inmark and the share transfer books of Inmark
shall be closed with respect to the Inmark Outstanding Shares and no further
transfer of such shares shall thereafter be made on such share transfer books.
1.8 EXCHANGE PROCEDURES. As soon as practicable after the Effective
Time, Rogue Wave shall mail to each holder of record of a stock certificate
that, immediately prior to the Effective Time, represented Inmark Outstanding
Shares (the "Inmark Certificates"): (a) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Inmark Certificates shall pass, only upon delivery of the Inmark Certificates
to Rogue Wave); and (b) instructions for use in effecting the surrender of
the Inmark Certificates in exchange for such holder's ratable portion of the
Merger Consideration. Upon surrender of an Inmark Certificate: (a) the
holder thereof shall be entitled to receive in exchange therefor a
certificate representing the number of shares of Rogue Wave Common Stock to
which such holder is entitled pursuant to Section 1.4(a) and represented by
the Inmark Certificate so surrendered; and (b) the Inmark Certificate so
surrendered shall forthwith be canceled. In lieu of the foregoing, upon
written instruction from an Inmark Shareholder, Rogue Wave shall be entitled
to deliver to counsel for Inmark, on behalf of such Inmark Shareholder, the
ratable portion of the Merger Consideration due such Inmark Shareholder,
subject to delivery of the Inmark Certificate(s) held by such Inmark
Shareholder. In such event, counsel for Inmark shall have sole
responsibility to deliver to such Inmark Shareholder such Merger
Consideration, and neither Rogue Wave nor RW Sub shall have any obligation or
liability therefore. In the event of a transfer of ownership of Inmark
Common Stock which is not registered in the transfer records of Inmark, the
4.
appropriate number of shares of Rogue Wave Common Stock may be delivered to
a transferee if the Inmark Certificate representing such Inmark Common Stock is
presented to Rogue Wave and accompanied by all documents required to evidence
and effect such transfer and to evidence that any applicable stock transfer
taxes have been paid. Until surrendered as contemplated by this Section 1.8,
each Inmark Certificate shall be deemed at any time after the Effective Time to
represent the right to receive upon such surrender a holder's ratable portion of
the Merger Consideration as provided by this Section 1.8 and the provisions of
the Delaware Law and the California Law. Immediately prior to the Effective
Date, Inmark shall provide to Rogue Wave and RW Sub a Schedule 1.8, setting
forth the name and address of each Inmark Shareholder and the number of shares
of Inmark Common Stock then held by such person and Rogue Wave shall be entitled
to rely on such Schedule in issuing the Merger Consideration as contemplated
hereunder.
1.9 DISSENTING SHARES. Notwithstanding anything in this Agreement to the
contrary, shares of Inmark Common Stock that are held by shareholders who have
not voted such shares in favor of the Merger shall not be canceled and converted
into shares of Rogue Wave Common Stock in accordance with Section 1.4(a) unless
and until such holder shall have failed to perfect, or shall have effectively
withdrawn or lost, such holder's right to appraisal and payment under the
California Law. If such holder shall have so failed to perfect, or shall have
effectively withdrawn or lost such right, such shareholder's shares shall be
deemed to have been canceled and converted as described in Section 1.4(a) at the
Effective Time, and each such share shall represent solely the right to receive
that portion of the Merger Consideration that such shares would have been
entitled to receive had they been voted in favor of the Merger. Inmark shall
give Rogue Wave prompt notice of any demands received by Inmark for appraisal of
its shares, and, prior to the Effective Time, Rogue Wave shall have the right to
participate in all negotiations and proceedings with respect thereto. Prior to
the Effective Time, Inmark shall not, without the prior written consent of Rogue
Wave, make any payment with respect to, or settle or offer to settle, any such
demand. From and after the Effective Time, no shareholder of Inmark who has
demanded appraisal rights as provided in Section 1301 of the California Law
shall be entitled to vote such holder's shares of Inmark Common Stock for any
purpose or to receive payment of dividends or other distributions with respect
to such holder's shares (except dividends and other distributions payable to
shareholders of record as of a date prior to the Effective Time).
1.10 NO FRACTIONAL SHARES. No fractional shares of Rogue Wave Common Stock
will be issued in connection with the Merger and no certificate therefor will be
issued. In lieu of such fractional shares, any holder of Inmark Common Stock
who would otherwise receive a fractional share shall, upon surrender of his
certificate or certificates representing Inmark Common Stock, be paid an amount
in cash (without interest) determined by multiplying such fraction by $0.35.
Rogue Wave will, subject to any applicable statute of limitation or abandoned
property or similar law, until three years after the Effective Time, pay to such
holders, upon surrender of their certificates representing Rogue Wave Common
Stock outstanding immediately prior to the Effective Time, the cash value of
such fractions so determined, without interest.
5.
1.11 CANCELLATION OF STOCK OPTIONS, ETC. At the Effective Time, each
option, warrant, convertible note, preferred stock and any other right to
purchase shares of Inmark Common Stock or capital stock then outstanding under
any stock option plan or agreement of any type shall be canceled and terminated.
1.12 SHAREHOLDERS' MEETING AND NOTICE OF APPRAISAL RIGHTS. Inmark, acting
through its Board of Directors, in accordance with applicable law and its
Articles of Incorporation and Bylaws, shall as soon as practicable either (a)
duly call, give notice of, convene and hold a special meeting of its
shareholders for the purpose of considering and voting upon the Merger, or
(b) solicit from all shareholders written consents approving the Agreement, the
Merger and the transactions contemplated herein. In connection with such
meeting or such solicitation, Inmark also shall: (a) provide each holder of
Inmark Common Stock with a proxy statement, information statement or other
disclosure document containing such disclosure as required under applicable
federal and state securities laws and in a form reasonably acceptable to Rogue
Wave; (b) take such other action in connection with such solicitation as is
required under federal and state securities laws and otherwise reasonably
requested by Rogue Wave and its counsel; and (c) if so required under Section
1300 of the California Law, notify each of its shareholders entitled to
appraisal rights under the California Law that appraisal rights are available
for any or all of the shares of the Inmark Common Stock, and shall include in
such notice any required provisions of the California Law. In connection with
such solicitation of consents, if so required by applicable law, Inmark shall
give prompt notice of the corporate actions taken thereby to those shareholders,
if any, who do not consent thereto in writing.
1.13 MARKET STAND-OFF. The shares of Rogue Wave Common Stock issued to
Inmark Shareholders pursuant to the Merger may not be sold, transferred or
otherwise disposed of by the holder thereof, as requested by the underwriters
for a period of 180 days following the effective date of the first registration
statement of Rogue Wave filed under the Securities Act of 1933, as amended;
provided that all officers and directors of Rogue Wave enter into similar
agreements.
1.14 FURTHER ACTION. Each of Rogue Wave, RW Sub and Inmark shall take all
actions as may be reasonably necessary or appropriate in order to effectuate the
transactions contemplated hereby. If at any time after the Effective Time any
further action by or on behalf of any such entity is necessary or desirable to
carry out the purposes of this Agreement or to vest the Surviving Corporation
with the full right, title and possession to all assets, property, rights,
privileges, immunities, powers and franchises of either or both of the
Constituent Corporations, the officers and directors of Rogue Wave and the
Surviving Corporation, as applicable, shall take or cause to be taken all such
necessary action.
1.15 ARTICLES OF INCORPORATION AND BYLAWS; DIRECTORS AND OFFICERS. The
Articles of Incorporation and Bylaws of Inmark shall be the Articles of
Incorporation and Bylaws of the Surviving Corporation immediately after the
Effective Time. The individuals identified on Schedule 1.15 shall be the
directors and officers of the Surviving Corporation, and shall hold such offices
from the Effective Time until their respective successors are duly elected or
6.
appointed and qualified in the manner provided in the Articles of Incorporation
and Bylaws of the Surviving Corporation, or as otherwise provided by law.
1.16 ACCOUNTING TREATMENT. The parties intend that the Merger will be
treated as a pooling of interest for accounting purposes.
1.17 TAX CONSEQUENCES. For federal income tax purposes, the Merger is
intended to constitute a tax-free reorganization within the meaning of Section
368(a) of the Code.
1.18 DISCLOSURE STATEMENTS. On the date hereof Rogue Wave shall deliver to
Inmark a Rogue Wave Disclosure Statement executed on behalf of Rogue Wave and RW
Sub and on the date hereof Inmark shall deliver to Rogue Wave an Inmark
Disclosure Statement executed on behalf of Inmark. References in Article 2 are
references to the schedules, as set forth in the Inmark Disclosure Statement.
References in Article 3 are references to the schedules as set forth in the
Rogue Wave Disclosure Statement.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF INMARK
Except as set forth in the Inmark Disclosure Statement, Inmark represents,
warrants and agrees, as of the date hereof, as follows:
2.1 ORGANIZATION AND RELATED MATTERS. Inmark is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California and has the requisite corporate power and authority to own, lease and
operate its assets and properties and to carry on its business as it is now
being conducted. Inmark is qualified to do business and is in good standing in
each jurisdiction in which the properties owned, leased or operated by it or the
nature of its business makes such qualification necessary, except where the
failure to be so qualified and in good standing would not have a Material
Adverse Effect on its business, as presently conducted. True, accurate and
complete copies of the Articles of Incorporation and Bylaws of Inmark, in each
case as in effect on the date hereof, including all amendments thereto, and
minutes of all actions, and actions by written consent, of the directors and
shareholders of Inmark, have been delivered to Rogue Wave.
2.2 CAPITALIZATION.
(a) The authorized capital stock of Inmark consists of (i) 5,000,000
shares of Inmark Common Stock, no par value, of which as of the date hereof,
3,379,290 are issued and outstanding and (ii) 1,000,000 shares of Preferred
Stock, no par value, of which as of the date hereof, no shares are issued and
outstanding. All of the issued and outstanding shares of Inmark Common Stock
are validly issued, fully paid and nonassessable. Schedule 2.2(a) sets forth a
list of all shareholders of Inmark including their names and addresses and the
number of shares they hold, beneficially and of record, of Inmark Common Stock.
7.
(b) As of the date hereof, there are Inmark Options to purchase
899,000 shares of Inmark Common Stock pursuant to Inmark's Stock Option Plan, a
list of which has been delivered with the Inmark Disclosure Statement to Rogue
Wave or its counsel. Schedule 2.2(b) sets forth a list of the name of each
optionee, the number of shares of Inmark Common Stock subject to each Inmark
Option, the date of grant and exercise price of each Inmark Option and a vesting
schedule for such Inmark Option. Except as set forth above or pursuant to the
exercise of Inmark Options, there are not as of the date hereof, and on the
Effective Time there will not be, any outstanding subscriptions, options,
warrants, stock appreciation rights, calls, rights, convertible securities or
other agreements or commitments of any character relating to issued or unissued
capital shares or other securities of Inmark, or otherwise obligating Inmark to
issue, transfer or sell any capital shares of Inmark, or other securities
convertible into, exchangeable for, or evidencing the right to subscribe for,
any capital shares of Inmark. Following the Closing, Inmark will have no
obligation to issue, transfer or sell any of its capital shares or other
securities of Inmark pursuant to any currently existing employee benefit plan or
otherwise. All shares of Inmark capital stock have been issued in compliance
with federal and state securities laws, and Inmark has no liability to any
current or former shareholder of Inmark arising from or relating to the offer
and sale of any of its securities, whether under federal or state securities
law, or otherwise. There are no voting trusts, proxies or other agreements or
understandings to which Inmark is a party or is bound with respect to the voting
of any of the capital stock of Inmark.
(c) Inmark has no subsidiaries and does not own or hold, directly or
indirectly, any debt or equity securities of, nor has any other interest in, any
corporation, limited liability company, partnership, joint venture or other
entity.
2.3 AUTHORITY; NONCONTRAVENTION; APPROVALS.
(a) Inmark has full corporate power and authority to execute, deliver
and perform this Agreement and the Agreement of Merger. The execution, delivery
and performance of the Agreement and the Agreement of Merger has been duly and
validly authorized by the Board of Directors of Inmark, and by all other
necessary corporate action on the part of Inmark. This Agreement and the
Agreement of Merger have been, or will be on or prior to the Closing Date, duly
and validly executed and delivered by Inmark, and constitutes the valid and
binding agreement of Inmark, enforceable against Inmark in accordance with its
terms, except as such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting or relating to
enforcement of creditors' rights generally, and general equitable principles.
(b) Neither the execution and delivery of this Agreement by Inmark
nor the consummation by Inmark of the transactions contemplated herein will
(i) conflict with or result in any breach of any provision of the Articles of
Incorporation or Bylaws of Inmark, (ii) result in a default (or give rise to
any right of termination, cancellation, acceleration, repurchase, put or
call) under the terms, conditions or provisions of any note, bond, mortgage,
indenture or other evidence of indebtedness of Inmark or any material license
agreement or lease or other material contract, instrument or obligation to
which Inmark is a party, or by which Inmark or
8.
any of its assets may be bound, (iii) violate any statute, rule, regulation,
order, writ, injunction, decree or arbitration award applicable to Inmark or
its assets, or (iv) result in the creation of any material (individually or
in the aggregate) liens, charges or encumbrances on any of the assets of
Inmark.
(c) No consent, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency, commission,
regulatory authority or other governmental authority or instrumentality, whether
domestic or foreign (a "Governmental Entity"), is required by or with respect to
Inmark in connection with the execution and delivery of this Agreement and the
Agreement of Merger by Inmark or the consummation by Inmark of the transactions
contemplated hereby or thereby, except for (i) the filing of the Agreement of
Merger with the Secretary of State of the State of California, (ii) the issuance
of a Permit by the California Department of Corporations with respect to the
issuance of Rogue Wave Common Stock pursuant to this Agreement, (iii) such other
consents, approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the Merger,
and (iv) informational filings.
2.4 FINANCIAL STATEMENTS.
(a) Inmark has delivered to Rogue Wave (i) an audited balance sheet
of Inmark as of December 31, 1994, its related audited statements of operations
and cash flows of Inmark for the twelve (12) months then ended, together with
the notes thereto and (ii) its unaudited balance sheet as at July 31, 1995 (the
"Inmark Statement Date") and unaudited statement of income for the seven month
period ending on the Inmark Statement Date (collectively, the "Inmark Financial
Statements").
(b) The Inmark Financial Statements are accurate and complete in all
respects and present fairly the financial position of Inmark as of the Inmark
Statement Date and the results of operations of Inmark for the period covered
thereby.
(c) Inmark has no liabilities or obligations (absolute or contingent)
required in accordance with GAAP to be disclosed in the financial statements of
Inmark except liabilities (i) that are reflected or disclosed in the Inmark
Financial Statements, (ii) that are disclosed in this Agreement or the schedules
hereto, or (iii) that were incurred after the Inmark Statement Date in the
ordinary course of business and which in the aggregate do not exceed $25,000.
2.5 ABSENCE OF CHANGES. Since the Inmark Statement Date:
(a) No event has occurred that has had or might have a Material
Adverse Effect on Inmark;
(b) There has not been any loss with respect to, or any interruption
in the use of, any of Inmark's assets (whether or not covered by insurance);
9.
(c) Inmark has not (i) declared, accrued, set aside or paid any
dividend or made any other distribution in respect of any of its capital stock,
or (ii) repurchased, redeemed or otherwise reacquired any of its capital stock;
(d) Inmark has not sold or otherwise issued any shares of capital
stock or any options, warrants or other rights to purchase or receive shares of
capital stock or other securities convertible into, exchangeable for, or
evidencing the right to subscribe for, any shares of capital stock of Inmark;
(e) Inmark has not amended its Articles of Incorporation or Bylaws
and has not effected or been a party to any Acquisition Transaction,
recapitalization, reclassification of shares, stock split, reverse stock split
or similar transaction;
(f) Inmark has not purchased or otherwise acquired any material asset
from any other person or entity, other than in the ordinary course of business;
(g) Inmark has not leased or licensed any material asset from any
other person or entity other than in the ordinary course of business;
(h) Inmark has not made any individual capital expenditure in excess
of $50,000;
(i) Inmark has not sold or otherwise transferred, and has not leased
or licensed, any material asset to any other person or entity except in the
ordinary course of business;
(j) Inmark has not written off as uncollectible, or established any
extraordinary reserve with respect to, any account receivable or other
indebtedness;
(k) Inmark has not pledged or hypothecated any of its assets or
otherwise permitted any of its assets to become subject to any lien or
encumbrance;
(l) Inmark has not made any loan or advance to any other person or
entity, except for employee travel advances made in the ordinary course of
business;
(m) Inmark has not (i) established or adopted any employee benefit
plan, or (ii) paid any bonus or made any profit-sharing or similar payment to,
or increased the amount of the wages, salary, commissions, fringe benefits or
other compensation or remuneration payable to, any of its directors, officers or
employees, other than in accordance with past practice;
(n) No material contract, agreement or obligation by which Inmark or
any of the assets owned or used by Inmark is or was bound, or under which Inmark
has or had any rights or interest, has been amended or terminated;
10.
(o) Inmark has not discharged any lien or encumbrance or discharged
or paid any indebtedness or other liability, except for accounts payable that
(i) are reflected as current liabilities in the Inmark Financial Statements or
have been incurred by Inmark since the Inmark Statement Date in the ordinary
course of business, and (ii) have been discharged or paid in the ordinary course
of business;
(p) Inmark has not forgiven any debt or otherwise released or waived
any right or claim;
(q) Inmark has not changed any of its methods of accounting or
accounting practices in any respect;
(r) Inmark has not entered into any transaction or taken any other
action outside the ordinary course of business; and
(s) Inmark has not agreed, committed or offered (in writing or
otherwise), and has not attempted, to take any of the actions referred to in
clauses "(c)" through "(r)" above.
2.6 CONTRACTS.
(a) Schedule 2.6(a) identifies each contract, agreement, lease,
instrument, understanding or arrangement to which Inmark is a party, or by which
Inmark is or may become subject, or by which any of its assets are or may become
bound (each, an "Inmark Material Contract"):
(i) for the employment, or restricting the employment, of any
employee;
(ii) with respect to consulting services under which Inmark is
obligated to make payments in excess of $25,000 in any year or under which
Inmark paid in excess of $25,000 in calendar year 1994;
(iii) restricting in any manner its right to compete with any
other person or entity or restricting its right to sell to or purchase from any
other person or entity;
(iv) with any Affiliate, or any person controlled by an
Affiliate, for or with respect to the purchase or sale of goods, the performance
of services or the loan or guarantee of any amount by or to Inmark;
(v) regarding the payment or receipt of license fees or
royalties to or from any person with annual payment obligations in excess of
$25,000;
(vi) regarding the license to Inmark of any Proprietary Asset,
other than end-user license agreements entered into in the ordinary course of
business;
11.
(vii) regarding agency, representation, distribution or
franchise, and that cannot be canceled without payment or penalty of less than
$25,000 upon notice of 60 days or less;
(viii) contracts relating to the sale, transfer or disposition
of Inmark's securities;
(ix) lease or sublease, either as lessee or sublessee, lessor or
sublessor, of real or personal property or intangibles;
(x) warranty or service contracts;
(xi) that provides for the guaranty for borrowed money by, or
indemnification obligations of, another person; or
(xii) that is specified under Section 2.10(e).
(b) Each Inmark Material Contract is in full force and effect, is
binding upon Inmark and, to the best of Inmark's knowledge, is binding on all
other parties thereto. Copies of each Inmark Material Contract have been
provided to counsel to Rogue Wave. Inmark and the other parties to such Inmark
Material Contracts have duly performed its obligations under each Inmark
Material Contract to the extent such obligations to perform have accrued, and no
breach or default, or alleged breach or default, or event which would (with the
passage of time, notice or both) constitute a breach or default thereunder has
occurred or has been alleged, nor will occur as a result of consummation of the
transactions contemplated by this Agreement, and, to the best of Inmark's
knowledge, no breach or default by any other contracting parties thereunder has
occurred or has been alleged. Consummation of the transactions contemplated by
this Agreement will not (and will not give any person a right to) terminate or
modify any material rights of, or accelerate or augment any material obligation
of Inmark under any Inmark Material Contract.
(c) Schedule 2.6(c) identifies each permit or license applied for,
pending, issued or given to Inmark that is material to the conduct of the
business, and Inmark possesses all such licenses and permits required in
order to operate the business, and is in compliance with each such license
and permit. Each such license and permit is valid and in full force and
effect and will remain so upon consummation of the transactions contemplated
by this Agreement except where the failure to comply would not have a
Material Adverse Effect.
2.7 TAX MATTERS. With respect to Taxes (as defined below):
(a) Inmark has filed or will file or cause to be filed, within the
time and in the manner prescribed by law, all returns, declarations, reports,
estimates, information returns and statements, including information returns and
reports ("Returns") required to be filed under federal, state, local or any
foreign laws by Inmark for all Returns due on or prior to the
12.
Effective Time; all Returns so filed complied in all material respects with
the laws, rules and regulations applicable to such Returns;
(b) Inmark has within the time and in the manner prescribed by law,
paid (and until the Closing will, within the time and in the manner prescribed
by law, pay) all Taxes (as defined below) that are due and payable;
(c) Inmark has established (and until the Closing will establish) on
its books and records reserves that are adequate for the payment of all Taxes
not yet due and payable and there is (and until the Closing shall be) no
material difference between the amounts of the book basis and the tax basis of
assets (net of liabilities) that are not accounted for by an accrual on the
books for federal income tax purposes or, if not required to be so accrued under
GAAP, are described in Schedule 2.7(c);
(d) There are no liens for Taxes upon the assets of Inmark except
liens for Taxes not yet due;
(e) Inmark has not filed (and will not file prior to the Effective
Time) any consent agreement under Section 341(f) of the Internal Revenue Code of
1986, as amended (the "Code") or agreed to have Section 341(f)(2) of the Code
apply to any disposition of the subsection (f) asset (as such term is defined in
Section 341(f)(4) of the Code) owned by Inmark;
(f) No deficiency or adjustment for any Taxes has been proposed or
asserted or assessed against Inmark and, to the best of Inmark's knowledge, no
foreign, federal, state or local audits, examination or other administrative
proceedings or court proceedings are presently pending with regard to any Taxes,
and no waiver or consent extending any statute of limitations for the assessment
or collection of any Taxes, which waiver or consent remains in effect, has been
executed by (or on behalf of) Inmark nor are any requests for such waiver or
consent pending;
(g) Inmark is not a party to any tax-sharing or allocation agreement,
nor does Inmark owe any amount under any tax-sharing or allocation agreement;
(h) The acquisition of Inmark by Rogue Wave will not result in the
payment of any "excess parachute payment" within the meaning of Section 280G of
the Code and there is no agreement, plan or arrangement covering any employee or
independent contractor of Inmark that would give rise to any payment that would
not be deductible pursuant to Section 280G or Section 162 of the Code;
(i) Inmark has not made any election under Section 338(g) of the Code
with respect to any acquisition and no outstanding debt obligation of Inmark is
"corporate acquisition indebtedness" within the meaning of Section 279(b) of the
Code;
(j) Inmark is not a United States Real Property Holding Corporation
as defined under Section 897(c)(2) of the Code;
13.
(k) Schedule 2.7 lists the years involved, type of Tax and taxing
authority involved for every completed audit of Taxes of Inmark; and
(l) For purposes of this Agreement, "Taxes" shall mean all taxes,
charges, fees, levies, or other assessments of whatever kind or nature,
including, without limitation, all net income, gross income, gross receipts,
sales, use, value-added, ad valorem, transfer, franchise, profits, license,
withholding, payroll, employment, excise, estimated, severance, stamp, net
worth, environmental, occupancy or property taxes, customs duties, fees,
assessments or charges of any kind whatsoever (together with any interest and
any penalties, additions to tax or additional amounts) imposed by any taxing
authority (domestic or foreign) upon or payable by Inmark or Rogue Wave, as
applicable.
2.8 EMPLOYEE AND LABOR MATTERS.
(a) Section 2.8 accurately sets forth, with respect to each employee
of Inmark (including any employee of Inmark who is on a leave of absence or on
layoff status):
(i) the name, title and general duties of such employee;
(ii) each Inmark Plan (as defined in Section 2.11) in which such
employee participates or is eligible to participate; and
(iii) accurate and complete information as to the aggregate
dollar amount of the compensation (including wages, salary, commissions,
director's fees, fringe benefits, bonuses, profit-sharing payments and other
payments or benefits of any type) received by each such employee with respect to
services performed for Inmark for the year to date June 30, 1995, and any change
in such employee's aggregate monthly compensation since June 30, 1995.
(b) No former employee of Inmark is receiving or is scheduled to
receive (or whose spouse or other dependent is receiving or is scheduled to
receive) any benefits (whether from Inmark or otherwise) relating to such former
employee's employment with Inmark.
(c) Inmark is not, and never has been, a party to or bound by any
employment agreement or any union contract, collective bargaining agreement or
similar contract.
(d) The employment of each of Inmark's employees is terminable by
Inmark at will. Inmark has delivered to Rogue Wave accurate and complete copies
of all employee manuals and handbooks, disclosure materials, policy statements
and other materials relating to the employment of the current and former
employees of Inmark.
(e) To the best of Inmark's knowledge, none of its employees (i)
presently intends to terminate his employment with Inmark, or (ii) is a party
to or is bound by any confidentiality agreement, noncompetition agreement or
other contract or agreement that may have an adverse effect on (A) the
performance by such employee of any of his duties or
14.
responsibilities as an employee of Inmark or Rogue Wave, or (B) the business
of Inmark or Rogue Wave.
(f) There is no unfair labor practice charge or similar charge,
complaint, allegation or other process or claim pending or, to the knowledge of
Inmark, threatened, against Inmark before the National Labor Relations Board or
any other Governmental Entity which, if adversely determined, would have a
Material Adverse Effect. There is not now pending, never has been, and to the
best of Inmark's knowledge, no person or entity has threatened to commence, any
slowdown, work stoppage, labor dispute or union organizing activity or any
similar activity or dispute affecting Inmark or any of its employees. No event
has occurred, and no condition or circumstance exists, that might directly or
indirectly give rise to or provide a basis for the commencement of any such
slowdown, work stoppage, labor dispute or union organizing activity or any
similar activity or dispute.
2.9 REAL AND PERSONAL PROPERTY.
(a) Inmark has good and valid title to or other right to use, free of
any liens or encumbrances, (i) all real property held on a fee basis used in its
business, all leasehold property held pursuant to leases (each, a "Lease") and
all other interests in such real property, and (ii) all other tangible assets
and properties that presently are used in its business, including tangible
assets and properties that it purports to own or have the right to use as
reflected in the Inmark Financial Statements or that thereafter were acquired,
except, in each case, for (a) liens reflected in the Inmark Financial Statements
as securing specified liabilities (with respect to which no default exists), (b)
liens for Taxes not yet due or matters otherwise described on Schedule 2.7
(whether or not such liens or other matters constitute encumbrances), and
(c) assets and properties disposed of since the Inmark Statement Date in the
ordinary course of business.
(b) Each Lease is valid, binding and enforceable against Inmark and,
to the best of Inmark's knowledge, each other party thereto, subject only to
such exceptions as do not materially interfere with the operation of the
business conducted on such leasehold property or are not material to the
business. There is not pending nor, to Inmark's knowledge, threatened, any
proceeding that would interfere with the quiet enjoyment of any such leasehold
property held by Inmark pursuant to any such Lease. Inmark is not in default
under the terms of any Lease nor, to the best of Inmark's knowledge, is any
other party thereto in default thereunder, and no event has occurred which (with
notice, lapse of time or both) would constitute a default thereunder by Inmark.
There are no condemnation proceedings pending nor, to the best of Inmark's
knowledge, threatened with respect to any portion of any property subject to a
Lease. All of the real property and personal property of Inmark are in all
material respects fit for the purposes for which intended and in good operating
condition and repair, ordinary wear and tear excepted, and as of the Closing,
such assets shall constitute all of the properties, rights and assets necessary
for the conduct of the business.
15.
2.10 PROPRIETARY ASSETS.
(a) Schedule 2.10 identifies each Proprietary Asset owned by or
licensed to Inmark that is material to the business of Inmark, including,
without limitation, the title and a brief description of each Inmark software
program developed by or on behalf of Inmark or under development by or on behalf
of Inmark (the "Inmark Software") and the release date or expected release date
of such Inmark Software, and such Proprietary Assets constitute all of the
Proprietary Assets necessary or useful to enable Inmark to conduct its business
in the manner currently being conducted and in the manner in which its business
is proposed to be conducted.
(b) Inmark has taken the measures and precautions necessary to
protect the confidentiality and value of each Proprietary Asset identified or
required to be identified on Schedule 2.10, and Schedule 2.10 specifies each
jurisdiction in which issuance or registration of any such Proprietary Assets
has been filed and applicable registration or application numbers.
(c) Inmark has not received any notice or other communication (in
writing or otherwise) of any actual, alleged, possible or potential
infringement of, and, to the best of its knowledge, presently is not
infringing and has not at any time infringed, any Proprietary Asset owned or
used by any other person or entity. To the best of Inmark's knowledge, no
other person or entity is infringing, and no Proprietary Asset owned or used
by any other person or entity infringes or conflicts with, any Proprietary
Asset owned or used by Inmark.
(d) To the extent any Proprietary Asset, including, without
limitation, any Inmark Software, has been licensed or developed, in whole or in
part, from or by any consultant or other third party, a description of such
Proprietary Asset and the third party relationship, including information
regarding any Inmark Material Contract with respect thereto, is set forth on
Schedule 2.10.
(e) Schedule 2.6(a) identifies all license, distribution or
agreements of any type related to the Proprietary Assets, including, without
limitation, each Inmark Software, including, all agreements related to (i) the
license, assignment or other transfer of any patent, copyright, trademark, trade
secret and other intellectual property rights thereto, and (ii) the
modification, reproduction, license, sublicense, distribution or marketing of
any Proprietary Asset, including, without limitation, each type of Inmark
Software. There are no oral agreements related to any of the foregoing. Any
obligation to pay royalties under any of such agreements is set forth on
Schedule 2.6(a).
2.11 BENEFIT PLANS; ERISA. All material employee benefit plans,
programs, policies, or arrangements (including, without limitation, each
employee benefit plan within the meaning of Section 3(3) of ERISA) that are
sponsored, maintained or contributed to or required to be contributed to by
Inmark for the benefit of any active, former, or retired employee of Inmark
are listed in Schedule 2.6(a) (the "Inmark Plans"). Each Inmark Plan has
been maintained and administered in all material respects with its terms and
applicable law, including ERISA and the Code. Any Inmark Plan intended to be
qualified under Section 401(a) of the Code has either obtained a favorable
determination letter as to its qualified status from the IRS or still has a
16.
remaining period of time under applicable Treasury Regulations or IRS
pronouncements in which to apply for such determination letter and to make
any amendments necessary to obtain a favorable determination. No Inmark Plan
is covered by Title IV of ERISA or Section 412 of the Code. To the knowledge
of Inmark, neither Inmark nor any officer or director of Inmark has incurred
any liability or penalty under Sections 4975 through 4980 of the Code or
Title I of ERISA. No suit, action, or other litigation (excluding claims for
benefits incurred in the ordinary course of Inmark Plan activities) has been
brought or, to the knowledge of Inmark, is threatened against or with respect
to any such Inmark Plan. All material contributions, reserves, or premium
payments required to be made or accrued as of the date hereof to the Inmark
Plans have been made or accrued.
2.12 PROCEEDINGS; ORDERS.
(a) (i) There is no Proceeding or order, injunction, writ or decree
pending or, to the best of Inmark's knowledge, threatened, against or affecting
Inmark or any of its assets that has or would have a Material Adverse Effect.
(ii) To the best of Inmark's knowledge, no event has occurred,
and no claim, dispute or other condition or circumstance exists, that might
directly or indirectly give rise to or serve as a basis for the commencement of
any such Proceeding or the imposition of any such order, injunction, writ or
decree.
(b) Schedule 2.12 identifies each Proceeding pending or order,
injunction, writ or decree that (i) involves a claim or potential claim of
liability in excess of $10,000 against or affecting Inmark or any of its assets
or (ii) enjoins or seeks to enjoin any activity by Inmark or any of its
directors or officers.
(c) Inmark has delivered or made available to Rogue Wave accurate and
complete copies of all pleadings, correspondence and other written materials to
which Inmark has access that relate to each Proceeding identified on Schedule
2.12.
2.13 ENVIRONMENTAL PROVISIONS.
(a) To the best of Inmark's knowledge, Inmark is in full compliance
with all applicable Environmental Laws, which compliance includes, but is not
limited to, the possession by Inmark of all permits and licenses required under
applicable Environmental Laws, and compliance with the terms and conditions
thereof, except where the failure to so comply would not have a Material Adverse
Effect. Inmark has not received any communication (written or oral) from any
person alleging that Inmark is not in such full compliance, and, to the best of
Inmark's knowledge, there are no circumstances that may prevent or interfere
with such full compliance in the future. Schedule 2.13 identifies all permits
and licenses currently held by Inmark pursuant to Environmental Laws.
(b) There is no Environmental Claim pending or, to the best of
Inmark's knowledge, threatened against Inmark or against any person or entity
from whom Inmark has,
17.
or may have, retained or assumed liability for any Environmental Claim either
contractually or by operation of law.
(c) Without limiting the generality of the foregoing, Schedule 2.13
identifies (i) all on-site and off-site locations where Inmark has stored or
disposed of, and all entities with which Inmark has arranged for the disposal
of, Materials of Environmental Concern, and (ii) all underground storage tanks
(whether or not in use by Inmark), and the capacity and contents of such tanks,
located on property owned or leased by Inmark. To the best of Inmark's
knowledge, there is no asbestos contained in or forming a part of any building,
building component, structure or office space owned or leased by Inmark, and
(iv) no polychlorinated biphenyls (PCBs) are used or stored at any property
owned or leased by Inmark.
2.14 INSURANCE. Inmark is, and at all times during the past two years has
been, insured with reputable insurers against all risks normally insured against
by comparable entities, and all of the insurance policies and bonds required to
be maintained by Inmark are in full force and effect. Schedule 2.14 lists all
insurance policies and bonds that, as of the date hereof, are material to the
business of Inmark. Inmark is not in default under any such policy or bond, and
no event which would (with the passage of time, notice or both) constitute a
breach or default thereunder by Inmark or, to the best knowledge of Inmark, the
insurer thereunder has occurred or, to the knowledge of Inmark, will occur as a
result of the transactions contemplated herein. Consummation of the
transactions contemplated herein will not (and will not give any person or
entity a right to) terminate or modify any material rights of, or accelerate or
augment any material obligation of, Inmark under any insurance policy or bond
insofar as such policy or bond relates to or covers occurrences that give rise
to claims for occurrences taking place prior to the Closing Date. There is no
pending claim under any of the policies set forth on Schedule 2.14, and no event
has occurred and no condition exists that could reasonably be expected to give
rise to or serve as a basis for any such claim.
2.15 RECEIVABLES; MAJOR CUSTOMERS.
(a) Schedule 2.15 provides an accurate and complete breakdown and
aging of all accounts receivable, notes receivable and other receivables of
Inmark as of the Inmark Statement Date.
(b) All existing accounts receivable of Inmark (including those
accounts receivable reflected on the Inmark Financial Statements that have not
yet been collected and those accounts receivable that have arisen since the
Inmark Statement Date and have not yet been collected):
(i) represent valid obligations of customers of Inmark arising
from bona fide transactions entered into in the ordinary course of business; and
(ii) are dated as set forth on Schedule 2.15 and, to the best of
Inmark's knowledge after reasonable investigation, will be collected in full
(without any counterclaim or setoff) on or before December 31, 1995.
18.
2.16 DISCLOSURE.
(a) The copies of all documents furnished by Inmark pursuant to the
terms of this Agreement are complete and accurate. Inmark has provided Rogue
Wave and its counsel with full and complete access to all of Inmark's
facilities, employees, vendors, records and other documents and data.
(b) For purposes of this Agreement and the transactions contemplated
hereby, none of (i) the representations and warranties made by Inmark in this
Agreement, (ii) the Inmark Disclosure Statement or (iii) any statement by Inmark
or, to the best of Inmark's knowledge, any other person, contained in any
document, certificate or other writing furnished by Inmark to Rogue Wave in
connection this Agreement, the Merger or the transactions contemplated hereby,
contains or will contain any untrue statement of a material fact or omits or
will omit to state any material fact necessary to make the statements made
herein or wherein, in light of the circumstances in which they were made, not
misleading.
(c) There is no fact within the knowledge of Inmark that (i) may have
an adverse effect on Inmark's business, condition, assets, liabilities,
operations, financial performance, net income or prospects (or any portion
thereof) or on the ability of Inmark to comply with or perform any covenant or
obligation under the Agreement or any document certificate or writing furnished
in connection with the transactions contemplated hereby, or (ii) may have the
effect of preventing, delaying, making illegal or otherwise interfering with the
Merger.
2.17 NO BROKERS OR FINDERS. No agent, broker, finder, or investment or
commercial banker, or other person or entity engaged by or acting on behalf of
Inmark in connection with the transactions contemplated herein is or will be
entitled to any broker's or finder's or similar fee or other commission as a
result of the transactions contemplated herein.
2.18 THIRD PARTY CONSENTS. No consent or approval is needed from any third
party in order to effect the Merger, this Agreement or any of the transactions
contemplated hereby.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF ROGUE WAVE AND RW SUB
Except as set forth in the Rogue Wave Disclosure Statement, each of Rogue
Wave and RW Sub represents, warrants and agrees, as of the date hereof, as
follows:
3.1 ORGANIZATION AND RELATED MATTERS. It is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the requisite corporate power and
authority to own, lease and operate its respective assets and properties and
to carry on its respective business as now being conducted. It is qualified
to do business and is in good standing in each jurisdiction in which the
properties owned, leased or
19.
operated by it or the nature of its business makes such qualification
necessary, except where the failure to be so qualified and in good standing
would not have a Material Adverse Effect on its business, as presently
conducted. True, accurate and complete copies of the organizational
documents of each of Rogue Wave and RW Sub, in each case as in effect on the
date hereof, including all amendments thereto, and minutes of all actions,
and actions by written consent of the directors and shareholders of Rogue
Wave and RW Sub, as applicable, have been delivered to Inmark.
3.2 CAPITALIZATION.
(a) The authorized capital stock of Rogue Wave consists of (i)
7,200,000 shares of Rogue Wave Common Stock, $0.001 par value, of which as of
the date hereof, 3,820,400 are issued and outstanding, and (ii) 1,200,000 shares
of Rogue Wave Preferred Stock, $0.001 par value, all of which are designated
Series A Preferred Stock and are issued and outstanding as of the date hereof.
As of the date hereof, the issued and outstanding shares of Series A Preferred
Stock are convertible into 1,200,000 shares of Rogue Wave Common Stock. The
issued and outstanding shares of Rogue Wave Common Stock and Rogue Wave
Preferred Stock are validly issued, fully paid and nonassessable. Schedule
3.2(a) sets forth a list of all shareholders of Rogue Wave and the number of
shares they hold, beneficially and of record, of Rogue Wave Common Stock.
(b) The authorized capital stock of RW Sub consists of 1,000 shares
of Common Stock, $0.01 par value, all of which are issued, outstanding and held
by Rogue Wave as of the date hereof. There are not as of the date hereof, and
on the Effective Time there will not be, any outstanding subscriptions, options,
warrants, stock appreciation rights, calls, rights, convertible securities or
other agreements or commitments of any character relating to issued or unissued
capital shares or other securities of RW Sub, or otherwise obligating RW Sub to
issue, transfer or sell any capital shares of RW Sub, or other securities
convertible into, exchangeable for, or evidencing the right to subscribe for,
any capital shares of RW Sub. All shares of RW Sub capital stock have been
issued in compliance with federal and state securities laws.
(c) As of the date hereof, there are Rogue Wave Options
outstanding to purchase 1,649,350 shares of Rogue Wave Common Stock pursuant
to Rogue Wave's 1994 Stock Option Plan, a list of which has been delivered
with the Rogue Wave Disclosure Statement to Inmark or its counsel. Set forth
on Schedule 3.2(c) is the name of each optionee, the number of shares of
Rogue Wave Common Stock subject to each Rogue Wave Option, the date of grant
and exercise price of each Rogue Wave Option and a vesting schedule for such
Rogue Wave Option. Except as set forth above or pursuant to the exercise of
Rogue Wave Options, there are not as of the date hereof, and on the Effective
Time there will not be, any outstanding subscriptions, options, warrants,
stock appreciation rights, calls, rights, convertible securities or other
agreements or commitments of any character relating to issued or unissued
capital shares or other securities of Rogue Wave, or otherwise obligating
Rogue Wave to issue, transfer or sell any capital shares of Rogue Wave, or
other securities convertible into, exchangeable for, or evidencing the right
to subscribe for, any capital shares of Rogue Wave. All shares of Rogue
20.
Wave capital stock have been issued in compliance with federal and state
securities laws, and Rogue Wave has no liability to any current or former
shareholder of Rogue Wave arising from or relating to the offer and sale of
any of its securities, whether under federal or state securities law, or
otherwise. There are no voting trusts, proxies or other agreements or
understandings to which Rogue Wave is a party or is bound with respect to the
voting of any of the capital stock of Rogue Wave.
(d) Except for RW Sub, Rogue Wave has no subsidiaries and, except as
set forth on Schedule 3.2(d), Rogue Wave does not own or hold, directly or
indirectly, any debt or equity securities of, nor has any other interest in, any
corporation, limited liability company, partnership, joint venture or other
entity.
3.3 AUTHORITY; NONCONTRAVENTION; APPROVALS.
(a) Each of Rogue Wave and RW Sub has full corporate power and
authority to execute, deliver and perform this Agreement and the Agreement of
Merger, as applicable. The execution, delivery and performance of the Agreement
and the Agreement of Merger has been duly and validly authorized by the
respective Board of Directors of Rogue Wave and RW Sub, and by all other
necessary corporate action on the part of Rogue Wave and RW Sub. This Agreement
and the Agreement of Merger have been, or will be on or prior to the Closing
Date, duly and validly executed and delivered by Rogue Wave or RW Sub, as
applicable, and constitutes the valid and binding agreement of Rogue Wave or RW
Sub, enforceable against Rogue Wave or RW Sub in accordance with its terms,
except as such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting or relating to
enforcement of creditors' rights generally, and general equitable principles.
(b) Neither the execution and delivery of this Agreement by Rogue
Wave or RW Sub nor the consummation by Rogue Wave or RW Sub of the transactions
contemplated herein will (i) conflict with or result in any breach of any
provision of its respective organizational documents, (ii) result in a default
(or give rise to any right of termination, cancellation, acceleration,
repurchase, put or call) under the terms, conditions or provisions of any note,
bond, mortgage, indenture or other evidence of indebtedness of Rogue Wave or RW
Sub or any material license agreement or lease or other material contract,
instrument or obligation to which Rogue Wave or RW Sub is a party, or by which
Rogue Wave or RW Sub or any of its respective assets may be bound, (iii) violate
any statute, rule, regulation, order, writ, injunction, decree or arbitration
award applicable to Rogue Wave or RW Sub or its respective assets, or
(iv) result in the creation of any material (individually or in the aggregate)
liens, charges or encumbrances on any of the assets of Rogue Wave or RW Sub.
(c) No consent, approval, order or authorization of, or registration,
declaration or filing with any Governmental Entity is required by or with
respect to Rogue Wave or RW Sub in connection with the execution and delivery of
this Agreement and the Agreement of Merger by Rogue Wave or RW Sub or the
consummation by Rogue Wave or RW Sub of the transactions contemplated hereby or
thereby, except for (i) the filing of the Agreement of Merger with the Secretary
of State of the State of Delaware and appropriate documents with the relevant
21.
authorities of other states in which Inmark is qualified to do business, (ii)
the issuance of a Permit by the California Department of Corporations with
respect to the issuance of Rogue Wave Common Stock pursuant to this
Agreement, (iii) such other consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the Merger, and (iv) informational filings.
3.4 FINANCIAL STATEMENTS.
(a) Rogue Wave has delivered to Inmark (i) an audited balance sheet
of Rogue Wave as of September 30, 1994, its related audited statements of
operations and cash flows of Rogue Wave for the twelve (12) months then ended,
together with the notes thereto and (ii) its unaudited balance sheet as at July
31, 1995 (the "Rogue Wave Statement Date") and unaudited statement of income for
the ten month period ending on the Rogue Wave Statement Date (collectively, the
"Rogue Wave Financial Statements").
(b) The Rogue Wave Financial Statements are accurate and complete in
all respects and present fairly the financial position of Rogue Wave as of the
Rogue Wave Statement Date and the results of operations of Rogue Wave for the
period covered thereby.
(c) Rogue Wave has no liabilities or obligations (absolute or
contingent) required in accordance with GAAP to be disclosed in the financial
statements of Rogue Wave except liabilities (i) that are reflected or disclosed
in the Rogue Wave Financial Statements, (ii) that are disclosed in this
Agreement or the schedules hereto, or (iii) that were incurred after the Rogue
Wave Statement Date in the ordinary course of business and which in the
aggregate do not exceed $25,000.
3.5 ABSENCE OF CHANGES. Since the Rogue Wave Statement Date:
(a) No event has occurred that has had or might have a Material
Adverse Effect on Rogue Wave;
(b) There has not been any loss with respect to, or any interruption
in the use of, any of Rogue Wave's assets (whether or not covered by insurance);
(c) Rogue Wave has not (i) declared, accrued, set aside or paid any
dividend or made any other distribution in respect of any of its capital stock,
or (ii) repurchased, redeemed or otherwise reacquired any of its capital stock;
(d) Rogue Wave has not sold or otherwise issued any shares of capital
stock or any options, warrants or other rights to purchase or receive shares of
capital stock or other securities convertible into, exchangeable for, or
evidencing the right to subscribe for, any shares of capital stock of Rogue
Wave;
22.
(e) Rogue Wave has not amended its Articles of Incorporation or
Bylaws and has not effected or been a party to any Acquisition Transaction,
recapitalization, reclassification of shares, stock split, reverse stock split
or similar transaction;
(f) Rogue Wave has not purchased or otherwise acquired any material
asset from any other person or entity, other than in the ordinary course of
business;
(g) Rogue Wave has not leased or licensed any material asset from any
other person or entity other than in the ordinary course of business;
(h) Rogue Wave has not made any individual capital expenditure in
excess of $50,000;
(i) Rogue Wave has not sold or otherwise transferred, and has not
leased or licensed, any material asset to any other person or entity except in
the ordinary course of business;
(j) Rogue Wave has not written off as uncollectible, or established
any extraordinary reserve with respect to, any account receivable or other
indebtedness;
(k) Rogue Wave has not pledged or hypothecated any of its assets or
otherwise permitted any of its assets to become subject to any lien or
encumbrance;
(l) Rogue Wave has not made any loan or advance to any other person
or entity, except for employee travel advances made in the ordinary course of
business;
(m) Rogue Wave has not (i) established or adopted any employee
benefit plan, or (ii) paid any bonus or made any profit-sharing or similar
payment to, or increased the amount of the wages, salary, commissions, fringe
benefits or other compensation or remuneration payable to, any of its directors,
officers or employees, other than in accordance with past practice;
(n) No material contract, agreement or obligation by which Rogue Wave
or any of the assets owned or used by Rogue Wave is or was bound, or under which
Rogue Wave has or had any rights or interest, has been amended or terminated;
(o) Rogue Wave has not discharged any lien or encumbrance or
discharged or paid any indebtedness or other liability, except for accounts
payable that (i) are reflected as current liabilities in the Rogue Wave
Financial Statements or have been incurred by Rogue Wave since the Rogue Wave
Statement Date in the ordinary course of business, and (ii) have been discharged
or paid in the ordinary course of business;
(p) Rogue Wave has not forgiven any debt or otherwise released or
waived any right or claim;
23.
(q) Rogue Wave has not changed any of its methods of accounting or
accounting practices in any respect;
(r) Rogue Wave has not entered into any transaction or taken any
other action outside the ordinary course of business; and
(s) Rogue Wave has not agreed, committed or offered (in writing or
otherwise), and has not attempted, to take any of the actions referred to in
clauses "(c)" through "(r)" above.
3.6 CONTRACTS.
(a) Schedule 3.6(a) identifies each contract, agreement, lease,
instrument, understanding or arrangement to which Rogue Wave is a party, or by
which Rogue Wave is or may become subject, or by which any of its assets are or
may become bound (each, a "Rogue Wave Material Contract"):
(i) for the employment, or restricting the employment, of any
employee;
(ii) with respect to consulting services under which Rogue Wave
is obligated to make payments in excess of $25,000 in any year or under which
Rogue Wave paid in excess of $25,000 in calendar year 1994;
(iii) restricting in any manner its right to compete with any
other person or entity or restricting its right to sell to or purchase from any
other person or entity;
(iv) with any Affiliate, or any person controlled by an
Affiliate, for or with respect to the purchase or sale of goods, the performance
of services or the loan or guarantee of any amount by or to Rogue Wave;
(v) regarding the payment or receipt of license fees or
royalties to or from any person with annual payment obligations in excess of
$25,000;
(vi) regarding the license to Rogue Wave of any Proprietary
Asset, other than end-user license agreements entered into in the ordinary
course of business;
(vii) regarding agency, representation, distribution or
franchise, and that cannot be canceled without payment or penalty of less than
$25,000 upon notice of 60 days or less;
(viii) contracts relating to the sale, transfer or disposition
of Rogue Wave's securities;
24.
(ix) lease or sublease, either as lessee or sublessee, lessor or
sublessor, of real or personal property or intangibles;
(x) warranty or service contracts;
(xi) that provides for the guaranty for borrowed money by, or
indemnification obligations of, another person; or
(xii) that is specified under Section 3.10(e).
(b) Each Rogue Wave Material Contract is in full force and effect, is
binding upon Rogue Wave and, to the best of Rogue Wave's knowledge, is binding
on all other parties thereto. Copies of each Rogue Wave Material Contract have
been provided to counsel to Inmark. Rogue Wave and the other parties to such
Rogue Wave Material Contracts have duly performed its obligations under each
Rogue Wave Material Contract to the extent such obligations to perform have
accrued, and no breach or default, or alleged breach or default, or event which
would (with the passage of time, notice or both) constitute a breach or default
thereunder has occurred or has been alleged, nor will occur as a result of
consummation of the transactions contemplated by this Agreement, and, to the
best of Rogue Wave's knowledge, no breach or default by any other contracting
parties thereunder has occurred or has been alleged. Consummation of the
transactions contemplated by this Agreement will not (and will not give any
person a right to) terminate or modify any material rights of, or accelerate or
augment any material obligation of Rogue Wave under any Rogue Wave Material
Contract.
(c) Schedule 3.6(c) identifies each permit or license applied for,
pending, issued or given to Rogue Wave that is material to the conduct of the
business, and Rogue Wave possesses all such licenses and permits required in
order to operate the business, and is in compliance with each such license and
permit. Each such license and permit is valid and in full force and effect and
will remain so upon consummation of the transactions contemplated by this
Agreement except where the failure to comply would not have a Material Adverse
Effect.
3.7 TAX MATTERS. With respect to Taxes:
(a) Rogue Wave has filed or will file or cause to be filed, within
the time and in the manner prescribed by law, all Returns required to be filed
under federal, state, local or any foreign laws by Rogue Wave for all Returns
due on or prior to the Effective Time; all Returns so filed complied in all
material respects with the laws, rules and regulations applicable to such
Returns;
(b) Rogue Wave has within the time and in the manner prescribed by
law, paid (and until the Closing will, within the time and in the manner
prescribed by law, pay) all Taxes that are due and payable;
(c) Rogue Wave has established (and until the Closing will establish)
on its books and records reserves that are adequate for the payment of all Taxes
not yet due and
25.
payable and there is (and until the Closing shall be) no material difference
between the amounts of the book basis and the tax basis of assets (net of
liabilities) that are not accounted for by an accrual on the books for
federal income tax purposes or, if not required to be so accrued under GAAP,
are described in Schedule 3.7(c);
(d) There are no liens for Taxes upon the assets of Rogue Wave except
liens for Taxes not yet due;
(e) Rogue Wave has not filed (and will not file prior to the
Effective Time) any consent agreement under Section 341(f) of the Code or agreed
to have Section 341(f)(2) of the Code apply to any disposition of the subsection
(f) asset (as such term is defined in Section 341(f)(4) of the Code) owned by
Rogue Wave;
(f) No deficiency or adjustment for any Taxes has been proposed or
asserted or assessed against Rogue Wave and, to the best of Rogue Wave's
knowledge, no foreign, federal, state or local audits, examination or other
administrative proceedings or court proceedings are presently pending with
regard to any Taxes, and no waiver or consent extending any statute of
limitations for the assessment or collection of any Taxes, which waiver or
consent remains in effect, has been executed by (or on behalf of) Rogue Wave nor
are any requests for such waiver or consent pending;
(g) Rogue Wave is not a party to any tax-sharing or allocation
agreement, nor does Rogue Wave owe any amount under any tax-sharing or
allocation agreement;
(h) Rogue Wave has not made any election under Section 338(g) of the
Code with respect to any acquisition and no outstanding debt obligation of Rogue
Wave is "corporate acquisition indebtedness" within the meaning of
Section 279(b) of the Code;
(i) Rogue Wave is not a United States Real Property Holding
Corporation as defined under Section 897(c)(2) of the Code; and
(j) Schedule 3.7 lists the years involved, type of Tax and taxing
authority involved for every completed audit of Taxes of Rogue Wave.
3.8 EMPLOYEE AND LABOR MATTERS.
(a) Section 3.8 accurately sets forth, with respect to each employee
of Rogue Wave (including any employee of Rogue Wave who is on a leave of absence
or on layoff status):
(i) the name, title and general duties of such employee;
(ii) each Rogue Wave Plan (as defined in Section 3.11) in which
such employee participates or is eligible to participate; and
26.
(iii) accurate and complete information as to the aggregate
dollar amount of the compensation (including wages, salary, commissions,
director's fees, fringe benefits, bonuses, profit-sharing payments and other
payments or benefits of any type) received by each such employee with respect to
services performed for Rogue Wave for the year to date June 30, 1995, and any
change in such employee's aggregate monthly compensation since June 30, 1995.
(b) No former employee of Rogue Wave is receiving or is scheduled to
receive (or whose spouse or other dependent is receiving or is scheduled to
receive) any benefits (whether from Rogue Wave or otherwise) relating to such
former employee's employment with Rogue Wave.
(c) Rogue Wave is not, and never has been, a party to or bound by any
employment agreement or any union contract, collective bargaining agreement or
similar contract.
(d) The employment of each of Rogue Wave's employees is terminable by
Rogue Wave at will. Rogue Wave has delivered to Inmark accurate and complete
copies of all employee manuals and handbooks, disclosure materials, policy
statements and other materials relating to the employment of the current and
former employees of Rogue Wave.
(e) To the best of Rogue Wave's knowledge, none of its employees (i)
presently intends to terminate his employment with Rogue Wave, or (ii) is a
party to or is bound by any confidentiality agreement, noncompetition agreement
or other contract or agreement that may have an adverse effect on (A) the
performance by such employee of any of his duties or responsibilities as an
employee of Rogue Wave, or (B) the business of Inmark or Rogue Wave.
(f) There is no unfair labor practice charge or similar charge,
complaint, allegation or other process or claim pending or, to the knowledge of
Rogue Wave, threatened, against Rogue Wave before the National Labor Relations
Board or any other Governmental Entity which, if adversely determined, would
have a Material Adverse Effect. There is not now pending, never has been, and
to the best of Rogue Wave's knowledge, no person or entity has threatened to
commence, any slowdown, work stoppage, labor dispute or union organizing
activity or any similar activity or dispute affecting Rogue Wave or any of its
employees. No event has occurred, and no condition or circumstance exists,
that might directly or indirectly give rise to or provide a basis for the
commencement of any such slowdown, work stoppage, labor dispute or union
organizing activity or any similar activity or dispute.
3.9 REAL AND PERSONAL PROPERTY.
(a) Rogue Wave has good and valid title to or other right to use,
free of any liens or encumbrances, (i) all real property held on a fee basis
used in its business, all leasehold property held pursuant to a Lease and all
other interests in such real property, and (ii) all other tangible assets and
properties that presently are used in its business, including tangible assets
and properties that it purports to own or have the right to use as reflected in
the Rogue Wave Financial Statements or that thereafter were acquired, except, in
each case, for (a) liens reflected
27.
in the Rogue Wave Financial Statements as securing specified liabilities
(with respect to which no default exists), (b) liens for Taxes not yet due or
matters otherwise described on Schedule 3.7 (whether or not such liens or
other matters constitute encumbrances), and (c) assets and properties
disposed of since the Rogue Wave Statement Date in the ordinary course of
business.
(b) Each Lease is valid, binding and enforceable against Rogue Wave
and, to the best of Rogue Wave's knowledge, each other party thereto, subject
only to such exceptions as do not materially interfere with the operation of the
business conducted on such leasehold property or are not material to the
business. There is not pending nor, to Rogue Wave's knowledge, threatened, any
proceeding that would interfere with the quiet enjoyment of any such leasehold
property held by Rogue Wave pursuant to any such Lease. Rogue Wave is not in
default under the terms of any Lease nor, to the best of Rogue Wave's knowledge,
is any other party thereto in default thereunder, and no event has occurred
which (with notice, lapse of time or both) would constitute a default thereunder
by Rogue Wave. There are no condemnation proceedings pending nor, to the best
of Rogue Wave's knowledge, threatened with respect to any portion of any
property subject to a Lease. All of the real property and personal property of
Rogue Wave are in all material respects fit for the purposes for which intended
and in good operating condition and repair, ordinary wear and tear excepted, and
as of the Closing, such assets shall constitute all of the properties, rights
and assets necessary for the conduct of the business.
3.10 PROPRIETARY ASSETS.
(a) Schedule 3.10 identifies each Proprietary Asset owned by or
licensed to Rogue Wave that is material to the business of Rogue Wave,
including, without limitation, the title and a brief description of each Rogue
Wave software program developed by or on behalf of Rogue Wave or under
development by or on behalf of Rogue Wave (the "Rogue Wave Software") and the
release date or expected release date of such Rogue Wave Software, and such
Proprietary Assets constitute all of the Proprietary Assets necessary or useful
to enable Rogue Wave to conduct its business in the manner currently being
conducted and in the manner in which its business is proposed to be conducted.
(b) Rogue Wave has taken the measures and precautions necessary to
protect the confidentiality and value of each Proprietary Asset identified or
required to be identified on Schedule 3.10, and Schedule 3.10 specifies each
jurisdiction in which issuance or registration of any such Proprietary Assets
has been filed and applicable registration or application numbers.
(c) Rogue Wave has not received any notice or other communication (in
writing or otherwise) of any actual, alleged, possible or potential infringement
of, and, to the best of its knowledge, presently is not infringing and has not
at any time infringed, any Proprietary Asset owned or used by any other person
or entity. To the best of Rogue Wave's knowledge, no other person or entity is
infringing, and no Proprietary Asset owned or used by any other person or entity
infringes or conflicts with, any Proprietary Asset owned or used by Rogue Wave.
28.
(d) To the extent any Proprietary Asset, including, without
limitation, any Rogue Wave Software, has been licensed or developed, in whole or
in part, from or by any consultant or other third party, a description of such
Proprietary Asset and the third party relationship, including information
regarding any Rogue Wave Material Contract with respect thereto, is set forth on
Schedule 3.10.
(e) Schedule 3.6(a) identifies all license, distribution or
agreements of any type related to the Proprietary Assets, including, without
limitation, each Rogue Wave Software, including, all agreements related to (i)
the license, assignment or other transfer of any patent, copyright, trademark,
trade secret and other intellectual property rights thereto, and (ii) the
modification, reproduction, license, sublicense, distribution or marketing of
any Proprietary Asset, including, without limitation, each type of Rogue Wave
Software. There are no oral agreements related to any of the foregoing. Any
obligation to pay royalties under any of such agreements is set forth on
Schedule 3.6(a).
3.11 BENEFIT PLANS; ERISA. All material employee benefit plans, programs,
policies, or arrangements (including, without limitation, each employee benefit
plan within the meaning of Section 3(3) of ERISA) that are sponsored, maintained
or contributed to or required to be contributed to by Rogue Wave for the benefit
of any active, former, or retired employee of Rogue Wave are listed in Schedule
3.6(a) (the "Rogue Wave Plans"). Each Rogue Wave Plan has been maintained and
administered in all material respects with its terms and applicable law,
including ERISA and the Code. Any Rogue Wave Plan intended to be qualified
under Section 401(a) of the Code has either obtained a favorable determination
letter as to its qualified status from the IRS or still has a remaining period
of time under applicable Treasury Regulations or IRS pronouncements in which to
apply for such determination letter and to make any amendments necessary to
obtain a favorable determination. No Rogue Wave Plan is covered by Title IV of
ERISA or Section 412 of the Code. To the knowledge of Rogue Wave, neither Rogue
Wave nor any officer or director of Rogue Wave has incurred any liability or
penalty under Sections 4975 through 4980 of the Code or Title I of ERISA. No
suit, action, or other litigation (excluding claims for benefits incurred in the
ordinary course of Rogue Wave Plan activities) has been brought or, to the
knowledge of Rogue Wave, is threatened against or with respect to any such Rogue
Wave Plan. All material contributions, reserves, or premium payments required
to be made or accrued as of the date hereof to the Rogue Wave Plans have been
made or accrued.
3.12 PROCEEDINGS; ORDERS.
(a) (i) There is no Proceeding or order, injunction, writ or decree
pending or, to the best of Rogue Wave's knowledge, threatened, against or
affecting Rogue Wave or any of its assets that has or would have a Material
Adverse Effect.
(ii) To the best of Rogue Wave's knowledge, no event has
occurred, and no claim, dispute or other condition or circumstance exists, that
might directly or indirectly give rise to or serve as a basis for the
commencement of any such Proceeding or the imposition of any such order,
injunction, writ or decree.
29.
(b) Schedule 3.12 identifies each Proceeding pending or order,
injunction, writ or decree that (i) involves a claim or potential claim of
liability in excess of $10,000 against or affecting Rogue Wave or any of its
assets or (ii) enjoins or seeks to enjoin any activity by Rogue Wave or any of
its directors or officers.
(c) Rogue Wave has delivered or made available to Inmark accurate and
complete copies of all pleadings, correspondence and other written materials to
which Rogue Wave has access that relate to each Proceeding identified on
Schedule 3.12.
3.13 ENVIRONMENTAL PROVISIONS.
(a) To the best of Rogue Wave's knowledge, Rogue Wave is in full
compliance with all applicable Environmental Laws, which compliance includes,
but is not limited to, the possession by Rogue Wave of all permits and licenses
required under applicable Environmental Laws, and compliance with the terms and
conditions thereof, except where the failure to so comply would not have a
Material Adverse Effect. Rogue Wave has not received any communication (written
or oral) from any person alleging that Rogue Wave is not in such full
compliance, and, to the best of Rogue Wave's knowledge, there are no
circumstances that may prevent or interfere with such full compliance in the
future. Schedule 3.13 identifies all permits and licenses currently held by
Rogue Wave pursuant to Environmental Laws.
(b) There is no Environmental Claim pending or, to the best of Rogue
Wave's knowledge, threatened against Rogue Wave or against any person or entity
from whom Rogue Wave has, or may have, retained or assumed liability for any
Environmental Claim either contractually or by operation of law.
(c) Without limiting the generality of the foregoing, Schedule 3.13
identifies (i) all on-site and off-site locations where Rogue Wave has stored or
disposed of, and all entities with which Rogue Wave has arranged for the
disposal of, Materials of Environmental Concern, and (ii) all underground
storage tanks (whether or not in use by Rogue Wave), and the capacity and
contents of such tanks, located on property owned or leased by Rogue Wave. To
the best of Rogue Wave's knowledge, there is no asbestos contained in or forming
a part of any building, building component, structure or office space owned or
leased by Rogue Wave, and (iv) no polychlorinated biphenyls (PCBs) are used or
stored at any property owned or leased by Rogue Wave.
3.14 INSURANCE. Rogue Wave is, and at all times during the past two years
has been, insured with reputable insurers against all risks normally insured
against by comparable entities, and all of the insurance policies and bonds
required to be maintained by Rogue Wave are in full force and effect. Schedule
3.14 lists all insurance policies and bonds that, as of the date hereof, are
material to the business of Rogue Wave. Rogue Wave is not in default under any
such policy or bond, and no event which would (with the passage of time, notice
or both) constitute a breach or default thereunder by Rogue Wave or, to the best
knowledge of Rogue Wave, the insurer thereunder has occurred or, to the
knowledge of Rogue Wave, will occur as a result of the transactions contemplated
herein. Consummation of the transactions contemplated herein
30.
will not (and will not give any person or entity a right to) terminate or
modify any material rights of, or accelerate or augment any material
obligation of, Rogue Wave under any insurance policy or bond insofar as such
policy or bond relates to or covers occurrences that give rise to claims for
occurrences taking place prior to the Closing Date. There is no pending
claim under any of the policies set forth on Schedule 3.14, and no event has
occurred and no condition exists that could reasonably be expected to give
rise to or serve as a basis for any such claim.
3.15 RECEIVABLES; MAJOR CUSTOMERS.
(a) Schedule 3.15 provides an accurate and complete breakdown and
aging of all accounts receivable, notes receivable and other receivables of
Rogue Wave as of the Rogue Wave Statement Date.
(b) All existing accounts receivable of Rogue Wave (including those
accounts receivable reflected on the Rogue Wave Financial Statements that have
not yet been collected and those accounts receivable that have arisen since the
Rogue Wave Statement Date and have not yet been collected):
(i) represent valid obligations of customers of Rogue Wave
arising from bona fide transactions entered into in the ordinary course of
business; and
(ii) are dated as set forth on Schedule 3.15 and, to the best of
Rogue Wave's knowledge after reasonable investigation, will be collected in full
(without any counterclaim or setoff) on or before December 31, 1995.
3.16 DISCLOSURE.
(a) The copies of all documents furnished by Rogue Wave or RW Sub
pursuant to the terms of this Agreement are complete and accurate. Rogue Wave
has provided Inmark and its counsel with full and complete access to all of
Rogue Wave's facilities, employees, vendors, records and other documents and
data.
(b) For purposes of this Agreement and the transactions contemplated
hereby, none of (i) the representations and warranties made by Rogue Wave in
this Agreement, (ii) the Rogue Wave Disclosure Statement or (iii) any statement
by Rogue Wave or, to the best of Rogue Wave's knowledge, any other person,
contained in any document, certificate or other writing furnished by Rogue Wave
to Inmark in connection this Agreement, the Merger or the transactions
contemplated hereby, contains or will contain any untrue statement of a material
fact or omits or will omit to state any material fact necessary to make the
statements made herein or wherein, in light of the circumstances in which they
were made, not misleading.
(c) There is no fact within the knowledge of Rogue Wave that (i) may
have an adverse effect on Rogue Wave's business, condition, assets, liabilities,
operations, financial performance, net income or prospects (or any portion
thereof) or on the ability of Rogue Wave to comply with or perform any covenant
or obligation under the Agreement or any document
31.
certificate or writing furnished in connection with the transactions
contemplated hereby, or (ii) may have the effect of preventing, delaying,
making illegal or otherwise interfering with the Merger.
3.17 NO BROKERS OR FINDERS. No agent, broker, finder, or investment or
commercial banker, or other person or entity engaged by or acting on behalf of
Rogue Wave in connection with the transactions contemplated herein is or will be
entitled to any broker's or finder's or similar fee or other commission as a
result of the transactions contemplated herein.
3.18 THIRD PARTY CONSENTS. No consent or approval is needed from any third
party in order to effect the Merger, this Agreement or any of the transactions
contemplated hereby.
ARTICLE 4
COVENANTS WITH RESPECT TO THE PERIOD PRIOR TO CLOSING
Rogue Wave covenants on behalf of itself and RW Sub, and Inmark covenants
on behalf of itself, as follows with respect to the period between the date of
this Agreement and the Effective Time:
4.1 ACCESS AND INVESTIGATION.
Each of Rogue Wave, RW Sub and Inmark will provide each other and
their respective representatives with reasonable access to its representatives,
personnel and assets and to copies of all existing books, records, tax returns,
work papers and other documents and information relating to its business, and
will compile and provide each other and their respective representatives with
such additional financial, operating and other data and information regarding
its business as the other may request in good faith.
4.2 OPERATION OF BUSINESS.
(a) Rogue Wave and Inmark will each:
(i) conduct its respective operations in the ordinary course of
business and in the same manner as such operations have been conducted prior to
the date of this Agreement;
(ii) use its best efforts to preserve intact its respective
current business organization, keep available the services of its current
officers and employees and maintain its relations and good will with all
suppliers, customers, landlords, creditors, licensors, licensees, employees and
other persons or entities having business relationships with Inmark; and
(iii) promptly notify the other party of any inquiry,
proposal or offer from any person or entity relating to any Acquisition
Transaction.
32.
(b) Rogue Wave and Inmark will not, without the prior written consent
of the other party except in the ordinary course of business:
(i) declare, accrue, set aside or pay any dividend or make any
other distribution in respect of any of its capital stock and it will not
repurchase, redeem or otherwise reacquire any of its capital stock;
(ii) sell or otherwise issue any capital stock or other equity
interest or securities or other instruments convertible into or exchangeable for
capital stock or any other rights, warrants or options to acquire the foregoing
equity securities;
(iii) amend its respective Articles of Incorporation or
Bylaws, and will not effect or become a party to any Acquisition Transaction,
recapitalization, reclassification of shares, stock split, reverse stock split
or similar transaction;
(iv) form any subsidiary or acquire any equity securities of, or
other interest in, any other entity;
(v) make any individual capital expenditure in excess of
$20,000;
(vi) enter into or permit any of the assets owned or used by
Rogue Wave or Inmark, as applicable, to become bound by any contract or
agreement that would, if entered into prior to the date hereof, be required to
be identified as an Inmark Material Contract or Rogue Wave Material Contract
pursuant to Section 2.6 and Section 3.6, respectively;
(vii) incur, assume or otherwise become subject to any
material liability, except for current liabilities incurred in the ordinary
course of business;
(viii) commence any Proceeding;
(ix) take or permit any action that would prevent the Merger from
qualifying as a tax-free reorganization under Section 368(a)(1)(A) of the Code;
(x) enter into any transaction or take any other action of the
type referred to in Section 2.5 or Section 3.5, as applicable;
(xi) enter into any transaction or take any other action that
might cause or constitute a breach of any representation or warranty made by
Rogue Wave or Inmark, as applicable, in this Agreement; and
(xii) agree, commit, offer (in writing or otherwise) or
attempt to take any of the actions prohibited by this subsection (b).
33.
4.3 FILINGS AND CONSENTS.
(a) Rogue Wave and Inmark agree to:
(i) make or give as soon as possible after the date of this
Agreement each filing or notice required to be made or given (pursuant to any
applicable statute, rule, regulation, order, writ, injunction, decree or
arbitration award, contract or otherwise) by it in connection with the execution
and delivery of the Agreement or the Agreement of Merger or in connection with
the consummation or performance of any of the transactions contemplated herein;
(ii) obtain each consent (pursuant to any applicable statute,
rule, regulation, order, writ, injunction, decree or arbitration award, contract
or otherwise) required by it in connection with the execution and delivery of
the Agreement or the Agreement of Merger or in connection with the consummation
or performance of any of the transactions contemplated herein as soon as
possible after the date of this Agreement;
(iii) promptly deliver to the other party a copy of each
filing made, each notice given and each consent obtained by it; and
(iv) cooperate, and ensure that its representatives cooperate,
with reasonable requests of the other party and representatives, and prepare and
make available such documents and take such other actions as the other party may
request in good faith, in connection with any filing, notice or consent that
such party is required or elects to make, give or obtain.
4.4 NOTIFICATION; UPDATES TO DISCLOSURE. Each of Rogue Wave, RW Sub and
Inmark promptly shall notify the others in writing of:
(a) the discovery by it of any event, condition, fact or circumstance
that occurred or existed on or prior to the date of this Agreement and that
caused or constitutes a material breach of any representation or warranty made
by it in this Agreement;
(b) any event, condition, fact or circumstance that occurs, arises or
exists after the date of this Agreement and that would cause or constitute a
material breach of any representation or warranty made by it in this Agreement
if (i) such representation or warranty had been made as of the time of the
occurrence, existence or discovery of such event, condition, fact or
circumstance, or (ii) such event, condition, fact or circumstance had occurred,
arisen or existed on or prior to the date of this Agreement;
(c) any material breach of any of its covenants or obligations; and
(d) any event, condition, fact or circumstance that may make the
timely satisfaction of any of the conditions set forth in Article 5 impossible
or unlikely.
34.
4.5 NO NEGOTIATION. Inmark and Rogue Wave will not (with the exception of
the prior retention of Xxxxxxx, Xxxxxx & Xxxxxxxxx, L.L.C., and only in
connection with Rogue Wave and Inmark, taken as a whole), and will ensure that
none of its respective representatives, directly or indirectly:
(a) enter into any contract, agreement, understanding or arrangement
relating to any Acquisition Transaction;
(b) solicit or encourage the initiation of any inquiry, proposal or
offer from any person or entity (other than Rogue Wave) relating to any
Acquisition Transaction;
(c) participate in any discussions or negotiations with, or provide
any information regarding Inmark or Rogue Wave or its respective business or
operations to, any person or entity (other than Rogue Wave or Inmark, as
applicable) relating to any proposed Acquisition Transaction; or
(d) permit any Affiliate of Inmark or Rogue Wave to do any of the
foregoing.
4.6 CONFIDENTIALITY. Each of Rogue Wave, RW Sub and Inmark shall ensure
that:
(a) it and its respective representatives keep strictly confidential
the terms of this Agreement;
(b) without the prior written consent of the other, neither it nor
any of its representatives issues or disseminates any press release or other
publicity or otherwise makes any disclosure of any nature (to any of its
suppliers, customers, landlords, creditors or to any other person or entity)
regarding any of the transactions contemplated herein, except to the extent
required by law to make any such disclosure regarding the transactions
contemplated herein; and
(c) if it is required by law to make any disclosure regarding the
transactions contemplated herein, it promptly advises the other, of the nature
and content of the intended disclosure.
4.7 APPROVAL OF MERGER. Each of RW Sub and Inmark shall solicit the
consent of its shareholders as promptly as practicable after the issuance of the
Permit for the purpose of obtaining the shareholder approval required in
connection with the transactions contemplated hereby, and shall use its best
efforts to obtain such approval. Rogue Wave, after the issuance of the Permit,
agrees to vote its shares of RW Sub in favor of the Merger.
4.8 CLOSING DOCUMENTS. Each of Rogue Wave, RW Sub and Inmark shall use
its best efforts to deliver to such other parties as is required under this
Agreement the closing documents referred to in this Agreement.
35.
4.9 SHAREHOLDER CERTIFICATES. Inmark shall deliver to Rogue Wave a
certificate regarding continuity of interest and similar matters in a form
reasonably satisfactory to Rogue Wave or its counsel (a "Shareholder
Certificate") signed by a majority of the holders of Inmark Outstanding Shares.
4.10 FIRPTA LETTER. Prior to the Effective Time, Inmark shall deliver to
Rogue Wave a statement executed on Inmark's behalf by its President in such form
as reasonably requested by counsel for Rogue Wave, confirming the requirements
of Treasury Regulation Section 1.897-2(h)(1)(i), if required.
4.11 FAIRNESS HEARING AND PERMIT. Rogue Wave and Inmark shall prepare an
Application for Qualification of Securities by Permit under Section 25121 of the
California Corporate Securities Law of 1968, as amended, a related Notice of
Hearing and an information statement or other disclosure material (the
"Disclosure Document") to be supplied to the shareholders of Inmark in
connection with the transactions contemplated hereby (collectively, the "Hearing
Documents"). Rogue Wave and Inmark will file the Hearing Documents as promptly
as practicable with the California Department of Corporations and request a
hearing on the fairness of the Merger pursuant to Section 25142 of the
California Corporate Securities Law. Rogue Wave and Inmark will thereafter
endeavor in good faith to obtain a finding of fairness and the issuance of a
Permit to such effect by the California Department of Corporations as a result
of such hearing.
4.12 EXPENSES. Whether or not the Merger is consummated, all costs and
expenses incurred in connection with this Agreement, the Agreement of Merger and
the transactions contemplated hereby and thereby, including fees of any finders
or brokers or attorneys and accountants retained by such party, shall be paid by
the party incurring such expense; PROVIDED, HOWEVER, that such payment
obligation shall not preclude either party from pursuing any remedies conferred
hereby or by law or equity on such party for the repayment of such amounts in
connection with a breach of this Agreement.
4.13 ISSUANCE OF SHARES. Rogue Wave shall, as and when required under this
Agreement and the Agreement of Merger, issue and deliver certificates
representing the Rogue Wave Common Stock into which the Inmark Outstanding
Shares at the Effective Time of the Merger will be converted.
ARTICLE 5
CONDITIONS OF MERGER
5.1 GENERAL CONDITIONS. The obligations of Rogue Wave, RW Sub and Inmark
to effect the Closing and consummate the transactions contemplated herein shall
be subject to the following conditions, unless waived in writing by each of
them:
36.
(a) NO ORDERS; LEGAL PROCEEDINGS. No order, injunction, writ or
decree shall have been enacted, entered, issued, promulgated or enforced by any
governmental entity that prohibits or restricts the Merger or the transactions
contemplated herein. No Proceeding shall be pending or threatened by any
Governmental Entity (i) challenging or seeking to make illegal or otherwise to
directly or indirectly restrain or prohibit or make materially more costly the
consummation of the transactions contemplated herein, or seeking to obtain
material damages in connection with the transactions contemplated herein, or
(ii) which would have a Material Adverse Effect on Rogue Wave or Inmark; and no
order, injunction, writ or decree shall have been issued which would have the
effect of or require anything set forth in clause (i) or clause (ii) above.
(b) APPROVALS. All permits, approvals and consents required to be
obtained from any Governmental Entity to effect the Merger and to consummate the
transactions contemplated herein shall have been received or obtained on or
prior to the Closing Date.
(c) SHAREHOLDERS' APPROVAL. This Agreement, and the transactions
contemplated herein, shall have been approved by (i) the requisite vote of the
Inmark Common Stock entitled to vote, as required by and in accordance with
Inmark's Articles of Incorporation and the applicable provisions of the
California Law, and (ii) the requisite vote of the outstanding shares of RW Sub
entitled to vote, as required by and in accordance with the applicable
provisions of RW Sub's Certificate of Incorporation and the Delaware Law.
(d) ISSUANCE OF PERMIT. The California Department of Corporations
shall have issued a Permit under Section 25121 of the California Corporate
Securities Law of 1968, as amended, covering the issuance of the Rogue Wave
Common Stock following a hearing as to the fairness of the Merger conducted
pursuant to Section 25142 of the California Securities Law.
(e) POOLING OF INTERESTS TRANSACTION. Rogue Wave's accounting firm
[and Inmark's accounting firm] shall [each] deliver a letter, in form and
substance satisfactory to Rogue Wave and Inmark, to the effect that the Merger
will qualify as a pooling of interests transaction for financial reporting
purposes.
5.2 CONDITIONS TO OBLIGATIONS OF ROGUE WAVE AND RW SUB. The obligations
of Rogue Wave and RW Sub to effect the Closing and consummate the transactions
contemplated herein is subject to the fulfillment, prior to or upon the Closing,
of the following, except to the extent waived in writing by each of them:
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS OF INMARK.
(i) Inmark shall have complied with and performed in all
material respects each covenant contained in this Agreement to be performed by
it at or prior to the Closing Date;
(ii) the representations and warranties of Inmark contained in
this Agreement, when read in conjunction with the Inmark Disclosure Statement
(which Inmark
37.
Disclosure Statement may be updated by Inmark as of the Closing Date provided
that the revisions made subsequent to the date of this Agreement when
considered in the aggregate do not constitute a Material Adverse Effect on
Inmark), shall be true and correct in all material respects as of the date of
this Agreement and as of the Closing Date; and
(iii) Inmark shall have delivered to Rogue Wave a certificate of
its Chief Executive Officer evidencing compliance with the conditions set forth
in this Section 5.2(a).
(b) NO MATERIAL ADVERSE CIRCUMSTANCE. After the date hereof, Inmark
shall have experienced no event which would have Material Adverse Effect on
Inmark.
(c) NO LITIGATION. No Proceeding shall have been commenced against
Inmark other than by Rogue Wave or RW Sub which, if adversely determined, would
have a Material Adverse Effect.
(d) CONSENTS AND APPROVALS. Inmark shall have obtained all consents
identified on Schedule 2.3(c), and all such other governmental or other
approvals, consents, authorizations or modifications as may be required to
permit the performance by Rogue Wave, RW Sub or Inmark of their respective
obligations under this Agreement, the consummation of the transactions herein
contemplated and the continuation of Inmark's business after the consummation of
the transactions contemplated herein.
(e) APPRAISAL RIGHTS. Holders of not more than 10% of the Inmark
Common Stock shall have exercised or shall continue to have the right to
exercise, dissenters rights with respect to the transactions contemplated by
this Agreement.
(f) FIRPTA. Rogue Wave, as agent for the shareholders of Inmark,
shall have received a properly executed "FIRPTA" Notification Letter, in form
and substance reasonably acceptable to Rogue Wave, which states that shares of
Inmark do not constitute "United States Real Property Interests" under
Section 897(c) of the Code for purposes of satisfying Rogue Wave's obligations
under Treasury Regulations Section 1.1445-2(c)(3).
(g) CLOSING DOCUMENTS. Rogue Wave, or its counsel, shall have
received all of the closing documents referred to in this Agreement.
(h) EMPLOYEE ACKNOWLEDGEMENTS. Each of the individuals employed by
Inmark as of the date of this Agreement shall execute an acknowledgement form
regarding their "at will" employment status and unpaid claims in a form
acceptable to Rogue Wave.
(i) OPINION OF COUNSEL. Rogue Wave shall have received an opinion of
Fenwick & West, counsel to Inmark, dated the Closing Date, in the form attached
hereto as Exhibit C.
38.
5.3 CONDITIONS TO OBLIGATIONS OF INMARK. The obligations of Inmark to
effect the Closing and consummate the transactions contemplated herein are
subject to the fulfillment, prior to or upon the Closing, of the following
conditions, except to the extent waived in writing by Inmark:
(a) REPRESENTATIONS AND WARRANTIES AND COVENANTS OF ROGUE WAVE AND RW
SUB.
(i) Rogue Wave and RW Sub shall have complied with and performed
in all material respects each covenant contained in this Agreement to be
performed by it at or prior to the Closing Date;
(ii) the representations and warranties of Rogue Wave and RW Sub
contained in this Agreement, when read in conjunction with the Rogue Wave
Disclosure Statement (which Rogue Wave Disclosure Statement may be updated by
Rogue Wave and RW Sub as of the Closing Date provided that the revisions made
subsequent to the date of this Agreement when considered in the aggregate do not
constitute a Material Adverse Effect on Rogue Wave), shall be true and correct
in all material respects as of the date of this Agreement and as of the Closing
Date; and
(iii) each of Rogue Wave and RW Sub shall have delivered to
Inmark a certificate of its Chief Executive Officer evidencing compliance with
the conditions set forth in this Section 5.3(a).
(b) NO MATERIAL ADVERSE CHANGE. After the date hereof there shall
have been no event, fact or circumstance not contemplated under this Agreement
the effect of which would have a Material Adverse Effect on Rogue Wave or RW
Sub.
(c) REQUIRED APPROVALS. Rogue Wave, RW Sub and Inmark shall have
received all such governmental approvals, consents, authorizations or
modifications as may be required to permit the performance by Rogue Wave, RW Sub
and Inmark, of their respective obligations under this Agreement and the
consummation of the transactions herein contemplated.
(d) NO LITIGATION. No Proceeding shall have been commenced against
Rogue Wave or RW Sub other than by Inmark which, if adversely determined, would
have a Material Adverse Effect.
(e) ROGUE WAVE BOARD OF DIRECTORS. Upon the Closing Date, the
authorized size of the Board of Directors of Rogue Wave shall be five (5)
members and the board shall consist of Xxxxxx Xxxxxx, Xxx Xxxxxxxx, Xxxxxx
Xxxxxxxx, Xxxxxx Xxxxxx and one representative of the Inmark Shareholders, who
shall initially be Xxxxxx Love. The Inmark Shareholders shall receive from the
holders of a majority-in-interest of the shares of Rogue Wave Common Stock and
the holders of a majority-in-interest of the shares of Rogue Wave Preferred
Stock, an acknowledgement that for a period of three (3) years following the
Closing,
39.
they shall agree to vote their shares of capital stock of Rogue Wave for one
designee of the Inmark Shareholders.
(f) CLOSING DOCUMENTS. Inmark, or its counsel, shall have received
all of the closing documents referred to in this Agreement.
(g) PROPRIETARY INFORMATION AGREEMENTS. Each of Rogue Wave's
employees shall have entered into Rogue Wave's standard form of Proprietary
Information Agreement.
(h) OPINION OF COUNSEL. Inmark shall have received an opinion of
Xxxxxx Godward Xxxxxx Xxxxxxxxx & Xxxxx, counsel to Rogue Wave and RW Sub, dated
the Closing Date, in the form attached hereto as Exhibit D.
ARTICLE 6
TERMINATION OF AGREEMENT
6.1 TERMINATION. This Agreement may be terminated at any time prior to
the Effective Time, whether or not it has been approved by the shareholders of
RW Sub or Inmark:
(a) By the mutual written consent of Rogue Wave and Inmark;
(b) By Rogue Wave, if on the date hereof or at any time prior to the
consummation of the Merger or the termination of this Agreement or any amendment
or extension thereof, Inmark shall have breached in any material respect this
Agreement;
(c) By Inmark, if on the date hereof or at any time prior to the
consummation of the Merger or the termination of this Agreement or any amendment
or extension thereof, Rogue Wave or RW Sub shall have breached in any material
respect this Agreement;
(d) By either Rogue Wave or Inmark:
(i) if a court of competent jurisdiction or a Governmental
Entity shall have issued an order, injunction, writ or decree, or commenced any
Proceeding, in either case restraining, enjoining or otherwise prohibiting the
Merger; or
(ii) if the Merger shall not have been consummated on or before
October 31, 1995, provided, however, that one (1) additional day past October
31, 1995 will be allowed for each day that the notice period for the California
Department of Corporations Fairness Hearing exceeds thirty (30) days.
In the event of any such termination, no party to this Agreement (or any of
its directors or officers) shall have any liability or further obligation to any
other party to this Agreement,
40.
provided that nothing herein will relieve any party from liability for any
breach of this Agreement prior to such termination.
6.2 COSTS AND EXPENSES. All costs and expenses incurred in connection
with this Agreement and all related transactions hereunder will be paid by (i)
in the case of Rogue Wave and RW Sub, by Rogue Wave, and (ii) in the case of
Inmark, by Inmark. After the Closing Date, all costs and expenses incurred will
be paid by Rogue Wave.
6.3 EXTENSION OF TIME; WAIVERS. At any time prior to the Closing Date
either Rogue Wave or Inmark may (i) extend the time for the performance of any
of the obligations or other acts of the other party, and (ii) waive compliance
with any of the agreements or conditions contained herein to be performed by the
other party; provided any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such party.
ARTICLE 7
COVENANTS TO BE PERFORMED AFTER THE CLOSING
7.1 RESERVATION OF EMPLOYEE POOL. As soon as practicable after the
Closing, Rogue Wave shall reserve an additional number of shares of Rogue Wave
Common Stock equal to eight percent (8%) of the Rogue Wave Common Stock
Equivalents determined as of the Closing, to be issued to employees, officers or
directors of, or consultants or advisors to Rogue Wave or the Surviving
Corporation.
7.2 EMPLOYMENT BENEFITS. As soon as practicable after the Closing, Rogue
Wave and the Surviving Corporation shall negotiate in good faith to standardize
the employee benefits packages for the employees of Rogue Wave and the Surviving
Corporation.
7.3 SEVERANCE COMPENSATION. In the event an Inmark employee or officer is
terminated within thirty (30) days of the Closing, other than for good cause,
such employee or officer shall be entitled to receive their current base salary
(excluding bonus or commission) for a period of sixty (60) days after any such
termination.
ARTICLE 8
MISCELLANEOUS
8.1 AMENDMENT. This Agreement may be amended, in writing, signed by all
parties hereto, with the approval of the Boards of Directors of Rogue Wave, RW
Sub and Inmark at any time before or after approval hereof by the shareholders
of RW Sub and Inmark, provided, however, that no amendment shall be made after
any such shareholder approval that would have a material adverse effect on such
shareholders without the further approval of such shareholders.
41.
8.2 ENTIRE AGREEMENT; COUNTERPARTS; APPLICABLE LAW. This Agreement, the
Disclosure Statements delivered by the parties and the agreements contemplated
by the exhibits hereto (a) constitute the entire agreement and supersede all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof, including, without limitation, that
certain letter of intent dated August 22, 1995, (b) may be executed in several
counterparts, each of which will be deemed an original and all of which shall
constitute one and the same instrument and (c) shall be governed in all
respects, including validity, interpretation and effect, by the laws of the
State of California as applied to contracts entered into and to be performed
entirely within the State of California.
8.3 ATTORNEYS' FEES. In any Proceeding to enforce this Agreement or the
rights of the parties hereunder, the prevailing party in such Proceeding shall
be entitled to receive a reasonable sum for its attorneys' fees and all other
reasonable costs and expenses incurred in such action or suit.
8.4 ASSIGNABILITY. This Agreement shall be binding upon, and shall be
enforceable by and inure to the benefit of, the parties named herein and their
respective successors; provided, however, that this Agreement may not be
assigned by any party without the prior written consent of the other party, and
any attempted assignment without such consent shall be void and of no effect.
8.5 NOTICES. All notices, requests, demands and other communications
hereunder shall be deemed to have been duly given if delivered by hand or mailed
by certified or registered mail:
To Rogue Wave or RW Sub:
Rogue Wave Software, Inc.
000 X.X. Xxxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxx, President
and Chief Executive Officer
With a copy to:
Xxxxxx Godward Xxxxxx Xxxxxxxxx & Xxxxx
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxxx, Esq.
42.
To Inmark:
Inmark Development Corporation
0000 Xxxxxxxx Xxxxx
Xxxxxxxx Xxxx, XX 00000
Attn: Xxxxxx Love, President
With a copy to:
Fenwick & West
0 Xxxx Xxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attn: Xxxx Xxxxxxx, Esq.
or to such other address at which any party may by registered mail notify the
other party, and shall be deemed given on the date on which hand-delivered or on
the third business day following the date on which mailed.
8.6 TITLES. The titles and captions of the sections and paragraphs of
this Agreement are included for convenience of reference only and shall have no
effect on the construction or meaning of this Agreement.
8.7 COOPERATION. Rogue Wave, RW Sub and Inmark each agree to execute and
deliver such other documents, certificates, agreements and other writings and to
take such other actions as may be necessary or desirable in order to consummate
expeditiously or implement the transactions contemplated hereby.
43.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement and
Plan of Reorganization as of the date first written above.
ROGUE WAVE SOFTWARE, INC.
/s/ Xxxxxx Xxxxxx
-----------------------------------
Xxxxxx Xxxxxx
President and Chief Executive Officer
RW ACQUISITION, INC.
/s/ Xxxxxx Xxxxxx
-----------------------------------
Xxxxxx Xxxxxx
President and Chief Executive Officer
INMARK DEVELOPMENT CORPORATION
/s/ Xxxxxx Love
-----------------------------------
Xxxxxx Love
President
44.
EXHIBIT A
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Exhibit A):
ACQUISITION TRANSACTION. "Acquisition Transaction" means any transaction
involving:
(a) The sale or other disposition of all or any portion of Inmark's or
Rogue Wave's, as applicable, business or assets (other than in the ordinary
course of business);
(b) Any merger, consolidation, business combination, share exchange,
reorganization or similar transaction involving Inmark or Rogue Wave, as
applicable; or
(c) any material investment or capital infusion in Inmark or Rogue Wave,
as applicable, or any similar transaction.
AFFILIATE. An "Affiliate" of Inmark or Rogue Wave shall mean (i) any
person or entity that directly, or indirectly through one or more
intermediaries, controls, or is controlled by or is under common control with an
officer, director or shareholder of Inmark or Rogue Wave, as applicable, who
holds ten percent (10%) or more of Inmark's or Rogue Wave's capital stock, as
applicable, or (ii) any ancestor, descendent or spouse of the person specified.
AGREEMENT. "Agreement" means the Agreement to which this Exhibit A is
attached, together with all Exhibits and schedules attached thereto or expressly
incorporated therein by reference, as it may be amended or supplemented from
time to time.
CALIFORNIA LAW. "California Law" means the General Corporation Law of the
State of California.
DELAWARE LAW. "Delaware Law" means the General Corporation Law of the
State of Delaware.
ENVIRONMENTAL CLAIM. "Environmental Claim" means any claim, action, cause
of action, investigation or notice (written or oral) by any person or entity
alleging potential liability (including, without limitation, potential liability
for investigatory costs, cleanup costs, governmental response costs, natural
resources damages, property damages, personal injuries, or penalties) arising
out of, based on or resulting from (A) the presence, or release into the
environment, of any Material of Environmental Concern at any location, whether
or not owned or operated by the person making the representation, or
(B) circumstances forming the basis of any violation, or alleged violation, of
any Environmental Law.
ENVIRONMENTAL LAW. "Environmental Law" means all federal, state, local and
foreign laws and regulations relating to pollution or protection of human health
or the environment
A-1
(including, without limitation, ambient air, surface water, ground water,
land surface or subsurface strata), including, without limitation, laws and
regulations relating to emissions, discharges, releases or threatened
releases of Materials of Environmental Concern, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern.
ERISA. "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
GAAP. "GAAP" means generally accepted accounting principles in the United
States, as in effect from time to time.
INMARK COMMON STOCK. "Inmark Common Stock" means the shares of Common
Stock, no par value, of Inmark.
INMARK SHAREHOLDERS. "Inmark Shareholders" means, collectively, the
holders of the outstanding shares of Inmark Common Stock immediately prior to
the Effective Date, excluding the holders of Inmark Common Stock who do not vote
in favor of the Merger.
IRS. "IRS" means the Internal Revenue Service or any successor entity.
MATERIAL ADVERSE EFFECT. "Material Adverse Effect" means any fact,
circumstance or condition that (i) would or would reasonably be expected to
prevent consummation of the Merger, or (ii) has had or would reasonably be
expected to have an adverse effect on the business, operations, condition
(financial or otherwise), assets or prospects of Inmark or Rogue Wave, as
applicable, which is material. For purposes of Section 2 and Section 3 of the
Agreement only, documents, objects, effects, conditions, events or occurrences
shall be deemed "material" if they involve amounts, or result in damages,
individually or in the aggregate, in excess of $100,000. For purposes of
Section 5 of the Agreement, a Material Adverse Effect will not have occurred
with respect to any fact, circumstance or condition due to general economic
condition or due to a downturn in revenues or net income after the announcement
of the Merger.
MATERIALS OF ENVIRONMENTAL CONCERN. "Materials of Environmental Concern"
means chemicals, pollutants, contaminants, wastes, toxic substances, petroleum
and petroleum products.
PROCEEDING. "Proceeding" means any action, suit, litigation, arbitration,
proceeding (including any civil, criminal, administrative, investigative or
appellate proceeding and any informal proceeding), prosecution, contest,
hearing, inquiry, inquest, audit, examination or investigation that is, has been
or may in the future be commenced, brought, conducted or heard by or before, or
that otherwise has involved or may involve, any Governmental Entity or any
arbitrator or arbitration panel.
PROPRIETARY ASSET. "Proprietary Asset" means any patent, patent
application, trademark, trademark application, copyright or copyright
application.
A-2
ROGUE WAVE COMMON STOCK. "Rogue Wave Common Stock" means the shares of
common stock, $0.001 par value, of Rogue Wave.
ROGUE WAVE PREFERRED STOCK. "Rogue Wave Preferred Stock" means the shares
of preferred stock, $0.001 par value, of Rogue Wave.
A-3
AGREEMENT OF MERGER
THIS AGREEMENT OF MERGER, dated as of September __, 1995 (the "Merger
Agreement"), is made and entered into by ROGUE WAVE SOFTWARE, INC., an Oregon
corporation ("Acquiror"), RW ACQUISITION, INC., a Delaware corporation
("Acquiror Sub"), and INMARK DEVELOPMENT CORPORATION, a California corporation
("Target" or "Surviving Corporation") (Target and Acquiror Sub being hereinafter
collectively referred to as the "Constituent Corporations").
RECITALS
A. Acquiror, Acquiror Sub and Target have entered into an Agreement and
Plan of Reorganization, dated as of September 19, 1995, (the "Reorganization
Agreement"), providing, among other things, for the execution and filing of this
Merger Agreement and the merger of Acquiror Sub with and into Target upon the
terms set forth in the Reorganization Agreement and this Merger Agreement (the
"Merger").
B. The respective Boards of Directors of each of the Constituent
Corporations deem it advisable and in the best interests of each of such
corporations and their respective shareholders that Acquiror Sub be merged with
and into Target.
AGREEMENT
NOW, THEREFORE, in consideration of the promises and mutual agreements
contained in this Merger Agreement, Acquiror and the Constituent Corporations
hereby agree that Acquiror Sub shall be merged with and into Target in
accordance with the provisions of the laws of the State of Delaware and the laws
of the State of California, upon the terms and subject to the conditions set
forth as follows:
ARTICLE I
SECTION 1. THE MERGER
1.1 FILING. This Merger Agreement, together with the officers'
certificates of each of the Constituent Corporations required by the General
Corporation Law of the State of California (the "California Law") and the
General Corporation Law of the State of Delaware (the "Delaware Law"), shall be
filed with the Secretary of State of the State of California and the Secretary
of State of the State of Delaware at the time specified in the Reorganization
Agreement.
1.
1.2 EFFECTIVENESS. The Merger shall become effective upon the filing of
this Merger Agreement with the Secretary of State of the State of California and
the Secretary of State of the State of Delaware (the "Effective Time").
1.3 MERGER. At the Effective Time, Acquiror Sub shall be merged into
Target and the separate corporate existence of Acquiror Sub shall thereupon
cease. Target shall be the Surviving Corporation in the Merger and the separate
corporate existence of Target, with all of its purposes, objects, rights,
privileges, powers, immunities and franchises, shall continue unaffected and
unimpaired by the Merger.
1.4 FURTHER ACTION. If at any time after the Effective Time any further
action is necessary or desirable to carry out the purposes of this Merger
Agreement or to vest the Surviving Corporation with the full right, title and
possession to all assets, property, rights, privileges, immunities, powers and
franchises of either or both of the Constituent Corporations, the officers and
directors of the Surviving Corporation are fully authorized in the name of
either or both of the Constituent Corporations or otherwise to take all such
action.
ARTICLE II
SECTION 2. CORPORATE GOVERNANCE MATTERS
2.1 ARTICLES OF INCORPORATION. The Articles of Incorporation of Target in
effect immediately prior to the Effective Time shall be the Articles of
Incorporation of the Surviving Corporation unless and until amended as provided
by law.
2.2 BYLAWS. The Bylaws of Target in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation unless and until
amended as provided by law.
2.3 DIRECTORS. The Board of Directors of the Surviving Corporation at and
after the Effective Time, each of whom will hold office from the Effective Time
until their respective successors are duly elected or appointed and qualified in
the manner provided in the Articles of Incorporation and Bylaws of the Surviving
Corporation, or as otherwise provided by law, shall be as follows:
Xxxxxx Xxxxxx
Xxx Xxxxxxxx
Xxxxxx Xxxxxxxx
Xxxxxx Xxxxxx
Xxxxxx Love
2.4 OFFICERS. The officers of the Surviving Corporation at and after the
Effective Time, each of whom will hold office from the Effective Time until
their respective successors are duly elected or appointed and qualified in the
manner provided in the Articles of
2.
Incorporation and Bylaws of the Surviving Corporation, or as otherwise provided
by law, are as follows:
Name: Title:
---- -----
Xxxxxx Xxxxxx President, Chief Executive Officer
Xxx Xxxxxxxx Executive Vice President, Vice President of
Marketing
Xxxxxx X. Xxxx Vice President of Sales
Xxxxxx X. Xxxxxxx, Xx. Chief Financial Officer, Secretary
ARTICLE III
SECTION 3. MANNER OF CONVERTING SHARES OF THE CONSTITUENT CORPORATIONS
3.1 CONVERSION OF TARGET COMMON STOCK. At the Effective Time, each then
outstanding share of Common Stock, no par value, of Target (the "Target Common
Stock"), other than shares of Target Common Stock that are held by shareholders
who have not voted such shares in favor of the merger, shall cease to be an
existing and issued share and shall become and be converted into, by virtue of
the Merger and without any action on the part of Acquiror, Acquiror Sub, Target
or the holder thereof, that number of shares of the common stock, $0.001 par
value, of Acquiror (the "Acquiror Common Stock") equal to (i) the number of
shares of Acquiror Common Stock equal to (A) the number of shares of Acquiror
Common Stock Equivalents (as defined below) divided by 0.8, minus (B) the number
of shares of Acquiror Common Stock Equivalents (the "Merger Consideration"),
divided by (ii) the number of shares of Target Common Stock Equivalents (as
defined below). The ratio pursuant to which each share of Target Common Stock
will be exchanged for one share of Acquiror Common Stock is hereinafter referred
to as the "Exchange Ratio". For the purposes of this Merger Agreement, the
number of shares of Acquiror Common Stock Equivalents just prior to the
Effective Time, shall be the sum of (A) the number of shares of Acquiror Common
Stock outstanding, (B) the number of shares of Acquiror Common Stock into which
the then outstanding shares of Acquiror Preferred Stock could be converted if
fully converted immediately prior to the Effective Time, and (C) the number of
shares of Acquiror Common Stock which could be obtained through the exercise or
conversion of all other rights, option and convertible securities (whether or
not exercisable or convertible) immediately prior to the Effective Time. For
the purposes of this Agreement, the number of shares of Target Common Stock
Equivalents just prior to the Effective Time, shall be the sum of (A) the number
of shares of Target Common Stock outstanding and (B) the number of shares of
Target Common Stock which could be obtained through the exercise or conversion
of all other rights, option and convertible securities (whether or not
exercisable or convertible) immediately prior to the Effective Time.
3.
3.2 ACQUIROR SUB COMMON STOCK. At the Effective Time, each then
outstanding share of common stock, $.01 par value, of Acquiror Sub shall cease
to be an existing and issued share and shall become and be converted into, by
virtue of the Merger and without any action on the part of Acquiror, Acquiror
Sub or Target, one share of Target Common Stock and the aggregate of such shares
shall constitute the only outstanding shares of capital stock of the Surviving
Corporation.
3.3 CLOSING OF TARGET TRANSFER BOOKS. On and after the Effective Time,
holders of certificates representing shares of Target Common Stock issued and
outstanding immediately prior to the Effective Time shall cease to have any
rights as shareholders of Target and the share transfer books of Target shall be
closed with respect to shares of Target Common Stock issued and outstanding
immediately prior to the Effective Time and no further transfer of such shares
shall thereafter be made on such share transfer books. If, after the Effective
Time, valid certificates previously representing such shares are presented to
Acquiror or Target, they shall be exchanged as provided in Section 3.4.
3.4 RECEIPT OF MERGER CONSIDERATION. At the Effective Time, each
certificate for Target Common Stock issued and outstanding immediately prior to
the Effective Time shall no longer be issued and outstanding but shall represent
solely the right to receive shares of the Merger Consideration into which the
shares of Target Common Stock it theretofore represented shall become converted
into Acquiror Shares pursuant to Section 3.1 (or the holder thereof's right to
receive payment for such shares pursuant to Section 1300 of the California Law
and Section 3.6 hereof); provided, however, that customary and appropriate
certifications and indemnities allowing exchange against lost or destroyed
certificates shall be provided. Upon surrender of a stock certificate
representing Target Common Stock to Acquiror, Acquiror shall deliver to the
holder of such certificate the Merger Consideration to which such holder is
entitled pursuant to Section 3.1 hereof.
3.5 NO FRACTIONAL SHARES. No fractional shares of Acquiror Common Stock
will be issued in connection with the Merger and no certificate therefor will be
issued. In lieu of such fractional shares, any holder of Target Common Stock
who would otherwise receive a fractional share shall, upon surrender of his
certificate or certificates representing Target Common Stock, be paid an amount
in cash (without interest) equal to the value of such fractional share of
Acquiror Common Stock, deemed for purposes of this Merger Agreement to be such
fraction multiplied by an amount per share equal to $0.35. Acquiror will,
subject to any applicable statute of limitation or abandoned property or similar
law, until three months after the Effective Time, pay to such holders, upon
surrender of their certificates representing Target Common Stock outstanding
immediately prior to the Effective Time, the cash value of such fractions so
determined, without interest.
3.6 DISSENTING SHARES. Notwithstanding anything in this Merger Agreement
to the contrary, shares of Target Common Stock that are issued and outstanding
immediately prior to the Effective Time and that are held by shareholders who
have not voted such shares in favor of the Merger shall not be canceled and
converted into the Merger Consideration unless and until such holder shall have
failed to perfect, or shall have effectively withdrawn or lost, such holder's
appraisal rights under the California Law. If such holder shall have so failed
to perfect, or shall have effectively withdrawn or lost such rights, such
holder's shares of Target Common Stock shall thereupon be deemed to have been
canceled and converted as described in Section 3.1 on the Effective Time, and
each such share shall represent solely the right to receive the Merger
Consideration into which the shares of Target Common Stock if theretofore
constituted shall have been converted pursuant to Section 3.1. From and after
the Effective Time, no shareholder who has demanded the appraisal of shares as
provided in Section 1300 of the
4.
California Law shall be entitled to vote such holder's shares for any purpose or
to receive payment of dividends or other distributions with respect to such
holder's shares (except dividends and other distributions payable to
shareholders of record at a date which is prior to the Effective Time).
ARTICLE IV
SECTION 4. TERMINATION AND AMENDMENT
4.1 TERMINATION. Notwithstanding the approval of this Merger Agreement by
the shareholders of Acquiror Sub and Target, this Merger Agreement shall
terminate forthwith in the event that the Reorganization Agreement shall be
terminated as therein provided.
4.2 AMENDMENT. This Merger Agreement may be amended by the parties hereto
at any time before or after approval hereof by the shareholders of either
Acquiror Sub or Target, but, after any such approval, no amendment shall be made
which, without the further approval of such shareholders, would (i) have an
adverse effect on the shareholders of either Acquiror Sub or Target, (ii) change
any of the principal terms of the Merger Agreement, or (iii) change any terms of
the Articles of Incorporation of the Surviving Corporation. This Merger
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto.
[THIS SPACE INTENTIONALLY LEFT BLANK]
5.
IN WITNESS WHEREOF, the parties have duly executed this AGREEMENT OF MERGER
as of the date first written above.
ATTEST: ROGUE WAVE SOFTWARE, INC.
an Oregon corporation
By: /s/ By: /s/ Xxxxxx Xxxxxx
-------------------------- --------------------------
Its Secretary Xxxxxx Xxxxxx, President
ATTEST: RW ACQUISITION, INC.
a Delaware corporation
By: /s/ By: /s/ Xxxxxx Xxxxxx
-------------------------- --------------------------
Its Secretary Xxxxxx Xxxxxx, President
ATTEST: INMARK DEVELOPMENT CORPORATION
a California corporation
By: /s/ By: /s/ Xxxxxx Love
------------------------- --------------------------
Its Assistant Secretary Xxxxxx Love, President
