EXHIBIT 2.2
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT dated as of October 25, 1998 (the
"AGREEMENT") is entered into by and between Qualix Group, Inc., a Delaware
corporation ("TARGET") and Legato Systems, Inc., a Delaware corporation
("ACQUIROR"). Capitalized terms used in this Agreement but not defined herein
shall have the meanings ascribed thereto in the Merger Agreement (as defined
below).
RECITALS
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A. Concurrently with the execution and delivery of this Agreement,
Target, ACQUIROR and Hat Acquisition Corp., a Delaware corporation and a wholly
owned subsidiary of ACQUIROR ("SUB"), are entering into an Agreement and Plan of
Reorganization (the "MERGER AGREEMENT"), which provides that, among other
things, upon the terms and subject to the conditions thereof, Target and
ACQUIROR will enter into a business combination transaction (the "MERGER").
B. As a condition to ACQUIROR's willingness to enter into the Merger
Agreement, ACQUIROR has requested that Target agree, and Target has so agreed,
to grant to ACQUIROR an option to acquire shares of Target's Common Stock,
$0.001 par value, upon the terms and subject to the conditions set forth herein.
AGREEMENT
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NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein and in the Merger Agreement and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
1. GRANT OF OPTION.
Target hereby grants to ACQUIROR an irrevocable option (the "OPTION")
to acquire up to a number of shares of the Common Stock, $0.001 par value, of
Target ("TARGET SHARES"), including the associated rights (the "RIGHTS") to
purchase shares of Target Preferred Stock pursuant to the Rights Agreement,
dated as of July 31, 1997, between Target and ChaseMellon Shareholders Services,
L.L.C., as Rights Agent (the "RIGHTS AGREEMENT"), equal to 19.9% of the issued
and outstanding shares of capital stock of Target as of the first date, if any,
upon which an Exercise Event (as defined in Section 2(a) below) shall occur (the
"OPTION SHARES"), in the manner set forth below by paying cash at a price of
$5.73 per share (the "EXERCISE PRICE"). All references in this Agreement to
Target Shares issued to ACQUIROR hereunder shall be deemed to include the Rights
(subject to the terms of the Rights Agreement).
2. EXERCISE OF OPTION; MAXIMUM PROCEEDS.
(a) For all purposes of this Agreement, an "EXERCISE EVENT" shall
have occurred upon termination of the Merger Agreement pursuant to Section
7.1(e) thereof.
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(b) ACQUIROR may deliver to Target a written notice (an
"EXERCISE NOTICE") specifying that it wishes to exercise and close a purchase of
Option Shares upon the occurrence of an Exercise Event and specifying the total
number of Option Shares it wishes to acquire (i) upon public disclosure of an
Acquisition Proposal for an Alternative Transaction with respect to Target, with
any party other than ACQUIROR (or an affiliate of ACQUIROR), (ii) upon the
commencement of an election contest within the meaning of Rule 14a-11 of the
Exchange Act with the purpose of seeking to effect a Change of Control of the
Target Board of Directors, or (iii) upon termination of the Merger Agreement
pursuant to Section 7.1(e) thereof (the events specified in clauses (i), (ii) or
(iii) of this sentence being referred to herein as "CONDITIONAL EXERCISE
EVENTS"). For purposes of this Agreement, a "Change of Control" of the Target
Board of Directors shall mean a change in the composition of such Board as a
result of which fewer than a majority of the incumbent directors are directors
who either (A) had been directors of Target at least eighteen (18) months prior
to such change or (B) were elected or nominated for election to the Target Board
with the affirmative votes of at least a majority of the directors who had been
directors of Target at least eighteen (18) months prior to such change and who
were still serving as directors at the time of the election or nomination. At
any time after delivery of an Exercise Notice, unless such Exercise Notice is
withdrawn by ACQUIROR, the closing of a purchase of Option Shares (a "CLOSING")
specified in such Exercise Notice shall take place at the principal offices of
Target upon the occurrence of an Exercise Event or at such later date prior to
the termination of the Option as may be designated by ACQUIROR in writing. In
the event that no Exercise Event shall occur prior to termination of the Option,
such Exercise Notice shall be void and of no further force and effect.
(c) The Option shall terminate upon the earliest of (i) the
Effective Time, (ii) 12 months following the termination of the Merger Agreement
pursuant to Section 7.1(e) thereof, or (iii) upon termination of the Merger
Agreement for any reason other than pursuant to Section 7.1(e) thereof;
provided, however, that if the Option is exercisable but cannot be exercised by
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reason of any applicable government order or because the waiting period related
to the issuance of the Option Shares under the HSR Act shall not have expired or
been terminated, or because any other condition to closing has not been
satisfied, then the Option shall not terminate until the tenth business day
after such impediment to exercise shall have been removed or shall have become
final and not subject to appeal.
(d) If ACQUIROR receives proceeds in connection with any sales
or other dispositions of this Option (or any rights hereunder) or Option Shares,
plus any dividends received by ACQUIROR declared on Option Shares (including by
exercising the ACQUIROR Put described in Section 6(a) hereof), of more than the
sum of (x) $1,500,000 plus (y) the Exercise Price multiplied by the number of
Target Shares purchased by ACQUIROR pursuant to the Option, then all proceeds to
ACQUIROR in excess of such sum shall be remitted by ACQUIROR to Target.
3. CONDITIONS TO CLOSING.
The obligation of Target to issue Option Shares to ACQUIROR hereunder
is subject to the conditions that (a) any waiting period under the HSR Act
applicable to the issuance of the Option Shares hereunder shall have expired or
been terminated; (b) all material consents, approvals, orders or authorizations
of, or registrations, declarations or filings with, any Federal,
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state or local administrative agency or commission or other Federal state or
local governmental authority or instrumentality, if any, required in connection
with the issuance of the Option Shares hereunder shall have been obtained or
made, as the case may be; and (c) no preliminary or permanent injunction or
other order by any court of competent jurisdiction prohibiting or otherwise
restraining such issuance shall be in effect. It is understood and agreed that
at any time during which ACQUIROR shall be entitled to deliver to Target an
Exercise Notice, the parties will use their respective best efforts to satisfy
all conditions to Closing, so that a Closing may take place as promptly as
practicable, and in any event, upon the occurrence of an Exercise Event.
4. CLOSING.
At any Closing, (a) Target shall deliver to ACQUIROR a single
certificate in definitive form representing the number of Target Shares
designated by ACQUIROR in its Exercise Notice consistent with this Agreement,
such certificate to be registered in the name of ACQUIROR and to bear the legend
set forth in Section 10 hereof, against delivery of (b) payment by ACQUIROR to
Target of the aggregate purchase price for the Target Shares so designated and
being purchased by delivery of a certified check or bank check in immediately
available funds.
5. REPRESENTATIONS AND WARRANTIES OF TARGET.
Target represents and warrants to ACQUIROR that (a) Target is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has the corporate power and authority to enter into
this Agreement and to carry out its obligations hereunder; (b) the execution and
delivery of this Agreement by Target and consummation by Target of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Target and no other corporate proceedings on the
part of Target are necessary to authorize this Agreement or any of the
transactions contemplated hereby; (c) this Agreement has been duly executed and
delivered by Target and constitutes a legal, valid and binding obligation of
Target and, assuming this Agreement constitutes a legal, valid and binding
obligation of ACQUIROR, is enforceable against Target in accordance with its
terms; (d) except for any filings required under the HSR Act, Target has taken
all necessary corporate and other action to authorize and reserve for issuance
and to permit it to issue upon exercise of the Option, and at all times from the
date hereof until the termination of the Option will have reserved for issuance,
a sufficient number of unissued Target Shares for ACQUIROR to exercise the
Option in full and will take all necessary corporate or other action to
authorize and reserve for issuance all additional Target Shares or other
securities which may be issuable pursuant to Section 8(a) upon exercise of the
Option, all of which, upon their issuance and delivery in accordance with the
terms of this Agreement, will be validly issued, fully paid and nonassessable;
(e) upon delivery of the Target Shares and any other securities to ACQUIROR upon
exercise of the Option, ACQUIROR will acquire such Target Shares or other
securities free and clear of all material claims, liens, charges, encumbrances
and security interests of any kind or nature whatsoever, excluding those imposed
by ACQUIROR; (f) the execution and delivery of this Agreement by Target do not,
and the performance of this Agreement by Target will not, (i) violate the
Certificate of Incorporation or Bylaws of Target, (ii) conflict with or violate
any order applicable to Target or any of its subsidiaries or by which they or
any of their property is
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bound or affected or (iii) result in any breach of or constitute a default (or
an event which with notice or lapse of time or both would become a default)
under, or give rise to any right of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or encumbrance on any
property or assets of Target or any of its subsidiaries pursuant to, any
contract or agreement to which Target or any of its subsidiaries is a party or
by which Target or any of its subsidiaries or any of their property is bound or
affected, except, in the case of clauses (ii) and (iii) above, for violations,
conflicts, breaches, defaults, rights of termination, amendment, acceleration or
cancellation, liens or encumbrances which would not, individually or in the
aggregate, have a Material Adverse Effect on Target; and (g) the execution and
delivery of this Agreement by Target does not, and the performance of this
Agreement by Target will not, require any consent, approval, authorization or
permit of, or filing with, or notification to, any Governmental Entity except
pursuant to the HSR Act.
6. CERTAIN RIGHTS
(a) ACQUIROR Put. ACQUIROR may deliver to Target a written
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notice (a "PUT NOTICE") at any time during which ACQUIROR may deliver an
Exercise Notice specifying that it wishes to sell the Option, to the extent not
previously exercised, at the price set forth in subparagraph (i) below (as
limited by subparagraph (iii) below), and the Option Shares, if any, acquired by
ACQUIROR pursuant thereto, at the price set forth in subparagraph (ii) below (as
limited by subparagraph (iii) below) (the "PUT"). At any time after delivery of
a Put Notice, unless such Put Notice is withdrawn by ACQUIROR, the closing of
the Put (the "PUT CLOSING") shall take place at the principal offices of Target
upon the occurrence of an Exercise Event or at such later date prior to the
termination of the Option as may be designated by ACQUIROR in writing. In the
event that no Exercise Event shall occur prior to termination of the Option,
such Put Notice shall be void and of no further force and effect.:
(i) The difference between the "MARKET/TENDER OFFER
PRICE" for Target Shares as of the date ACQUIROR gives notice of its intent to
exercise its rights under this Section 6(a) (defined as the higher of (A) the
highest price per share offered as of such date pursuant to any Alternative
Transaction which was made prior to such date and not terminated or withdrawn as
of such date and (B) the highest closing sale price of Target Shares on the
Nasdaq National Market during the twenty (20) trading days ending on the trading
day immediately preceding such date) and the Exercise Price, multiplied by the
number of Target Shares purchasable pursuant to the Option, but only if the
Market/Tender Offer Price is greater than the Exercise Price. For purposes of
determining the highest price offered pursuant to any Alternative Transaction
which involves consideration other than cash, the value of such consideration
shall be equal to the higher of (x) if securities of the same class of the
proponent as such consideration are traded on any national securities exchange
or by any registered securities association, a value based on the closing sale
price or asked price for such securities on their principal trading market on
such date and (y) the value ascribed to such consideration by the proponent of
such Alternative Transaction, or if no such value is ascribed, a value
determined in good faith by the Board of Directors of Target.
(ii) The Exercise Price paid by ACQUIROR for Target Shares
acquired pursuant to the Option plus the difference between the Market/Tender
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Offer Price and
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such Exercise Price (but only if the Market/Tender Offer Price is greater than
the Exercise Price) multiplied by the number of Target Shares so purchased.
(iii) Notwithstanding subparagraphs (i) and (ii) above,
pursuant to this Section 6 Target shall not be required to pay ACQUIROR in
excess of an aggregate of (A) (x) $1,500,000 plus (y) the Exercise Price paid by
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ACQUIROR for Target Shares acquired pursuant to the Option and put to Target
pursuant to Section 6 minus (B) the gain received by ACQUIROR on sale(s) of this
Option (or any rights hereunder) or Option Shares to third parties. The parties
intend ACQUIROR profit received pursuant to this Option and the Option Shares
not to exceed $1,500,000 in the aggregate and Section 3(d) and Section 6(a)(iii)
shall be read collectively to achieve such purpose.
(b) Payment and Redelivery of Option or Shares. At the Put Closing,
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Target shall pay the required amount to ACQUIROR in immediately available funds
and ACQUIROR shall surrender to Target the Option and the certificates
evidencing the Target Shares purchased by ACQUIROR pursuant thereto.
7. REGISTRATION RIGHTS
(a) Following the termination of the Merger Agreement, ACQUIROR
(sometimes referred to herein as a "HOLDER") may by written notice (sometimes
referred to herein as the "REGISTRATION NOTICE") to Target (the "REGISTRANT")
request the Registrant to register under the Securities Act all or any part of
the shares acquired by such Holder pursuant to this Agreement (the "REGISTRABLE
SECURITIES") in order to permit the sale or other disposition of such shares
pursuant to a bona fide firm commitment underwritten public offering in which
the Holder and the underwriters shall effect as wide a distribution of such
Registrable Securities as is reasonably practicable and shall use reasonable
efforts to prevent any person or group from purchasing through such offering
shares representing more than 1% of the outstanding shares of Common Stock of
the Registrant on a fully diluted basis (a "PERMITTED OFFERING"); provided,
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however, that any such Registration Notice must relate to a number of shares
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equal to at least 2% of the outstanding shares of Common Stock of the Registrant
on a fully diluted basis and that any rights to require registration hereunder
shall terminate with respect to any shares that may be sold pursuant to Rule
144(k) under the Securities Act. The Registration Notice shall include a
certificate executed by the Holder and its proposed managing underwriter, which
underwriter shall be an investment banking firm of internationally recognized
standing reasonably acceptable to the Company (the "MANAGER"), stating that (i)
the Holder and the Manager have a good faith intention to commence a Permitted
Offering and (ii) the Manager in good faith believes that, based on the then
prevailing market conditions, it will be able to sell the Registrable Securities
at a per share price equal to at least 80% of the per share average of the
closing sale prices of the Registrant's Common Stock on the Nasdaq National
Market for the twenty trading days immediately preceding the date of the
Registration Notice. The Registrant shall thereupon have the option exercisable
by written notice delivered to the Holder within ten business days after the
receipt of the Registration Notice, irrevocably to agree to purchase all or any
part of the Registrable Securities for cash at a price (the "OPTION PRICE")
equal to the product of (i) the number of Registrable Securities so purchased
and (ii) the per share average of the closing sale prices of the Registrant's
Common Stock on the Nasdaq National Market for the twenty trading days
immediately preceding the date of the Registration Notice. Any such purchase of
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Registrable Securities by the Registrant hereunder shall take place at a closing
to be held at the principal executive offices of the Registrant or its counsel
at any reasonable date and time designated by the Registrant in such notice
within 10 business days after delivery of such notice. The payment for the
shares to be purchased shall be made by delivery at the time of such closing of
the Option Price in immediately available funds.
(b) If the Registrant does not elect to exercise its option to
purchase pursuant to Section 7(a) with respect to all Registrable Securities,
the Registrant shall use all reasonable efforts to effect, as promptly as
practicable, the registration under the Securities Act of the unpurchased
Registrable Securities requested to be registered in the Registration Notice;
provided, however, that (i) the Holder shall not be entitled to more than an
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aggregate of two effective registration statements hereunder and (ii) the
Registrant will not be required to file any such registration statement during
any period of time (not to exceed 40 days after a Registration Notice in the
case of clause (A) below or 90 days after a Registration Notice in the case of
clauses (B) and (C) below) when (A) the Registrant is in possession of material
non-public information which it reasonably believes would be detrimental to be
disclosed at such time and, in the written opinion of counsel to such
Registrant, such information would have to be disclosed if a registration
statement were filed at that time; (B) such Registrant is required under the
Securities Act to include audited financial statements for any period in such
registration statement and such financial statements are not yet available for
inclusion in such registration statement; or (C) such Registrant determines, in
its reasonable judgment, that such registration would interfere with any
financing, acquisition or other material transaction involving the Registrant.
If consummation of the sale of any Registrable Securities pursuant to a
registration hereunder does not occur within 180 days after the filing with the
SEC of the initial registration statement therefor, the provisions of this
Section 7 shall again be applicable to any proposed registration, it being
understood that neither party shall be entitled to more than an aggregate of two
effective registration statements hereunder. The Registrant shall use all
reasonable efforts to cause any Registrable Securities registered pursuant to
this Section 7 to be qualified for sale under the securities or blue sky laws of
such jurisdictions as the Holder may reasonably request and shall continue such
registration or qualification in effect in such jurisdictions; provided,
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however, that the Registrant shall not be required to qualify to do business in,
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or consent to general service of process in, any jurisdiction by reason of this
provision.
(c) The registration rights set forth in this Section 7 are
subject to the condition that the Holder shall provide the Registrant with such
information with respect to such Holder's Registrable Securities, the plan for
distribution thereof, and such other information with respect to such Holder as,
in the reasonable judgment of counsel for the Registrant, is necessary to enable
the Registrant to include in a registration statement all material facts
required to be disclosed with respect to a registration thereunder.
(d) A registration effected under this Section 7 shall be
effected at the Registrant's expense, except for underwriting discounts and
commissions and the fees and expenses of counsel to the Holder, and the
Registrant shall use all reasonable efforts to provide to the underwriters such
documentation (including certificates, opinions of counsel and "comfort" letters
from auditors) as are customary in connection with underwritten public offerings
and as such underwriters may reasonably require. In connection with any
registration, the Holder and the Registrant agree to enter into an underwriting
agreement reasonably
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acceptable to each such party, in form and substance customary for transactions
of this type with the underwriters participating in such offering.
(e) Indemnification
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(i) The Registrant will indemnify the Holder, each of its
directors and officers and each person who controls the Holder within the
meaning of Section 15 of the Securities Act, and each underwriter of the
Registrant's securities, with respect to any registration, qualification or
compliance which has been effected pursuant to this Agreement, against all
expenses, claims, losses, damages or liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other document, or any
amendment or supplement thereto, incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading, or any violation by the Registrant of any rule or regulation
promulgated under the Securities Act applicable to the Registrant in connection
with any such registration, qualification or compliance, and the Registrant will
reimburse the Holder and, each of its directors and officers and each person who
controls the Holder within the meaning of Section 15 of the Securities Act, and
each underwriter for any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, provided that the Registrant will not be liable in
any such case to the extent that any such claim, loss, damage, liability or
expense arises out of or is based on any untrue statement or omission or alleged
untrue statement or omission, made in reliance upon and in conformity with
written information furnished to the Registrant by such Holder or director or
officer or controlling person or underwriter seeking indemnification.
(ii) The Holder will indemnify the Registrant, each of its
directors and officers and each underwriter of the Registrant's securities
covered by such registration statement and each person who controls the
Registrant within the meaning of Section 15 of the Securities Act, against all
claims, losses, damages and liabilities (or actions in respect thereof),
including any of the foregoing incurred in settlement of any litigation,
commenced or threatened, arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or any violation by
the Holder of any rule or regulation promulgated under the Securities Act
applicable to the Holder in connection with any such registration, qualification
or compliance, and will reimburse the Registrant, such directors, officers or
control persons or underwriters for any legal or any other expenses reasonably
incurred in connection with investigating, preparing or defending any such
claim, loss, damage, liability or action, in each case to the extent, but only
to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Registrant by the Holder
for use therein, provided that in no event shall any indemnity under this
Section 8(e) exceed the gross proceeds of the offering received by the Holder.
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(iii) Each party entitled to indemnification under this
Section 7(e) (the "INDEMNIFIED PARTY") shall give notice to the party required
to provide indemnification (the "INDEMNIFYING PARTY") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense; provided, however, that the Indemnifying Party
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shall pay such expense if representation of the Indemnified Party by counsel
retained by the Indemnifying Party would be inappropriate due to actual or
potential differing interests between the Indemnified Party and any other party
represented by such counsel in such proceeding, and provided further that the
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failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Section 7(e) unless
the failure to give such notice is materially prejudicial to an Indemnifying
Party's ability to defend such action. No Indemnifying Party, in the defense of
any such claim or litigation shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation. No Indemnifying Party shall be required to
indemnify any Indemnified Party with respect to any settlement entered into
without such Indemnifying Party's prior consent (which shall not be unreasonably
withheld).
8. ADJUSTMENT UPON CHANGES IN CAPITALIZATION; RIGHTS PLANS
(a) In the event of any change in the Target Shares by reason of
stock dividends, stock splits, reverse stock splits, mergers (other than the
Merger), recapitalizations, combinations, exchanges of shares and the like, the
type and number of shares or securities subject to the Option and the Exercise
Price shall be adjusted appropriately, and proper provision shall be made in the
agreements governing such transaction so that ACQUIROR shall receive, upon
exercise of the Option, the number and class of shares or other securities or
property that ACQUIROR would have received in respect of the Target Shares if
the Option had been exercised immediately prior to such event or the record date
therefor, as applicable.
(b) At any time during which the Option is exercisable, and at
any time after the Option is exercised (in whole or in part, if at all), Target
shall not amend its Rights Agreement nor adopt a new stockholders rights plan
that contains provisions for the distribution of rights thereunder solely as a
result of ACQUIROR being the beneficial owner of shares of Target by virtue of
the Option being exercisable or having been exercised (or as a result of such
other party beneficially owning shares issuable in respect of any Option
Shares).
9. RESTRICTIVE LEGENDS
Each certificate representing Option Shares issued to ACQUIROR
hereunder shall include a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
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AMENDED, AND MAY BE REOFFERED OR SOLD ONLY IF SO REGISTERED OR
IF AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. SUCH
SECURITIES ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER AS SET FORTH IN THE STOCK OPTION AGREEMENT DATED
AS OF OCTOBER 25, 1998, A COPY OF WHICH MAY BE OBTAINED FROM
THE ISSUER.
10. LISTING AND HSR FILING
Target, upon the request of ACQUIROR, shall promptly file an
application to list the Target Shares to be acquired upon exercise of the Option
for quotation on the Nasdaq National Market and shall use its reasonable efforts
to obtain approval of such listing as soon as practicable. Promptly after the
date hereof, each of the parties hereto shall promptly file with the Federal
Trade Commission and the Antitrust Division of the United States Department of
Justice all required premerger notification and report forms and other documents
and exhibits required to be filed under the HSR Act to permit the acquisition of
the Target Shares subject to the Option at the earliest possible date.
11. BINDING EFFECT
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. Nothing
contained in this Agreement, express or implied, is intended to confer upon any
person other than the parties hereto and their respective successors and
permitted assigns any rights or remedies of any nature whatsoever by reason of
this Agreement. Certificates representing shares sold in a registered public
offering pursuant to Section 7 shall not be required to bear the legend set
forth in Section 9.
12. SPECIFIC PERFORMANCE
The parties recognize and agree that if for any reason any of the
provisions of this Agreement are not performed in accordance with their specific
terms or are otherwise breached, immediate and irreparable harm or injury would
be caused for which money damages would not be an adequate remedy. Accordingly,
each party agrees that in addition to other remedies the other party shall be
entitled to an injunction restraining any violation or threatened violation of
the provisions of this Agreement. In the event that any action shall be brought
in equity to enforce the provisions of the Agreement, neither party will allege,
and each party hereby waives the defense, that there is an adequate remedy at
law.
13. ENTIRE AGREEMENT
This Agreement and the Merger Agreement (including the appendices and
exhibits thereto) constitute the entire agreement between the parties with
respect to the subject matter hereof and supersede all other prior agreements
and understandings, both written and oral, between the parties with respect to
the subject matter hereof.
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14. FURTHER ASSURANCES
Each party will execute and deliver all such further documents and
instruments and take all such further action as may be necessary in order to
consummate the transactions contemplated hereby.
15. VALIDITY
The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of the other provisions of this
Agreement, which shall remain in full force and effect. In the event any
Governmental Entity of competent jurisdiction holds any provision of this
Agreement to be null, void or unenforceable, the parties hereto shall negotiate
in good faith and shall execute and deliver an amendment to this Agreement in
order, as nearly as possible, to effectuate, to the extent permitted by law, the
intent of the parties hereto with respect to such provision.
16. NOTICES
All notices and other communications hereunder shall be in writing and
shall be deemed given if delivered personally or by commercial delivery service,
or sent via telecopy (receipt confirmed) to the parties at the following
addresses or telecopy numbers (or at such other address or telecopy numbers for
a party as shall be specified by like notice):
(i) if to ACQUIROR, to:
Legato Systems, Inc.
0000 Xxxxxx Xxxxx
Xxxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
with a copy to:
Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx
Xxxxxxxx & Xxxxxxxxx, LLP
000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx, Xx.
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
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(ii) if to Target, to:
Qualix Group, Inc.
000 Xxxxx Xxxx, Xxxxxx Xxxxx
Xxx Xxxxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx. P.C.
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
17. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware applicable to agreements made and to be
performed entirely within such State.
18. COUNTERPARTS
This Agreement may be executed in two counterparts, each of which
shall be deemed to be an original, but both of which, taken together, shall
constitute one and the same instrument.
19. EXPENSES
Except as otherwise expressly provided herein or in the Merger
Agreement, all costs and expenses incurred in connection with the transactions
contemplated by this Agreement shall be paid by the party incurring such
expenses.
20. AMENDMENTS; WAIVER
This Agreement may be amended by the parties hereto and the terms and
conditions hereof may be waived only by an instrument in writing signed on
behalf of each of the parties hereto, or, in the case of a waiver, by an
instrument signed on behalf of the party waiving compliance.
21. ASSIGNMENT
Target may not sell, transfer, assign or otherwise dispose of any of
its rights or obligations under this Agreement or the Option created hereunder
to any other person, without the express written consent of ACQUIROR. The
rights and obligations hereunder shall inure to the benefit of and be binding
upon any successor of a party hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective duly authorized officers as of the date first
above written.
QUALIX GROUP, INC.
By: /s/ Xxxxxxx X. Xxxx
--------------------------------------
Xxxxxxx X. Xxxx
President and Chief Executive Officer
LEGATO SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxx
-------------------------------------
Xxxxx X. Xxxx
President and Chief Executive Officer
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