EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
CORILLIAN CORPORATION
WIZARD ACQUISITION CORPORATION
AND
INTELIDATA TECHNOLOGIES CORPORATION
DATED AS OF MARCH 31, 2005
TABLE OF CONTENTS
PAGE
Article 1. THE MERGER.............................................................................................1
1.1. The Merger......................................................................................1
1.2. Closing of the Merger...........................................................................2
1.3. Effective Time..................................................................................2
1.4. Effects of the Merger...........................................................................2
1.5. Certificate of Incorporation and Bylaws of the Surviving Corporation............................2
1.6. Directors and Officers of the Surviving Corporation.............................................2
Article 2. CONVERSION OF SECURITIES...............................................................................3
2.1. Conversion of Capital Stock.....................................................................3
2.2. Appraisal Rights................................................................................3
2.3. Exchange of Certificates........................................................................4
2.4. Stock Options...................................................................................7
2.5. Warrants........................................................................................7
Article 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY..........................................................7
3.1. Organization and Qualification..................................................................8
3.2. Charter and Bylaws..............................................................................8
3.3. Capitalization..................................................................................8
3.4. Company SEC Reports; Financial Statements......................................................10
3.5. Controls.......................................................................................12
3.6. Information Supplied...........................................................................12
3.7. Authorization and Enforceability...............................................................13
3.8. Absence of Certain Changes or Events...........................................................13
3.9. Consents and Approvals.........................................................................15
3.10. Permits........................................................................................15
3.11. Compliance with Laws...........................................................................16
3.12. Litigation.....................................................................................16
3.13. Employee Benefit Matters.......................................................................16
3.14. No Excess Parachute Payments...................................................................20
3.15. Employees......................................................................................20
3.16. Property and Leases............................................................................21
3.17. Intellectual Property Rights...................................................................21
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3.18. Taxes..........................................................................................23
3.19. Material Contracts.............................................................................26
3.20. Relations with Customers.......................................................................27
3.21. Environmental Matters..........................................................................27
3.22. Interested Party Transactions..................................................................28
3.23. Change in Control..............................................................................28
3.24. Fairness Opinion...............................................................................28
3.25. No Finders.....................................................................................28
3.26. Disclosure.....................................................................................28
3.27. Tax Treatment..................................................................................29
3.28. Rights Plan....................................................................................29
Article 4. REPRESENTATIONS AND WARRANTIES OF THE PARENT AND MERGER SUB...........................................29
4.1. Organization and Qualification.................................................................29
4.2. Capitalization.................................................................................29
4.3. Parent SEC Reports; Financial Statements.......................................................30
4.4. Compliance with Laws...........................................................................31
4.5. Registration Statement.........................................................................31
4.6. Authorization and Enforceability...............................................................32
4.7. Absence of Certain Changes or Events...........................................................32
4.8. Consents and Approvals.........................................................................32
4.9. Ownership and Interim Operations of Merger Sub.................................................32
4.10. Litigation.....................................................................................33
4.11. No Finders.....................................................................................33
4.12. Tax Treatment..................................................................................33
4.13. Capital Resources..............................................................................33
Article 5. COVENANTS AND AGREEMENTS..............................................................................33
5.1. Conduct of Business of the Company.............................................................33
5.2. No Solicitation................................................................................36
5.3. Proxy Statement; Registration Statement; Stockholders Meeting..................................38
5.4. State Takeover Statutes........................................................................40
5.5. Affiliates.....................................................................................40
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5.6. Nasdaq Listing Application.....................................................................40
5.7. Confidentiality................................................................................40
5.8. Access to Information..........................................................................41
5.9. Approvals and Consents; Cooperation............................................................41
5.10. Commercially Reasonable Efforts; Further Actions...............................................42
5.11. Officers' and Directors' Indemnification.......................................................42
5.12. Notification of Certain Matters................................................................42
5.13. Public Announcements...........................................................................43
5.14. Voting of Shares...............................................................................43
5.15. Expenses.......................................................................................43
5.16. Section 368 Qualification......................................................................43
5.17. Employee Benefit Plans.........................................................................43
5.18. Company Options and Company Stock Plans........................................................44
5.19. Company Warrants...............................................................................44
5.20. Rights Plan....................................................................................44
5.21. Director and Officer Resignations..............................................................45
Article 6. CONDITIONS PRECEDENT..................................................................................45
6.1. Conditions to Obligations of the Parent, Merger Sub, and the Company...........................45
6.2. Conditions to Obligations of the Parent and Merger Sub.........................................45
6.3. Conditions to Obligations of the Company.......................................................47
Article 7. TERMINATION AND ABANDONMENT...........................................................................48
7.1. Termination....................................................................................48
7.2. Effect of Termination..........................................................................50
Article 8. DEFINED TERMS.........................................................................................51
8.1. Definitions of Certain Terms...................................................................51
8.2. Location of Other Defined Terms................................................................57
Article 9. GENERAL PROVISIONS....................................................................................58
9.1. Amendment and Modification.....................................................................58
9.2. Waiver of Compliance; Consents.................................................................58
9.3. Investigation; Survival of Representations and Warranties......................................58
9.4. Notices........................................................................................58
9.5. Specific Performance...........................................................................59
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9.6. Assignment.....................................................................................59
9.7. Governing Law..................................................................................60
9.8. Interpretation.................................................................................60
9.9. Entire Agreement...............................................................................60
9.10. Parties in Interest............................................................................60
9.11. Severability...................................................................................60
9.12. Counterparts...................................................................................61
EXHIBIT LIST
5.14.........................................................................Form of Agreement to Facilitate Merger
6.2(n)(A)......................................................................................FIRPTA Notice to IRS
6.2(n)(B)................................................................................FIRPTA Notification Letter
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is dated as of
March 31, 2005, by and among Corillian Corporation, an Oregon corporation (the
"Parent"), Wizard Acquisition Corporation, a Delaware corporation and
wholly-owned subsidiary of the Parent ("Merger Sub"), and InteliData
Technologies Corporation, a Delaware corporation (the "Company").
WHEREAS, the respective Boards of Directors of the Parent, Merger
Sub and the Company have each determined that an acquisition of the Company
by the Parent is advisable and in the best interests of their respective
stockholders;
WHEREAS, in furtherance of the acquisition of the Company by the
Parent, the Boards of Directors of the Parent, Merger Sub and the Company
have approved the merger of the Company with and into Merger Sub (the
"Merger") upon the terms and subject to the conditions set forth herein,
whereby each share of common stock, par value $0.001 per share, of the
Company (the "Company Common Stock") issued and outstanding immediately
prior to the effective time of the Merger (other than Cancelled Shares, as
defined below), shall be converted into the right to receive shares of
common stock, no par value, of the Parent (the "Parent Common Stock"), and
certain cash consideration as described in Article 2 below;
WHEREAS, for federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of Section 368
of the Internal Revenue Code of 1986, as amended (the "Code");
WHEREAS, officers and directors of the Company have, to induce the
Parent to execute this Agreement, executed and delivered to the Parent the
Agreements to Facilitate Merger described in Section 5.14;
WHEREAS, the parties hereto desire to make certain
representations, warranties, and agreements in connection with the Merger
and also to prescribe various conditions to the Merger; and
WHEREAS, capitalized terms shall have the meaning set forth in
this Agreement, including the meanings set forth in Article 8.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual representations, warranties, covenants and agreements contained herein
and intending to be legally bound hereby, the Parent, Merger Sub and the Company
hereby agree as follows:
ARTICLE 1.
THE MERGER
1.1. The Merger.
Subject to the terms and conditions of this Agreement, at the Effective
Time (as defined in Section 1.3 hereof), the Company shall be merged with and
into Merger Sub in accordance
with the provisions of Delaware Law, whereupon the separate corporate existence
of the Company shall cease, and Merger Sub shall continue as the surviving
corporation (the "Surviving Corporation").
1.2. Closing of the Merger.
The closing of the Merger (the "Closing") shall take place at 10:00
a.m., local time, on a date to be specified by the parties (the "Closing Date"),
which shall be no later than the second business day after the satisfaction or
waiver of the conditions set forth in Article 6 (other than those conditions
that by their terms are to be satisfied at the Closing, but subject to the
satisfaction or waiver of those conditions), at the offices of Xxxxxxx Coie LLP,
0000 XX Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxx, or at such other place as the parties
hereto may agree.
1.3. Effective Time.
At the time of the Closing, the Company and Merger Sub shall file, or
cause to be filed, with the Secretary of State of the State of Delaware a
Certificate of Merger for the Merger, which Certificate shall be in the form
required by and executed in accordance with the applicable provisions of
Delaware Law and in form and substance acceptable to the Parent (the
"Certificate of Merger"). The Merger shall become effective at the time such
filing is made or, if agreed to by the Parent and the Company, at such later
time or date set forth in the Certificate of Merger (the "Effective Time").
1.4. Effects of the Merger.
The Merger shall have the effects set forth under Delaware Law. From
and after the Effective Time, the Surviving Corporation shall possess all the
rights, privileges, powers, and franchises, and be subject to all the
restrictions, disabilities, and duties, of the Company and Merger Sub, all as
more fully described under Delaware Law.
1.5. Certificate of Incorporation and Bylaws of the Surviving
Corporation.
The Certificate of Incorporation of Merger Sub shall, by virtue of the
Merger, become and thereafter be the Certificate of Incorporation of the
Surviving Corporation until amended in accordance with such Certificate of
Incorporation and Delaware Law. The Bylaws of Merger Sub in effect immediately
prior to the Effective Time shall be the Bylaws of the Surviving Corporation,
until amended in accordance with such Bylaws, the Certificate of Incorporation
and Delaware Law.
1.6. Directors and Officers of the Surviving Corporation.
The directors of Merger Sub and the officers of the Company immediately
prior to the Effective Time shall be the directors and officers of the Surviving
Corporation until their respective successors shall be duly elected and
qualified or appointed.
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ARTICLE 2.
CONVERSION OF SECURITIES
2.1. Conversion of Capital Stock.
At the Effective Time, by virtue of the Merger and without any action
on the part of any holder of any share of capital stock of the Company or Merger
Sub:
(a) Common Stock of Merger Sub. Each share of common stock
of Merger Sub, par value $0.001 per share ("Merger Sub Common Stock"),
issued and outstanding immediately prior to the Effective Time shall
continue to remain issued and outstanding.
(b) Cancellation of Parent Owned Stock and Treasury Shares.
Each share of Company Common Stock issued and outstanding immediately
prior to the Effective Time that is then held by the Parent, the
Company or their direct or indirect wholly-owned subsidiaries
(collectively, the "Cancelled Shares") shall be canceled without
payment of any consideration therefor and without any conversion
thereof.
(c) Conversion of Shares. Each share of Company Common Stock
issued and outstanding immediately prior to the Effective Time, other
than the Cancelled Shares and any Dissenting Shares (as defined and to
the extent provided in Section 2.2(a) hereof), shall be converted into
the right to receive (i) the fraction of a share (subject to adjustment
as provided below) of Parent Common Stock equal to the Exchange Ratio,
and (ii) the Per Share Cash Consideration, without interest (the "Cash
Consideration"), together with any cash in lieu of fractional shares of
Parent Common Stock to be paid pursuant to Section 2.3(g) hereof (such
shares and cash, as adjusted pursuant to the following paragraph, the
"Merger Consideration"). Each share of Company Common Stock shall
thereafter cease to be outstanding and cease to exist, and each holder
of Company Common Stock outstanding immediately prior to the Effective
Time will cease to have any rights with respect to the Company Common
Stock and each certificate formerly representing shares of Company
Common Stock (other than the Cancelled Shares) shall thereafter
represent only the right to receive the Merger Consideration.
(d) Adjustments to Exchange Ratio. An appropriate adjustment
shall be made to the Exchange Ratio in the event that, prior to the
Effective Time, the outstanding shares of Parent Common Stock, without
new consideration, are changed into or exchanged for a different kind
of shares or securities through a reorganization, reclassification,
stock dividend, stock combination, or other like change in the Parent's
capitalization.
2.2. Appraisal Rights.
(a) Notwithstanding any provision of this Agreement to the
contrary other than Section 2.2(b), any shares of Company Common Stock
held by a holder who is entitled to and has demanded and perfected
appraisal rights for such shares in accordance with Section 262 of the
Delaware General Corporation Law (the "DGCL") and who, as of the
Effective Time, has not effectively withdrawn or lost such appraisal
rights ("Dissenting Shares"), shall not be converted into or represent
a right to receive Merger
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Consideration pursuant to Section 2.1(c), but instead shall be
converted into the right to receive only such consideration as may be
determined to be due with respect to such Dissenting Shares under the
DGCL. From and after the Effective Time, a holder of Dissenting Shares
shall not be entitled to exercise any of the voting rights or other
rights of a stockholder of the Surviving Corporation.
(b) Notwithstanding the provisions of Section 2.2(a), if any
holder of shares of Company Common Stock who demands appraisal of such
shares under the DGCL shall effectively withdraw or lose (through
failure to perfect or otherwise) the right to appraisal, then, as of
the later of the Effective Time and the occurrence of such event, such
holder's shares shall no longer be Dissenting Shares and shall
automatically be converted into and represent only the right to receive
Merger Consideration as provided in Section 2.1(c) without interest
thereon, upon surrender of the certificate representing such shares
pursuant to Section 2.3.
(c) The Company shall give Parent (i) prompt notice of any
written demands for appraisal of any shares of Company Common Stock,
withdrawals of such demands, and any other instruments served pursuant
to the DGCL and received by the Company which relate to any such demand
for appraisal and (ii) the opportunity to participate in all
negotiations and proceedings which take place prior to the Effective
Time with respect to demands for appraisal under the DGCL. The Company
shall not, except with the prior written consent of Parent, voluntarily
make any payment with respect to any demands for appraisal of Company
Common Stock or offer to settle or settle any such demands.
2.3. Exchange of Certificates.
(a) Prior to the Effective Time, the Parent shall appoint
the Parent's stock transfer agent or such other person as the Parent
may select to act as exchange agent for the exchange of Parent Common
Stock upon surrender of Certificates (the "Exchange Agent"). Promptly
following the Effective Time, Parent shall deposit, or cause to be
deposited, with the Exchange Agent, for the benefit of the holders of
Company Common Stock, for exchange in accordance with this Article 2
through the Exchange Agent, (i) certificates representing the number of
shares of Parent Common Stock issuable pursuant to Section 2.1(c)(i),
and (ii) the amount of cash payable pursuant to Section 2.1(c)(ii) as
of the Effective Time and, thereafter, cash from time to time as
required to make payments in lieu of fractional shares pursuant to
Section 2.3(g) (such cash and certificates for Parent Common Stock,
together with any dividends or distributions with respect thereto,
being hereinafter referred to as the "Exchange Fund"). The Exchange
Agent shall, pursuant to irrevocable instructions, deliver (x) the
Parent Common Stock and cash contemplated to be issued pursuant to
Section 2.1(c) hereto, and (y) such cash as may be required to make
payments in lieu of any fractional shares out of the Exchange Fund.
Except as contemplated by Section 2.3(h), the Exchange Fund shall not
be used for any other purpose.
(b) As promptly as reasonably practicable after the
Effective Time, but in no event later than ten business days
thereafter, the Parent will cause the Exchange Agent to mail to each
holder of record of a certificate or certificates (to the extent such
certificates
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have not already been submitted to the Exchange Agent) which
immediately prior to the Effective Time represented outstanding shares
(other than Cancelled Shares) of Company Common Stock (each, a
"Certificate" and collectively, the "Certificates") (i) a letter of
transmittal (which shall be in customary form and shall specify that
delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon proper delivery of the Certificates
to the Exchange Agent and shall be in such form and have such other
provisions as the Parent and the Exchange Agent shall reasonably
specify), (ii) instructions for use in effecting the surrender of the
Certificates in exchange for the Merger Consideration, and (iii) such
notification as may be required under the DGCL to be given to the
holders of Dissenting Shares.
(c) Upon surrender to the Exchange Agent of a Certificate
for cancellation, together with such letter of transmittal, duly
executed and completed in accordance with the instructions thereto, and
such other documents as may be reasonably required by the Exchange
Agent pursuant to such instructions, the holder of such Certificate
shall be entitled to receive in exchange therefor, (i) the Cash
Consideration, (ii) one or more of the Parent certificates representing
the number of whole shares of Parent Common Stock into which the shares
represented by the Certificate(s) shall have been converted pursuant to
Section 2.1(c), and (iii) if applicable, a bank check for fractional
shares pursuant to Section 2.3(g), to be distributed as soon as
practicable after the Effective Time, and the Certificate so
surrendered shall immediately be cancelled. In the event of a transfer
of ownership of shares of Company Common Stock which is not registered
in the transfer records of the Company, Parent Common Stock (and any
Cash Consideration and any cash paid for fractional shares pursuant to
Section 2.3(g)) may be issued or paid to a transferee if the
Certificate representing such shares of Company Common Stock is
presented to the Exchange Agent, accompanied by all documents required
to evidence and effect such transfer and by evidence that any
applicable stock transfer taxes have been paid.
(d) Whenever a dividend or other distribution is declared by
the Parent in respect of the Parent Common Stock, the record date for
which is after the Effective Time, that declaration shall include
dividends or other distribution in respect of all shares issuable
pursuant to this Agreement. No dividends or other distributions
pertaining to Parent Common Stock with a record date on the same date
as or after the Effective Time shall be paid to any holder of shares of
Company Common Stock who have not surrendered their Certificates for
exchange, until the holder of such Certificates shall have exchanged
such Certificates in accordance with Section 2.3(c) hereof. Subject to
the effect, if any, of applicable Law, the Exchange Agent shall
receive, hold, and remit any such dividends or other distributions to
each such record holder entitled thereto, without interest, at the time
that such Certificates are surrendered to the Exchange Agent for
exchange. Holders of Company Common Stock will not be entitled,
however, to dividends or other distributions that are payable to
persons who were holders of record of Parent Common Stock as of a
record date that is prior to the date of the Effective Time.
(e) All shares of Parent Common Stock issued upon the
surrender for exchange of the Certificates in accordance with the terms
hereof (including any cash paid for fractional shares pursuant to
Section 2.3(g) hereof) and the Cash Consideration shall
5
be deemed to have been issued in full satisfaction of all rights
pertaining to the shares of Company Common Stock represented by the
Certificates.
(f) After the Effective Time, there shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of the shares of Company Common Stock that were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates representing such shares are presented to the Surviving
Corporation, they shall be cancelled and exchanged as provided in this
Article 2.
(g) No fractional shares of Parent Common Stock and no
certificates or scrip therefor, or other evidence of ownership thereof,
shall be issued upon the surrender for exchange of Certificates, no
dividend or other distribution of the Parent shall relate to any
fractional share, and such fractional share interests shall not entitle
the owner thereof to vote or to any rights of a stockholder of the
Parent. All fractional shares of Parent Common Stock to which a holder
of Company Common Stock immediately prior to the Effective Time would
otherwise be entitled, at the Effective Time, shall be aggregated if
and to the extent multiple Certificates of such holder are submitted
together to the Exchange Agent. If a fractional share results from such
aggregation, then (in lieu of such fractional share) the Exchange Agent
shall pay to each holder of shares of Company Common Stock who
otherwise would be entitled to receive such fractional share of Parent
Common Stock an amount of cash (without interest) determined by
multiplying (i) the fractional share of Parent Common Stock to which
such holder would otherwise be entitled, by (ii) the Parent Average
Stock Price. The Parent will make available to the Exchange Agent any
cash necessary for this purpose.
(h) Any portion of the Exchange Fund that remains
undistributed to the holders of shares of Company Common Stock six (6)
months after the Effective Time shall be delivered to Parent, upon
demand by Parent. Any holder of Certificates who have not theretofore
complied with Section 2.2(a) shall thereafter look only to Parent for
the portion of the Merger Consideration represented by the Certificates
to which such holder is entitled pursuant to Section 2.1(c) hereof. Any
portion of the Exchange Fund remaining unclaimed by holders of shares
of Company Common Stock as of the date that is immediately prior to
such time as such amounts would otherwise escheat to or become property
of any Governmental Entity shall, to the extent permitted by applicable
Law, become the property of Parent, free and clear of any claims or
interest or any person previously entitled thereto.
(i) To the fullest extent permitted by Law, neither Parent
nor the Surviving Corporation shall be liable to any holder of shares
of Company Common Stock for any Parent Common Stock (or dividends or
distributions with respect thereto) or cash delivered to a public
official pursuant to any applicable abandoned property, escheat or
similar Law.
(j) Each of the Surviving Corporation, Parent and the
Exchange Agent shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any
holder of shares of Company Common Stock such amounts as it is required
to deduct and withhold with respect to the making of such payments
under the
6
Code, or any provision of state, local or foreign tax Law. To the
extent that amounts are so withheld by the Surviving Corporation,
Parent or Exchange Agent, as the case may be, such withheld amounts
shall be treated for all purposes of this Agreement as having been paid
to the holder of shares of Company Common Stock in respect of which
such deduction and withholding was made by the Surviving Corporation,
Parent or Exchange Agent, as the case may be.
(k) If any Certificate shall have been lost, stolen or
destroyed, upon the delivery to the Exchange Agent of an affidavit of
that fact by the person claiming such Certificate to be lost, stolen or
destroyed and, if required by the Surviving Corporation, the posting by
such person of a bond, in such reasonable amount as the Parent or
Surviving Corporation may direct, as indemnity against any claim that
may be made against it with respect to such Certificate, the Exchange
Agent shall issue or pay in exchange for such lost, stolen or destroyed
Certificate the Merger Consideration and the cash value of any fraction
of a share of Parent Common Stock as provided in Section 2.3(g) hereof.
2.4. Stock Options
As soon as practicable following the Closing, but effective as of the
Effective Time, each Company Option that is outstanding immediately prior to the
Effective Time (including, specifically and without limitation, every option
outstanding under any Company Stock Plan) and that has not been exercised prior
to the Effective Time, shall be terminated. No options or Company Stock Plan
will continue after the Effective Time or be assumed or continued by Parent or
the Surviving Corporation. Prior to the Closing Date, the Company shall take all
action necessary to effect the termination of all Company Options, as
contemplated by this Section 2.4.
2.5. Warrants
Each warrant to purchase shares of Company Common Stock (a "Company
Warrant") that is outstanding immediately prior to the Effective Time shall, at
the Effective Time, cease to represent a right to purchase shares of Company
Common Stock and shall be converted, at the Effective Time, into a warrant to
purchase shares of Parent Common Stock (a "Parent Warrant") on substantially the
same terms and conditions as were applicable under such Company Warrant. The
number of shares of Parent Common Stock subject to each such Parent Warrant
shall be the number of shares of Company Common Stock subject to each such
Company Warrant immediately prior to the Effective Time multiplied by the
Exchange Ratio, rounded, if necessary, to the nearest whole share of Parent
Common Stock, and such Parent Warrant shall have an exercise price per share
(rounded to the nearest cent) equal to the per share exercise price specified in
such Company Warrant divided by the Exchange Ratio.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As a material inducement to the Parent and Merger Sub to enter into
this Agreement, with the understanding that the Parent and Merger Sub shall be
relying thereon in consummating the transactions contemplated hereunder, the
Company hereby represents and warrants to the Parent
7
and Merger Sub, except as set forth in the Company Disclosure Schedule delivered
by the Company to the Parent and Merger Sub on the date hereof (the "Company
Disclosure Schedule"), which Company Disclosure Schedule identifies the section
and subsection numbers of this Article 3 to which the disclosures pertain and
which disclosures relate only to the representations and warranties set forth in
the section or subsection of this Agreement to which such section of the Company
Disclosure Schedule expressly relates and not to any other representation and
warranty contained in this Agreement (except to the extent that one section of
the Company Disclosure Schedule specifically refers to another section thereof),
as follows:
3.1. Organization and Qualification.
(a) The Company and each Company Subsidiary is a corporation
duly organized, validly existing and in good standing under the laws of
its jurisdiction of incorporation and has all power and authority to
own, lease and operate its properties and to carry on its business as
now being conducted. The Company and each Company Subsidiary is duly
qualified and in good standing to do business in each jurisdiction in
which the property owned, leased, or operated by it or the nature of
the business conducted by it (i) makes such qualification necessary and
(ii) where the failure to qualify could reasonably be expected to have
a Company Material Adverse Effect.
(b) Section 3.1(b) of the Company Disclosure Schedule lists
each Company Subsidiary and its jurisdiction of incorporation. Except
for the capital stock of the Company Subsidiaries owned by the Company,
neither the Company nor any Company Subsidiary owns, directly or
indirectly, any capital stock or other interest in any person. The
Company wholly owns each Company Subsidiary.
3.2. Charter and Bylaws.
The Company has furnished or made available to the Parent a complete
and correct copy of the Certificate of Incorporation and the Bylaws of the
Company and the Certificate of Incorporation, Bylaws or equivalent
organizational documents of each Company Subsidiary, each as in full force and
effect as of the date hereof. Neither the Company nor any Company Subsidiary is
in violation of any of the provisions of its Certificate of Incorporation,
Bylaws or equivalent organizational documents.
3.3. Capitalization.
(a) The authorized capital stock of the Company consists of
100,000,000 shares of Company Common Stock and 5,000 shares of
Preferred Stock of the Company, par value $0.001 per share (the
"Company Preferred Stock"). As of the date hereof, there are (i)
51,133,492 shares of Company Common Stock issued and outstanding; (ii)
no shares of Preferred Stock issued and outstanding; (iii) 1,034,784
shares of Company Common Stock and no shares of Company Preferred Stock
held in the treasury of the Company; (iv) no shares of Company Common
Stock or Company Preferred Stock owned by the Company Subsidiaries; and
(v) 3,964,015 shares of Company Common Stock reserved for future
issuance pursuant to Company Stock Plans (including 3,034,397 shares
subject to outstanding Company Options, which includes 45,000
8
restricted stock awards that will vest immediately prior to the
Effective Time). Except (1) as set forth in this Section 3.3(a), (2) as
set forth in Section 3.3(a) of the Company's Disclosure Schedule,
including the Employee Stock Purchase Plan set forth therein ("ESPP")
and (3) as provided in the Rights Plans (as defined in Section 3.28
hereof), there are no outstanding (x) securities of the Company
convertible into or exchangeable for shares of capital stock or voting
securities or ownership interests in the Company, (y) options,
warrants, rights or other agreements or commitments to acquire from the
Company, or obligations of the Company to issue, any capital stock,
voting securities or other ownership interests in (or securities
convertible into or exchangeable for capital stock or voting securities
or other ownership interests in) the Company, (z) obligations of the
Company to grant, extend or enter into any subscription, warrant,
right, convertible or exchangeable security or other similar agreement
or commitment relating to any capital stock, voting securities or other
ownership interests in the Company (the items in clauses (x), (y) and
(z), together with the capital stock of the Company, being referred to
collectively as "Company Securities") or (iv) obligations by the
Company or any of the Company Subsidiaries to make any payments based
on the price or value of shares of the Company's capital stock. All
outstanding shares of Company Common Stock have been duly authorized
and validly issued, are fully paid and nonassessable and were issued in
compliance with all applicable federal and state securities laws (or
applicable exemptions thereunder).
(b) Section 3.3(b) of the Company Disclosure Schedule
accurately sets forth (A) a list of all Company Stock Plans and
information regarding the exercise price, the date of grant or issuance
and the number of underlying securities issuable in respect of each
Company Option, and (B) a list of all Warrants outstanding and
information regarding the holder, the exercise price, the expiration
date and the number and type of securities into which the warrants are
exercisable. All securities of the Company subject to issuance upon
exercise of Company Options, upon issuance on the terms and conditions
specified in the instruments pursuant to which they are issuable, shall
be duly authorized, validly issued, fully paid and nonassessable.
Except as set forth in Section 3.3(b) of the Company Disclosure
Schedule, no consent of holders of any Company Options is required to
carry out the Merger and the other transactions contemplated by this
Agreement, including, without limitation, the matters contemplated by
Section 2.4 and Article 1. All actions, if any, required on the part of
the Company under the Company Options to allow for the treatment of
Company Options as is provided in Section 2.4 and Article 1, have been,
or prior to the Closing shall be, validly taken by the Company. The
Company has delivered or made available to the Parent complete and
correct copies of the Company Stock Plans and all forms of Company
Options and agreements under any such plans.
(c) Except as contemplated by this Agreement, the Company is
not under any obligation to repurchase, redeem or otherwise acquire any
securities of the Company or of any Company Subsidiary or to provide
funds to, or make any investment (in the form of a loan, capital
contribution or otherwise) in, any Company Subsidiary or any other
Person. As of the date of this Agreement and except as contemplated by
this Agreement, there are no voting trusts or other agreements or
understandings to which the Company is a party, or, to the Knowledge of
the Company, to which persons other than the Company
9
are parties, that relate to the voting or control of any outstanding
shares of the Company's capital stock.
(d) Each outstanding share of capital stock of each Company
Subsidiary is duly authorized, validly issued, fully paid and
nonassessable, and each such share is owned by the Company or another
Company Subsidiary, free and clear of all Encumbrances. There are no
outstanding (i) securities of the Company or any Company Subsidiary
convertible into or exchangeable for shares of capital stock or other
voting securities or ownership interests in any Company Subsidiary,
(ii) options, warrants, rights or other agreements or commitments to
acquire from the Company or any Company Subsidiary (or obligations of
the Company or any Company Subsidiary to issue) any capital stock,
voting securities or other ownership interests in, or any securities
convertible into or exchangeable for any capital stock, voting
securities or ownership interests in, any Company Subsidiary, (iii)
obligations of the Company or any Company Subsidiary to grant, extend
or enter into any subscription, warrant, right, convertible or
exchangeable security or other similar agreement or commitment relating
to any capital stock, voting securities or other ownership interests in
any Company Subsidiary (the items in clauses (i), (ii) and (iii),
together with the capital stock of such Company Subsidiaries, being
referred to collectively as "Subsidiary Securities") or (iv)
obligations of the Company or any Company Subsidiary to make any
payment based on the value of any shares of any Company Subsidiary.
There are no outstanding obligations of the Company or any of Company
Subsidiary to purchase, redeem or otherwise acquire any outstanding
Subsidiary Securities.
3.4. Company SEC Reports; Financial Statements.
(a) The Company has filed with the SEC, at or prior to the
time due (including by proper extension pursuant to Rule 12b-25), and
has heretofore made available to the Parent true and complete copies
of, all forms, reports, schedules, registration statements, definitive
proxy statements and other documents (together with all information
incorporated therein by reference, the "Company SEC Reports") it filed
or was required to file with the SEC since January 1, 2002. As of their
respective dates, the Company SEC Reports complied in all material
respects with all applicable requirements of the Exchange Act or the
Securities Act, as the case may be, and the rules and regulations of
the SEC thereunder applicable to the Company SEC Reports. As of their
respective dates and as of the date any information from such Company
SEC Reports has been incorporated by reference, the Company SEC Reports
did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Section 3.4(a) of the
Company Disclosure Schedule lists all comment letters or other
correspondence received by the Company from the Staff of the SEC since
January 1, 2002 with respect to any Company SEC Report or otherwise and
all responses to such comment letters or correspondence by or on behalf
of the Company, copies of all of which have been provided to the
Parent.
10
(b) To the extent required in connection with the Company
SEC Reports, the Company's Chief Executive Officer and Chief Financial
Officer have signed, and the Company has furnished to the SEC, all
necessary certifications required by Sections 302 and 906 of the
Xxxxxxxx-Xxxxx Act of 2002. Such certifications contain no
qualifications or exceptions to the matters certified therein and have
not been modified or withdrawn, and neither the Company nor any of its
officers has received notice from any Governmental Entity questioning
or challenging the accuracy, completeness, form or manner of filing or
submission of such certifications nor to the Company's Knowledge is any
such notice or action threatened.
(c) Each of the financial statements of the Company
(including the related notes) included or incorporated by reference in
the Company SEC Reports (including any similar documents filed after
the date of this Agreement) comply as to form in all material respects
with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, have been prepared in
accordance with GAAP (except, in the case of unaudited statements, as
permitted by Form 10-Q or Regulation S-X of the SEC) applied on a
consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present the consolidated
financial position of the Company and its consolidated Company
Subsidiaries as of the dates thereof and the consolidated results of
their operations and cash flows for the periods then ended (subject to
normal year-end adjustments in the case of any unaudited interim
financial statements). Neither the Company nor any Company Subsidiary
has, nor does the Company or any Company Subsidiary have any Knowledge
of any basis for, any material liabilities or obligations individually
or in the aggregate (whether absolute, accrued, contingent, or
otherwise) of any nature, other than liabilities or obligations (i)
accrued or reserved against in the most recent consolidated balance
sheet of the Company included in the Company SEC Reports, (ii)
specifically disclosed in this Agreement, or (iii) incurred in the
ordinary course of business consistent with past practice since the
date of the balance sheet included in the most recent Company SEC
Report (none of which could, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect or are
in such amounts as to be materially greater than the liabilities or
obligations set forth in the balance sheet most recently filed with the
SEC prior to the date of this Agreement).
(d) Except as set forth in Section 3.4(d) of the Company
Disclosure Schedule, the Company has not been notified by its
independent auditors or by the staff of the SEC that such auditors or
staff of the SEC, as the case may be, are of the view that any
financial statements included in any registration statement filed by
the Company under the Securities Act or any periodic or current report
filed under the Exchange Act should be restated, or that the Company
should modify its accounting in future periods in a manner that would
be materially adverse to the Company. As of the date hereof, the
Company has complied in all material respects with the listing and
other standards of Nasdaq applicable to it (other than failing to meet
the minimum per share price qualification of the Nasdaq SmallCap
Market).
(e) Prior to the execution of this Agreement, the Company
has delivered to the Parent its Annual Report on Form 10-K for the
fiscal year ended December 31, 2004
11
(the "2004 Form 10-K") in its final form, and no changes or
modifications to the 2004 Form 10-K will be required or made prior to
filing with the SEC. The 2004 Form 10K complies in all material
respects with all applicable requirements of the Exchange Act, and the
rules and regulations of the SEC thereunder applicable to the 2004 Form
10-K.
3.5. Controls.
Except as set forth in Section 3.5 of the Company Disclosure
Schedule:
(a) Each of the Company and the Company Subsidiaries has
internal control over financial reporting as defined in Rule 13a-15(f)
under the Exchange Act and such internal control over financial
reporting is effective. Since January 1, 2002, there has been no
material change in the internal control over financial reporting of the
Company and the Company Subsidiaries that has materially affected, or
is reasonably likely to materially affect, the internal control over
financial reporting of the Company and the Company Subsidiaries.
Without limiting the generality of the foregoing, each of the Company
and the Company Subsidiaries maintains accurate books and records
reflecting its assets and liabilities and maintains proper and adequate
internal accounting controls which provide reasonable assurance that
(i) transactions are executed with management's authorization; (ii)
transactions are recorded as necessary to permit preparation of the
consolidated financial statements of the Company and to maintain
accountability for the Company's consolidated assets; (iii) access to
the Company's consolidated assets is permitted only in accordance with
management's authorization; (iv) the reporting of the Company's
consolidated assets is compared with existing assets at regular
intervals; and (v) accounts, notes and other receivables and inventory
are recorded accurately, and proper and adequate procedures are
implemented to effect the collection thereof on a current and timely
basis. The Company has not been notified by its independent auditor
that there is any significant deficiency or material weakness in the
Company's internal control over financial reporting. The Company has
delivered to Parent complete and accurate copies of any management
letter or similar correspondence from any independent auditor since
January 1, 2002, of the Company or any of the Company Subsidiaries.
(b) The Company maintains disclosure controls and procedures
required under the Exchange Act effective to ensure that all material
information concerning the Company and the Company Subsidiaries is made
known on a timely basis to the individuals responsible for the
preparation of the Company's filings with the SEC and other public
disclosure documents. Section 3.5(b) of the Company Disclosure Schedule
lists, and the Company has delivered to the Parent copies of, all
written descriptions of, and all policies, manuals and other documents
promulgating, such disclosure controls and procedures and internal
controls over financial reporting.
3.6. Information Supplied.
The proxy statement/prospectus included as part of the Registration
Statement (such proxy statement/prospectus, together with notice of meeting,
form of proxy, and any letter or other materials to the Company's stockholders
included therein are referred to in this Agreement
12
as the "Proxy Statement/Prospectus") shall not, at the time the Proxy
Statement/Prospectus is first mailed and at the time of the Company Stockholders
Meeting, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made, not
misleading, or omit to state any material fact necessary to correct any
statement made in any earlier communication with respect to the solicitation of
any proxy or approval for the Merger in connection with which the Proxy
Statement/Prospectus shall be mailed, which has become false or misleading,
except that no representation or warranty is made by the Company with respect to
any information regarding and supplied in writing by the Parent, Merger Sub or
any Affiliate of the Parent or Merger Sub which is contained or incorporated by
reference in the Proxy Statement/Prospectus. The Proxy Statement/Prospectus
shall comply as to form in all material respects with the provisions of the
Exchange Act and the rules and regulations of the SEC promulgated thereunder.
3.7. Authorization and Enforceability.
The Company has the corporate power and authority to execute and
deliver this Agreement and, subject to obtaining the Company Stockholder
Approval and the approvals set forth in Section 3.7 of the Company Disclosure
Schedule, the corporate power and authority to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by the Company
and the consummation of the transactions contemplated hereby have been duly and
validly authorized and unanimously approved by the Company's Board of Directors
and no other corporate proceedings on the part of the Company (other than
Company Stockholder Approval) or any Company Subsidiary are necessary to
authorize this Agreement, and, subject to obtaining the Company Stockholder
Approval, no other corporate action on the part of the Company or any Company
Subsidiary is necessary to consummate the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by the Company and
constitutes the valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, subject to rules of Law governing
bankruptcy, specific performance, injunctive relief, or other equitable
remedies. Under applicable Law, the Company's Certificate of Incorporation and
Nasdaq rules, the affirmative vote of the holders of a majority of the
outstanding shares of Company Common Stock is the only vote required for the
stockholders of the Company to approve the Merger and, except as set forth in
Section 3.7 of the Company Disclosure Schedule no holders of any other Company
Securities are entitled to any vote or consent regarding the Merger, this
Agreement or any of the transactions contemplated hereby.
3.8. Absence of Certain Changes or Events.
Except as contemplated hereby or as disclosed in the Company SEC
Reports or Section 3.8 of the Company Disclosure Schedule, since January 1,
2005, the Company and the Company Subsidiaries have conducted their business in
the ordinary course of business and consistent with past practice and there has
not been:
(a) any change, effect, event, occurrence, state of facts or
development that, individually or in the aggregate, has had or could
reasonably be expected to have a Company Material Adverse Effect;
13
(b) any declaration, setting aside or payment of any
dividend or other distribution with respect to any shares of capital
stock of the Company, or any repurchase, redemption or other
acquisition by the Company or any Company Subsidiary (other than any
wholly owned subsidiary) of any outstanding shares of capital stock or
other equity or debt securities of, or other ownership interests in,
the Company;
(c) any split, combination or reclassification of any of its
capital stock;
(d) any amendment of any provision of the Certificate of
Incorporation, Bylaws or other governing documents of, or of any
material term of any outstanding security issued by, the Company or any
Company Subsidiary (other than any wholly owned subsidiary);
(e) any incurrence, assumption or guarantee by the Company
or any Company Subsidiary of any indebtedness for borrowed money, other
than trade payables incurred in the ordinary course of business and
consistent with past practice;
(f) any change in any method of accounting or accounting
practice by the Company or any Company Subsidiary, except for any such
change required by reason of a change in GAAP and concurred with by the
Company's independent public accountants;
(g) any election or change in any election concerning Taxes,
any adoption or change in any Tax accounting method or practice, or any
change in any Tax accounting period;
(h) any issuance of any equity or debt securities of the
Company other than pursuant to the Company Stock Plans and the Company
Options in the ordinary course of business and consistent with past
practice;
(i) any acquisition or disposition of assets material to the
Company and the Company Subsidiaries (except for sales of inventory in
the ordinary course of business consistent with past practice), any
acquisition or disposition of capital stock of any third party (other
than acquisitions or dispositions of non-controlling equity interests
of third parties in the ordinary course of business), or any merger or
consolidation with any third party, by the Company or any Company
Subsidiary;
(j) any creation or assumption by the Company or any Company
Subsidiary of any Encumbrance on any asset other than in the ordinary
course of business and consistent with past practice;
(k) any capital expenditure or expenditures in excess of
$15,000 individually or $50,000 in the aggregate, other than capital
expenditures made in the ordinary course of business;
(l) any material damage, destruction or loss (whether or not
covered by insurance) from fire or other casualty to its material
tangible property;
14
(m) any increase in the base salary of any officer or
employee of the Company, other than increases in the base salary of
non-officer employees in the ordinary course of business and consistent
with past practice;
(n) any adoption, amendment, modification, or termination of
any bonus, profit-sharing, incentive, severance or other similar plan
or any outstanding option, award, or benefit thereunder for the benefit
of any of its directors, officers or employees;
(o) entry by the Company into any joint venture, partnership
or similar agreement with any person other than a Company Subsidiary;
or
(p) any authorization of, or commitment or agreement to take
any of, the foregoing actions except as otherwise permitted by this
Agreement.
3.9. Consents and Approvals.
Except as set forth in Section 3.9 of the Company Disclosure Schedule,
the execution and delivery of this Agreement by the Company and the consummation
of the transactions contemplated hereby does not: (a) violate any provision of
the Certificate of Incorporation, Bylaws, or other governing document of the
Company or any Company Subsidiary; (b) violate any Law or Order by which the
Company or any Company Subsidiary or any of their respective properties or
assets may be bound; or (c) result in any violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default under, result in
the loss of any material benefit under, or give rise to any right of
termination, cancellation, increased payments, or acceleration under, or result
in the creation of any Encumbrance on any of the properties or assets of the
Company or any Company Subsidiary under any of the terms, conditions, or
provisions of any note, bond, mortgage, indenture, or of any material license,
franchise, permit, authorization, agreement, or other instrument or obligation
to which the Company or any Company Subsidiary is a party, or by which it or any
of its material properties or assets may be bound. Except as set forth in
Section 3.9 of the Company Disclosure Schedule, no filing with or permit,
consent, or approval of any Governmental Entity or any other Person is required
by the Company or any Company Subsidiary in connection with the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby, except for (i) any applicable requirements of the Securities Act, the
Exchange Act and state securities laws; (ii) the Company Stockholder Approval;
(iii) the filing and recordation of the Certificate of Merger as required by
Delaware Law; and (iv) applicable notices to Nasdaq.
3.10. Permits.
Each of the Company and the Company Subsidiaries is in possession of
all Permits, except where the failure to have, or the suspension or cancellation
of, any of the Permits could not reasonably be expected to have a Company
Material Adverse Effect. As of the date hereof, no suspension or cancellation of
any of the Permits is pending or, to the Knowledge of the Company, threatened,
except where the failure to have, or the suspension or cancellation of, any of
such Permits could not reasonably be expected to have a Company Material Adverse
Effect. Section 3.10 of the Company Disclosure Schedule lists all material
Permits of the Company and
15
the Company Subsidiaries, and the Company has made available to the Parent all
other Permits of the Company and the Company Subsidiaries.
3.11. Compliance with Laws.
Except as set forth in Section 3.11 of the Company Disclosure Schedule,
all activities of the Company and each Company Subsidiary have been, and are
currently being, conducted in all material respects in compliance with all
applicable Laws and Orders. To the Knowledge of the Company, (a) no
investigation or review by any Governmental Entity with respect to the Company
is pending or threatened or has been undertaken within the past five (5) years
and (b) no Governmental Entity has indicated an intention to conduct the same.
3.12. Litigation.
Except as set forth in Section 3.12 of the Company Disclosure Schedule,
there are no material suits, actions or proceedings pending or, to the Knowledge
of the Company, threatened (in any manner) against or affecting the Company or
any of the Company Subsidiaries. Neither the Company nor any of the Company
Subsidiaries is subject to any outstanding Order that contains ongoing material
obligations, restricts the activities of the Company or any Company Subsidiary
going forward or could reasonably be expected to prevent, hinder or delay the
timely completion of the transactions contemplated by this Agreement.
3.13. Employee Benefit Matters.
(a) Section 3.13(a) of the Company Disclosure Schedule
contains a complete and accurate list of all Employee Benefit Plans.
Neither the Company nor any Company Subsidiary has any agreement,
arrangement, commitment or obligation, whether formal or informal,
whether written or unwritten and whether legally binding or not, to
create, enter into or contribute to any additional Employee Benefit
Plan, or to modify or amend any existing Employee Benefit Plan. There
has been no amendment, interpretation or other announcement (written or
oral) by the Company, any Company Subsidiary or any other Person
relating to, or change in participation or coverage under, any Employee
Benefit Plan that, either alone or together with other such items or
events, could materially increase the expense of maintaining such
Employee Benefit Plan (or the Employee Benefit Plans taken as a whole)
above the level of expense incurred with respect thereto for the fiscal
year ended December 31, 2004. The terms of each Employee Benefit Plan
permit the Company or relevant Company Subsidiary, as applicable, to
amend and terminate such Employee Benefit Plan at any time and for any
reason without penalty and without material liability or expense other
than for the ordinary accrual of benefits as of the date of
termination. None of the rights of the Company or any Company
Subsidiary under any Employee Benefit Plan will be impaired in any way
by this Agreement or the consummation of the transactions contemplated
by this Agreement.
(b) The Company has delivered to Parent true, correct and
complete copies (or, in the case of unwritten Employee Benefit Plans,
descriptions) of all Employee Benefit Plans (and all amendments thereto
since the inception of the particular Employee
16
Benefit Plan), along with, to the extent applicable to the particular
Employee Benefit Plan, copies of the following: (i) the last three
annual reports (Form 5500 series), filed with respect to such Employee
Benefit Plan, together with all schedules and audit reports required
with respect thereto; (ii) the most recent summary plan description,
and all summaries of material modifications related thereto,
distributed with respect to such Employee Benefit Plan; (iii) all
contracts and agreements (and any amendments thereto since the
inception of such Employee Benefit Plan) relating to such Employee
Benefit Plan, including, without limitation, all trust agreements,
investment management agreements, annuity contracts, insurance
contracts, bonds, indemnification agreements and service provider
agreements; (iv) the most recent determination letter issued by the IRS
with respect to such Employee Benefit Plan; (v) the most recent annual
actuarial valuation prepared for such Employee Benefit Plan; (vi) all
written communications during the last three years relating to the
amendment, creation or termination of such Employee Benefit Plan, or an
increase or decrease in benefits, acceleration of payments or vesting
or other events that could result in material liability to the Company
or any Company Subsidiary; (vii) all material correspondence to or from
any Governmental Entity relating to such Employee Benefit Plan; (viii)
samples of all administrative forms currently in use with respect to
such Employee Benefit Plan, including, without limitation, all COBRA
and HIPAA forms and notices; (ix) all coverage, nondiscrimination, top
heavy and Code Section 415 tests performed with respect to such
Employee Benefit Plan for the last three years; and (x) the most recent
registration statement, annual report (Form 11-K) and prospectus
prepared in connection with such Employee Benefit Plan.
(c) With respect to each Employee Benefit Plan, except as
set forth in Section 3.13(c) of the Company Disclosure Schedule: (i)
such Employee Benefit Plan was properly and legally established; (ii)
such Employee Benefit Plan is, and at all times since inception has
been, maintained, administered, operated and funded in all material
respects in accordance with its terms and in compliance with all
applicable requirements of all applicable Laws, including, without
limitation, ERISA and the Code; (iii) the Company, each Company
Subsidiary, each of their respective directors, officers, employees,
representatives and agents, and, to the Knowledge of the Company, all
other Persons (including, without limitation, all other fiduciaries)
have, at all times and in all material respects, properly performed all
of their duties and obligations (whether arising by operation of law or
by contract) under or with respect to such Employee Benefit Plan,
including, without limitation, all reporting, disclosure and
notification obligations; (iv) all returns, reports (including, without
limitation, all Form 5500 series annual reports, together with all
schedules and audit reports required with respect thereto), notices,
statements and other disclosures relating to such Employee Benefit Plan
required to be filed with any Governmental Entity or distributed to any
Employee Benefit Plan participant have been properly prepared and duly
filed or distributed in a timely manner; (v) none of the Company, any
Company Subsidiary, any of their respective directors, officers,
employees, representatives or agents, or, to the Knowledge of the
Company, any other fiduciary of such Employee Benefit Plan has engaged
in any transaction or acted or failed to act in a manner that violates
the fiduciary requirements of ERISA or any other applicable Law; (vi)
no transaction or event has occurred or is threatened or about to occur
(including any of the transactions contemplated in or by this
Agreement) that
17
constitutes or could constitute a prohibited transaction under Section
406 or 407 of ERISA or under Section 4975 of the Code for which an
exemption is not available; and (vii) neither the Company nor any
Company Subsidiary has incurred, and there exists no condition or set
of circumstances in connection with which the Company, any Company
Subsidiary, the Surviving Corporation or Parent could incur, directly
or indirectly, any material liability or expense (except for routine
contributions and benefit payments) under ERISA, the Code or any other
applicable Law, or pursuant to any indemnification or similar
agreement, with respect to such Employee Benefit Plan.
(d) Except as set forth in Section 3.13(d) of the Company
Disclosure Schedule, each Employee Benefit Plan that is intended to be
qualified under Section 401(a) of the Code is so qualified and its
related trust and/or group annuity contract is exempt from taxation
under Section 501(a) of the Code. Each such Employee Benefit Plan (i)
is the subject of an unrevoked favorable determination letter from the
IRS with respect to such Employee Benefit Plan's qualified status under
the Code, as amended by that legislation commonly referred to as "GUST"
and "EGTRRA," and all subsequent legislation, or (ii) has remaining a
period of time under the Code or applicable Treasury regulations or IRS
pronouncements in which to request, and make any amendments necessary
to obtain, such a letter from the IRS. Except as set forth in Section
3.13(d) of the Company Disclosure Schedule, nothing has occurred, or is
reasonably expected by the Company or any Company Subsidiary to occur,
that could adversely affect the qualification or exemption of any such
Employee Benefit Plan or its related trust or group annuity contract.
No such Employee Benefit Plan is a "top-heavy plan," as defined in
Section 416 of the Code.
(e) Except as set forth in Section 3.13(e) of the Company
Disclosure Schedule, all contributions, premiums and other payments due
or required to be paid to (or with respect to) each Employee Benefit
Plan have been timely paid, or, if not yet due, have been accrued as a
liability on the balance sheet most recently filed with the SEC prior
to the date of this Agreement. All income taxes and wage taxes that are
required by law to be withheld from benefits derived under the Employee
Benefit Plans have been properly withheld and remitted to the proper
depository.
(f) Except with respect to one another, neither the Company
nor any Company Subsidiary is, or has ever been, a member of (i) a
controlled group of corporations, within the meaning of Section 414(b)
of the Code, (ii) a group of trades or businesses under common control,
within the meaning of Section 414(c) of the Code, (iii) an affiliated
service group, within the meaning of Section 414(m) of the Code, or
(iv) any other group of Persons treated as a single employer under
Section 414(o) of the Code.
(g) Neither the Company nor any Company Subsidiary sponsors,
maintains or contributes to, or has ever sponsored, maintained or
contributed to (or been obligated to sponsor, maintain or contribute
to), (i) a multiemployer plan, as defined in Section 3(37) or
4001(a)(3) of ERISA, (ii) a multiple employer plan within the meaning
of Section 4063 or 4064 of ERISA or Section 413 of the Code, (iii) an
employee benefit plan that is subject to Section 302 of ERISA, Title IV
of ERISA or Section 412 of the
18
Code, or (iv) a "multiple employer welfare arrangement," as defined in
Section 3(40) of ERISA.
(h) None of the Company, any Company Subsidiary or any
Employee Benefit Plan provides or has any obligation to provide (or
contribute toward the cost of) post-employment or post-termination
benefits of any kind, including, without limitation, death and medical
benefits, with respect to any current or former officer, employee,
agent, director or independent contractor of the Company or any Company
Subsidiary, other than (i) continuation coverage mandated by Sections
601 through 608 of ERISA and Section 4980B(f) of the Code or other
applicable Law that is paid for solely by the relevant individual, (ii)
retirement benefits under any Employee Benefit Plan that is qualified
under Section 401(a) of the Code, and (iii) deferred compensation that
is accrued as a current liability on the balance sheet most recently
filed with the SEC prior to the date of this Agreement.
(i) Except as set forth in Section 3.13(i) of the Company
Disclosure Schedule, there are no actions, suits or claims (other than
routine claims for benefits) pending or, to the Knowledge of the
Company, threatened with respect to (or against the assets of) any
Employee Benefit Plan, nor, to the Knowledge of the Company, is there a
basis for any such action, suit or claim. Except as set forth in
Section 3.13(i) of the Company Disclosure Schedule, no Employee Benefit
Plan is currently under investigation, audit or review, directly or
indirectly, by any Governmental Entity, and, to the Knowledge of the
Company, no such action is contemplated or under consideration by any
Governmental Entity.
(j) Except as set forth in Section 3.13(j) of the Company
Disclosure Schedule, neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated by this
Agreement (either alone or upon the occurrence of any additional or
subsequent event(s)) will (i) entitle any individual to severance pay,
unemployment compensation or any other payment from the Company, any
Company Subsidiary, the Surviving Corporation, Parent or any Employee
Benefit Plan, (ii) otherwise increase the amount of compensation due to
any individual or forgive indebtedness owed by any individual, (iii)
result in any benefit or right becoming established or increased, or
accelerate the time of payment or vesting of any benefit, under any
Employee Benefit Plan, or (iv) require the Company, any Company
Subsidiary, the Surviving Corporation or Parent to transfer or set
aside any assets to fund or otherwise provide for any benefits for any
individual. Section 3.13(j) of the Company Disclosure Schedule sets
forth all payments, benefits, acceleration provisions and other rights
to which an employee, director, consultant, or former employer,
director or consultant may become entitled upon his or her termination
in connection with or subsequent to the consummation of the
transactions contemplated by this Agreement.
(k) No "leased employee," as defined in Section 414(n) of
the Code, performs, or has ever performed, services for the Company or
any Company Subsidiary.
19
3.14. No Excess Parachute Payments.
No amount required to be paid (whether in cash or property or the
vesting of property) in connection with any of the transactions contemplated by
this Agreement to any employee, officer or director of the Company or any of its
affiliates who is a "disqualified individual" (as such term is defined in
proposed Treasury Regulation Section 1.280G-1) under any employment, severance
or termination agreement, other compensation arrangement or Employee Benefit
Plan currently in effect or in effect as of the Closing Date is reasonably
expected to be characterized as an "excess parachute payment" (as such term is
defined in Section 280G(b)(1) of the Code).
3.15. Employees.
(a) Section 3.15(a) of the Company Disclosure Schedule sets
forth (i) all Company and Company Subsidiary employees, as well as
independent contractors and leased employees, as of the date hereof,
including their respective name, job title or function, and location,
as well as a true, correct and complete listing of the current salary
or wage, incentive pay and bonuses, accrued vacation, and the current
status (as to leave or disability pay status, leave eligibility status,
full time or part time, exempt or nonexempt, temporary or permanent
status) of all Company and Company Subsidiary employees; (ii) the names
of all former officers of the Company or of any Company Subsidiary
whose employment with the Company or such Company Subsidiary has
terminated either voluntarily or involuntarily during the preceding
12-month period; and (iii) the names of the current officers (with all
positions and titles indicated) and directors of the Company and of
each Company Subsidiary. All current and former employees, independent
contractors and leased employees have been properly classified as such
by the Company or the Company Subsidiaries.
(b) The Company and the Company Subsidiaries have complied
in all material respects with all Laws relating to the employment of
labor, including provisions thereof relating to wages, hours, equal
opportunity, workers' compensation, unemployment compensation,
collective bargaining and the payment of social security and other
taxes.
(c) Except as set forth in Section 3.15(c) of the Company
Disclosure Schedule, neither the Company nor any of the Company
Subsidiaries has labor relations problems or employment-related
complaints or charges pending or, to the Knowledge of the Company,
threatened or reasonably expected to arise against the Company or the
Subsidiaries with the Equal Employment Opportunity Commission,
Department of Labor, or any other comparable state or local agency and
the Company's and Subsidiaries' labor relations are satisfactory.
(d) There are no strikes, concerted slowdowns, concerted
work stoppages, lockouts or, to the Knowledge of the Company, any
threats thereof, by or with respect to any employees of the Company or
the Company Subsidiaries.
(e) There are no workers' compensation claims pending
against the Company or the Company Subsidiaries nor, to the Knowledge
of the Company, are there any facts
20
that would give rise to such a claim or claims not covered by workers'
compensation insurance.
(f) To the Knowledge of the Company, no employee,
independent contractor or leased employee of the Company or the Company
Subsidiaries is subject to any secrecy or noncompetition agreement or
any other agreement or restriction of any kind that would impede the
ability of such employee to carry out fully the activities currently
performed by such employee in furtherance of the business of the
Company or the Company Subsidiaries.
3.16. Property and Leases.
(a) The Company and the Company Subsidiaries have sufficient
title or leasehold interests to all their tangible properties and
assets to conduct their respective businesses as currently conducted.
Neither the Company nor any Company Subsidiary owns any real property.
(b) Section 3.16(b) of the Company Disclosure Schedule lists
all leases for real or material personal property to which the Company
or any Company Subsidiary is a party and includes the termination date
for such leases and the amount of annual payments under the leases. All
leases of real property leased for the use or benefit of the Company or
any Company Subsidiary to which the Company or any Company Subsidiary
is a party, and all amendments and modifications thereto are in full
force and effect, and there exists no material default under any such
lease by the Company or any Company Subsidiary, nor any event which
with notice or lapse of time or both would constitute a default
thereunder by the Company or any Company Subsidiary, which would permit
any such lease to be terminated by the other party thereto. No consent,
waiver, approval or authorization is required under any lease for real
or material personal property to which the Company or any Company
subsidiary is a party as a result of the execution of this Agreement or
the consummation of the transactions contemplated hereby.
3.17. Intellectual Property Rights.
(a) Section 3.17(a) of the Company Disclosure Schedule lists
all Company Intellectual Property that is registered with U.S. Patent
and Trademark Office or a corresponding foreign governmental or public
authority and that: (i) is owned by, licensed to or otherwise
controlled by the Company and the Company Subsidiaries; or (ii) is used
in, developed for use in, or necessary to the conduct of the business
of the Company and the Company Subsidiaries as it is currently
conducted or as it is contemplated to be conducted. Section 3.17(a) of
the Company Disclosure Schedule also lists all Company Intellectual
Property that has been licensed to or from third parties or the public
(in the case of open source software). The Company has delivered or
made available to the Parent complete and accurate copies of
correspondence, litigation documents, legal opinions, agreements, file
histories and office actions relating to the patents and patent
application listed on Section 3.17(a) of the Company Disclosure
Schedule. Each item of Company Intellectual Property owned or used or
contemplated to
21
be used by the Company or the Company Subsidiaries immediately prior to
the Effective Time hereunder shall be owned or available for use by the
Parent or its subsidiaries on identical terms and conditions
immediately after the Effective Time.
(b) The Company and the Company Subsidiaries own, free and
clear of any Encumbrance, other than pursuant to the license agreements
or other contracts to which the Company is a party, and possess all
right, title and interest, or hold a valid license, in and to all
Company Intellectual Property, and have taken all reasonable action to
protect the Company Intellectual Property. To the Knowledge of the
Company, all patents included in the Company Intellectual Property are
valid and enforceable. To the Knowledge of the Company, the Company
Intellectual Property owned or licensed by the Company is sufficient
for the conduct of the business of the Company and the Company
Subsidiaries as it is currently conducted and as it is currently
contemplated to be conducted. There are no royalties, fees, honoraria
or other payments payable by the Company or any of the Company
Subsidiaries to any Person by reason of the ownership, development,
modification, use, license, sublicense, sale, distribution or other
disposition of the Company Intellectual Property other than as set
forth in Section 3.17(b) of the Company Disclosure Schedule. The
Company and the Company Subsidiaries have taken all reasonable security
measures to protect the secrecy, confidentiality and value of the
Company Intellectual Property.
(c) Section 3.17(c) of the Company Disclosure Schedule lists
the Internet domain names included in the Company Intellectual
Property. The Company or one of the Company Subsidiaries is the
registrant and sole legal and beneficial owner of the Internet domain
names included in the Company Intellectual Property, free and clear of
any Encumbrance. The Company or one of the Company Subsidiaries is the
registered owner of the trademarks underlying each of the domain names
included in the Company Intellectual Property. The Company is not aware
of any pending or threatened actions, suits, claims, litigation or
proceedings relating to the domain names included in the Company
Intellectual Property. The Company has operated the websites identified
in Section 3.17(c) of the Company Disclosure Schedule.
(d) Except as set forth in Section 3.17(d) of the Company
Disclosure Schedule, all personnel, including employees, agents,
consultants and contractors, who have contributed to or participated in
the conception or development, or both, of the Company Intellectual
Property on behalf of the Company or any of the Company Subsidiaries
and all officers and technical employees of the Company or the Company
Subsidiaries either (i) have been a party to "work-for-hire"
arrangements or agreements with the Company or one or more of the
Company Subsidiaries in accordance with applicable Law that has
accorded the Company or the Company Subsidiaries effective and
exclusive ownership of all Intellectual Property thereby arising, or
(ii) have executed appropriate instruments of assignment in favor of
the Company or one or more the Company Subsidiaries as assignee that
have conveyed to the Company or one or more of the Company Subsidiaries
effective and exclusive ownership of all Intellectual Property arising
thereby.
22
(e) To the Knowledge of the Company, the use of the Company
Intellectual Property in the conduct of the Company's and the Company
Subsidiaries' businesses has not infringed, misappropriated or
conflicted with and does not and will not infringe, misappropriate or
conflict with any Intellectual Property right of any other Person, nor
has the Company or any Company Subsidiary received any notice (written
or oral) of any infringement, misappropriation or violation by the
Company or any Company Subsidiary of any Intellectual Property right of
any third party. Except in connection with litigation initiated by the
Company to enforce its rights in the Company Intellectual Property
disclosed in Section 3.17(e) of the Company Disclosure Schedule, no
claim (written or oral) by any Person contesting the validity of any
Company Intellectual Property has been made, is currently outstanding
or, to the Knowledge of the Company, is threatened. To the Knowledge of
the Company, no Person is infringing any Intellectual Property right of
the Company or any Company Subsidiary.
(f) For purposes of this Section 3.17, the term "Knowledge"
shall not include knowledge that could have been possessed by the
Company if it had performed a right to use, clearance or freedom to
operate search concerning the Intellectual Property rights of the
Company, any Company Subsidiary or any other Person, unless the Company
otherwise possesses such Knowledge.
3.18. Taxes.
(a) The Company and each Company Subsidiary (i) have
properly prepared and timely filed all income and similar Tax Returns
and all other material Tax Returns required to be filed by or with
respect to the Company and each Company Subsidiary (taking into account
any extension of time to file); (ii) paid or accrued to the extent
required by GAAP in the financial statement included in the Company SEC
Reports (other than a reserve for deferred taxes established to reflect
timing differences between book and taxable income pursuant to
Statement of Financial Accounting Standards No. 109) all Taxes (whether
or not shown to be due on such Tax Returns); and (iii) paid or accrued
in the financial statement included in the Company SEC Reports all
Taxes for which a notice of assessment or collection has been received
by the Company or any Company Subsidiary (other than those being
contested or which the Company intends to contest in good faith by
appropriate proceedings). All such Tax Returns are true, correct and
complete in all material respects and have been prepared in accordance
with applicable Law in all material respects. There are no Encumbrances
for Taxes (other than Taxes not yet due and payable) on any of the
assets of the Company or any of its subsidiaries.
(b) The Company and each Company Subsidiary have withheld or
collected and paid over to appropriate Governmental Entities (or are
properly holding for such payment) all Taxes required by Law to be
withheld or collected by them in connection with amounts paid or owing
to any Person.
(c) Except as set forth in Section 3.18(c) of the Company
Disclosure Schedule, no dispute or claim concerning any Tax liability
of the Company or any Company Subsidiary has been proposed or claimed
in writing or, to the Knowledge of the
23
Company, threatened by any authority, including a claim that the
Company or any Company Subsidiary is subject to Tax in a jurisdiction
where it does not currently file a Tax Return. The Company has made
available to the Parent correct and complete copies of all income Tax
Returns and material non-income Tax Returns for Taxable years for which
the applicable statute of limitations has not expired, and all
examination reports, and statements of deficiencies, if any, assessed
against or agreed to by the Company and any Company Subsidiary.
(d) Neither the Company nor any of the Company Subsidiaries
has waived any statute of limitations in respect of Taxes or agreed to
any extension of time with respect to a Tax assessment or deficiency,
which is currently effective. No power of attorney that currently is in
effect has been granted by the Company or any of the Company
Subsidiaries with respect to any Tax matter.
(e) Neither the Company nor any of the Company Subsidiaries
has ever been a United States real property holding corporation within
the meaning of Section 897(c)(1)(A)(ii) of the Code. Neither the
Company nor any of the Company Subsidiaries is a party to any Tax
allocation, indemnity, sharing or similar agreement (excluding any
lease or similar agreement to the extent it provides for the payment of
property taxes by the lessee or similar user of property) that will
survive the Closing. Neither the Company nor any of the Company
Subsidiaries (i) has been a member of any affiliated, consolidated,
combined, unitary or similar group (other than the group, the common
parent of which is the Company) that filed or was required to file a
consolidated, combined, unitary or similar Tax Return, or (ii) has or
will have any liability for the Taxes (excluding any contractual
obligation to pay property taxes as a lessee or similar user of
property) of any Person (other than the Company and any of the Company
Subsidiaries that is currently a member of the Company's affiliated
group filing a consolidated federal income Tax Return) under Treas.
Reg. Section 1.1502-6 (or any similar provision of any other Law), as a
transferee or successor, by Contract, assumption, transferee liability,
operation of Law or otherwise.
(f) As of the date of the most recent financial statements
included in the Company SEC Documents, the unpaid Taxes of the Company
and the Company Subsidiaries did not exceed the liability for Taxes
(other than any allowance for deferred Taxes established to reflect
timing differences between book and taxable income pursuant to
Statement of Financial Accounting Standards No. 109) set forth on the
face of such financial statements, and neither the Company nor any of
the Company Subsidiaries has any liability for unpaid Taxes accruing
after the date of such financial statements, except for Taxes arising
in the ordinary course of business subsequent thereto.
(g) The Company and each of the Company Subsidiaries has
disclosed on its Tax Returns any Tax reporting position taken in any
Tax Return which reasonably could result in the imposition of penalties
under Section 6662 of the Code or any comparable provisions of state,
local or foreign Law.
(h) Neither the Company nor any of the Company Subsidiaries
has consummated, has participated in, or is currently participating in
any transaction which
24
was or is a "Tax shelter" transaction as defined in Sections 6662, 6011
or 6111 (before amendment by the American Jobs Creation Act of 2004) of
the Code or the treasury regulations promulgated thereunder or which
was or is a "Listed Transaction" or a "Reportable Transaction" as those
terms are defined in the Code and the treasury regulations thereunder.
(i) Neither the Company nor any of the Company Subsidiaries
is required to include in income, or exclude any item of deduction
from, Taxable income for any Taxable period ending after the Closing
Date by reason of any (i) change in accounting method for a Taxable
period ending on or prior to the Closing Date (nor does the Company or
any of the Company Subsidiaries have any Knowledge that the Internal
Revenue Service (or other Governmental Entity) has proposed or is
considering proposing, any such change), (ii) "closing agreement"
described in Section 7121 of the Code (or any similar provision of any
other Law), (iii) installment sale or open transaction disposition made
on or prior to the Closing, or (iv) prepaid amount received on or prior
to the Closing.
(j) Neither the Company nor any of the Company Subsidiaries
has made any payment or payments, is obligated to make any payment or
payments, or is a party to any Contract (or participating employer in
any Company Plans) that, individually or collectively, could give rise
to the payment of any amount (whether in cash or property, including
Company Common Stock) as a result of the Merger that may not be
deductible pursuant to the terms of Section 162(m) or 280G of the Code.
(k) Except as set forth in Section 3.18(k) of the Company
Disclosure Schedule, neither the Company nor any of the Company
Subsidiaries is involved in, subject to, or a party to any joint
venture, partnership, limited liability company agreement or other
arrangement that is treated as a "partnership" for federal, state,
local or foreign income Tax purposes. Neither the Company nor any
Company Subsidiary owns an entity that is treated as "disregarded as an
entity separate from its owner" pursuant to Section 301.7701-3 of the
treasury regulations.
(l) Neither the Company nor any of the Company Subsidiaries
has been either a "distributing corporation" or a "controlled
corporation" (within the meaning of Section 355(a)(1)(A) of the Code)
in a distribution of stock qualifying for tax-free treatment under
Section 355 of the Code (i) in the two years prior to the date of this
Agreement or (ii) in a distribution that could otherwise constitute
part of a "plan" or "series of related transactions" (within the
meaning of Section 355(e) of the Code) in conjunction with the Merger.
(m) Except as set forth in Section 3.18(m) of the Company
Disclosure Schedule, there is currently no limitation on the
utilization of the net operating losses, built-in losses, capital
losses, Tax credits or other similar items of the Company under (i)
Section 382 of the Code, (ii) Section 383 of the Code, (iii) Section
384 of the Code, and (iv) Section 1502 of the Code and treasury
regulations promulgated thereunder. Neither the Company nor any of the
Company Subsidiaries is or has been a party to any
25
transaction where a deferred intercompany gain was generated under
Section 1502 of the Code and the treasury regulations promulgated
thereunder.
3.19. Material Contracts.
(a) Except as otherwise disclosed in Sections 3.13(a), 3.16
or 3.19(a) of the Company Disclosure Schedule, neither the Company nor
any of its subsidiaries is a party to or subject to:
(i) any Contract pursuant to which the Company or any
Company Subsidiary has granted to, or obtained from, a third
party a license to any Company Intellectual Property;
(ii) any Contract pursuant to which any agent, sales
representative, distributor or other third party markets,
licenses or sells any Company Product or any Contract that
provides for an exclusive relationship with respect to any
Company Product;
(iii) any union Contract, or any employment,
consulting, severance, termination, or indemnification
Contract providing for future payments, written or oral, with
any current or former officer or director or any other
Contract with an officer or director;
(iv) any joint venture Contract or similar
arrangement or any other agreement not in the ordinary course
of business;
(v) any Contract with a stockholder or other Contract
relating to any equity ownership or profit interest with the
Company, the Company Subsidiaries or otherwise;
(vi) any Contract involving or reasonably expected to
involve revenues or costs (including capital expenditures) to
the Company or otherwise involve payments or investment by the
Company in excess of $100,000 which has not been terminated or
performed in its entirety by the Company or any Company
Subsidiary and not renewed;
(vii) any Contract for the disposition or acquisition
of any property or assets in excess of $10,000 and not made in
the ordinary course of business;
(viii) any Contract of the Company or any Company
Subsidiary relating to the borrowing of money or an extension
of credit;
(ix) any Contract that provides for an express
non-competition covenant with any person or in any geographic
area and which limits the ability of the Company to compete in
its current business lines or otherwise restricts the Company
or the Company Subsidiaries from engaging in any line of
business or to market or sell any products or services; or
26
(x) any other Contract that is material to the
Company or any Company Subsidiary.
(b) The agreements listed in Sections 3.13(a), 3.16 and
3.19(a) of the Company Disclosure Schedule are referred to as the
"Company Material Agreements." All Company Material Agreements are
valid and binding agreements of the Company or a Company Subsidiary and
are in full force and effect and shall remain in full force and effect
immediately following consummation of the transactions contemplated by
this Agreement, subject to rules of Law governing bankruptcy, specific
performance, injunctive relief or other equitable remedies. Neither the
Company nor any Company Subsidiary nor, to the Knowledge of the
Company, any other party thereto, is in default in any material respect
under the terms of any Company Material Agreement.
3.20. Relations with Customers.
Except as set forth in Section 3.20 of the Company Disclosure Schedule,
neither the Company nor any Company Subsidiary has received any information from
any customer that accounted for more than 5% of the revenues of the Company and
its Subsidiaries during the last full fiscal year to the effect that such
customer intends to materially decrease the amount of business it does with the
businesses of the Company or any Company Subsidiary either prior to or following
the Merger. Section 3.20 of the Company Disclosure Schedule lists the top twenty
(20) customers of Company Products as measured by consolidated sales revenue
earned by the Company for the twelve month period ended December 31, 2004.
3.21. Environmental Matters.
Except as set forth in Section 3.21 of the Company Disclosure Schedule,
the Company and the Company Subsidiaries: (a) are in compliance in all material
respects with all applicable Environmental Laws (which compliance includes, but
is not limited to, the possession by the Company and the Company Subsidiaries of
all Permits required under applicable Environmental Laws, and compliance with
the terms and conditions thereof); (b) have not received any communication
(written or, to the Knowledge of the Company, oral) from a Governmental Entity
or third party alleging that the Company is not in compliance with, or has any
liability under, any Environmental Law; (c) have not owned or operated any
property that is contaminated with any Hazardous Material which may be expected
to require remediation under any Environmental Law; (d) are not subject to
liability for any Environmental Release, disposal or contamination (whether
on-site or, to the Knowledge of the Company, off-site) of any Hazardous
Material; (e) have not received any claims (written or, to the Knowledge of the
Company, oral), and has no Knowledge of any potential claims, that the Company
or any Company Subsidiary may be liable under any Environmental Law; and (f) are
not subject to any other circumstances in connection with any Environmental Law
that could reasonably be expected to have a Company Material Adverse Effect. The
Company's accrual in the financial statements included in the Company SEC
Reports plus insurance proceeds payable for such matter under insurance coverage
currently in effect are reasonably sufficient to pay all costs and expenses
arising out of or related to the matters disclosed in Section 3.21 of the
Company Disclosure Schedule.
27
3.22. Interested Party Transactions.
Since January 1, 2002, except as described in the Company SEC Reports
or as set forth in Section 3.22 of the Company Disclosure Schedule: (a) no event
has occurred that would be required to be reported by the Company pursuant to
Item 404 of Regulation S-K promulgated by the SEC; and (b) there are no existing
contracts, agreements, business dealings, arrangements or other understandings
between the Company or any Company Subsidiary and any Related Party. There are
no assets of any Related Party that are used in or necessary to the conduct of
the business of the Company or any Company Subsidiary.
3.23. Change in Control.
Except as set forth in Section 3.23 of the Company Disclosure Schedule,
the execution and delivery of this Agreement and the Agreements to Facilitate
Merger and the consummation of the transactions contemplated hereby and thereby
do not and shall not, either alone or in combination with some other event (such
as termination of employment) (a) result in any payment (including severance,
unemployment compensation, Tax gross-up, bonus or otherwise) becoming due to any
current or former director, employee or independent contractor of the Company or
any of its subsidiaries, from the Company or any of its subsidiaries under any
Company Stock Plan, any Employee Benefit Plan, agreement or otherwise, (b)
materially increase any benefits otherwise payable under any Company Stock Plan,
any Employee Benefit Plan, agreement or otherwise or (c) result in the
acceleration of the time of payment, exercise or vesting of any such benefits.
3.24. Fairness Opinion.
The Company has received an opinion from Wachovia Securities, financial
advisor to the Company (such opinion to be promptly confirmed in writing and
dated as of the date hereof), to the effect that, subject to the qualifications
and limitations stated therein, the merger consideration to be received by the
holders of shares of Company Common Stock pursuant to this Agreement is fair to
such holders from a financial point of view. A copy of such written opinion
shall be delivered to the Parent promptly following receipt of such written
opinion from Wachovia Securities. As of the time of execution of this Agreement,
such opinion has not been withdrawn, revoked or modified.
3.25. No Finders.
Except for the fees payable to Wachovia Securities as set forth in
Section 3.25 of the Company Disclosure Schedule, the Company has not incurred
any brokers', finders' or any similar fee in connection with the transactions
contemplated by this Agreement.
3.26. Disclosure.
No representation or warranty by the Company in this Agreement and no
statement contained in the Company Disclosure Schedule, contains any untrue
statement of a material fact or omits any material fact necessary to make the
statements herein or therein not misleading when taken together in light of the
circumstances in which they were made.
28
3.27. Tax Treatment.
Neither the Company nor any of its Affiliates has taken or agreed to
take any action, or is aware of any fact or circumstances, that would prevent
the Merger from qualifying as a reorganization within the meaning of Section 368
of the Code.
3.28. Rights Plan.
That certain Stockholder Rights Plan, dated January 21, 1998, by and
between the Company and American Stock Transfer & Trust Company, as Rights Agent
(the "Rights Plan") has been amended (a copy of which amendment has been
provided to Parent prior to the date hereof), such that the execution of this
Agreement and the Agreement to Facilitate Merger and the consummation of the
transactions contemplated hereby and thereby, do not and will not on the date
hereof or as a result of the passage of time (i) result in any Person being
deemed to have become an Acquiring Person (as defined in the Rights Plan), (ii)
result in the ability of any Person to exercise any Rights (as defined in the
Rights Plan) under the Rights Plan, (iii) enable or require the Rights to
separate from the shares of Company Common Stock to which they are attached or
to be triggered or become exercisable, or (iv) enable the Company to exchange
any Rights for shares of Company Common Stock pursuant to the Rights Plan. No
Distribution Date or Triggering Event (as such terms are defined in the Rights
Plan) or similar event has occurred or will occur by reason of (a) the adoption,
approval, execution or delivery of this Agreement and the Agreements to
Facilitate Merger, (b) the public announcement of such adoption, approval,
execution or delivery, or (c) the consummation of the Merger or any of the other
transactions contemplated by this Agreement.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF
THE PARENT AND MERGER SUB
As a material inducement to the Company to enter into this Agreement,
with the understanding that the Company shall be relying thereon in consummating
the transactions contemplated hereunder, the Parent and Merger Sub hereby
represent and warrant to the Company that:
4.1. Organization and Qualification.
Each of the Parent and Merger Sub is a corporation duly organized and
validly existing under the laws of the state of its incorporation and has all
requisite corporate power and authority to own, lease, and operate its
properties and to carry on its business as now being conducted. Each of the
Parent and Merger Sub is duly qualified and in good standing to do business in
each jurisdiction in which the property owned, leased, or operated by it or the
nature of the business conducted by it (a) makes such qualification necessary
and (b) where the failure to qualify could reasonably be expected to have a
Parent Material Adverse Effect.
4.2. Capitalization.
As of February 28, 2005, the authorized capital stock of the Parent
consists of (a) 150,000,000 shares of Parent Common Stock, of which there were
38,900,538 shares issued and
29
outstanding, and (b) 40,000,000 shares of preferred stock, no par value, of
which there were no shares issued and outstanding. The authorized capital stock
of Merger Sub consists of 1,000 shares of Merger Sub Common Stock, 100 of which
are issued and outstanding and owned by the Parent. All issued and outstanding
shares of Parent Common Stock and Merger Sub Common Stock are, and the shares of
Parent Common Stock to be issued and delivered in the Merger pursuant to Article
2 shall be, at the time of issuance and delivery, duly authorized, validly
issued, fully paid, nonassessable and free of preemptive rights. As of February
28, 2005, the Parent has no more than 7,800,000 shares of the Parent Common
Stock reserved for future issuance pursuant to employee or director benefit
plans (including those subject to outstanding options). Except as set forth
above or in the Parent SEC Reports, there are no preemptive or other outstanding
rights, options, warrants, conversion rights, stock appreciation rights,
redemption rights, repurchase rights, agreements, arrangements, calls,
commitments or rights of any kind that obligate the Parent to issue or sell any
shares of capital stock or other securities of the Parent or any securities or
obligations convertible or exchangeable into or exercisable for or giving any
Person a right to subscribe for or acquire, any securities of the Parent, and no
securities or obligations evidencing such rights are authorized, issued or
outstanding. The Parent does not have outstanding any bonds, debentures, notes
or other obligations the holders of which have the right to vote (or convertible
into or exercisable for securities having the right to vote) with the
stockholders of the Parent on any matter.
4.3. Parent SEC Reports; Financial Statements.
(a) The Parent has filed with the SEC, at or prior to the
time due, and has heretofore made available to the Company true and
complete copies of, all forms, reports, schedules, registration
statements, definitive proxy statements and other documents (together
with all information incorporated therein by reference, the "Parent SEC
Reports") it filed or was required to file with the SEC since January
1, 2002. As of their respective dates, the Parent SEC Reports complied
in all material respects with all applicable requirements of the
Exchange Act or the Securities Act, as the case may be, and the rules
and regulations of the SEC thereunder applicable to the Parent SEC
Reports. As of their respective dates and as of the date any
information from the Parent SEC Reports has been incorporated by
reference, the Parent SEC Reports did not contain any untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
The Parent has provided to the Company copies of all comment letters or
other correspondence received by the Parent from the Staff of the SEC
since January 1, 2002 with respect to any Parent SEC Report or
otherwise and all responses to such comment letters or correspondence
by or on behalf of the Parent.
(b) To the extent required in connection with the Parent SEC
Reports, the Parent's Chief Executive Officer and Chief Financial
Officer have signed, and the Parent has furnished to the SEC, all
necessary certifications required by Sections 302 and 906 of the
Xxxxxxxx-Xxxxx Act of 2002. Such certifications contain no
qualifications or exceptions to the matters certified therein and have
not been modified or withdrawn, and neither the Parent nor any of its
officers has received notice from any Governmental Entity questioning
or challenging the accuracy, completeness, form or manner of filing or
30
submission of such certifications nor to the Parent's Knowledge is any
such notice or action threatened.
(c) Each of the financial statements of the Parent
(including the related notes) included or incorporated by reference in
the Parent SEC Reports (including any similar documents filed after the
date of this Agreement) comply as to form in all material respects with
applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, have been prepared in
accordance with GAAP (except, in the case of unaudited statements, as
permitted by Form 10-Q or Regulation S-X of the SEC) applied on a
consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present the consolidated
financial position of the Parent and its consolidated subsidiaries as
of the dates thereof and the consolidated results of their operations
and cash flows for the periods then ended (subject to normal year-end
adjustments in the case of any unaudited interim financial statements).
(d) The Parent has not been notified by its independent
auditors or by the staff of the SEC that such auditors or staff of the
SEC, as the case may be, are of the view that any financial statements
included in any registration statement filed by the Parent under the
Securities Act or any periodic or current report filed under the
Exchange Act should be restated, or that the Parent should modify its
accounting in future periods in a manner that could reasonably be
expected to have a Parent Material Adverse Effect.
4.4. Compliance with Laws.
All activities of the Parent and each subsidiary of the Parent have
been, and are currently being, conducted in all material respects in compliance
with all applicable Laws and Orders. To the Knowledge of the Parent, (a) no
investigation or review by any Governmental Entity with respect to the Parent is
pending or threatened or has been undertaken within the past five (5) years and
(b) no Governmental Entity has indicated an intention to conduct the same, in
each case that could reasonably be expected to have a Parent Material Adverse
Effect.
4.5. Registration Statement.
The Registration Statement and any amendments or supplements thereto
will comply in all material respects with the Securities Act, and none of the
information relating to the Parent or its Affiliates included or incorporated
therein or in any amendments or supplements thereto, or any schedules required
to be filed with the SEC in connection therewith, will, at the time the
Registration Statement becomes effective, at the time of the Company
Stockholders Meeting or at the Effective Time, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, or omit to state any
material fact required necessary to correct any statement made in any earlier
communication with respect to any proxy or approval for the Merger in connection
with which the Proxy Statement/Prospectus shall be mailed, which has become
false or misleading; provided, however, that no representation or warranty is
made by the Parent with respect to information supplied by the Company or any
Affiliate of the Company specifically for inclusion in the Registration
Statement.
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4.6. Authorization and Enforceability.
Each of the Parent and Merger Sub has the requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by the Parent and Merger Sub and the consummation of the transactions
contemplated hereby have been duly and validly authorized and approved by the
Boards of Directors of the Parent and Merger Sub and by the Parent as the sole
stockholder of Merger Sub, and no other corporate proceedings on the part of the
Parent and Merger Sub are necessary to authorize this Agreement or to consummate
the transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by each of the Parent and Merger Sub and constitutes the
valid and binding obligation of the Parent and Merger Sub, enforceable against
each of them in accordance with its terms, subject to rules of Law governing
bankruptcy, specific performance, injunctive relief, or other equitable
remedies.
4.7. Absence of Certain Changes or Events.
Except as contemplated hereby or as disclosed in the Parent SEC
Reports, since January 1, 2005, the Parent and its subsidiaries have conducted
their business in the ordinary course of business and consistent with past
practice and there has not been any change, effect, event, occurrence, state of
facts or development that, individually or in the aggregate, has had or could
reasonably be expected to have a Parent Material Adverse Effect.
4.8. Consents and Approvals.
The execution and delivery of this Agreement by the Parent and Merger
Sub and the consummation of the transactions contemplated hereby will not: (a)
violate any provision of the Certificate of Incorporation, Bylaws or other
governing document of the Parent and Merger Sub; (b) violate any Law or Order by
which the Parent or Merger Sub or any of their respective properties or assets
may be bound; or (c) result in any violation or breach of, or constitute (with
or without due notice or lapse of time or both) a default under, result in the
loss of any material benefit under, or give rise to any right of termination,
cancellation, increased payments, or acceleration under, or result in the
creation of any Encumbrance on any of the properties or assets of the Parent or
Merger Sub under, any of the terms, conditions, or provisions of any note, bond,
mortgage, indenture, license, franchise, permit, authorization, agreement, or
other instrument or obligation to which the Parent or Merger Sub is a party, or
by which it or any of its properties or assets may be bound, except where such
violation could not reasonably be expected to have, individually or in the
aggregate, a Parent Material Adverse Effect. No filing with or permit, consent,
or approval of any Governmental Entity is required by the Parent or Merger Sub
in connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, except for (i) any
applicable requirements of the Securities Act or the Exchange Act, (ii) the
filing and recordation of the Certificate of Merger as required by Delaware Law;
and (iii) applicable notices to Nasdaq.
4.9. Ownership and Interim Operations of Merger Sub.
Merger Sub is a direct, wholly owned subsidiary of the Parent. Merger
Sub was formed solely for the purpose of engaging in the transactions
contemplated by this Agreement and has
32
not engaged in any business activities or conducted any operations other than in
connection with the performance of its obligations hereunder.
4.10. Litigation.
There are no suits, actions or proceedings pending or, to the Knowledge
of the Parent or Merger Sub, threatened against or affecting the Parent or any
of its subsidiaries that could reasonably be expected to prevent, hinder or
delay the timely completion of the transaction contemplated by this Agreement or
that could be reasonably expected to have a Parent Material Adverse Effect.
Neither the Parent nor any of its subsidiaries is subject to any outstanding
Order that could reasonably be expected to prevent, hinder or delay the timely
completion of the transaction contemplated by this Agreement.
4.11. No Finders.
The Parent has not incurred any brokers', finders' or any similar fee
in connection with the transactions contemplated by this Agreement.
4.12. Tax Treatment.
Neither the Parent nor any of its Affiliates has taken or agreed to
take any action, or is aware of any fact or circumstances, that would prevent
the Merger from qualifying as a reorganization within the meaning of Section 368
of the Code.
4.13. Capital Resources.
The Parent has, and will have, sufficient cash or access to cash to pay
the aggregate Per Share Cash Consideration and cash in lieu of fractional shares
at such time and in such manner as contemplated by this Agreement.
ARTICLE 5.
COVENANTS AND AGREEMENTS
5.1. Conduct of Business of the Company.
Except as contemplated by this Agreement or to the extent that the
Parent otherwise consents in writing, which consent shall not be unreasonably
withheld, during the period from the date of this Agreement to the Effective
Time, the Company and each Company Subsidiary shall conduct their respective
operations according to their ordinary and usual course of business and
consistent with past practice, and the Company and each Company Subsidiary shall
use commercially reasonable efforts to preserve intact in all material respects
their respective business organizations, to maintain in all material respects
their present and planned business, to keep available in all material respects
the services of their respective officers and employees and to maintain in all
material respects satisfactory relationships with licensors, licensees,
suppliers, contractors, distributors, consultants, customers, and others having
business relationships with them. Without limiting the generality of the
foregoing, and except as otherwise expressly provided in or contemplated by this
Agreement or as set forth in Section 5.1 of the Company
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Disclosure Schedule, prior to the Effective Time, neither the Company nor any
Company Subsidiary shall, without the prior written consent of the Parent:
(a) amend or otherwise change their Certificate of
Incorporation or Bylaws or other organizational documents;
(b) issue, sell, pledge, dispose of, grant or encumber, or
authorize the issuance, sale, pledge, disposition, grant or encumbrance
of, (i) any shares of capital stock of any class of the Company or any
Company Subsidiary, or any options, warrants, convertible securities or
other rights of any kind to acquire any shares of such capital stock,
or any other ownership interest (including, without limitation, any
phantom interest), of the Company or any Company Subsidiary (except for
the issuance of shares of Company Common Stock pursuant to the exercise
of presently outstanding Company Options) or (ii) any assets of the
Company or any Company Subsidiary, except for sales of inventory in the
ordinary course of business and in a manner consistent with past
practice;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with
respect to any of its capital stock;
(d) reclassify, combine, split, subdivide or redeem,
purchase or otherwise acquire, directly or indirectly, any of its
capital stock;
(e) acquire or agree to acquire (including, without
limitation, by merger, consolidation or acquisition of stock or assets)
(i) any corporation, partnership, limited liability company or other
business organization or any division thereof or, (ii) any material
amount of assets forming part of any such business organization or
division;
(f) except for trade payables incurred in the ordinary
course of business and consistent with past practice, create, incur or
assume any indebtedness for borrowed money or issue any debt securities
or assume, guarantee or endorse, or otherwise as an accommodation
become responsible for, the obligations of any Person, or make any
loans, advances or capital contributions to, or investments in, any
other Person, or create, incur or assume any Encumbrance on any asset;
(g) authorize, make or agree to make any capital expenditure
or expenditures in excess of $15,000 individually or $50,000 in the
aggregate;
(h) except as otherwise provided in this Agreement, (i)
increase in any manner the compensation of any of its directors,
officers, employees, or consultants, or accelerate the payment of any
such compensation; (ii) pay or accelerate or otherwise modify the
payment, vesting, exercisability, or other feature or requirement of
any bonus, pension, retirement allowance, severance, change of control,
stock option, or other employee benefit to any such director, officer,
employee or consultant other than pursuant to its current terms without
any action by the Company; or (iii) except as required by or applicable
Law, commit itself to any additional or increased pension,
profit-sharing, bonus, incentive, deferred compensation, group
insurance, severance, change of control, retirement or other benefit
plan, agreement, or arrangement, or any employment or
34
consulting agreement, with or for the benefit of any person, or amend
any of such plans or any of such agreements in existence on the date
hereof (except any amendment required by Law or that would not
materially increase benefits under the relevant plan);
(i) alter or revise its accounting principles, procedures,
methods or practices in any material respect (including, without
limitation, procedures with respect to the payment of accounts payable
and collection of accounts receivable) except as required by applicable
Law or regulation or by a change in GAAP and concurred with by the
Company's and the Parent's independent public accountants;
(j) pay, discharge or satisfy any claim, liability or
obligation (absolute, accrued, asserted or unasserted, contingent or
otherwise) in an amount in excess of $50,000 in the aggregate, other
than the payment, discharge or satisfaction, in the ordinary course of
business and consistent with past practice, of liabilities reported in
the Company's latest balance sheet filed with the SEC prior to the date
of this Agreement, or subsequently incurred in the ordinary course of
business and consistent in all material respects with past practice;
(k) transfer or license to any person or entity or otherwise
extend, amend or modify in any material respect any rights to Company
Intellectual Property;
(l) modify, amend or terminate any Company Material
Agreement or waive, release or assign any material rights or claims
thereunder;
(m) enter into any development services, licensing,
distribution, sales, sales representation or similar agreement or
obligation with respect to any material Company Intellectual Property
or enter into any contract of a character required to be disclosed by
Section 3.18(a) other than such agreements entered into in the ordinary
course of business consistent with past practices;
(n) remove or permit to be removed from any building,
facility, or real property any material equipment, fixture, vehicle, or
other personal property or parts thereof, except in the ordinary course
of business consistent with past practice;
(o) institute, settle, or compromise any claim, action,
suit, or proceeding pending or threatened by or against it, at law or
in equity or before any Governmental Entity or any nongovernmental
self-regulatory agency;
(p) file an amended Tax Return, enter into any closing
agreement, settle any Tax claim or assessment relating to the Company
or any Company Subsidiary, surrender any right to claim a refund or
credit of Taxes, consent to any extension or waiver of the limitation
period applicable to any Tax claim or assessment relating to the
Company or any Company Subsidiary, or take any other similar action,
including making any election with respect to any Taxes, relating to
the filing or any Tax Return or the payment of any Tax, if such
amendment, agreement, settlement, surrender, consent, election or other
action would have the effect of materially increasing the Tax liability
of the Company or any Company Subsidiary or materially decreasing any
Tax attribute of the Company or any Company Subsidiary at or after the
Effective Time;
35
(q) take, or agree to commit to take, or fail to take any
action that would make any representation, warranty, covenant or
agreement of the Company contained herein inaccurate or breached such
that the conditions in Section 6.2(a) shall not be satisfied at, or as
of any time prior to, the Effective Time; or
(r) enter into, or publicly announce an intention to enter
into, any agreement or consent to do any of the foregoing actions set
forth in this Section 5.1.
5.2. No Solicitation.
(a) From and after the date hereof until the Effective Time
or the termination of this Agreement pursuant to Article 7, the Company
shall not, and shall not authorize or permit its Company Subsidiaries
and their respective officers, directors, employees, financial
advisors, counsel, representatives and agents (collectively,
"Representatives") to, directly or indirectly, (i) solicit, initiate,
encourage or otherwise facilitate any inquiry, offer, proposal or
announcement that constitutes, or could be reasonably expected to lead
to, an Acquisition Proposal; (ii) enter into any agreement or letter of
intent regarding, approve, endorse or recommend, an Acquisition
Proposal (except for any confidentiality agreement, to the extent
provided below); or (iii) participate or engage in or encourage in any
way negotiations or discussions concerning, or provide any non-public
information to, any Person relating to, an Acquisition Proposal, or
which may reasonably be expected to lead to an Acquisition Proposal.
(b) Upon execution of this Agreement, the Company and its
Representatives shall, and shall cause all Company Subsidiaries and
their respective Representatives to, immediately terminate all
discussions with any Person (other than the Parent) concerning any
Acquisition Proposal, and shall request that such Persons promptly
return any confidential information furnished by the Company in
connection with any Acquisition Proposal. Other than as contemplated in
this Agreement, the Company shall not waive any provision of its Rights
Plan or of any confidentiality, standstill or similar agreement entered
into with any Person regarding any Acquisition Proposal, and prior to
the Closing shall enforce all such agreements in accordance with their
terms.
(c) Notwithstanding the provisions of Section 5.2(a) and
subject to compliance with Section 5.2(b), this Agreement shall not
prohibit the Company's Board of Directors from, prior to obtaining the
Company Stockholder Approval, furnishing nonpublic information to or
entering into discussions or negotiations with, any Person that makes
an unsolicited, bona fide written Acquisition Proposal that the
Company's Board of Directors reasonably determines is likely to result
in a Superior Proposal, if, and only to the extent that:
(i) neither the Company nor its Representatives
violated any of the restrictions set forth in this Section
5.2;
(ii) the Company's Board of Directors, after
consultation with outside legal counsel and a financial
advisor of nationally recognized reputation, determines in
good faith, by resolution duly adopted, that such action is
required
36
in order for the Company's Board of Directors to comply with
its fiduciary duties under applicable Law;
(iii) prior to first furnishing nonpublic information
to, or first entering into discussions and negotiations with,
such Person after the date hereof, the Company (A) provides
written notice of at least three (3) business days to the
Parent to the effect that it intends to furnish information
to, or enter into discussions or negotiations with, such
Person, and naming and identifying the Person making the
Acquisition Proposal, and (B) receives from such Person an
executed confidentiality agreement with terms no less
favorable to the Company than the Confidentiality Agreement;
and
(iv) the Company concurrently provides the Parent
with all non-public information to be provided to such Person
that the Parent has not previously received from the Company,
the Company keeps the Parent reasonably informed of the status
and the material terms and conditions and all other material
developments with respect to any such discussions or
negotiations, and the Company provides the Parent with copies
of all material documents regarding such discussions and
negotiations.
(d) The Company shall notify the Parent, telephonically and in
writing, as promptly as practicable (and in any event, within 24 hours)
if it or any of its Representatives receives an Acquisition Proposal or
any inquiry reasonably likely to lead to an Acquisition Proposal or if
any discussions or negotiations are sought to be initiated or continued
with the Company or its Representatives concerning an Acquisition
Proposal, and such notification shall contain, in writing, the name of
the Person involved and the material terms and conditions of such an
Acquisition Proposal.
(e) Subject to Section 5.2(f), unless and until this Agreement
has been terminated in accordance with Article 7, the Company shall not
withdraw or modify, or propose publicly to withdraw or modify, in a
manner adverse to the Parent or Merger Sub, the approval or
recommendation of the Merger as set forth in Section 5.3(a); or approve
or recommend, or propose publicly to approve or recommend, any
Acquisition Proposal.
(f) Notwithstanding the foregoing, in the event that, prior to
obtaining the Company Stockholder Approval, the Company's Board of
Directors receives a Superior Proposal that has not been withdrawn, the
Company's Board of Directors may, if it determines in good faith, by
resolution duly adopted after consultation with outside legal counsel
and a financial advisor of nationally recognized reputation, that such
action is required in order for the Company's Board of Directors to
comply with its fiduciary duties under applicable Law, withdraw or
modify the approval or recommendation of the Merger, approve or
recommend such Superior Proposal and terminate this Agreement as
permitted pursuant to the terms of this Section 7.1(f) (and,
concurrently with or immediately after such termination, cause the
Company to enter into a definitive agreement with respect to such
Superior Proposal); provided that:
37
(i) the Company notifies the Parent in writing that
it intends to take such action, which notice must identify the
party making such proposal, set forth the material terms and
conditions of such proposal, and have attached to it the most
current version of any such written agreement;
(ii) Parent shall not have proposed, within three (3)
business days after receipt of such notice from the Company,
to amend this Agreement to provide for terms as favorable as
or superior to those of the Superior Proposal;
(iii) provided the Parent has submitted a proposal to
amend this Agreement as contemplated by subparagraph (ii)
above, (A) for a period of three (3) business days after
receipt of such proposal, the Company shall have reasonably
considered and discussed in good faith all proposals submitted
by the Parent and, without limiting the foregoing, met with,
and caused its financial advisors and legal advisors to meet
with, the Parent and its advisors from time to time as
reasonably requested by the Parent to reasonably consider and
discuss in good faith the Parent's proposals; and (B) the
Company's Board of Directors in good faith determines, after
consultation with its financial and legal advisors, that after
taking into account any amendments to this Agreement proposed
by the Parent as of the end of such three (3) business day
negotiation, the Parent's proposal is not at least as
favorable to the stockholders of the Company as the Superior
Proposal; and
(iv) the Company did not violate the restrictions of
this Section 5.2.
Without limiting any other rights of the Parent and Merger Sub
under this Agreement in respect of any such action, any withdrawal or
modification by the Company of the approval or recommendations of the
Merger or any termination of this Agreement shall not have any effect
on the approvals of, and other actions referred to herein for the
purpose of causing Section 203 of Delaware Law and any other takeover
statute to be inapplicable to, this Agreement and the transactions
contemplated hereby, which approvals and actions are irrevocable.
(g) Nothing contained in this Section 5.2 shall prohibit the
Company or its Board of Directors from taking and disclosing to the
Company's stockholders a position with respect to a tender offer by a
third party pursuant to Rules 14d-9 and 14e-2(a) promulgated under the
Exchange Act or from taking any action or making any disclosure
required by applicable Law; provided that the content of the
disclosure complies with this Section 5.2.
(h) Any violation of the restrictions in this Section 5.2
by a Representative shall be deemed a breach of this Section 5.2 by
the Company.
5.3. Proxy Statement; Registration Statement; Stockholders Meeting.
(a) The Company shall take all lawful action necessary to
(i) cause a special meeting of its stockholders (such meeting or any
adjournment thereof, the "Company Stockholders Meeting") to be duly
called and held as soon as practicable (and in any
38
event within 45 days) following the date on which the Registration
Statement becomes effective for the purpose of voting on the approval
and adoption of the agreement of merger (within the meaning of Section
251 of Delaware Law) contained in this Agreement and the Merger (the
"Company Stockholder Approval"), and (ii) solicit proxies from its
stockholders to obtain the Company Stockholder Approval for such
approval and adoption. Except as permitted by Section 5.2(f), the
Company's Board of Directors shall unanimously recommend approval and
adoption of the agreement of merger (within the meaning of Section 251
of Delaware Law) contained in this Agreement and the Merger by the
Company's stockholders and state such recommendation in the
Proxy/Prospectus. Unless this Agreement is previously terminated in
accordance with Article 7, the Company shall submit this Agreement to
its stockholders at the Company Stockholders Meeting even if the
Company's Board of Directors determines at any time after the date
hereof that it is no longer advisable or recommends that the Company
stockholders reject it (and not postpone or adjourn such meeting or the
vote by the Company's stockholders upon this Agreement and the Merger
to another date without the Parent's approval). In accordance
therewith, the Company shall, with the cooperation of the Parent,
prepare and file, as soon as reasonably practicable, a Proxy
Statement/Prospectus. The Company shall use all reasonable efforts to
cause the definitive Proxy Statement/Prospectus to be mailed to the
stockholders of the Company, as soon as reasonably practicable
following its effectiveness, with the date of mailing as mutually
determined by the Company and the Parent.
(b) The Parent shall, with the cooperation of the Company,
prepare and file, as soon as reasonably practicable, a registration
statement under the Securities Act registering the shares of Parent
Common Stock to be issued in the Merger (the "Registration Statement"),
which Registration Statement shall include the Proxy
Statement/Prospectus. The Parent will use all reasonable efforts to
have the Registration Statement declared effective by the SEC as
promptly thereafter as practicable. The Parent shall also take any
action required to be taken under state blue sky or securities laws in
connection with the issuance of Parent Common Stock pursuant to the
Merger. The Company shall furnish to the Parent all information
concerning the Company and the Company Subsidiaries and the holders of
its capital stock, and shall take such other action and otherwise
cooperate, as the Parent may reasonably request in connection with any
such action.
(c) The Parent shall notify the Company promptly of the
receipt of the comments of the SEC with respect to the transactions
contemplated hereby and of any request by the SEC for amendments or
supplements to the Registration Statement and shall supply the Company
with copies of all material correspondence with the SEC with respect to
the transactions contemplated hereby.
(d) If at any time prior to the Effective Time, any event
should occur relating to the Company, any Company Subsidiary, or the
Company's officers or directors that is required to be described in an
amendment or supplement to the definitive Proxy Statement/Prospectus or
the Registration Statement, the Company shall promptly inform the
Parent. If at any time prior to the Effective Time, any event shall
occur relating to the Parent or Merger Sub or their respective officers
or directors that is required to be
39
described in an amendment or supplement to the definitive Proxy
Statement/Prospectus or the Registration Statement, the Parent shall
promptly inform the Company. Whenever any event occurs that should be
described in an amendment of, or supplement to, the definitive Proxy
Statement/Prospectus or the Registration Statement, the Company or the
Parent, as the case may be, shall, upon learning of such event,
promptly notify the other and consult and cooperate with the other in
connection with the preparation of a mutually acceptable amendment or
supplement. The parties shall promptly file such amendment or
supplement with the SEC and mail such amendment or supplement as soon
as practicable after it is cleared by the SEC.
5.4. State Takeover Statutes.
The Company and its Board of Directors shall (a) take all reasonable
actions necessary to ensure that no "fair price", "control share acquisition",
"moratorium" or other anti-takeover statute, or similar statute or regulation,
is or becomes applicable to this Agreement, the Merger or any of the other
transactions contemplated hereby or thereby and (b) if any "fair price",
"control share acquisition", "moratorium" or other anti-takeover statute, or
similar statute or regulation, becomes applicable to this Agreement or the
Merger or any other transaction contemplated hereby or thereby, take all action
necessary to ensure that the Merger and the other transactions contemplated
hereby and thereby, may be consummated as promptly as practicable on the terms
contemplated hereby and otherwise to minimize the effect of such statute or
regulation on the Merger and the other transactions contemplated hereby and
thereby.
5.5. Affiliates.
Within ten (10) days after the date of this Agreement, the Company
shall deliver to the Parent a letter identifying all persons who are to the
Company's Knowledge "affiliates" of the Company for purposes of Rule 145 under
the Securities Act. The Company shall use reasonable efforts to cause each such
person to deliver to the Parent at least five (5) business days prior to the
Effective Time, a written agreement covering Rule 145 matters in customary form
and reasonably acceptable to the Parent and the Company from each such person.
5.6. Nasdaq Listing Application.
The Parent shall prepare and submit to Nasdaq a listing application for
Parent Common Stock to be issued in the Merger pursuant to Article 2 of this
Agreement and shall use its reasonable efforts to obtain, prior to the Effective
Time, approval for the listing on the Nasdaq National Market of such Parent
Common Stock, subject to official Notice to Nasdaq of issuance. The Company
shall cooperate with the Parent in such listing application.
5.7. Confidentiality.
The Parent and the Company shall comply with, and shall cause their
respective representatives to comply with, in all respects, all of their
respective obligations under the Confidentiality Agreement, and in no event
shall the negotiation, entering into or termination of this Agreement be deemed
to waive or otherwise adversely affect the rights and obligations of the parties
under the Confidentiality Agreement, which rights and obligations shall continue
in full force and effect in accordance with their terms.
40
5.8. Access to Information.
(a) The Company shall afford to the Parent and Merger Sub, and to
their respective accountants, officers, directors, employees, counsel, and other
representatives reasonable access, during normal business hours, upon reasonable
prior notice, from the date hereof through the Effective Time, to all of its
properties, books, data, contracts, commitments, and records. During such
period, the Company shall additionally furnish promptly to the Parent and Merger
Sub all information concerning the Company's and all Company Subsidiaries'
businesses, prospects, properties, liabilities, results of operations, financial
condition, product evaluations and testing, officers, employees, consultants,
customers, and others having dealings with the Company and all Company
Subsidiaries as the Parent and Merger Sub may reasonably request and reasonable
opportunity to contact and obtain information from such officers, employees,
consultants, customers, and others having dealings with the Company and all
Company Subsidiaries as the Parent and Merger Sub may reasonably request. No
investigation pursuant to this Section 5.8 shall affect any representation or
warranty of the Company contained herein or any condition to the obligations of
the Parent and Merger Sub hereto.
(b) Parent and Merger Sub shall reasonably afford to the Company,
and to its accountants, officers, directors, employees, counsel, and other
representatives reasonable access, during normal business hours, upon reasonable
prior notice, from the date hereof through the Effective Time, to its books,
data, contracts, commitments and records. During such period, the Parent and
Merger Sub shall additionally furnish promptly to the Company all information
concerning the Parent's and all Parent Subsidiaries' businesses, prospects,
properties, liabilities, results of operations, financial condition, as the
Company may reasonably request and reasonable opportunity to contact and obtain
information from the officers of the Parent as the Company may reasonably
request. No investigation pursuant to this Section 5.8 shall affect any
representation or warranty of the Parent or Merger Sub contained herein or any
condition to the obligations of the Company hereto.
5.9. Approvals and Consents; Cooperation. Upon the terms and subject
to the conditions set forth in this Agreement, each of the parties agrees to
cooperate with each other and to use all commercially reasonable efforts to
promptly take, or cause to be taken, all actions, and to do, or cause to be
done, and to assist and cooperate with the other parties in doing, all things
necessary, proper or advisable to consummate and make effective, in the most
expeditious manner practicable, the Merger and the other transactions
contemplated by this Agreement, including, without limitation, (i) the obtaining
of all necessary actions or nonactions, waivers, consents and approvals from
Governmental Entities and the making of all necessary registrations, submissions
of information, applications and filings (including filings with Governmental
Entities) and the taking of all reasonable steps as may be necessary to obtain
an approval or waiver from, or to avoid an action or proceeding by, any
Governmental Entity; (ii) the obtaining and maintenance of all necessary
consents, approvals, permits, authorizations and other confirmations or waivers
from third parties; and (iii) the execution and delivery of any additional
instruments necessary to consummate the transactions contemplated by this
Agreement.
41
5.10. Commercially Reasonable Efforts; Further Actions.
Subject to the terms and conditions herein provided and without being
required to waive any conditions herein (whether absolute, discretionary, or
otherwise), each of the parties hereto agrees to use commercially reasonable
efforts to take, or cause to be taken, all action, and to do, or cause to be
done, all things necessary, proper, or advisable to consummate and make
effective the transactions contemplated by this Agreement, in the most
expeditious manner possible. In case at any time after the Effective Time any
further action is necessary or desirable to carry out the purposes of this
Agreement, the proper officers and directors of each party to this Agreement
shall take all such necessary action.
5.11. Officers' and Directors' Indemnification.
(a) The Parent and the Surviving Corporation agree that the
Surviving Corporation shall provide to the directors and officers of
the Company indemnification at least as favorable to the Company's
officers and directors as provided by the Company's Certificate of
Incorporation and Bylaws with respect to matters occurring prior to the
Effective Time, including without limitation the authorization of this
Agreement and the transactions contemplated hereby until the six year
anniversary date of the Effective Time (or, in case of matters
occurring prior to the Effective Time giving rise to claims that are
made prior to but which have not been resolved by the sixth (6th)
anniversary of the Effective Time, until such matters are finally
resolved).
(b) Prior to the Effective Time the Parent shall cause to be
purchased, or at its election allow the Company to purchase, a "tail"
or extended reporting period endorsement directors' and officers'
liability insurance policy (covering a period of six (6) years after
the Effective Time and of at least the same coverage and amounts and
containing terms and conditions which are, in the aggregate, no less
advantageous to the insured than the Company's existing directors' and
officers' liability insurance policy), with respect to claims arising
from facts or events that occurred at or prior to the Effective Time
for those persons who are currently covered by such policy; provided,
however, that the aggregate premium for insurance under this Section
5.11(b) shall not be in excess of $500,000 net of any refund or credit
for the remaining term of the existing policy and if such premium for
such insurance exceeds that amount, then the Parent shall cause to be
purchased insurance policies that provide the maximum coverage
available at that amount.
5.12. Notification of Certain Matters.
The Company shall give prompt written notice to the Parent, and the
Parent shall give prompt written notice to the Company, of (a) the occurrence,
or nonoccurrence, of any event the occurrence or nonoccurrence of which would be
likely to cause any representation or warranty of such party contained herein to
be untrue or inaccurate in any material respect at or prior to the Effective
Date and (b) any material failure of the Company or the Parent, as the case may
be, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder; provided, however, that the delivery
of any notice pursuant to this Section 5.12
42
shall not limit or otherwise affect the remedies available hereunder to the
party receiving such notice.
5.13. Public Announcements.
The Parent and Merger Sub, on the one hand, and the Company, on the
other hand, shall consult with each other before issuing, and provide each other
the opportunity to review and comment upon, any press release or other public
statements with respect to the transactions contemplated by this Agreement,
including the Merger, and shall not issue any such press release or make any
such public statement prior to such consultation, except as may be required by
applicable Law, court process or by applicable Nasdaq rules. The parties agree
that the initial press release to be issued with respect to the transactions
contemplated by this Agreement shall be in the form previously agreed to by the
parties.
5.14. Voting of Shares.
To induce the Parent to execute this Agreement, all of the officers and
directors of the Company have executed and delivered as of the date hereof
Agreements to Facilitate Merger in the form attached hereto as Exhibit 5.14 (the
"Agreements to Facilitate Merger") pursuant to which, as and to the extent set
forth therein, each such person has agreed to vote his, her or its shares of
Company Common Stock in favor of the Merger at the Company Stockholders Meeting.
5.15. Expenses.
Except as set forth in Section 7.2 and as otherwise provided in this
Section 5.15, all fees and expenses incurred in connection with the Merger, this
Agreement and the transactions contemplated by this Agreement shall be paid by
the party incurring such fees or expenses, whether or not the Merger is
consummated; provided, however, that the Company and the Parent shall share
equally the cost of printing and filing with the SEC the Proxy
Statement/Prospectus and the Registration Statement.
5.16. Section 368 Qualification.
The Parent, Merger Sub and the Company will each use commercially
reasonable efforts to cause the Merger to qualify as a reorganization within the
meaning of Section 368 of the Code, will report the Merger in such manner and
will not take any action reasonably likely to cause the Merger to not so
qualify.
5.17. Employee Benefit Plans.
Parent shall either maintain, or cause the Surviving Corporation to
maintain, the Employee Benefit Plans of the Company or to provide the employees
of the Surviving Corporation with all Employee Benefit Plans as are provided by
Parent and its subsidiaries to their own employees who are similarly situated
(such similar situation to be determined after the Surviving Corporation
determines which position and title the employee is to retain following the
Merger). The foregoing shall not constitute any commitment, contract,
understanding, undertaking, guarantee (express or implied) on the part of the
Surviving Corporation or Parent to
43
continue the employment of any employee of the Company for any period of time or
on any terms except as determined by the Surviving Corporation. The Company
agrees that, at the request of Parent, it and the Company Subsidiaries shall
terminate their respective 401(k) plans and any other Employee Benefit Plans,
severance, separation, retention and salary continuation plans, programs or
arrangements, in each case, prior to the Effective Time and, upon the reasonable
request of the Parent, timely take reasonable corrective or remedial action for
any noncompliance of the Employee Benefit Pans with applicable Law.
5.18. Company Options and Company Stock Plans.
Prior to the Effective Time, the Company shall, if and to the extent
necessary or required by the terms of any Company Stock Plan (including the
ESPP) or any Company Option, (i) provide notice to holders of Company Options
under the Company Stock Plans regarding the non-assumption and termination of
such Company Options and Company Stock Plans, (ii) obtain any consents from
holders of Company Options, and (iii) amend the terms of any equity incentive
plans or arrangements, to give effect to the provisions of Section 2.4 and this
Section 5.18.
5.19. Company Warrants.
The Company shall provide the notifications required by the Company
Warrant in the time frames set forth in the Company Warrant and take all
actions, if any, necessary to make the Company Warrant a Parent Warrant in
accordance with Section 2.5, effective as of the Effective Time.
5.20. Rights Plan.
Prior to the earlier of the termination of this Agreement pursuant to
Section 7.1 hereof or the Effective Time, the Company and its Board of Directors
shall not amend or modify or take any other action with regard to the Rights
Plan in any manner or take any other action so as to (a) render the Rights Plan
inapplicable to any transaction(s) other than the Merger and other transactions
contemplated by this Agreement and the Agreements to Facilitate Merger, (b)
permit any person or group who would otherwise be an Acquiring Person (as
defined in the Rights Plan) not to be an Acquiring Person, (c) provide that a
Distribution Date or Triggering Event (as such terms are defined in the Rights
Plan) or similar event does not occur as promptly as practicable by reason of
the execution of any agreement or transaction other than this Agreement and the
Agreements to Facilitate Merger and the Merger and the agreements and
transactions contemplated hereby and thereby, or (d) except as specifically
contemplated by this Agreement, otherwise affect the rights of holders of Rights
(as defined in the Rights Plan). The Company and its Board of Directors shall
take all action to ensure that the Rights Plan is and, through the Effective
Time, will be inapplicable to Parent and Merger Sub, this Agreement, the Merger,
the Agreements to Facilitate Merger and the transactions contemplated hereby and
thereby. Pursuant to the amendment of the Rights Plan contemplated in Section
3.28 hereof, the rights under the Rights Plan shall expire immediately prior to
the Effective Time.
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5.21. Director and Officer Resignations.
On the Closing Date, the Company shall cause to be delivered to Parent
duly executed resignations, effective as of the Effective Time, of each member
of the Board of Directors of the Company and each Company Subsidiary and, to the
extent requested by the Parent, each officer of the Company and each Company
Subsidiary, and shall take such other action as is necessary to accomplish the
foregoing.
ARTICLE 6.
CONDITIONS PRECEDENT
6.1. Conditions to Obligations of the Parent, Merger Sub, and the
Company.
The respective obligations of each Party to consummate the Merger shall
be subject to the fulfillment at or prior to the Closing of the following
conditions:
(a) No Injunction. None of the Parent, Merger Sub, or the
Company shall be subject to any final Order of a court of competent
jurisdiction within the United States that (i) prevents or materially
delays the consummation of the Merger, or (ii) would impose any
material limitation on the ability of the Parent effectively to
exercise full rights of ownership of the Company or the assets or
business of the Company.
(b) Stockholder Approval. The Company Stockholder Approval
shall have been obtained.
(c) Registration Statement. The Registration Statement (as
amended or supplemented) shall have become effective under the 1933 Act
and shall not be subject to any "stop order," and no action, suit,
proceeding, or investigation by the SEC to suspend the effectiveness or
qualification thereof shall have been initiated and be continuing or
have been threatened and be unresolved. The Parent shall also have
received all state securities Law or blue sky authorizations necessary
to carry out the transactions contemplated hereby.
(d) Nasdaq Listing. The shares of Parent Common Stock to be
delivered pursuant to the Merger shall have been duly listed on the
Nasdaq National Market, subject to official notice of issuance.
6.2. Conditions to Obligations of the Parent and Merger Sub.
The respective obligations of the Parent and Merger Sub to consummate
the Merger shall be subject to the fulfillment at or prior to the Closing of the
following additional conditions:
(a) Each representation and warranty of the Company
contained in this Agreement, to the extent qualified by materiality
(including a Company Material Adverse Effect qualification), shall have
been true and correct in all respects and, to the extent not so
qualified, shall have been true and correct in all material respects,
in each case on and as of the date hereof and on the Closing Date as
though made on and as of such date (except for representations and
warranties made as of a specified date, which, to the
45
extent qualified by materiality (including a Company Material Adverse
Effect qualification), shall have been true and correct in all respects
and, to the extent not so qualified, shall have been true and correct
in all material respects, as the case may be, only as of the specified
date), and the Parent shall have received a certificate to such effect
signed by the Company's Chief Executive Officer.
(b) The Company shall have performed and complied in all
material respects with all agreements, obligations, and conditions
required by this Agreement to be performed or complied with by it on or
prior to the Closing, and the Parent shall have received a certificate
to such effect signed by the Company's Chief Executive Officer.
(c) The Company shall have obtained all permits,
authorizations, consents, and approvals required on its part to perform
its obligations under, and consummate the transactions contemplated by,
this Agreement, in form and substance reasonably satisfactory to the
Parent, and the Parent and Merger Sub shall have received evidence
reasonably satisfactory to them of the receipt of such permits,
authorizations, consents, and approvals.
(d) There shall not be pending any suit, action or
proceeding related directly or indirectly to the Merger, including
without limitation any suit, action or process that seeks to restrain
or prohibit the consummation of the Merger or to unwind the Merger
after it has been consummated or seeks damages or other relief with
respect to the Merger.
(e) Parent shall have received from Xxxxxxx Coie LLP,
counsel to Parent, a written opinion dated the Closing Date to the
effect that for U.S. federal income tax purposes the Merger will
constitute a "reorganization" within the meaning of Section 368(a) of
the Code. In rendering such opinion, counsel to Parent shall be
entitled to rely upon customary assumptions and representations
reasonably satisfactory to such counsel, including representations set
forth in certificates of officers of Parent, Merger Sub and the
Company.
(f) The Parent shall have received a letter from each of the
Affiliates pursuant to Section 5.5 hereof.
(g) The directors and officers (as identified by Parent) of
the Company and of each Company Subsidiary shall have tendered their
resignations as of the Effective Time.
(h) Since the date of this Agreement, there shall not have
occurred or come into existence any change, event, occurrence, state of
facts or development that has had, or could reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse
Effect, and the Parent shall have received a certificate to such effect
from the Company's Chief Executive Officer.
(i) All actions necessary to cause all Company Options and
Company Stock Plans to terminate effective as of the Effective Time
shall have been taken.
46
(j) All actions necessary to cause all outstanding Rights
(as defined in the Rights Plan) under the Rights Plan to expire
immediately prior to the Effective Time and to render such Rights
inapplicable to Parent, Merger Sub, this Agreement, the Merger, the
Agreements to Facilitate Merger and the other transactions contemplated
by this Agreement and the Agreements to Facilitate Merger shall have
been taken.
(k) Holders of no more than five percent (5%) of the
outstanding Company Common Stock shall have delivered a notice or
notices of intent to demand payment in accordance with Section 262 of
the DGCL.
(l) Company shall have filed the 2004 Form 10-K within the
time period allowed by Rule 12b-25, and such 2004 Form 10-K is
identical to the form of 2004 Form 10-K provided to the Parent pursuant
to Section 3.4(e), except as otherwise consented to in writing by
Parent.
(m) The Company shall have filed a report of the Company's
management report on its internal controls and the attestation given by
the Company's independent auditors in connection with such report with
the 2004 Form 10-K or an amendment thereto within the time period
allowed by the SEC's rules, and any deficiencies in internal controls
described in such report or attestation shall not be materially
different from the deficiencies described in Section 3.5 of the Company
Disclosure Schedule or otherwise disclosed in writing to, and
acknowledged in writing as applicable to this condition by, the Parent
prior to the execution of this Agreement, except for such differences
as would not (i) have a Company Material Adverse Effect, (ii) have a
material adverse impact on Parent or Parent's ability to prepare its
consolidated financial statements or comply with applicable legal or
Nasdaq requirements or (iii) reasonably be expected to materially
adversely affect Parent's quantitative valuation of the Company.
(n) FIRPTA documentation, including (A) a notice to the
Internal Revenue Service, in accordance with the requirements of Treas.
Reg. Section 1.897-2(h)(2), in substantially the form attached hereto
as Exhibit 6.2(n)(A), dated as of the Closing Date and executed by the
Company, together with written authorization for Parent to deliver such
notice form to the Internal Revenue Service on behalf of the Company
after the Closing, and (B) a FIRPTA Notification Letter, in
substantially the form attached hereto as Exhibit 6.2(n)(B), dated as
of the Closing Date and executed by the Company.
6.3. Conditions to Obligations of the Company.
The obligation of the Company to consummate the Merger shall be subject
to the fulfillment at or prior to the Closing of the following additional
conditions:
(a) Each representation and warranty of the Parent contained
in this Agreement, to the extent qualified by materiality (including a
Parent Material Adverse Effect qualification), shall have been true and
correct in all respects and, to the extent not so qualified, shall have
been true and correct in all material respects, in each case on and as
of the date hereof and on the Closing Date as though made on and as of
such date (except for representations and warranties made as of a
specified date, which, to the
47
extent qualified by materiality (including a Parent Material Adverse
Effect qualification), shall have been true and correct in all respects
and, to the extent not so qualified, shall have been true and correct
in all material respects, as the case may be, only as of the specified
date), and the Company shall have received a certificate to such effect
from a senior executive officer of the Parent.
(b) The Parent and Merger Sub shall have performed and
complied in all material respects with all agreements, obligations, and
conditions required by this Agreement to be performed or complied with
by them on or prior to the Closing, and the Company shall have received
a certificate to such effect from a senior executive officer of the
Parent.
(c) The Parent and Merger Sub shall have obtained all
permits, authorizations, consents, and approvals required on their part
to perform their obligations under, and consummate the transactions
contemplated by, this Agreement, in form and substance satisfactory to
the Company, and the Company shall have received evidence satisfactory
to it of the receipt of such permits, authorizations, consents, and
approvals.
(d) Since the date of this Agreement, there shall not have
occurred or come into existence any change, event, occurrence, state of
facts or development that has had, or could reasonably be expected to
have, individually or in the aggregate, a Parent Material Adverse
Effect, and the Company shall have received a certificate to such
effect from a senior executive officer of the Parent.
(e) The Company shall have received from Hunton & Xxxxxxxx,
LLP, counsel to the Company, a written opinion dated the Closing Date
to the effect that for U.S. federal income tax purposes the Merger will
constitute a "reorganization" within the meaning of Section 368(a) of
the Code, provided that if Hunton & Xxxxxxxx LLP does not render such
opinion, this condition shall nonetheless be satisfied if Xxxxxxx Coie
LLP delivers such opinion to the Company. In rendering such opinion,
counsel to the Company shall be entitled to rely upon customary
assumptions and representations reasonably satisfactory to such
counsel, including representations set forth in certificates of
officers of Parent, Merger Sub and the Company.
ARTICLE 7.
TERMINATION AND ABANDONMENT
7.1. Termination.
This Agreement may be terminated at any time prior to the Effective
Time, whether before or after approval by the stockholders of the Company, only:
(a) by mutual written consent duly authorized by the Board
of Directors of the Parent and the Company;
(b) by either the Parent or the Company if the Merger shall
not have been consummated on or before the date that is six (6) months
after the date hereof; provided, however, that the terminating party
shall not have breached in any material respect its
48
obligations under this Agreement in any manner that shall have been the
proximate cause of, or resulted in, the failure to consummate the
Merger by such date;
(c) by either the Parent or the Company if a Governmental
Entity has issued a final nonappealable Order, or taken any other
action, having the effect of permanently restraining, enjoining, or
otherwise prohibiting the Merger;
(d) by either the Parent or the Company if, at the Company
Stockholders Meeting, the Company Stockholder Approval is not obtained,
except that the right to terminate this Agreement under this Section
7.1(d) shall not be available to any party whose failure to perform any
material obligation under this Agreement has been the proximate cause
of, or resulted in, the failure to obtain the Company Stockholder
Approval;
(e) by the Parent if either (i) the Company has breached its
obligations under Sections 5.2 or 5.3 in any material respect, (ii) the
Company's Board of Directors has recommended, approved, accepted, or
entered into an agreement regarding, an Acquisition Proposal or has not
rejected an Acquisition Proposal within ten (10) business days
following the receipt by the Company of a written Acquisition Proposal,
(iii) the Company's Board of Directors has withdrawn or modified in a
manner adverse to the Parent its unanimous recommendation of the Merger
or has failed to recommend the Merger in the Proxy/Prospectus, or (iv)
a tender offer or exchange offer for 15% or more of the outstanding
shares of Company Common Stock is commenced, and the Company's Board of
Directors, within ten (10) business days after such tender offer or
exchange offer is so commenced, either fails to recommend against
acceptance of such tender offer or exchange offer by its stockholders
or takes no position with respect to the acceptance of such tender
offer or exchange offer by its stockholders;
(f) by the Company if, prior to obtaining the Company
Stockholder Approval, (i) it has complied with its obligations under
Section 5.2 (including subsections (f)(i)-(iii) thereof); (ii) the
Company's Board of Directors has authorized acceptance of a Superior
Proposal thereunder, and (iii) the Company has paid to the Parent the
fee required by Section 7.2 to be paid to the Parent in the manner
therein provided;
(g) by the Parent if (i) the Parent is not in material
breach of its obligations under this Agreement and (ii) there has been
a breach (A) by the Company of any of its representations, warranties,
or obligations under this Agreement (other than breaches covered by
subsection (e)(i) above), or (B) by an officer or director of the
Company under such person's Agreement to Facilitate Merger described in
Section 5.14, in each case such that the conditions in Section 6.2
shall not be satisfied, and the breach is not curable or, if curable,
is not cured by the Company by within thirty (30) calendar days after
receipt by the Company of written notice from the Parent of such
breach; or
(h) by the Company if (i) the Company is not in material
breach of its obligations under this Agreement and (ii) there has been
a breach by the Parent of any of its representations, warranties, or
obligations under this Agreement such that the conditions in Section
6.3 shall not be satisfied, and the breach is not curable or, if
curable,
49
is not cured by the Parent within thirty (30) calendar days after
receipt by the Parent of written notice from the Company of such
breach.
7.2. Effect of Termination.
(a) In recognition of the time, efforts, and expenses
expended and incurred by the Parent with respect to the Company and the
opportunity that the acquisition of the Company presents to the Parent,
if:
(i) (A) this Agreement is terminated by the Parent or
the Company pursuant to Section 7.1(d), (B) at or prior to the
Company Stockholders Meeting there shall have been publicly
disclosed one or more Acquisition Proposals other than the
proposal contemplated by this Agreement, and (C) within 12
months of the date of such termination, the Company shall have
entered into an agreement providing for an Acquisition
Proposal with a person (or their Affiliate) that made an
Acquisition Proposal described in clause (B) of this
subsection, then the Company shall pay the Parent a fee in the
amount of $1,400,000 (the "Termination Fee"), payable upon the
same date the Company enters into an agreement providing for
an Acquisition Proposal;
(ii) this Agreement is terminated by the Parent
pursuant to Section 7.1(e), then the Company shall pay the
Parent the Termination Fee, payable within one business day
after termination by the Parent; and
(iii) this Agreement is terminated by the Company
pursuant to Section 7.1(f), then the Company shall pay the
Parent the Termination Fee, payable on or prior to the date of
termination.
(b) Any amounts payable pursuant to Section 7.2(a) shall be
paid by wire transfer of immediately available funds to an account
designated by the receiving party for such purpose. The parties
acknowledge that the agreements contained in this Section 7.2 are an
integral part of the transactions contemplated by this Agreement and
are not a penalty, and that, without these agreements, the parties
would not enter into this Agreement. If the Parent or the Company fails
to pay promptly any amounts due pursuant to this Section 7.2, such
party shall also pay to the other party such other party's costs and
expenses (including legal fees and expenses) in connection with any
action to the extent such other party is the prevailing party in such
action, including the filing of any lawsuit or other legal action,
taken to collect payment, together with interest on the unpaid amounts
under this section, accruing from its due date, at an interest rate per
annum equal to two percentage points in excess of the prime commercial
lending rate quoted by Xxxxx Fargo Bank N.A. Any change in the interest
rate hereunder resulting from a change in such prime rate shall be
effective at the beginning of the day of such change in such prime
rate.
(c) Except as provided in the next sentence of this
paragraph, in the event of the termination of this Agreement pursuant
to any paragraph of Section 7.1, the obligations of the parties to
consummate the Merger shall expire, and none of the parties
50
shall have any further obligations under this Agreement except pursuant
to Sections 5.7, 5.15, 7.2 and Article 9, which shall survive
termination of this Agreement. In the event this Agreement is
terminated pursuant to any paragraph of Section 7.1 due to a breach by
the Company, the Company shall not be relieved from any liability for
such breach or its obligations pursuant to Section 7.2, and the Parent
shall have no further obligations under this Agreement except as
provided in Sections 5.7, 5.15, and Article 9. Notwithstanding the
preceding sentence, the parties agree that the amounts payable upon the
occurrence of the events specified in Section 7.2(a) shall be the sole
and exclusive remedy of the parties upon termination of the Agreement
arising from the occurrence of such events; provided, however, that
nothing herein shall relieve the Company or the Parent from liability
for the willful breach of any of its representations, warranties,
covenants or agreements set forth in this Agreement.
ARTICLE 8.
DEFINED TERMS
8.1. Definitions of Certain Terms.
When used in this Agreement, and in addition to the other terms defined
herein, the following terms shall have the meanings specified in this Article 8.
(a) "Acquisition Proposal" shall mean any inquiry, offer or
proposal, or any indication of interest in making any offer or
proposal, relating to (i) a possible transaction or series of related
transactions pursuant to which any Person or "group" (as used in
Section 13(d) of the Exchange Act) acquires 15% or more of the
outstanding shares of the Company's capital stock, including without
limitation by a tender offer or an exchange offer which, if
consummated, would result in any Person acquiring 15% or more of the
outstanding shares of the Company's capital stock, (ii) a possible
merger or other business combination involving the Company or Company
Subsidiaries, or (iii) any other transaction pursuant to which any
Person might acquire control ( by way of sale, lease, license,
liquidation, dissolution or otherwise) of assets (including for this
purpose the outstanding equity securities of any Company Subsidiary) of
the Company (x) having a fair market value equal to 10% or more of the
fair value of all of the consolidated assets of the Company immediately
prior to such a transaction, (y) constituting the credit card business
of the Company, or (z) otherwise material to the Company; provided,
however, that the term "Acquisition Proposal" shall not include the
Merger and the other transactions contemplated by this Agreement.
(b) "Affiliate" shall mean, in relation to any party hereto,
any entity directly or indirectly controlling, controlled by or under
common control with such party.
(c) "COBRA" shall mean the health care continuation
provisions of the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, and the regulations, rulings and other pronouncements
issued thereunder.
(d) "Company Intellectual Property" shall mean all
Intellectual Property used in, developed for use in, or necessary to
the conduct of the business of the Company and
51
the Company Subsidiaries as it is currently conducted or as it is
contemplated to be conducted.
(e) "Company Material Adverse Effect" shall mean any effect,
change, event, circumstance or condition that, individually or in the
aggregate with all similar effects, changes, events, circumstances or
conditions, is or would reasonably be expected to: (i) have a material
adverse effect on the business, operations, assets, properties, results
of operations or financial condition of the Company and the Company
Subsidiaries taken as a whole; (ii) prevent or materially delay the
consummation of the Merger or otherwise have a material adverse effect
on the ability of the Company to perform its obligations under this
Agreement; or (iii) have a material adverse effect on the ability of
the Surviving Corporation or the Parent to conduct such business
following the Effective Time or the ability of the Parent to exercise
full rights of ownership of the Company or its assets or business.
Notwithstanding anything to the contrary contained in the foregoing,
none of the following shall be deemed, individually or in the
aggregate, to constitute a Company Material Adverse Effect: (A) a
decrease in the market price of the Company Common Stock or its removal
of listing from Nasdaq SmallCap Market, in each case, in and of itself
or (B) any change, event, violation or inaccuracy directly attributable
to any of the following: (1) any actions taken by the Company at the
written request or direction, following the date of this Agreement, of
the Parent, or (2) a general decline in the financial markets in the
United States.
(f) "Company Option" shall mean any option to purchase
shares of Company Common Stock or other equity securities of the
Company, including, without limitation, any option granted under the
Company Stock Plans and any option granted under the ESPP.
(g) "Company Products" shall mean all software and other
products produced, manufactured, marketed or distributed at any time by
the Company or any Company Subsidiary.
(h) "Company Stock Plans" shall mean any stock option plan,
restricted stock plan, or other similar program or agreement,
including, without limitation, the Company's 1996 Incentive Plan,
Merger Stock Incentive Plan, Non-Employee Directors' Stock Option Plan,
1998 Chief Executive Officer's Plan and ESPP, to which the Company or
any Company Subsidiary is a party or which is maintained by the Company
or any Company Subsidiary and pursuant to which the Company has granted
options to purchase shares of Company Common Stock or awards of Company
Common Stock.
(i) "Company Subsidiary" shall mean each individual
subsidiary of the Company.
(j) "Confidentiality Agreement" shall mean the Mutual
Confidentiality Agreement, dated February 25, 2005, between the Company
and the Parent.
(k) "Contract" shall mean any contract, agreement,
consensual obligation, promise or undertaking, whether written or oral
and whether express or implied.
52
(l) "Delaware Law" shall mean the General Corporation Law of
the State of Delaware and the Delaware Constitution.
(m) "Employee Benefit Plans" shall mean any retirement,
pension, profit sharing, deferred compensation, stock bonus, savings,
bonus, incentive, cafeteria, medical, dental, vision, hospitalization,
life insurance, accidental death and dismemberment, medical expense
reimbursement, dependent care assistance, tuition reimbursement,
disability, sick pay, holiday, vacation, severance, change of control,
stock purchase, stock option, restricted stock, phantom stock, stock
appreciation rights, fringe benefit or other employee benefit plan,
fund, policy, program, contract, arrangement or payroll practice of any
kind (including any "employee benefit plan," as defined in Section 3(3)
of ERISA) or any employment, consulting or personal services contract,
whether written or oral, qualified or nonqualified, funded or unfunded,
or domestic or foreign, (i) sponsored, maintained or contributed to by
the Company or any Company Subsidiary or to which the Company or any
Company Subsidiary is a party, (ii) covering or benefiting any current
or former officer, employee, agent, director or independent contractor
of the Company or any Company Subsidiary (or any dependent or
beneficiary of any such individual), or (iii) with respect to which the
Company or any Company Subsidiary has (or could have) any obligation or
liability.
(n) "Encumbrance" shall mean any charge, claim, condition,
equitable interest, lien, option, pledge, security interest, mortgage,
right of way, easement, encroachment, servitude, right of first option,
right of first refusal or similar restriction, including any
restriction on use, voting (in the case of any security or equity
interest), transfer, receipt of income or exercise of any other
attribute of ownership.
(o) "Environmental Laws" shall mean any Law relating to
pollution or protection of human or worker health or safety or the
environment (including ambient air, surface water, ground water, land
surface or subsurface strata), including Laws relating to Environmental
Releases or threatened Environmental Releases of Hazardous Materials,
or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous
Materials, as in effect on the date hereof.
(p) "Environmental Release" shall mean any release, spill,
emission, leaking, injection, deposit, disposal, discharge, dispersal,
leaching or migration into the atmosphere, soil, surface water or
groundwater.
(q) "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended, and the regulations, rulings and
other pronouncements issued thereunder.
(r) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder.
(s) "Exchange Ratio" shall mean the quotient obtained by
dividing (x) 4,918,032.78689 by (y) the total of the number of shares
of Company Common Stock outstanding immediately prior to the Closing
plus the number of shares of Company
53
Common Stock that would have been issuable upon exercise of any Company
Option that may be, by virtue of any amendment to the Company Option,
exercisable for Parent Common Stock after the Effective Time, rounded
to the nearest one-hundred thousandth (0.00001) (with amounts of
0.000005 and above rounded up).
(t) "GAAP" shall mean accounting principles generally
accepted in the United States, applied on a consistent basis.
(u) "Governmental Entity" shall mean any United States or
non-United States federal, national, state or local governmental or
quasi-governmental, administrative, regulatory or judicial court,
department, commission, agency, board, bureau, instrumentality or other
authority.
(v) "Hazardous Materials" shall mean: (i) any petroleum or
petroleum products, radioactive materials, asbestos in any form that is
or could become friable, urea formaldehyde foam insulation, and
transformers or other equipment that contain dielectric fluid
containing polychlorinated biphenyls above regulated levels and radon
gas; (ii) any chemicals, materials or substances which are now defined
as or included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials," "extremely hazardous wastes,"
"restricted hazardous wastes," "toxic substances," "toxic pollutants,"
or words of similar import, under any Environmental Law; and (iii) any
other chemical, material, substance or waste, exposure to which as of
the date hereof is prohibited, limited or regulated by any Governmental
Entity.
(w) "HIPAA" shall mean the means the Health Insurance
Portability and Accountability Act of 1997, as amended, and the
regulations, rulings and other pronouncements issued thereunder.
(x) "Intellectual Property" shall mean all rights in
patents, patent applications, trademarks (whether registered or not),
trademark applications, service xxxx registrations and service xxxx
applications, trade names, trade dress, logos, slogans, tag lines,
uniform resource locators, Internet domain names, Internet domain name
applications, corporate names, copyright applications, registered
copyrighted works and commercially significant unregistered
copyrightable works (including proprietary software, books, written
materials, prerecorded video or audio tapes, and other copyrightable
works), technology, software, trade secrets, know-how, technical
documentation, specifications, data, designs and other intellectual
property and proprietary rights, other than off-the-shelf computer
programs.
(y) "IRS" shall mean the United States Internal Revenue
Service.
(z) "Knowledge" shall mean with respect to the Company, the
Parent or Merger Sub the knowledge actually possessed, or which, upon
the exercise of reasonable due diligence, could be possessed, by any
current director or officer of the Company, the Parent or Merger Sub,
as the case may be.
(aa) "Law" shall mean any constitution, law, ordinance,
principle of common law, code, regulation, statute or treaty of any
Governmental Entity.
54
(bb) "Nasdaq" shall mean the Nasdaq National Market or the
Nasdaq SmallCap Market, as applicable.
(cc) "Order" shall mean any order, injunction, judgment,
decree, ruling, assessment or arbitration award of any Governmental
Entity or arbitrator.
(dd) "Parent Average Stock Price" shall mean the average
closing sale price of one share of Parent Common Stock as reported on
Nasdaq for the twenty (20) consecutive trading days ending on and
including the third Nasdaq trading day preceding the Closing Date.
(ee) "Parent Material Adverse Effect" shall mean any effect,
change, event, circumstance or condition that, individually or in the
aggregate with all similar effects, changes, events, circumstances or
conditions, is or would reasonably be expected to: (i) have a material
adverse effect on the business, operations, assets, properties, results
of operations, or financial condition of the Parent and its
subsidiaries, considered as a whole, or (ii) prevent or materially
delay the consummation of the Merger or otherwise have a material
adverse effect on the ability of the Parent to perform its obligations
under this Agreement. Notwithstanding anything to the contrary
contained in the foregoing, none of the following shall be deemed,
individually or in the aggregate, to constitute a Parent Material
Adverse Effect: (A) a change in the market price of the Parent Common
Stock, in and of itself or (B) any change, event, violation or
inaccuracy directly attributable to any of the following (1) any
actions taken by the Parent at the written request or direction,
following the date of this Agreement, of the Company, or (2) a general
decline in the financial markets in the United States.
(ff) "Per Share Cash Consideration" shall mean the quotient
obtained by dividing (x) the sum of (1) $4,500,000, plus (2) any cash
received upon the exercise of the outstanding Company Options or
Company Warrants prior to the Effective Time, less (3) any other
amounts necessary to terminate Company Options in accordance with this
Agreement and less (4) an amount mutually determined by the Parent and
the Company with respect to contingencies of the Company, such amount
to not exceed $275,000 by (y) the total number of shares of Company
Common Stock outstanding immediately prior to the Closing, rounded to
the nearest one-hundred thousandth (0.00001) (with amounts of 0.000005
and above rounded up).
(gg) "Permits" shall mean registrations, franchises, grants,
authorizations (including marketing authorizations), licenses, permits,
easements, variances, exceptions, consents, certificates, approvals and
orders of any Governmental Entity necessary for each of the Company or
the Company Subsidiaries to manufacture, market, sell or distribute the
Company's products or to own, lease and operate its properties or to
carry on its business as it is now being conducted.
(hh) "Person" shall mean a natural person, corporation,
limited liability company, association, joint stock company, trust,
partnership, governmental entity, agency or branch or department
thereof, or any other legal entity.
55
(ii) "Related Party" shall mean any officer, director or
beneficial owner of more than 5% of the outstanding voting securities
of the Company or any Company Subsidiary (or any entity of which such
person is an officer, director or beneficial owner of more than 5% of
such entity's outstanding voting securities).
(jj) "SEC" shall mean the Securities and Exchange Commission.
(kk) "Securities Act" shall mean the Securities Act of 1933,
as amended.
(ll) "Superior Proposal" shall mean an unsolicited, bona fide
written Acquisition Proposal by a third party for all of the
outstanding shares of the capital stock or all of the voting power of
the Company (x) which each member of the Company's Board of Directors
reasonably determines in good faith, by resolution duly adopted, to be
more favorable to the Company's stockholders than the Merger, after
consultation with outside legal counsel and a financial advisor of
nationally recognized reputation, from a financial point of view and,
in addition, taking into account all the terms and conditions of the
Acquisition Proposal and this Agreement, and all legal, financial,
regulatory and other aspects of such Acquisition Proposal deemed
relevant by the Company's Board of Directors, including the Termination
Fee, (y) for which financing, to the extent required, is then committed
and (z) which is reasonably likely to be consummated, within a period
of time not materially longer in duration that the period of time
reasonably believed to be necessary to consummate the Merger, on the
terms set forth.
(mm) "Tax" (and, with correlative meaning, "Taxes" and
"Taxable") shall mean (i) any net income, alternative or add-on minimum
tax, gross income, estimated, gross receipts, sales, use, ad valorem,
value added, transfer, franchise, capital stock, profits, license,
registration, withholding, payroll, social security (or equivalent),
employment, unemployment, disability, excise, severance, stamp,
occupation, premium, property (real, tangible or intangible),
environmental or windfall profit tax, custom duty or other tax,
governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest or any penalty, addition to tax
or additional amount (whether disputed or not) imposed by any
Governmental Entity responsible for the imposition of any such tax
(domestic or foreign), (ii) any liability for the payment of any
amounts of the type described in clause (i) of this sentence as a
result of being a member of an affiliated, consolidated, combined,
unitary or aggregate group for any Taxable period, and (iii) any
liability for the payment of any amounts of the type described in
clause (i) or (ii) of this sentence as a result of being a transferee
of or successor to any Person or as a result of any express or implied
obligation to assume such Taxes or to indemnify any other Person.
(nn) "Tax Return" shall mean any return, statement, report or
form (including estimated Tax returns and reports, withholding Tax
returns and reports, any schedule or attachment, and information
returns and reports) required to be filed with respect to Taxes.
56
8.2. Location of Other Defined Terms.
The following additional terms are defined elsewhere in this agreement,
as indicated below:
Defined Term Section
------------ -------
2004 Form 10-K 3.4(e)
Agreement First Paragraph
Agreements to Facilitate Merger 5.14
Cancelled Shares 2.1(b)
Cash Consideration 2.1(c)
Certificate of Merger 1.3
Certificate(s) 2.3(b)
Closing 1.2
Closing Date 1.2
Code Third Recital
Company First Paragraph
Company Common Stock Second Recital
Company Disclosure Schedule Article 3
Company Material Agreements 3.19(b)
Company Preferred Stock 3.3(a)
Company SEC Reports 3.4(a)
Company Securities 3.3(a)
Company Stockholder Approval 5.3(a)
Company Stockholders Meeting 5.3(a)
Company Warrant 2.5
DGCL 2.2(a)
Dissenting Shares 2.2(a)
Effective Time 1.3
ESPP 3.3(a)
Exchange Agent 2.3(a)
Exchange Fund 2.3(a)
Merger Second Recital
Merger Consideration 2.1(c)
Merger Sub First Paragraph
Merger Sub Common Stock 2.1(a)
Option Consideration 2.4
Parent First Paragraph
Parent Common Stock Second Recital
Parent SEC Reports 4.3(a)
Parent Warrant 2.5
Proxy Statement/Prospectus 3.6
Registration Statement 5.3(b)
Representatives 5.2(a)
Subsidiary Securities 3.3(d)
Surviving Corporation 1.1
Tax 3.18
Termination Fee 7.2(a)(i)
57
ARTICLE 9.
GENERAL PROVISIONS
9.1. Amendment and Modification.
Subject to applicable Law, this Agreement may be amended, modified, or
supplemented only by written agreement of the Parent, Merger Sub and the Company
at any time prior to the Effective Time with respect to any of the terms
contained herein. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
9.2. Waiver of Compliance; Consents.
Any failure of the Parent or Merger Sub on the one hand, or the Company
on the other hand, to comply with any obligation, covenant, agreement, or
condition herein may be waived by the Company or the Parent, respectively, only
by a written instrument signed by an officer of the party granting such waiver,
but such waiver or failure to insist upon strict compliance with such
obligation, covenant, agreement, or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing. Merger Sub agrees that any consent or waiver
of compliance given by the Parent hereunder shall be conclusively binding upon
Merger Sub, whether or not given expressly on its behalf.
9.3. Investigation; Survival of Representations and Warranties.
The respective representations and warranties of the Parent and the
Company contained herein or in any certificates or other documents delivered
prior to or at the Closing shall not be deemed waived or otherwise affected by
any investigation made by any party hereto. Each and every representation and
warranty contained herein shall be deemed to be conditions to the Merger and
shall not survive the Merger. This Section 9.3 shall have no effect upon any
other obligation of the parties hereto, whether to be performed before or after
the Closing.
9.4. Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed given (a) on the date of delivery if delivered personally, or by
telecopy or facsimile, upon electronic confirmation of receipt, (b) on the first
business day following the date of dispatch if delivered by a recognized
next-day courier service, or (c) on the fifth business day following the date of
mailing if delivered by registered or certified mail, return receipt requested,
postage prepaid. All notices hereunder must be delivered as set forth below, or
pursuant to instructions as may be designated in writing by the party to receive
such notice:
58
(a) if to the Parent or Merger Sub, to it at:
CORILLIAN CORPORATION
0000 X.X. Xxxx Xxxxx Xxxxx
Xxxxxxxxx, XX 00000-0000
Fax: (000) 000-0000
Attention: Xxxx Xxxx
with a copy (which shall not constitute notice) to:
Xxxxxxx Coie LLP
0000 XX Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxx 00000
Fax: (000) 000-0000
Attention: Xxx Xxxxxx
(b) If to the Company, to it at:
INTELIDATA TECHNOLOGIES CORPORATION
00000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xx Xxxxxxxx
with a copy (which shall not constitute notice) to:
Hunton & Xxxxxxxx, XXX
Xxxx xx Xxxxxxx Xxxxx, Xxxxx 0000
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxxx
9.5. Specific Performance.
The parties hereto agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. Accordingly,
the parties further agree that each party shall be entitled to an injunction or
restraining order to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the United States
or any state having jurisdiction, this being in addition to any other right or
remedy to which such party may be entitled under this Agreement, at law or in
equity.
9.6. Assignment.
Neither this Agreement nor any of the rights, interests or obligations
under this Agreement shall be assigned, in whole or in part, by operation of Law
or otherwise by any of the parties without the prior written consent of the
other parties; any instrument purporting to make
59
such assignment shall be void. Subject to the preceding sentence, this Agreement
shall be binding upon, inure to the benefit of, and be enforceable by, the
parties and their respective successors and assigns.
9.7. Governing Law.
This Agreement shall be construed in accordance with and governed by
the Law of the State of Delaware (without giving effect to choice of Law
principles thereof).
9.8. Interpretation.
The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section references are to
this Agreement unless otherwise specified. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation." The table of contents, article and
section headings contained in this Agreement are inserted for reference purposes
only and shall not affect the meaning or interpretation of this Agreement. This
Agreement shall be construed without regard to any presumption or other rule
requiring the resolution of any ambiguity regarding the interpretation or
construction hereof against the party causing this Agreement to be drafted.
9.9. Entire Agreement.
This Agreement, including the annexes, exhibits and schedules hereto,
the Company Disclosure Schedule, and the Confidentiality Agreement referred to
herein, embodies the entire agreement and understanding of the parties hereto in
respect of the subject matter contained herein and supersede all prior
agreements and the understandings between the parties with respect to such
subject matter, including that certain letter agreement between the Parent and
the Company, dated March 22, 2005. No discussions regarding or exchange of
drafts or comments in connection with the transactions contemplated herein shall
constitute an agreement among the parties hereto. Any agreement among the
parties shall exist only when the parties have fully executed and delivered this
Agreement.
9.10. Parties in Interest.
This Agreement shall be binding upon and inure solely to the benefit of
each party hereto and its successors and permitted assigns, and, except for the
provisions of Section 5.11, nothing in this Agreement, express or implied, is
intended to or shall confer upon any other person any rights, benefits or
remedies of any nature whatsoever under or by reason of this Agreement.
9.11. Severability.
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of Law or public policy, all other terms
and provisions of this Agreement shall nevertheless remain in full force and
effect so long as the economics or legal substance of the transactions
contemplated hereby are not affected in any manner materially adverse to any
party. Upon determination that any term or other provision hereof is invalid,
illegal or incapable
60
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible to the fullest extent permitted by applicable Law in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled to the
extent possible.
9.12. Counterparts.
This Agreement may be executed by facsimile and in two or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
[Remainder of page intentionally left blank]
61
IN WITNESS WHEREOF, the parties hereto have executed this Agreement and
Plan of Merger as of the date first above written.
CORILLIAN CORPORATION
By: /s/ Xxxx X. Xxxx
Name: Xxxx X. Xxxx
Title: President
WIZARD ACQUISITION CORPORATION
By: /s/ Xxxx X. Xxxx
Name: Xxxx X. Xxxx
Title: President
INTELIDATA TECHNOLOGIES CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: Chief Executive Officer
SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER
AGREEMENT TO FACILITATE MERGER
This Agreement to Facilitate Merger (this "Agreement") is made and
entered into as of [_________], 2005, between [PARENT], an Oregon corporation
("Acquiror"), and the undersigned stockholder ("Stockholder") of [COMPANY], a
Delaware corporation (the "Company").
RECITALS
A. Concurrently with the execution of this Agreement, Acquiror, the
Company and [MERGER SUB], a Delaware corporation and wholly owned subsidiary of
Acquiror ("Merger Sub"), have entered into an Agreement and Plan of Merger (the
"Merger Agreement") which provides for the merger (the "Merger") of the Company
with and into Merger Sub. Pursuant to the Merger, each share of common stock,
par value $0.001 per share, of the Company ("Company Common Stock") issued and
outstanding immediately prior to the effective time of the Merger (other than
Cancelled Shares, as defined in the Merger Agreement) will be converted into the
right to receive (i) a certain fraction of a share of common stock, no par
value, of Acquiror and (ii) a cash payment, each on the basis described in the
Merger Agreement.
B. Stockholder is the record holder and beneficial owner (as defined in
Rule 13d-3 under the Exchange Act) of such number of Shares as is indicated on
the final page of this Agreement.
C. As a condition to its willingness to enter into the Merger
Agreement, Acquiror has required that Stockholder enter into this Agreement, and
Stockholder is willing to enter into this Agreement in order to induce Acquiror
to enter into the Merger Agreement.
NOW, THEREFORE, intending to be legally bound, the parties agree as
follows:
1. Certain Definitions. For purposes of this Agreement, the following
terms shall have the meanings specified:
1.1 "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
1.2 "Expiration Time" shall mean the earlier to occur of (i)
the Effective Time (as such term is defined in the Merger Agreement) of
the Merger and (ii) the termination of the Merger Agreement pursuant to
Article 7 thereof.
1.3 "Person" means any individual, corporation, limited
liability company, partnership, trust or other entity or governmental
authority.
1.4 "Shares" means: (a) all equity securities of the Company
(including all shares of common stock or preferred stock, and all
options, warrants and other rights to acquire shares of common stock or
preferred stock) beneficially owned (as defined in Rule 13d-3 under the
Exchange Act) by Stockholder as of the date of this Agreement and (b)
all additional equity securities of the Company (including all
additional shares of common stock or preferred stock, and all
additional options, warrants and other rights to acquire shares of
common stock or preferred stock) over which Stockholder acquires
beneficial ownership (as defined in Rule 13d-3 under the Exchange Act)
during the period from the date of this Agreement through the
Expiration Time.
1.5 A Person shall be deemed to have effected a "Transfer" of
a security if such Person directly or indirectly: (a) sells, assigns,
pledges, encumbers, grants an option with respect to, transfers,
distributes or disposes of (by gift, operation of law or otherwise)
such security or any interest in such security (except that the
exercise of an option to purchase Shares by Stockholder shall not be
deemed a Transfer); (b) enters into an agreement or commitment
providing for the sale of, assignment of, pledge of, encumbrance of,
grant of an option with respect to, transfer of or disposition of (by
operation of law or otherwise) such security or any interest therein;
or (c) tenders, or agrees or commits to tender, any Shares in a tender
offer, exchange offer, or like transaction.
1.6 All other capitalized terms not defined in this Agreement
shall have the meanings accorded them in the Merger Agreement.
2. Agreement to Retain Shares and Voting Rights.
2.1 Transfer and Encumbrance. Stockholder shall not (except as
may be specifically required by court order) Transfer any of the Shares
or make any offer or agreement relating thereto at any time prior to
the Expiration Time; provided, however, that nothing in this Agreement
shall restrict Stockholder from (a) exercising any options to acquire
shares of Company Common Stock, or (b) effecting any Transfer of the
Shares (i) by will or applicable laws of descent and distribution or
(ii) to any member of the immediate family of Stockholder, or to any
trust the beneficial ownership of which is held by Stockholder or any
such family member (each a "Permitted Transferee"), so long as such
Permitted Transferee agrees in writing, in form and substance
reasonably satisfactory to Acquiror, to be bound by the terms of this
Agreement to the same extent as Stockholder is bound. Any purported
Transfer in violation of this Agreement shall be null and void.
2.2 Voting Rights. Stockholder shall not (except as may be
specifically required by court order) deposit (or permit the deposit
of) any of the Shares in a voting trust or grant any proxy or enter
into any voting agreement or similar agreement in contravention of the
obligations of Stockholder under this Agreement at any time prior to
the Expiration Time.
3. Agreement to Vote Shares. At every meeting of stockholders of the
Company (or any adjournment thereof) called with respect to any of the
following, and on every action or approval by written consent of the
stockholders of the Company with respect to any of the following, Stockholder
shall vote the Shares in favor of approval of the Merger and the Merger
Agreement and any matter that could reasonably be expected to facilitate the
Merger. Stockholder agrees not to take any actions contrary to Stockholder's
obligations under this Agreement. Without limiting the generality of the
foregoing, Stockholder shall vote against any proposal (other than the Merger
Agreement) that could reasonably be expected to (a) result in any change in the
directors of the Company, any change in the present capitalization of the
2
Company or any amendment to the Company's Certificate of Incorporation or Bylaws
if the effect of such amendment could reasonably be expected to materially
impair the consummation of the Merger; (b) result in a breach of any covenant,
representation or warranty or any other obligation or agreement of the Company
under the Merger Agreement; (c) impair in any material respect the Company's
ability to perform its obligations under the Merger Agreement; or (d) otherwise
prevent or materially delay the consummation of the transactions contemplated by
the Merger Agreement.
4. No Solicitation. Prior to the Expiration Time, Stockholder shall not
as a stockholder, either individually or through any representatives or agents
(but may as an officer or director to the extent permitted by the Merger
Agreement): (a) solicit, initiate, encourage or otherwise facilitate any
inquiry, offer, proposal or announcement that constitutes, or could be
reasonably expected to lead to, an Acquisition Proposal; (b) enter into any
agreement or letter of intent regarding, approve, endorse or recommend, an
Acquisition Proposal; or (c) participate or engage in or encourage in any way
negotiations or discussions concerning, or provide any non-public information
to, any Person relating to, an Acquisition Proposal, or which may reasonably be
expected to lead to, any Acquisition Proposal. Upon execution of this Agreement,
Stockholder shall (y) immediately terminate all discussions with any Person; and
(z) promptly (but in any event within twenty-four hours) notify Acquiror if it
receives an Acquisition Proposal or any inquiry reasonably likely to lead to an
Acquisition Proposal or if any discussions or negotiations are sought to be
initiated or continued with such Stockholder concerning an Acquisition Proposal.
5. Irrevocable Proxy. Concurrently with the execution of this
Agreement, Stockholder shall deliver to Acquiror a proxy in the form attached
hereto as Exhibit A (the "Proxy"), which shall be irrevocable to the extent
provided therein, with the total number of shares of outstanding capital stock
of the Company beneficially owned (as such term is defined in Rule 13d-3 under
the Exchange Act) by Stockholder and subject to the Proxy set forth therein.
6. Representations, Warranties and Covenants of Stockholder.
Stockholder hereby represents and warrants to Acquiror that Stockholder (a) is
the sole record and beneficial owner of the Shares, which at the date hereof and
at all times up until the Expiration Time will be free and clear of any liens,
claims, options, charges or other encumbrances; (b) does not beneficially own
any shares of capital stock of the Company other than the Shares; and (c) has
full power and authority to make, enter into and carry out the terms of this
Agreement and the Proxy.
7. Additional Documents. Stockholder hereby covenants and agrees to
execute and deliver any additional documents necessary or desirable, in the
reasonable opinion of Acquiror, to carry out the intent of this Agreement.
8. Consent and Waiver. Stockholder hereby gives any consents or waivers
that are reasonably required for the consummation of the Merger under the terms
of any agreements to which Stockholder is a party as a stockholder or pursuant
to any rights Stockholder may have as a stockholder.
9. No Ownership Interest. Nothing contained in this Agreement shall be
deemed to vest in Acquiror any direct or indirect ownership or incidents of
ownership of or with respect to
3
any of the Shares, except as otherwise expressly provided herein. All rights,
ownership and economic benefits of and relating to the Shares shall remain with,
and belong to, Stockholder, and this Agreement shall not be deemed to authorize
Acquiror to manage, direct, superintend, restrict, regulate, govern or
administer any of the policies or operations of the Company or to direct
Stockholder in the voting of any of the Shares, except as otherwise expressly
provided herein.
10. Termination. This Agreement and the Proxy delivered in connection
herewith shall terminate and shall have no further force or effect as of the
Expiration Time.
11. Miscellaneous.
11.1 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, then the remainder
of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
11.2 Binding Effect and Assignment. This Agreement and all of
the provisions hereof shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted
assigns, but, except as otherwise specifically provided herein, neither
this Agreement nor any of the rights, interests or obligations of the
parties hereto may be assigned by either of the parties without the
prior written consent of the other.
11.3 Amendments and Modification. This Agreement may not be
modified, amended, altered or supplemented except upon the execution
and delivery of a written agreement executed by the parties hereto.
11.4 Specific Performance; Injunctive Relief. The parties
hereto acknowledge that Acquiror will be irreparably harmed and that
there will be no adequate remedy at law for a violation of any of the
covenants or agreements of Stockholder set forth herein. Therefore, it
is agreed that, in addition to any other remedies that may be available
to Acquiror upon any such violation, Acquiror shall have the right to
enforce such covenants and agreements by specific performance,
injunctive relief or by any other means available to Acquiror at law or
in equity.
11.5 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and sufficient if
delivered in person, by cable, telegram or telecopy, or sent by mail
(registered or certified mail, postage prepaid, return receipt
requested) or overnight courier (prepaid) to the respective parties as
follows:
If to Acquiror: [PARENT]
_______________________
_______________________
Fax: __________________
Attention: ___________
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with a copy (which shall not constitute notice) to:
Xxxxxxx Coie LLP
0000 XX Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxx X. Xxxxxx
If to Stockholder: To the address for notice set forth on the
signature page hereof.
or to such other address as any party may have furnished to the other in writing
in accordance herewith. Notices shall only be effective upon receipt.
11.6 Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of
Delaware without giving effect to the conflict of laws provision
thereof.
11.7 Entire Agreement. This Agreement contains the entire
understanding of the parties in respect of the subject matter hereof,
and supersedes all prior negotiations and understandings between the
parties with respect to such subject matter.
11.8 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be an original, but all of which
together shall constitute one and the same agreement.
11.9 Effect of Headings. The section headings herein are for
convenience only and shall not affect the construction of
interpretation of this Agreement.
11.10 Fiduciary Duty as Director or Officer. The parties
hereto acknowledge and agree that Stockholder's obligations hereunder
are solely in his or her capacity as a stockholder of the Company, and
that none of the provisions herein set forth shall be deemed to
restrict or limit any fiduciary duty the undersigned or any of his or
her respective affiliates may have as a member of the Board of
Directors of the Company or as an executive officer of the Company or
restrict or limit any actions taken by the undersigned in his capacity
as a member of the Board of Directors of the Company or as an executive
officer of the Company; provided that no such duty shall excuse
Stockholder from his or her obligations as a stockholder of the Company
to vote Shares as herein provided and to otherwise comply with the
terms and conditions of this Agreement.
11.11 WAIVER OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES
THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO
INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF
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LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH SUCH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C)
EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH SUCH PARTY
HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS,
THE WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.11.
[Remainder of page intentionally left blank. Signature page follows.]
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SIGNATURE PAGE
TO
AGREEMENT TO FACILITATE MERGER
IN WITNESS WHEREOF, the parties have caused this Agreement to
Facilitate Merger to be duly executed on the date and year first above written.
[PARENT]
By: ___________________________________________
Name:
Title:
STOCKHOLDER
_______________________________________________
Name:
Address:
Shares beneficially owned as of
the date hereof:
[__________] shares of [COMPANY] Common
Stock
Form of beneficial ownership:
[__________] shares are currently held
directly;
[__________] shares are currently subject
to outstanding options.
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EXHIBIT A
IRREVOCABLE PROXY
The undersigned stockholder of [COMPANY], a Delaware corporation (the
"Company"), hereby irrevocably appoints [____________________] and
[____________________] of [PARENT], an Oregon corporation ("Acquiror"), and each
of them, as the sole and exclusive attorneys and proxies of the undersigned,
with full power of substitution and resubstitution, to the full extent of the
undersigned's rights with respect to the shares of outstanding capital stock of
the Company beneficially owned by the undersigned as of the date hereof, which
shares are listed below (the "Shares"), and any and all other shares or
securities issued or issuable in respect thereof on or after the date hereof,
until such time as that certain Agreement and Plan of Merger, dated as of the
date hereof (the "Merger Agreement"), by and among Acquiror, the Company and
[MERGER SUB], a Delaware corporation and wholly owned subsidiary of Acquiror,
shall be terminated in accordance with its terms or the Merger (as defined in
the Merger Agreement) is effective, whichever first occurs. Upon the execution
hereof, all prior proxies given by the undersigned with respect to the Shares
and any and all other shares or securities issued or issuable in respect thereof
on or after the date hereof are hereby revoked and no subsequent proxies will be
given.
This proxy is coupled with an interest and is irrevocable, is granted
in order to secure the obligations under the Agreement to Facilitate Merger,
dated as of the date hereof, between Acquiror and the undersigned stockholder
(the "Agreement to Facilitate Merger"), and is granted in consideration of
Acquiror entering into the Merger Agreement. The attorneys and proxies named
above will be empowered at any time prior to termination of the Merger Agreement
to exercise all voting and other rights (including, without limitation, the
power to execute and deliver written consents with respect to the Shares) of the
undersigned at every annual, special or adjourned meeting of the stockholders of
the Company, and in every written consent in lieu of such a meeting, or
otherwise, in favor of the Merger and the Merger Agreement and any matter that
could reasonably be expected to facilitate the Merger.
The attorneys and proxies named above may only exercise this proxy to
vote the Shares subject hereto at any time prior to termination of the Merger
Agreement at every annual, special or adjourned meeting of the stockholders of
the Company and in every written consent in lieu of such meeting, in favor of
approval of the Merger and the Merger Agreement and any matter that could
reasonably be expected to facilitate the Merger, and may not exercise this proxy
on any other matter. The undersigned stockholder may vote the Shares on all
other matters.
Any obligation of the undersigned hereunder shall be binding upon the
successors and assigns of the undersigned.
Dated: [__________], 2005
Signature of Stockholder: ____________________________________________________
Print Name of Stockholder: ____________________________________________________
Shares beneficially owned as of the date hereof:
___________ shares of outstanding common stock, par value $0.001 per share, of
[COMPANY]
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