EXHIBIT 99.1
AGREEMENT
BY AND AMONG
ADC TELECOMMUNICATIONS, INC.
AND
XXXXXXX SYSTEMS PLC
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June 19, 1999
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TABLE OF CONTENTS
PAGE
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ARTICLE I
THE ACQUISITION, INCLUDING THE SCHEME...................................................3
1.1. THE ACQUISITION.......................................................3
1.2. DELIVERY OF ORDER.....................................................5
ARTICLE II
EXCHANGE OF AMERICAN DEPOSITARY RECEIPTS
AND ASSUMPTION OF COMPANY OPTIONS ......................................................5
2.1. APPOINTMENT OF ALLOTMENT AGENT........................................5
2.2. SURRENDER AND ALLOTMENT PROCEDURE.....................................5
2.3. EXCHANGE OF SHARE OPTIONS.............................................7
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY...........................................8
3.1. ORGANIZATION AND QUALIFICATION........................................8
3.2. CAPITAL STOCK OF SUBSIDIARIES.........................................9
3.3. CAPITALIZATION........................................................9
3.4. AUTHORITY RELATIVE TO THIS AGREEMENT.................................10
3.5. NO CONFLICT; REQUIRED FILINGS AND CONSENTS...........................11
3.6. COMMISSION FILINGS; FINANCIAL STATEMENTS.............................12
3.7. ABSENCE OF CHANGES OR EVENTS.........................................13
3.8. LITIGATION...........................................................13
3.9. TITLE TO PROPERTIES..................................................13
3.10. CERTAIN CONTRACTS....................................................14
3.11. COMPLIANCE WITH LAW..................................................14
3.12. INTELLECTUAL PROPERTY RIGHTS.........................................15
3.13. TAXES................................................................16
3.14. EMPLOYEES............................................................18
3.15. EMPLOYEE BENEFIT PLANS...............................................18
3.16. ENVIRONMENTAL MATTERS................................................20
3.17. FINDERS OR BROKERS...................................................21
3.18. BOARD RECOMMENDATION.................................................21
3.19. OPINION OF FINANCIAL ADVISOR.........................................21
3.20 TAX MATTERS..........................................................21
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER................................................22
4.1. ORGANIZATION AND QUALIFICATION.......................................22
4.2. CAPITALIZATION.......................................................22
4.3. AUTHORITY RELATIVE TO THIS AGREEMENT.................................23
4.4. NO CONFLICTS; REQUIRED FILINGS AND CONSENTS..........................24
4.5. COMMISSION FILINGS; FINANCIAL STATEMENTS.............................25
4.6. ABSENCE OF CHANGES OR EVENTS.........................................25
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4.7. LITIGATION...........................................................25
4.8. COMPLIANCE WITH LAW..................................................26
4.9. FINDERS OR BROKERS...................................................26
4.10 TAX MATTERS..........................................................26
ARTICLE V
REQUIRED APPROVALS.....................................................................26
5.1. SHAREHOLDER AND COURT APPROVALS......................................26
ARTICLE VI
COVENANTS AND AGREEMENTS...............................................................28
6.1. CONDUCT OF BUSINESS OF THE COMPANY PENDING THE ACQUISITION...........28
6.2. PROXY STATEMENT......................................................31
6.3 PREPARATION OF NO ACTION REQUEST OR FORM S-4; BLUE SKY LAWS..........32
6.4. ADDITIONAL AGREEMENTS, COOPERATION...................................32
6.5. PUBLICITY............................................................33
6.6. NO SOLICITATION......................................................33
6.7. ACCESS TO INFORMATION................................................35
6.8. NOTIFICATION OF CERTAIN MATTERS......................................35
6.9. RESIGNATION OF OFFICERS AND DIRECTORS................................35
6.10. INDEMNIFICATION......................................................36
6.11. SHAREHOLDER LITIGATION...............................................37
6.12. SEVERANCE ARRANGEMENTS...............................................37
6.13. EMPLOYEE BENEFIT PLANS...............................................37
6.14. DETERMINATION OF OPTIONHOLDERS.......................................37
6.15. PREPARATION OF TAX RETURNS...........................................37
6.16. POOLING AFFILIATES...................................................38
6.17. POOLING ACTIONS......................................................38
6.18. TAX INCENTIVES AND XXX GRANTS........................................38
6.19 COMMISSION FILINGS; COMPLIANCE.......................................38
6.20. LISTING OF ADDITIONAL SHARES.........................................39
ARTICLE VII
CONDITIONS TO CLOSING..................................................................39
7.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE ACQUISITION......39
7.2. CONDITIONS TO OBLIGATIONS OF BUYER...................................40
7.3. CONDITIONS TO OBLIGATIONS OF THE COMPANY.............................42
ARTICLE VIII
TERMINATION............................................................................43
8.1. TERMINATION..........................................................43
8.2. EFFECT OF TERMINATION................................................44
8.3. FEES AND EXPENSES....................................................45
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ARTICLE IX
MISCELLANEOUS..........................................................................46
9.1. NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES........................46
9.2. CLOSING AND WAIVER...................................................47
9.3. NOTICES..............................................................47
9.4. COUNTERPARTS.........................................................49
9.5. INTERPRETATION.......................................................49
9.6. AMENDMENT............................................................49
9.7. NO THIRD PARTY BENEFICIARIES.........................................49
9.8. GOVERNING LAW........................................................49
9.9. ENTIRE AGREEMENT.....................................................50
9.10. VALIDITY.............................................................50
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EXHIBITS
EXHIBITS
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A Scheme of Arrangement
B Company Option Agreement
C Restricted Stock Rollover Agreement
D Post-Closing Severance Arrangements
E Form of Company Affiliate Letter
F Form of Buyer Affiliate Letter
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AGREEMENT
THIS AGREEMENT, dated as of June 19, 1999, is made by and among ADC
Telecommunications, Inc., a corporation formed under the laws of the State of
Minnesota ("BUYER"), and Xxxxxxx Systems PLC, a public limited company
organized under the laws of Ireland (the "COMPANY").
WITNESSETH:
WHEREAS, the Board of Directors of the Company deems it desirable
and in the best interests of the Company and its shareholders that, subject
to the sanction of the High Court of Ireland (the "High Court"), the Company
and its shareholders enter into a Scheme of Arrangement (the "Scheme") in the
form of EXHIBIT A hereto pursuant to Section 201 of the Companies Act, 1963
of Ireland (the "COMPANIES ACT"); and whereby, pursuant to the Scheme and
this Agreement, among other things, (i) all of the issued and outstanding
Ordinary Shares, nominal value $0.0025 per share, of the Company ("COMPANY
ORDINARY SHARES") shall be canceled and the holders thereof shall be allotted
a number of shares of common stock, par value $.20 per share, of Buyer
("BUYER COMMON STOCK"), (ii) all of the issued and outstanding Deferred
Shares, nominal value IRL1.00 per share, of the Company (the "COMPANY
DEFERRED SHARES") shall be canceled and the holders thereof shall be allotted
a number of shares of Buyer Common Stock, and (iii) the Company Options (as
defined in Section 1.1(c) hereof) shall be assumed by Buyer and converted
into options for the purchase of shares of Buyer Common Stock upon the terms
and subject to the conditions set forth herein and in Exhibit A, and, with
respect to the Scheme, in accordance with the laws of Ireland; and
WHEREAS, for United States federal income tax purposes, the parties
intend that the Scheme and the other transactions described in the preceding
Recital (collectively, the "Acquisition") shall qualify as a "reorganization"
under Section 368(a) of the Internal Revenue Code of 1986, as amended (the
"CODE"), and that this Agreement constitute a "plan of reorganization" within
the meaning of the Code; and
WHEREAS, for financial reporting purposes, the parties intend that
the Acquisition shall be accounted for as a "pooling of interests." The
Company has provided to Buyer an opinion letter from its independent
accountants, PricewaterhouseCoopers LLP, addressed to the Company, stating
that, after appropriate review of this Agreement and based on its familiarity
with the Company, the Company will qualify as a party to a
pooling-of-interests transaction under Opinion 16 of the Accounting
Principles Board and applicable SEC rules and regulations (collectively,
"OPINION 16"). Buyer has provided to the Company an opinion letter from its
independent accountants, Xxxxxx Xxxxxxxx LLP, addressed to Buyer, stating
that, as of the date of such letter, based on its familiarity with Buyer,
Buyer will qualify as a party to a pooling-of-interests transaction under
Opinion 16; and
WHEREAS, the Board of Directors of the Company deems it desirable
and in the best interest of the Company and its shareholders that the Company
enter into this Agreement with Buyer, pursuant to which, subject to the
directions of the High Court, the Company will propose to its shareholders to
agree to the Scheme, subject to the conditions set forth herein; and
WHEREAS, for the purpose of implementing the Scheme, it will be
necessary for the Company to reduce and cancel the existing share capital of
the Company, and the Company will accordingly propose to its shareholders
that, subject to the confirmation of the High Court, the capital of the
Company should be appropriately reduced and cancelled; and
WHEREAS, as a condition to, and immediately after the execution of,
this Agreement, Buyer and the Company are concurrently entering into the
Stock Option Agreement (the "COMPANY OPTION AGREEMENT") in substantially the
form attached hereto as EXHIBIT B, pursuant to which the Company will grant
Buyer an option exercisable upon the occurrence of certain events; and
WHEREAS, as an inducement to Buyer to enter into this Agreement,
Xxxx X. Xxxxx III has agreed to enter into an agreement in substantially the
form of EXHIBIT C hereto to roll over all shares of unvested restricted stock
("RESTRICTED STOCK") of the Company into a number of restricted shares
("BUYER RESTRICTED STOCK") of Buyer Common Stock equal to the number of
shares of unvested Restricted Stock multiplied by the Ordinary Allotment
Ratio (as defined in Exhibit A hereto); and
WHEREAS, the Board of Directors of Buyer deems it desirable and in
the best interest of Buyer and its shareholders that Buyer consummate the
Acquisition, including effecting the Scheme, and enter into this Agreement,
pursuant to which, among other things, (i) subject to the confirmation of the
High Court, all of the issued and outstanding Company Ordinary Shares shall
be canceled and the holders thereof shall be allotted a number of shares of
Buyer Common Stock, (ii) subject to the confirmation of the High Court, all
of the issued and outstanding Company Deferred Shares shall be canceled and
the holders thereof shall be allotted a number of shares of Buyer Common
Stock, (iii) the Company Options shall be assumed by Buyer in exchange for
newly issued Buyer Options (as defined in Section 1.1(c) hereof) (assuming
the Scheme is effected), and (iv) subject to the sanction of the Scheme by
the High Court, the Company shall make an issuance of the New Ordinary Shares
and the New Deferred Shares (as each such term is defined in Exhibit A
hereto) to Buyer, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, the parties hereto, intending to
be legally bound, agree as follows:
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ARTICLE I
THE ACQUISITION, INCLUDING THE SCHEME
1.1. THE ACQUISITION. Subject to the fulfillment or waiver of
the conditions set forth in Article VII hereof:
(a) The Company and Buyer shall, as soon as is practicable,
effect the Scheme, the terms of which, in the form attached hereto as Exhibit
A or in such other form as the Buyer and the Company shall mutually agree,
are hereby incorporated herein by reference. The parties shall use their
respective best efforts to cause the Effective Date (as defined in Exhibit A)
to occur on or before September 30, 1999. The foregoing notwithstanding, if
the Effective Date does not occur on or prior to September 30, 1999, the
parties shall use their respective best efforts to cause the Effective Date
to occur as soon as practicable thereafter. In any event, the parties shall
comply with any time limits which may be specified in the Final Court Order
(as defined in Section 1.2 hereof).
(b) The Company shall proceed in accordance with the
provisions of Article V hereof to seek the agreement of the Company's
shareholders and the sanction of the High Court for the Scheme and to seek
the adoption by the Company and the confirmation by the High Court of the
resolution as to the reduction of the capital of the Company (a "CAPITAL
REDUCTION" or, together with such other resolutions, if any, as may be
brought before the shareholders at a meeting duly called and held for such
purpose, a "CAPITAL REDUCTION RESOLUTION," as the context may require) and,
subject to such agreement, sanction, adoption and confirmation being given,
shall perform all acts as are required of it by the Scheme.
(c) Subject to the agreement and adoption by the Company as
above referred to having been procured, to the Company proceeding with the
Petition as described (and defined) in Article V hereof and to the Scheme
becoming effective, Buyer shall perform all acts as are expressed in the
Scheme to be performed by it.
(d) At the Effective Time (as defined in Exhibit A hereto),
pursuant to the terms of the Share Option Plan and the agreements
representing the Company Options (each as defined below) and with no further
action by or on behalf of the holders of the Company Options, each option to
purchase Company Ordinary Shares (each a "COMPANY OPTION") issued by the
Company pursuant to the Company's 1995 Share Option Plan (the "SHARE OPTION
PLAN") or otherwise, outstanding and unexercised, whether or not vested or
exercisable, shall be assumed by Buyer. Each Company Option shall be deemed
to constitute an option to acquire, on the same terms and conditions as were
applicable under such Company Option (after giving effect to the accelerated
vesting provisions contained in the applicable agreements or the Share Option
Plan), the number of whole shares of Buyer Common Stock equal to the number
of Company Ordinary Shares that were issuable upon exercise of such Company
Option immediately prior to the Effective Time multiplied by the Ordinary
Allotment Ratio, rounded down to the nearest whole
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number of shares of Buyer Common Stock (a "BUYER OPTION"), and the per share
exercise price of the shares of Buyer Common Stock issuable upon exercise of
such Buyer Option shall be equal to the exercise price per share of Company
Ordinary Shares at which such Company Option was exercisable immediately
prior to the Effective Time divided by the Ordinary Allotment Ratio, rounded
up to the nearest whole cent. It is the intention of the parties that any
assumption of "incentive stock options" (as defined in Section 422 of the
Code ("ISOS")) shall comply with Section 424 of the Code such that ISOs so
assumed by Buyer shall qualify following the Effective Time as ISOs if and to
the extent that such Company Options qualified as ISOs prior to the Effective
Time.
(e) The parties acknowledge that the Company's 1996
Employee Stock Purchase Plan (the "ESPP") shall continue to operate in
accordance with its terms following the execution of this Agreement, except
as provided below. The Company shall not make an Offering (as defined in the
ESPP) under the ESPP for any Plan Period (as defined in the ESPP) beginning
on or after September 1, 1999. Effective as of one business day prior to the
Effective Time, the Company shall cause the ESPP, to terminate in accordance
with Section 19 of the ESPP, and no purchase rights shall be subsequently
granted or exercised under the ESPP. The Company shall take all actions
necessary to ensure that the ESPP will not be amended or modified in any
respect after the date hereof, except to effect the terms of this Section
1.1(e).
(f) If, between the date of this Agreement and the
Effective Time, shares of Buyer Common Stock shall be changed into a
different number of shares or a different class of shares by reason of any
reclassification, recapitalization, split-up, combination, exchange of shares
or readjustment, or if a stock dividend thereon shall be declared with a
record date within such period, or if a cash dividend thereon of more than
$1.00 per share of Buyer Common Stock shall be declared with a record date
within such period (a "COMMON STOCK ADJUSTMENT"), then the Ordinary Allotment
Ratio shall be adjusted appropriately so as to maintain the proportional
interests of the owners of American Depositary Receipts ("ADRS") evidencing
American Depositary Shares of the Company (the "COMPANY ADSS") (representing
underlying Company Ordinary Shares) in the outstanding shares of Buyer Common
Stock in effect immediately prior to the Common Stock Adjustment.
(g) No fractional shares of Buyer Common Stock and no
certificates or scrip certificates therefor shall be issued to represent any
such fractional interest, and any such fractional interest shall be rounded
down to the next whole share and issued to any holder of such fractional
share interest.
(h) If, between the date of this Agreement and the
Effective Time, the Company ADSs shall be changed into a different number of
shares or a different class of shares by reason of any reclassification,
consolidation, division, subdivision or cancellation (other than the
cancellation contemplated by Section 1.1(b) of this Agreement), or if a share
dividend thereon shall be declared with a record date within such period (the
"ADS ADJUSTMENT"), then the Ordinary Allotment Ratio in respect of the ADSs
shall be adjusted appropriately so as to
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maintain the proportional interests of the owners of the Company ADSs in the
outstanding shares of Buyer Common Stock in effect immediately prior to the
ADS Adjustment.
1.2. DELIVERY OF ORDER. As soon as practicable after the
fulfillment or waiver of the conditions set forth in Article VII hereof, or
on such later date as may be mutually agreed to between Buyer and the
Company, the Company and Buyer will cause to be delivered to the Registrar of
Companies in Dublin, Ireland, a copy of the final court order of the High
Court sanctioning the Scheme and the order of the High Court confirming the
Capital Reduction (the "FINAL COURT ORDER") and the minute required by
Section 75 of the Companies Act, as described in Article V hereof.
ARTICLE II
EXCHANGE OF AMERICAN DEPOSITARY RECEIPTS
AND ASSUMPTION OF COMPANY OPTIONS
2.1. APPOINTMENT OF ALLOTMENT AGENT. Buyer shall authorize a
commercial bank, trust company or other financial institution, which may be
the Custodian (as defined in the Deposit Agreements between the Company and
the holders of ADRs (the "DEPOSIT AGREEMENT") or the Depositary (as defined
in the Deposit Agreement), to act as Allotment Agent ("ALLOTMENT AGENT") for
the holders of ADRs prior to the hearing on the Petition which authorization
shall be subject to the approval of the Company, which approval shall not be
unreasonably withheld or delayed. In accordance with and subject to the
provisions of this Agreement and the Allotment Agent Agreement between Buyer
and the Allotment Agent, if any, or the Deposit Agreement, as the case may
be, at the Effective Time, Buyer shall deliver, or cause to be delivered, a
number of shares of Buyer Common Stock equal to the Ordinary Allotment Ratio
multiplied by the total number of issued and outstanding Company ADSs as of
the Effective Time (together with any dividends or distributions with respect
to the Buyer Common Stock, the "ALLOTMENT FUND") to the Allotment Agent. The
Allotment Agent shall hold the Allotment Fund for the benefit of holders of
ADRs evidencing Company ADSs. The Allotment Agent shall distribute the
Allotment Fund pursuant to this Article II.
2.2. SURRENDER AND ALLOTMENT PROCEDURE. The surrender and
allotment procedure for the ADRs pursuant to the terms of the Acquisition
shall be as set forth below, subject to the terms of the Deposit
Agreement(s), or as may be mutually agreed upon by the Company, the Buyer and
the Depositary (as defined in Section 2.2(b) below).
(a) At and after the Effective Time (subject to Section
2.2(h) hereof), each holder of record of any outstanding Company ADSs shall
be entitled, upon surrender to the Allotment Agent of the ADRs representing
Company ADSs and such other documents as the Allotment Agent may request, to
receive therefor an allotment of shares of Buyer Common Stock equal to the
Ordinary Allotment Ratio multiplied by the number of Company Ordinary Shares
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underlying the Company ADSs evidenced by such ADRs so surrendered, as shall
be more particularly provided in the Allotment Agent Agreement.
(b) On or before the third business day following the
Effective Time, Buyer will cause the Allotment Agent to send a notice and a
transmittal form to the Depositary for the Company ADSs, advising such holder
of the terms of the Acquisition and the procedure for the surrender of ADRs
evidencing the Company ADSs and allotment of the shares of Buyer Common Stock
as provided in the Allotment Agent Agreement.
(c) Upon receipt from the Depositary of the completed
transmittal form and the ADRs, Buyer shall cause the Allotment Agent to
deliver to the Depositary the requisite number of shares of Buyer Common
Stock from the Allotment Fund for distribution to the holders of the Company
ADSs. Subject to the terms of the Deposit Agreement(s), Buyer shall cause the
Depositary to send each holder of the Company ADSs a notice informing such
holders that the Deposit Agreement(s) will terminate one year after the
Effective Time and instructing each such holder to surrender the ADRs
evidencing their Company ADSs to the Depositary in exchange for the allotment
of shares of Buyer Common Stock. Upon receipt of such ADRs, Buyer shall cause
the Depositary to deliver the number of shares of Buyer Common Stock allotted
for each Company ADS received to the holders thereof.
(d) No dividends or other distributions declared or made
with respect to Buyer Common Stock with a record date after the Effective
Time shall be paid to the holder of any unsurrendered ADR with respect to the
shares of Buyer Common Stock represented thereby until the holder of such ADR
shall surrender such ADR. Subject to the effect of escheat, tax or other
applicable laws, following surrender of any such ADR, there shall be paid to
the holder, without interest, (i) the amount of dividends or other
distributions with a record date after the Effective Time theretofore paid
with respect to the whole shares of Buyer Common Stock which the holder was
allotted pursuant to the Acquisition, and (ii) at the appropriate payment
date, the amount of dividends or other distributions, with a record date
after the Effective Time but prior to surrender and a payment date occurring
after surrender, payable with respect to the whole shares of Buyer Common
Stock which the holder was allotted pursuant to the Acquisition.
(e) All shares of Buyer Common Stock issued upon
cancellation of the Company Ordinary Shares underlying the Company ADSs in
accordance with the Scheme and the terms of this Agreement (including any
cash paid pursuant to Section 2.2(d) hereof) shall be deemed to have been
issued in full satisfaction of all rights pertaining to such Company ADSs.
(f) Neither Buyer nor the Company shall be liable to any
holder of ADRs evidencing Company ADSs for any such shares of Buyer Common
Stock (or dividends or distributions with respect to such shares) or cash
delivered to a public official in compliance with any abandoned property,
escheat or similar law.
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(g) From the Effective Time, each ADR that, prior to the
Effective Time, represented Company ADSs shall cease to be of any value and
shall not entitle the holders thereof to any rights whatsoever, except to
evidence the right to receive the allotment of shares of Buyer Common Stock
equal to the Ordinary Allotment Ratio multiplied by the number of Company
Ordinary Shares underlying the Company ADSs evidenced by such ADR. No
interest shall be paid with respect to the allotments of shares of Buyer
Common Stock pursuant to the Acquisition, regardless of when delivered to the
holders of ADRs.
(h) Any portion of the Allotment Fund that remains
unclaimed by the former ADR holders of the Company for one (1) year after the
Effective Time shall be delivered by the Allotment Agent to Buyer, upon
demand of Buyer, and any former ADR holders of the Company shall thereafter
look only to Buyer for satisfaction of their claim for an allotment of shares
of Buyer Common Stock in respect of Company ADSs pursuant to the terms of
this Section 2.2.
(i) Any person claiming an ADR to have been lost, stolen or
destroyed shall comply with the applicable terms of the Deposit Agreements.
2.3. EXCHANGE OF SHARE OPTIONS.
(a) As soon as practicable after the Effective Time, but no
later than two business days after the Effective Time, Buyer shall inform in
writing the holders of Company Options of their rights pursuant to the Share
Option Plan and the agreements evidencing the grants of such Company Options
shall continue in effect on the same terms and conditions (subject to the
adjustments required by Section 1.1(d) hereof), after giving effect to the
Acquisition and the assumption by Buyer as set forth herein.
(b) Buyer shall take all corporate action necessary to
reserve for issuance a sufficient number of shares of Buyer Common Stock for
delivery upon exercise of the Company Options assumed in accordance with
Section 1.1(d) hereof and to file all documents required to be filed to cause
the shares of Buyer Common Stock issuable upon exercise of the Buyer Options
to be listed on the Nasdaq National Market. Promptly after the Effective
Time, but no later than one (1) day after the Effective Date, Buyer shall
file a registration statement with the U.S. Securities and Exchange
Commission (the "SEC") on Form S-8 (or any successor form) or another
appropriate form with respect to shares of Buyer Common Stock subject to such
options and Buyer shall use all reasonable efforts to maintain the
effectiveness of such registration statement or registration statements (and
maintain the current status of the prospectuses contained therein) for so
long as any such options remain outstanding.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Buyer that the statements
contained in this Article III are true and correct, except as set forth in
the letter delivered by the Company to Buyer on the date hereof (the "COMPANY
DISCLOSURE LETTER") (which Company Disclosure Letter sets forth the
exceptions to the representations and warranties contained in this Article
III). The Company Disclosure Letter shall be arranged in sections
corresponding to the Sections in this Article III to which the exceptions
apply and the disclosure in any such section shall qualify the other Sections
in this Article III to the extent that it is reasonably apparent from a
reading of such disclosure that it also qualifies or applies to such other
Sections; PROVIDED that the Company shall use commercially reasonable
efforts, including specific cross-references to the Sections, to identify the
other Sections to which such disclosure applies.
3.1. ORGANIZATION AND QUALIFICATION. Each of the Company and its
Subsidiaries (as defined below) is a company (or similar entity with
corporate characteristics including limited liability of shareholders) duly
organized, validly existing, duly registered and, if applicable, in good
standing under the laws of the jurisdiction of its organization and each such
entity has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now being conducted,
except where any failure would not reasonably be expected to have a Company
Material Adverse Effect (as defined below). Each of the Company and its
Subsidiaries is duly qualified or licensed to carry on its business as it is
now being conducted, and is qualified to conduct business, in each
jurisdiction where the character of its properties owned or leased or the
nature of its activities makes such qualification necessary, except for
failures to be so qualified that would not, individually or in the aggregate,
have, or would not reasonably be expected to have, a Company Material Adverse
Effect. Neither the Company nor any of its Subsidiaries is in violation of
any of the provisions of its Memorandum and Articles of Association,
Certificate of Incorporation or other applicable charter document (any such
document of any business entity hereinafter referred to as its "CHARTER
DOCUMENT") or its Memorandum of Association, ByLaws, or other applicable
governing document (any such documents of any business entity hereinafter
referred to as its "GOVERNING DOCUMENT"). The Company has made available to
Buyer accurate and complete copies of the respective Charter Documents and
Governing Documents, as currently in effect, of each of the Company and its
Subsidiaries. As used in this Agreement, the term "COMPANY MATERIAL ADVERSE
EFFECT" means any change, effect, event or condition that (i) has a material
adverse effect on the business, results of operations or financial condition
of the Company and its Subsidiaries, taken as a whole (other than any such
change, effect, event or condition that results or arises from: (A) the
announcement of this Agreement or the transactions contemplated hereby and
the consequences of such announcement, to the extent directly related
thereto; (B) changes or conditions effecting the industry in which the
Company markets its products and services generally, except to the extent
such changes or conditions disproportionately affect the Company and its
Subsidiaries, taken as a whole; (C) changes in general economic, regulatory
or political conditions, except to the extent
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such changes or conditions disproportionately affect the Company and its
Subsidiaries, taken as a whole; or (D) any action taken by Buyer or any of
its directors, officers, employees, agents or affiliates; and PROVIDED that,
a failure by the Company to meet the revenue or earnings predictions of
equity analysts as reflected in the First Call consensus estimate or any
other revenue or earnings predictions or expectations for any period ending
on or after the date of this Agreement shall not, in and of itself, be deemed
to constitute a Company Material Adverse Effect), or (ii) prevents or
materially delays the Company's ability to consummate the transactions
contemplated hereby. As used in this Agreement, the term "SUBSIDIARY" when
used with respect to any party means any corporation or other organization,
whether incorporated or unincorporated, of which such party directly or
indirectly owns or controls at least a majority of the securities or other
interests having by their terms ordinary voting power to elect a majority of
the board of directors or others performing similar functions.
3.2. CAPITAL STOCK OF SUBSIDIARIES. Neither the Company nor any of
its Subsidiaries owns, controls or holds with the power to vote, directly or
indirectly, of record, beneficially or otherwise, any share capital, capital
stock or any equity or ownership interest in any company, corporation,
partnership, association, joint venture, business, trust or other entity,
except for the Subsidiaries described in the Company SEC Reports (as defined
in Section 3.6(a) hereof) or as listed in Section 3.2 of the Company
Disclosure Letter, and except for ownership of securities in any publicly
traded company held for investment by the Company or any of its Subsidiaries
and comprising less than five percent of the outstanding stock of such
company. Except as set forth in Section 3.2 of the Company Disclosure Letter,
the Company is directly or indirectly the registered, record and beneficial
owner of all of the outstanding share capital or shares of capital stock (or
other ownership interests having by their terms ordinary voting power to
elect a majority of directors or others performing similar functions with
respect to such Subsidiary) of each of its Subsidiaries, there are no proxies
with respect to such shares, and no equity securities of any of such
Subsidiaries are or may be required to be issued by reason of any options,
warrants, scrip, rights to subscribe for, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into or
exchangeable for, share capital or shares of any capital stock of any such
Subsidiary, and there are no contracts, commitments, understandings or
arrangements by which the Company or any such Subsidiary is bound to issue,
transfer or sell any share capital or shares of such capital stock or
securities convertible into or exchangeable for such shares. Other than as
set forth in Section 3.2 of the Company Disclosure Letter, all of such shares
so owned by the Company are validly issued, fully paid and nonassessable and
are owned by it free and clear of any claim, lien, pledge, security interest
or other encumbrance of any kind (collectively "LIENS") with respect thereto.
3.3. CAPITALIZATION. The authorized share capital of the Company is
US $187,500 divided into 75,000,000 Ordinary Shares of $0.0025 each, and
IRL30,000 divided into 30,000 Deferred Shares of IRL1.00 each. As of the
close of business on May 31, 1999 (the "COMPANY MEASUREMENT DATE"), (a)
39,194,170 Company Ordinary Shares were issued and outstanding, (b) 30,000
Company Deferred Shares were issued and outstanding, (c) the Company had no
treasury shares within the meaning of Section 209 of the Irish Companies Act,
1990,
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(d) 8,322,969 Company Ordinary Shares were reserved for issuance under the
Share Option Plan and the ESPP, (e) Company Options had been granted and
remain outstanding under the Share Option Plan to purchase 7,023,719 Company
Ordinary Shares in the aggregate, and (f) except for the Company Options and
rights to the issuance of 367,954 Company Ordinary Shares in the aggregate
under the ESPP, there are no outstanding Rights (defined below). Since the
Company Measurement Date, no additional shares in the Company have been
issued, except pursuant to the exercise of Company Options and the ESPP and
no Rights have been granted. Except as described in the preceding sentence,
the Company has no outstanding bonds, debentures, notes or other securities
or obligations the holders of which have the right to vote or which are
convertible into or exercisable for securities having the right to vote on
any matter on which any shareholder of the Company has a right to vote. All
issued and outstanding Company Ordinary Shares are duly authorized, validly
issued, fully paid, nonassessable and free of preemptive rights. There are
not at the date of this Agreement any existing options, warrants, calls,
subscriptions, convertible securities or other rights which obligate the
Company or any of its Subsidiaries to issue, exchange, transfer or sell any
shares in the capital of the Company or any of its Subsidiaries other than
Company Ordinary Shares issuable pursuant to Company Options and the ESPP, or
awards granted pursuant thereto (collectively, "RIGHTS"). As of the Company
Measurement Date, there were no outstanding contractual obligations of the
Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire
any shares in the capital of the Company or any of its Subsidiaries. As of
the Company Measurement Date, there were no outstanding contractual
obligations of the Company to vote or to dispose of any shares in the capital
of any of its Subsidiaries.
3.4. AUTHORITY RELATIVE TO THIS AGREEMENT. The Company has the
requisite corporate power and authority to execute and deliver, and perform
its obligations under, this Agreement and the Company Option Agreement,
subject to obtaining the necessary approvals of its shareholders and of the
High Court as referred to in Section 3.5(b)(i)(B) hereof, under applicable
law. The execution and delivery of this Agreement and the Company Option
Agreement and the consummation of the Scheme and other transactions
contemplated hereby and thereby have been duly and validly authorized by the
Board of Directors of the Company and no other corporate proceedings on the
part of the Company are necessary to authorize this Agreement or the Company
Option Agreement or to consummate the Scheme or other transactions
contemplated hereby and thereby (other than approvals by the Company's
shareholders required by applicable law, and the making of the Final Court
Order). This Agreement and the Company Option Agreement have been duly and
validly executed and delivered by the Company and, assuming the due
authorization, execution and delivery hereof by Buyer, each constitutes a
valid and binding agreement of the Company, enforceable against the Company
in accordance with its terms, except to the extent that its enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting the enforcement of creditors rights
generally or by general equitable principles.
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3.5. NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) Assuming that all filings, permits, authorizations,
consents and approvals or waivers thereof have been duly made or obtained as
contemplated by Section 3.5(b) hereof, neither the execution and delivery of
this Agreement or the Company Option Agreement by the Company nor the
consummation of the Scheme or other transactions contemplated hereby nor
compliance by the Company with any of the provisions hereof will (i) violate,
conflict with, or result in a breach of any provision of, or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination or suspension of,
or accelerate the performance required by, or result in a right of
termination or acceleration under, or result in the creation of any Lien upon
any of the properties or assets of the Company or any of its Subsidiaries
under, any of the terms, conditions or provisions of (x) their respective
Charter Documents or Governing Documents, (y) any note, bond, charge, lien,
pledge, mortgage, indenture or deed of trust to which the Company or any such
Subsidiary is a party or to which they or any of their respective properties
or assets may be subject, or (z) any license, lease, agreement or other
instrument or obligation to which the Company or any such Subsidiary is a
party or to which they or any of their respective properties or assets may be
subject, or (ii) violate any judgment, ruling, order, writ, injunction,
decree, statute, rule or regulation applicable to the Company or any of its
Subsidiaries or any of their respective properties or assets, except, in the
case of clauses (i) (y) and (z) and (ii) above, for such violations,
conflicts, breaches, defaults, terminations, suspensions, accelerations,
rights of termination or acceleration or creations of liens, security
interests, charges or encumbrances which would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.
(b) No filing or registration with or notification to and
no permit, authorization, consent or approval of any court, commission,
governmental body, regulatory authority, agency or tribunal wherever located
(a "GOVERNMENTAL ENTITY") is required to be obtained, made or given by the
Company in connection with the execution and delivery of this Agreement or
the Company Option Agreement or the consummation by the Company of the Scheme
or other transactions contemplated hereby except (i) (A) the making of the
Order by the High Court pursuant to Sections 201(1) of the Companies Act and
the making of the Final Court Order or such other orders or judgments as may
be required under Irish law, (B) the delivery and, to the extent applicable,
registration of the Final Court Order or such other orders or judgments as
may be required under Irish law, and the minute required by Section 75 of the
Companies Act, to the Registrar of Companies in Dublin, Ireland, (C) in
connection with the applicable requirements of the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR ACT"), (D) in
connection with the applicable requirements of the Irish Mergers, Take-overs
and Monopolies (Control) Xxx, 0000, as amended (the "IRISH CONTROL ACT"), (E)
in connection with the applicable requirements of the Australian Foreign
Acquisitions and Takeovers Act (the "AUSTRALIAN TAKEOVERS ACT"), (F) in
connection with the applicable requirements of the Investment Canada Act, (G)
in connection with the applicable requirements of the Competition Act
(Canada), (H) the filing of the Proxy Statement (as defined in Section 6.2
below) with the SEC in accordance with the Securities Exchange Act of 1934,
as amended, and the rules and
-11-
regulations promulgated thereunder (the "EXCHANGE ACT"), or (I) such
consents, approvals, orders, authorizations, registrations, declarations and
filings as may be required under applicable state securities laws and the
laws of any country other than the United States and Ireland, or (ii) where
the failure to obtain any such consents, approvals, authorizations or
permits, or to make such filings or notifications, would not, individually or
in the aggregate, reasonably be expected to have a Company Material Adverse
Effect.
3.6. COMMISSION FILINGS; FINANCIAL STATEMENTS.
(a) The Company has filed all forms, reports, schedules,
statements and other documents required to be filed by it since January 1,
1996 to the date hereof (collectively, as supplemented and amended since the
time of filing, the "COMPANY SEC REPORTS") with the SEC. The Company SEC
Reports (i) were prepared in all material respects with all applicable
requirements of the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (the "SECURITIES ACT") and the Exchange
Act, as the case may be, and (ii) did not at the time they were filed 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. The representation in clause (ii) of the preceding sentence does
not apply to any misstatement or omission in any Company SEC Report filed
prior to the date of this Agreement which was superseded by a subsequent
Company SEC Report filed prior to the date of this Agreement. No Subsidiary
of the Company is required to file any report, form or other document with
the SEC.
(b) The audited consolidated financial statements and
unaudited consolidated interim financial statements of the Company and its
Subsidiaries included or incorporated by reference in such Company SEC
Reports (collectively, the "FINANCIAL STATEMENTS") have been prepared in
accordance with United States generally accepted accounting principles
applied on a consistent basis during the periods involved (except as may be
otherwise indicated in the notes thereto) and present fairly, in all material
respects, the financial position and results of operations and cash flows of
the Company and its Subsidiaries on a consolidated basis at the respective
dates and for the respective periods indicated (except, in the case of all
such financial statements that are interim financial statements, for normal
year-end adjustments).
(c) Except as set forth in the Company SEC Reports or in
Section 3.6(c) of the Company Disclosure Letter, neither the Company nor any
of its Subsidiaries has any liabilities or obligations of any nature, whether
absolute, accrued, unmatured, contingent or otherwise whether due or to
become due, known or unknown, except (i) the liabilities recorded on the
Company's consolidated balance sheet at March 31, 1999 (the "BALANCE SHEET")
included in the financial statements referred in Section 3.6(a) hereof and
the notes thereto, (ii) liabilities or obligations incurred since March 31,
1999 (whether or not incurred in the ordinary course of business and
consistent with past practice) that would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect,
or (iii) liabilities that would not be
-12-
required by United States generally accepted accounting principles to be
disclosed in financial statements or in the notes thereto.
3.7. ABSENCE OF CHANGES OR EVENTS. Except as set forth in
Section 3.7 of the Company Disclosure Letter or in the Company's SEC Reports,
since March 31, 1999 through the date of this Agreement, the Company and its
Subsidiaries have not incurred any liability or obligation that has resulted
or would reasonably be expected to result in a Company Material Adverse
Effect, and there has not been any change in the business, financial
condition or results of operations of the Company or any of its Subsidiaries
which has had, or would reasonably be expected to have, individually or in
the aggregate, a Company Material Adverse Effect, and the Company and its
Subsidiaries have conducted their respective businesses in the ordinary
course consistent with their past practices.
3.8. LITIGATION. Except as disclosed in the Company SEC Reports
or as set forth in Section 3.8 of the Company Disclosure Letter, there is no
(i) claim, action, suit or proceeding pending or, to the Knowledge of the
Company or any of its Subsidiaries, threatened against or relating to the
Company or any of its Subsidiaries before any Governmental Entity, or (ii)
outstanding judgment, order, writ, injunction or decree (collectively,
"ORDERS"), or application, request or motion therefor, of any Governmental
Entity in a proceeding to which the Company, any Subsidiary of the Company or
any of their respective assets was or is a party except actions, suits,
proceedings or Orders that, individually or in the aggregate, has had or
would reasonably be expected to have a Company Material Adverse Effect, and
neither the Company nor any Subsidiary is in default in any material respect
with respect to any such Order.
3.9. TITLE TO PROPERTIES. The Company does not own any real
property. The Company has heretofore made available to Buyer correct and
complete copies of all material leases, subleases and other agreements
(collectively, the "REAL PROPERTY LEASES") under which the Company or any of
its Subsidiaries uses or occupies or has the right to use or occupy, now or
in the future, any real property or facility (the "LEASED REAL PROPERTY"),
including without limitation all modifications, amendments and supplements
thereto. Except in each case where the failure would not, individually or in
the aggregate, reasonably be expected to have a Company Material Adverse
Effect or except as otherwise set forth in Section 3.9 of the Company
Disclosure Letter, (i) the Company or one of its Subsidiaries has a valid
leasehold interest in each parcel of Leased Real Property free and clear of
all Liens except permitted liens and each Real Property Lease is in full
force and effect, (ii) all rent and other sums and charges due and payable by
the Company or its Subsidiaries as tenants thereunder are current in all
material respects, (iii) no termination event or condition or uncured default
of a material nature on the part of the Company or any such Subsidiary exists
under any Real Property Lease, (iv) the Company or one of its Subsidiaries is
in actual possession of each Leased Real Property and is entitled to quiet
enjoyment thereof in accordance with the terms of the applicable Real
Property Lease, and (v) the Company and its Subsidiaries own outright all of
the personal property (except for leased property or assets for which it has
a valid and enforceable right to use) which is reflected on the Balance
Sheet, except
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for property since sold or otherwise disposed of in the ordinary course of
business and consistent with past practice.
3.10. CERTAIN CONTRACTS. Neither the Company nor any of its
Subsidiaries has breached, or received in writing any claim or notice that it
has breached, any of the terms or conditions of (i) any agreement, contract
or commitment required to be filed as an exhibit to the Company SEC Reports
(including any agreements, contracts or commitments entered into since March
31, 1999 that are required to be filed by the Company with the SEC in any
report covering the period ending June 30, 1999), (ii) any agreements,
contracts or commitments with customers of the Company pursuant to which the
Company recognized revenues in excess of $3,000,000 for the twelve-month
period ended May 31, 1999, or (iii) any agreements, contracts or commitments
containing covenants that limit the ability of the Company or any of its
Subsidiaries to compete in any line of business or with any Person (as
defined in Section 9.5 hereof), or that include any exclusivity provision or
involve any restriction on the geographic area in which the Company or any of
its Subsidiaries may carry on its business (collectively, "COMPANY MATERIAL
CONTRACTS"), in such a manner as, individually or in the aggregate, has had
or would reasonably be expected to have a Company Material Adverse Effect.
Section 3.10 of the Company Disclosure Letter lists each Company Material
Contract described in clauses (ii) and (iii) of the preceding sentence. Each
Company Material Contract that has not expired by its terms is in full force
and effect and is the legal, valid and binding obligation of the Company
and/or its Subsidiaries, enforceable against them in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights and remedies
generally and subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity), except where the failure of such Contract to be in full force and
effect or to be legal, valid, binding or enforceable against the Company
and/or its Subsidiaries has not had and would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.
Except as set forth in Section 3.10 of the Company Disclosure Letter, no
consent, approval, waiver or authorization of, or notice to any Person is
needed in order that each such Company Material Contract shall continue in
full force and effect in accordance with its terms without penalty,
acceleration or rights of early termination by reason of the consummation of
the Scheme and the other transactions contemplated by this Agreement.
3.11. COMPLIANCE WITH LAW. All activities of the Company and its
Subsidiaries have been, and are currently being, conducted in compliance in
all material respects with all applicable Irish, Canadian, Australian, United
States federal, state and local and other foreign laws, ordinances,
regulations, interpretations, judgments, decrees, injunctions, permits,
licenses, certificates, governmental requirements, Orders and other similar
items of any court or other Governmental Entity or any nongovernmental
self-regulatory agency, and no notice has been received by the Company of any
claims filed against the Company alleging a violation of any such laws,
regulations or other requirements which would be required to be disclosed in
the Company SEC Reports. The Company and its Subsidiaries have all permits,
licenses and franchises from Governmental Entities required to conduct their
businesses as now being
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conducted, except for such permits, licenses and franchises the absence of
which has not had and would not, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect.
3.12. INTELLECTUAL PROPERTY RIGHTS.
(a) The Company and its Subsidiaries own, or are licensed
or otherwise possess legally enforceable rights to use, all patents,
trademarks, trade names, service marks and copyrights, any applications for
and registrations of such patents, trademarks, trade names, service marks and
copyrights, and all processes, formulae, methods, schematics, technology,
know-how, computer software programs or applications and tangible or
intangible proprietary information or material that are necessary to conduct
the business of the Company and its Subsidiaries as currently conducted, or
planned to be conducted, the absence of which would be reasonably likely to
have a Company Material Adverse Effect (the "COMPANY INTELLECTUAL PROPERTY
RIGHTS"). The Company and its Subsidiaries have taken all reasonably
necessary action to protect the Company Intellectual Property Rights,
including without limitation, use of reasonable secrecy measures to protect
the trade secrets included in the Company Intellectual Property Rights.
(b) The execution and delivery of this Agreement and
consummation of the transactions contemplated hereby will not result in the
breach of, or create on behalf of any third party the right to terminate or
modify, any license, sublicense or other agreement relating to the Company
Intellectual Property Rights, or any material licenses, sublicenses or other
agreements as to which the Company or any of its Subsidiaries is a party and
pursuant to which the Company or any of its Subsidiaries is authorized to use
any third party patents, trademarks, copyrights or trade secrets ("COMPANY
THIRD PARTY INTELLECTUAL PROPERTY RIGHTS"), including software that is used
in the manufacture of, incorporated in, or forms a part of any product sold
by or expected to be sold by the Company or any of its Subsidiaries, the
breach of which would, individually or in the aggregate, be reasonably likely
to have a Company Material Adverse Effect.
(c) All patents, registered trademarks, service marks and
copyrights which are held by the Company or any of its Subsidiaries, the loss
or invalidity of which would reasonably be expected to cause a Company
Material Adverse Effect, are valid and subsisting. The Company (i) has not
been sued in any suit, action or proceeding, or received in writing any claim
or notice, which involves a claim of infringement of any patents, trademarks,
service marks, copyrights or violation of any trade secret or other
proprietary right of any third party; and (ii) has no Knowledge that the
manufacturing, marketing, licensing or sale of its products infringes any
patent, trademark, service xxxx, copyright, trade secret or other proprietary
right of any third party, which infringement in the cases of clause (i) and
(ii) would, individually or in the aggregate, reasonably be expected to have
a Company Material Adverse Effect.
(d) Except as set forth in the Company SEC Reports, to the
Knowledge of the Company, the software products offered by the Company, and
all software and hardware used by
-15-
the Company or any of its Subsidiaries in the ordinary course of business, is
Year 2000 Ready, except to the extent any such failure to be Year 2000 Ready
would not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect. As used herein, "YEAR 2000 READY" shall mean
the ability of the software products offered by the Company and the hardware
and software used by the Company or its Subsidiaries to provide the following
functions:
(i) consistently handle date information before,
during and after January 1, 2000, including but not limited to
accepting date input, providing date output, and performing
calculations on dates or portions of dates;
(ii) function accurately in accordance with all
documentation without interruption before, during and after January 1,
2000, without any change of operations associated with the advent of
the new century;
(iii) respond to two-digit date input in a way that
resolves any ambiguity as to century in a disclosed, defined and
predetermined manner; and
(iv) store and provide output of date information in
ways that are unambiguous as to century.
3.13. TAXES.
(a) "TAX" or "TAXES" shall mean all Irish, Canadian,
Australian or United States federal, state, provincial or local taxes and any
other applicable duties, levies, fees, charges and assessments that are in
the nature of a tax, including income, gross receipts, property, sales, use,
license, excise, franchise, ad valorem, value-added, transfer, social
security payments, and health taxes and any deductibles relating to wages,
salaries and benefits and payments to subcontractors for any jurisdiction in
which the Company or any of its Subsidiaries does business (to the extent
required under applicable Tax law), together with all interest, penalties and
additions imposed with respect to such amounts.
(b) Except as could not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect:
(i) the Company and its Subsidiaries have prepared
and timely filed or will timely file with the appropriate governmental
agencies all franchise, income and all other material Tax returns and
reports required to be filed on or before the Effective Time
(collectively "RETURNS"), taking into account any extension of time to
file granted to or obtained on behalf of the Company and/or its
Subsidiaries;
(ii) all Taxes of the Company and its Subsidiaries
shown on such Returns or otherwise known by the Company to be due or
payable have been timely paid
-16-
in full to the proper authorities, other than such Taxes as are being
contested in good faith by appropriate proceedings or which are
adequately reserved for in accordance with generally accepted
accounting principles;
(iii) all deficiencies resulting from Tax
examinations of income, sales and franchise and all other material
Returns filed by the Company and its Subsidiaries in any jurisdiction
in which such Returns are required to be so filed have either been paid
or are being contested in good faith by appropriate proceedings;
(iv) no deficiency has been asserted or assessed
against the Company or any of its Subsidiaries which has not been
satisfied or otherwise resolved, and no examination of the Company or
any of its Subsidiaries is pending or, to the Knowledge of the Company,
threatened for any material amount of Tax by any taxing authority;
(v) no extension of the period for assessment or
collection of any material Tax is currently in effect and no extension
of time within which to file any material Return has been requested,
which Return has not since been filed;
(vi) all Returns filed by the Company and its
Subsidiaries are correct and complete or adequate reserves have been
established with respect to any additional Taxes that may be due (or
may become due) as a result of such Returns not being correct or
complete;
(vii) to the Knowledge of the Company, no Tax liens
have been filed with respect to any Taxes;
(viii) neither the Company nor any of its
Subsidiaries have made, and none will make, any voluntary adjustment by
reason of a change in their accounting methods for any pre-Scheme
period, or any election, that would affect the taxable income or
deductions of the Company or any of its Subsidiaries for any period
ending after the Effective Date;
(ix) the Company and its Subsidiaries have made
timely payments of the Taxes required to be deducted and withheld from
the wages paid to their employees;
(x) the Company and its Subsidiaries are not
parties to any Tax sharing or Tax matters agreement;
(xi) neither the Company nor any of its
Subsidiaries is liable for any recapture or clawback of any relief or
exemption from Tax howsoever arising (including the entering into and
the consummation of the Acquisition), and whether by virtue of any act
or omission by the Company or any of its Subsidiaries or by any other
person or persons; and
-17-
(xii) neither the Company nor any of its Subsidiaries
is liable to be assessed for or made accountable for any Tax for which
any other person or persons may be liable to be assessed or made
accountable whether by virtue of the entering into or the consummation
of the Acquisition or by virtue of any act or acts done by or which may
be done by or any circumstance or circumstances involving or which may
involve any other person or persons.
(c) The Company and its Subsidiaries are not parties to any
agreement, contract, or arrangement that would result, separately or in the
aggregate, in the payment of any "excess parachute payments" within the
meaning of Section 280G of the Code by reason of the Acquisition.
(d) Section 3.13(d) of the Company Disclosure Letter lists
each material tax incentive to which the Company is entitled on the date
hereof under the laws of the Republic of Ireland, the period for which such
tax incentive applies, and the nature of such tax incentive. The Company has
complied in all material respects with all requirements of Irish law to be
entitled to claim such tax incentives.
3.14. EMPLOYEES.
(a) Neither the Company nor any of its Subsidiaries is a
party to any collective bargaining agreement, arrangement or labor contract
with a labor union or labor organization, whether formal or otherwise. There
is no labor strike, slowdown or stoppage pending (or, to the Knowledge of the
Company or any of its Subsidiaries, any unfair labor practice complaints or
labor disturbances which are pending or threatened) against the Company or
any of its Subsidiaries, which would, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect.
(b) Within one year preceding the date of this Agreement,
neither the Company nor any of its Subsidiaries has given notice of any
redundancies to the Irish Minister for Enterprise, Trade and Employment, or
started consultations with any trade union, under part II of the Irish
Protection of Employment Act, 1977 or regulation 7 of the European
Communities (Safeguarding of Employee's Rights on the Transfer of
Undertakings) Regulations, 1980.
3.15. EMPLOYEE BENEFIT PLANS.
(a) The Company Disclosure Letter, under the caption
referencing this Section 3.15(a), lists all material retirement and pension
plans, schemes, practices or arrangements of any kind, whether written or
oral, maintained by the Company or its Subsidiaries (now or in the past) or
to which the Company or its Subsidiaries makes or has made contributions
(other than required solely by statute or regulation) (collectively the
"PENSION SCHEMES"). The Company Disclosure Letter, under the caption
referencing this Section 3.17(a), lists all material incentive compensation,
deferred compensation, profit sharing, stock purchase, stock option, life,
health,
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disability or other insurance plans, severance or separation plans and any
other employee benefit plans or practices or arrangements of any kind,
whether written or oral, maintained by the Company or its Subsidiaries (now
or in the past) or to which the Company or its Subsidiaries makes or has made
contributions (other than required solely by statute or regulation)
(collectively the "EMPLOYEE BENEFIT PLANS"). Other than the Pension Schemes
and Employee Benefit Plans, there are no material arrangements (other than
required solely by statute or regulation) to which the Company or its
Subsidiaries contributes, or has contributed, or may become liable to
contribute under which benefits of any kind are payable to or in respect of
the employees of the Company or its Subsidiaries on retirement, death, or in
the event of disability or sickness, termination of employment, or in other
similar circumstances.
(b) The Company has made available to Buyer true and
correct copies (as amended through the date hereof) of all documents
constituting or relating to all Pension Schemes and Employee Benefit Plans.
(c) None of the benefits under a Pension Scheme or Employee
Benefit Plan has been materially augmented since March 31, 1999, nor will the
Company or its Subsidiaries make any commitments to augment materially any
such benefits. Except as described in the Company Disclosure Letter under the
caption referencing this Section 3.15(c), no condition, agreement or plan
provision or, with respect to the jurisdictions in which the Company's
employees are located, rule of law, statute or common law doctrine of
"acquired rights" materially limits the right of the Company or its
Subsidiaries to amend, cut back or terminate any Pension Scheme or Employee
Benefit Plan, nor will the transaction contemplated by this Agreement
materially limit the right of the Company, its Subsidiaries, or the Buyer to
amend, cut back or terminate any Pension Scheme or Employee Benefit Plan.
(d) The Company and each of its Subsidiaries has not
received any notice or directive that it has not complied with all material
provisions of the Pension Schemes applicable to it and has no Knowledge of
any reason why the tax exempt (or favored) status, if any, of any of the
Pension Schemes or Employee Benefit Plans might be withdrawn.
(e) There are not in respect of any Pension Scheme or
Employee Benefit Plan or the benefits thereunder any actions, suits or claims
pending or, to the Knowledge of the Company or any of its Subsidiaries,
threatened (other than routine claims for benefits or such actions, suits or
claims that would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect).
(f) Where applicable, except where any failure would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect, (i) all contributions to each Pension Scheme have at
all times been made in accordance with the recommendations of the actuary to
that Pension Scheme, (ii) a proper accrual has been made for those
contributions which are due to each Pension Scheme or Employee Benefit Plan
on or before the Effective Date, (iii) each of the Pension Schemes is fully
funded on an accrued
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benefits basis, and (iv) the contributions and expenses payable to the
Pension Schemes have been applied in accordance with the provisions thereof
and the trusts upon which they are to be held.
(g) With respect to any Pension Scheme or Employee Benefit
Plan that is subject to the United States Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), (i) there have been no prohibited
transactions, except those that would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect, and (ii)
neither the Company nor any of its Subsidiaries, directors, officers,
employees or other "fiduciaries," as such term is defined in Section 3(21) of
ERISA, have committed any breach of fiduciary responsibility imposed by ERISA
or any other applicable law with respect to the plans which would subject the
Company, Subsidiary, Buyer, or any of its directors, officers or employees to
any liability under ERISA or any applicable law, except any breach that would
not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect.
(h) The Company does not contribute (and has not ever
contributed) to any multiemployer plan, as defined in Section 3(37) of ERISA.
Neither the Company nor its Subsidiaries has any potential liability for
death or medical benefits after separation from employment other than (i)
death benefits under the employee benefit plans or programs set forth under
the caption referencing this Section 3.15 in the Company Disclosure Letter
and (ii) health care continuation benefits (COBRA benefits) described in
Section 601 et. seq. of ERISA or other applicable state law.
3.16. ENVIRONMENTAL MATTERS.
(a) The Company and its Subsidiaries (i) have been in
compliance and are presently complying with all applicable health, safety and
Environmental Laws, and (ii) have obtained all material permits, licenses and
authorizations which are required under all applicable health, safety and
Environmental Laws and are in compliance in all material respects with such
permits, licenses and authorizations, except for such failures to comply or
to obtain permits, licenses or authorizations that would not, individually or
in the aggregate, reasonably be expected to have a Company Material Adverse
Effect. Except as disclosed in the Company Current SEC Filings or as set
forth in Section 3.16 of the Company Disclosure Letter, to the Knowledge of
the Company or any of its Subsidiaries, (i) none of the Leased Real Property
(including without limitation soils and surface and ground waters) are
contaminated with any Hazardous Materials in quantities which require
investigation or remediation under Environmental Laws, (ii) neither the
Company nor any of its Subsidiaries is liable for any off-site contamination,
and (iii) there is no environmental matter which could reasonably be expected
to expose the Company or any of its Subsidiaries to a claim to clean-up any
Hazardous Materials or otherwise to remedy any pollution or damage at any of
the properties utilized in the Company's business under any Environmental
Laws.
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(b) For purposes of this Agreement, the term (i)
"ENVIRONMENTAL LAWS" means all applicable Irish, Canadian, Australian, United
States federal, state, local and other foreign laws, rules, regulations,
codes, ordinances, orders, decrees, directives, permits, licenses and
judgments relating to pollution, contamination or protection of the
environment (including, without limitation, all applicable Irish, Canadian,
Australian, United States federal, state, local and other foreign laws,
rules, regulations, codes, ordinances, orders, decrees, directives, permits,
licenses and judgments relating to Hazardous Materials in effect as of the
date of this Agreement), and (ii) "HAZARDOUS MATERIALS" means any dangerous,
toxic or hazardous pollutant, contaminant, chemical, waste, material or
substance as defined in or governed by any Irish, Canadian, Australian,
United States federal, state, local or other foreign law, statute, code,
ordinance, regulation, rule or other requirement relating to such substance
or otherwise relating to the environment or human health or safety, including
without limitation any waste, material, substance, pollutant or contaminant
that might cause any injury to human health or safety or to the environment
or might subject the Company or any of its Subsidiaries to any imposition of
costs or liability under any Environmental Law.
3.17. FINDERS OR BROKERS. Except for Xxxxxx Xxxxxxx Xxxx Xxxxxx,
whose fees will be paid by the Company, none of the Company, the Subsidiaries
of the Company, the Board of Directors of the Company or any member of such
Board of Directors has employed any agent, investment banker, broker, finder
or intermediary in connection with the transactions contemplated hereby who
might be entitled to a fee or any commission in connection with the Scheme or
the other transactions contemplated hereby.
3.18. BOARD RECOMMENDATION. The Board of Directors of the Company
has, at a meeting of such Board duly held on June 18, 1999, approved and
adopted this Agreement, the Scheme, the Company Option Agreement and the
other transactions contemplated hereby, determined that the Scheme is fair to
the shareholders of the Company and recommended that the shareholders of the
Company approve the Scheme and the other transactions contemplated hereby,
and has not rescinded or modified in any respect any of such actions.
3.19. OPINION OF FINANCIAL ADVISOR. The Company has received the
opinion of Xxxxxx Xxxxxxx Xxxx Xxxxxx dated the date of this Agreement, to
the effect that, as of such date, the Ordinary Allotment Ratio is fair, from
a financial point of view, to the holders of Company Ordinary Shares.
3.20 TAX MATTERS. Neither the Company nor, to its Knowledge, any
of its affiliates has taken or agreed to take any action, or knows of any
circumstances, that (without regard to any action taken or agreed to be taken
by Buyer, or any of its affiliates) would prevent the business combination to
be effected by the Acquisition from constituting a transaction qualifying as
a reorganization within the meaning of Section 368 of the Code.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to the Company that the statements
contained in this Article IV are true and correct.
4.1. ORGANIZATION AND QUALIFICATION. Buyer is a corporation duly
organized, validly existing, duly registered and in good standing under the
laws of the State of Minnesota, with the corporate power and authority to
own, lease and operate its properties and to carry on its business as now
being conducted, except where any failure would not have a Buyer Material
Adverse Effect (as defined below). Buyer is duly qualified or licensed to
carry on its business as it is now being conducted, and is qualified to
conduct business, in each jurisdiction where the character of its properties
owned or leased or the nature of its activities makes such qualification
necessary, except for failures to be so qualified that would not,
individually or in the aggregate, have, or would not reasonably be expected
to have, a Buyer Material Adverse Effect. Buyer is not in violation of any of
the provisions of its Charter Document or its Governing Document. As used in
this Agreement, the term "BUYER MATERIAL ADVERSE EFFECT" means any change,
effect, event or condition that (i) has a material adverse effect on the
business, results of operations or financial condition of Buyer and its
Subsidiaries, taken as a whole (other than any such change, effect, event or
condition that results or arises from: (A) the announcement of this Agreement
or the transactions contemplated hereby and the consequences of such
announcement, to the extent directly related thereto; (B) changes or
conditions effecting the industry in which Buyer markets its products and
services generally, except to the extent such changes or conditions
disproportionately affect Buyer and its Subsidiaries, taken as a whole; (C)
changes in general economic, regulatory or political conditions, except to
the extent such changes or conditions disproportionately affect Buyer and its
Subsidiaries, taken as a whole; or (D) any action taken by the Company or any
of its directors, officers, employees, agents or affiliates; and PROVIDED
that, a failure by Buyer to meet the revenue or earnings predictions of
equity analysts as reflected in the First Call consensus estimate or any
other revenue or earnings predictions or expectations for any period ending
on or after the date of this Agreement shall not, in and of itself, be deemed
to constitute a Buyer Material Adverse Effect), or (ii) prevents or
materially delays Buyer's ability to consummate the transactions contemplated
hereby.
4.2. CAPITALIZATION. The authorized capital stock of Buyer
consists of 310,000,000 shares, divided into 300,000,000 shares of Buyer
Common Stock and 10,000,000 shares of Preferred Stock, no par value. As of
the close of business on June 18, 1999 (the "Buyer Measurement Date"), (a)
135,636,594 shares of Buyer Common Stock were issued and outstanding, (b) no
shares of Preferred Stock were issued and outstanding, (c) 25,400,846 shares
of Buyer Common Stock were reserved for issuance under the stock-based
benefit plans of the Buyer (the "BUYER STOCK PLANS"), (d) Buyer Options had
been granted and remain outstanding under the Buyer Stock Plans to purchase
12,932,216 shares of Buyer Common Stock in the aggregate, and (e) except for
the Buyer Options, rights to acquire shares of Buyer Common Stock
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under Buyer's Employee Stock Purchase Plan (the "BUYER ESPP") and rights to
acquire shares of Buyer Common Stock pursuant to the Second Amended and
Restated Rights Agreement, dated as of November 28, 1995, between Buyer and
Norwest Bank, Minnesota, National Association (the "BUYER SRP PLAN"), there
are no outstanding Buyer Rights (as defined below). Since the Buyer
Measurement Date, no additional shares of Buyer Common Stock have been issued
and are outstanding, except pursuant to the exercise of Buyer Options and the
Buyer ESPP, and no Buyer Rights have been granted (other than additional
Buyer SRP Rights issued upon the issuance of shares of Buyer Common Stock).
All issued and outstanding shares of Buyer Common Stock are duly authorized,
validly issued, fully paid, nonassessable and free of preemptive rights
created by the Minnesota Business Corporation Act or Buyer's Charter Document
or Governing Document. There are not at the date of this Agreement any
existing options, warrants, calls, subscriptions, convertible securities or
other rights which obligate Buyer or any of its Subsidiaries to issue,
exchange, transfer or sell any shares of capital stock of Buyer or any of its
Subsidiaries, other than shares of Buyer Common Stock issuable under the
Buyer Stock Plans and the Buyer ESPP, or awards granted pursuant thereto, and
other than Buyer SRP Rights issued upon the issuance of additional shares of
Buyer Common Stock (collectively, "BUYER RIGHTS"). As of the Buyer
Measurement Date, there were no outstanding contractual obligations of Buyer
or any of its Subsidiaries to repurchase, redeem or otherwise acquire any
shares of capital stock of Buyer or any of its Subsidiaries. As of the Buyer
Measurement Date, there were no outstanding contractual obligations of Buyer
to dispose of any shares of capital stock of any of its Subsidiaries.
4.3. AUTHORITY RELATIVE TO THIS AGREEMENT. Buyer has the
requisite corporate power and authority to execute and deliver, and to
perform its obligations under, this Agreement and the Company Option
Agreement, subject to obtaining the necessary approval of the High Court
referred to in Article V hereof, under applicable law. The execution and
delivery by Buyer of this Agreement and the Company Option Agreement, and the
consummation of the Scheme and the transactions contemplated hereby and
thereby have been duly and validly authorized by all necessary corporate
action on the part of Buyer. This Agreement and the Company Option Agreement
have been duly and validly executed and delivered by Buyer and, assuming the
due authorization, execution and delivery of this Agreement and the Company
Option Agreement by the Company, is a valid and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms, except to the extent
that its enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of
creditors rights generally or by general equitable principles. The shares of
Buyer Common Stock to be issued by Buyer and allotted pursuant to the
Acquisition, as well as the Buyer Options and the shares of Buyer Common
Stock to be issued upon exercise thereof: (i) have been duly authorized, and,
when issued in accordance with the terms of the Scheme and this Agreement,
will be validly issued, fully paid and nonassessable and will not be subject
to preemptive rights, (ii) will, when issued in accordance with the terms of
the Scheme and this Agreement, be registered or exempt from registration
under the Securities Act, and registered or exempt from registration under
applicable United States "Blue Sky" laws and (iii) will, when issued in
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accordance with the terms of the Scheme and this Agreement, be listed on the
Nasdaq National Market.
4.4. NO CONFLICTS; REQUIRED FILINGS AND CONSENTS.
(a) Neither the execution, delivery or performance of this
Agreement by Buyer, nor the consummation of the transactions contemplated
hereby, nor compliance by Buyer with any provision hereof will (i) conflict
with or result in a breach of any provision of the Charter Documents or
Governing Documents of Buyer, (ii) cause a default (or give rise to any right
of termination, cancellation or acceleration or loss of a material benefit
under, or result in the creation of any lien, charge or other encumbrance
upon any of the properties of Buyer under any of the terms, conditions or
provisions of any note, bond, mortgage or indenture, or any other material
instrument, obligation or agreement to which Buyer is a party or by which its
properties or assets may be bound or (iii) violate any law applicable to
Buyer or binding upon any of its properties, except for, in the case of
clauses (ii) and (iii), such defaults or violations which would not,
individually or in the aggregate, reasonably be expected to have a Buyer
Material Adverse Effect.
(b) No filing or registration with or notification to and
no permit, authorization, consent or approval of any Governmental Entity is
required to be obtained, made or given by Buyer in connection with the
execution and delivery of this Agreement or the consummation by Buyer of the
Scheme or other transactions contemplated hereby except (i) (A) the making of
the Order by the High Court pursuant to Section 201(1) of the Companies Act
and the making of the Final Court Order or such other orders or judgments as
may be required under Irish law, (B) the delivery and, to the extent
applicable, registration of the Final Court Order or such other orders or
judgments as may be required under Irish law, and the minute required by
Section 75 of the Companies Act, to the Registrar of Companies in Dublin,
Ireland, (C) in connection with the applicable requirements of the HSR Act,
(D) in connection with the applicable requirements of the Irish Control Act,
(E) in connection with the applicable requirements of the Australian
Takeovers Act, (F) in connection with the applicable requirements of the
Investment Canada Act, (G) in connection with the applicable requirements of
the Competition Act (Canada), (H) the issuance of a "no action" letter by the
SEC or the filing of a Registration Statement on Form S-4 with the SEC, in
accordance with the Securities Act, as further described in Section 6.3
hereof, or (I) such consents, approvals, orders, authorizations,
registrations, declarations and filings as may be required under applicable
state securities laws and the laws of any country other than the United
States and the Republic of Ireland, or (ii) where the failure to obtain any
such consents, approvals, authorizations or permits, or to make such filings
or notifications, would not, individually or in the aggregate, reasonably be
expected to have a Buyer Material Adverse Effect.
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4.5. COMMISSION FILINGS; FINANCIAL STATEMENTS.
(a) Buyer has filed all forms, reports, schedules,
statements and other documents required to be filed by it since October 31,
1996 to the date hereof (collectively, as supplemented and amended since the
time of filing, the "BUYER SEC REPORTS") with the SEC. The Buyer SEC Reports
(i) were prepared in all material respects with all applicable requirements
of the Securities Act and the Exchange Act, as the case may be, and (ii) did
not at the time they were filed 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. The representation
in clause (ii) of the preceding sentence does not apply to any misstatement
or omission in any Buyer SEC Report filed prior to the date of this Agreement
which was superseded by a subsequent Buyer SEC Report filed prior to the date
of this Agreement.
(b) The audited consolidated financial statements and
unaudited consolidated interim financial statements of Buyer and its
Subsidiaries included or incorporated by reference in such Buyer SEC Reports
have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods
involved (except as may otherwise be indicated in the notes thereto) and
present fairly, in all material respects, the financial position and results
of operations and cash flows of Buyer and its Subsidiaries on a consolidated
basis at the respective dates and for the respective periods indicated
(except, in the case of all such financial statements that are interim
financial statements, for normal year-end adjustments).
4.6. ABSENCE OF CHANGES OR EVENTS. Except as set forth in the
Buyer SEC Reports, since April 30, 1999 through the date of this Agreement,
Buyer and its Subsidiaries have not incurred any liability or obligation that
has resulted or would reasonably be expected to result in a Buyer Material
Adverse Effect, and there has not been any change in the business, financial
condition or results of operations of Buyer or any of its Subsidiaries which
has had, or is reasonably expected to have, individually or in the aggregate,
a Buyer Material Adverse Effect, and Buyer and its Subsidiaries have
conducted their respective businesses in the ordinary course consistent with
their past practices.
4.7. LITIGATION. Except as disclosed in the Buyer SEC Reports,
there is no (i) claim, action, suit or proceeding pending or, to the
Knowledge of Buyer, threatened against or relating to Buyer or any of its
Subsidiaries before any Governmental Entity, or (ii) outstanding Orders, or
application, request or motion therefor, of any Governmental Entity in a
proceeding to which Buyer, any Subsidiary of Buyer or any of their respective
assets was or is a party except actions, suits, proceedings or Orders that,
individually or in the aggregate, has had or would reasonably be expected to
have a Buyer Material Adverse Effect, and Buyer nor any Subsidiary is in
default in any material respect with respect to any such Order.
-25-
4.8. COMPLIANCE WITH LAW. All activities of Buyer have been, and
are currently being, conducted in compliance in all material respects with
all applicable United States federal, state and local and other foreign laws,
ordinances, regulations, interpretations, judgments, decrees, injunctions,
permits, licenses, certificates, governmental requirements, Orders and other
similar items of any court or other Governmental Entity or any
nongovernmental self-regulatory agency, and no notice has been received by
Buyer of any claims filed against Buyer alleging a violation of any such
laws, regulations or other requirements which would be required to be
disclosed in the Buyer SEC Reports. Buyer has all permits, licenses and
franchises from Governmental Entities required to conduct its business as now
being conducted, except for such permits, licenses and franchises the absence
of which would not, individually or in the aggregate, reasonably be expected
to have a Buyer Material Adverse Effect.
4.9. FINDERS OR BROKERS. Except for Credit Suisse First Boston,
whose fees will be paid by Buyer, none of Buyer, the Subsidiaries of Buyer,
the Board of Directors of Buyer or any member of such Board of Directors has
employed any agent, investment banker, broker, finder or intermediary in
connection with the transactions contemplated hereby who might be entitled to
a fee or any commission in connection with the Scheme or the other
transactions contemplated hereby.
4.10 TAX MATTERS. Neither Buyer nor, to its Knowledge, any of
its affiliates has taken or agreed to take any action, or knows of any
circumstances, that (without regard to any action taken or agreed to be taken
by the Company or any of its affiliates) would prevent the business
combination to be effected by the Acquisition from constituting a transaction
qualifying as a reorganization within the meaning of Section 368 of the Code.
ARTICLE V
REQUIRED APPROVALS
5.1. SHAREHOLDER AND COURT APPROVALS.
(a) Promptly following the date of this Agreement, the
Company undertakes to take appropriate action to prepare and issue
proceedings in the High Court requesting the High Court to order that a
meeting or meetings of the Company's shareholders be convened at the earliest
practicable date for the purpose of considering and approving (if they deem
fit) the Scheme (the "COURT MEETINGs"), which shall have been recommended for
approval by the Company's Board of Directors consistent with its fiduciary
obligations.
(b) For the purpose of considering and (if thought fit) of
approving the Scheme, the Company shall, as soon as practicable subsequent to
the issuance by the High Court of any directions in that respect, take the
necessary action to convene the Court Meetings, in accordance with the
directions of the High Court.
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(c) For the purpose of considering and (if thought fit)
adopting the Capital Reduction Resolution, the Company shall, take the
necessary action to convene an extraordinary general meeting of the
shareholders of the Company (the "Extraordinary Meeting") to take place
immediately following the Court Meetings.
(d) Subsequent to approval of the Scheme at the Court
Meetings (the "COURT MEETING APPROVAL"), by the requisite votes required
under Section 201(3) of the Companies Act ("SECTION 201") and the adoption of
the Capital Reduction Resolution by the shareholders at the Extraordinary
Meeting, the Company shall as soon as practicable, but not later than five
(5) days (plus such additional time as Buyer may require for what is provided
at paragraph (f) below) after such vote has been taken, present a petition or
petitions (the "PETITION") and issue a notice of motion for directions and
file any grounding affidavits required requesting the High Court to issue
directions in relation to the date to be fixed for the hearing of the
Petition and for an order of the High Court directing the manner of
advertisement of the hearing of the Petition and for such further and other
orders as the High Court deems fit. The Company shall as soon as practicable
thereafter proceed with the Petition for the purpose of obtaining the Final
Court Order.
(e) As soon as practicable subsequent to the Petition
hearing and the making of the Final Court Order and the satisfaction or
waiver of all Closing conditions set forth in Article VII hereof, the Company
and Buyer shall deliver a copy of the Final Court Order and the minute
required by Section 75 of the Companies Act to the Registrar of Companies in
Dublin, Ireland (the "FILING").
(f) Drafts, and final forms, of all documents to be filed
with the High Court, including those documents referred to in paragraphs (a)
to (d) of this Section 5.1, shall be reviewed and approved by Buyer and
Buyer's counsel prior to the filing thereof by the Company, such approval not
to be unreasonably withheld or delayed. The Company shall consult with Buyer
regarding the conduct of all court proceedings and shall advise Buyer's
counsel of the dates of any hearings.
(g) Buyer shall be represented in the High Court by
solicitors or counsel on the hearing of the Petition and any other hearings,
and shall give such undertakings, subject to the Scheme becoming effective,
as are required by the High Court for the purposes of assuring that Buyer
shall perform those acts which the Scheme, in the form attached hereto as
Exhibit A or in such other form as the Buyer and the Company shall mutually
agree, provides that it shall perform.
(h) In connection with the Court Meetings and the
Extraordinary Meeting, subject to Section 6.6(b) hereof, the Company will
duly solicit the vote of the shareholders of the Company for their respective
approvals, as set forth above in this Section 5.1, by mailing or
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delivering to each such shareholder the Proxy Statement referred to in
Section 6.2 hereof, after the High Court has ordered a meeting to be convened.
ARTICLE VI
COVENANTS AND AGREEMENTS
6.1. CONDUCT OF BUSINESS OF THE COMPANY PENDING THE ACQUISITION.
Except as contemplated by this Agreement or as expressly agreed to in writing
by Buyer, during the period from the date of this Agreement to the earlier of
(i) the termination of this Agreement or (ii) the Effective Time, each of the
Company and its Subsidiaries will conduct their respective operations
according to its ordinary course of business consistent with past practice,
and will use commercially reasonable efforts consistent with past practice
and policies to preserve intact its business organization, to keep available
the services of its officers and employees and to maintain satisfactory
relationships with suppliers, distributors, customers and others having
business relationships with it and will take no action which would materially
adversely affect the ability of the parties to consummate the transactions
contemplated by this Agreement. Without limiting the generality of the
foregoing, and except as otherwise expressly provided in this Agreement,
prior to the Effective Time, the Company will not nor will it permit any of
its Subsidiaries to, without the prior written consent of Buyer:
(a) amend any of its Charter Documents or Governing Documents;
(b) authorize for issuance, issue, sell, deliver, grant any
options or warrants for, or otherwise agree or commit to issue, sell,
deliver, pledge, dispose of or otherwise encumber any shares of any class of
its share capital or any securities convertible into shares of any class of
its share capital, except (i) pursuant to and in accordance with the terms of
Company Options outstanding on the Measurement Date or granted pursuant to
clause (iii) below, (ii) pursuant to the ESPP in accordance with the terms of
Section 1.1(d) hereof, or (iii) the grant of Company Options consistent with
past practices to new employees, which Company Options will represent, in the
aggregate, the right to acquire no more than 75,000 Company Ordinary Shares;
(c) except as set forth in Section 6.1(c) of the Company
Disclosure Letter, subdivide, cancel, consolidate or reclassify any shares of
its share capital, issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its share capital,
declare, set aside or pay any dividend or other distribution (whether in
cash, shares or property or any combination thereof) in respect of its share
capital or purchase, redeem or otherwise acquire any shares of its own share
capital or of any of its Subsidiaries, except as otherwise expressly provided
in this Agreement, or register any shares of its share capital for trading on
the Irish Stock Exchange;
(d) (i) incur or assume any long-term or short-term debt or
issue any debt securities except for borrowings under existing lines of
credit in the ordinary course of business
-28-
consistent with past practice; (ii) assume, guarantee, endorse or otherwise
become liable or responsible (whether directly, contingently or otherwise)
for the material obligations of any other person (other than Subsidiaries of
the Company); or (iii) make any material loans, advances or capital
contributions to, or investments in, any other person (other than to
Subsidiaries of the Company);
(e) except as otherwise expressly contemplated by this
Agreement, (i) increase in any manner the compensation of (A) any employee
(other than those described in clause (i)(B) hereof), except in the ordinary
course of business consistent with past practice and current market
conditions or (B) any of its directors or executive officers, except in the
ordinary course of business, consistent with past practice and after
consultation with Buyer, (ii) pay or agree to pay any pension, retirement
allowance or other employee benefit not required, or enter into, amend or
agree to enter into or amend any agreement or arrangement with such director
or officer or employee, whether past or present, relating to any such
pension, retirement allowance or other employee benefit, except as required
to comply with law or under currently existing agreements, plans or
arrangements or with respect to employees, in the ordinary course of business
consistent with past practice; (iii) grant any rights to receive any
severance or termination pay to, or enter into or amend any employment or
severance agreement with, any employee or any of its directors or officers
except as required pursuant to (A) the Employment Agreement, dated as of
January 4, 1999, by and between the Company, its Subsidiaries and Xxxx X.
Xxxxx (the "XXXXX AGREEMENT"), (B) the Employment Agreement, dated as of
August 1, 1997, by and between the Company, its Subsidiaries and Xxxx X.
Xxxxx III (the "XXXXX AGREEMENT"), which agreements shall not be amended, or
by applicable law; or (iv) except as may be required (A) to comply with
applicable law or (B) as permitted by paragraph (b)(iii) of this Section 6.1,
become obligated (other than pursuant to any new or renewed collective
bargaining agreement) under any new pension plan, welfare plan, multiemployer
plan, employee benefit plan, benefit arrangement, or similar plan or
arrangement which was not in existence on the date hereof, including any
bonus, incentive, deferred compensation, share purchase, share option, share
appreciation right, group insurance, severance pay, retirement or other
benefit plan, agreement or arrangement, or employment or 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; PROVIDED, HOWEVER, that this
clause (iv) shall not prohibit the Company from renewing any such plan,
agreement or arrangement already in existence on terms no more favorable to
the parties to such plan, agreement or arrangement;
(f) except as otherwise expressly contemplated by this
Agreement, enter into, amend in any material respect or terminate any Company
Material Contracts other than in the ordinary course of business consistent
with past practice;
(g) sell, lease, license, mortgage or dispose of any of its
properties or assets, other than (i) transactions in the ordinary course of
business consistent with past practice and (ii) sales of assets, for the fair
market value thereof, which sales do not individually or in the aggregate
exceed $2,000,000 and, in the case of both clauses (i) and (ii), except as
may be required or contemplated by this Agreement;
-29-
(h) acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial portion of the assets of or equity in,
or by any other manner, any business or any corporation, limited liability
company, partnership, association or other business organization or division
thereof or otherwise acquire or agree to acquire any assets, other than the
acquisition of assets that are in the ordinary course of business consistent
with past practice and not material to the Company and its Subsidiaries taken
as a whole;
(i) except as set forth in Section 6.1(i) of the Company
Disclosure Letter, alter (through merger, liquidation, reorganization,
restructuring or in any fashion) the corporate structure or ownership of the
Company or any Subsidiary;
(j) authorize or commit to make any material capital
expenditures not reflected in the budget previously provided in writing by
the Company to Buyer (the "COMPANY CAPEX BUDGET"), other than capital
expenditures incurred in the ordinary course of business and consistent with
past practices, which ordinary course expenditures, together with the capital
expenditures reflected in the Company CapEx Budget, will not exceed, in the
aggregate 115% of the Company CapEx Budget;
(k) make any change in the accounting methods or accounting
practices followed by the Company, except as required by generally accepted
accounting principles or applicable law;
(l) make any election under Irish, United States, Canadian
or Australian Tax law which would, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect;
(m) prepare or file any Tax Return inconsistent with past
practice or, on any such Tax Return, take any position, make any election, or
adopt any method that is inconsistent with positions taken, elections made or
methods used in preparing or filing similar Tax Returns in prior periods,
except if required by applicable law or regulation;
(n) knowingly take any action (except any action that the
Company is required to take by Buyer or by this Agreement) that (without
regard to any action taken or agreed to be taken by Buyer or any of its
Affiliates) would prevent Buyer from accounting for the business combination
to be effected by the Acquisition as a pooling-of-interests;
(o) settle any action, suit, claim, investigation or
proceeding (legal, administrative or arbitrative) requiring a payment by the
Company or its Subsidiaries in excess of $2,000,000 without the consent of
Buyer, which consent shall not be unreasonably withheld or delayed;
(p) except as set forth in Section 6.1(p) of the Company
Disclosure Letter, pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or
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unasserted, contingent or otherwise), other than the payment, discharge or
satisfaction, in the ordinary course of business consistent with past
practice or in accordance with their terms, of claims, liabilities or
obligations reflected or reserved against in, or contemplated by, the most
recent financial statements (or the notes thereto) of the Company included in
the Company SEC Reports or incurred in the ordinary course of business
consistent with past practice; or
(q) authorize, recommend, propose, agree or announce an
intention to do any of the foregoing or enter into any contract, agreement,
commitment or arrangement to do any of the foregoing; PROVIDED, HOWEVER, that
nothing contained herein shall limit the ability of Buyer to exercise its
rights under the Company Option Agreement.
6.2. PROXY STATEMENT. The Company will, as promptly as
practicable, prepare and file with the SEC a proxy statement and form of
proxy in connection with the vote of the Company's shareholders with respect
to the Scheme, the Capital Reduction Resolution, and such other resolutions,
if any, as may be brought before the shareholders at the Court Meetings and
the Extraordinary Meeting (such proxy statement together with any amendments
thereof or supplements thereto, in each case in the form or forms mailed to
Company's shareholders, is called the "PROXY STATEMENT"). The Company will
use all commercially reasonable efforts to cause the Proxy Statement to be
mailed to shareholders of the Company at the earliest practicable date
following the giving by the High Court of directions in that respect, shall
request the Depositary in writing to notify holders of the ADRs of the Court
Meetings and the Extraordinary Meeting and to mail the Proxy Statement to the
holders of the ADRs, and shall use all commercially reasonable efforts to
hold the Court Meetings and the Extraordinary Meeting as soon as practicable
following those directions. The Proxy Statement will, when prepared pursuant
to this Section 6.2 and mailed to the Company's shareholders, comply in all
material respects with the applicable requirements of the Exchange Act. The
Proxy Statement shall not include any untrue statement (other than written
statements supplied by Buyer in writing specifically for inclusion in the
Proxy Statement, as to which the Company shall not be responsible) of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading. The written
statements supplied by Buyer specifically for inclusion in the Proxy
Statement shall not include any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements made therein, in light of the circumstances under which they
were made, not misleading. In the Proxy Statement, to the extent that such
recommendations are consistent with the fiduciary obligations of the Board of
Directors of the Company and to the extent permitted by applicable laws,
including the Companies Acts 1963-1990 of Ireland, the Company's Board of
Directors shall state that it recommends that the Company's shareholders
approve the Scheme and the Capital Reduction Resolution. The Proxy Statement
shall be reviewed and approved by Buyer and Buyer's counsel prior to the
mailing of such Proxy Statement to the Company's shareholders, such approval
not to be unreasonably withheld or delayed.
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6.3 PREPARATION OF NO ACTION REQUEST OR FORM S-4; BLUE SKY
LAWS. As promptly as practicable after the date hereof, Buyer and the Company
shall prepare and file with the SEC a "no action" request letter seeking an
exemption from the registration requirements of the Securities Act with
respect to Buyer Common Stock to be issued in the Acquisition, and any other
documents required as mutually agreed by Buyer and Company to be necessary to
discharge their respective obligations under United States and Irish
securities laws, in connection with the Acquisition and the transactions
contemplated hereby. If required, Buyer shall prepare and file with the SEC a
registration statement meeting, in all material respects, the requirements of
Form S-4 under the Securities Act, in which the Proxy Statement will be
included as part of a proxy statement/prospectus (in the form mailed to the
Company's shareholders, the "PS/P"). The PS/P shall not include any untrue
statement (other than written statements supplied by the Company in writing
specifically for inclusion in the PS/P, as to which Buyer shall not be
responsible) of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements made therein, in
light of the circumstances under which they are made, not misleading. The
written statements supplied by the Company specifically for inclusion in the
PS/P shall not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements made therein, in light of the circumstances under which they
were made, not misleading. Buyer and the Company shall use all commercially
reasonable efforts to have such Form S-4 declared effective under the
Securities Act as promptly as practicable after filing. Buyer shall also take
any action required to be taken under any applicable provincial or state
securities laws (including United States "Blue Sky" laws) in connection with
the issuance of the Buyer Common Stock in the Acquisition; PROVIDED, HOWEVER,
that neither Buyer nor the Company shall be required to register or qualify
as a foreign corporation or to take any action that would subject it to
service of process in any jurisdiction where any such entity is not now so
subject, except as to matters and transactions arising solely from the offer
and sale of Buyer Common Stock or the Buyer Options.
6.4. ADDITIONAL AGREEMENTS, COOPERATION.
(a) Subject to the terms and conditions herein provided,
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 as
promptly as practicable the transactions contemplated by this Agreement, and
to cooperate, subject to compliance with applicable law, with each other in
connection with the foregoing, including using commercially reasonable
efforts (i) to obtain all necessary waivers, consents and approvals from
other parties to loan agreements, material leases and other material
contracts, (ii) to obtain all necessary consents, approvals and
authorizations as are required to be obtained under any United States federal
or state, Irish, Canadian, Australian or other foreign law or regulations,
(iii) to defend all lawsuits or other legal proceedings challenging this
Agreement or the consummation of the transactions contemplated hereby, (iv)
to lift or rescind any injunction or restraining order or other order
adversely affecting the ability of the parties to consummate the transactions
contemplated hereby arising out of or related to the Final Court Order
referred to in Article V hereof, (v) to effect all necessary registrations
and filings and
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submissions of information requested by Governmental Entities, and (vi) to
fulfill all conditions to this Agreement.
(b) Each of the parties hereto agrees, subject to
compliance with applicable law, to furnish to the other party such necessary
information and reasonable assistance as such other party may request in
connection with its preparation of necessary filings or submissions to any
regulatory or governmental agency or authority, including, without
limitation, any filing necessary under the provisions of the HSR Act, the
Irish Control Act, the Australian Takeovers Act, the Investment Canada Act,
the Competition Act (Canada), or any other Irish, United States federal or
state, Australian, Canadian federal or provincial, or foreign statute or
regulations.
6.5. PUBLICITY. Except as otherwise required by law or the rules
of any applicable securities exchange or the Nasdaq National Market, so long
as this Agreement is in effect, Buyer and the Company will not, and will not
permit any of their respective affiliates or representatives to, issue or
cause the publication of any press release or make any other public
announcement with respect to the transactions contemplated by this Agreement
without the consent of the other party, which consent shall not be
unreasonably withheld or delayed. Buyer and the Company will cooperate with
each other in the development and distribution of all press releases and
other public announcements with respect to this Agreement and the
transactions contemplated hereby, and will furnish the other with drafts of
any such releases and announcements as far in advance as possible.
6.6. NO SOLICITATION.
(a) Immediately upon execution of this Agreement, the
Company shall (and shall cause its officers, directors, employees, investment
bankers, attorneys and other agents to) cease all discussions, negotiations,
responses to inquiries (except as set forth in the proviso to this sentence)
and other communications relating to any potential business combination with
all third parties who, prior to the date hereof, may have expressed or
otherwise indicated any interest in pursuing an Acquisition Proposal with the
Company; PROVIDED that, if any such inquiries are made after the date hereof,
the Company shall respond by stating that it is a party to a binding
agreement with Buyer and is prohibited thereby from further responding to
such inquiries.
(b) Prior to termination of this Agreement pursuant to
Article VIII hereof, the Company and its Subsidiaries will not, nor shall the
Company authorize or permit any officers, directors or employees of, or any
investment bankers, attorneys or other agents retained by or acting on behalf
of, the Company or any of its Subsidiaries to, (i) initiate, solicit or
encourage, directly or indirectly, any inquiries or the making of any
proposal that constitutes an Acquisition Proposal (as hereinafter defined),
(ii) except as permitted below, engage or participate in negotiations or
discussions with, or furnish any information or data to, or take any other
action to, facilitate any inquiries or making any proposal by, any third
party relating to an Acquisition Proposal, or (iii) except as permitted
below, enter into any agreement with respect to any Acquisition Proposal or
approve an Acquisition Proposal. Notwithstanding anything to the
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contrary contained in this Section 6.6 or in any other provision of this
Agreement, prior to the Company Shareholders Meeting, the Company and its
Board of Directors (the "COMPANY BOARD") may participate in discussions or
negotiations with or furnish information to any third party making an
unsolicited Acquisition Proposal (a "POTENTIAL ACQUIROR") or approve or
recommend an unsolicited Acquisition Proposal if both (A) a majority of the
directors of the Company Board, without including directors who have a
financial interest in such Acquisition Proposal or who are or may be
considered Affiliates (as defined in Rule 405 under the Securities Act), or
"connected persons" (as defined in Section 26 of the Irish Companies Act,
1990), of any person making an Acquisition Proposal ("DISINTERESTED
DIRECTORS") determines in good faith, after receiving advice from its
financial advisor, that a Potential Acquiror has submitted to the Company an
Acquisition Proposal that is a Superior Proposal (as hereinafter defined),
and (B) a majority of the disinterested directors of the Company Board
determines in good faith, after receiving advice from reputable outside legal
counsel experienced in such matters (and the parties hereto agree that the
law firms of Xxxx and Xxxx LLP and XxXxxx XxxxXxxxxx are so experienced),
that the failure to participate in such discussions or negotiations or to
furnish such information is inconsistent with the Company Board's fiduciary
duties under applicable law. In the event that the Company shall receive any
Acquisition Proposal, it shall promptly (and in no event later than 24 hours
after receipt thereof) furnish to Buyer the identity of the recipient of such
information and of the Potential Acquiror, the terms of such Acquisition
Proposal, copies of all such information, and shall further promptly inform
Buyer in writing as to the fact such information is to be provided after
compliance with the terms of the preceding sentence. Nothing contained herein
shall prevent the Company from complying with Rules 14d-9 and 14e-2
promulgated under the Exchange Act with regard to an Acquisition Proposal or
making any disclosure to the Company's shareholders if, in the good faith
judgment of the Company Board, after receiving advice from reputable outside
legal counsel experienced in such matters (and the parties hereto agree that
the law firms of Xxxx and Xxxx LLP and XxXxxx XxxxXxxxxx are so experienced),
such disclosure is required by applicable law. Without limiting the
foregoing, the Company understands and agrees that any violation of the
restrictions set forth in this Section 6.6(b) shall be deemed to be a breach
of this Section 6.6(b) sufficient to enable Buyer to terminate this Agreement
pursuant to Section 8.1(d)(i) hereof.
(c) For the purposes of this Agreement, "ACQUISITION
PROPOSAL" shall mean any proposal, whether in writing or otherwise, made by
any person other than Buyer and its Subsidiaries to acquire "beneficial
ownership" (as defined under Rule 13(d) of the Exchange Act) of 20% or more
of the assets of, or 20% or more of the outstanding capital stock of any of
the Company or its Subsidiaries pursuant to a merger, consolidation, exchange
of shares or other business combination, sale of shares of capital stock,
sales of assets, tender offer or exchange offer or similar transaction
involving the Company or its Subsidiaries.
(d) The term "SUPERIOR PROPOSAL" means any BONA FIDE
Acquisition Proposal to acquire (including by means of a scheme of
arrangement), directly or indirectly, for consideration consisting of cash
and/or securities, more than 50% of the Company Ordinary Shares then
outstanding or all or substantially all the assets of the Company, and
otherwise on
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terms that a majority of the disinterested directors determines, in good
faith, to be more favorable to the Company and its shareholders than the
Acquisition (after receiving advice from the Company's independent financial
advisor that the Acquisition Proposal is more favorable to the Company's
shareholders, from a financial point of view, than the Acquisition) and for
which financing, to the extent required, is then committed.
6.7. ACCESS TO INFORMATION. From the date of this Agreement
until the Effective Time, and upon reasonable notice, the Company and Buyer
shall each (and shall cause each of their respective Subsidiaries to) afford
to the other party and its authorized representatives (including counsel,
other consultants, accountants and auditors) such reasonable access during
normal business hours to all facilities, personnel and operations and to all
books and records of it and its Subsidiaries, as is necessary for such party
to be kept reasonably informed with respect to operational and other business
matters of the other party, in light of the parties' respective positions in
the transaction contemplated hereby, including: (i) permitting the other
party to make such inspections as it may reasonably require under such
circumstances, and (ii) causing its officers and those of its Subsidiaries to
furnish to the other party such financial and operating data and other
information with respect to its business and properties as such other party
may from time to time reasonably request under the circumstances. During this
period, the Company will also confer with Buyer to keep it reasonably
informed with respect to operational and other business matters relating to
the Company and its Subsidiaries and the status of satisfactions of
conditions to the Closing. During this period, each of the Company and Buyer
shall furnish promptly to the other a copy of each report, schedule,
registration statement and other document filed with, or received by it from,
the SEC during such period. All information obtained by one party hereto
pursuant to this Section 6.7 shall be kept confidential in accordance with
the Confidentiality Agreement, dated March 22, 1999, between Buyer and the
Company.
6.8. NOTIFICATION OF CERTAIN MATTERS. The Company or Buyer, as
the case may be, shall promptly notify the other of its obtaining of
Knowledge of the institution of any claim, suit, action or proceeding arising
out of or related to the Scheme or the transactions contemplated hereby;
PROVIDED, HOWEVER, that no such notification shall affect the representations
or warranties of the parties or the conditions to the obligations of the
parties hereunder.
6.9. RESIGNATION OF OFFICERS AND DIRECTORS. At or prior to the
Effective Time, the Company shall deliver to Buyer the resignations of such
officers and directors of the Company and its Subsidiaries as Buyer shall
specify at least ten (10) days prior to the Effective Time, which
resignations shall be effective at the Effective Time and shall contain an
acknowledgment that the relevant individual has no outstanding claims for
compensation for loss of office, redundancy, unfair dismissal or otherwise;
PROVIDED that such resignations shall be solely as to offices held, but shall
not otherwise affect such person's status as an employee; and PROVIDED
FURTHER, that such resignation by Messrs. Xxxxx and Xxxxx shall not affect
any claims for severance by Messrs. Xxxxx and Xxxxx respectively.
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6.10. INDEMNIFICATION.
(a) As of the date of this Agreement and for a period of
six (6) years following the Effective Time, Buyer will indemnify and hold
harmless from and against all claims, damages, losses, obligations or
liabilities ("LOSSES") any persons who were directors or officers of the
Company (including, without limitation, the Director of Investor Relations,
and the Vice President and Corporate Counsel of the Company), prior to the
Effective Time (the "INDEMNIFIED PERSONS") to the fullest extent such person
could have been indemnified for such Losses under applicable law or under the
Governing Documents of the Company in effect immediately prior to the date
hereof, with respect to any act or failure to act by any such Indemnified
Person prior to the Effective Time.
(b) Any determination required to be made with respect to
whether an Indemnified Person's conduct complies with the standards set forth
under the Irish law shall be made by independent counsel selected by Buyer
and reasonably acceptable to the Indemnified Persons. Buyer shall pay such
counsel's fees and expenses (it being agreed that neither the Indemnified
Persons nor Buyer shall challenge any such determination by such independent
counsel).
(c) In the event that Buyer or any of its successors or
assigns (i) consolidates with or merges into any other person, and Buyer or
such successor or assign is not the continuing or surviving corporation or
entity of such consolidation or merger, or (ii) transfers all or
substantially all of its properties and assets to any person, then, and in
each case, proper provision shall be made so that such person or the
continuing or surviving corporation assumes the obligations set forth in this
Section 6.10 and none of the actions described in clauses (i) and (ii) above
shall be taken until such provision is made.
(d) Buyer shall maintain in effect for not less than six
(6) years from the Effective Time the current policies of directors' and
officers' liability insurance maintained by the Company (provided that Buyer
may substitute therefor policies of at least comparable coverage containing
terms and conditions which are no less advantageous to the Indemnified
Parties in all material respects so long as no lapse in coverage occurs as a
result of such substitution) with respect to all matters, including the
transactions contemplated hereby, occurring prior to, and including the
Effective Time; PROVIDED that, in the event that any Claim is asserted or
made within such six (6)-year period, such insurance shall be continued in
respect of any such Claim until final disposition of any and all such Claims;
and PROVIDED, FURTHER, that Buyer shall not be obligated to make annual
premium payments for such insurance to the extent such premiums exceed 200%
of the premiums paid as of the date hereof by the Company or any Subsidiary
for such insurance. In such case, Buyer shall purchase as much coverage as
possible for 200% of the premiums paid as of the date hereof for such
insurance, which coverage shall be at least as favorable as that provided by
Buyer to its directors.
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6.11. SHAREHOLDER LITIGATION. The Company shall give Buyer the
reasonable opportunity to participate (but not control) in the defense of any
shareholder litigation against or in the name of the Company and/or its
respective directors relating to the transactions contemplated by this
Agreement.
6.12. SEVERANCE ARRANGEMENTS.
(a) Prior to Closing, the Company shall: (i) take all
actions necessary to terminate, without liability to the Company or to Buyer,
its Executive Retention Plan, and (ii) obtain waivers of any provision of any
employment or other Contract to which it is a party (excluding the Xxxxx
Agreement and the Xxxxx Agreement) which, as a result of the transactions
contemplated by this Agreement, gives rise to any right to receive severance
or other payments upon termination of employment.
(b) With respect to those participants of the Company's
Executive Retention Plan identified in Schedule 6.12(b) of the Company
Disclosure Letter, during the twelve (12) month period commencing at the
Effective Time, Buyer shall offer severance arrangements for certain
termination events occurring within such twelve (12) month period as further
described in EXHIBIT D to this Agreement, in exchange for such participants
signing a release in a form acceptable to Buyer.
6.13. EMPLOYEE BENEFIT PLANS. The Company shall take all action
necessary or required to terminate or amend, if requested by Buyer and
permitted by law, the Company's United States 401(k) Plan at least three (3)
business days before the Effective Time; PROVIDED that, the winding up of
such Plan and distribution of amounts to participants thereof shall occur
after the Effective Time. Buyer shall provide, during the period commencing
at the Effective Time and ending on the first anniversary thereof, to the
Employees of the Company and its Subsidiaries who become employees of Buyer
as of the Effective Time with a package of benefits under employee benefit
plans that are not materially less favorable, in the aggregate, to those
employees than the benefits currently provided, in the aggregate, by the
Company and its Subsidiaries to those employees; PROVIDED, HOWEVER, that when
determining Company benefits under this Section 6.13, no benefits provided
under the Company's ESPP at any time shall be considered.
6.14. DETERMINATION OF OPTIONHOLDERS. At least five (5) business
days before the Effective Time, the Company shall provide Buyer with a true
and complete list of (a) the optionholders of the Company, (b) the number of
Company Ordinary Shares subject to Company Options held by each such
optionholder and (c) the address of each such optionholder as set forth in
the books and records of the Company or any Subsidiary, following upon which
there shall be no additional grants of Company Options by the Company without
Buyer's prior consent.
6.15. PREPARATION OF TAX RETURNS. The Company shall provide Buyer
with a copy of appropriate workpapers, schedules, drafts and final copies of
each foreign and domestic, federal, provincial and state income Tax return or
election of the Company (including returns of all
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Employee Benefit Plans) at least ten (10) days before filing such return or
election and shall consult with Buyer with respect thereto prior to such
filing.
6.16. POOLING AFFILIATES.
(a) Promptly following the date of this Agreement, the
Company shall deliver to Buyer a list of names and addresses of those persons
who are affiliates within the meaning of Rule 145 of the rules and
regulations promulgated under the Securities Act or otherwise applicable SEC
accounting releases with respect to the Company (the "COMPANY POOLING
AFFILIATES"). The Company shall provide Buyer such information and documents
as Buyer shall reasonably request for purposes of reviewing such list. The
Company shall deliver to Buyer, on or prior to the Closing, an affiliate
letter in the form attached hereto as EXHIBIT E, executed by each of the
Company Pooling Affiliates identified in the foregoing list. Buyer shall be
entitled to place legends as specified in such affiliate letters on the
certificates evidencing any of the Buyer Common Stock to be received by such
Company Pooling Affiliates pursuant to the terms of this Agreement, and to
issue appropriate stop transfer instructions to the transfer agent for the
Buyer Common Stock, consistent with the terms of such letters.
(b) Buyer shall procure, on or prior to the Effective Time,
an affiliate letter in the form attached hereto as EXHIBIT F, executed by
appropriate affiliates of Buyer.
(c) For so long as resales of shares of Buyer Common Stock
issued pursuant to the Acquisition are subject to the resale restrictions set
forth in Rule 145 under the Securities Act, Buyer will use good faith efforts
to comply with Rule 144(c)(1) under the Securities Act.
6.17. POOLING ACTIONS. Between the date of this Agreement and the
Effective Time, neither Buyer nor its affiliates shall knowingly take any
action that would prevent Buyer from accounting for, and each of the parties
hereto will take all actions reasonably necessary for Buyer to account for,
the business combination to be effected by the Acquisition as a pooling of
interests.
6.18. TAX INCENTIVES AND XXX GRANTS. The Company shall take all
actions reasonably necessary, including making all applications, filings or
other submissions required by the Company, to maintain the Irish
manufacturing tax incentive and the grants from the Industrial Development
Agency (Ireland), each of which the Company takes advantage of on the date
hereof under the laws of Ireland.
6.19 COMMISSION FILINGS; COMPLIANCE. The Company and Buyer shall
each cause the forms, reports, schedules, statements and other documents
required to be filed with the SEC by the Company and Buyer, respectively,
between the date of this Agreement and the Effective Time (with respect to
either the Company or Buyer, the "NEW SEC REPORTS") to be prepared in all
material respects with all applicable requirements of the Securities Act and
the Exchange Act, as the case may be, and such New SEC Reports will not at
the time they are filed contain any
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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 are made, not
misleading.
6.20. LISTING OF ADDITIONAL SHARES. Prior to the Effective Time,
Buyer shall file with the Nasdaq National Market a Notification Form for
Listing of Additional Shares with respect to the shares of Buyer Common Stock
to be issued in the Acquisition.
6.21 TAX-FREE REORGANIZATION. Buyer and the Company shall each
use all commercially reasonable efforts to cause the Acquisition to be
treated as a reorganization within the meaning of Section 368(a) of the Code.
ARTICLE VII
CONDITIONS TO CLOSING
7.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
ACQUISITION. The respective obligation of each party to effect the
Acquisition is subject to the satisfaction or waiver on or prior to the
Effective Date of the following conditions:
(a) SHAREHOLDER APPROVAL. The Court Meeting Approval
referred to in Section 5.1 hereof shall have been obtained and the Capital
Reduction Resolution shall have been adopted by the shareholders of the
Company at the Extraordinary Meeting.
(b) NO INJUNCTIONS OR RESTRAINTS. No judgment, order,
decree, statute, law, ordinance, rule or regulation entered, enacted,
promulgated, enforced or issued by any court or other Governmental Entity of
competent jurisdiction or other legal restraint or prohibition (collectively,
"RESTRAINTS") shall be in effect (i) imposing or seeking to impose material
limitations on the ability of Buyer to acquire or hold or to exercise full
rights of ownership of any Company Ordinary Shares; (ii) imposing or seeking
to impose material limitations on the ability of Buyer and its Affiliates to
combine and operate the business and assets of the Company; (iii) imposing or
seeking to impose other material sanctions, damages, or liabilities directly
arising out of the Acquisition on Buyer or the Company; (iv) requiring or
seeking to require divestiture by Buyer of all or any material portion of the
business, assets or property of the Company; or (v) preventing the
consummation of the Acquisition.
(c) GOVERNMENTAL ACTION. No action or proceeding shall be
instituted by any Governmental Entity seeking to prevent consummation of the
Acquisition, asserting the illegality of the Acquisition or this Agreement or
seeking material damages directly arising out of the transactions
contemplated hereby which continues to be outstanding.
(d) GOVERNMENTAL CONSENTS. All necessary authorizations,
consents, orders or approvals of, or declarations or filings with, or
expiration or waiver of waiting periods imposed
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by, any Governmental Entity of any applicable jurisdiction required for the
consummation of the transactions contemplated by this Agreement shall have
been filed, expired or obtained which the failure to obtain, make or occur
would have the effect of making the Scheme or this Agreement or any of the
transactions contemplated thereby or hereby illegal or which individually or
in the aggregate would have a Buyer Material Adverse Effect (assuming the
Scheme had become effective), including, but not limited to:
(i) the expiration or termination of the
applicable waiting period, or any extensions thereof, pursuant to
the HSR Act;
(ii) the sanctioning of the Scheme by the High Court
in the form attached hereto as Exhibit A or in such other form as may
be mutually acceptable to Buyer and the Company;
(iii) (A) the Minister for Enterprise, Trade and
Employment (the "MINISTER") stating in writing that he does not intend
to make an order under section 9 of the Irish Control Act in relation
to the Acquisition; or (B) (if no Order under that section is made and
the Minister does not state in writing that he does not intend to make
such an Order), the relevant period within the meaning of Section 6 of
the Irish Control Act elapsing;
(iv) (A) the Australian Treasurer stating in writing
that the Commonwealth Government of Australia has no objection to the
Acquisition under the Australian Takeovers Act; or (B) (if no Order
under the Australian Takeovers Act (including an interim Order under
Section 22 thereof) is made (or if an interim Order is made but a final
order is not made)), the relevant period provided under the Australian
Takeovers Act elapsing; and
(v) The Commissioner of Competition appointed under
the Competition Act (Canada) shall have issued an Advance Ruling
Certificate pursuant to Section 102 of the Competition Act (Canada)
with respect to the Acquisition or the applicable waiting period or
periods under Part IX of the Competition Act (Canada) shall have
expired and the Commissioner of Competition shall have advised the
parties that he does not intend to oppose the Acquisition and shall not
have made or threatened to make an application under Part VIII of the
Competition Act (Canada) in respect of the Acquisition.
7.2. CONDITIONS TO OBLIGATIONS OF BUYER. The obligation of
Buyer to effect the Acquisition is further subject to satisfaction or waiver
of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company set forth herein shall be true and correct both
when made and at and as of the Effective Date, as if made at and as of such
time (except to the extent expressly made as of an
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earlier date, in which case as of such date), except where the failure of
such representations and warranties to be so true and correct (without giving
effect to any limitation as to "MATERIALITY" or "MATERIAL ADVERSE EFFECT" set
forth therein) does not have, and would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.
(b) PERFORMANCE OF OBLIGATIONS OF THE COMPANY. The Company
shall have performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Effective Date.
(c) NO MATERIAL ADVERSE EFFECT. Since the date of this
Agreement, there has not been a Company Material Adverse Effect, nor has there
been any change, event or condition that, with the passage of time, would
reasonably be expected to result in a Company Material Adverse Effect.
(d) DELIVERY OF CLOSING DOCUMENTS. At or prior to
the Effective Time, the Company shall have delivered to Buyer all
of the following:
(i) a certificate of the President and the Chief
Financial Officer of the Company, dated as of the Effective Date,
stating that the conditions precedent set forth in Sections 7.2(a), (b)
and (c) hereof have been satisfied; and
(ii) a copy, dated as of a date not more than five
business days, or such other recent practicable date, in advance of the
Effective Date, of the Articles and Memorandum of Association of
the Company, certified by the secretary of the Company.
(e) DIRECTOR AND OFFICER RESIGNATIONS. Buyer shall have
received the resignation of the directors and officers of the Company and its
Subsidiaries as are set forth in Section 6.9 hereof.
(f) KEY EMPLOYEE AGREEMENTS. The persons identified in
Section 7.2(f) of the Company Disclosure Letter shall have entered into
employment agreements with Buyer.
(g) POOLING LETTERS. Buyer and the Company shall have
received the letters described in the third Recital to this Agreement from
PricewaterhouseCoopers and Xxxxxx Xxxxxxxx LLP and such letters shall not
have been withdrawn, modified or qualified in any material respect as of the
Effective Time, as certified by PricewaterhouseCoopers and Xxxxxx Xxxxxxxx
LLP, respectively, in a writing addressed to their respective addressees and
dated as of the Effective Date.
(h) COMPANY AFFILIATE LETTERS. Buyer shall have received all
of the letters described in Section 6.16(a) hereof executed by each of the
Company Pooling Affiliates.
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(i) SUBSIDIARY SHARES. Any outstanding minority ownership
interests in the Company's Subsidiaries shall be transferred to the Company,
effective as of the Effective Time, for no consideration, resulting in 100%
ownership and control of each of the Company's Subsidiaries by the Company.
(j) RESTRICTED STOCK ROLLOVER AGREEMENT. Xxxx X. Xxxxx III
shall have entered into the Restricted Stock Rollover Agreement,
substantially in the form attached hereto as EXHIBIT C, which agreement shall
be in full force and effect as of the Effective Time.
(k) RETENTION PLAN. The Company's Executive Retention
Plan shall have been terminated with no liability to the Company or to Buyer.
7.3. CONDITIONS TO OBLIGATIONS OF THE COMPANY. The obligation
of the Company to effect the Acquisition is further subject to satisfaction
or waiver of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Buyer set forth herein shall be true and correct both when
made and at and as of the Effective Date, as if made at and as of such time
(except to the extent expressly made as of an earlier date, in which case as
of such date), except where the failure of such representations and
warranties to be so true and correct (without giving effect to any limitation
as to "MATERIALITY" or "MATERIAL ADVERSE EFFECT" set forth therein) does not
have, and would not, individually or in the aggregate, reasonably be expected
to have a Buyer Material Adverse Effect.
(b) PERFORMANCE OF OBLIGATIONS OF BUYER. Buyer shall have
performed in all material respects all obligations required to be performed
by it under this Agreement at or prior to the Effective Date.
(c) DELIVERY OF CLOSING DOCUMENTS. At or prior to the
Effective Time, the Buyer shall have delivered to the Company a certificate
of the President and the Chief Financial Officer of Buyer, dated as of the
Effective Date, stating that the conditions precedent set forth in Sections
7.3(a) and (b) hereof have been satisfied.
(d) TAX OPINION. The Company shall have received the
opinion of Xxxx and Xxxx LLP, counsel to the Company, to the effect that the
Acquisition will be treated for U.S. federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code and that
accordingly, solely for U.S. federal tax purposes; PROVIDED that, if Xxxx and
Xxxx LLP does not render such opinion, this condition shall nonetheless be
deemed satisfied if Xxxxxx & Whitney LLP renders such opinion to the Company
(it being agreed that Buyer and the Company shall each provide reasonable
cooperation, including making reasonable representations, to Xxxx and Xxxx
LLP or Xxxxxx & Whitney LLP, as the case may be, to enable them to render
such opinion).
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ARTICLE VIII
TERMINATION
8.1. TERMINATION. This Agreement may be terminated and the
Scheme abandoned at any time prior to the Effective Time, whether before or
after approval of the Scheme by the Company's shareholders or sanction of the
Scheme by the High Court:
(a) by mutual written consent of the Company and Buyer;
(b) by either the Company or Buyer;
(i) if the Acquisition shall not have been
completed by December 31, 1999 (unless Buyer is required to file a
registration statement on Form S-4 with the SEC, in which case, such
date shall be January 31, 2000); PROVIDED, HOWEVER, that the right to
terminate this Agreement pursuant to this Section 8.1(b)(i) shall not
be available to any party whose failure to perform any of its
obligations under this Agreement results in the failure of the
Acquisition to be consummated by such time;
(ii) if Court Meeting Approval shall not have been
obtained or the Capital Reduction Resolution shall not have been
adopted at the Extraordinary Meeting or at any adjournment or
postponement thereof;
(iii) if any Restraint having any of the effects set
forth in Section 7.1(b) or (c) hereof shall be in effect and shall have
become final and nonappealable; or
(iv) if the Company enters into a merger,
acquisition or other agreement (including an agreement in principle) or
understanding to effect a Superior Proposal or the Board of Directors
of the Company or a committee thereof resolves to do so; PROVIDED,
HOWEVER, that the Company may not terminate this Agreement pursuant to
this Section 8.1(iv) unless (a) the Company has delivered to Buyer a
written notice of the Company's intent to enter into such an agreement
to effect such Acquisition Proposal, which notice shall include,
without limitation, the material terms and conditions of the
Acquisition Proposal and the identity of the Person making the
Acquisition Proposal, and (b) three business days have elapsed
following delivery to Buyer of such written notice by the Company
during which time, Buyer may propose amendments to the terms of this
Agreement to be at least as favorable as such Acquisition Proposal;
PROVIDED, FURTHER, that the Company may not terminate this Agreement
pursuant to this Section 8.1(iv) unless, at the end of such
three-business-day period, the Board of Directors of the Company
continues reasonably to believe that the Acquisition Proposal
constitutes a Superior Proposal.
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(c) by the Company, if Buyer shall have breached any
of its representations and warranties contained in Article IV hereof which
breach has or is reasonably likely to have a Buyer Material Adverse Effect or
Buyer shall have breached or failed to perform in any material respect any of
its covenants or other agreements contained in this Agreement, in each case,
which breach or failure to perform has not been cured by Buyer within thirty
(30) days following receipt of notice thereof from the Company; or
(d) by Buyer:
(i) if the Company shall have breached any of its
representations and warranties contained in Article III hereof which
breach has or is reasonably likely to have a Company Material Adverse
Effect or the Company shall have breached or failed to perform in any
material respect any of its covenants or other agreements contained
in this Agreement, in each case, which breach or failure to perform
has not been cured by the Company within thirty (30) days following
receipt of notice thereof from Buyer;
(ii) if (a) the Board of Directors of the Company or
any committee thereof shall have withdrawn or modified in a manner
adverse to Buyer its approval or recommendation of the Scheme, the
Capital Reduction Resolution or this Agreement, or approved or
recommended an Acquisition Proposal (including a Superior Proposal), or
(b) the Board of Directors of the Company or any committee thereof
shall have resolved to take any of the foregoing actions; or
(iii) at any time after 6:00 a.m. Minneapolis time on
June 21, 1999, if the Company Option Agreement shall not have been
executed and delivered by the Company to Buyer prior to such
termination.
8.2. EFFECT OF TERMINATION. The termination of this Agreement
pursuant to the terms of Section 8.1 hereof shall become effective upon
delivery to the other party of written notice thereof. In the event of the
termination of this Agreement pursuant to the foregoing provisions of this
Article VIII, this Agreement shall become void and have no effect, with no
liability on the part of either party (except as provided in Section 8.3
hereof) or its shareholders or directors or officers in respect thereof,
EXCEPT for agreements which survive the termination of this Agreement, EXCEPT
for liability that Buyer or the Company might have to the other party arising
from a breach of this Agreement due to termination of this Agreement in
accordance with Sections 8.1(c) or 8.1(d); or due to the fraudulent or
willful misconduct of such party, and EXCEPT that any termination shall not
affect the Company Option Agreement.
8.3. FEES AND EXPENSES.
(a) Except as provided in this Section 8.3, whether or not
the Acquisition is completed, the Company, on the one hand, and Buyer, on the
other, shall bear their respective expenses incurred in connection with this
Agreement, and the Scheme and the other transactions
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contemplated hereby, including, without limitation, the preparation,
execution and performance of this Agreement, the Scheme and the transactions
contemplated hereby, and all fees and expenses of investment bankers,
finders, brokers, agents, representatives, counsel and accountants, and the
costs and expenses incurred in connection with (i) the filings with the High
Court and the filing and registration of the Final Court Order with the
Registrar of Companies in Dublin, Ireland, (ii) any filings under the Irish
Control Act, and (iii) any filings of the premerger notification and report
forms under the HSR Act.
(b) Notwithstanding any provision in this Agreement to the
contrary, if this Agreement is terminated (x) by the Company or Buyer
pursuant to Section 8.1(b)(ii) and if, after the date hereof and prior to the
termination date, an Acquisition Proposal occurs, or (y) by Buyer pursuant to
Section 8.1(b)(iv), 8.1(d)(i) or 8.1(d)(ii) hereof then, in each case, the
Company shall (without prejudice to any other rights Buyer may have against
the Company for breach of this Agreement), reimburse Buyer upon demand for
all out-of-pocket fees and expenses incurred or paid by or on behalf of Buyer
or any Affiliate of Buyer in connection with this Agreement, the Scheme and
transactions contemplated herein, including all fees and expenses of counsel,
investment banking firms, accountants and consultants, up to a maximum
aggregate amount of $1,500,000.
(c) Notwithstanding any other provision in this Agreement
to the contrary, if (x) this Agreement is terminated by the Company or Buyer
at a time when Buyer is entitled to terminate this Agreement pursuant to
Section 8.1(b)(ii) or 8.1(d)(i) (other than due to a breach of Section 6.6(b)
hereof) and, concurrently with or (1) within nine months after such a
termination, (A) the Company shall enter into an agreement, arrangement or
binding understanding with respect to an Acquisition Proposal (which shall
include, for this purpose, the commencement by a third party of a tender
offer or exchange offer or similar transaction other than a Hostile Tender
Offer (as defined below) directly with the Company's shareholders)
(collectively, a "Third Party Deal") with a third party which made an
Acquisition Proposal at or prior to the time of such termination, or (B) a
tender offer or exchange offer or similar transaction directly with the
Company's shareholders for the acquisition of a majority of the outstanding
Ordinary Shares (or ADRs representing such majority) which has been
unilaterally commenced by a third party (a "Hostile Tender") which made an
Acquisition Proposal at or prior to the time of such termination shall have
become unconditional or irrevocable, or (2) within six months after such a
termination, if a third party made an Acquisition Proposal at or prior to the
time of such termination, and either (A) the Company shall enter into a Third
Party Deal with any other third party, or (B) a Hostile Tender commenced by
any other third party shall have become unconditional or irrevocable, or (y)
this Agreement is terminated pursuant to Section 8.1(d)(i) (if such
termination results from a breach of Section 6.6(b) hereof), or Section
8.1(b)(iv) or 8.1(d)(ii), then, in each case, the Company shall (in addition
to any obligation under Section 8.3(b) hereof and without prejudice to any
other rights that Buyer may have against the Company for a breach of this
Agreement) pay to Buyer U.S. $21,000,000 (the "TERMINATION FEE") in cash,
such payment to be made promptly, but in no event later than the second
business day following,
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in the case of clause (x), the later to occur of such termination and the
entry into of such Third Party Deal, or, in the case of clause (y), such
termination.
(d) Notwithstanding any provision in this Agreement to the
contrary, if this Agreement is terminated by the Company pursuant to Section
8.1(c) hereof, then Buyer shall (without prejudice to any other rights the
Company may have against Buyer for breach of this Agreement), reimburse the
Company upon demand for all out-of-pocket fees and expenses incurred or paid
by or on behalf of the Company or any Affiliate of the Company in connection
with this Agreement and the transactions contemplated herein, including all
fees and expenses of counsel, investment banking firms, accountants and
consultants, up to a maximum aggregate amount of $1,500,000.
(e) The parties acknowledge that the agreements contained
in Sections 8.3(b), (c) and (d) hereof are an integral part of the
transactions contemplated by this Agreement, and that, without these
agreements, Buyer, on the one hand, and the Company, on the other, would not
enter into this Agreement. Accordingly, if the Company fails promptly to pay
the amounts due pursuant to Sections 8.3(b) and (c) hereof, or if Buyer fails
promptly to pay the amounts due pursuant to Section 8.3(d) hereof, (i) the
party failing to so pay shall pay interest on such amounts at the prime rate
announced by U.S. Bank National Association, Minneapolis office, in effect on
the date the Termination Fee (or fees and expenses) were required to be made,
and (ii) if in order to obtain such payment a party commences a suit or takes
other action which results in a judgment or other binding determination
against the Company for the fees and expenses in Sections 8.3(b) or 8.3(d)
hereof or the Termination Fee, the nonpaying party shall also pay to the
party entitled to receive payment thereunder (as the case may be) its costs
and expenses (including reasonable attorneys' fees) in connection with such
suit, together with interest payable under the preceding clause (i).
ARTICLE IX
MISCELLANEOUS
9.1. NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of the
representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time. This
Section 9.1 shall not limit any covenant or agreement of the parties which by
its terms contemplates performance after the Effective Time.
9.2. CLOSING AND WAIVER.
(a) Unless this Agreement shall have been terminated in
accordance with the provisions of Section 8.1 hereof, a closing (the
"CLOSING" and the date and time thereof being the "CLOSING DATE") will be
held as soon as practicable on a date agreed upon by the parties hereto after
the conditions set forth in Sections 7.1, 7.2 and 7.3 hereof shall have been
satisfied or
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waived. The Closing will be held at the offices of Xxxxxx & Xxxxxxx LLP in
Minneapolis, Minnesota or at such other place as the parties may agree.
(b) At any time prior to the Effective Date, any party
hereto may (i) extend the time for the performance of any of the obligations
or other acts of any other party hereto, (ii) waive any inaccuracies in the
representations and warranties of the other party contained herein or in any
document delivered pursuant hereto, and (iii) waive compliance with any of
the agreements of any other party or with any conditions to its own
obligations contained herein. Any agreement on the part of a party hereto to
any such extension or waiver shall be valid only if set forth in an
instrument in writing duly authorized by and signed on behalf of such party.
9.3. NOTICES.
(a) Any notice or communication to any party hereto shall
be duly given if in writing and delivered in person or mailed by first class
mail and airmail, if overseas (registered or return receipt requested),
facsimile (with receipt electronically acknowledged) or overnight air courier
guaranteeing next day delivery, to such other party's address.
If to Buyer:
ADC Telecommunications, Inc.
00000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxx
with a copy to:
Xxxxxx & Whitney LLP
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
A&L Goodbody
0 Xxxxxxxxx Xxxxxx, Xxxxx Xxxxxx
Xxxxxx 0, Xxxxxxx
Facsimile No: (000) 000-0-0000000
Attention: Xxxxxxx Xxxxxx
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If to the Company:
Xxxxxxx Systems PLC
Xxx Xxx xx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxx, Esq.
with copies to:
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, Xx., Esq.
XxXxxx XxxxXxxxxx
0 Xxxxxxxxxxxxx Xxxxx
Xxxxxx Xxxxx Xxxx
Xxxxxx 0, Xxxxxxx
Facsimile No.: (000) 000-0-0000000
Attention: Xxxxxxx Xxxx
(b) All notices and communications will be deemed to have
been duly given: at the time delivered by hand, if personally delivered;
seven (7) business days after being deposited in the mail, if mailed; when
sent, if sent by facsimile; and two (2) business days after timely delivery
to the courier, if sent by overnight air courier guaranteeing next day
delivery.
9.4. COUNTERPARTS. This Agreement may be executed via facsimile
in two (2) or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
9.5. INTERPRETATION. The language used in this Agreement and
the other agreements contemplated hereby shall be deemed to be the language
chosen by the parties to express their mutual intent, and no rule of strict
construction shall be applied against any party. The headings of articles and
sections herein are for convenience of reference, do not constitute a part of
this Agreement, and shall not be deemed to limit or affect any of the
provisions hereof. As used in this Agreement, "PERSON" means any individual,
corporation, limited liability company, limited or general partnership, joint
venture, association, joint stock company, trust, unincorporated organization
or other entity; "KNOWLEDGE" means the actual knowledge of a director or any
executive officer of the applicable party or any of its Subsidiaries, as such
knowledge has been obtained in the normal conduct of the business and
including such knowledge as a reasonably prudent person in such position
would have obtained upon the exercise of reasonable diligence;
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and all amounts shall be deemed to be stated in U.S. dollars, unless
specifically referenced otherwise.
9.6. AMENDMENT. This Agreement may be amended by the parties at
any time before or after any required approval of matters presented in
connection with the Scheme by the shareholders of the Company; PROVIDED,
HOWEVER, that after any such approval, there shall not be made any amendment
that by law requires further approval by such shareholders or the High Court
without obtaining such further approval. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties.
9.7. NO THIRD PARTY BENEFICIARIES. Except for the provisions of
Section 6.10 and 6.12(b) hereof (which is intended to be for the benefit of
the persons referred to therein, and may be enforced by such persons) nothing
in this Agreement shall confer any rights upon any person or entity which is
not a party or permitted assignee of a party to this Agreement.
9.8. GOVERNING LAW. Except to the extent that the laws of
Ireland are mandatorily applicable to the Scheme, this Agreement shall be
governed by, and construed in accordance with, the laws of the State of
Minnesota. Each of the parties hereto irrevocably consents to the exclusive
jurisdiction of any court located in Ireland in connection with any matter
based upon or arising out of the Scheme. Each of the parties hereto
irrevocably consents to the jurisdiction of any federal or state court in the
States of Minnesota and Massachusetts in connection with any other matter
based upon or arising out of this Agreement or the matters contemplated
herein. Each of the parties hereto agrees that process may be served upon
them in any manner authorized by the laws of the State of Minnesota or State
of Massachusetts for such Persons, and hereby waives (and covenants not to
assert or plead) any objection which they might otherwise have to such
jurisdiction and such process.
9.9. ENTIRE AGREEMENT. This Agreement (together with the
Exhibits and the Company Disclosure Letter, and the other documents delivered
pursuant hereto or contemplated hereby) constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes
all other prior agreements and understandings, both written and oral, between
the parties with respect to the subject matter hereof, in each case other
than the Company Option Agreement and the Confidentiality Agreement.
9.10. VALIDITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability
of any other provisions of this Agreement, which shall remain in full force
and effect. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties shall negotiate
in good faith to modify this Agreement so as to effect the original intent of
the parties as closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the extent possible.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers all as of the day and year
first above written.
ADC TELECOMMUNICATIONS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Its: Chief Executive Officer
------------------------------
XXXXXXX SYSTEMS PLC
By: /s/ Xxxx X. Xxxxx III
------------------------------
Its: Chief Executive Officer
------------------------------
