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CONFORMED COPY
AGREEMENT AND PLAN OF MERGER
AMONG
MISYS PLC
KIRSTY, INC.
MOXIE ACQUISITION CORP.
AND
C-ATS SOFTWARE INC.
Dated as of December 14, 1998
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AGREEMENT AND PLAN OF MERGER
TABLE OF CONTENTS
Page
ARTICLE I
THE TENDER OFFER
1.1. The Offer................................................................2
1.2. Company Action...........................................................4
1.3. Board of Directors.......................................................5
ARTICLE II
THE MERGER
2.1. The Merger...............................................................6
2.2. Closing..................................................................7
2.3. Effective Time...........................................................7
2.4. Effects of the Merger....................................................7
2.5. Certificate of Incorporation and By-Laws.................................7
2.6. Directors................................................................7
2.7. Officers.................................................................7
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
3.1. Effect on Capital Stock..................................................8
3.2. Exchange of Certificates Representing Common Stock.......................9
3.3. Adjustment of Offer Price and Merger Consideration......................11
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
4.1. Existence; Good Standing; Corporate Authority...........................11
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4.2. Authorization, Validity and Effect of Agreements........................12
4.3. Compliance with Laws....................................................12
4.4. Capitalization..........................................................12
4.5. Subsidiaries............................................................13
4.6. No Violation............................................................14
4.7. Company Reports; Undisclosed Liabilities................................15
4.8. Litigation..............................................................15
4.9. Absence of Certain Changes..............................................16
4.10. Taxes...................................................................16
4.11. Employee Benefit Plans..................................................17
4.12. Labor and Employment Matters............................................19
4.13. Brokers and Finders.....................................................20
4.14. Opinion of Financial Advisor............................................20
4.15. State Anti-takeover Laws................................................20
4.16. Voting Requirements.....................................................20
4.17. Material Contracts......................................................20
4.18. Intellectual Property; Technology.......................................21
4.19. Calendar Function.......................................................24
4.20. Material Delaying Event.................................................24
4.21. Environmental Matters...................................................24
4.22. Insurance...............................................................25
4.23. Product Liability; Warranties...........................................26
4.24. Disclosures; Information Supplied.......................................26
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF THE PARENT, THE PURCHASER AND THE US PARENT
5.1. Existence; Good Standing; Corporate Authority...........................27
5.2. Authorization, Validity and Effect of Agreements........................27
5.3. Litigation..............................................................27
5.4. No Violation............................................................27
5.5. Information Supplied....................................................27
5.6. Ownership of Shares....................................................28
5.7. Interim Operations of the Purchaser.....................................28
ARTICLE VI
COVENANTS
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6.1. Conduct of the Business of the Company..................................28
6.2. Access to Information...................................................32
6.3. Stockholder Approvals...................................................32
6.4. Reasonable Best Efforts.................................................33
6.5. Consents................................................................33
6.6. Public Announcements....................................................34
6.7. Consent of the US Parent................................................34
6.8. No Solicitation.........................................................34
6.9. Indemnification; Insurance..............................................36
6.10. Employees and Employee Benefit Plans....................................37
6.11. Notification of Certain Matters.........................................38
6.12. Anti-takeover Statutes..................................................38
6.13. Top-Up Option...........................................................38
ARTICLE VII
CLOSING CONDITIONS
7.1. Conditions to the Obligations of the Parent, the US Parent, the
Purchaser and the Company..............................................40
7.2. Condition to the Obligations of the Parent, the US Parent and the
Purchaser..............................................................41
ARTICLE VIII
TERMINATION AND ABANDONMENT
8.1. Termination.............................................................41
8.2. Procedure and Effect of Termination.....................................43
8.3. Fees and Expenses.......................................................43
ARTICLE IX
MISCELLANEOUS
9.1. Amendment and Modification..............................................44
9.2. Waiver of Compliance; Consents..........................................45
9.3. Nonsurvival of Representations and Warranties...........................45
9.4. Notices.................................................................45
9.5. Assignment; Parties in Interest.........................................46
9.6. Specific Performance....................................................47
9.7. Governing Law...........................................................47
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9.8. Counterparts............................................................47
9.9. Entire Agreement........................................................47
9.10. Investigations..........................................................47
9.11. Severability............................................................48
9.12. Interpretation; Definitions.............................................48
ANNEX A-- Conditions to the Offer
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of December 14, 1998,
among MISYS PLC, a public limited company organized under the laws of England
(the "Parent"), KIRSTY, INC. a Delaware corporation that is an indirect wholly
owned subsidiary of the Parent (the "US Parent"), MOXIE ACQUISITION CORP., a
Delaware corporation that is a wholly owned subsidiary of the US Parent (the
"Purchaser"), and C-ATS SOFTWARE INC., a Delaware corporation (the "Company")
(the "Agreement" or the "Merger Agreement").
WHEREAS, the respective Boards of Directors of the Parent, the
US Parent, the Purchaser and the Company have approved the acquisition of the
Company by the Parent and its subsidiaries on the terms and subject to the
conditions set forth in this Agreement;
WHEREAS, in furtherance of such acquisition, the Parent
proposes to cause the Purchaser to make a tender offer to purchase all the
outstanding shares of Common Stock, par value $0.001 per share, of the Company
(the "Common Stock"; all the outstanding shares of Common Stock being
hereinafter collectively referred to as the "Shares") at a purchase price of
$7.50 per Share (the "Offer Price"), net to the seller in cash, without interest
thereon, upon the terms and subject to the conditions set forth in this
Agreement (as such tender offer may be amended from time to time as permitted
under this Agreement, the "Offer"); and the Board of Directors of the Company
has adopted resolutions declaring the advisability of and approving the Offer
and the Merger, recommending that the Company's stockholders accept the Offer
and approving the acquisition of Shares by the Purchaser pursuant to the Offer
and the Stockholders Agreement;
WHEREAS, the respective Boards of Directors of the Parent, the
Purchaser, the US Parent and the Company have each approved the merger of the
Purchaser and the Company (the "Merger"), upon the terms and subject to the
conditions set forth in this Agreement, whereby each Share, other than Shares
owned directly or indirectly by the Parent or the Company and Dissenting Shares,
will be converted in the Merger into the right to receive cash in an amount
equal to the price per Share paid in the Offer;
WHEREAS, concurrently with the execution of this Agreement and
as an inducement to the Parent to enter into this Agreement, the Parent, the
Purchaser and certain stockholders of the Company are entering into Stockholders
Agreements (the "Stockholders Agreements") pursuant to which such stockholders
have, among other things, agreed severally to sell all of their Shares to the
Purchaser at a cash price per Share
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equal to the Offer Price upon the terms and subject to the conditions set forth
in the Stockholders Agreement; and
WHEREAS, the Parent, the Purchaser, the US Parent and the
Company wish to make certain representations, warranties, covenants and
agreements in connection with the Offer and the Merger and also to prescribe
various conditions to the Offer and the Merger.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, and intending to be legally
bound hereby, the Parent, the Purchaser, the US Parent and the Company hereby
agree as follows:
ARTICLE I
THE TENDER OFFER
1.1. The Offer. (a) Provided that (i) this Agreement shall not
have been terminated in accordance with Section 8.1 and (ii) none of the events
or circumstances set forth in paragraphs (a) - (f) of Annex A hereto shall have
occurred or be existing, the Purchaser agrees to commence the Offer by the fifth
business day after the first public announcement of the execution hereof or on
such earlier date as is reasonably practicable. The initial expiration date for
the Offer shall be twenty (20) business days after the commencement of the
Offer. The obligation of the Purchaser to accept for payment and pay for Shares
tendered pursuant to the Offer shall be subject to the condition (the "Minimum
Condition") that the number of Shares validly tendered and not withdrawn prior
to the expiration of the Offer, combined with any Shares already owned by the
Parent, the US Parent, the Purchaser or any of their affiliates and Shares
subject to the Stockholders Agreements and not tendered in the Offer, constitute
more than 50% of the Shares outstanding on a fully diluted basis at the
expiration of the Offer and also shall be subject to the satisfaction of the
other conditions set forth in Annex A. The Purchaser expressly reserves the
right to waive any such condition (other than the Minimum Condition), to
increase the price per Share payable in the Offer, and to make any other changes
in the terms and conditions of the Offer, provided that no change may be made
without the consent of the Company which is adverse to the holders of Shares,
decreases the price per Share payable in the Offer, changes the form of
consideration to be paid in the Offer, reduces the maximum number of Shares to
be purchased in the Offer, imposes conditions to the Offer in addition to those
set forth in Annex A hereto or extends the expiration date of the Offer (except
that the Purchaser, without the consent of the Company, may extend the
expiration date of the Offer, subject to the Company's rights of termination
pursuant to Section 8.1, (a) as required to comply with any rule, regulation or
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interpretation of the Securities and Exchange Commission (the "SEC"), (b) if at
the scheduled or extended expiration date of the Offer any of the conditions set
forth in Annex A have not been satisfied or waived, until such time as all such
conditions are satisfied or waived or, (c) provided that at least 90% of the
Shares have not been tendered, for one or more times for a total number of days
in the aggregate pursuant to this clause (c) not to exceed 20 for any reason
other than those specified in the immediately preceding clauses (a) and (b)).
The Parent, the US Parent and the Purchaser agree that if all of the conditions
set forth in Annex A hereto are not satisfied on any scheduled expiration date
of the Offer then, provided that all such conditions are reasonably capable of
being satisfied by the commercially reasonable best efforts of the parties
hereto, the Purchaser shall extend the Offer from time to time until such
conditions are satisfied or waived, provided that the Purchaser shall not be
required to extend the Offer for a total of more than 20 days beyond the initial
expiration date of the Offer. The Offer Price shall, subject to applicable
withholding of taxes, be net to the seller in cash, upon the terms and subject
to the conditions of the Offer. Subject to the terms and conditions of the
Offer, the Purchaser agrees to pay, and the Parent agrees to cause the Purchaser
to pay, as promptly as practicable after the expiration of the Offer, for all
Shares validly tendered and not withdrawn.
(b) As soon as reasonably practicable on the date of
commencement of the Offer, the Parent and the Purchaser will file with the SEC a
Tender Offer Statement on Schedule 14D-1 (together with all amendments and
supplements thereto, the "Schedule 14D-1") with respect to the Offer, which
shall have been provided to the Company such that the Company shall have a
reasonable opportunity to comment thereon and to which the Company shall not
have reasonably objected. The Schedule 14D-1 will contain or will incorporate by
reference an offer to purchase (the "Offer to Purchase") and forms of the
related letter of transmittal and any related summary advertisement (the
Schedule 14D-1, the Offer to Purchase and such other documents, together with
all supplements and amendments thereto, being referred to herein collectively as
the "Offer Documents"). Each of the Parent, the Purchaser and the Company agrees
to correct promptly any information provided by it for use in the Offer
Documents which shall have become false or misleading, and the Parent and the
Purchaser further agree to take all steps necessary to cause the Schedule 14D-1
as appropriately corrected to be filed with the SEC and the other Offer
Documents as so corrected to be disseminated to holders of Shares, in each case
as and to the extent required by applicable federal securities laws. The Parent,
the US Parent and the Purchaser agree to provide to the Company and its counsel
any comments the Parent, the US Parent, the Purchaser or their counsel may
receive from the SEC or its staff with respect to the Offer Documents promptly
after the receipt of such comments.
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(c) The Parent shall provide or cause to be provided to the
Purchaser on a timely basis the funds necessary to accept for payment and pay
for any Shares that the Purchaser becomes obligated to accept for payment
pursuant to the Offer.
1.2. Company Action. (a) The Company hereby approves of and
consents to the Offer and represents that the Company Board, at a meeting duly
called and held, has unanimously (i) determined that this Agreement and the
transactions contemplated hereby, including the Offer and the Merger, as of the
date of such meeting, were advisable and fair to and in the best interests of
the stockholders of the Company, (ii) approved and adopted this Agreement and
the transactions contemplated hereby, and, for purposes of exempting the
Stockholders Agreements and the transactions contemplated thereby from the
provisions of Section 203 of the General Corporation Law of the State of
Delaware, as amended (the "DGCL"), approved and adopted the Stockholders
Agreements and the transactions contemplated thereby, the approvals described in
this clause (ii) constituting approval of the foregoing for purposes of Section
203 of the DGCL, and (iii) recommended that the stockholders of the Company
accept the Offer and tender their Shares pursuant to the Offer and approve and
adopt this Agreement and the Merger (if required). The Company hereby consents
to the inclusion in the Offer Documents of reference to the recommendation of
the Company Board described in the immediately preceding sentence. The Company
represents to the Purchaser and the Parent that the Company has been advised by
each of its directors and executive officers that they intend either to tender
or cause to be tendered all Shares beneficially owned by them to the Purchaser
pursuant to the Offer.
(b) As soon as reasonably practicable on the date of
commencement of the Offer, the Company agrees that it will file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with all
amendments and supplements thereto, the "Schedule 14D-9") containing the
recommendation of the Company Board described in Section 1.2(a) and shall
disseminate the Schedule 14D-9 to the extent required by Rule 14d-9 promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
any other applicable federal securities laws. The Company shall provide the
Schedule 14D-9 to the Parent such that the Parent shall have a reasonable
opportunity to comment thereon, and the Company shall not file the Schedule
14D-9 if the Parent has reasonably objected thereto. The Company, the Parent and
the Purchaser each agrees to correct promptly any information provided by the
Company, the Parent or the Purchaser, as the case may be, for use in the
Schedule 14D-9 which shall have become false or misleading, and the Company
further agrees to take all steps necessary to cause the Schedule 14D-9 as
appropriately corrected to be filed with the SEC and disseminated to holders of
Shares, in each case as and to the extent required by applicable federal
securities laws. The Company agrees to provide the Parent and its counsel any
comments
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the Company or its counsel may receive from the SEC or its staff with respect to
the Schedule 14D-9 promptly after the receipt of such comments.
(c) The Company agrees promptly to furnish the Purchaser with
mailing labels containing the names and addresses of all record holders of
Shares and with security position listings of Shares held in stock depositories,
each as of a recent date, together with all other available listings and
computer files containing names, addresses and security position listings of
record holders and beneficial owners of Shares. The Company agrees to furnish
the Purchaser with such additional information, including, without limitation,
updated listings and computer files of stockholders, mailing labels and security
position listings, and such other assistance as the Parent, the Purchaser or
their agents may reasonably request in connection with communicating the Offer
to the stockholders of the Company and consummating the Merger. Subject to the
requirements of applicable law, and except for such steps as are necessary to
disseminate the Offer Documents and any other documents necessary to consummate
the Offer, the Parent, the Purchaser and their affiliates shall hold in
confidence the information contained in such labels, listings, files and all
other information delivered pursuant to this Section 1.2(c), shall use such
information only in connection with the Offer, and, if this Agreement shall be
terminated in accordance with Section 8.1, shall deliver to the Company all
copies, extracts and summaries of such information then in their possession or
the possession of their agents.
1.3. Board of Directors. (a) Promptly upon the purchase by the
Purchaser of Shares pursuant to the Offer, and from time to time thereafter, the
Purchaser shall be entitled, subject to compliance with Section 14(f) of the
Exchange Act, to designate up to such number of directors, rounded up to the
next whole number, on the Board of Directors of the Company (the "Company
Board") as shall give the Purchaser representation on the Company Board equal to
the product of the total number of directors on the Company Board (giving effect
to the directors elected pursuant to this sentence) multiplied by the percentage
that the aggregate number of Shares beneficially owned by the Parent, the
Purchaser or any of their affiliates at such time bears to the total number of
Shares then outstanding (provided that, if the Parent, the Purchaser and their
affiliates beneficially own in the aggregate at least a majority of the Shares,
the Purchaser shall in any event be entitled to designate at least a majority of
the directors on the Company Board), and the Company shall, at such time,
promptly take all actions necessary to cause the Purchaser's designees to be
elected as directors of the Company, including increasing the size of the
Company Board or securing the resignations of incumbent directors or both;
provided, however, that in the event that the Purchaser's designees are elected
to the Company Board, until the Effective Time, the Company Board shall have at
least one director who is a director of the Company on the date of this
Agreement and who is not an officer of the Company or any of its subsidiaries
(each, an "Independent Director") and, provided, further, that, if no
Independent Directors then
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remain, the other directors of the Company on the date hereof shall designate
one person to fill such vacancy who shall not be an officer or affiliate of the
Company or any of its subsidiaries, or officer or affiliate of the Parent or any
of its subsidiaries, and such person shall be deemed to be an Independent
Director for purposes of this Agreement. At such times, the Company shall use
reasonable best efforts to cause persons designated by the Purchaser to
constitute the same percentage as persons designated by the Purchaser shall
constitute of the Company Board with respect to (i) each committee of the
Company Board, (ii) each board of directors of each subsidiary of the Company
and (iii) each committee of each such board, in each case only to the extent
permitted by applicable law.
(b) The Company shall promptly take all actions required
pursuant to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder in order to fulfill its obligations under this Section 1.3 and shall
include the Information Statement containing such information with respect to
the Company and its officers and directors as is required under Section 14(f)
and Rule 14f-1 (the "Information Statement") as an annex to the Schedule 14D-9
to fulfill such obligations. The Purchaser shall supply to the Company and be
solely responsible for any information with respect to either of them and their
nominees, officers, directors and affiliates required by such Section 14(f) and
Rule 14f-1.
(c) Following the election or appointment of designees of the
Purchaser pursuant to this Section 1.3 (the "Purchaser Designees") and prior to
the Effective Time, any amendment of this Agreement or the Constituent Documents
of the Company, any termination of this Agreement by the Company, any extension
by the Company of the time for the performance of any of the obligations or
other acts of the Purchaser or waiver of any of the Company's rights hereunder
shall require the concurrence of a majority of the Independent Directors.
ARTICLE II
THE MERGER
2.1. The Merger. Upon the terms and subject to the
satisfaction or waiver, if permissible, of the conditions set forth in Article
VII hereof, as promptly as practicable following the consummation of the Offer,
in accordance with the provisions of this Agreement and the DGCL, the parties
hereto shall cause the Purchaser to be merged with and into the Company, and the
Company shall be the surviving corporation (hereinafter sometimes called the
"Surviving Corporation") and shall continue its corporate existence under the
laws of the State of Delaware. At the Effective Time, the separate existence of
the Purchaser shall cease.
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2.2. Closing. The closing of the Merger will take place at
10:00 a.m. (New York City time) on a date to be specified by the Parent or the
Purchaser, which shall be no later than the second business day after
satisfaction or waiver of the conditions set forth in Article VII (the "Closing
Date"), at the offices of Debevoise & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, unless another date, time or place are agreed to in writing by the
parties hereto.
2.3. Effective Time. Subject to the provisions of this
Agreement, as soon as practicable on or after the Closing Date, the parties
shall file a certificate of merger or other appropriate documents (in any such
case, the "Certificate of Merger") executed in accordance with the relevant
provisions of the DGCL and shall make all other filings or recordings required
under the DGCL and other applicable law. The Merger shall become effective at
such time as the Certificate of Merger is duly filed with the Delaware Secretary
of State, or at such other time specified in the Certificate of Merger as the
Purchaser and the Company shall agree (the time the Merger becomes effective
being hereinafter referred to as the "Effective Time").
2.4. Effects of the Merger. The Merger shall have the effects
set forth in Section 259 of the DGCL.
2.5. Certificate of Incorporation and By-Laws. (a) The
Certificate of Incorporation of the Company (the "Certificate of
Incorporation"), as in effect immediately prior to the Effective Time, shall be
the certificate of incorporation of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable law.
(b) The by-laws of the Company (the "By-laws"), as in effect
immediately prior to the Effective Time, shall be the by-laws of the Surviving
Corporation, until thereafter changed or amended as provided therein or by
applicable law.
2.6. Directors. The directors of the Purchaser immediately
prior to the Effective Time shall be the directors of the Surviving Corporation,
until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.
2.7. Officers. The officers of the Company immediately prior
to the Effective Time shall be the officers of the Surviving Corporation, until
the earlier of their resignation or removal or until their respective successors
are duly elected and qualified, as the case may be.
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ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
3.1. Effect on Capital Stock. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
Shares or any shares of capital stock of the Purchaser:
(a) Capital Stock of the Purchaser. Each issued and
outstanding share of capital stock of the Purchaser shall be converted into and
become one fully paid and nonassessable share of common stock, par value $0.001
per share, of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent Owned Stock.
Each Share that is owned by the Company and each Share that is owned by the
Parent, the Purchaser, the US Parent or any other direct or indirect wholly
owned subsidiary of Parent shall automatically be canceled and retired and shall
cease to exist, and no consideration shall be delivered in exchange therefor.
(c) Conversion of Company Common Stock. Subject to Section
3.1(d), each issued and outstanding Share (other then Shares to be canceled in
accordance with Section 3.1(b)) shall be converted into the right to receive
from the Surviving Corporation in cash, without interest, the price per Share
actually paid in the Offer (the "Merger Consideration"). As of the Effective
Time, all such Shares shall no longer be outstanding and shall automatically be
canceled and retired and shall cease to exist, and each holder of a certificate
representing any such Shares shall cease to have any rights with respect
thereto, except the right to receive the Merger Consideration as to such Shares,
less any applicable withholding tax, without interest, as provided herein.
(d) Shares of Dissenting Stockholders. Notwithstanding
anything in this Agreement to the contrary, any issued and outstanding Shares
held by a person (a "Dissenting Stockholder") who has neither voted in favor of
the Merger nor consented in writing thereto and otherwise complies with all the
applicable provisions of the DGCL concerning the right of holders of Common
Stock to dissent from the Merger and require appraisal of their Shares
("Dissenting Shares") shall not be converted as described in Section 3.1(c) but
shall become the right to receive such consideration as may be determined to be
due to such Dissenting Stockholder pursuant to the laws of the State of
Delaware. If, after the Effective Time, such Dissenting Stockholder withdraws
his demand for appraisal or fails to perfect or otherwise loses his right of
appraisal, in any case pursuant to the DGCL, his Shares shall be deemed to be
converted as of the Effective
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Time into the right to receive the Merger Consideration. The Company shall give
the Parent (i) prompt notice of any demands for appraisal of Shares received by
the Company and (ii) if and after the Purchaser shall have accepted for payment
Shares pursuant to and subject to the conditions of the Offer, the opportunity
to participate in and direct all negotiations and proceedings with respect to
any such demands. The Company shall not, without the prior written consent of
the Parent, make any payment with respect to, or settle, offer to settle or
otherwise negotiate, any such demands.
(e) Stock Options. Each option to purchase Shares granted to
any employee, consultant or director of the Company or any of its subsidiaries
pursuant to any of the Company Stock Option Plans that, immediately prior to the
Effective Time, is outstanding, whether vested or not vested (each, an "Option"
and, collectively, the "Options") shall be canceled in exchange for the right to
receive a cash payment equal to the product (such product, the "Option
Consideration") of (i) the excess of (x) the Merger Consideration over (y) the
exercise price per share of such Option multiplied by (ii) the number of Shares
covered by such Option, which cash payment shall be reduced by any applicable
withholding Taxes and be without interest. In the case of Options subject to the
C-ATS 1988 Incentive Stock Option Plan and all other Options vested as of such
date, such payment shall be made as soon as practicable following the
consummation of the Merger. In the case of all other Options, such payment shall
be made on June 1, 1999, provided that the holder of such Option continues to be
employed by the Company or the Surviving Corporation on such date.
Notwithstanding the foregoing, any Options that become vested prior to June 1,
1999 shall receive such payment as soon as practicable following the date of
such vesting. The Company shall use its reasonable best efforts to obtain all
necessary consents of the holders of Options to the cancellation of the Options
in accordance with this Section 3.1(e).
3.2. Exchange of Certificates Representing Common Stock. (a)
Prior to the Effective Time, the Purchaser and the Parent shall appoint a
commercial bank or trust company having net capital of not less than
$100,000,000 and which is reasonably satisfactory to the Company, to act as
paying agent hereunder (the "Paying Agent") for payment of the Merger
Consideration upon surrender of certificates representing Shares
("Certificates"). The Purchaser and the Parent shall, or shall cause the
Surviving Corporation to provide the Paying Agent with cash in amounts necessary
to pay for all the shares of Common Stock pursuant to Section 3.1(c) and to make
all payments in connection with the Options as to which payments are due
pursuant to Section 3.1(e), as and when such amounts are needed by the Paying
Agent. Such amounts shall hereinafter be referred to as the "Exchange Fund."
(b) Promptly after the Effective Time, the Purchaser and the
Parent shall cause the Paying Agent to mail to each holder of record of Shares
immediately prior to the
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Effective Time (i) a letter of transmittal which shall specify that delivery
shall be effected, and risk of loss and title to such Certificates shall pass,
only upon delivery of the Certificates to the Paying Agent and which letter
shall be in customary form and have such other provisions as the Purchaser or
the Parent may reasonably specify and (ii) instructions for effecting the
surrender of such Certificates in exchange for the Merger Consideration
applicable thereto. Upon surrender of a Certificate to the Paying Agent together
with such letter of transmittal, duly executed and completed in accordance with
the instructions thereto, and such other documents as may reasonably be required
by the Paying Agent, the holder of such Certificate shall be entitled to receive
in exchange therefor the amount of cash into which shares of Common Stock
theretofore represented by such Certificate shall have been converted pursuant
to Section 3.1, net of applicable withholding Taxes, and the Shares represented
by the Certificate so surrendered shall forthwith be canceled. No interest will
be paid or will accrue on the cash payable upon surrender of any Certificate. In
the event of a transfer of ownership of Shares which is not registered in the
transfer records of the Company, payment may be made with respect to such Shares
to such a transferee if the Certificate representing such shares of Shares is
presented to the Paying Agent, accompanied by all documents required to evidence
and effect such transfer and to evidence that any applicable stock transfer
Taxes have been paid.
(c) At and after the Effective Time, there shall be no
transfers on the share transfer books of the Company of the Shares which were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates are presented to the Surviving Corporation, they shall be
canceled and exchanged as provided in this Article III.
(d) Any portion of the Exchange Fund (including the proceeds
of any interest and other income received by the Paying Agent in respect of all
such funds) that remains unclaimed by the former stockholders of the Company six
months after the Effective Time shall be delivered to the Surviving Corporation.
Any former stockholders of the Company who have not theretofore complied with
this Article III shall thereafter look only to the Surviving Corporation for
payment of any Merger Consideration that may be payable upon surrender of any
Certificates such stockholder holds, as determined pursuant to this Agreement,
without any interest thereon.
(e) None of the Purchaser, the Parent, the Company, the
Surviving Corporation, the Paying Agent or any other person shall be liable to
any former holder of Shares for any amount properly delivered to a public
official pursuant to applicable abandoned property, escheat or similar laws.
(f) If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Certificate to be lost, stolen or destroyed and, if required by the
Surviving Corporation or the Paying Agent, the
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posting by such person of a bond in such reasonable amount as the Surviving
Corporation or the Paying Agent may direct as indemnity against any claim that
may be made against it with respect to such Certificate, the Paying Agent will
issue in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration payable in respect thereof pursuant to this Agreement.
(g) The Paying Agent shall invest the cash in the Exchange
Fund on a daily basis, as instructed by the Purchaser. Any interest and other
income resulting from such investments shall be paid to the Purchaser before the
Effective Time and to the Surviving Corporation thereafter.
3.3. Adjustment of Offer Price and Merger Consideration. In
the event of any reclassification, recapitalization, stock split, stock dividend
or similar transaction with respect to the Common Stock (or if a record date
with respect to any of the foregoing shall occur) prior to the Effective Time,
appropriate and proportionate adjustments, if any, shall be made to the amount
of the Offer Price and Merger Consideration, and all references to the Merger
Consideration in this Agreement shall be deemed to be to the Offer Price or the
Merger Consideration as so adjusted.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As of the date hereof, except as set forth in the Disclosure
Letter, the Company represents and warrants to the Parent and the Purchaser and
agrees as follows:
4.1. Existence; Good Standing; Corporate Authority. Each of
the Company and its subsidiaries is (a) a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and (b) is duly licensed or qualified to do business as a foreign
corporation and is in good standing under the laws of any other jurisdiction in
which the character of the properties owned or leased by it or in which the
transaction of its business makes such licensure, qualification or good standing
necessary, except where the failure to be so in good standing or to be so
licensed or qualified, individually or in the aggregate, would not have, or
would not reasonably be expected to result in, a material adverse effect on the
business, operations, results of operations, prospects, assets or financial
condition of the Company and its subsidiaries taken as a whole (except for any
such effect that is caused principally by the announcement or pendency of the
Offer or the Merger) (a "Material Adverse Effect"). Each of the Company and its
subsidiaries has the requisite corporate power and authority to own, operate and
lease its properties and carry on its business as now conducted. The
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Company has heretofore delivered or made available to the Parent true and
correct copies of the Certificate of Incorporation and By-laws of the Company
(the "Constituent Documents") and the organizational documents of each
subsidiary, in each case as currently in effect.
4.2. Authorization, Validity and Effect of Agreements. The
Company has all requisite corporate power and authority to execute and deliver
this Agreement and, subject to obtaining the Company Stockholder Approval, to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly and validly authorized by the
Company Board, and no other corporate proceedings on the part of the Company
(other than the Company Stockholder Approval) are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby. This Agreement
has been duly and validly executed and delivered by the Company, and (assuming
this Agreement constitutes the valid and binding obligation of the Purchaser,
the Parent and the US Parent) constitutes the valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms.
4.3. Compliance with Laws. Except as set forth on Schedule 4.3
of the Disclosure Letter (each "Schedule" hereinafter referred to shall mean a
Schedule of the Disclosure Letter), neither the Company nor any of its
subsidiaries is in violation of any federal, state, local or foreign law,
statute, ordinance, rule, regulation, order, judgment, ruling or decree ("Laws")
of any federal, state, local or foreign judicial, legislative, executive,
administrative or regulatory body or authority or any court, arbitration, board
or tribunal (each such entity, a "Governmental Entity") applicable to the
Company or any of its subsidiaries or any of their respective properties or
assets, except for violations which, individually or in the aggregate, would not
have, or would not reasonably be expected to result in, a Material Adverse
Effect. No action, demand, requirement or investigation by any Governmental
Entity with respect to the Company or its subsidiaries is pending and has been
served upon the Company or, to the knowledge of the Company, is threatened, with
respect to any of the foregoing.
4.4. Capitalization. The authorized capital stock of the
Company consists of 40,000,000 shares of Common Stock and 8,097,660 shares of
Preferred Stock ("Preferred Stock"), par value $0.001 per share. As of December
11, 1998 (a) 7,123,577 shares of Common Stock were issued and outstanding and no
shares of Preferred Stock were outstanding, (b) Options to purchase an aggregate
of 1,792,550 shares of Common Stock were outstanding, 1,792,550 shares of Common
Stock were reserved for issuance upon the exercise of outstanding Options and
2,815,714 shares of Common Stock were reserved for future grants under the Stock
Option Plans, and there were no stock appreciation rights or limited stock
appreciation rights outstanding other than those
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attached to such Options, and (c) no shares of Common Stock of the Company were
held by the Company's subsidiaries. Schedule 4.4 sets forth a list of all
Options, the name of the holders of such Options and the exercise price, the
first date of exercisability and the vesting schedule for each such Option. As
of the date hereof, except for the Options, the Company has no outstanding
shares of preferred stock, bonds, debentures, notes or other obligations or
securities entitling the holders thereof to vote (or which are convertible into
or exercisable for securities having the right to vote) with the stockholders of
the Company on any matter. All issued and outstanding shares of Common Stock are
duly authorized, validly issued, fully paid, nonassessable and free of
preemptive rights. As of the date hereof, except as set forth in this Section
4.4 or on Schedule 4.4, there are no preemptive or similar rights on the part of
any holders of any class of securities of the Company, and there are no other
shares of capital stock of the Company, no securities of the Company convertible
or exchangeable for shares of capital stock or voting securities of the Company,
and no existing options, warrants, calls, subscriptions, convertible securities,
or other rights, agreements or commitments which obligate the Company or any of
its subsidiaries to issue, transfer on its behalf or sell any shares of capital
stock of, or equity interests in, the Company or any of its subsidiaries. There
are no outstanding obligations of the Company or any subsidiary of the Company
to repurchase, redeem or otherwise acquire any shares of capital stock of the
Company. After the Effective Time, the Surviving Corporation will have no
obligation created by the Company prior to the date hereof to issue, transfer on
its behalf or sell any shares of capital stock of the Company or the Surviving
Corporation. Except as contemplated hereby, there are no voting trusts or other
agreements or understandings to which the Company or any of its subsidiaries is
a party with respect to the voting of capital stock of the Company or any of its
subsidiaries.
4.5. Subsidiaries. The Company owns, directly or indirectly
through a subsidiary, all of the outstanding shares of capital stock (or other
ownership interests having by their terms ordinary voting power to elect
directors or others performing similar functions with respect to such
subsidiary) of each of the Company's subsidiaries. All outstanding shares of
capital stock of each of the Company's subsidiaries are duly authorized, validly
issued, fully paid and nonassessable, and are owned, directly or indirectly, by
the Company free and clear of all liens, pledges, security interests, claims or
other encumbrances ("Encumbrances"), except for Permitted Liens. There are no
outstanding securities of any of the Company's subsidiaries convertible or
exchangeable for shares of capital stock or voting securities of such
subsidiary. Schedule 4.5 sets forth for each subsidiary of the Company: (i) its
name and jurisdiction of incorporation or organization; (ii) its authorized
capital stock or share or equity capital; (iii) the number of issued and
outstanding shares of capital stock or share or equity capital; and (iv) the
holder or holders of such shares. Except for interests in the Company's
subsidiaries or as set forth in Schedule 4.5, neither the Company nor any of its
subsidiaries owns directly or
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indirectly any ownership interest or investment in any corporation, partnership,
joint venture, business, trust or other entity.
4.6. No Violation. Neither the execution and delivery by the
Company of this Agreement nor the consummation by the Company of the
transactions contemplated hereby will: (a) violate, conflict with or result in a
breach of any provisions of the Certificate of Incorporation or By-laws (or
comparable constituent documents) of the Company or any of its subsidiaries; (b)
violate, conflict, in any material respect, with, or result in a material breach
of, constitute a material default (or an event which, with notice or lapse of
time or both, would constitute a material default) under, result in the
termination or in a right of termination of, accelerate the performance required
by or benefit obtainable under, result in the vesting, triggering or
acceleration of any material payment or other material obligations pursuant to,
result in the creation of any Encumbrance (other than Permitted Liens) upon any
of the material properties of the Company or its subsidiaries under, or result
in there being declared void, voidable, subject to withdrawal, or without
further binding effect, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust or any license, franchise, Permit,
lease, contract, agreement or other instrument, commitment or obligation to
which the Company or any of its subsidiaries is a party, by which the Company or
any of its subsidiaries or any of their respective properties is bound, or under
which the Company or any of its subsidiaries or any of their respective
properties is entitled to a benefit (each of the foregoing, to the extent the
same have any continuing force or effect, a "Contract" and collectively,
"Contracts"); (c) other than the filings provided for in Section 2.3 or Schedule
4.6, the filings required under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 0000 (xxx "XXX Xxx"), any filings under the Exchange Act, or filings in
connection with the maintenance of qualification to do business in other
jurisdictions (the filings disclosed in Schedule 4.6 in response to this clause
(c), the other filings referred to in this clause (c) and Consents required or
permitted to be made or obtained, collectively, the "Regulatory Filings"),
require any consent, approval or authorization of, or declaration, filing or
registration with, any Governmental Entity, except for those consents,
approvals, authorizations, declarations, filings or registrations the failure of
which to obtain or make individually or in the aggregate would not have, or
would not be reasonably expected to result in, a Material Adverse Effect; or (d)
violate any Laws material to the business of the Company, any of its
subsidiaries or any of their respective assets.
4.7. Company Reports; Undisclosed Liabilities. The Company has
made available to the Parent each registration statement, report, proxy
statement or information statement (as defined under the Exchange Act) prepared
by it for filing with the SEC since December 31, 1993, each in the form
(including exhibits and any amendments thereto) filed with the SEC
(collectively, the "Company Reports"). As of their respective dates, the Company
Reports (a) complied as to form in all material respects with the applicable
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requirements of the Securities Act of 1933, as amended, and the rules and
regulations thereunder (the "Securities Act") or the Exchange Act, as the case
may be, and (b) did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading. Each of the consolidated balance sheets of the Company
included in or incorporated by reference into the Company Reports (including the
related notes and schedules) fairly presented the consolidated financial
position of the Company and its consolidated subsidiaries as of its date, and
each of the consolidated statements of earnings and cash flows of the Company
included in or incorporated by reference into the Company Reports (including any
related notes and schedules) fairly presented the results of operations,
earnings or cash flows, as the case may be, of the Company and its subsidiaries
for the periods set forth therein, in each case in accordance with generally
accepted accounting principles consistently applied during the periods involved,
except as may be noted therein and subject, in the case of unaudited statements,
to normal year-end audit adjustments (consisting only of normal recurring
accruals). Neither the Company nor any of its subsidiaries has any liabilities
or obligations, contingent or otherwise, except liabilities and obligations (i)
in the respective amounts reflected on or reserved against in the Company's
consolidated balance sheet of September 30, 1998 included in the Company
Reports, (ii) not required by GAAP to be reflected in such consolidated balance
sheet (other than any such liabilities and obligations which were not reflected
or reserved against because they were contingent at September 30, but which
would be reflected or reserved against in such a balance sheet prepared in
accordance with GAAP because they are no longer contingent as of the date
hereof) and (iii) liabilities and obligations incurred in the ordinary course of
business since that date which would not be prohibited by this Agreement.
4.8. Litigation. Except as set forth in Schedule 4.8, as of
the date hereof there are no claims, actions, suits, proceedings, arbitrations,
investigations or audits (collectively, "Litigation") by a third party
(including a Governmental Entity) pending or, to the knowledge of the Company,
threatened against the Company (or any Plan) or any of its subsidiaries, at law
or in equity, other than those which individually or in the aggregate would not
in the good faith judgment of the Company be reasonably expected to have or
result in a Material Adverse Effect.
4.9. Absence of Certain Changes. Except as set forth in
Schedule 4.9, since September 30, 1998 until the date hereof, the Company and
its subsidiaries have conducted their business only in the ordinary course of
such business consistent with past practices, and there has not been (a) any
Material Adverse Effect (or any event or condition that would reasonably be
expected to result in a Material Adverse Effect) suffered by the Company or any
of its subsidiaries; (b) any declaration, setting aside or payment of any
dividend or other distribution with respect to the capital stock of the
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Company or its subsidiaries (other than wholly owned subsidiaries) or, except as
required by the Company's benefit plans, any repurchase, redemption or any other
acquisition by the Company or its subsidiaries of any outstanding shares of
capital stock or other securities of, or other ownership interests in, the
Company or its subsidiaries; (c) any change in accounting principles, practices
or methods; (d) any increase or commitment to increase the remuneration
(including salary, incentive compensation or benefits) of any director or
employee of or consultant to the Company or any of its subsidiaries, whether
directly or indirectly (including by amendment, implementation or the entering
into of any employment or employee benefit or compensation agreement, plan or
arrangement), by any amount constituting an increase in excess of 5% (or, in the
case of any executive officer of the Company or any such subsidiary, by any
amount) other than any changes required by the current terms of any existing
plan or agreement or pursuant to this Agreement or changes in the ordinary
course of business consistent with past practice; (e) any revaluation by the
Company or any of its subsidiaries of any of their respective assets, other than
normal recurring adjustments made in the ordinary course of business, including,
without limitation, write-downs of inventory or write-offs of accounts
receivable; (f) any transaction or commitment made by the Company or any of its
subsidiaries to buy or sell any assets of Company's business, other than sales
in the ordinary course of business consistent with past practice; or (g) any
other event or condition which, had it occurred subsequent to the date hereof,
would constitute a breach of Section 6.1.
4.10. Taxes. (a) Except as set forth on Schedule 4.10, the
Company and each of its subsidiaries have (or will have by the Effective Time)
timely filed all Tax Returns required to be filed by any of them. All such Tax
Returns are true, correct and complete in all material respects. All Taxes of
the Company and its subsidiaries which are (i) shown as due on such Tax Returns,
(ii) to the knowledge of the Company, otherwise due and payable or (iii) claimed
or asserted by any taxing authority to be due, have been paid, except for those
Taxes being contested in good faith and for which adequate reserves have been
established in the financial statements included in the most recent Company
Report in accordance with GAAP. The Company and each subsidiary has either
withheld and paid over to the relevant taxing authority or set aside in accounts
an amount equal to all Taxes required to have been withheld and paid in
connection with payments to employees, independent contractors, creditors,
stockholders or other third parties.
(b) Except as set forth in Schedule 4.10, (i) there are no
material Encumbrances for Taxes upon the assets of the Company or any of its
subsidiaries except Encumbrances for Taxes not yet due; (ii) there are no
material outstanding deficiencies for any Taxes threatened, proposed, asserted
or assessed against the Company or any subsidiary which are not adequately
provided for in the financial statements included in the most recent Company
Report; (iii) there are no federal, state, local or foreign audits or
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other administrative proceedings or judicial proceedings presently pending with
regard to any Taxes or Tax Returns required to be filed by or with respect to
the Company or any of its subsidiaries; (iv) the Company has filed a
consolidated Tax Return for federal income tax purposes on behalf of itself and
all of its domestic subsidiaries as the common parent corporation of an
"affiliated group" (within the meaning of Section 1504(a) of the Internal
Revenue Code of 1986, as amended (the "Code")) of which such subsidiaries are
"includible corporations" in such affiliated group within the meaning of Section
1504(c)(2) of the Code; (v) none of the Company or any of its subsidiaries has
been a member of an "affiliated group" (as defined above), or any similar
affiliated, combined or consolidated group for state, local or foreign tax
purposes (other than a group the common parent of which is the Company), or has
any liability for the Taxes of any person (other than the Company or its current
subsidiaries) under Treasury Regulation Section 1.1502-6 or any similar
provision of state, local or foreign law or as a transferee, successor, by
contract or otherwise; and (vi) neither the Company nor any of its subsidiaries
is a party to any tax sharing, tax indemnity or other agreement or arrangement
with respect to Taxes with any entity not included in the financial statements
included in the Company Report.
(c) The Company is not a "U.S. real property holding company"
as defined in Section 897 of the Code.
4.11. Employee Benefit Plans. (a) Absence of Changes in
Benefits Plans. Schedule 4.11(a) contains a complete and correct list, as of the
date hereof, of (i) all material severance and employment agreements of the
Company or its subsidiaries with any current employee, officer, independent
contractor, or director, (ii) all material severance programs, policies and
practices of each of the Company and each of its subsidiaries, (iii) all
material plans or arrangements of the Company and each of its subsidiaries
relating to its current employees, officers, independent contractors, or
directors which contain change in control provisions, including in all cases any
and all amendments entered on or prior to the date hereof, and (iv) all material
Plans. For purposes of this Agreement, "Plan" shall mean collective bargaining
agreement, employment agreement, consulting agreement, severance agreement or
any bonus, pension, post-retirement benefit, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock purchase, stock
option, phantom stock, retirement, vacation, severance, disability, death
benefit, hospitalization, medical, dental or other plan, arrangement or
understanding providing material benefits to any current employee, officer,
independent contractor, or director of the Company or any of its subsidiaries.
Since January 1, 1997, until the date hereof, there has not been any adoption or
amendment in any respect by the Company or any of its subsidiaries of any Plan,
nor has there been any material change in any actuarial or other assumptions
used to calculate funding obligations with respect to any material Plan, or any
change in the manner in which such contributions
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are determined which, individually or in the aggregate, would result in a
material increase in the Company's or its subsidiaries' liabilities thereunder.
(b) Stock Options. All of the Options have been granted in
compliance with all the terms and provisions of the Company Stock Option Plans,
any awards made thereunder and all applicable law.
(c) ERISA Compliance. (i) With respect to Plans, no event has
occurred and there exists no condition or set of circumstances, in connection
with which the Company or any of its subsidiaries could be subject to any
liability under the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), the Code or any other applicable law that individually or in the
aggregate would have, or would reasonably be expected to result in, a Material
Adverse Effect on the Company or any of its subsidiaries.
(ii) Each Plan has been administered substantially in
accordance with its terms and all the Plans have been operated, and are in
material compliance with the applicable provisions of ERISA, the Code and all
other applicable laws and the terms of all applicable collective bargaining
agreements. The IRS has issued a favorable determination letter with respect to
the qualification of each Plan that constitutes an "employee pension benefit
plan" as defined in ERISA, and, as of the date hereof, to the knowledge of the
Company, the IRS has not taken any action to revoke any such letter.
(iii) Neither the Company nor any trade or business, whether
or not incorporated (an "ERISA Affiliate"), which together with the Company
would be deemed a "single employer" within the meaning of Section 4001(b) of
ERISA, has incurred any material unsatisfied liability under Title IV of ERISA
in connection with any Plan and no condition exists that presents a material
risk to the Company or any ERISA Affiliate of incurring any such liability
(other than liability for premiums to the Pension Benefit Guaranty Corporation
("PBGC") arising in the ordinary course). No Plan has incurred an "accumulated
funding deficiency" within the meaning of Section 302 of ERISA or Section 412 of
the Code, whether or not waived.
(iv) As of the date hereof, except as set forth in Schedule
4.11(c), no Plan (A) is subject to Title IV of ERISA; (B) is a "multiemployer
plan" within the meaning of Section 3(37) of ERISA; (C) is a "multiple employer
plan" within the meaning of Section 413(c) of the Code; or (D) is or at any time
was funded through a "welfare benefit fund" within the meaning of Section 419(e)
of the Code and no benefits under a Plan are or at any time have been provided
through a voluntary employees' beneficiary association within the meaning of
Section 501(c)(9) of the Code or a supplemental unemployment benefit plan within
the meaning of Section 501(c)(17) of the Code.
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(v) Except as set forth in Schedule 4.11(c), no Plan provides
medical benefits (whether or not insured), with respect to current or former
employees after retirement or other termination of service (other than (x)
coverage mandated by applicable law or (y) benefits the full cost of which is
borne by the current or former employee).
(vi) Each Plan which is a welfare benefit plan as defined in
Section 3(1) of ERISA (including any such plan covering former employees of the
Company or any of its subsidiaries) and each Plan which is a pension benefit
plan as defined in Section 3(2) of ERISA (including any such plan covering
former employees of the Company or any of its subsidiaries) may be amended or
terminated by the Company or such subsidiary at any time.
(vii) All amounts payable under Plans are deductible for
federal income tax purposes. The consummation of the transactions contemplated
by this Agreement will not, either alone or in combination with another event
undertaken by the Company or any of its subsidiaries prior to the date hereof,
(A) entitle any current or former employee, agent, independent contractor or
officer of the Company or any ERISA Affiliate to severance pay, unemployment
compensation or any other payment, except as expressly provided in this
Agreement, (B) accelerate the time of payment or vesting, or increase the amount
of compensation due any such employee, agent, independent contractor or officer,
(C) constitute a "change in control" causing a material increase or acceleration
of benefits under any Plan, and the Company and the Company Board have taken all
required actions to effect the foregoing.
(viii) There is no pending or threatened assessment,
complaint, proceeding, or investigation of any kind in any court or government
agency with respect to any Plan (other than routine claims for benefits).
4.12. Labor and Employment Matters. Except as set forth in
Schedule 4.12, as of the date hereof, (a) neither the Company nor any of its
subsidiaries is a party to, or bound by, any collective bargaining agreement or
other contracts or understanding with a labor union or labor organization and no
collective bargaining agreement is being negotiated by the Company or any of its
subsidiaries; and (b) there is no (i) unfair labor practice, labor dispute
(other than routine individual grievances) or labor arbitration proceeding
pending or, to the knowledge of the Company, threatened against the Company or
any of its subsidiaries, (ii) to the knowledge of the Company, any activity or
proceeding by a labor union or representative thereof to organize any employees
of the Company or any of its subsidiaries, or (iii) lockouts, strikes or
slowdowns, work stoppages or similar labor activities or, to the knowledge of
the Company, threats thereof by or with respect to any such employees.
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4.13. Brokers and Finders. Except for Broadview International
LLC, no broker, dealer or financial advisor is entitled to receive from the
Company or any of its subsidiaries any broker's, finder's or investment banking
fee in connection with this Agreement or the transactions contemplated hereby.
4.14. Opinion of Financial Advisor. The Company Board has
received the opinion of Broadview International LLC, to the effect that, as of
the date of this Agreement, the consideration to be received by holders of
Shares (other than the Parent and its affiliates) in the Offer and the Merger is
fair from a financial point of view to such holders.
4.15. State Anti-takeover Laws. Section 203 of the DGCL is
inapplicable to the Offer, the Merger, this Agreement, the Stockholders
Agreements and the transactions contemplated hereby and thereby. Section 2115 of
the California General Corporation Law ("CGCL"), is inapplicable to the Company,
and no "fair price," "moratorium," "control share acquisition" or other
anti-takeover provision of the CGCL is or will be applicable to the Offer, the
Merger, this Agreement, the Stockholders Agreements or the transactions
contemplated hereby and thereby. To the knowledge of the Company, no "fair
price," moratorium," "control share acquisition" or other anti-takeover statute
of any other state will be applicable to the Offer, the Merger, this Agreement,
the Stockholders Agreements or the transactions contemplated hereby and thereby.
4.16. Voting Requirements. The affirmative vote of the holders
of a majority of the voting power of all outstanding shares of Common Stock,
voting as a single class, at the Company Stockholder Meeting to adopt this
Agreement and the Merger (the "Company Stockholder Approval") is the only vote
of the holders of any class or series of the capital stock of the Company
necessary to approve and adopt this Agreement and the transactions contemplated
hereby. No action by the Company or vote of its stockholders generally is
required for the valid execution and performance of the Stockholders Agreements
(other than pursuant to Section 203 of the DGCL).
4.17. Material Contracts. Schedule 4.17 sets forth a list as
of the date hereof of all of the following Contracts that contain material
obligations that have not yet been performed: (a)(i) all Contracts for borrowed
money or guarantees thereof with any banking or financial institution, and (ii)
all other Contracts for borrowed money or guarantees thereof other than (with
respect to this subclause (ii)) Contracts entered into in the ordinary course of
business consistent with the past practice of the Company or Contracts between
the Company and any of its wholly owned subsidiaries or between any of the
Company's wholly owned subsidiaries, (b) Contracts containing covenants by the
Company or any subsidiary of the Company restricting its ability or the ability
of any of
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the subsidiaries of the Company to engage in any line of business, (c) Contracts
to purchase supplies or other assets, other than purchase orders entered into in
the ordinary course of business consistent with the past practice of the Company
and other Contracts involving obligations of less than $25,000 individually and
$250,000 in the aggregate, (d) Contracts with distributors, brokers, or sales
agents for the distribution of the products or services of the Company, (e)
Contracts to purchase or acquire advertising or other product promotion or brand
support other than spot orders purchased in the ordinary course of business or
involving commitments by the Company of less than $25,000, (f) Contracts
involving the investment, including by way of capital contribution, loan or
advance, by the Company or any of its subsidiaries of more than $25,000 in any
other person, firm or entity (other than wholly owned subsidiaries), other than
investments no longer owned by the Company or its subsidiaries, (g) Contracts
regarding the license or lease of Company Intellectual Property, (h) Contracts
regarding the provision of consulting or maintenance services, and (i) other
Contracts under which the obligation of the Company and its subsidiaries is
$500,000 or more in the twelve months following the date hereof (all Contracts
described in each of the categories (a) through (i) above, "Material
Contracts"). All Material Contracts are, with respect to the Company and its
subsidiaries, valid and binding, in full force and effect and enforceable
against the Company or its subsidiaries, as the case may be, in accordance with
their respective terms. To the Company's knowledge, (x) as of the date hereof,
all Material Contracts are, with respect to the other parties thereto, valid and
binding, in full force and effect and enforceable against such parties in
accordance with their respective terms, and (y) all Material Contracts are, with
respect to the other parties thereto, valid and binding, in full force and
effect and enforceable against such parties in accordance with their respective
terms, except, with respect to this clause (y) only, where failure to be valid
and binding, in full force and effect or enforceable would not, individually or
in the aggregate, be material and adverse to the Company and its subsidiaries,
taken as a whole. There is not under any such Contract, any existing default, or
event, which after notice or lapse of time, or both, would constitute a default,
by the Company or any of its subsidiaries, or to the Company's knowledge, any
other party, other than any such defaults or events which, individually or in
the aggregate, would not have a Material Adverse Effect.
4.18. Intellectual Property; Technology. (a) Schedule 4.18
sets forth a complete and correct list of all material Intellectual Property
that (i) is owned or (ii) is used or held for use, in each case, by the Company
or any subsidiary in connection with, or that is material to, the business
currently conducted or proposed to be conducted by the Company and its
subsidiaries (the "Company Intellectual Property"), except that Schedule 4.18
does not need to set forth inventions, processes, formulae, trade secrets,
know-how or confidential information that are not reduced to tangible form or
that are not susceptible to legal protection by filing or registration with any
Governmental Entity.
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(b) The Company and its subsidiaries own, or have the valid
right and license to use, and the Surviving Corporation will, immediately after
the Closing, own or have the valid right and license to use, all of the
Intellectual Property material to the conduct of the business of the Company and
its subsidiaries as currently conducted. The Company and the subsidiaries own
all of their rights in and to the Company Intellectual Property, free and clear
of any material Encumbrances (except for Permitted Liens).
(c) The conduct of the business of the Company and its
subsidiaries does not, to the knowledge of the Company, infringe any patent
rights of any Person, and does not infringe any other Intellectual Property or
other rights of any Person. To the knowledge of the Company, as of the date
hereof, none of the Company Intellectual Property is being infringed,
misappropriated or otherwise used or available for use by any Person without
written authority from the Company, except in each case for any infringements
that, individually or in the aggregate, would not reasonably be expected to be
material.
(d) No claim or demand of any Person has been made or, to the
knowledge of the Company, threatened, nor is there any litigation that is
pending or, to the knowledge of the Company, threatened, that (i) challenges the
rights of the Company or any of its subsidiaries in respect of any material
Company Intellectual Property or (ii) asserts that the Company or any of its
subsidiaries is infringing or otherwise in conflict with, or is required to pay
any material royalty, license fee, charge or other material amount with regard
to, any material Company Intellectual Property. None of the Company Intellectual
Property is subject to any material outstanding order, ruling, decree, judgment
or stipulation by or with any court, tribunal, arbitrator or other Governmental
Entity.
(e) Schedule 4.18 sets forth a complete list of Company
Intellectual Property that is owned by the Company and that is registered with,
filed in or issued by, as the case may be, the United States Patent and
Trademark Office, the United States Copyright Office or other filing offices,
domestic or foreign, and such registrations, filings, issuances and other
actions remain in full force and effect. The Company and its subsidiaries have
taken all reasonable and customary actions to ensure full protection of the
material Company Intellectual Property and to maintain the confidentiality of
all confidential Intellectual Property, in each case under any applicable Law.
(f) To the knowledge of the Company, the Company or a
subsidiary has valid licenses to all copies of all Software that is utilized by
it in connection with the conduct of its business and that it does not own
("Commercial Software"), and the
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use by the Company or such subsidiary of such Commercial Software, including
without limitation all modifications and enhancements thereto (whether created
by the Company or by a third party) is in material compliance with the terms and
provisions of such licenses. To the knowledge of the Company, none of the
software marketed or licensed by the Company to its customers (the "Company
Software"), and no use thereof by the Company or any subsidiary or permitted use
by the Company's or any of its subsidiaries' licensees, infringes upon or
violates any patent, copyright, trade secret or other Intellectual Property
right of any person or entity, and no claim or demand with respect to any such
infringement or violation has been made or, to the best knowledge of the
Company, threatened. To the knowledge of the Company, there are no defects in
the Company Software that would prevent such Software from performing in all
material respects the tasks and functions that it was intended to perform except
those which can be cured without a Material Adverse Effect. True and correct
copies of all material licenses and arrangements (including amendments,
supplements, waivers and other modifications) for any and all Company
Intellectual Property that is not owned by the Company (including but not
limited to any and all material Commercial Software) have been delivered to the
Purchaser. All royalties, license fees, charges and other amounts payable by, on
behalf of, to or for the account of any of the Company or its subsidiaries in
respect of any Intellectual Property (including but not limited to Software) are
reflected in the financial statements contained in or referenced by the Company
Reports.
(g) Schedule 4.18 sets forth a complete list of all
agreements, arrangements, commitments and contracts, including, but not limited
to, escrow agreements, license agreements, and product service agreements, which
provide for the conditional release or transfer of, or give any customer the
right to possess, any source code to or relating to Company Software in any form
or medium. Except as set forth in Schedule 4.18, no condition or default exists
which would cause or with lapse of time would result in the release or transfer
of, or give any customer the right to possess, any source code to or relating to
Company Software in any form or medium under all such agreements, arrangements,
commitments and contracts.
(h) "Intellectual Property" means the United States and
foreign trademarks, service marks, trade names, trade dress, copyrights, and
similar rights, including registrations and applications to register or renew
the registration of any of the foregoing, the United States and foreign letters
patent and patent applications, and inventions, processes, designs, formulae,
trade secrets, know-how, confidential information, Software, data and
documentation, and all similar intellectual property rights, tangible
embodiments of any of the foregoing (in any form or medium including electronic
media), and licenses of any of the foregoing.
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(i) "Software" means all computer programs, including all
source code and object code versions thereof, in any and all forms and media,
whether recorded on paper, magnetic media or other electronic or non-electronic
media, and all documentation relating thereto, including, but not limited to,
user manuals and training materials.
4.19. Calendar Function. The Company has conducted an
inventory of all computer software programs owned or licensed by it as well as
the hardware and embedded microcontrollers in non-computer equipment used by the
Company in connection with and material to the operation of its business
(collectively, the "Computer Systems") in order to determine which parts of the
Computer Systems are not Year 2000 Compatible (as defined below) and to estimate
the cost of rendering such Computer Systems Year 2000 Compatible prior to
January 1, 2000. Based on the above-referenced inventory, the Company represents
and warrants that the Computer Systems are either Year 2000 Compatible or that
it is the reasonable expectation of the Company that they will be Year 2000
Compatible prior to July 1, 1999; the estimated remaining cost of rendering the
Computer Systems Year 2000 Compatible is $30,000. "Year 2000 Compatible" means
that the Computer Systems to the extent required for their particular use (i)
correctly perform date data century recognition, and calculations that
accommodate same century and multi-century formulas and date values; (ii)
operate or are expected to operate on a basis comparable to their current
operation during and after calendar year 2000 A.D., including but not limited to
leap years; and (iii) shall not end abnormally or provide invalid or incorrect
results as a result of date data which represents or references different
centuries or more than one century.
4.20. Material Delaying Event. To the knowledge of the
Company, there is no existing event, circumstance or condition that would have,
or be reasonably expected to result in, a Material Delaying Effect. A "Material
Delaying Effect" is an effect that would prevent or delay the consummation of
the Offer beyond the relevant Long-Stop Date.
4.21. Environmental Matters. (a) The Company and its
subsidiaries have at all times complied with all applicable Environmental Laws,
including compliance with all Permits and authorizations required pursuant to
all applicable Environmental Laws. No material violation by the Company or any
of its subsidiaries has at any time been alleged of any applicable Environmental
Law.
(b) Except as disclosed in Schedule 4.21, the Company and its
subsidiaries are not subject to any litigation related to any Environmental Law
with respect to any of the current or past operations of the Company or any of
its subsidiaries, or any of the currently or formerly owned, leased or used
property or assets of the Company or any of its subsidiaries.
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(c) Neither the Company nor any of its subsidiaries, nor, to
the knowledge of the Company, any other person, has caused or taken any action
that will result in, and neither the Company nor any of its subsidiaries is
subject to, any liability or obligation on the part of the Company or any of its
subsidiaries relating to (i) the environmental conditions on, under, or about
the real property or other properties or assets currently or formerly owned,
leased, operated or used by the Company or any of its subsidiaries or (ii) the
past or present use, management, handling, transport, treatment, generation,
storage, disposal, or release of any Hazardous Materials.
(d) Except as disclosed in Schedule 4.21, neither the Company
nor any of its subsidiaries is subject to any outstanding order from, or
contractual or other obligation with, any Governmental Entity or other person in
respect of which the Company or any of its subsidiaries may be required to incur
costs arising from the release or threatened release of a Hazardous Material and
neither the Company nor any of its subsidiaries has entered into any contractual
or other obligation with any Governmental Entity or other person pursuant to
which the Company or any of its subsidiaries assumed responsibility for the
remediation of any condition arising from or relating to the release or
threatened release of Hazardous Materials.
(e) The Company and its subsidiaries have made available to
the Purchaser all information, including, without limitation, all studies,
analyses and test results, in its possession, custody or control or otherwise
known to the Company or any of its subsidiaries relating to (i) the
environmental conditions on, under or about the real property owned or leased by
the Company or any of its subsidiaries or other properties or assets currently
or formerly owned, leased, operated or used by the Company or any of its
subsidiaries and (ii) any Hazardous Materials used, handled, transported,
generated, discharged, or otherwise released by the Company or any of its
subsidiaries or any other person on, under, about or from any of the real
property owned or leased by the Company or any of its subsidiaries and the
properties currently or formerly owned, leased, or used by Company or its
subsidiaries.
4.22. Insurance. Schedule 4.22 contains a complete and correct
list and summary description of all insurance policies maintained (including
Directors' and Officers' insurance) by or on behalf of the Company and its
subsidiaries. The Company has made available to the Parent complete and correct
copies of all such policies together with all riders and amendments thereto.
Such policies are in full force and effect in all material respects, and all
premiums due thereon have been paid. The Company and its subsidiaries have
complied in all material respects with the terms and provisions of such
policies.
4.23. Product Liability; Warranties. Except as set forth in
Schedule 4.23, there are no liabilities of the Company or any of its
subsidiaries, fixed or contingent,
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asserted or, to the knowledge of the Company, unasserted, (a) with respect to
any product liability or any similar claim that relates to any Company Software
or other product or service of the Company or any of its subsidiaries, or (b)
with respect to any claim for the breach of any express or implied product
warranty or any other similar claim with respect to any Company Software or
other products or services of the Company or any of its subsidiaries, other than
standard warranty obligations (to replace, repair or refund) made by the Company
or any of its subsidiaries in the ordinary course of business to buyers of the
respective Company Software or other products, and except, in each case, where
such liabilities are not, individually or in the aggregate, reasonably likely to
have a Material Adverse Effect.
4.24. Disclosures; Information Supplied. None of the
information supplied or to be supplied (and not subsequently retracted) by the
Company for inclusion or incorporation by reference in the Offer Documents, the
Schedule 14D-9 or the Information Statement will, at the respective times the
Offer Documents, the Schedule 14D-9 and the Information Statement are filed with
the SEC or first published, sent or given to the Company's stockholders, 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 are made, not
misleading. The Schedule 14D-9 and the Information Statement will comply as to
form in all material respects with the requirements of the Exchange Act and the
rules and regulations thereunder, except that no representation or warranty is
made by the Company with respect to statements made or incorporated by reference
therein based on information supplied by the Parent or the Purchaser for
inclusion or incorporation by reference therein.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF THE PARENT, THE PURCHASER AND THE US PARENT
As of the date hereof and as of the Effective Date, the
Parent, the Purchaser and the US Parent each jointly and severally represents
and warrants to the Company and agrees as follows:
5.1. Existence; Good Standing; Corporate Authority. Each of
the Purchaser, the Parent and the US Parent is a corporation duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of
incorporation.
5.2. Authorization, Validity and Effect of Agreements. Each of
the Purchaser, the US Parent and the Parent has the requisite corporate power
and authority
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to execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation by the Purchaser, the US Parent and the Parent of the transactions
contemplated hereby have been duly and validly authorized by the respective
Boards of Directors of the Purchaser, the US Parent and the Parent, as
applicable, and by the stockholders of the Purchaser, and no other corporate
proceedings on the part of the Purchaser, the US Parent or the Parent are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by the Purchaser, the US Parent and the Parent, and (assuming this
Agreement constitutes the valid and binding obligation of the Company)
constitutes the valid and binding obligation of each of the Purchaser, the US
Parent and the Parent, enforceable against the Purchaser, the US Parent and the
Parent in accordance with its terms.
5.3. Litigation. There is no judgment, decree or order pending
or, to the knowledge of the Purchaser, the US Parent, the Parent or any of their
directors or officers, threatened against the Purchaser, the US Parent or the
Parent that would have a Material Delaying Effect.
5.4. No Violation. Neither the execution and delivery of this
Agreement by the Purchaser, the US Parent and the Parent nor the consummation by
them of the transactions contemplated hereby will (a) violate, conflict with or
result in any breach of any provision of the Articles of Incorporation or
By-Laws of the Purchaser or the US Parent or the Memorandum and Articles of
Association, in each case as amended, of the Parent; (b) other than the
Regulatory Filings, require any consent, approval or authorization of, or
declaration, filing or registration with, any Governmental Entity, the lack of
which individually or in the aggregate would have a Material Delaying Effect or
(c) violate any Laws applicable to the Purchaser, the US Parent or the Parent or
any of their respective assets, except for violations which individually or in
the aggregate would not have a Material Delaying Effect.
5.5. Information Supplied. None of the information supplied or
to be supplied (and not subsequently retracted) by the Parent or the Purchaser
for inclusion or incorporation by reference in the Offer Documents, the Schedule
14D-9, the Information Statement or the Proxy Statement will, in the case of the
Offer Documents, the Schedule 14D-9 and the Information Statement, at the
respective times the Offer Documents, the Schedule 14D-9 and the Information
Statement are filed with the SEC or first published, sent or given to the
Company's stockholders, or, in the case of the Proxy Statement, at the date the
Proxy Statement is first mailed to the Company's stockholders held to vote on
approval and adoption of this Agreement, 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 are made, not
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misleading. The Offer Documents will comply as to form in all material respects
with the requirements of the Exchange Act and the rules and regulations
promulgated thereunder, except that no representation or warranty is made by the
Purchaser, the Parent or the US Parent with respect to statements made or
incorporated by reference therein based on information supplied by the Company
for inclusion or incorporation by reference therein.
5.6. Ownership of Shares. Neither the Purchaser, the US
Parent, the Parent nor any of their respective affiliates is the beneficial
owner of any shares of Common Stock of the Company, except pursuant to the
Stockholders Agreement.
5.7. Interim Operations of the Purchaser. The Purchaser was
formed solely for the purpose of engaging in the transactions contemplated
hereby, has engaged in no other business activities and has conducted its
operations only as contemplated hereby.
ARTICLE VI
COVENANTS
6.1. Conduct of the Business of the Company. Except as
contemplated by this Agreement or as set forth in Schedule 6.1, during the
period from the date of this Agreement to the Effective Time, the Company and
its subsidiaries will each conduct its operations according to its ordinary and
usual course of business, and will use reasonable best efforts to preserve
intact its business organization and to maintain satisfactory relationships with
customers and others having business relationships with it. The Company will
make its officers reasonably available to confer on a regular and frequent basis
with representatives of the Parent to report upon the status of operations.
Without limiting the generality of the foregoing, and except as otherwise
expressly contemplated by this Agreement or as set forth in Schedule 6.1, prior
to the Effective Time, neither the Company nor any of its subsidiaries will,
without the prior written consent of the Parent:
(a) amend its Certificate of Incorporation or By-laws (or
equivalent instruments);
(b) authorize for issuance, issue, sell, deliver or agree or
commit to issue, sell or deliver (whether through the issuance or
granting of additional options, warrants, commitments, subscriptions,
rights to purchase or otherwise) any shares of capital stock of any
class or any securities convertible into shares of capital stock of any
class, except as required by any Plan or Stock Option Plan existing as
of the date hereof;
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(c) split, combine or reclassify any shares of its capital
stock, declare, set aside or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in
respect of its capital stock, or redeem or otherwise acquire any shares
of its capital stock, provided that any of the Company's wholly owned
subsidiaries may declare, set aside or pay any dividend or other
distribution with respect to their capital stock;
(d) (i) except under current borrowing facilities in the
ordinary course of business in accordance with past practice, create,
incur or assume any long-term debt (including obligations in respect of
capital leases); (ii) except in the ordinary course of business and
consistent with past practices, assume, guarantee, endorse or otherwise
become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any person other than any subsidiary
of the Company; or (iii) make any loans, advances or capital
contributions to, or investments in, any person other than any of the
subsidiaries of the Company, except for loans or advances to employees
or customers in the ordinary course of business and consistent with
past practices;
(e) except in the ordinary course of business consistent with
past practice or as otherwise described in Schedule 6.1(e), sell,
transfer or otherwise dispose of, any business, subsidiary, or assets
(including without limitation, receivables, leasehold interests or
Intellectual Property) that are material to the Company and its
subsidiaries taken as a whole, or fixed assets that are sold,
transferred or otherwise disposed of, either individually or in the
aggregate, with a book value in excess of $250,000;
(f) make any capital or research and development expenditures
in the aggregate for the Company and its subsidiaries in excess of the
amounts specified in the Company's 1999 expense plan for capital or
research and development expenditures, previously made available to the
Parent, other than increases over such plan in amounts that are in the
aggregate immaterial;
(g) except in the ordinary course of business consistent with
past practice or as otherwise described in Schedule 6.1(g), license or
permit any third party to use any Intellectual Property;
(h) without the written consent of the Parent (which shall not
be unreasonably withheld or delayed), settle or compromise any pending
or threatened suit, action, Tax audit or claim in which the amount
involved is greater than $250,000 or which is material to the Company
and its subsidiaries taken as a whole;
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(i) waive or amend any term or condition of any
confidentiality or "standstill" agreement to which the Company is a
party;
(j) except with respect to agreements which are terminable at
will by the Company or any of its subsidiaries without any material
penalty to the Company or any of its subsidiaries, enter into or amend
any legally binding employment, severance, consulting or salary
continuation agreements with any officers, directors or employees or
grant any increases in compensation or benefits to employees other than
increases to officers and employees in the ordinary course of business
consistent with the past practice of the Company and its subsidiaries;
(k) enter into, renew or agree to any modification or
amendment to any Contract unless the Contract (I) expressly provides
that the Company's aggregate exposure thereunder (including any
exposure described in clause (iii) below) to the other party to the
Contract (the "Licensee") or to any other third party does not exceed
the greater of (A) $2,000,000 and (B) the aggregate amount actually
paid by the Licensee to the Company under such Contract through the
date on which the determination of Company's liability is made, (ii)
expressly excludes any consequential damages (including loss of
profits) of the Licensee or other third parties from any liability of
the Company, (iii) expressly provides that the Company's potential
liability in respect of infringement claims relating to the Company's
Intellectual Property does not exceed the aggregate amount actually
paid by the Licensee to the Company under such Contract through the
date on which the determination of Company's liability is made, (iv)
only obligates the Company to provide a package of standard products
and services or to provide non-standard products and services that do
not, in the aggregate, exceed 20% of the value of the Contract or to
provide other services on a "time and materials" basis, and (v) does
not require or obligate the Company to perform services or provide
non-standard products in the future at an aggregate cost to the Company
of more than $1,000,000;
(l) make any material Tax election or permit any material
insurance policy naming it as a beneficiary or a loss payable payee to
be canceled or terminated;
(m) except for bonuses payable for 1998 in the aggregate
amount not to exceed $1,250,000, and annual salary reviews and
increases (which shall not exceed 5% on average), grant any material
increase in the compensation payable or to become payable to any of its
officers or to its employees as a whole or establish, adopt, enter
into, make any new grants or awards under, or amend, any collective
bargaining (except as required by law), bonus, profit sharing, thrift,
compensation, stock option or other equity, pension, retirement,
incentive or deferred
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compensation, employment, retention, termination, severance, health,
life or other welfare, fringe or other plan, agreement, trust, fund,
policy or arrangement for the benefit of any current directors,
officers or employees, or grant or pay any material benefit not
required by any existing plan or arrangement;
(n) (x) adopt or terminate any material Plan or (y) amend any
Plan in any material respect (except in each case as expressly
contemplated by this Agreement);
(o) except in the ordinary course of business, enter into (i)
any agreements with distributors, brokers, or sales agents other than
agreements terminable without penalty on less than 30 days' notice,
(ii) any agreements to distribute products for others or which restrict
the ability of the Company or its subsidiaries to compete or (iii) any
other agreements, other than agreements relating to product promotions,
that would be Material Contracts; or amend in any respect materially
adverse to the Company any of the foregoing agreements as they exist on
the date hereof;
(p) declare, set aside or pay any dividend or make any other
distribution or payment with respect to any shares of Common Stock or
other capital stock or ownership interests (other than such payments by
a wholly owned subsidiary to the Company or another wholly owned
subsidiary);
(q) directly or indirectly redeem, purchase or otherwise
acquire any shares of its capital stock or the capital stock of any of
its subsidiaries;
(r) settle or compromise any pending or threatened Litigation
without the Parent's consent (which consent will not be unreasonably
withheld or delayed), other than settlements of Litigations which
involve solely the payment of money (without admission of liability)
not to exceed $50,000 in any one case or $100,000 in the aggregate;
(s) waive, relinquish, release, assign or terminate any
material right or claim, including any such right or claim under any
Material Contract in any respect that is materially adverse to the
Company;
(t) except as required by GAAP, make any change to any of the
accounting principles, practices or methods used by it;
(u) acquire any business (by merger, purchase of capital
stock, purchase of assets, consolidation or otherwise); or
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(v) agree to do any of the foregoing.
6.2. Access to Information. From the date hereof to the
Effective Time, subject to applicable confidentiality agreements creating
obligations to others, the Company shall, and shall cause its subsidiaries,
officers, directors, employees, auditors and other agents to, afford the
officers, employees, auditors and other agents of the Parent, and
representatives of and advisors to financing sources, reasonable access during
normal business hours to its officers, employees, agents, properties, offices,
plants and other facilities and to all books, records and contracts, and shall
furnish the Parent and such financing sources with all financial, operating and
other data and information as the Parent, through its officers, employees or
agents, or such financing sources may from time to time reasonably request. The
Company will promptly furnish to the Parent, at the Parent's expense, a copy of
each material document filed or received by it pursuant to the Federal
securities laws or Federal or state tax laws or any Environmental Laws, and of
such other documents as the Parent may reasonably request. Except as required by
Law, the Parent will hold, and will cause its officers, employees, accountants,
counsel, financial advisers and other representatives and affiliates to hold,
any and all information received from the Company, directly or indirectly, in
confidence, according to the terms of the Confidentiality Agreement.
6.3. Stockholder Approvals. (a) If required by applicable law
in connection with the consummation of the Merger, as soon as practicable
following the purchase of the Shares pursuant to the Offer, the Company, acting
through the Company Board shall, in accordance with applicable law, take all
steps necessary to duly call, set a record date for, give notice of, convene and
hold a meeting of its stockholders (the "Company Stockholder Meeting") as soon
as practicable for the purpose of adopting and approving this Agreement and the
Merger. At such meeting, the Parent and the Purchaser will each vote, or cause
to be voted, all Shares acquired in the Offer or otherwise beneficially owned by
it or any of its subsidiaries on the record date for such meeting, in favor of
the approval and adoption of this Agreement and the Merger.
(b) The Company will, if required by law in connection with
the consummation of the Merger, as soon as practicable following the expiration
of the Offer, prepare and file a preliminary Proxy Statement with the SEC, and
shall use all reasonable best efforts to obtain and furnish the information
required to be included by it in the Proxy Statement and, after consultation
with the Parent, to respond promptly to any comments made by the SEC with
respect to the Proxy Statement and any preliminary version thereof and cause the
Proxy Statement to be mailed to its stockholders at the earliest practicable
time following the purchase of the Shares pursuant to the Offer. The Proxy
Statement will contain the recommendations of the Company Board as set forth in
Section 1.2(a), and the Company Board will use all reasonable best efforts to
obtain the Company Stockholder
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Approval. Notwithstanding the foregoing, the Company will not mail any Proxy
Statement, or any amendment or supplement thereto, to which the Parent
reasonably objects, provided that the Parent shall identify its objections and
fully cooperate with the Company to create a mutually satisfactory Proxy
Statement.
(c) Notwithstanding the foregoing, if after the expiration of
the Offer the Purchaser shall be the owner of at least 90 percent of the
outstanding Shares, the parties hereto shall take all necessary and appropriate
action to cause the Merger to become effective, as soon as practicable after the
expiration of the Offer and compliance with any applicable rules of the SEC,
without a meeting of shareholders of the Company, if practicable, in accordance
with Section 253 of the DGCL.
6.4. Reasonable Best Efforts. Subject to the terms and
conditions herein provided and without limiting in any way the rights of the
Company under Section 6.8 hereof, after consultation with outside counsel of
nationally recognized standing ("Outside Counsel"), each of the parties hereto
agrees to use all reasonable best efforts consistent with applicable legal
requirements to take, or cause to be taken, all action, and to do, or cause to
be done, all things necessary or proper and advisable under applicable laws and
regulations to ensure that the conditions set forth in Annex A hereto and
Article VII hereof are satisfied and to consummate and make effective, in the
most expeditious manner practicable, the transactions contemplated by this
Agreement, including the Merger.
6.5. Consents. The Company shall use all reasonable best
efforts to obtain all material consents of third parties and governmental
authorities ("Consents") and to make all governmental filings necessary to the
consummation of the transactions contemplated by this Agreement. The Company,
the Parent and the Purchaser shall as promptly as practicable file Pre-Merger
Notification and Report Forms under the HSR Act with the Federal Trade
Commission (the "FTC") and the Antitrust Division of the Department of Justice
(the "Antitrust Division") and shall use all reasonable best efforts to respond
as promptly as practicable to all inquiries received from the FTC or the
Antitrust Division for additional information or documentation.
6.6. Public Announcements. The Parent and the Company will
attempt in good faith to consult with each other before issuing any press
release or otherwise making any public statements with respect to the Offer or
the Merger and shall not issue any such press release or make any such public
statement prior to such consultation, except as may be required by law or by
obligations pursuant to any listing agreement with any securities exchange.
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6.7. Consent of the US Parent. The US Parent, as the sole
shareholder of the Purchaser, by executing this Agreement, consents to the
execution and delivery of this Agreement by the Purchaser and the consummation
of the Merger and the other transactions contemplated hereby and such consent
shall be treated for all purposes as a vote duly cast at a meeting of the
stockholders of the Purchaser held for such purpose.
6.8. No Solicitation. (a) The Company and its subsidiaries
shall, and shall direct and use reasonable best efforts to cause their
respective officers, directors or employees, and any investment banker,
financial advisor, attorney, accountant retained by, or other advisor or
representative of, it to immediately cease any discussions or negotiations with
any parties other than the Purchaser and the Parent that may be ongoing with
respect to an Acquisition Proposal. The Company and its subsidiaries shall not,
and shall not authorize or permit any of their respective officers, directors or
employees or any investment banker, financial advisor, attorney, accountant
retained by, or other advisor or representative of, it to, directly or
indirectly, (i) solicit, initiate or encourage (including by way of furnishing
nonpublic information), or take any other action to facilitate, any inquiries or
the making of any proposal that constitutes, or may reasonably be expected to
lead to, an Acquisition Proposal or (ii) participate in any discussions or
negotiations regarding an Acquisition Proposal; provided, however, that if, at
any time prior to the adoption of this Agreement by the holders of Common Stock,
the Company Board determines in good faith, after consultation with Outside
Counsel, that failure to do so would constitute a breach of its fiduciary duties
to the Company's stockholders under applicable law, the Company, subject to
compliance with Section 6.8(c), in response to an Acquisition Proposal that (I)
was unsolicited and that did not otherwise result from a breach of this Section
6.8(a), and (II) constitutes a Superior Proposal, may (x) furnish nonpublic
information with respect to the Company and its subsidiaries to the person who
made such Acquisition Proposal pursuant to a customary and reasonable
confidentiality agreement and (y) participate in negotiations regarding such
Acquisition Proposal. Without limiting the foregoing, it is understood that any
violation of the restrictions set forth in the preceding sentence by any
director or officer of the Company or any of its subsidiaries or any investment
banker, financial advisor, attorney, accountant or other representative of the
Company or any of its subsidiaries, whether or not acting on behalf of the
Company or any of its subsidiaries, shall be deemed to be a breach of this
Section 6.8(a) by the Company. For purposes of this Agreement, "Acquisition
Proposal" means any proposal or offer from any person relating to any direct or
indirect acquisition or purchase of 10% or more of the assets of the Company or
any of its subsidiaries (including Intellectual Property) or the direct or
indirect acquisition or purchase of any shares of any class of outstanding
equity securities of the Company or any of its subsidiaries (except as may be
explicitly permitted by this Agreement), any tender offer or exchange offer that
if consummated would result in any person beneficially owning 10% or more of any
class of equity securities of the Company or any of its subsidiaries or any
merger, consolidation,
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business combination, sale of substantially all the assets, recapitalization,
liquidation, dissolution or similar transaction involving the Company or any of
its subsidiaries, other than the transactions contemplated by this Agreement.
For purposes of this Agreement, a "Superior Proposal" means any bona fide
proposal made by a third party to acquire, directly or indirectly, for
consideration consisting of cash and/or securities, 100% of the voting power of
the Common Stock of or all or substantially all the assets of the Company and
its subsidiaries and otherwise on terms which the Company Board determines in
good faith (based on the written opinion of Broadview International LLC or
another financial advisor of nationally recognized standing (which opinion shall
be provided to the Purchaser)) to be more favorable to the Company's
stockholders than the Offer and the Merger and for which any necessary financing
is then committed or which, in the good faith judgment of the Company Board, is
reasonably capable of being obtained by such third party.
(b) Neither the Company Board nor any committee thereof shall
(i) withdraw or modify, or propose to withdraw or modify, in a manner adverse to
the Parent or the Purchaser, the approval or recommendation by such Company
Board or such committee of this Agreement, the Offer or the Merger unless there
is a Superior Proposal outstanding, (ii) approve or recommend, or propose to
approve or recommend, an Acquisition Proposal unless such Acquisition Proposal
is a Superior Proposal or (iii) cause the Company to enter into any letter of
intent, agreement in principle, acquisition agreement or other agreement (an
"Acquisition Agreement") with respect to an Acquisition Proposal unless such
Acquisition Proposal is a Superior Proposal, and unless, in each case, the
Company Board shall have (x) determined in good faith, after consultation with
Outside Counsel, that failure to do so would constitute a breach of its
fiduciary duties to the Company's stockholders under applicable law, and (y)
terminated this Agreement pursuant to Section 8.1(e)(iv).
(c) The Company shall promptly (but in any event within one
day) advise the Parent and the Purchaser orally and in writing of any
Acquisition Proposal or any inquiry regarding the making of an Acquisition
Proposal including any request for information, the material terms and
conditions of such request, Acquisition Proposal or inquiry and the identity of
the person making such request, Acquisition Proposal or inquiry. The Company
will, to the extent reasonably practicable, keep the Parent and the Purchaser
fully informed of the status and details (including amendments or proposed
amendments) of any such request, Acquisition Proposal or inquiry.
(d) Nothing contained in this Section 6.8 shall prohibit the
Company from at any time taking and disclosing to its stockholders a position
contemplated by Rule 14e-2(a) promulgated under the Exchange Act or from making
any disclosure to the Company's stockholders if, in the good faith judgment of
the Company Board, after
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consultation with Outside Counsel, failure so to disclose would constitute a
breach of its fiduciary duties to the Company's stockholders under applicable
law; provided, however, that neither the Company nor its Board of Directors nor
any committee thereof shall, except as permitted by Section 6.8(b), withdraw or
modify, or propose to withdraw or modify, its position with respect to the
Merger or this Agreement or approve or recommend, or propose to approve or
recommend, an Acquisition Proposal; provided, further, that the taking of a
position by the Company pursuant to Rule 14e-2(a)(2) or (3) of the Exchange Act
in respect of an Acquisition Proposal shall not be deemed a withdrawal, a
modification or a proposal to do either, of its position with respect to the
Merger for purposes hereof.
6.9. Indemnification; Insurance. (a) For a period of three
years after the Effective Time, the Parent shall, and shall cause the Surviving
Corporation to, indemnify, defend and hold harmless the present and former
officers, directors, employees and agents of the Company and its subsidiaries
(collectively, the "Indemnified Parties") from and against, and pay or reimburse
the Indemnified Parties for, all losses, obligations, expenses, claims, damages
or liabilities (whether or not resulting from third-party claims and including
interest, penalties, out-of-pocket expenses and attorneys' fees incurred in the
investigation or defense of any of the same or in asserting any of their rights
hereunder) resulting from or arising out of actions or omissions occurring on or
prior to the Effective Time to the full extent permitted or required under
applicable law and, in the case of indemnification by the Surviving Corporation,
to the extent permitted under the provisions of the Certificate of Incorporation
and the By-laws of the Company, each as in effect at the date hereof (which
provisions shall not be amended in any manner which adversely affects any
Indemnified Party, for a period of three years), provided that in the event any
claim or claims are asserted or made within such three-year period, all rights
to indemnification in respect of each such claim shall continue until final
disposition of such claim. Without limiting the foregoing, in any case in which
approval by the Surviving Corporation is required to effectuate any
indemnification, the Parent shall cause the Surviving Corporation to direct, at
the election of the Indemnified Party, that the determination of any such
approval shall be made by independent counsel selected by the Indemnified Party.
(b) In the event that the Parent, the Surviving Corporation or
any of their successors or assigns (i) consolidates with or merges into any
other person and is not the continuing or surviving corporation or entity of
such consolidation or merger or (ii) transfers or conveys all or substantially
all of its properties and assets to any person, then, and in each such case,
proper provision will be made so that the successors and assigns of the Parent
or the Surviving Corporation, as the case may be, shall assume the obligations
set forth in this Section 6.9. In the event the Surviving Corporation transfers
any material portion of its assets, in a single transaction or in a series of
transactions, the Parent will
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either guarantee the indemnification obligations referred to in Section 6.9(a)
or take such other action to insure that the ability of the Surviving
Corporation, legal and financial, to satisfy such indemnification obligations
will not be diminished in any material respect.
(c) For not less than three years after the Effective Time,
the Parent and the Purchaser shall use its reasonable best efforts maintain in
effect directors' and officers' liability insurance covering the Indemnified
Parties who are currently covered by the Company's existing directors' and
officers' liability insurance, on terms and conditions no less favorable to such
directors and officers than those in effect on the date hereof, provided that in
no event shall the Parent be required to expend in any one year an amount in
excess of 200% of the annual premiums currently paid by the Company for such
insurance (the Company represents that the annual premium is currently
approximately $120,000); and, provided, further, that if the annual premiums of
such insurance coverage exceed such amount, the Parent shall be obligated to
obtain a policy with the greatest coverage available for a cost not exceeding
such amount.
6.10. Employees and Employee Benefit Plans. The Parent intends
to cause the Surviving Corporation and its subsidiaries to maintain employee
compensation policies and benefit plans for their respective employees from and
for a period of twelve months after the Effective Time that, in the aggregate,
are substantially comparable, in the aggregate, to the compensation policies and
Plans as of the date hereof. From and after the Effective Time, the Parent shall
cause the Surviving Corporation and its subsidiaries to honor all existing
employment agreements in accordance with the terms thereof as in effect on the
date hereof or as the same may be amended with the consent of the employee party
thereto and the Parent. To the extent that employees of the Surviving
Corporation or its subsidiaries become eligible to participate in any employee
benefit plan of the Parent after the Effective Time, the Parent shall recognize
the service of such employees with the Company or its subsidiaries completed
prior to the Effective Time for all purposes of eligibility to participate and
vesting in its benefit plans.
6.11. Notification of Certain Matters. The Company will give
prompt notice to the Parent and the Purchaser, and the Parent and the Purchaser
will give prompt notice to the Company, of the occurrence or non-occurrence of
any event likely to cause (a) any representation or warranty contained in this
Agreement to be untrue or inaccurate in any material respect, (b) any failure of
the Company, or of the Parent or the Purchaser, as the case may be, to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied under this Agreement, and (c) any of the conditions specified in Annex
A or Article VIII to fail to be satisfied, provided that the delivery of any
notice pursuant to this Section 6.11 will not limit or otherwise affect the
remedies available under this Agreement to the party receiving such notice.
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6.12. Anti-takeover Statutes. If any "fair price,"
"moratorium," "control share acquisition" or other form of anti-takeover statute
(including Section 1101 of the CGCL) is or shall become applicable to the Offer,
Merger or other transactions contemplated hereby, the Company and the members of
the Company Board shall grant such approvals and, subject to the Company's
rights under Section 6.8, take such actions as are necessary (including amending
the Offer) so that the Offer, Merger and other transactions contemplated hereby
may be consummated as promptly as practicable on the terms contemplated hereby
and otherwise act to eliminate or minimize the effects of any such anti-takeover
statute on the transactions contemplated hereby.
6.13. Top-Up Option. (a) Grant of Top-Up Option. Subject to
the conditions set forth below in this Section 6.13, the Company hereby grants
to the Purchaser an irrevocable option (the "Top-Up Option") to purchase from
the Company for cash that number of Shares equal to the Top-Up Share Amount. The
purchase price per Share shall equal the Offer Price. The "Top-Up Share Amount"
means that number of Shares that, when added to the number of Shares owned by
the Purchaser and its affiliates immediately prior to the exercise of the Top-Up
Option, shall constitute 90.1% of the Shares then outstanding on a fully diluted
basis (assuming the issuance of Shares pursuant to the Top-Up Option). The
Top-Up Option shall expire if not exercised prior to the earlier of the
Effective Date and 12:00 midnight, Eastern time, on the date that is 10 business
days after termination of the Offer (the "Top-Up Expiration Date").
(b) Exercise of the Top-Up Option. The Top-Up Option may be
exercised by the Purchaser, in whole but not in part, at any one time following
the satisfaction of the conditions set forth in Section 6.13(c), provided that
the Top-Up Expiration Date has not occurred. The Purchaser shall exercise the
Top-Up Option by giving written notice to the Company specifying the number of
Shares it will purchase pursuant to such exercise and the place and date (not
later than ten business days from the date such notice was given) for the
closing of such purchase. Notwithstanding the occurrence of the Top-Up
Expiration Date, the Purchaser shall be entitled to purchase Shares pursuant to
the exercise of the Top-Up Option if it has exercised the Top-Up Option in
accordance with the terms hereof prior to such occurrence, and the occurrence of
the Top-Up Expiration Date shall not affect any rights under this Section 6.13
which by their terms do not terminate or expire prior to or as of such date.
(c) Conditions to the Exercise of the Top-Up Option. The
Purchaser shall not be entitled to exercise the Top-Up Option, and the Company
shall have no obligation to deliver Shares pursuant to the exercise of the
Top-Up Option, unless all of the following conditions have been satisfied:
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(i) the Purchaser shall have accepted Shares for
payment pursuant to the Offer;
(ii) the Minimum Condition shall have been satisfied;
(iii) the Top-Up Share Amount does not exceed the
number of Shares authorized by the Company for issuance but
not issued or reserved for issuance; and
(iv) the Top-Up Share Amount does not exceed 19.9% of
the Shares issued and outstanding at the time of exercise of
the Top-Up Option (without giving effect to the issuance of
Shares pursuant to the Top-Up Option).
(d) Closing. At the closing of the purchase of Shares pursuant
to the exercise of the Top-Up Option, (i) the Purchaser will make payment to the
Company of the full purchase price for such purchased Shares in same-day funds
in an amount equal to the product of the Offer Price multiplied by the number of
Shares being purchased at such closing, and (ii) the Company will deliver to the
Purchaser a duly executed certificate or certificates representing the number of
Shares so purchased, registered in the name of the Purchaser or its nominee
(designated by the Purchaser in its notice of exercise). The certificate or
certificates described in clause (ii) above may include legends legally required
including a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE REOFFERED OR
SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.
(e) Securities Act. The Purchaser represents that any Shares
purchased pursuant to this Section 6.13 will be acquired for investment only and
not with a view to any public distribution thereof, and the Purchaser will not
offer to sell or otherwise dispose of any Shares so acquired in violation of the
registration requirements of the Securities Act.
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ARTICLE VII
CLOSING CONDITIONS
7.1. Conditions to the Obligations of the Parent, the US
Parent, the Purchaser and the Company. The respective obligations of each party
to effect the Merger shall be subject to the fulfillment at or prior to the
Effective Time of the following conditions:
(a) The Purchaser shall have purchased all Shares duly
tendered and not withdrawn pursuant to the terms of the Offer and
subject to the terms thereof, provided that the obligation of the
Parent and the Purchaser to effect the Merger shall not be conditioned
on the fulfillment of the condition set forth in this subsection (a)
if the failure of the Purchaser to purchase the Shares pursuant to the
Offer shall have constituted a breach of the Offer or of this
Agreement.
(b) There shall not be in effect any statute, rule or
regulation enacted, promulgated or deemed applicable by any
Governmental Entity of competent jurisdiction that makes consummation
of the Merger illegal, and no temporary restraining order, preliminary
or permanent injunction or other order issued by any court of competent
jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect, provided that the party
seeking to avoid its obligations pursuant to this Section 7.1(b) shall
have used all reasonable best efforts to prevent the entry of any such
injunction or other order and to appeal as promptly as possible any
injunction or other order that may be entered.
(c) If required under applicable law, this Agreement shall
have been approved and adopted by the affirmative vote of the holders
of the requisite number of Shares in accordance with the Certificate of
Incorporation and By-laws of the Company and the DGCL.
(d) Any waiting period (and any extension thereof) applicable
to the consummation of the Merger under the HSR Act shall have expired
or been terminated.
7.2. Condition to the Obligations of the Parent, the US Parent
and the Purchaser. The respective obligations of the Parent, the US Parent and
the Purchaser to effect the Merger shall be subject to the fulfillment at or
prior to the Effective Time of the condition that the Purchaser and the US
Parent shall have received such affidavits or certifications in form and
substance reasonably satisfactory to the Purchaser and the US
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Parent as are necessary to exempt the Merger from the provisions of section 1445
of the Code.
ARTICLE VIII
TERMINATION AND ABANDONMENT
8.1. Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after approval by the
stockholders of the Company:
(a) by mutual consent of the Board of Directors of the Parent
and the Company Board;
(b) by action of the Board of Directors of the Parent or
action of the Company Board if at least that number of Shares required
by the Minimum Condition to be tendered shall not have been purchased
in the Offer on or before the date that is 90 days after the date
hereof, provided that the right to terminate this Agreement pursuant to
this Section 8.1(b) shall not be available to any party whose failure
to fulfill any material obligation under this Agreement in all material
respects has been the cause of, or resulted in, the failure of the
Offer or the Merger, as the case may be, to occur on or before the
aforesaid dates;
(c) by either the Parent or the Company if the Offer shall
expire or terminate in accordance with its terms without any Shares
having been purchased thereunder and, in the case of termination by the
Parent, the Purchaser shall not have been required by the terms of the
Offer or this Agreement to purchase any Shares pursuant to the Offer;
(d) by either the Parent, the Purchaser or the Company, if any
court of competent jurisdiction in the United States or the United
Kingdom or other Governmental Entity of competent jurisdiction shall
have issued an order, decree or ruling or taken any other action
restraining, permanently enjoining or otherwise prohibiting the
consummation of the Offer or the Merger, and such order, decree, ruling
or other action shall have become final and non-appealable;
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(e) by the Company:
(i) if the Parent or the Purchaser shall have failed
to commence the Offer or failed to pay for Shares pursuant to
the Offer in each case in accordance with Section 1.1(a),
provided that (in the case of failure to pay for Shares) the
conditions to the Offer set forth in paragraphs (a) - (f) of
Annex A shall have been satisfied;
(ii) if any of the respective representations and
warranties of the Parent or the Purchaser that are qualified
as to materiality shall not have been true and correct or any
such representations and warranties that are not so qualified
shall not have been true and correct in all material respects,
in each case as of the date of this Agreement, which failure
to be true and correct or true and correct in all material
respects is not reasonably capable of being cured by the
commercially reasonable best efforts of the Parent or the
Purchaser within 10 days of the receipt by the Parent of
written notice thereof;
(iii) if the Parent or the Purchaser shall have
failed to perform in any material respect any obligation or to
comply in any material respect with any agreement or covenant
applicable thereto to be performed or complied with by it
prior to the time of determination which failure is not
reasonably capable of being cured by the commercially
reasonable best efforts of the Parent or the Purchaser within
10 days of the receipt by the Parent of written notice
thereof; or
(iv) if the Company takes any of the actions
described in Section 6.8(b), provided, that (A) the Company
has notified the Parent or the Purchaser in writing of its
intent to take any such action five days prior to the
termination of this Agreement pursuant to this Section
8.1(e)(iv), and the relevant Acquisition Proposal continues to
be a Superior Proposal notwithstanding any modification by the
Parent and the Purchaser of the terms of the Offer and the
Merger; (B) the Company has complied with the provisions of
Sections 6.8(b) and (c); and (C) such termination under this
Section 8.1(e)(iv) shall not be effective until the Company
has paid to the Parent or deposited with a mutually acceptable
escrow agent an amount equal to the sum of the maximum Parent
Expenses and the Termination Fee.
(f) by the Parent or the Purchaser:
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(i) if the Offer has expired and the Purchaser is
neither required to accept and pay for the Shares tendered
into the Offer nor to extend the expiration date of the Offer
or if any of the events or circumstances set forth in Annex A
hereto shall have occurred and shall not be reasonably capable
of being cured by the commercially reasonable best efforts of
the parties hereto prior to the last date to which the Parent
and the Purchaser are required to extend the Offer pursuant to
Section 1.1; or
(ii) if the Company shall have taken any of the
actions described in Section 6.8(b) or if the Company Board
shall have resolved to take any such action.
8.2. Procedure and Effect of Termination. In the event of
termination and abandonment of the Merger by the Parent, the Purchaser or the
Company pursuant to Section 8.1, written notice thereof shall forthwith be
given to the other parties hereto, and this Agreement shall terminate and the
Merger shall be abandoned, without further action by any of the parties hereto.
The Purchaser and the US Parent agree that any termination by the Parent shall
be conclusively binding upon them, whether given expressly on their behalf or
not, and the Company shall have no further obligation with respect to them. If
this Agreement is terminated as provided herein, no party hereto shall have any
liability or further obligation to any other party to this Agreement, provided
that any termination shall be without prejudice to the rights of any party
hereto arising out of breach by any other party of any covenant or agreement
contained in this Agreement, and provided, further, that the obligations set
forth in the last sentence of Section 1.2(c), the last sentence of Section 6.2,
Sections 8.1, 8.2 and 8.3 and Article IX shall in any event survive any
termination.
8.3. Fees and Expenses. (a) Except as otherwise provided
herein and as provided below in this Section 8.3, all fees and expenses incurred
in connection with the Offer, the Merger, this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such fees or expenses,
whether or not the Offer or the Merger is consummated, except that printing and
mailing costs and expenses associated with the Offer Documents shall be shared
equally by the Parent and the Company.
(b) Notwithstanding any herein to the contrary, if this Agreement is
terminated pursuant to Section 8.1(b), Section 8.1(e)(iv), Section 8.1(f)(i)
(but only as a result of the existence of any of the conditions set forth in
Section (e) or (f) of Annex A), or Section 8.1(f)(ii), the Company shall
promptly reimburse the Parent for all Parent Expenses incurred by the Parent and
its affiliates. For purposes of this Agreement, the term "Parent Expenses" means
all documented reasonable out-of-pocket expenses incurred by the Parent and its
affiliates, up to a maximum of $750,000, in connection with or arising out
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of the Offer, the Merger, this Agreement and the transactions contemplated
hereby (including, without limitation, amounts paid or payable to investment
bankers, lending banks, dealer-managers and information agents, fees and
expenses of counsel, accountants and consultants, underwriting and all printing
and mailing costs), regardless of when those expenses are incurred.
(c) If this Agreement is terminated pursuant to Section 8.1(b), Section
8.1(e)(iv) or Section 8.1(f)(ii), and within one year of such termination the
Company consummates an Acquisition Proposal or enters into an Acquisition
Agreement with respect to an Acquisition Proposal that is subsequently
consummated, the Company shall pay the Parent $1,500,000 (the "Termination Fee")
in addition to any payment due or made with respect to Parent Expenses. The
Company shall pay such amount immediately upon consummation of such Acquisition
Proposal, in same-day funds.
(d) The Company acknowledges that the agreements contained in this
Section 8.3 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, the Purchaser and the Parent
would not enter this Agreement; accordingly, the Company agrees that in the
event that the Company shall fail to pay any Parent Expenses or the Termination
Fee when due, "Parent Expenses" and the Termination Fee shall be deemed to
include the costs and expenses actually incurred or accrued by the Parent, the
US Parent and the Purchaser (including, without limitation, fees and expenses of
counsel) in connection with the collection under and enforcement of this Section
8.3, together with interest on such unpaid Parent Expenses or Termination Fee,
commencing on the date that such Parent Expenses or Termination Fee became due,
at a rate equal to the rate of interest publicly announced by Citibank, N.A.,
from time to time, in the City of New York, as such bank's Base Rate plus 1.00%.
ARTICLE IX
MISCELLANEOUS
9.1. Amendment and Modification. Subject to applicable law and
to the provisions of Section 1.3(c), this Agreement may be amended, modified or
supplemented only by written agreement of the Parent, the US Parent, the
Purchaser and the Company at any time prior to the Effective Time with respect
to any of the terms contained herein, provided that after the Company
Stockholder Approval has been obtained, no such amendment or modification shall
be made that reduces the amount or changes the form of the Merger Consideration
or otherwise materially and adversely affects the rights of the Company's
stockholders hereunder, without the further approval of such stockholders.
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9.2. Waiver of Compliance; Consents. Any failure of the Parent
or the Purchaser, on the one hand, or the Company, on the other hand, to comply
with any obligation, covenant, agreement or condition herein may be waived by
the Company or the Parent, respectively, only by a written instrument signed by
the party granting such waiver (and, in the case of the Company, approved in
accordance with the provisions of Section 1.3(c), if applicable), but such
waiver or failure to insist upon strict compliance with such obligation,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure. Whenever this Agreement
requires or permits consent by or on behalf of any party hereto, such consent
shall be given in writing in a manner consistent with the requirements for a
waiver of compliance as set forth in this Section 9.2. The Purchaser hereby
agrees that any consent or waiver of compliance given by the Parent hereunder
shall be conclusively binding upon it, whether given expressly on its behalf or
not.
9.3. 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 acceptance for payment
of, and the payment for, Shares by the Purchaser pursuant to the Offer.
9.4. Notices. Any notice required to be given hereunder shall
be sufficient if in writing and sent by facsimile transmission (with a
confirmatory copy sent by overnight courier), by courier service (with proof of
service), hand delivery or certified or registered mail (return receipt
requested and first-class postage prepaid), addressed as follows:
If to the Purchaser, the US Parent or the If to the Company:
Parent:
Misys plc C-ATS Software Inc.
Burleigh House 0000 Xxxxxxxxxxx Xxxx
Xxxxxx Xxx Xxxx Xxxx, XX 00000
Xxxxxxx Xxxxxx
Xxxxxxxxxxxx XX00 0XX
Xxxxxxx
Telephone: 000-00-000-000-0000 Telephone: 000-000-0000
Facsimile: 011-44-138-687-1045 Facsimile: 000-000-0000
Attention: Xxxx X. Xxxxxx Attention: Xxxxx Xxxxxxx
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With a copy to: With a copy to:
Debevoise & Xxxxxxxx Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxxx Xxxxxx 650 Page Xxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxxx Xxxx, XX 00000
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxx, Xx., Esq. Attention: Xxxxxxx X. Xxxxxxx, Esq.
or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date and time
of the confirmation of such telecommunication or the receipt of such personal
delivery or mailing. In addition, such notice shall be deemed delivered as of
the date communicated orally to the relevant person set forth above, provided
that messages of any kind shall not constitute valid notice, and provided
further that such oral communication shall constitute valid notice only if, and
only to the extent that, it is followed within six hours by a written
confirmation sent to the appropriate party by facsimile transmission.
9.5. Assignment; Parties in Interest. This Agreement and all
of the provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns, but
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by any of the parties hereto without the prior written consent
of the other parties (except that the Purchaser may assign to the Parent or any
other direct or indirect wholly owned subsidiary of the Parent any and all
rights and obligations of the Purchaser under this Agreement or the Purchaser's
right to purchase Shares pursuant to the Offer, provided that any such
assignment will not relieve the Parent or the Purchaser from any of its
obligations under this Agreement). Except for Section 1.3(c) which is intended
for the benefit of the Company's stockholders other than the Parent and its
affiliates, this Agreement is not intended to confer upon any other person
except the parties any rights or remedies under or by reason of this Agreement.
9.6. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
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9.7. Governing Law. This Agreement shall be governed by the
laws of the State of Delaware (regardless of the laws that might otherwise
govern under applicable principles of conflicts of law) as to all matters,
including but not limited to matters of validity, construction, effect,
performance and remedies. Each of the parties hereto irrevocably consents to the
jurisdiction of any state or federal court within the State of Delaware in
connection with any matter based upon or arising out of this Agreement or the
matters contemplated herein, agrees that process may be served upon it in any
manner authorized by the laws the State of Delaware for such persons and waives
and covenants not to assert or plead any objection which it might otherwise have
to such jurisdiction or such process.
9.8. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.9. Entire Agreement. This Agreement, including the annexes
and the exhibits and schedules to this Agreement, and the Confidentiality
Agreement, embody the entire agreement and understanding of the parties hereto
in respect of the subject matter contained herein and supersedes all prior
agreements and the understandings between the parties with respect to such
subject matter.
9.10. Investigations. No action taken pursuant to this
Agreement, including, without limitation, any investigation by or on behalf of
any party, shall be deemed to constitute a waiver by the party taking such
action of compliance with any representations, warranties, covenants or
agreements contained in this Agreement.
9.11. Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
9.12. Interpretation; Definitions. (a) The article and section
headings contained in this Agreement are solely for the purpose of reference,
are not part of the agreement of the parties and shall not in any way affect the
meaning or interpretation of this Agreement. Unless the context otherwise
requires, words describing the singular number shall include the plural and vice
versa, and words denoting any gender shall include all genders. Wherever the
words "include," "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation."
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As used in this Agreement, (i) the term "person" shall mean and include an
individual, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization and a government or any department or agency
thereof; (ii) the terms "affiliate" and "associate" shall have the meanings set
forth in Rule l2b-2 of the General Rules and Regulations promulgated under the
Exchange Act, except that it is expressly understood that the term "affiliate"
shall include all parties (other than the Parent and any of its subsidiaries)
who have executed and delivered the Stockholders Agreement; (iii) the term
"subsidiary" of any specified corporation shall mean any corporation of which
the outstanding securities having ordinary voting power to elect a majority of
the board of directors are directly or indirectly owned by such specified
corporation; (iv) the phrase "to the knowledge" of any specified corporation
shall refer to the actual knowledge of the directors or senior officers of such
corporation, after reasonable inquiry.
(b) The following terms shall have the following meanings
ascribed to them:
"Company Stock Option Plans" means the C-ATS 1988 Incentive
Stock Option Plan, the Amended and Restated 1995 Stock Plan and the 1995
Director Option Plan.
"Confidentiality Agreement" means the Confidential Disclosure
Agreement, dated as of November 23, 1998, between the Parent and the Company.
"Disclosure Letter" means that certain Letter dated the date
hereof delivered by the Company to the Parent.
"Environmental Law" means any foreign, federal, state or local
law, statute, regulation, rule, ordinance, decree, or any other requirement of
law (including common law) regulating or relating to the protection of human
health and safety or the environment, including, but not limited to, laws
relating to releases or threatened releases of Hazardous Materials into the
environment.
"GAAP" means United States generally accepted accounting
principles.
"Hazardous Materials" means any substance or material that is
classified or regulated as "hazardous" or "toxic" pursuant to any Environmental
Law, including, without limitation, asbestos, polychlorinated biphenyls,
petroleum and urea-formaldehyde insulation.
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"Permits" means all franchises, approvals, permit
authorizations, licenses, orders, registrations, certificates, variances, and
other similar permits or rights obtained from any Governmental Entity and all
pending applications therefor.
"Permitted Lien" means (a) Encumbrances securing Taxes,
assessments, governmental charges or levies, all of which are not yet due and
payable or as to which adequate reserves have been established that are included
in the most recent consolidated financial statements included in the Company
Reports and that may thereafter be paid without penalty, (b) mechanics',
carriers', workmen's, repairmen's, and other similar Encumbrances incurred in
the ordinary course of business consistent with past practice, or (c) such other
liens which, individually and in the aggregate, do not and would not materially
detract from the value of any of the property or assets of the Company or its
subsidiaries or materially interfere with the use thereof.
"Tax" means any federal, state, local or foreign income, gross
receipts, property, sales, use, license, excise, franchise, employment, payroll,
premium, withholding, alternative or added minimum, ad valorem, transfer or
excise tax, or any other tax, custom, duty, governmental fee or other like
assessment or charge of any kind whatsoever, together with any interest or
penalty, imposed by any Governmental Entity.
"Tax Return" means any return, report or similar statement
required to be filed with respect to any Tax (including any attached schedules),
including, without limitation, any information return, claim for refund, amended
return or declaration of estimated Tax.
DEFINITIONS
Defined Term Section Reference
Acquisition Agreement 6.8(b)
Acquisition Proposal 6.8(a)
affiliate 9.12(a)
Agreement Preamble
Antitrust Division 6.5
By-laws 2.5(b)
Certificate of Incorporation 2.5(a)
Certificate of Merger 2.3
Certificates 3.2(a)
CGCL 4.15
Closing Date 2.2
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Code 4.10(b)
Commercial Software 4.18(f)
Common Stock Recitals
Company Preamble
Company Board 1.3(a)
Company Intellectual Property 4.18
Company Reports 4.7
Company Software 4.18(f)
Company Stock Option Plan 9.12(b)
Company Stockholder Approval 4.16
Company Stockholder Meeting 6.3(a)
Computer Systems 4.19
Confidentiality Agreement 9.12(b)
Consents 6.5
Constituent Documents 4.1
Contract(s) 4.6
DGCL 1.2(a)
Disclosure Letter 9.12(b)
Dissenting Shares 3.1(d)
Dissenting Stockholder 3.1(d)
Effective Time 2.3
Encumbrances 4.5
Environmental Law 9.12(b)
ERISA 4.11(c)
ERISA Affiliate 4.11(c)(iii)
Exchange Act 1.2(b)
Exchange Fund 3.2(a)
FTC 6.5
GAAP 9.12(b)
Governmental Entity 4.3
Hazardous Materials 9.12(b)
HSR Act 4.6
Indemnified Parties 6.9(a)
Independent Director 1.3(a)
Information Statement 1.3(b)
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Intellectual Property 4.18(h)
Laws 4.3
Licensee 6.1(k)
Litigation 4.8
Material Adverse Effect 4.1
Material Contracts 4.17
Material Delaying Effect 4.20
Merger Recitals
Merger Agreement Preamble
Merger Consideration 3.1(c)
Minimum Condition 1.1(a)
Offer Recitals
Offer Documents 1.1(b)
Offer Price Recitals
Offer to Purchase 1.1(b)
Option 3.1(e)
Option Consideration 3.1(e)
Outside Counsel 6.4
Parent Preamble
Parent Expenses 8.3(b)
Paying Agent 3.2(a)
PBGC 4.11(c)
Permits 9.12(b)
Permitted Lien 9.12(b)
Plan 4.11(a)
Preferred Stock 4.4
Purchaser Preamble
Purchaser Designees 1.3(c)
Regulatory Filings 4.6
Schedule 4.3
Schedule 14D-1 1.1(b)
Schedule 14D-9 1.2(b)
SEC 1.1(a)
Securities Act 4.7
Shares Recitals
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Software 4.18(i)
Stockholders Agreements Recitals
subsidiary 9.12(a)
Superior Proposal 6.8(a)
Surviving Corporation 2.1
Tax 9.12(b)
Tax Return 9.12(b)
Termination Fee 8.3(c)
Top-Up Expiration Date 6.13(a)
Top-Up Option 6.13(a)
Top-Up Share Amount 6.13(a)
US Parent Preamble
Year 2000 Compatible 4.19
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IN WITNESS WHEREOF, the Parent, the US Parent, the Purchaser
and the Company have caused this Agreement to be signed by their respective duly
authorized officers as of the date first above written.
MISYS PLC
By /s/ Xxxx Xxxxxx
Name:Xxxx Xxxxxx
Title:Corporate Development Director and
Secretary
KIRSTY, INC.
By /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: Vice President
MOXIE ACQUISITION CORP.
By /s/Xxxx Xxxxxx
Name:Xxxx Xxxxxx
Title: Secretary
C-ATS SOFTWARE INC.
By /s/ Xxxxx Xxxxxxx
Name:Xxxxx Xxxxxxx
Title: President
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ANNEX A
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer, the
Purchaser shall not be required to accept for payment, or, subject to any
applicable rules and regulations of the SEC, including Rule 14e-1(c) under the
Exchange Act (relating to the Purchaser's obligation to pay for or return
tendered shares after the termination or withdrawal of the Offer), to pay for
any Shares not theretofore accepted for payment or paid for, and the Purchaser
may amend or terminate the Offer as to such Shares not theretofore accepted for
payment or paid for (subject to any such applicable rules and regulations of the
SEC) (i) unless the Minimum Condition has been satisfied or waived, (ii) if any
waiting period under the HSR Act applicable to the purchase of Shares pursuant
to the Offer shall not have expired or been terminated, or (iii) if at any time
on or after the date of the Merger Agreement and at or before the time that the
Shares are accepted for payment any of the following conditions exists and is
continuing:
(a) there shall be threatened or pending any action or
proceeding by any Governmental Entity or any order or temporary,
preliminary or permanent injunction or restraining order entered in any
action or proceeding before any Governmental Entity located or having
jurisdiction within the United States, the United Kingdom or any
country or economic region in which either the Company or the Parent,
directly or indirectly, has material assets or operations, or any
statute, rule, regulation, legislation, interpretation, judgment or
order enacted, entered, enforced, promulgated, amended, issued or
deemed applicable to the Purchaser, the Company or any subsidiary or
affiliate of the Purchaser or the Company or the Offer or the Merger,
by any Governmental Entity located or having jurisdiction within the
United States, the United Kingdom or any country or economic region in
which either the Company or the Parent, directly or indirectly, has
material assets or operations, which would reasonably be expected to
have the effect of: (i) making illegal, or otherwise directly or
indirectly prohibiting, challenging or materially restraining the
making of the Offer, the acceptance for payment of, payment for, or
ownership, directly or indirectly, of more than 90% of the Shares by
the Parent or the Purchaser, the consummation of the Merger or the
Offer, materially delaying the Merger or making the aggregate cost of
acquiring the Shares materially higher; (ii) seeking to prohibit or
limit the ownership or operation by the Company or any of its
subsidiaries that owns a material portion of the business and assets of
the Company and its subsidiaries taken as a whole, or by the Parent or
the Purchaser of all or any material portion of the business or assets
of the Company and its subsidiaries taken as a whole or the Parent and
its subsidiaries taken as a whole, or compelling the Purchaser or the
Parent to dispose
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of or hold separate all or any material portion of the business or
assets of the Company and its subsidiaries taken as a whole or the
Parent and its subsidiaries taken as a whole, as a result of the
transactions contemplated by the Merger Agreement; (iii) seeking to
impose limitations on the ability of the Purchaser or the Parent
effectively to acquire or hold or to exercise full rights of ownership
of Shares including, without limitation, the right to vote any Shares
acquired or owned by the Parent or the Purchaser on all matters
properly presented to the stockholders of the Company, including,
without limitation, the adoption and approval of the Merger Agreement
and the Merger or the right to vote any shares of capital stock of any
subsidiary (other than immaterial subsidiaries) directly or indirectly
owned by the Company; or (iv) seeking to require divestiture by the
Parent or the Purchaser, directly or indirectly, of any Shares or
assets of the Parent, the Purchaser, the Company or their respective
affiliates;
(b) there shall have occurred any event, change, effect or
development that, individually or in the aggregate, has had or would be
reasonably expected to have, a Material Adverse Effect;
(c) there shall have occurred (i) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the
United States or the United Kingdom, or (ii) a currency moratorium on
the exchange markets in London or New York City with respect to the
English pound sterling or the United States dollar;
(d) the Merger Agreement shall have been terminated in
accordance with its terms or the Offer shall have been terminated with
the consent of the Company;
(e) any of the representations and warranties of the Company
set forth in the Merger Agreement that are qualified as to materiality
shall not have been true and correct or any such representations and
warranties that are not so qualified shall not have been true and
correct in all material respects, in each case as of the date of the
Merger Agreement and immediately prior to the consummation of the offer
as if made on such date (other than representations and warranties made
as of a specified date), which failure to be true and correct or true
and correct in all material respects is not reasonably capable of being
cured by the commercially reasonable best efforts of the Company within
10 days of the receipt by the Company of written notice thereof; or
(f) the Company shall have failed to perform in any material
respect any obligation or to comply in any material respect with any
agreement or covenant of the Company to be performed or complied with
by it under the Merger Agreement
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prior to the time of such determination, which failure is not
reasonably capable of being cured by the commercially reasonable best
efforts of the Company within 10 days of the receipt by the Company of
written notice thereof;
which, in the good faith sole judgment of the Purchaser with respect to each and
every matter referred to above and regardless of the circumstances giving rise
to any such condition, makes it inadvisable to proceed with the Offer or with
such acceptance for payment of or payment for Shares or to proceed with the
Merger.
The foregoing conditions are for the sole benefit of the
Purchaser and may be asserted by the Purchaser regardless of the circumstances
giving rise to any such condition or may (except of the Minimum Condition) be
waived by the Purchaser in whole or in part at any time and from time to time in
its sole discretion. The failure by the Purchaser at any time to exercise any of
the foregoing rights shall not be deemed a waiver of any such right, the waiver
of any such right with respect to particular facts and other circumstances shall
not be deemed a waiver with respect to any other facts and circumstances, and
each such right shall be deemed an ongoing right that may be asserted at any
time and from time to time.
Capitalized terms used but not defined in this Annex A shall
have the meanings set forth in the Merger Agreement of which this Annex A is a
part.
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