EXHIBIT (d)(1)
EXECUTION COPY
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
Among
REUTERS GROUP PLC,
PROTON ACQUISITION CORPORATION
and
XXXXXX.XXX, INC.
Dated as of February 17, 2003
TABLE OF CONTENTS
PAGE
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ARTICLE I
THE OFFER
Section 1.1 The Offer ................................................... 2
Section 1.2 The Top-Up Option ........................................... 4
Section 1.3 Exercise of the Top-Up Option ............................... 4
Section 1.4 The Top-Up Closing .......................................... 5
ARTICLE II
THE MERGER
Section 2.1 Effective Time of the Merger ................................ 6
Section 2.2 Closing ..................................................... 6
Section 2.3 Effects of the Merger ....................................... 6
Section 2.4 Certificate of Incorporation and Bylaws ..................... 6
Section 2.5 Directors ................................................... 6
Section 2.6 Officers .................................................... 7
Section 2.7 Board of Directors; Committees .............................. 7
ARTICLE III
CONVERSION OF SECURITIES
Section 3.1 Conversion of Capital Stock ................................. 8
Section 3.2 Exchange of Certificates .................................... 9
Section 3.3 Closing of Company Transfer Books ........................... 10
Section 3.4 Withholding ................................................. 10
Section 3.5 Lost, Stolen or Destroyed Certificates ...................... 10
Section 3.6 Further Assurances .......................................... 10
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 4.1 Organization ................................................ 11
Section 4.2 Capitalization .............................................. 11
Section 4.3 Authority ................................................... 13
Section 4.4 Consents and Approvals; No Violations ....................... 13
Section 4.5 Permits ..................................................... 14
Section 4.6 SEC Reports, Financial Statements and No Material
Undisclosed Liabilities 14
Section 4.7 Disclosure Documents ........................................ 15
Section 4.8 Litigation .................................................. 16
Section 4.9 Absence of Certain Changes .................................. 16
Section 4.10 Taxes ....................................................... 17
Section 4.11 Benefit Plans; Employment-Related Agreements ................ 19
Section 4.12 Opinion of Financial Advisor ................................ 20
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Section 4.13 Board Approval; Certain Antitakeover Provisions
Not Applicable .............................................. 20
Section 4.14 Intellectual Property ....................................... 21
Section 4.15 Vote Required ............................................... 23
Section 4.16 Brokers ..................................................... 24
Section 4.17 Environmental Matters ....................................... 24
Section 4.18 Personal Property, Real Property and Leases ................. 25
Section 4.19 Contracts ................................................... 25
Section 4.20 Customers and Suppliers ..................................... 27
Section 4.21 Transactions with Affiliates ................................ 27
Section 4.22 Labor Matters ............................................... 27
Section 4.23 Broker-Dealer ............................................... 28
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Section 5.1 Organization ................................................ 28
Section 5.2 Authority ................................................... 28
Section 5.3 Consents and Approvals; No Violations ....................... 28
Section 5.4 Disclosure Documents ........................................ 29
Section 5.5 Financing ................................................... 30
Section 5.6 Brokers ..................................................... 30
ARTICLE VI
COVENANTS
Section 6.1 Interim Operations .......................................... 30
Section 6.2 Reasonable Best Efforts ..................................... 32
Section 6.3 Access to Information ....................................... 33
Section 6.4 Company Stockholders' Meeting ............................... 34
Section 6.5 Company Stock Option Plan; Warrants ......................... 35
Section 6.6 Company Benefit Plans ....................................... 37
Section 6.7 No Solicitation ............................................. 38
Section 6.8 Notification of Certain Matters ............................. 40
Section 6.9 Public Announcements ........................................ 40
Section 6.10 State Takeover Laws ......................................... 41
Section 6.11 Indemnification and Insurance ............................... 41
ARTICLE VII
CONDITIONS
Section 7.1 Conditions to Each Party's Obligation To Effect the Merger .. 43
ARTICLE VIII
TERMINATION
Section 8.1 Termination ................................................. 43
Section 8.2 Effect of Termination ....................................... 44
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ARTICLE IX
MISCELLANEOUS
Section 9.1 Nonsurvival of Representations and Warranties ............... 46
Section 9.2 Amendment ................................................... 46
Section 9.3 Extension; Waiver ........................................... 46
Section 9.4 Notices ..................................................... 46
Section 9.5 Interpretation .............................................. 47
Section 9.6 Counterparts ................................................ 48
Section 9.7 Entire Agreement; No Third Party Beneficiaries .............. 48
Section 9.8 GOVERNING LAW ............................................... 49
Section 9.9 Specific Performance ........................................ 49
Section 9.10 Assignment .................................................. 49
Section 9.11 Validity .................................................... 49
Section 9.12 Procedure for Termination, Amendment, Extension or Waiver ... 49
Section 9.13 Jurisdiction ................................................ 50
Section 9.14 Company Disclosure Schedule ................................. 50
ANNEX A ................................................................... A-1
ANNEX B ................................................................... B-1
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Index of Defined Terms
Defined Term Location of Definition
13E-3 Transaction Statement......................................Section 1.1(b)
Action...........................................................Section 4.8
affiliate........................................................Section 9.5
Agreed Representations...........................................Annex A
Agreement........................................................Preamble
Base Date........................................................Section 4.9
Benefit Continuation Period......................................Section 6.6
Benefit Plans....................................................Section 4.11(a)
Certificate of Merger............................................Section 2.1(b)
Certificates.....................................................Section 3.1(c)
Closing..........................................................Section 2.2
Closing Date.....................................................Section 2.2
Code.............................................................Section 3.4
Company..........................................................Preamble
Company Common Stock ............................................Recitals
Company Disclosure Schedule......................................Article IV
Company Material Adverse Effect .................................Section 9.5
Company Proxy Statement..........................................Section 4.7(b)
Company SEC Documents............................................Section 4.6
Company Stock Option Plan........................................Section 4.2(a)
Condition Termination Date.......................................Annex A
Confidentiality Agreement........................................Section 6.3
Constituent Corporations.........................................Preamble
Contract ........................................................Section 4.4
Covered Affiliate................................................Section 4.21
Delaware Courts .................................................Section 9.13
DGCL.............................................................Section 2.1(a)
Dissenting Stockholder...........................................Recitals
Effective Time...................................................Section 2.1(b)
Employees........................................................Section 4.11(a)
End Date.........................................................Section 8.1(b)
Environmental Law................................................Section 4.17(b)
ERISA............................................................Section 4.11(a)
ERISA Affiliate .................................................Section 4.11(c)
ERISA Plans .....................................................Section 4.11(b)
Exchange Act.....................................................Section 1.1(a)
Expiration Date..................................................Section 1.1(a)
Filing Office....................................................Section 2.1(b)
GAAP.............................................................Section 4.6
Governmental Entity..............................................Section 4.4
Hazardous Substance..............................................Section 4.17(c)
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HSR Act..........................................................Section 4.4
Indemnified Parties .............................................Section 6.11
Independent Directors............................................Section 2.7
Information Statement............................................Section 4.7(a)
Initial Expiration Date..........................................Section 1.1(a)
Intellectual Property............................................Section 4.14(a)
Intellectual Property Contracts..................................Section 4.14(a)
IRS..............................................................Section 4.10(a)
IP Claims........................................................Section 4.14(b)
IT Assets........................................................Section 4.14(a)
Licensed Intellectual Property...................................Section 4.14(a)
Liens............................................................Section 4.2(b)
Material Contracts...............................................Section 4.19
Merger...........................................................Recitals
Merger Consideration.............................................Section 3.1(c)
Minimum Condition................................................Annex A
Offer............................................................Recitals
Offer Documents..................................................Section 1.1(b)
Offer to Purchase................................................Section 1.1(a)
Options..........................................................Section 4.2(a)
Original Agreement...............................................Recitals
Parent...........................................................Preamble
Paying Agent.....................................................Section 3.2(a)
Permits .........................................................Section 4.5
Per Share Amount.................................................Recitals
Purchaser........................................................Preamble
Registered.......................................................Section 4.14(a)
Rights...........................................................Section 4.2(c)
SEC..............................................................Section 1.1(a)
Securities Act...................................................Section 4.6(a)
Schedule 14D-9 ..................................................Section 1.1(a)
Schedule TO......................................................Section 1.1(b)
Scheduled Intellectual Property..................................Section 4.14(b)
Special Committee................................................Section 4.12
Standstill Agreement.............................................Section 9.7
Subsidiary.......................................................Section 3.1(b)
Superior Proposal................................................Section 6.7(b)
Surviving Corporation............................................Recitals
Takeover Proposal................................................Section 6.7(a)
Takeover Proposal Interest.......................................Section 6.7(a)
Tax Return.......................................................Section 4.10(c)
Taxes............................................................Section 4.10(c)
Tender and Voting Agreements.....................................Recitals
Termination Fee..................................................Section 8.2(b)
Top-Up Closing...................................................Section 1.3(d)
Top-Up Exercise Event............................................Section 1.3(b)
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Top-Up Exercise Notice ..........................................Section 1.3(c)
Top-Up Notice Date ..............................................Section 1.3(d)
Top-Up Option....................................................Section 1.2
Top-Up Option Shares ............................................Section 1.2
Top-Up Termination Date .........................................Section 1.3(c)
Trade Secrets ...................................................Section 4.14(a)
UKLA ............................................................Section 5.3
Voting Debt......................................................Section 4.2(c)
WARN ACT.........................................................Section 4.22(b)
Warrants.........................................................Section 4.2(a)
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AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER dated as of
February 24, 2003 (this "Agreement") among Reuters Group PLC, a public limited
company organized under the laws of England and Wales ("Parent"), Proton
Acquisition Corporation, a Delaware corporation and an indirect wholly owned
subsidiary of Parent ("Purchaser"), and Xxxxxx.xxx, Inc., a Delaware corporation
(the "Company" and together with Purchaser, the "Constituent Corporations").
W I T N E S S E T H:
WHEREAS it is proposed that Purchaser will make a tender offer (as
such offer may be amended from time to time as permitted under this Agreement,
the "Offer") to purchase all the outstanding shares of the Company's common
stock, par value $0.01 per share (the "Company Common Stock"), for $7.35 per
share of Company Common Stock (such amount, or any other amount per share
offered pursuant to the Offer in accordance with the terms of this Agreement,
being hereinafter referred to as the "Per Share Amount"), net to each seller in
cash, in accordance with the terms and subject to the conditions provided
herein;
WHEREAS the respective Boards of Directors of Parent, Purchaser and
the Company have approved and declared advisable this Agreement, the Offer and
the merger (the "Merger") of Purchaser with and into the Company (after such
time, the "Surviving Corporation") following the consummation of the Offer, upon
the terms and subject to the conditions hereof, whereby pursuant to the Offer
each issued and outstanding share of Company Common Stock properly tendered and
not withdrawn will be purchased by Purchaser at a price per share equal to the
Per Share Amount, net to each seller in cash, and subsequent to the Offer, each
issued and outstanding share of Company Common Stock not owned, directly or
indirectly, by the Company, Parent or any of their respective Subsidiaries (as
defined in Section 3.1(b)), excluding shares of Company Common Stock held by
persons who object to the Merger and comply with all the provisions of Delaware
law concerning the right of holders of shares of Company Common Stock to dissent
from the Merger and require appraisal of their shares of Company Common Stock
(each such person, a "Dissenting Stockholder"), will be converted into the right
to receive the Per Share Amount pursuant to the Merger;
WHEREAS certain stockholders of the Company have entered into a
Tender and Voting Agreement, (collectively, the "Tender and Voting Agreements"),
providing, among other things, that the stockholders party thereto shall tender
all shares of Company Common Stock owned by them to Purchaser pursuant to the
Offer;
WHEREAS Parent, Purchaser and the Company desire to make certain
representations, warranties and agreements in connection with the Offer and the
Merger and also to prescribe various conditions to the Offer and the Merger; and
WHEREAS, on and as of the date hereof, the parties to the Agreement
and Plan of Merger dated as of February 17, 2002 (the "Original Agreement") have
agreed to amend and restate the Original Agreement in full to read as set forth
in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree that, on and as of the date of this Agreement, the Original
Agreement is hereby amended and restated to read as follows:
ARTICLE I
THE OFFER
Section 1.1 The Offer.
(a) Provided that this Agreement shall not have been terminated in
accordance with Section 8.1 and none of the events or circumstances set forth in
Annex A hereto (other than in clauses (i) or (ii) of Annex A) shall have
occurred or be existing (unless, to the extent permitted hereby, waived), within
five business days of the date hereof, Purchaser will commence the Offer for all
outstanding shares of Company Common Stock. The Offer shall be subject only to
the conditions set forth in Annex A hereto; provided, that Purchaser may waive
any condition, except, that Purchaser shall not, without the prior written
consent of the Company, (i) waive the Minimum Condition (as defined in Annex A),
(ii) reduce the number of shares of Company Common Stock subject to the Offer,
(iii) reduce the Per Share Amount, (iv) modify or add to the conditions set
forth in Annex A, or (v) change the form of consideration payable in the Offer.
Subject to the terms and conditions thereof and the immediately following
sentence, the Offer shall initially expire at midnight, New York City time, on
the date that is twenty business days after the date that the Offer is commenced
(the "Initial Expiration Date", and any expiration time and date established
pursuant to any extension of the Offer under this Agreement, as so extended, the
"Expiration Date"). Notwithstanding the foregoing, Purchaser shall be obligated
(i) to extend the Offer, from time to time, if at the Initial Expiration Date or
any subsequent Expiration Date of the Offer any of the conditions to Purchaser's
obligation to purchase shares of Company Common Stock are not satisfied until
those conditions are satisfied (or, to the extent permitted hereby, waived) and
(ii) to extend the Offer for any period required by any order, decree or ruling
of, or any rule, regulation, interpretation or position of, any Governmental
Entity (as defined in Section 4.4) applicable to the Offer. Following the final
Expiration Date and consummation of the Offer, Purchaser may, in its sole
discretion, provide for a "subsequent offering period" in accordance with Rule
14d-11 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). The Offer will be made by means of an offer to purchase (the "Offer to
Purchase") and related letter of transmittal containing the terms set forth in
this Agreement and the conditions set forth in Annex A hereto. Upon the terms
and subject to the satisfaction or, to the extent permitted hereby, waiver of
the conditions of the Offer as of the Initial Expiration Date or any final
Expiration Date, Purchaser will accept for payment and pay for all shares of
Company Common Stock duly tendered and not withdrawn promptly after such
Expiration Date, and Parent shall or shall cause one of its affiliates to
promptly provide to the Paying Agent (as defined in Section 3.2(a)), as and when
needed, all funds necessary to pay for the shares of Company Common Stock
accepted for payment in the Offer or acquired during the "subsequent offering
period." Purchaser shall accept tenders of shares of Company Common Stock
through the delivery of certificates representing Warrants (as defined in
Section 4.2(a)) pursuant to such procedures as Purchaser and the Company agree
and may be specified in the Offer; provided, that such procedures shall permit
each tendering holder of Warrants to receive the same amount such holder would
have received had the holder exercised the Warrant for
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Company Common Stock prior to tender (i.e., the Per Share Price times the number
of shares of Company Common Stock for which the Warrant is then exercisable),
less the aggregate exercise price for such number of shares of Company Common
Stock. Subject to Section 6.7, the Company's Board of Directors shall recommend
to its stockholders that they accept the Offer and tender their shares of
Company Common Stock to Purchaser pursuant to the Offer in a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with any
supplements thereto and including the exhibits thereto, the "Schedule 14D-9") to
be filed with the Securities and Exchange Commission (the "SEC") on the date the
Offer Documents are filed with the SEC. Each of the Company, Parent and
Purchaser will promptly correct any information provided by it in writing
specifically for use in the Schedule 14D-9 that becomes false or misleading in
any material respect, and the Company will take all steps necessary to cause the
Schedule 14D-9 as so corrected to be filed with the SEC and disseminated to the
holders of Company Common Stock and holders of Warrants to whom the Offer was
sent, in each case as and to the extent required by applicable law.
(b) As soon as practicable on the date the Offer is commenced,
Parent and Purchaser will file with the SEC a Tender Offer Statement on Schedule
TO (together with all amendments and supplements thereto, the "Schedule TO")
with respect to the Offer. Parent agrees, as to the Schedule TO and the included
Offer to Purchase and related letter of transmittal (which, with the documents
included in the Schedule TO, including, but not limited to, the Rule 13E-3
Transaction Statement (the "13E-3 Transaction Statement"), pursuant to which the
Offer shall be made and together with any supplements thereto and including the
exhibits thereto, constitute the "Offer Documents") and the Company agrees, as
to the Schedule 14D-9, that such documents shall, in all material respects,
comply with the requirements of the Exchange Act and the rules and regulations
thereunder and other applicable laws. Parent and Purchaser will disseminate the
Offer Documents (other than the Schedule TO) to holders of Company Common Stock
and holders of Warrants. Each of Parent, Purchaser and the Company will promptly
correct any information provided by it in writing specifically for use in the
Offer Documents that becomes false or misleading in any material respect, and
each of Parent and Purchaser will take all steps necessary to cause the Schedule
TO as so corrected to be filed with the SEC, and the other Offer Documents as so
corrected to be disseminated to holders of shares of Company Common Stock and
holders of Warrants, in each case as and to the extent required by applicable
law. The Company and its counsel, as to the Offer Documents, and Parent,
Purchaser and their counsel, as to the Schedule 14D-9, shall be given a
reasonable opportunity to review and comment on such documents prior to their
being filed with the SEC and to review any comments received from the SEC with
respect to such documents, and Parent, Purchaser and the Company agree to give
reasonable consideration to the comments of the Company and its counsel and
Parent, Purchaser and their counsel, respectively. The Company and its counsel
and Parent, Purchaser and their counsel will provide Parent, Purchaser and their
counsel, on the one hand, and the Company and its counsel, on the other hand,
with a reasonable opportunity to participate in all communications, if any, with
the SEC and its staff, including any meetings and telephone conferences relating
to the Schedule 14D-9, the Offer, the Offer Documents, the Merger or this
Agreement.
(c) In connection with the Offer, the Company will cause its
Transfer Agent to furnish promptly to Purchaser a list, as of a recent date, of
the record holders of shares of Company Common Stock and of Warrants and their
addresses, as well as mailing labels
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containing the names and addresses of all record holders of shares of Company
Common Stock and all record holders of Warrants, and lists of security positions
of shares of Company Common Stock held in stock depositories. The Company will
furnish Purchaser with such additional information (including, but not limited
to, updated lists of holders of shares of Company Common Stock and record
holders of Warrants and their addresses, mailing labels and lists of security
positions) and such other assistance as Parent or Purchaser or their agents may
reasonably request in communicating the Offer to the record and beneficial
holders of shares of Company Common Stock and the record and beneficial holders
of Warrants.
Section 1.2 The Top-Up Option.
Subject to the terms and conditions set forth herein, the Company
hereby grants to Purchaser an irrevocable option (the "Top-Up Option") to
purchase up to that number of shares of Company Common Stock (the "Top-Up Option
Shares") equal to the lowest number of shares of Company Common Stock that, when
added to the number of shares of Company Common Stock collectively owned by
Parent, Purchaser and any other affiliates of Parent immediately following
consummation of the Offer, shall constitute at least 90 percent of the shares of
Company Common Stock then outstanding on a fully diluted basis (assuming the
issuance of the Top-Up Option Shares and the exercise of all Options (as defined
in Section 4.2), Warrants and any other rights to acquire Company Common Stock
on the date of the Top-Up Exercise Event (as defined in Section 1.3)) at a
purchase price per Top-Up Option Share equal to the Per Share Amount.
Section 1.3 Exercise of the Top-Up Option.
(a) Purchaser may, at its election, exercise the Top-Up Option, in
whole, but not in part, at any one time after the occurrence of a Top-Up
Exercise Event and prior to the Top-Up Termination Date.
(b) A "Top-Up Exercise Event" shall occur upon Purchaser's
acceptance for payment pursuant to the Offer of Company Common Stock
constituting, together with Company Common Stock owned directly or indirectly by
Parent, Purchaser and any other affiliates of Parent, less than 90 percent of
the shares of the Company Common Stock then outstanding on a fully diluted basis
(assuming the exercise of all Options, Warrants and any other rights to acquire
Company Common Stock on the date of the Top-Up Exercise Event), but only if (i)
the issuance of the Top-Up Option Shares pursuant thereto would not require the
approval of the stockholders of the Company under applicable law or regulation
(including, but not limited to, NASDAQ rules and regulations, including Section
4350(i)(1)(D) of the NASD Manual) or (ii) NASDAQ has granted a waiver from any
such rule or regulation that is reasonably acceptable to the parties hereto, and
there is no other applicable law, rule or regulation that would require the
approval of the Company's stockholders for the issuance of the Top-Up Shares.
Upon and after the request of Parent, the Company will use its reasonable best
efforts (but without the payment of any money) to obtain such a waiver from
NASDAQ as promptly as possible after any such request.
(c) The "Top-Up Termination Date" shall occur upon the earliest to
occur of (i) the Effective Time, (ii) the termination of this Agreement, (iii)
the date that is ten business days after the occurrence of a Top-Up Exercise
Event, unless the Top-Up Option has been
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previously exercised in accordance with the terms and conditions hereof and (iv)
the date that is ten business days after the Top-Up Notice Date unless the
Top-Up Closing shall have previously occurred.
(d) In the event Purchaser wishes to exercise the Top-Up Option,
Purchaser shall send to the Company a written notice (a "Top-Up Exercise
Notice," the date of receipt of such notice being referred to herein as the
"Top-Up Notice Date") specifying the place for the closing of the purchase and
sale pursuant to the Top-Up Option (the "Top-Up Closing") and a date not earlier
than one business day nor later than ten business days after the Top-Up Notice
Date for the Top-Up Closing. The Company shall, promptly after receipt of the
Top-Up Exercise Notice, deliver a written notice to Purchaser confirming the
number of Top-Up Option Shares and the aggregate purchase price therefor.
Section 1.4 The Top-Up Closing.
(a) At the Top-Up Closing, subject to the terms and conditions of
this Agreement, (i) the Company shall deliver to Purchaser a certificate or
certificates evidencing the applicable number of Top-Up Option Shares and (ii)
Purchaser shall purchase each Top-Up Option Share from the Company at the Per
Share Amount; provided, that the obligation of the Company to deliver Top-Up
Option Shares upon the exercise of the Top-Up Option is subject to the condition
that no provision of any applicable law or regulation and no judgment,
injunction, order or decree shall prohibit the exercise of the Top-Up Option or
the delivery of the Top-Up Option Shares in respect of any such exercise.
Payment by Purchaser of the purchase price for the Top-Up Option Shares may be
made, at the option of Purchaser, by delivery of (i) immediately available funds
by wire transfer to an account designated by the Company or (ii) a promissory
demand note issued by Purchaser in customary form that is reasonably acceptable
to the parties and in a principal face amount equal to the aggregate amount of
the purchase price for the Top-Up Option Shares.
(b) Upon the delivery by Purchaser to the Company of the Top-Up
Exercise Notice, and the tender of the applicable Per Share Amount in either of
the two forms described in Section 1.4(a), Purchaser shall be deemed to be the
holder of record of the Top-Up Option Shares issuable upon such exercise,
notwithstanding that the stock transfer books of the Company shall then be
closed or that certificates representing such Top-Up Option Shares shall not
then be actually delivered to Purchaser or the Company shall have failed or
refused to designate the bank account described in Section 1.4(a).
(c) Purchaser shall pay all expenses, and any and all federal,
state and local taxes and other charges, that may be payable in connection with
the preparation, issuance and delivery of stock certificates under this Section
1.4.
(d) Certificates evidencing Top-Up Option Shares delivered
hereunder may include legends legally required including the 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
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REGISTERED OR IF AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
ARTICLE II
THE MERGER
Section 2.1 Effective Time of the Merger. After acceptance for
payment and payment for the shares of Company Common Stock pursuant to the Offer
and otherwise subject to the terms and conditions hereof, the following shall
occur:
(a) In accordance with the Delaware General Corporation Law (the
"DGCL"), Purchaser shall be merged with and into the Company at the
Effective Time (as defined in Section 2.1(b)), with the Company continuing
as the Surviving Corporation and succeeding to and assuming all the rights
and obligations of Purchaser in accordance with the DGCL.
(b) A certificate of merger or other appropriate documents (the
"Certificate of Merger") will be duly prepared and executed by the Company
and Purchaser and thereafter delivered to the Delaware Secretary of State
(the "Filing Office") for filing as provided in the DGCL as soon as
practicable on the Closing Date (as defined in Section 2.2). The Merger
will become effective upon the filing of the Certificate of Merger with
the Filing Office or at such other later date or time as Purchaser and the
Company shall agree and as specified in the Certificate of Merger (the
time the Merger becomes effective being the "Effective Time").
Section 2.2 Closing. Unless this Agreement is terminated and the
transactions contemplated herein abandoned pursuant to Section 8.1, the closing
of the Merger (the "Closing") will take place at 10:00 a.m. on a date to be
specified by the parties, which will be no later than the second business day
following the satisfaction or, if permissible, waiver of each of the conditions
set forth in Article VII (the "Closing Date"), at the offices of Xxxxxxxx &
Xxxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, unless another date or
place is agreed to by the parties hereto.
Section 2.3 Effects of the Merger. The Merger will have the effects
set forth in this Agreement and the DGCL. The title to any real estate or any
interest therein vested, by deed or otherwise, in the Company or Purchaser shall
not revert or in any way become impaired by reason of the Merger.
Section 2.4 Certificate of Incorporation and Bylaws.
(a) The Certificate of Incorporation of Purchaser shall be the
Certificate of Incorporation of the Surviving Corporation until thereafter
amended as provided by applicable law.
(b) The Bylaws of Purchaser shall be the Bylaws of the Surviving
Corporation until amended in accordance therewith and with applicable law.
Section 2.5 Directors. The directors of Purchaser at the Effective
Time will be the directors of the Surviving Corporation, each to hold office
from the Effective Time in
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accordance with the Certificate of Incorporation and Bylaws of the Surviving
Corporation and until his or her successor is duly elected and qualified.
Section 2.6 Officers. The officers of the Company at the Effective
Time will be the officers of the Surviving Corporation, each to hold office from
the Effective Time in accordance with the Certificate of Incorporation and
Bylaws of the Surviving Corporation until any removal in accordance therewith or
until his or her successor is duly appointed and qualified.
Section 2.7 Board of Directors; Committees. If requested by Parent,
the Company will, promptly following the purchase by Purchaser of shares of
Company Common Stock pursuant to the Offer, take all actions necessary to cause
persons designated by Parent to become a majority of the members of the Board of
Directors of the Company. In furtherance thereof, the Company will increase the
size of the Board of Directors of the Company, or secure the resignation of
directors of the Company, or both, as is necessary to permit Parent's designees
to be elected to the Board of Directors of the Company; provided, however, that
the parties shall use their respective reasonable best efforts to ensure that,
prior to the Effective Time, the Board of Directors of the Company shall at all
times have at least two members (the "Independent Directors") who are members of
the Special Committee (as defined in Section 4.12) on the date of this Agreement
(each such individual, an "Independent Director"). At such time, the Company, if
so requested, will cause persons designated by Purchaser to constitute a
majority of each committee of the Board of Directors of the Company (other than
the audit committee and the Special Committee), and of each board of directors
of each Subsidiary of the Company and of each committee of each such board (in
each case involving Subsidiaries of the Company to the extent of the Company's
ability to cause the election of such persons). If, however, there are in office
fewer than two Independent Directors for any reason, the Company's Board of
Directors will take all action necessary to cause a person designated by the
remaining Independent Directors to fill such vacancy, which person shall be
deemed to be an Independent Director for all purposes of this Agreement, or if
no Independent Directors then remain, the other directors of the Company then in
office will designate two persons to fill such vacancies who are not directors,
officers or employees or affiliates of Parent or the Purchaser or any of their
respective Subsidiaries or affiliates and such persons will be deemed to be
Independent Directors for all purposes of this Agreement. Following the election
or appointment of Parent's designees pursuant to this Section 2.7 and until the
Effective Time, the approval of a majority of the Independent Directors, if any,
will be required to authorize any: (i) termination of this Agreement by the
Company; (ii) amendment of this Agreement; (iii) extension by the Company of
time for performance of any obligation or action hereunder by Parent or the
Purchaser; (iv) waiver by the Company of compliance with any of the agreements
or conditions contained herein; (v) consent by the Company hereunder, or (vi)
other action of the Company hereunder or in connection with the transactions
contemplated hereby. The Company's obligations to appoint designees to the Board
of Directors of the Company shall be subject to Section 14(f) of the Exchange
Act and Rule 14f-1 promulgated thereunder. The Company shall promptly take all
actions required pursuant to such Section and Rule in order to fulfill its
obligations under this Section 2.7 (provided, that Purchaser shall have provided
to the Company on a timely basis and shall be responsible for all information
required to be included in the Schedule 14D-9 with respect to such designees)
and shall include in the Schedule 14D-9 such information as is required under
such Section and Schedule.
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ARTICLE III
CONVERSION OF SECURITIES
Section 3.1 Conversion of 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 of capital stock of the Company or of Purchaser:
(a) Each issued and outstanding share of capital stock of
Purchaser shall be converted into and become one validly issued, fully paid and
nonassessable share of common stock, par value $0.01 per share, of the Surviving
Corporation.
(b) All shares of Company Common Stock that are owned, directly or
indirectly, by the Company or any Subsidiary of the Company and any shares of
Company Common Stock owned, directly or indirectly, by Parent, Purchaser or any
other Subsidiary of Parent shall be cancelled and shall cease to exist and no
cash, shares of capital stock of Parent or Purchaser or other consideration
shall be delivered in exchange therefor. As used in this Agreement, "Subsidiary"
means, with respect to any party, any corporation or other organization, whether
incorporated or unincorporated, of which (i) such party or any other subsidiary
of such party is a general partner (excluding any partnership, the general
partnership interests of which held by such party or any subsidiary of such
party do not have a majority of the voting general partnership interest in such
partnership) or (ii) at least a majority of the securities or other interests
having by their terms ordinary voting power to elect a majority of the Board of
Directors or others performing similar functions with respect to such
corporation or other organization is directly or indirectly owned or controlled
by such party, by any one or more of its subsidiaries, or by such party and one
or more of its subsidiaries. References to a wholly owned Subsidiary of an
entity include a Subsidiary all the common equity interests of which are owned
directly or through wholly owned Subsidiaries by such entity.
(c) Subject to Sections 3.1(b) and 3.1(d), each share of Company
Common Stock issued and outstanding immediately prior to the Effective Time
shall be converted into the right to receive from the Surviving Corporation in
cash, without interest, the Per Share Amount or any higher price paid for any
share of Company Common Stock pursuant to the Offer (the "Merger
Consideration"). All such shares of Company Common Stock, when so converted,
shall no longer be outstanding and shall automatically be cancelled and each
holder of a certificate or certificates (the "Certificates") which immediately
prior to the Effective Time represented any such shares shall cease to have any
rights with respect thereto, except the right to receive the Merger
Consideration, without interest.
(d) Notwithstanding anything in this Agreement to the contrary,
any issued and outstanding shares of Company Common Stock held by a Dissenting
Stockholder 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 or
fails to perfect or otherwise loses his rights as a Dissenting Stockholder to
payment of fair value, in any case pursuant to the DGCL, his shares of Company
Common Stock shall be deemed to be converted as of the Effective Time into the
right to receive the Merger Consideration. The Company shall give Parent (i)
prompt notice of any written demands
-8-
for appraisal of shares of Company Common Stock received by the Company and (ii)
the opportunity to direct all negotiations and proceedings with respect to any
such demands. The Company shall not, without the prior written consent of
Parent, voluntarily make any payment with respect to, or settle or offer to
settle, any such demands.
Section 3.2 Exchange of Certificates.
(a) Paying Agent. Parent shall or shall cause one of its
affiliates to authorize a commercial bank (or other person) in the United States
reasonably acceptable to the Company to act as paying agent hereunder (the
"Paying Agent") for the payment of the Merger Consideration upon surrender of
the Certificates.
(b) Parent to Provide Funds. Parent shall or shall cause one of
its affiliates to promptly provide to the Paying Agent, as needed, all the funds
necessary to pay for the shares of Company Common Stock pursuant to Section 3.1.
(c) Exchange Procedures. As soon as practicable after the
Effective Time, the Paying Agent shall mail to each holder of record of a
Certificate, other than Parent, the Company and any Subsidiary of Parent or the
Company, (i) a letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall pass, only upon
actual delivery of the Certificates to the Paying Agent, and shall be in a form
and have such other provisions as Parent may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for the Merger Consideration. Upon surrender of a Certificate for cancellation
to the Paying Agent or to such other agent or agents as may be appointed by the
Surviving Corporation, together with such letter of transmittal, duly executed,
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 the shares of Company Common Stock theretofore
represented by such Certificate shall have been converted pursuant to Section
3.1 (after giving effect to any required tax withholdings), and the Certificates
so surrendered shall forthwith be cancelled. No interest will be paid or will
accrue on the cash payable upon the surrender of any Certificate. If payment is
to be made to a person other than the person in whose name the Certificate so
surrendered is registered, it shall be a condition of payment that such
Certificate shall be properly endorsed or otherwise in proper form for transfer
and that the person requesting such payment shall pay any transfer or other
taxes required by reason of the payment to a person other than the registered
holder of such Certificate or establish to the satisfaction of the Surviving
Corporation that such tax has been paid or is not applicable. Until surrendered
as contemplated by this Section 3.2, each Certificate shall be deemed at any
time after the Effective Time to represent only the right to receive upon such
surrender the amount of cash, without interest, into which the shares of Company
Common Stock theretofore represented by such Certificate shall have been
converted pursuant to Section 3.1 (after giving effect to any required tax
withholdings). Notwithstanding the foregoing, neither the Paying Agent nor any
party shall be liable to a former stockholder of the Company for any cash or
interest delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws. Any portion of the Merger Consideration made
available to the Transfer Agent pursuant to (and any interest or other income
earned thereon) that remains unclaimed by the holders of Company Common Stock
six months after the Effective Time shall be returned to the Surviving
Corporation, upon demand, and any such holder who has not
-9-
exchanged those shares of Company Common Stock for the Merger Consideration in
accordance with this Section 3.2 before that time shall thereafter look only to
the Surviving Corporation for payment of the Merger Consideration in respect of
those shares without any interest thereon. Any amounts remaining unclaimed by
holders of shares of Company Common Stock seven years after the Effective Time
(or any earlier date immediately before that time when the amounts would
otherwise escheat to or become property of any Governmental Entity) shall
become, to the extent permitted by applicable law, the property of the Surviving
Corporation, free and clear of any claims or interest of any person previously
entitled thereto.
Section 3.3 Closing of Company Transfer Books. At the Effective
Time, the stock transfer books of the Company shall be closed and no
registration of transfers of shares of Company Common Stock shall thereafter be
made on the stock transfer books of the Surviving Corporation. If, after the
Effective Time, Certificates are presented to the Surviving Corporation, they
shall be cancelled and exchanged as provided in this Article III.
Section 3.4 Withholding. The Surviving Corporation or the Paying
Agent will be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of shares of Company Common
Stock such amounts as the Surviving Corporation or the Paying Agent is required
to deduct and withhold with respect to the making of such payment under the
Internal Revenue Code of 1986, as amended (the "Code"), or any provision of
state, local or foreign tax law. To the extent that amounts are so withheld by
the Surviving Corporation or the Paying Agent, such withheld amounts will be
treated for all purposes of this Agreement as having been paid to the holder of
the shares of Company Common Stock in respect of which such deduction and
withholding was made by the Surviving Corporation or the Paying Agent.
Section 3.5 Lost, Stolen or Destroyed Certificates. In the event 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 subject to such other conditions as the Board of
Directors of the Surviving Corporation may reasonably impose, the Surviving
Corporation shall issue in exchange for such lost, stolen or destroyed
Certificate the Merger Consideration deliverable in respect thereof as
determined in accordance herewith. When authorizing such issue of the Merger
Consideration in exchange therefor, the Board of Directors of the Surviving
Corporation (or any authorized officer thereof) may, in its reasonable
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed Certificate to give the Surviving
Corporation a bond in such reasonable sum as it may direct as indemnity against
any claim that may be made against the Surviving Corporation with respect to the
Certificate alleged to have been lost, stolen or destroyed.
Section 3.6 Further Assurances. If at any time after the Effective
Time the Surviving Corporation shall consider or be advised that any deeds,
bills of sale, assignments or assurances or any other acts or things are
necessary, desirable or proper (a) to vest, perfect or confirm, of record or
otherwise, in the Surviving Corporation, its right, title or interest in, to or
under any of the rights, privileges, powers, franchises, properties or assets of
either of the Constituent Corporations or (b) otherwise to carry out the
purposes of this Agreement, the Surviving Corporation and its proper officers
and directors or their designees shall be authorized to execute and deliver, in
the name and on behalf of either of the Constituent Corporations in the
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Merger, all such deeds, bills of sale, assignments and assurances and do, in the
name and on behalf of such Constituent Corporations, all such other acts and
things necessary, desirable or proper to vest, perfect or confirm its right,
title or interest in, to or under any of the rights, privileges, powers,
franchises, properties or assets of such Constituent Corporation and otherwise
to carry out the purposes of this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in (a) the disclosure schedule delivered by the
Company to Parent and attached as Annex B to this Agreement (the "Company
Disclosure Schedule"), subject to Section 9.14 hereof, or (b) the Company's
annual report on Form 10-K for its fiscal years ended December 31, 2001 or in
any other Company SEC Document (as defined in Section 4.6) filed thereafter, but
before the date of this Agreement, the Company represents and warrants to Parent
and Purchaser as follows:
Section 4.1 Organization.
(a) Each of the Company and each of its Subsidiaries is a
corporation or other legal entity duly organized, validly existing and, to the
extent applicable in the relevant jurisdiction, in good standing under the laws
of the jurisdiction of its incorporation or organization and has all requisite
corporate or organizational power and authority to own, lease and operate its
properties and assets and to carry on its business as now being conducted,
except where the failure to be so organized, existing or in good standing or to
have such power authority, individually or in the aggregate, has not had and is
not reasonably likely to have a Company Material Adverse Effect (as defined in
Section 9.5) or the effect of materially impairing or delaying the ability of
the Company to perform its obligations under this Agreement. Each of the Company
and its Subsidiaries is duly qualified or licensed to do business and, to the
extent applicable in the relevant jurisdiction, in good standing in each
jurisdiction in which the property owned, leased or operated by it or the nature
of the business conducted by it makes such qualification or licensing necessary,
except where the failure to be so duly qualified or licensed and in good
standing, individually or in the aggregate, has not had and is not reasonably
likely to have a Company Material Adverse Effect or the effect of materially
impairing or delaying the ability of the Company to perform its obligations
under this Agreement.
(b) The Company has heretofore made available to Parent a complete
and correct copy of the Certificates of Incorporation and Bylaws of the Company,
and such Certificate of Incorporation and Bylaws are in full force and effect.
The Company is not in violation of any provision of its Certificate of
Incorporation or Bylaws.
Section 4.2 Capitalization.
(a) As of the date of this Agreement, the authorized capital stock
of the Company consists of (i) 200,000,000 shares of Company Common Stock of
which, as of February 10, 2003, 32,511,117 shares were issued and outstanding
and (ii) 5,000,000 shares of Preferred Stock, par value U.S. $0.01 per share, of
which, as of the date hereof, none are issued
-11-
or outstanding. As of the date of this Agreement, 530,000 treasury shares of
Company Common Stock are owned by the Company or its Subsidiaries. No shares of
capital stock of the Company have been acquired by the Company that are subject
to any future payment obligation. No shares of Company Common Stock are subject
to issuance except, as of February 3, 2003, (i) 9,343,138 shares of Company
Common Stock were subject to issuance upon exercise of unexpired and unexercised
Options (as defined below) under the Company's 1999 Stock Option Plan (the
"Company Stock Option Plan") and of which Options to purchase 4,830,481 shares
of Company Common Stock have an exercise price that is less than the Per Share
Amount, (ii) 8,705 shares of Company Common Stock were subject to issuance upon
exercise of unexpired and unexercised Options under the XxxxXxxxxxx.xxx Inc.
1999 Stock Option Plan and of which Options to purchase 8,705 shares of Company
Common Stock have an exercise price that is less than the Per Share Amount,
(iii) 207,350 shares of Company Common Stock were subject to issuance upon
exercise of unexpired and unexercised Options under the Company's 1995 Market
Guide Key Employee Incentive Plan and of which Options to purchase 81,300 shares
of Company Common Stock have an exercise price that is less than the Per Share
Amount, (iv) 400,000 shares of Company Common Stock were reserved for issuance
pursuant to any other option plans, agreements or arrangements and of which
Options to purchase zero shares of Company Common Stock have an exercise price
that is less than the Per Share Amount, and (vi) 69,240 shares of Company Common
Stock were subject to issuance upon exercise of outstanding Warrants for Company
Common Stock (the "Warrants") issued by the Company. For purposes of this
Agreement, "Options" means each unexpired and unexercised option on the Company
Common Stock granted from time to time by the Company. The Company Disclosure
Schedule contains a correct and complete list of each outstanding Option and
Warrant to purchase shares of Company Common Stock, including the holder, date
of grant, exercise price and number of shares of Company Common Stock subject
thereto. Since February 3, 2003, the Company has not issued any shares of its
capital stock, except for the issuance of Company Common Stock upon the exercise
of options granted under the Company Stock Plan which were outstanding on
February 3, 2003, and has not repurchased, redeemed or otherwise retired any
shares of its capital stock and has not agreed to issue any shares of its
capital stock. All the outstanding shares of the Company's capital stock are,
and all shares which may be issued pursuant to the Company Stock Plan or upon
exercise of the Warrants or any other options will be, when issued and paid for
in accordance with the respective terms thereof, duly authorized, validly
issued, fully paid and nonassessable and not subject to any preemptive rights of
third parties in respect thereto.
(b) Each of the Company's Subsidiaries are wholly owned, directly
or indirectly, by the Company, free and clear of any lien, claim, option,
charge, security interest or encumbrance of any kind (collectively, "Liens").
Except for the capital stock of its Subsidiaries, the Company does not own,
directly or indirectly, any capital stock or other ownership interest in any
corporation, partnership, trust, limited liability company or other entity.
(c) Except as disclosed in Section 4.2.(a) of this Agreement or as
a result of actions taken after the date of this Agreement in accordance with
Section 6.1 hereof, (i) no bonds, debentures, notes or other indebtedness having
the right to vote under ordinary circumstances (or convertible into securities
having such right to vote) ("Voting Debt") of the Company or any of its
Subsidiaries are issued or outstanding, (ii) there are no existing options,
warrants, calls, subscriptions, preemptive or other rights or other agreements
or commitments of
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any character (collectively, "Rights") relating to the issued or unissued
capital stock, treasury stock or Voting Debt of the Company or any of its
Subsidiaries or obligating the Company or any of its Subsidiaries to issue,
transfer or sell or cause to be issued, transferred or sold any shares of
capital stock or Voting Debt of, or other equity interests in, the Company or of
any of its Subsidiaries or securities convertible into or exchangeable for such
shares, Voting Debt or equity interests or obligating the Company or any of its
Subsidiaries to grant, extend or enter into any such Right and (iii) there are
no outstanding contractual obligations of the Company or any of its Subsidiaries
to repurchase, redeem or otherwise acquire any shares of capital stock of the
Company or any of its Subsidiaries or any Rights. The Company does not own,
directly or indirectly, any voting interest in any person that may require a
filing by Parent under the HSR Act (as defined in Section 4.4) or under the
European Community Merger Regulations, as amended, or any comparable provisions
under any applicable pre-merger notification laws or regulations of foreign
jurisdictions.
Section 4.3 Authority. The Company has all requisite corporate power
and authority to execute, deliver and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby, subject only
to, with respect to the Merger (if required by the DGCL), the approval and
adoption of this Agreement and the Merger by the affirmative vote of the holders
of Company Common Stock entitled to cast at least a majority of the total number
of votes entitled to be cast by holders of Company Common Stock. The execution,
delivery and performance of this Agreement by the Company and the consummation
by the Company of the Offer, the Merger and of the other transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of the Company, including by the approval of the Company's Board of
Directors (acting upon the recommendation of the Special Committee), and no
other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions so contemplated,
other than, with respect to the Merger (if required by the DGCL), the approval
and adoption of this Agreement and the Merger by the Company's stockholders as
described in the preceding sentence. This Agreement has been duly executed and
delivered by the Company and, assuming the due authorization, execution and
delivery hereof by Parent and Purchaser, constitutes a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, subject as to enforceability to applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance and similar laws relating to creditors'
rights and to general principles of equity.
Section 4.4 Consents and Approvals; No Violations. None of the
execution, delivery or performance of this Agreement by the Company, the
consummation by the Company of the transactions contemplated hereby, compliance
by the Company with any of the provisions of this Agreement or execution,
delivery or performance of the Tender and Voting Agreements will (i) conflict
with or result in any breach of any provision of the Certificate of
Incorporation or the Bylaws of the Company, or similar organizational documents
of any Company Subsidiary, (ii) require any filing by the Company with, or
permit, authorization, consent or approval of, any court, arbitral tribunal,
administrative agency or commission or other governmental or other regulatory
authority or agency, foreign or domestic (a "Governmental Entity") (except for
(A) compliance with any applicable requirements of the Exchange Act, (B) any
filings as may be required under the DGCL in connection with the Merger, (C)
filings, permits, authorizations, consents and approvals as may be required
under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
-13-
Act of 1976, as amended (the "HSR Act") or any comparable provisions under any
applicable pre-merger notification laws or regulations of foreign jurisdictions,
(D) the filing with the SEC and The NASDAQ Stock Market, Inc. of (1) the
Schedule 14D-9, (2) the 13E-3 Transaction Statement and (3) the Company Proxy
Statement if stockholder approval is required by law and other such reports
under the Exchange Act as may be required in connection with this Agreement and
the transactions contemplated hereby, and (E) such filings and approvals as may
be required by any applicable state securities, blue sky or takeover laws),
(iii) result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, amendment, cancellation or acceleration) under, or require the
giving of notice to or the obtaining of any consent or approval from any third
party under, any of the terms, conditions or provisions of any note, bond,
mortgage, lien, indenture, lease, license, contract, agreement or other
instrument or obligation, including any Material Contract (as defined in Section
4.19), to which the Company or any Company Subsidiary is a party or by which any
of them or any of their respective properties or assets may be bound (each a
"Contract") or any Permit (as defined in Section 4.5) or (iv) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to the Company,
any Company Subsidiary or any of their respective properties or assets, except,
in the case of clauses (ii), (iii) and (iv), for such exceptions as would not,
individually or in the aggregate, have a Company Material Adverse Effect or
prevent or materially delay the consummation of the transactions contemplated by
this Agreement.
Section 4.5 Permits. Each of the Company and its Subsidiaries has
all governmental permits, franchises, variances, exemptions, orders and other
governmental authorizations, consents and approvals ("Permits") necessary to
conduct its business as presently conducted except those the absence of which
are not, individually or in the aggregate, reasonably likely to have a Company
Material Adverse Effect.
Section 4.6 SEC Reports, Financial Statements and No Material
Undisclosed Liabilities.
(a) Since December 31, 1999, the Company has filed with the SEC
all forms, reports, schedules, statements and other documents required to be
filed by it under the Exchange Act and the Securities Act of 1933, as amended
(the "Securities Act") (as they have been amended or supplemented since the time
of their filing to the date hereof and including all such forms, reports,
schedules, statements and documents filed with the SEC after the date of this
Agreement, collectively, the "Company SEC Documents"). The Company SEC
Documents, including without limitation any financial statements or schedules
included or incorporated by reference therein, (i) did not at the time they were
filed, and in the case of the Company SEC Documents filed after the date hereof,
will not at the time they are filed, contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading and (ii) complied and, in the case of the
Company SEC Documents filed after the date hereof will comply in all material
respects with the applicable requirements of the Exchange Act or the Securities
Act, as the case may be, and the applicable rules and regulations thereunder
including, without limitation, those amendments to the federal securities laws
effected by, and those regulations adopted in accordance with, the
Xxxxxxxx-Xxxxx Act of 2002 to the extent applicable thereto.
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(b) The financial statements of the Company included or
incorporated by reference in the Company SEC Documents filed before the date of
this Agreement (i) comply and, in the case of the Company SEC Documents filed
after the date hereof, will comply, in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto and (ii) fairly present and, in the case of the Company SEC
Documents filed after the date hereof, will fairly present, in accordance with
United States generally accepted accounting principles ("GAAP") applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto or, in the case of unaudited statements, subject to normal
year-end audit adjustments which were not and will not be material in the
aggregate), the consolidated financial position of the Company and its
Subsidiaries as at the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended.
(c) Except as reflected, reserved against or otherwise disclosed
in the financial statements of the Company included in the Company SEC Documents
or as otherwise disclosed in the Company SEC Documents, in each case filed prior
to the date of this Agreement, neither the Company nor any of its Subsidiaries
has any liabilities or obligations of any type or kind (whether or not known,
absolute, accrued, fixed, contingent, required by GAAP to be recognized or
disclosed on a consolidated balance sheet of the Company or any of its
Subsidiaries or in the notes thereto, or otherwise), other than liabilities or
obligations which, individually or in the aggregate, have not had and are not
reasonably likely to have a Company Material Adverse Effect. Except as required
by GAAP or applicable law or regulation, the Company has not, since December 31,
2001, made any change in the accounting practices or policies applied in the
preparation of its financial statements. Except as has not had and would not be
reasonably likely to have a Company Material Adverse Effect, whether
individually or in the aggregate, the books and records of the Company and its
Subsidiaries have been maintained in accordance with all applicable legal and
accounting requirements.
Section 4.7 Disclosure Documents.
(a) None of the Schedule 14D-9, the 13E-3 Transaction Statement
and the information statement to be filed by the Company in connection with the
Offer pursuant to Rule 14f-1 under the Exchange Act (the "Information
Statement") nor any of the information supplied by the Company or any of its
Subsidiaries specifically for inclusion in the Offer Documents will, at the
respective times the Schedule 14D-9, the Information Statement or the Offer
Documents (including any amendments or supplements thereto) are filed with the
SEC or are first published, sent or given to stockholders, as the case may be,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. At the respective times when they are filed with the SEC or are
first published, sent or given to stockholders, the Schedule 14D-9, the 13E-3
Transaction Statement and the Information Statement (including any amendments or
supplements thereto) will comply as to form in all material respects with the
applicable requirements of the Exchange Act, and the rules and regulations
thereunder. Notwithstanding the foregoing, the Company makes no representation
or warranty with respect to any information supplied by Parent or the Purchaser
or any of its representatives for inclusion in the Schedule 14D-9, the 13E-3
Transaction Statement or the Information Statement (including any amendments or
supplements thereto).
-15-
(b) The proxy or information statement relating to any meeting of
the Company's stockholders that may be required to be held in connection with
the Merger (as it may be amended from time to time, the "Company Proxy
Statement") will not, when filed with the SEC, at the date mailed to the
Company's stockholders and at the time of the meeting of stockholders to be held
in connection with the Merger, 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 or necessary to correct any statement in any
earlier communication with respect to the solicitation of proxies or otherwise.
The Company Proxy Statement will, when filed with the SEC by the Company, comply
as to form in all material respects with the provisions of the Exchange Act and
the rules and regulations thereunder. Notwithstanding the foregoing, the Company
makes no representation or warranty with respect to any information supplied by
Parent or the Purchaser or any of its representatives for inclusion in the
Company Proxy Statement.
Section 4.8 Litigation. There is no suit, claim, action, litigation,
proceeding, investigation or other application (hereinafter an "Action")
instituted or pending or, to the knowledge of the Company, threatened, against
the Company or any of its Subsidiaries by or before any Governmental Entity that
is reasonably likely to be resolved adversely to the Company, which, if so
resolved, would have or would be reasonably likely to have, individually or in
the aggregate, a Company Material Adverse Effect. Neither the Company nor any of
its Subsidiaries is subject to any outstanding order, judgment, writ, award,
injunction or decree that is material to the business of the Company and its
Subsidiaries, taken as a whole.
Section 4.9 Absence of Certain Changes. Since September 30, 2002
(the "Base Date"), except for any actions that may be taken after the date of
this Agreement in compliance with Section 6.1, there has not been:
(a) any event, change or development which, individually or in the
aggregate, has had or is reasonably likely to have a Company Material Adverse
Effect;
(b) any material damage, destruction or other casualty loss with
respect to any material asset or property that is owned, leased or otherwise
used by the Company or any of its Subsidiaries;
(c) any declaration, setting aside or payment of any dividend or
other distribution in cash, stock or property in respect of the capital stock of
the Company;
(d) any incurrence, assumption or guarantee by the Company or any
of its Subsidiaries of any material indebtedness for borrowed money, other than
in the ordinary course of business and in amounts and on terms consistent with
past practices;
(e) any change in any method of accounting or accounting
principles or practices by the Company or any of its Subsidiaries, except for
any such change required by reason of a concurrent change in GAAP or Regulation
S-X under the Exchange Act;
(f) any material Tax election made or changed, any annual Tax
accounting period changed, any method of tax accounting adopted or changed, any
material amended Tax
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Returns or claims for material Tax refunds filed, any material closing agreement
entered into, any material Tax claim, audit or assessment settled, or any right
to claim a material Tax refund, offset or other reduction in Tax liability
surrendered;
(g) (i) any increase in the salary, wage, bonus or other
compensation or grant or award of or increase in any benefits payable or that
could become payable by the Company or any of its Subsidiaries to the officers
or key employees listed on Section 4.9(g) of the Company Disclosure Schedule,
(ii) any amendment to any of the Company's compensation and benefit plans
affecting any such officers or key employees, (iii) any establishment, adoption
or entry into any new Benefit Plan (as defined in Section 4.11(a)) affecting any
such officers or key employees or (iv) any agreements between the Company, on
the one hand, and any such officer or key employee, on the other;
(h) any issuance or sale by the Company or any Subsidiary of (i)
any shares of its capital stock, or any shares of capital stock of any of its
Subsidiaries, of any class; (ii) any securities convertible into or exchangeable
or exercisable for any shares of its capital stock of any class or any Voting
Debt; and (iii) any options, warrants, calls, commitments or rights of any kind
to acquire any shares of its capital stock of any class or any Voting Debt, in
each case other than shares of Company Common Stock issued pursuant to the
exercise of options, warrants and other stock based awards;
(i) any transfer, lease, license, guarantee, sale, mortgage,
pledge or other disposition of or encumbrance on any material property or assets
(including the capital stock of any of its Subsidiaries) outside the ordinary
course of business; or
(j) any acquisition (by any means) of (i) any material amount of
assets or (ii) any investment in any stock or other interest in any other person
or entity.
Section 4.10 Taxes.
(a) Each of the Company and its Subsidiaries has duly filed all
material Tax Returns (as defined in Section 4.10(c)) required to be filed by it
or appropriate extensions thereof have been properly obtained, all such Tax
Returns are complete and accurate in all material respects and disclose all
material Taxes (as defined in Section 4.10(c)) required to be paid by the
Company and its Subsidiaries, and the Company and each of its Subsidiaries has
duly paid or caused to be paid all Taxes shown as due and payable on such Tax
Returns in respect of the periods covered by such Tax Returns and, where payment
is not yet due, has made adequate provision in the Company's financial
statements for payment of all material Taxes through the end of the last period
for which the Company and its Subsidiaries ordinarily record items on their
respective books. The Company Disclosure Schedule lists the periods through
which the Tax Returns required to be filed by the Company or its Subsidiaries
have been examined by the Internal Revenue Service (the "IRS") or other
appropriate taxing authority, or the period during which any assessments may be
made by the IRS or other appropriate taxing authority has expired. As of the
date hereof, there are not pending or, to the knowledge of the Company
threatened in writing, any audits, examinations, investigations or other
proceedings in respect of Taxes or Tax matters. The Company has made available
to Parent true and correct copies of the United States federal income Tax
Returns filed by the Company and its Subsidiaries for each of
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the fiscal years ended 1999, 2000 and 2001. All deficiencies and assessments
asserted as a result of any examinations or other audits by federal, state,
local or foreign taxing authorities have been paid, fully settled or adequately
provided for in the Company's financial statements, and no issue or claim for
Taxes has been asserted in writing by any taxing authority for any prior period,
the adverse determination of which would result in a deficiency which would have
a Company Material Adverse Effect, other than those heretofore paid or provided
for in the Company's financial statements. There are no outstanding agreements
or waivers in writing extending the statutory period of limitation applicable to
any Tax Return of the Company or its Subsidiaries. There are no Liens for
material Taxes upon the assets of the Company or of any of its Subsidiaries,
except Liens relating to current Taxes not yet due. All Taxes which the Company
or any of its Subsidiaries have been required by law to withhold or to collect
for payment have been duly withheld or collected and paid to the appropriate
taxing authority. Neither the Company nor any of its Subsidiaries (i) has been a
member of a group filing consolidated returns for federal income tax purposes,
other than the affiliated group of which the Company is the common parent
corporation, or (ii) is a party to a tax sharing or tax indemnity agreement or
any other agreement of a similar nature that remains in effect. Neither the
Company nor any of its Subsidiaries is a party to or otherwise subject to any
arrangement having the effect of or giving rise to the recognition of a
deduction or loss in a taxable period ending on or before the closing date, and
a corresponding recognition of taxable income or gain in a taxable period ending
after the closing date, or any other arrangement that would have the effect of
or give rise to the recognition of taxable income or gain in a taxable period
ending after the closing date without the receipt of entitlement to a
corresponding amount of cash. Neither the Company nor any of its Subsidiaries is
required to include in income any adjustment pursuant to Section 481(a) of the
Code for any period after the closing date, by reason of any voluntary or
involuntary change in accounting method (nor has any Government Authority
proposed any such adjustment or change of accounting method).
(b) As of December 31, 2001, the net operating losses (as defined
in Section 172 (c) of the Code) of the Company and its consolidated Subsidiaries
for U.S. federal tax purposes that were eligible to be carried forward to
taxable years beginning after December 31, 2001, the alternative minimum tax net
operating losses (determined under Section 56(d) of the Code) eligible for such
carryforward, any research credits (determined under Section 41 of the Code) or
other business credits (as defined in Section 38(b) of the Code) that were
eligible for such carryforward, and any applicable state net operating losses
(the last as of December 31, 2000 rather than December 31, 2001) are each as set
forth in the Company Disclosure Schedule. Neither the Company nor any of its
Subsidiaries has engaged in any extraordinary transaction since December 31,
2001, which would have the effect of reducing or limiting the amount of such net
operating losses or alternative minimum tax net operating losses eligible to be
carried forward to any taxable year beginning after December 31, 2001.
(c) For purposes of this Agreement, the term "Taxes" means all
taxes, charges, fees, levies or other assessments, including, without
limitation, income, gross receipts, excise, property, sales, use, transfer,
license, payroll, employment, withholding, environmental, ad valorem,
alternative or add-on minimum and franchise taxes, imposed by the United States
or any state, local or foreign government or subdivision or agency thereof,
including any interest, penalties or additions thereto. For purposes of this
Agreement, the term "Tax Return" means any
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report, return or other information or document required to be filed with a
taxing authority in connection with Taxes.
Section 4.11 Benefit Plans; Employment-Related Agreements.
(a) All benefit and compensation plans, contracts, policies or
arrangements covering current or former employees of the Company and its
Subsidiaries (the "Employees") and current or former directors of the Company,
including, but not limited to, "employee benefit plans" within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and deferred compensation, stock option, stock purchase, stock
appreciation rights, stock based, incentive and bonus plans (the "Benefit
Plans"), are listed on Schedule 4.11(a) of the Company Disclosure Schedule, and
each Benefit Plan which has received a favorable opinion letter from the
Internal Revenue Service National Office, including any master or prototype
plan, has been separately identified. True and complete copies of all Benefit
Plans listed on Schedule 4.11(a) of the Company Disclosure Schedule, including,
but not limited to, any trust instruments and insurance contracts forming a part
of any Benefit Plans, and all amendments thereto have been provided or made
available to Purchaser.
(b) All Benefit Plans covering Employees which are subject to
ERISA (the "ERISA Plans") are in substantial compliance with ERISA and the Code.
Each ERISA Plan which is intended to be qualified under Section 401(a) of the
Code, has received a favorable determination letter from the Internal Revenue
Service covering all tax law changes prior to the Economic Growth and Tax Relief
Reconciliation Act of 2001 or has applied to the Internal Revenue Service for
such favorable determination letter within the applicable remedial amendment
period under Section 401(b) of the Code, and the Company is not aware of any
circumstances likely to result in the loss of the qualification of such Plan
under Section 401(a) of the Code. No ERISA Plan is intended to be part of a
voluntary employees' beneficiary association within the meaning of Section
501(c)(9) of the Code. Neither the Company nor any of its Subsidiaries has
engaged in a transaction with respect to any ERISA Plan that, assuming the
taxable period of such transaction expired as of the date hereof, could subject
the Company or any Subsidiary to a tax or penalty imposed by either Section 4975
of the Code or Section 502(i) of ERISA in an amount which would be material.
(c) Neither the Company nor any ERISA Affiliate (as defined below)
nor any predecessor thereof sponsors, maintains or contributes to, or has in the
past sponsored, maintained or contributed to, any Benefit Plan subject to Title
IV of ERISA. An "ERISA Affiliate" of any entity means any other entity that,
together with such entity, would be treated as a single employer under Section
4001 of ERISA or Section 414 of the Code. Neither the Company nor any ERISA
Affiliate nor any predecessor thereof contributes to, or has in the past
contributed to, any multiemployer plan, as defined in Section 3(37) of ERISA.
(d) Except as set forth on Schedule 4.14(d) of the Company
Disclosure Schedule, all contributions and payments required to be made under
each Benefit Plan have been timely made.
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(e) There is no pending or, to the knowledge of the Company
threatened, litigation relating to the Benefit Plans. Neither the Company nor
any of its Subsidiaries has any obligations for retiree health and life benefits
under any ERISA Plan.
(f) There has been no amendment to, announcement by the Company or
any of its Subsidiaries relating to, or change in employee participation or
coverage under, any Benefit Plan which would increase materially the expense of
maintaining such Benefit Plan above the level of the expense incurred therefor
for the most recent fiscal year. Neither the execution of this Agreement and the
Tender and Voting Agreements, stockholder approval of this Agreement nor the
consummation of the transactions contemplated hereby or thereby will (v) entitle
any employees of the Company or any of the Subsidiaries to severance pay or any
increase in severance pay upon any termination of employment after the date
hereof, (w) except as contemplated by Section 6.5(a), accelerate the time of
payment or vesting or result in any payment or funding (through a grantor trust
or otherwise) of compensation or benefits under, increase the amount payable or
result in any other material obligation pursuant to, any of the Benefit Plans or
Options, (x) limit or restrict the right of the Company or, after the
consummation of the transactions contemplated hereby, Parent to merge, amend or
terminate any of the Benefit Plans, (y) cause the Company or any of its
Subsidiaries or, after the consummation of the transactions contemplated hereby,
Parent or any of its Subsidiaries to record additional compensation expense on
its income statement with respect to any outstanding stock option or other
equity-based award or (z) result in payments under any of the Benefit Plans
which would not be deductible under Section 162(m) or Section 280G of the Code.
(g) All Benefit Plans maintained outside of the United States are
listed on Schedule 4.11(g) of the Company Disclosure Schedule and each such plan
complies in all material respects with applicable local law. The Company and its
Subsidiaries have no unfunded liabilities with respect to any such Benefit Plan
and there is no pending, or to the knowledge of the Company, threatened
litigation relating to any such Benefit Plan.
Section 4.12 Opinion of Financial Advisor. The Company's Board of
Directors and a special committee of the Board of Directors comprised entirely
of independent directors (the "Special Committee") have received the opinion of
Bear, Xxxxxxx & Co., Inc., the Company's financial advisor, to the effect that,
as of the date of this Agreement, the Per Share Amount to be received in the
Offer and the Merger by the Company's stockholders is fair to the Company's
stockholders (other than Parent and its affiliates) from a financial point of
view, a copy of which opinion has been or will promptly after receipt thereof by
the Company be delivered to Parent.
Section 4.13 Board Approval; Certain Antitakeover Provisions Not
Applicable.
(a) Subject to Section 6.7, the Board of Directors of the Company,
at a meeting duly called and held and acting on the recommendation of the
Special Committee, have adopted resolutions (i) approving and declaring
advisable this Agreement, the Offer, the Merger and the other transactions
contemplated hereby, (ii) declaring that it is in the best interest of the
Company's stockholders (other than Parent) that the Company enter into this
Agreement and consummate the Offer, the Merger and the other transactions
contemplated hereby on the terms and subject to the conditions set forth in this
Agreement, (iii) recommending that the Company's
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stockholders accept the Offer, tender their shares pursuant to the Offer and
approve and adopt this Agreement (if required by applicable law), (iv) approving
the acquisition of the shares of Company Common Stock by Purchaser pursuant to
the Offer and the other transactions contemplated by this Agreement, including
for purposes of Section 203 of the DGCL and (v) approving the execution and
delivery of the Tender and Voting Agreements, including for purposes of Section
203 of the DGCL.
(b) No state takeover statute (including, without limitation,
Section 203 of the DGCL), other than those with which this Agreement complies,
applies or purports to apply to the Offer, the Merger, this Agreement or the
Tender and Voting Agreements, or any of the transactions contemplated hereby or
thereby. The Company does not have a stockholder rights plan or "poison pill."
Section 4.14 Intellectual Property.
(a) The following terms have the following meanings as used in
this Section 4.14:
"Intellectual Property" means all (i) trademarks, service marks, brand
names, certification marks, collective marks, d/b/a's, Internet domain
names, logos, symbols, trade dress, assumed names, fictitious names, trade
names, and other indicia of origin, all applications and registrations for
the foregoing, and all goodwill associated therewith and symbolized
thereby, including all renewals of same; (ii) inventions and discoveries,
whether patentable or not, and all patents, registrations, invention
disclosures and applications therefor, including divisions, continuations,
continuations-in-part and renewal applications, and including renewals,
extensions and reissues; (iii) confidential, proprietary information,
trade secrets and know-how, including processes, schematics, business
methods, formulae, drawings, prototypes, models, designs, customer lists
and supplier lists (collectively, "Trade Secrets"); (iv) published and
unpublished works of authorship, whether copyrightable or not (including
without limitation databases and other compilations of information),
copyrights therein and thereto, and registrations and applications
therefor, and all renewals, extensions, restorations and reversions
thereof; and (v) all other intellectual property or proprietary rights.
"Intellectual Property Contracts" means all agreements with respect to
Intellectual Property (other than contracts in which Intellectual Property
is only incidental) to which the Company or the Subsidiaries are a party,
including without limitation agreements granting the Company and the
Subsidiaries rights to use the Licensed Intellectual Property,
nonassertion agreements, settlement agreements, agreements granting rights
to use Scheduled Intellectual Property (as defined in Section 4.14(b)),
trademark coexistence agreements and trademark consent agreements.
"IT Assets" means the Company's and the Subsidiaries' computers, computer
software, firmware, middleware, servers, workstations, routers, hubs,
switches, data communications lines, and all other information technology
equipment, and all associated documentation.
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"Licensed Intellectual Property" means Intellectual Property that the
Company and the Subsidiaries are licensed or otherwise permitted by other
persons to use.
"Registered" means issued by, registered with, renewed by or the subject
of a pending application before a relevant Governmental Entity or internet
domain name registrar.
(b) Section 4.14 of the Company Disclosure Schedule sets forth a
true and complete list of all (i) material and/or Registered Intellectual
Property owned by the Company and the Subsidiaries, indicating for each
Registered item the owner or applicant name, the registration or application
number and the applicable filing jurisdiction (collectively the "Scheduled
Intellectual Property") and (ii) material Intellectual Property Contracts (other
than commercial "off-the-shelf" or "shrink-wrap" software and ordinary course
customer agreements of which true and complete representative samples of all
current or recent forms used have been provided to Parent prior to the date
hereof). Except as would not constitute a Company Material Adverse Effect, the
Company and the Subsidiaries exclusively own all Scheduled Intellectual Property
and such Scheduled Intellectual Property is not subject to any outstanding
order, judgment or decree concerning its use or adversely affecting the
Company's or the Subsidiaries' rights thereto. To the Company's knowledge and
except as would not constitute a Company Material Adverse Effect, all Scheduled
Intellectual Property is valid, subsisting and enforceable. To the Company's
knowledge and except as would not constitute a Company Material Adverse Effect,
the Company and the Subsidiaries have sufficient rights to use all material
Intellectual Property used in their businesses as presently conducted, all of
which rights shall survive unchanged the consummation of the transactions
contemplated by this Agreement and the Tender and Voting Agreements. Except as
would not constitute a Material Adverse Effect, there is no litigation,
opposition, cancellation, proceeding, or claim pending, or to the knowledge of
the Company, asserted or threatened ("IP Claims") concerning the ownership,
validity, registerability, enforceability, infringement, use or licensed right
to use any Scheduled Intellectual Property or, to the knowledge of the Company,
Licensed Intellectual Property as concerns the Company or the Subsidiaries. To
the Company's knowledge and except as would not constitute a Company Material
Adverse Effect, no valid basis for any such litigation, opposition,
cancellation, proceeding, objection or claim exists with respect to the
Scheduled Intellectual Property. Except as would not constitute a Company
Material Adverse Effect, to the Company's knowledge, no person is infringing
upon or misappropriating any Scheduled Intellectual Property right or other
Intellectual Property right which the Company or the Subsidiaries holds
exclusively.
(c) Consistent with the Company's strategic decisions from time to
time regarding the use of its Trade Secrets (including decisions regarding
technology strategy changes and conformance with public standards), the Company
and the Subsidiaries have taken reasonable measures to protect the secrecy,
confidentiality and value of all material Trade Secrets which are owned, used or
held by the Company or the Subsidiaries, and to the Company's knowledge, such
material Trade Secrets have not been used, disclosed to or discovered by any
person except pursuant to valid and appropriate non-disclosure and/or license
agreements and those agreements have not been breached. To the Company's
knowledge, none of the current employees of the Company or its Subsidiaries has
any patents issued or applications pending for any device, process, design or
invention of any kind now used or
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needed by the Company or its Subsidiaries in the furtherance of their
businesses, which patents or applications have not been assigned to the Company
or its Subsidiaries.
(d) Except as would not constitute a Company Material Adverse
Effect, each Intellectual Property Contract is legal, valid, binding and
enforceable against the parties, and is in full force and effect, subject to
applicable bankruptcy and insolvency laws and general principles of equity, and
will continue to be so immediately following the consummation of the
transactions contemplated by this Agreement and the Tender and Voting
Agreements. Except as would not constitute a Company Material Adverse Effect, to
the Company's knowledge, no claim has been threatened or asserted to an
appropriate legal officer of the Company or the Subsidiaries that the Company or
the Subsidiaries or, to the Company's knowledge, another person has breached any
Intellectual Property Contract, nor has the Company threatened or asserted any
such claim against a counterparty. Except as would not constitute a Company
Material Adverse Effect, there exists no event, condition or occurrence which,
with the giving of notice or lapse of time, or both, would constitute a breach
or default by the Company or the Subsidiaries or, to the Company's knowledge,
another person, under any material Intellectual Property Contract. No party to
any material Intellectual Property Contract has given the Company or the
Subsidiaries written notice of its intention to cancel, terminate, change the
scope of rights under, or fail to renew any such Intellectual Property Contract.
Neither the Company nor the Subsidiaries, nor to the Company's knowledge, any
other party to any Intellectual Property Contract, has repudiated in writing any
material provision thereof. To the Company's knowledge and except as would not
constitute a Company Material Adverse Effect, consummation of the transactions
contemplated by this Agreement and the Tender and Voting Agreements will not
place the Company or the Subsidiaries in breach or default of any Intellectual
Property Contract or trigger any modification, termination or acceleration
thereunder. To the Company's knowledge and except as would not constitute a
Company Material Adverse Effect, the Licensed Intellectual Property is valid,
subsisting and enforceable and is not subject to any outstanding order, judgment
or decree concerning the Company's or its Subsidiaries' use thereof or adversely
affecting their rights thereto.
(e) The IT Assets operate and perform in all material respects in
accordance with their documentation and functional specifications to the extent
such documentation and/or specifications exist as of the date hereof. The
Company takes all reasonable efforts to ensure that, and to the Company's
knowledge, the IT Assets do not contain any "time bombs," "Trojan horses," "back
doors," "trap doors," "worms," viruses, bugs, faults or other devices or effects
that (A) enable any person to access without authorization the IT Assets, or (B)
otherwise significantly adversely affect the functionality of the IT Assets,
except as disclosed in its documentation. To the Company's knowledge, no person
has gained unauthorized access to the IT Assets. To the Company's knowledge,
none of the IT Assets contain any shareware, open source code or other software
which requires the disclosure of any information which would otherwise be a
Trade Secret of the Company or any of its Subsidiaries.
Section 4.15 Vote Required. The affirmative vote of the holders of a
majority of the outstanding shares of Company Common Stock entitled to vote with
respect to the Merger is the only vote of the holders of any class or series of
the Company's capital stock necessary to approve the Merger, this Agreement and
the transactions contemplated hereby, and that vote is itself not required if
the Merger can be effected in compliance with Section 253 of the DGCL.
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Section 4.16 Brokers. No broker, investment banker or other person,
other than Bear, Xxxxxxx & Co., Inc., the fees and expenses of which are
described in the engagement letter between the Company and Bear, Xxxxxxx & Co.
dated January 8, 2003, a true, correct and complete copy of which has been
provided by the Company to Parent prior to the date hereof, and will be paid by
the Company, is entitled to any broker's, finder's or other similar fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Company.
Section 4.17 Environmental Matters.
(a) Except as has not had and would not be likely to have,
individually or in the aggregate, a Company Material Adverse Effect:
(i) no written notice, order, complaint or penalty has been
received by the Company or any of its Subsidiaries arising out of
any Environmental Laws, and there are no judicial, administrative or
other actions, suits or proceedings pending or, to the Company's
knowledge, threatened which allege a violation by the Company or any
of its Subsidiaries of any Environmental Laws;
(ii) the Company and each of its Subsidiaries have all
environmental permits necessary for their operations to comply with
all applicable Environmental Laws and are in compliance with the
terms of such permits;
(iii) the operations of the Company and each of its
Subsidiaries are in compliance with applicable Environmental Laws;
(iv) no property currently owned or operated (but only with
respect to the portion of the building owned or operated) by the
Company or any of its Subsidiaries (including soils, groundwater,
surface water, buildings or other structures) is contaminated with
any Hazardous Substance (as defined in Section 4.17(c)); or
(v) neither the Company nor any of its Subsidiaries is
subject to any order, decree, injunction or other arrangement with
any Governmental Entity or any indemnity or other agreement with any
third party relating to liability under any Environmental Law or
relating to Hazardous Substances.
(b) As used herein, the term "Environmental Law" means any
federal, state, local or foreign statute, law, regulation, order, decree,
permit, authorization, common law or agency requirement relating to: (A) the
protection, investigation or restoration of the environment, health, safety, or
natural resources, (B) the handling, use, presence, disposal, release or
threatened release of any Hazardous Substance or (C) noise, odor, indoor air,
employee exposure, wetlands, pollution, contamination or any injury or threat of
injury to persons or property relating to any Hazardous Substance.
(c) As used herein, the term "Hazardous Substance" means any
substance that is: (A) listed, classified or regulated pursuant to any
Environmental Law; (B) any petroleum product or by-product, asbestos-containing
material, lead-containing paint polychlorinated
-24-
biphenyls, radioactive material or radon; and (C) any other substance which may
be the subject of regulatory action by any Governmental Entity in connection
with any Environmental Law.
Section 4.18 Personal Property, Real Property and Leases.
(a) The Company and its Subsidiaries have sufficient title to all
their tangible properties and assets to conduct their respective businesses as
currently conducted or as contemplated to be conducted, with only such
exceptions as, individually or in the aggregate, have not had and are not
reasonably likely to have a Company Material Adverse Effect. Each parcel of real
property owned or leased by the Company or any of its Subsidiaries is owned or
leased, free and clear of all Liens, other than (i) Liens for current taxes and
assessments not yet past due, (ii) mechanics' and materialmen's Liens for
construction in progress, (iii) workmen's, repairmen's, warehousemen's and
carriers' Liens, and (iv) all matters of record, Liens and other imperfections
of title, which, in any of the cases of (i) through (iv), individually or in the
aggregate, have not had and are not reasonably likely to have a Company Material
Adverse Effect.
(b) All leases, subleases or similar instruments relating to real
property to which the Company or any of its Subsidiaries is a party and all
amendments and modifications thereto are in full force and effect and have not
been further modified or amended, and there exists no default under any such
lease by the Company or any such Subsidiary, nor any event which with notice or
lapse of time or both would constitute a default thereunder by the Company or
any such Subsidiary, except as, individually or in the aggregate, has not had
and is not reasonably likely to have a Company Material Adverse Effect. The
Company Disclosure Schedule contains a correct and complete list of all real
property and interests in real property leased or subleased by the Company or
any of its Subsidiaries and all leases, subleases or similar instruments
relating to real property to which the Company or any of its Subsidiaries is a
party. The Company has provided to Parent true and complete copies of all
leases, subleases or similar instruments relating to real property to which the
Company or any of its Subsidiaries is a party.
Section 4.19 Contracts. Other than arrangements between or among the
Company and/or its wholly owned Subsidiaries and all Benefit Plans, Employment
Related Agreements and Intellectual Property Contracts disclosed in the Company
Disclosure Schedule, the Company Disclosure Schedule lists all Contracts that
exist as of the date hereof to which the Company or any of its Subsidiaries is a
party or by which it or such Subsidiary is, or any of their assets or properties
are, bound and which fall within any of the following categories (all Contracts
required to be listed in Section 4.19 of the Company Disclosure Schedule,
"Material Contracts"):
(a) joint venture, partnership, stockholder, limited liability
company (other than with respect to wholly owned limited liability companies),
governance, equity participation and similar Contracts;
(b) Contracts which contain requirements for payments in excess of
$200,000 per year or $500,000 in aggregate, including but not limited to service
agreements, leases and other purchasing Contracts;
-25-
(c) Contracts relating to any outstanding commitment for capital
expenditures;
(d) All material content provider (excluding research
contributors), distribution, marketing and sponsorship Contracts;
(e) Contacts with or relating to shareholders of the Company with
respect to their shareholdings;
(f) indentures, mortgages, promissory notes, loan agreements or
guarantees of borrowed money, letters of credit or other agreements or
instruments or commitments for the borrowing or the lending of money (or
providing for the creation of any Lien upon any of the assets) of the Company or
any of its Subsidiaries with an aggregate value in excess of U.S. $100,000;
(g) Contracts associated with off balance sheet financing;
(h) stock purchase agreements, asset purchase agreements, merger
agreements or other acquisition or divestiture agreements;
(i) Contracts which prohibit or restrict the Company or any of its
Subsidiaries from conducting or competing in any line of business, conducting
business in any particular geographical area, competing with any person or
engaging in any other activity;
(j) material Contracts with Xxxxxxx Xxxxx & Co. or any of its
affiliates;
(k) Contracts providing or committing to provide funds to, making
or committing to make any investment in, or making or committing to make capital
contributions to, any entity or business to which the Company or any of its
Subsidiaries is a party;
(l) Contracts relating to investments made or committed to be made
by any of the Companies, including any commercial contracts with any such
investee companies; and
(m) any other Contract which is material to the business of the
Company and its subsidiaries, taken as a whole, irrespective of amount.
All Contracts to which the Company or any of its Subsidiaries is a
party or by which it or such Subsidiary is bound are valid and binding
obligations of the Company or such Subsidiary and, to the knowledge of the
Company, the valid and binding obligation of each other party thereto except
such Contracts which, if not so valid and binding, individually or in the
aggregate, have not had and are not reasonably likely to have, a Company
Material Adverse Effect. Neither the Company nor any of its Subsidiaries nor, to
the knowledge of the Company, any other party thereto is in violation of or in
default in respect of, nor has there occurred an event or condition which with
the passage of time or giving of notice (or both) would constitute a default
under or permit the termination of, any such Contract except such violations or
defaults under or terminations which, individually or in the aggregate, have not
had and would not be reasonably be expected to have, a Company Material Adverse
Effect. The Company has
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furnished or made available to Parent true and complete copies of all Material
Contracts, including any amendments thereto.
Section 4.20 Customers and Suppliers. Since September 30, 2002 to
the date of this Agreement, there has been no termination, cancellation or
material curtailment of the business relationship of the Company or any Company
Subsidiary with any customer or supplier or group of affiliated customers or
suppliers which, individually or in the aggregate, has had or would be
reasonably likely to have a Company Material Adverse Effect nor any written
notice of intent to so terminate, cancel or materially curtail.
Section 4.21 Transactions with Affiliates. Since December 31, 2001,
neither the Company nor any of its Subsidiaries has, in the ordinary course of
business or otherwise, purchased, leased or otherwise acquired any material
property or assets or obtained any material services from, or sold, leased or
otherwise disposed of any material property or assets or provided any material
services to (except with respect to remuneration for services rendered as a
director, officer or employee of the Company), any executive officer or director
of the Company or any affiliate of any such executive officer or director
(subject to the last sentence of this Section 4.21, each such person being
referred to herein as a "Covered Affiliate"). Other than in the ordinary course
of business in connection with their employment by the Company, (x) the
Contracts do not include any obligation or commitment between the Company or any
of its Subsidiaries, on the one hand, and any Covered Affiliate, on the other,
(y) the Company's and its Subsidiaries' assets do not include any receivable or
other obligation owed by any Covered Affiliate to the Company and (z) the
liabilities reflected on the Company's financial statements do not include any
obligation or commitment to any Covered Affiliate. For the sake of clarity, in
no event shall the Company or any Subsidiary be considered an affiliate of any
executive officer or director of the Company for purposes of this Section 4.21.
Section 4.22 Labor Matters
(a) Neither the Company nor any of its Subsidiaries is a party to
or otherwise bound by any collective bargaining agreement, contract or other
agreement or understanding with a labor union or labor organization, nor, as of
the date hereof, is the Company or any of its Subsidiaries the subject of any
material proceeding asserting that the Company or any of its Subsidiaries has
committed an unfair labor practice or is seeking to compel it to bargain with
any labor union or labor organization, nor is there pending or, to the knowledge
of the Company, threatened, nor has there been for the past five years, any
labor strike, dispute, walk-out, work stoppage, slow-down or lockout involving
the Company or any of its Subsidiaries.
(b) Except as has not had and is not reasonably likely to have,
whether, individually or in the aggregate, a Company Material Adverse Effect,
(i) the Company and its Subsidiaries have complied with each, and are not in
violation of any, applicable employment law or regulation, including, without
limitation, any law or regulation relating to anti-discrimination and equal
employment opportunities, and (ii) there are, and have been, no violations of
any other law or regulation of any Governmental Entity respecting the hiring,
hours, wages, occupational safety and health, employment, promotion, termination
or benefits or any employee or other person, including the Worker Adjustment and
Retraining Notification Act of 1988 ("WARN Act").
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(c) Neither the Company nor any of its Subsidiaries is a party to
any agreement which restricts the Company or any Subsidiary from relocating,
closing or terminating any of its operations or facilities of any portion
thereof.
(d) Except as has not had and is not reasonably likely to have,
whether, individually or in the aggregate, a Company Material Adverse Effect,
the Company and its Subsidiaries have complied and are in material compliance
with the requirements of the Immigration Reform and Control Act of 1986 and the
Immigration and Naturalization Act.
Section 4.23 Broker-Dealer. Neither the Company nor any of its
Subsidiaries is or has been registered or required to be registered as a
broker-dealer under the Exchange Act or, to the knowledge of the Company, the
laws of any state or foreign jurisdiction.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Parent and Purchaser, jointly and severally, represent and warrant
to the Company as follows:
Section 5.1 Organization. Each of Parent and Purchaser is a
corporation duly organized, validly existing and, in the case of Purchaser, in
good standing under the laws of the jurisdiction of its organization and has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as now being conducted, except where the failure to
be so organized, existing or in good standing or to have such power and
authority, individually or in the aggregate, has not and is not reasonably
likely to prevent or delay the consummation of the Offer or the Merger in any
material respect or to impair or delay in any material respect the ability of
each of Parent and Purchaser to perform its obligations under this Agreement.
Section 5.2 Authority. Each of Parent and Purchaser has the
requisite corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The execution, delivery
and performance of this Agreement by each of Parent and Purchaser and the
consummation of the Offer, the Merger and of the other transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of each of Parent and Purchaser and have been approved by the sole stockholder
of Purchaser, and no approval of the shareholders of Parent is required in
respect thereof. This Agreement has been duly executed and delivered by each of
Parent and Purchaser and, assuming the due authorization, execution and delivery
hereof by the Company, constitutes a valid and binding obligation of Parent and
Purchaser, enforceable against Parent and Purchaser in accordance with its
terms, subject as to enforceability to applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance and similar laws relating to creditors'
rights and to general principles of equity.
Section 5.3 Consents and Approvals; No Violations. None of the
execution, delivery or performance of this Agreement by Parent or Purchaser, the
consummation by Parent or Purchaser of the transactions contemplated hereby, or
compliance by Parent or Purchaser with
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any of the provisions hereof will (a) conflict with or result in any breach of
any provision of the organizational documents of Parent or the Certificate of
Incorporation or Bylaws of Purchaser, (b) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, amendment, cancellation or acceleration)
under, or require the giving of notice to or the obtaining of any consent or
approval from any third party under, any of the terms, conditions or provisions
of any Contract to which Parent, Purchaser or any of their respective
Subsidiaries is a party or to which any of the foregoing's assets are bound, (c)
require any filing by Parent or Purchaser with, or permit, authorization,
consent or approval of, any Governmental Entity (except for (i) compliance with
any applicable requirements of the Exchange Act and Securities Act, (ii) any
filing pursuant to the DGCL, (iii) filings, permits, authorizations, consents
and approvals as may be required under the HSR Act or comparable merger and
notifications, laws or regulations of foreign jurisdictions, (iv) the filing or
deemed filing with the SEC and The NASDAQ Stock Market, Inc. of (A) the Schedule
TO, (B) the 13E-3 Transaction Statement, (C) the Company Proxy Statement, if
Company stockholder approval is required by law and (D) such reports under
Section 13(a) of the Exchange Act as may be required in connection with this
Agreement and the transactions contemplated hereby, (v) such filings and
approvals as may be required by any applicable state securities, blue sky or
takeover laws, (vi) any announcements or disclosures as may be required under
the United Kingdom Listing Authority's (the "UKLA") Listing Rules or by the
UKLA, or (vii) any notices as may be required to be given to the Financial
Services Authority in connection with Multex Investor Europe), or (d) violate
any order, writ, injunction, decree, statute, rule or regulation applicable to
Parent, Purchaser, any of their respective affiliates, or any of their
respective properties or assets, except in the case of clause (b), (c) or (d)
such violations, breaches or defaults which, individually or in the aggregate,
have not and are not reasonably likely to prevent or delay the consummation of
the Offer and the Merger in any material respect or to impair or delay in any
material respect the ability of each of Parent and Purchaser to perform its
other obligations under this Agreement.
Section 5.4 Disclosure Documents.
(a) At the respective times when they are filed with the SEC or
are first published, sent or given to stockholders, the Offer Documents
(including any amendments or supplements thereto) will comply as to form in all
material respects with the applicable requirements of the Exchange Act, and the
rules and regulations thereunder. None of the Offer Documents or the information
supplied by Parent or Purchaser specifically for inclusion in the Schedule 14D-9
will, at the respective times the Offer Documents or the Schedule 14D-9
(including any amendments or supplements thereto) are filed with the SEC or are
first published, sent or given to stockholders, as the case may be, contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(b) None of the information supplied by Parent or Purchaser
specifically for inclusion or incorporation by reference in the Company Proxy
Statement, if required as the case may be, will, at the date mailed to the
Company's stockholders and at the time of the meeting of 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. Notwithstanding the foregoing,
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Parent and Purchaser make no representation or warranty with respect to any
information supplied by the Company or any of its representatives in writing
specifically for inclusion in any of the foregoing documents or the Offer
Documents.
Section 5.5 Financing. Parent has, and will have, sufficient cash,
committed and available lines of credit or other sources of immediately
available funds to consummate the purchase of all of the Shares, to satisfy its
obligations under Section 6.5 and to pay all related payments, fees and expenses
pursuant to the Offer and this Agreement, in each case promptly in accordance
with the terms and conditions of this Agreement.
Section 5.6 Brokers. No broker, investment banker or other person,
other than X.X. Xxxxxx plc, the fees and expenses of which will be paid by
Parent or its Subsidiaries, is entitled to any broker's, finder's or other
similar fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of Parent and
Purchaser.
ARTICLE VI
COVENANTS
Section 6.1 Interim Operations. The Company covenants and agrees as
to itself and its Subsidiaries that, after the date hereof and prior to the
Effective Time (unless Parent shall otherwise approve in writing), except as may
be reasonably responsive to an express requirement of law or as otherwise
expressly contemplated by this Agreement):
(a) Maintenance of the Business. The business of it and its
Subsidiaries shall be conducted in the ordinary and usual course and, to the
extent consistent therewith, it and its Subsidiaries shall use their respective
commercially reasonable efforts to preserve its business organization intact and
maintain its existing relations and goodwill with customers, suppliers,
distributors, creditors, lessors, unions, employees and business associates in
all material respects;
(b) Negative Interim Operating Covenants. Neither it nor any of
its Subsidiaries shall:
(i) Corporate Matters - amend its Certificate of
Incorporation or Bylaws or comparable organizational documents;
(ii) Actions Regarding Capital Stock/Stock Issuances -
a. issue, sell, pledge, dispose of or encumber:
i. any shares of its capital stock or any
shares of capital stock of any of its
Subsidiaries, of any class;
ii. any securities convertible into or
exchangeable or exercisable for any shares
of its capital stock of any class or any
Voting Debt;
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iii. any options, warrants, calls, commitments or
rights of any kind to acquire any shares of
its capital stock of any class or any Voting
Debt or any other property or assets,
in each case, other than (x) shares of Company Common
Stock issuable pursuant to options, warrants and other
stock-based awards outstanding on the date hereof, (y)
the purchase of shares of Company Common Stock under the
Company 1999 Employee Stock Purchase Plan pursuant to
payroll deductions previously authorized by eligible
employees for the purchase interval in effect on the
date hereof and (z) after August 17, 2003, the grant of
options to any director, officer or employee of the
Company or any Subsidiary in the ordinary course of
business consistent with past practice;
b. other than in the case of any direct or indirect
wholly owned Subsidiary, split, combine, subdivide
or reclassify its outstanding shares of capital
stock;
c. repurchase, redeem or otherwise acquire, directly
or indirectly, or permit any of its Subsidiaries
to purchase or otherwise acquire, any shares of
its capital stock or any securities convertible
into or exchangeable or exercisable for any shares
of its capital stock;
(iii) Dividends - declare, set aside or pay any dividend
payable in cash, stock or property in respect of any capital stock
other than dividends payable to it or to its direct or indirect
wholly owned Subsidiaries by their respective direct or indirect
wholly owned Subsidiaries;
(iv) Dispositions - other than in the ordinary and usual
course of business or pursuant to existing contracts or commitments,
transfer, lease, license, guarantee, sell, mortgage, pledge, or
otherwise dispose of or encumber any material property or assets
(including capital stock of any of its Subsidiaries);
(v) Indebtedness; Acquisitions; Capital Expenditures - (A)
incur or modify any material indebtedness other than in the ordinary
course of business consistent with past practices or indebtedness
existing solely between the Company and its wholly owned
Subsidiaries; (B) enter into any Contract providing for payments by
the Company or any of its Subsidiaries, or otherwise agree to make
any expenditure or agree to incur any liability by or on behalf of
the Company or any of its Subsidiaries, in excess of $500,000 in the
aggregate; (C) make or authorize or commit for any capital
expenditures not reflected in the annual budget delivered to Parent
before the date hereof, other than in amounts that are less than
$100,000 individually and $300,000 in the aggregate and (D) by any
means, make any acquisition of, any material amount of assets or any
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acquisition of or investment in any stock of or other interest in,
any other person or entity;
(vi) Employee Benefits - (A) prior to August 17, 2003, make
any awards under, amend or otherwise modify, any Benefit Plan and
thereafter make any such award, amendment or modification other than
in the ordinary course of business consistent with past practice;
(B) prior to August 17, 2003, permit any newly eligible employees to
participate in the Company 1999 Employee Stock Purchase Plan, grant
any new purchase rights thereunder, or commence a new purchase
interval after the expiration of the current purchase interval; (C)
establish, adopt or enter into any new Benefit Plans; (D) prior to
August 17, 2003, except as set forth on Schedule 6.1(b)(vi)(D),
increase the salary, wage, bonus or other compensation or benefits
of any employees, and thereafter increase the salary, wage, bonus or
other compensation or benefits of any employees other than in the
ordinary course of business consistent with past practices; or (E)
hire any employee at a compensation level expected to be more than
$125,000 a year;
(vii) Other Company Rights or Claims - except as disclosed in
the Company Disclosure Schedule, settle or compromise any material
claims or litigation or, except in the ordinary and usual course of
business, modify, amend or terminate any of its Material Contracts
or waive, release or assign any material rights or claims;
(viii) Tax Elections; Accounting Practices; Insurance Policies
- neither it nor any of its Subsidiaries shall make any material Tax
election or file any material income Tax Refund or implement or
adopt any change in its accounting principles or material accounting
practices, in all cases other than as may be required by applicable
laws or by GAAP, or permit any insurance policy naming it as a
beneficiary or loss-payable payee to be cancelled or terminated
except in the ordinary and usual course of business; and
(ix) General - neither it nor any of its Subsidiaries will
authorize or enter into an agreement to do any of the foregoing.
Section 6.2 Reasonable Best Efforts. Upon the terms and subject to
the conditions of this Agreement, each of the parties hereto will use its
reasonable best efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective, in the most expeditious
manner practicable, the Offer and the Merger, including (i) obtaining all
necessary actions or non-actions, waivers, consents and approvals from
Governmental Entities and the making of all necessary registrations and filings
(including filings with Governmental Entities) and the taking of all reasonable
steps as may be necessary to obtain an approval or waiver from, or to avoid an
action or proceeding by any Governmental Entity (including those in connection
with any governmental antitrust review), (ii) obtaining all necessary consents,
approvals or waivers from third parties, (iii) defending any claims,
investigations, actions, lawsuits or other legal proceedings, whether judicial
or administrative, challenging this
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Agreement or the consummation of the Offer and the Merger, including seeking to
have any stay or temporary restraining order entered by any court or other
Governmental Entity vacated or reversed and (iv) executing and delivering any
additional instruments necessary to consummate the Offer and the Merger. Subject
to applicable laws and the terms of any relevant agreements with third parties
relating to the exchange of information, Parent and the Company shall have the
right to review in advance, and to the extent practicable each will promptly
consult the other on, any filing made with, or written materials submitted to,
any third party and/or any Governmental Entity in connection with the
transactions contemplated by this Agreement. The Company and Parent shall keep
the other apprised of the status of matters relating to completion of the
transactions contemplated hereby, including promptly furnishing the other with
copies of notices or other communications sent to or received by Parent or the
Company and its Subsidiaries, as the case may be, from any third party and/or
any Governmental Entity with respect to the transactions contemplated hereby.
Each party shall afford the other party with advance notice of, and a meaningful
opportunity to participate in, any such communications to or from Governmental
Entities, including, without limitation, a right to attend, with advisors
present, any meetings (telephonic or in person) with such Governmental Entities.
In furtherance of the foregoing, in connection with the receipt of any necessary
approvals under the HSR Act or any other comparable laws of foreign
jurisdictions, Parent, the Company and their respective Subsidiaries shall be
required to take or commit to take any and all actions that may be required with
respect to Parent or the Company or any of their respective Subsidiaries or any
portions thereof or any of the businesses, product lines, properties or assets
of the Parent or the Company or any of their respective Subsidiaries (including,
but not limited to, challenging, defending against and appealing any Action,
injunction, order or decree that may be taken or issued by or before any
Governmental Entity in connection with this Agreement or the transactions
contemplated hereby), unless in any such case any such action is reasonably
likely to (i) have a Company Material Adverse Effect (without giving effect to
the exceptions (i)-(v) thereof) or a material adverse effect on the business,
assets, liabilities, operations, results of operations or condition (financial
or otherwise) of Parent and its subsidiaries, taken as a whole, (ii) require
Parent or any of its Subsidiaries to divest or hold separate a material amount
of the assets of Parent and its Subsidiaries, taken as a whole or (iii) have a
material adverse effect on the benefits expected to be realized by Parent from
the transaction.
Section 6.3 Access to Information. Upon reasonable notice, the
Company will (and will cause its Subsidiaries to) afford to the officers,
employees, accountants, counsel and other representatives of Parent and
Purchaser, access, at all reasonable times during the period prior to the
Effective Time, to all its properties, facilities, books, Contracts, commitments
and records (including Tax Returns) and other information requested by such
party, including for purposes of post-acquisition planning and integration
planning to the extent requested by Parent, and, during such period, the Company
will (and will cause each of its Subsidiaries to) furnish promptly to Parent and
Purchaser all information concerning its business, properties and personnel as
Parent or Purchaser may request; provided, that (i) no investigation or request
pursuant to this Section 6.3 or otherwise as undertaken in connection with the
transactions contemplated hereunder, shall affect or be deemed to modify any
representation or warranty made by the Company; (ii) the Company in responding
to requests from Parent or any Parent representative for access to records or
other information of a confidential and competitively sensitive nature may,
prior to expiration or termination of the waiting period under the HSR Act,
limit such access to Parent's outside accountants, counsel, financial advisors
and other outside
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representatives; and (iii) in no event shall this Section 6.3 be deemed to
permit Parent, Purchaser, any of this respective affiliates or any of their
respective directors, officers, employees, agents or representatives to conduct
any invasive sampling or testing. Any information that is obtained pursuant to
this Section 6.3 or any other provision of this Agreement shall be subject to
the terms of the Confidentiality Agreement dated December 16, 2002, by and
between Reuters America Inc. and the Company (the "Confidentiality Agreement"),
and each party hereto will comply with the terms of the Confidentiality
Agreement, whether or not a party thereto.
Section 6.4 Company Stockholders' Meeting.
(a) If approval of this Agreement and the Merger by the
stockholders of the Company is required by law, the Company shall duly give
notice of, convene and hold a meeting of its stockholders for the purpose of
voting upon this Agreement (insofar as it relates to the Merger), the Merger and
related matters as soon as possible following consummation of the Offer. The
Company will, through its Board of Directors, recommend to its stockholders
approval and adoption of this Agreement and approval of the Merger, except to
the extent that the Board of Directors of the Company shall have withdrawn its
approval or recommendation of this Agreement or the Merger to the extent
permitted by Section 6.7. The obligations of the Company contained in the first
sentence of this paragraph shall apply and remain in full force and effect
regardless of whether the Company or the Special Committee shall have withdrawn
its approval or recommendation of this Agreement or the Merger.
(b) As soon as possible after commencement of the Offer, the
Company shall commence preparation of a preliminary Company Proxy Statement
related to the Merger and this Agreement, which shall be substantially completed
prior to the Initial Expiration Date. Following the consummation of the Offer,
if approval of this Agreement and the Merger by the stockholders of the Company
is required by law, the Company will, as soon as possible following consummation
of the Offer, but in any event within 5 business days, file such preliminary
Company Proxy Statement with the SEC and will use all reasonable efforts to
respond to any comments of the SEC or its staff and to cause a definitive
Company Proxy Statement to be mailed to the Company's stockholders. The Company
will notify Parent promptly of the receipt of and will respond promptly to (i)
any comments from the SEC or its staff and (ii) any request by the SEC or its
staff for amendments or supplements to the Company Proxy Statement or for
additional information and will supply Parent with copies of all correspondence
between the Company or any of its representatives, on the one hand, and the SEC
or its staff, on the other hand, with respect to the Company Proxy Statement or
the Merger. If at any time prior to the approval of this Agreement by the
Company's stockholders there shall occur any event that is required to be set
forth in an amendment or supplement to the Company Proxy Statement, the Company
will promptly notify Parent thereof and prepare and mail to its stockholders
such an amendment or supplement. Parent and its counsel shall be given a
reasonable opportunity to be involved in the drafting of and review and comment
upon any Company Proxy Statement and any amendment or supplement thereto and any
such correspondence prior to its filing with the SEC or dissemination to the
Company's stockholders and the Company shall not mail any Company Proxy
Statement, or any amendment or supplement thereto, to which Parent reasonably
objects. Subject to Section 6.7, the Company shall include in the definitive
Company Proxy Statement the recommendation of the Company's Board of Directors
that stockholders of the Company vote in favor of the approval of the Merger
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and the adoption of this Agreement and shall use all reasonable efforts to
solicit from holders of Company Common Stock proxies in favor of the Merger and
take all actions reasonably necessary or, in the reasonable opinion of the
Purchaser, advisable to secure the approval of stockholders required by the
DGCL, the Company's Certificate of Incorporation and any other applicable law to
effect the Merger.
(c) Notwithstanding the foregoing, if the number of shares of
Company Common Stock owned by Parent, Purchaser and any other affiliate of
Parent collectively immediately following consummation of the Offer shall
constitute at least 90 percent of the outstanding shares of Company Common
Stock, and provided that the conditions to the Company's obligations set forth
in Section 7.1 shall have been satisfied or waived, the parties shall, at the
request of Parent, take all necessary and appropriate action to cause the Merger
to become effective as soon as possible, but in any event within two business
days, after such acquisition, without the approval of the stockholders of the
Company, in accordance with Section 253 of the DGCL. Parent agrees to cause all
shares of Company Common Stock purchased pursuant to the Offer and all other
shares of Company Common Stock owned by Purchaser, Parent or any Subsidiary of
Parent or with respect to which Parent then has the right to vote, if any, to be
voted in favor of the approval and adoption of this Agreement and the approval
of the Merger.
Section 6.5 Company Stock Option Plan; Warrants.
(a) The Company shall take, and shall cause each plan
administrator to take, such actions as may be necessary such that, at the
Effective Time, each Option, whether or not exercisable, outstanding pursuant to
the Company Stock Option Plan, the XxxxXxxxxxx.xxx Inc. 1999 Stock Option Plan,
the 1995 Market Guide Key Employee Incentive Plan, the 1995 Market Guide
Independent Directors Stock Incentive Plan, and any other option plan, agreement
or arrangement, shall be cancelled and, except for those Options described in
paragraph (b) below, only entitle the holder thereof, upon surrender thereof, to
receive an amount in cash from the Company equal to the result of multiplying
the total number of shares of Company Common Stock previously subject to such
unexercised Option by the positive difference, if any, between the Per Share
Amount and the per Share exercise price of such Option. No Options shall be
outstanding from and as of the Effective Time.
(b) Effective at the Effective Time, Parent shall cause to be
established a restricted share program with respect to cancelled Options that
(i) were previously issued under the Company Stock Plan pursuant to the Plan's
"Discretionary Option Grant Program", (ii) were not fully vested or exercisable
as of immediately prior to the Effective Time, (iii) had an exercise price of
less than the Per Share Amount and (iv) are described on Schedule 6.5(b) (such
Options, "Program 1 Options").
Under the restricted share program, Parent shall make all necessary
arrangements so that each holder of a cancelled Program 1 Option (an "Optionee")
can be awarded an entitlement from the Reuters Employee Share Ownership Trust
(the "Trust") to a number of Reuters Group PLC ordinary shares, nominal value
L0.25 per share (the "Ordinary Shares"), equal to the number of shares of
Company Common Stock for which such holder's Program 1 Option would have become
exercisable had it not been cancelled (the "Option Shares"),
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multiplied by the Restricted Share Exchange Ratio (as hereinafter defined),
rounding any fractional Ordinary Shares to the nearest whole share. The
"Restricted Share Exchange Ratio" shall mean (i) the difference between the Per
Share Amount and the per share exercise price of the Program 1 Option (the
"Option Spread Amount") divided by (ii) the dollar equivalent (as determined by
Parent on or about the applicable Vesting Date) of the average of the closing
middle market quotation for an Ordinary Share derived from the Daily Official
List of the London Stock Exchange for the ten consecutive trading days in the
period ending five days prior to the Effective Time. The Ordinary Shares
allocated to each Optionee shall vest on each Vesting Date in the same
proportion that the Program 1 Options would have vested. "Vesting Date" means
each date after the Effective Time on which the Optionee's Program 1 Options
would have become exercisable had they not been cancelled as of the Effective
Time. An Optionee shall have no rights with respect to any Ordinary Shares until
the applicable Vesting Date.
Parent shall make all necessary arrangements so that on each Vesting
Date the Trustee transfers to each Optionee (i) in the case of non-U.S. based
employees, the Ordinary Shares vesting on such date or (ii) in the case of U.S.
based employees, a number of American Depositary Shares representing such vested
Ordinary Shares, rounded down to the nearest whole number of American Depositary
Shares (in each case, the "Transferred Securities"). If, on the trading day
immediately preceding the date of receipt of such Transferred Securities, the
reported last sale price per Transferred Security in the regular trading session
on the principal national securities exchange or inter-dealer quotation system
on which it is listed or admitted to trading multiplied by the total number of
Transferred Securities transferred to an Optionee on the Vesting Date (converted
to the U.S. dollar equivalent as determined by Parent on or about the applicable
Vesting Date, in the case of Ordinary Shares) is less than the Option Spread
Amount multiplied by the number of Option Shares that would have been issuable
to the Optionee under the Program 1 Option on the date of receipt of such
Transferred Securities, Parent shall pay, or cause to be paid, to the Optionee
the difference in cash in the Optionee's local currency (such amount, the
"Additional Payment").
The Program 1 Options will be governed by the additional terms set
forth on Schedule 6.5(b).
The Company acknowledges and agrees that the restricted share
program described in this Section 6.5(b) satisfies the requirements of Article
II of the Company Stock Option Plan.
(c) At or immediately before the Effective Time, each then
outstanding Warrant shall be converted into an obligation of the Surviving
Corporation to pay upon exercise thereof, and a right of the holder thereof to
receive in full satisfaction of such Warrant, cash in an amount in respect
thereof equal to the product of (A) the Merger Consideration less the exercise
price per share of Company Common Stock subject to such Warrant and (B) the
number of shares of Company Common Stock subject to such Warrant. Parent shall
make the payment of the amount determined in accordance with the foregoing
sentence after the Effective Time promptly upon any exercise by a holder of such
Warrant in accordance with its terms.
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Section 6.6 Company Benefit Plans.
(a) From the Effective Time through the first anniversary of the
Effective Time (the "Benefit Continuation Period"), Parent shall, or shall cause
the Surviving Corporation to, continue to provide to each individual who is a
U.S.-based employee of the Company and its Subsidiaries as of the Effective Time
with the compensation and benefits set forth on Schedule 6.6(a)(i). If the
employment of any U.S.-based employee is terminated during the Benefit
Continuation Period without cause for reasons including, but not limited to, job
elimination, reduction in work force, plant-closing, sale of business,
reorganization and consolidation, Parent shall, or shall cause the Surviving
Corporation to provide that employee with severance as set forth on Schedule
6.6(a)(ii) for each year of service with Parent and each year of service with
the Company or its Subsidiaries from the most recent date of hire of the
employee by the Company or its Subsidiaries, provided that in no event will
service that would not have been credited under a comparable plan of the Company
be counted.
(b) From the Effective Time through the six month anniversary of
the Effective Time, Parent shall, or shall cause the Surviving Corporation to,
continue to provide to each individual who is a non-U.S.-based employee of a
foreign Subsidiary of the Company as of the Effective Time the compensation and
benefits set forth on Schedule 6.6(b).
(c) Parent shall cause each U.S.-based and, to the extent possible
under the relevant jurisdiction, non-U.S.-based employee to be given credit for
all service with the Company and its Subsidiaries for purposes of eligibility
for participation and vesting under all benefit plans, policies and arrangements
of Parent, the Surviving Corporation and its Subsidiaries, in which that
employee is eligible to participate and to the extent such credit was given by
the Company's applicable employee benefit plan, policy or arrangement.
(d) With respect to each U.S.-based and, to the extent possible
under the relevant jurisdiction, non-U.S.-based employee who becomes a
participant in any welfare benefit plan of Parent, the Surviving Corporation or
a Subsidiary of the Surviving Corporation, Parent shall cause any pre-existing
medical condition restrictions contained in that welfare benefit plan to be
waived with respect to that employee and his or her eligible dependents and
shall cause the out-of-pocket payments of that employee and his or her eligible
dependents made in the year during which the employee switches participation
from the Company's welfare benefit plans to welfare benefit plans maintained by
Parent to be credited under such welfare benefit plan for purposes of the
deductible and maximum out-of-pocket limits applicable under that welfare
benefit plan in the same manner that such payments would have been credited
under that welfare benefit plan if the employee and his or her eligible
dependents had been covered under such welfare benefit plan when those expenses
were incurred.
(e) Nothing in this Section 6.6 shall be deemed to in any way
restrict the ability of the Surviving Corporation to terminate any employee or
terminate, modify or institute any compensation arrangement or Benefit Plan of
the Surviving Corporation.
(f) If in the course of discussions between the parties, Parent
determines that one or more Benefit Plans needs to be amended, modified or
terminated, the Company and its Subsidiaries shall take all actions reasonably
requested by Parent, to the extent permitted under
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any such Benefit Plan, to so amend, modify or terminate, and, if reasonably
necessary or appropriate, obtain applicable determination letters in connection
with such action.
Section 6.7 No Solicitation.
(a) If any inquiry or proposal is received by, any information is
requested from, or any negotiations or discussions are sought to be initiated or
continued with the Company or its officers, directors, employees listed in the
third paragraph of the Standstill Agreement (as defined in Section 9.7),
investment bankers, attorneys, accountants or other agents, in each case, in
connection with a Takeover Proposal (as defined below) (a "Takeover Proposal
Interest"), then the Company shall promptly provide Parent with written notice
of that Takeover Proposal Interest, which notice shall (i) identify the name of
the person indicating such a Takeover Proposal Interest and the material terms
and conditions of any Takeover Proposal and (ii) include a copy of any written
Takeover Proposal Interest or Takeover Proposal that may have been submitted by
such third party as part of its expression of Takeover Proposal Interest;
provided that once any such notice is provided by the Company, the Company shall
not have any further obligation to provide any updates or notices regarding
either discussions with or information provided to that third party or
discussions, negotiations or other developments with respect to that Takeover
Proposal or any Takeover Proposal thereafter submitted by that third party,
except as otherwise expressly set forth in clause (C)(iv) of Section 6.7(b). For
purposes of this Agreement, "Takeover Proposal" means any proposal (including,
without limitation, any proposal or offer to stockholders of the Company), other
than a proposal by Parent or any of its affiliates, for a merger, consolidation,
share exchange, business combination, reorganization, recapitalization,
liquidation, dissolution, tender offer or other similar transaction involving,
or any purchase of, all or any significant portion of the consolidated assets of
the Company and its Subsidiaries, or 5 percent or more of the equity securities
of the Company.
(b) The Company agrees that it shall immediately cease and cause
to be terminated all existing discussions, negotiations and communications with
any person with respect to any Takeover Proposal and, except in compliance with
and in the circumstances described in clause (C) of this Section 6.7(b), shall
enforce and shall not terminate, amend, modify or waive any standstill provision
of any confidentiality or standstill agreement between the Company and other
parties entered into prior to the date hereof. The Company shall not, nor shall
it permit any of its Subsidiaries to, nor shall it authorize or permit any
officer, director, employee, agent or representative (including any investment
banker, attorney, accountant or other advisor) of the Company or any of its
Subsidiaries to, directly or indirectly, (i) solicit, initiate or facilitate any
inquiries or the making of any Takeover Proposal, (ii) enter into any agreement
with respect to any Takeover Proposal, (iii) participate in any discussions or
negotiations regarding, or furnish or disclose to any person any nonpublic
information or data with respect to or in furtherance of, or facilitate any
effort or attempt to make or implement, any Takeover Proposal or (iv) enter into
any agreement, arrangement or understanding requiring it to abandon, terminate
or fail to consummate the transactions contemplated by this Agreement; provided,
however, that
(A) the Company may take such actions as are required by the
Exchange Act with regard to any Takeover Proposal,
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(B) until the earlier of (x) Purchaser's purchase of shares of
Company Common Stock pursuant to the Offer and (y) obtaining the
affirmative vote required to approve the Merger as set forth under Section
4.15, the Company may participate in discussions or negotiations with, or
furnish information to, any person in response to an unsolicited bona fide
written Takeover Proposal by any person made after the date hereof, but
only if (1) the Board of Directors of the Company or the Special Committee
determines, in good faith, that (x) taking such action is reasonably
likely to be required by their fiduciary duties under applicable law and
(y) taking that action has a reasonable prospect of resulting in the
receipt by the Company of a Superior Proposal and (2) the Company shall
have entered into a confidentiality and standstill agreement with that
person that is at least as restrictive to that person as the
Confidentiality Agreement and the Standstill Agreement; and
(C) the Company may recommend any unsolicited bona fide written
Takeover Proposal to the stockholders of the Company, may withdraw or
modify its recommendation of the Offer, the Merger and this Agreement and
may terminate this Agreement and enter into any agreement regarding a
Takeover Proposal, if and only to the extent that, in the cases of this
clause (C), (i) the Board of Directors of the Company or the Special
Committee determines in good faith by resolution duly adopted that such
Takeover Proposal is a Superior Proposal (as defined below), (ii) the
Board of Directors of the Company or the Special Committee determines in
good faith after consultation with and advice from its outside legal
counsel that the failure to take such action would be reasonably likely to
constitute a breach of the directors' fiduciary duties under applicable
law, (iii) the Company shall have executed with the person making such
Takeover Proposal a confidentiality agreement containing terms and
provisions at least as restrictive to such third party as those contained
in the Confidentiality Agreement and the Standstill Agreement and (iv) two
business days have elapsed following the Company's delivery to Parent of
written notice advising Parent that the Company's Board of Directors or
the Special Committee has received a Superior Proposal, specifying the
material terms and conditions of such Superior Proposal, identifying the
person making such Superior Proposal and providing Parent a copy of any
written Superior Proposal; provided, however, that the Company shall not
terminate this Agreement or enter into an agreement with respect to a
Superior Proposal unless in addition the Company (1) has provided Parent
written notice that it intends to terminate this Agreement, (2) within a
period of two business days following the delivery of the written notice
referred to in this clause (iv) above, if Parent proposes adjustments in
the terms and conditions of this Agreement, but the Company Board of
Directors or the Special Committee determines, in its good faith judgment
(after receiving the advice of its financial advisor and after considering
such proposed adjustments and negotiations relating thereto), that the
Agreement as so proposed to be adjusted is not as favorable to the
Company's stockholders as such Superior Proposal and (3) at least two
business days after the Company has provided the written notice referred
to in this clause (iv) above, the Company delivers to Parent (x) a written
notice of termination of this Agreement pursuant to this Section 6.7(b)
and Section 8.1(d) and (y) a wire transfer of immediately available funds
in the amount of the Termination Fee (as defined in Section 8.2(b)).
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Without limiting the foregoing, it is understood that any violation of the
restrictions set forth in the preceding sentence by any officer, director,
employee listed in the third paragraph of the Standstill Agreement, agent or
representative (including any investment banker, attorney, accountant or other
advisor) of the Company or any of its Subsidiaries shall be deemed to be a
breach of this paragraph by the Company. The Company shall promptly provide to
Parent any non-public information regarding the Company provided to any other
person which was not previously provided to Parent, such additional information
to be provided no later than the date of provision of such information to such
other person. For purposes of this Agreement, "Superior Proposal" means a bona
fide written proposal made by a person other than Parent, Purchaser or an
affiliate thereof (i) which is for a merger, consolidation, share exchange,
business combination, reorganization, recapitalization, liquidation,
dissolution, tender offer or other similar transaction involving, or any
purchase or acquisition of, (A) more than fifty percent of the voting power of
the Company's capital stock or (B) all or substantially all of the consolidated
assets of the Company and its Subsidiaries, (ii) which is otherwise on terms
which the Company's Board of Directors or the Special Committee determines in
good faith after consultation with its independent financial advisors would
result in a transaction that, if consummated, is more favorable to the Company's
stockholders, from a financial point of view, than the Offer and Merger (or, if
applicable, any proposal by Parent to amend the terms of this Agreement), taking
into account all the terms and conditions of such proposal, the likelihood of
the transaction contemplated by such proposal being completed, and all
financial, regulatory, legal and other aspects of such proposal; provided,
however, that no proposal shall be deemed to be a Superior Proposal if any
financing required to consummate the proposal is not committed, and (iii) the
failure of which to accept or recommend by the Company's Board of Directors or
the Special Committee would be reasonably likely to constitute a breach of the
directors' fiduciary duties under applicable law.
(c) The Company shall promptly inform the individuals or entities
referred to in the second sentence of Section 6.7(b) of the obligations
undertaken in this Section 6.7. The Company shall promptly require and ensure
that each person that has heretofore executed a confidentiality agreement in
connection with its consideration of any Takeover Proposal return all
confidential information heretofore furnished to such person by or on behalf of
the Company or any of its Subsidiaries.
Section 6.8 Notification of Certain Matters. The Company will give
prompt notice to Parent and Purchaser, and Parent (or Purchaser, as the case may
be) will give prompt notice to the Company, of (a) any notice or other
communication from any person alleging that the consent of that person is or may
be required in connection with the transactions contemplated by this Agreement;
(b) any notice or other communication from any Governmental Entity in connection
with the transactions contemplated by this Agreement; and (c) any actions,
suits, claims, investigations or proceedings commenced or, to its knowledge,
threatened against, relating to or involving or otherwise affecting the Company
or any of its Subsidiaries or Parent and any of its Subsidiaries, as the case
may be, that, if pending on the date of this Agreement, would have been required
to have been disclosed pursuant to any of the provisions of Article IV or V or
that relate to the transactions contemplated by this Agreement.
Section 6.9 Public Announcements. The Company, Parent and Purchaser
will consult with each other and provide each other a meaningful opportunity to
review and comment
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on, before issuing any press releases or otherwise making any public statements
with respect to the transactions contemplated by this Agreement and shall not
issue any such press releases or make any such public statements prior to such
consultation and review and comment process, except as may be required by
applicable law or regulation or by obligations pursuant to any listing agreement
with or the listing rules of The Nasdaq Stock Market, Inc. or the UKLA. In
addition, the Company shall give Parent and its counsel and Parent shall give
the Company and its counsel a reasonable opportunity to review and comment on
any documents to be filed with the SEC by the Company or Parent, as the case may
be, or any other public statements of the Company or Parent, as the case may be,
to be made, to the extent such filings or statements contain information
concerning the Company's or Parent's, as the case may be, financial condition or
results of operations, prior to their being filed with the SEC or publicly
released, and the Company or Parent, as the case may be, agrees to give
reasonable consideration to the comments of Parent and its counsel or the
Company and its counsel, as the case may be, in respect thereof.
Section 6.10 State Takeover Laws. If any "fair price", "control
share acquisition" or "business combination" statute or other takeover or tender
offer statute or regulation shall become or is deemed to become applicable to
the transactions contemplated by this Agreement or the Tender and Voting
Agreements, each of Parent, Purchaser and the Company and their respective
Boards of Directors shall, subject to its fiduciary duties and in consultation
with its outside legal counsel, take all action necessary to render such statute
inapplicable to the foregoing.
Section 6.11 Indemnification and Insurance. Parent shall cause the
Surviving Corporation, and the Surviving Corporation hereby agrees, to do the
following:
(a) The Surviving Corporation shall indemnify and hold harmless
all current and former officers and directors of the Company and of its
Subsidiaries (the "Indemnified Parties)" to the fullest extent permitted by
applicable law and to the same extent and subject to the same terms as such
persons are currently indemnified by the respective Certificates of
Incorporation and Bylaws of the Company and of its Subsidiaries and under any
indemnification agreement with the Company, for acts or omissions occurring at
or prior to the Effective Time (including acts or omissions in connection with
this Agreement and the consummation of the transactions contemplated hereby).
(b) The Certificate of Incorporation of the Surviving Corporation
shall contain provisions no less favorable with respect to indemnification than
are set forth in Article VIII of the Company's Certificate of Incorporation and
Article VIII of the Company's Bylaws, as the same may exist on the date of this
Agreement.
(c) For a period of not less than six years from the Effective
Time, the Surviving Corporation shall provide directors' and officers' insurance
and indemnification policy in favor of the Indemnified Parties in respect of
acts or omissions occurring at or prior to the Effective Time (including acts or
omissions in connection with this Agreement and the consummation of transactions
contemplated hereby) of at least the same coverage (with carriers at least
substantially comparable to in claims paying rating to the Company's existing
carriers) containing terms and conditions which are not at least as advantageous
to the Indemnified Parties
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as those contained in the directors' and officers' insurance and indemnification
policy maintained by the Company on the date of this Agreement; provided, that
(i) unless Parent otherwise elects by written notice to the Company at least 7
days before the consummation of the Offer, the Company shall be entitled to
purchase (or, if Parent so directs, the Company shall be required to purchase) a
directors' and officers' insurance and indemnification policy in connection with
the Surviving Corporation's obligations under this Section 6.11(c) at least 1
day before the final Expiration Date, so long as the cost of that policy does
not exceed $2 million and (ii) if the Company so elects or is so directed by
Parent and this policy is so purchased, then the Surviving Corporation shall be
deemed to have satisfied its obligations under this Section 6.11(c) in full.
(d) The provisions of this Section 6.11 are intended for the
benefit of, and shall be enforceable by, all Indemnified Parties and their
respective heirs and personal representatives, and such persons shall be
entitled to reimbursement by the Surviving Corporation of fees and expenses
(including reasonable attorneys' fees) incurred to enforce the terms of this
section.
(e) In the event Parent or the Surviving Corporation or any of
their respective successors or assigns (i) consolidates with or merges into any
other person and shall not be the continuing or surviving corporation or entity
of such consolidation or merger or (ii) transfers all or substantially all its
properties and assets to any person, then the obligations of Parent or the
Surviving Corporation, as the case may be, that is set forth in this Section
6.11 shall survive such consolidation, merger or transfer, and then, and, in
each such case, to the extent necessary, proper provision shall be made so that
the successors and assigns of Parent or the Surviving Corporation, as the case
may be, shall assume the obligations set forth in this Section 6.11. Parent
shall be responsible for any breach by the Surviving Corporation of the
provisions of this Section 6.11. Any Indemnified Party wishing to claim
indemnification under this Section 6.11 from the Surviving Corporation (or
Parent in accordance with the terms of this Section 6.11), upon learning of any
such claim, action, suit, proceeding or investigation, shall promptly notify the
Surviving Corporation or Parent, as the case may be, thereof, but in no event
shall the failure to give any such notice promptly affect the respective rights
and obligations of the parties hereto under this Section 6.11, unless that
failure materially prejudices the Surviving Corporation (and then only to the
extent of that material prejudice). In the event of any such claim, action,
suit, proceeding or investigation (whether arising before or after the Effective
Time), (i) Purchaser or the Surviving Corporation, as the case may be, shall
have the right to assume the defense thereof and Purchaser or the Surviving
Corporation, as the case may be, shall not be liable to such Indemnified Parties
for any legal expenses of other counsel or any other expenses subsequently
incurred by such Indemnified Parties in connection with the defense thereof
unless counsel for the Indemnified Parties reasonably advises the Indemnified
Parties that there are issues that raise conflicts of interest between Purchaser
and the Indemnified Parties (or among the Indemnified Parties) that make such
assumption unadvisable, in which case the Indemnified Parties may retain
counsel, reasonably satisfactory to the Surviving Corporation or Parent, as the
case may be, and Purchaser shall pay the reasonable legal expenses of such
Indemnified Party or Parties (but in no event shall the Surviving Corporation be
liable for the fees and expenses of more than one counsel (other than local
counsel) for the Indemnified Parties, or, in the event of such a conflict of
interest among the Indemnified Parties than for each such conflicted Indemnified
Party), (ii) the Indemnified Parties will cooperate in the defense of any such
matter and (iii) the
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Surviving Corporation or Parent, as the case may be, shall not be liable for any
settlement effected without its prior written consent; provided, that the
Surviving Corporation or Parent, as the case may be, shall not have any
obligation hereunder to any Indemnified Party when and if a court of competent
jurisdiction shall ultimately determine, and such determination shall have
become final, that the indemnification of such Indemnified Party in the manner
contemplated hereby is prohibited by applicable law.
ARTICLE VII
CONDITIONS
Section 7.1 Conditions to Each Party's Obligation To Effect the
Merger. The respective obligations of the parties to effect the Merger are
subject to the satisfaction or waiver, on or prior to the Closing Date, of each
of the following conditions:
(a) Stockholder Approval. If required by applicable law, this
Agreement (insofar as it relates to the Merger) and the Merger shall have been
approved and adopted by the requisite affirmative vote or consent of the holders
of the shares of Company Common Stock in accordance with applicable law, and the
Company's Certificate of Incorporation and the Company's Bylaws.
(b) Purchase of Shares. Purchaser shall have accepted for purchase
and paid for shares of Company Common Stock pursuant to the Offer.
(c) No Injunctions or Restraints. No statute, rule or regulation
shall have been enacted, promulgated or otherwise be in effect by any
Governmental Entity 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 or impairing the consummation of the
Merger in any material respect shall be in effect on the Closing Date.
ARTICLE VIII
TERMINATION
Section 8.1 Termination. This Agreement may be terminated and the
Offer and Merger may be abandoned at:
(a) Any time before the Effective Time, whether before or after
stockholder approval thereof, by mutual written consent of Parent and the
Company;
(b) By either Parent or the Company (i) if, prior to the purchase
of the Company Common Stock in the Offer, a court of competent jurisdiction or
other Governmental Entity shall have issued an order, decree or ruling or taken
any other action, in each case permanently restraining, enjoining or otherwise
prohibiting the Offer or the Merger, and that judgment, injunction, order or
decree shall have become final and nonappealable, or (ii) if the Offer has not
been consummated by October 17, 2003 (subject to the right of either party to
extend such date in one-month increments upon no less than 5 days and no more
than 15 days prior written notice to the other party, for an aggregate extension
of no more than nine months, in all cases only in the circumstance where the
Offer has not been consummated by October 17, 2003 due (whether in whole or in
part) to the failure of any of the conditions set forth in any of
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clauses (ii), (iii)(c), (iii)(e) or (iii)(f) of Annex A) (either such date, the
"End Date"); provided, however, that the right to terminate this Agreement
pursuant to clause (ii) of this Section 8.1(b) shall not be available to any
party whose failure to fulfill any obligation under this Agreement has been the
cause of, or resulted in, the failure of the Offer to be consummated by such
date;
(c) By Parent, at any time prior to the purchase of the Company
Common Stock pursuant to the Offer, if (i) the Company's Board of Directors
shall have withdrawn, modified, or changed its recommendation in respect of this
Agreement, the Merger or the Offer in a manner adverse to the Merger or the
Offer, to Parent or to the Purchaser, (ii) the Company's Board of Directors
shall have recommended any proposal other than by Parent or the Purchaser in
respect of a Takeover Proposal, (iii) (A) the Company shall have continued to
violate or breach in any material respect any of its obligations under Section
6.7 after 10 business days' prior written notice thereof from Parent or (B) the
Company shall have violated or breached in any material respect any of its
obligations under Section 6.7 or (iv) the Company shall have breached any
representation, warranty, covenant or other agreement contained in this
Agreement that would give rise to the failure of a condition set forth in
paragraph (b) or (c) of Annex A hereto, and that breach cannot be cured or
remedied by the End Date, but only after 10 days' prior written notice of that
breach by Parent to the Company; or
(d) By the Company (i) pursuant to and in compliance with Section
6.7(c), (ii) if the Purchaser shall have failed to commence the Offer within ten
business days following the date of this Agreement, unless such failure to
commence the Offer is due in any way to any action or failure to act on the part
of the Company or (iii) if, at any time prior to the consummation of the Offer,
Parent or the Purchaser shall have breached in any material respect any of the
representations, warranties, covenants or agreements contained in this
Agreement, and such material breach cannot be cured or remedied by the End Date,
but only after 10 days' prior written notice of that breach by the Company to
Parent.
Section 8.2 Effect of Termination.
(a) In the event of the termination of this Agreement as provided
in Section 8.1 (other than clause (a) thereof), written notice thereof shall
forthwith be given to the other party or parties specifying the provision hereof
pursuant to which such termination is made, and this Agreement shall forthwith
become null and void (except for the last sentence of Section 6.3, this Section
8.2 and Article IX, which shall survive such termination) and there shall be no
liability on the part of Parent, the Purchaser or the Company, except (i) as set
forth in Sections 6.3 and 8.2, and (ii) subject to Section 8.2(f), nothing
herein shall relieve any party from liability for any willful breach of this
Agreement or from fraud.
(b) If any of the following shall occur:
(i) Parent shall have terminated this Agreement pursuant to
any of Section 8.1(c)(i), Section 8.1(c)(ii) or Section
8.1(c)(iii)(A),
(ii) the Company shall have terminated this Agreement
pursuant to Section 8.1(d)(i),
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(iii) if both (x) Parent or the Company shall have terminated
this Agreement pursuant to Section 8.1(b)(ii) and at any time
between the commencement of the Offer and the date of such
termination, there shall have been commenced, publicly proposed or
communicated to the holders of shares of Company Common Stock a
Takeover Proposal and (y) a Qualifying Takeover Event shall have
occurred within 9 months following that termination, or
(iv) if Parent shall have terminated this Agreement pursuant
to Section 8.1(c)(iii)(B), and a Qualifying Takeover Event shall
have occurred within 9 months following that termination,
then the Company shall pay to Parent a termination fee (the "Termination Fee")
of $5.5 million, which amount shall be payable by wire transfer to such account
as Parent may designate in writing to the Company. The Company shall pay the
Termination Fee to Parent (x) within 5 business days of any termination
described in Section 8.2(b)(i), (y) as a precondition to any termination
described in Section 8.2(b)(ii) (as further contemplated by Section 6.7(b)) and
(z) on the date that the Company shall have executed and delivered a definitive
agreement providing for the Qualifying Takeover Event (or on the date that the
relevant person becomes the beneficial owner of the Company Common Stock that
gave rise to the Qualifying Takeover Event, as applicable) in connection with
any termination described in either Section 8.2(b)(iii) or Section 8.2(b)(iv).
(c) For purposes of this Agreement, the term "Qualifying Takeover
Event" shall mean that either of the following shall have occurred: (i) the
Company shall have entered into a definitive agreement with respect to any
Takeover Proposal providing for the purchase or acquisition of more than fifty
percent of either (A) the voting power of the Company's capital stock or (B) the
assets of the Company and its Subsidiaries (judged either by their fair market
value or the consolidated revenue of the Company that is generated therefrom,
whichever percentage is higher) or (ii) any third party shall have otherwise
become the beneficial owner of more than fifty percent of the voting power of
the Company Common Stock.
(d) Except as provided in this Section 8.2, 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.
(e) The Company acknowledges that the agreements contained in
paragraphs (b) and (c) of this Section 8.2 are an integral part of the
transactions contemplated by this Agreement, and that, without these agreements,
Parent and Purchaser would not enter into this Agreement; accordingly, if the
Company fails to pay promptly any amount due pursuant to this Section 8.2 and,
in order to obtain such payment, Parent or any of its affiliates commences a
suit that results in a judgment against the Company for any such amount, the
Company shall also pay to Parent or such affiliate their costs and expenses
(including attorneys' fees) in connection with such suit, together with interest
on the amount of the fee at the base rate of Citibank, N.A. from the date such
payment was due under this Agreement.
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(f) Except in the case of any termination of this Agreement
pursuant to Section 8.1(c)(iii)(A), any payment by Company of the full
Termination Fee pursuant to this Section 8.2 shall relieve the Company, each of
its affiliates and each of their respective directors, officers, employees,
agents and representatives from any further liability, obligation or damages
under any provision of this Agreement or otherwise in connection with this
Agreement and the transactions contemplated hereby.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Nonsurvival of Representations and Warranties. None of
the representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement will survive the Effective Time. This
Section 9.1 shall not limit any covenant or agreement of a party that by its
terms expressly contemplates performance after the Effective Time or the
survival of this Article IX after the Effective Time.
Section 9.2 Amendment. This Agreement may be amended by the parties
hereto at any time before or after approval of the matters presented in
connection with the Merger by the stockholders of the Company, but, after any
such approval, no amendment will be made which by law requires further approval
by such stockholders, or which reduces the amount or changes the kind of
consideration to be received in exchange for the shares of Company Common Stock,
without such further approval. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
Section 9.3 Extension; Waiver. At any time prior to the Effective
Time, the parties hereto may to the extent legally allowed, (i) extend the time
for the performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto and (iii) waive
compliance with any of the agreements or conditions contained herein. Any such
extension or waiver will be valid only if set forth in a prior written
instrument signed on behalf of the party against whom the extension or waiver is
to be effective by a duly authorized officer of such party setting forth in
detail the extension or waiver.
Section 9.4 Notices. All notices and other communications hereunder
will be in writing and will be deemed given if delivered personally, telecopied
(which is confirmed) or mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as is specified by like notice):
(a) if to Purchaser or Parent to:
Proton Acquisition Corporation
c/o Reuters America Inc.
3 Times Square - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxx of America
Attention: General Counsel
Telecopy No.: 000-000-0000
-46-
Reuters Group Plc
0xx Xxxxx
00 Xxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Attention: General Counsel
Telecopy No.: 011-44-207-542-5896
with copies to:
Xxxxxxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxxxx
Xxxxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
(b) if to the Company, to:
Xxxxxx.xxx, Inc.
000 Xxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
Telecopy No.: (000) 000-0000
with copies to:
Xxxxx, Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxx
Telecopy No.: (000) 000-0000
or to any other address or facsimile number as that party may hereafter specify
for this purpose by notice to the other parties. All such notices, requests and
other communications shall be deemed received on the date of receipt by the
recipient thereof if received before 5 p.m. on a business day in the place of
receipt. Otherwise, any such notice, request or communication shall be deemed
not to have been received until the next succeeding business day in the place of
receipt.
Section 9.5 Interpretation. When a reference is made in this
Agreement to a Section, such reference will be to a Section of this Agreement
unless otherwise indicated. The headings contained in this Agreement are for
reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement. This Agreement shall be deemed to include the
Company Disclosure Schedule and the other Annexes hereto and all references to
"herein", "hereof", "hereunder", and all similar references shall include both
the Company Disclosure Schedule and the other Annexes hereto. Whenever the words
"include", "includes"
-47-
or "including" are used in this Agreement they will be deemed to be followed by
the words "without limitation". References to the "Company" include the
Subsidiaries of the Company unless the context clearly requires otherwise. The
phrases "the date of this Agreement", "the date hereof" and terms of similar
import, unless the context otherwise requires, will be deemed to refer to
February 17, 2003. As used in this Agreement, the term "affiliate" shall have
the meaning set forth in Rule 12b-2 of the Exchange Act; provided that in no
event will Parent or Purchaser, on the one hand, or the Company or any of its
Subsidiaries, on the other, be considered an affiliate of the other such
party(ies). The phrase "to the knowledge of the Company" and similar phrases
refer, as to any given fact, to the actual knowledge of that fact by the
executive officers and directors of the Company. As used in this Agreement, any
reference to a "Company Material Adverse Effect" means a material adverse effect
on the business, assets, liabilities, operations, results of operations or
condition (financial or otherwise) of the Company and its Subsidiaries, taken as
a whole, except any such effect resulting from or arising in connection with (i)
(A) the exercise of any termination or other right by any third party to, or the
loss of any right of (or the imposition of any obligation on) the Company or any
Subsidiary under, any Contract listed on Section 4.4 of the Company Disclosure
Schedule (and a true and accurate copy of which has been made available by the
Company to Parent before the date of this Agreement), but only if and to the
extent that the exercise or loss of the foregoing right or the imposition of the
foregoing obligation actually resulted or potentially could result from the
change of control of the Company that would occur as a result of the
consummation of the transactions contemplated hereby or (B) any other expiration
of the term, or other termination by any third party, of any Contract listed on
the Company Disclosure Schedule in accordance with its terms, but only if and to
the extent that there is clear evidence that the failure to renew, or the
decision to terminate, any such Contract is primarily attributable to the
transactions contemplated hereby, (ii) changes, circumstances, or conditions
affecting the financial services industry or the information services industry
generally, (iii) changes in general United States or global economic, regulatory
or political conditions or in any financial market or in the financial markets
generally, (iv) changes in applicable law or regulation or in GAAP after the
date of this Agreement or (v) any act of war or terrorism (other than any act of
terrorism directly upon or in the vicinity of the facilities, systems,
operations or general personnel of the Company and/or its Subsidiaries).
Section 9.6 Counterparts. This Agreement may be executed in two or
more counterparts, all of which will be considered one and the same agreement
and will become effective when two or more counterparts have been signed by each
of the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
Section 9.7 Entire Agreement; No Third Party Beneficiaries. This
Agreement (including the annexes and the documents and the instruments referred
to herein), the Confidentiality Agreement and the letter agreement, dated
January 29, 2003, between the Company and Reuters America Inc. (the "Standstill
Agreement") (a) constitute the entire agreement, and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof and thereof, and (b) other than Section
6.11, are not intended to confer upon any person other than the parties hereto
and thereto any rights or remedies hereunder or thereunder.
-48-
Section 9.8 GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE, EXECUTED, DELIVERED AND PERFORMED WHOLLY WITHIN THE STATE OF NEW
YORK, WITHOUT REGARD TO ANY APPLICABLE PRINCIPLES OF CONFLICTS OF LAW, EXCEPT AS
OTHERWISE REQUIRED BY THE DGCL.
Section 9.9 Specific Performance. The parties hereto agree that if
any of the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached, irreparable damage would occur,
no adequate remedy at law would exist and damages would be difficult to
determine, and that the parties will be entitled to specific performance of the
terms hereof, in addition to any other remedy at law or equity.
Section 9.10 Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder will be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties; provided, however, that Purchaser may
assign this Agreement and any of its rights, interests and obligations hereunder
to any direct or indirect Subsidiary of Parent without such prior written
consent, but no such transfer or assignment shall relieve Purchaser of its
obligations under the Offer or prejudice the rights of tendering stockholders to
receive payment for Shares validly tendered and accepted for payment pursuant to
the Offer. Subject to the preceding sentence, this Agreement will be binding
upon, inure to the benefit of and be enforceable by the parties and their
respective successors and permitted assigns.
Section 9.11 Validity. The invalidity or unenforceability of any
provision of this Agreement will not affect the validity or enforceability of
any other provisions hereof, which will remain in full force and effect. Upon
such determination that any term or other provision is invalid or incapable of
being enforced, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in order that the transactions contemplated by this Agreement may be
consummated as originally contemplated to the fullest extent possible.
Section 9.12 Procedure for Termination, Amendment, Extension or
Waiver. A termination of this Agreement pursuant to Section 8.1, an amendment of
this Agreement pursuant to Section 9.2 or an extension or waiver pursuant to
Section 9.3 shall, in order to be effective, require (a) in the case of Parent
or Purchaser, action by its duly authorized designee, (b) in the case of the
Company before consummation of the Offer, action by the Special Committee or the
duly authorized designee thereof and (c) in the case of the Company following
consummation of the Offer, action by the affirmative vote of a majority of the
Independent Directors, if any, shall be required to (i) amend or terminate this
Agreement by the Company, (ii) exercise or waive any of the Company's rights or
remedies under this Agreement, (iii) extend the time for performance of Parent's
and Purchaser's respective obligations under this Agreement, (iv) amend the
Company's Certificate of Incorporation or Bylaws or (v) approve any transactions
between the Company and any of its Subsidiaries, on the one hand, and Parent,
Purchaser or any of their respective affiliates, on the other. The failure of
any party to assert any of its rights hereunder shall not constitute a waiver of
such rights.
-49-
Section 9.13 Jurisdiction. Each of Parent, the Purchaser and the
Company hereby expressly and irrevocably submits to the non-exclusive personal
jurisdiction of the United States District Court for the District of Delaware
and to the jurisdiction of any other competent court of the State of Delaware
(collectively, the "Delaware Courts"), preserving, however, all rights of
removal to such federal court under 28 U.S.C. Section 1441, in connection with
all disputes arising out of or in connection with this Agreement or the
transactions contemplated hereby and agrees not to commence any litigation
relating thereto except in such courts. Each such party hereby waives the right
to any other jurisdiction or venue for any litigation arising out of or in
connection with this Agreement or the transactions contemplated hereby to which
any of them may be entitled by reason of its present or future domicile.
Notwithstanding the foregoing, each such party agrees that each of the other
parties shall have the right to bring any action or proceeding for enforcement
of a judgment entered by the Delaware Courts in any other court or jurisdiction.
Section 9.14 Company Disclosure Schedule. The parties hereto agree
that any reference in a particular Section of the Company Disclosure Schedule
(e.g., Section 4.4 thereof) shall only be deemed to be an exception to (or, as
applicable, a disclosure for purposes of) (a) the representations and warranties
(or covenants, as applicable) of the Company that are contained in the
corresponding Section of this Agreement (i.e., Section 4.4 hereof) and (b) any
other representation(s) and warranty(ies) of the Company that is (are) contained
in this Agreement, but only if the relevance of that reference as an exception
to (or, as applicable, a disclosure for purposes of) such representations(s) and
warranty(ies) would be readily apparent to a reasonable person who has read that
reference and such representation(s) and warranty(ies).
[Remainder of page intentionally left blank.]
-50-
IN WITNESS WHEREOF, Parent, Purchaser and the Company have caused
this Agreement to be signed by their respective officers thereunto duly
authorized as of the date first written above.
REUTERS GROUP PLC
By: /s/ Xxxxxxxxxxx Xxxxxx
-----------------------------
Name: Xxxxxxxxxxx Xxxxxx
Title: Attorney-in-Fact
PROTON ACQUISITION CORPORATION
By: /s/ Xxxxxxxxxxx Xxxxxx
-----------------------------
Name: Xxxxxxxxxxx Xxxxxx
Title: President
XXXXXX.XXX, INC.
By: /s/ Xxxxx Xxxxxx
-----------------------------
Name: Xxxxx Xxxxxx
Title: Chairman and Chief
Executive Officer
-51-
ANNEX A
to
Agreement and Plan of Merger
Conditions of the Offer. Notwithstanding any other provision of the
Offer, subject to any applicable rules and regulations of the SEC, including
Rule 14e-1(c) promulgated under the Exchange Act (relating to Parent's
obligation to pay for or return tendered shares of Company Common Stock promptly
after termination or withdrawal of the Offer), Purchaser shall not be required
to accept for payment or pay for, or may delay the acceptance for payment of or
payment for, any tendered shares of Company Common Stock, if (i) there shall not
have been properly and validly tendered pursuant to the Offer and not withdrawn
prior to the expiration of the Offer a number of shares of Company Common Stock
which, together with the number of shares of Company Common Stock owned by
Parent, Purchaser or any of their respective affiliates, if any, that represents
at least a majority of the total issued and outstanding shares of Company Common
Stock (assuming the exercise of all options, warrants and other rights to
purchase shares of Company Common Stock which are then or which will be within
six months thereafter vested and exercisable) (the "Minimum Condition"), (ii)
any applicable waiting period under the HSR Act shall not have terminated or
expired or any other comparable provisions under any applicable pre-merger
notification laws or regulations of foreign jurisdictions shall not have
terminated, expired or otherwise been satisfied or (iii) on the relevant
Expiration Date, any of the following events shall have occurred and be
continuing:
(a) (i) the representations and warranties of the Company contained
in the Merger Agreement that are qualified by, or contain exceptions
relating to, materiality, Company Material Adverse Effect or any similar
standard or qualification, were not true and correct in all respects as of
the date of this Agreement, except to the extent expressly made as of an
earlier date, in which case as of such earlier date, (ii) the
representations and warranties of the Company that are not so qualified or
do not contain any such exceptions, were not true and correct in all
material respects as of the date of this Agreement, except to the extent
expressly made as of an earlier date, in which case as of such earlier
date, or (iii) the Company shall have breached or failed to perform in any
material respect any of its obligations under the Merger Agreement;
(b) except for the Agreed Representations (as defined in this Annex
A) and the representations and warranties contained in Sections 4.6(a) and
4.6 (b) of the Merger Agreement, the representations and warranties of the
Company that are contained in the Merger Agreement (disregarding, for this
purpose, all exceptions in those representations and warranties relating
to materiality, Company Material Adverse Effect or any similar standard or
qualification), are not true and correct on either (as applicable) (i) the
relevant Expiration Date if a Condition Termination Date has not
previously occurred or (ii) on the Condition Termination Date, in each
case, as if made at and as of that date (except to the extent expressly
made as of an earlier date, in which case as of that earlier date), and,
in either such case, those inaccuracies have had or are reasonably likely
to have, whether individually or in the aggregate, a Company Material
Adverse Effect as of the relevant Expiration Date (in the case of clause
(i) of this condition) or as of the Condition
A-1
Termination Date (in the case of clause (ii) and which inaccuracies, in
the case of clause (ii), shall not have been previously cured to the
extent sufficient to satisfy this condition by the relevant Expiration
Date);
(c) (i) each of the Agreed Representations of the Company that are
contained in the Merger Agreement that are qualified by, or contain
exceptions relating to, materiality, Company Material Adverse Effect or
any similar standard or qualification, are not true and correct in all
respects as of the relevant Expiration Date, as if made on and as of that
date (except to the extent expressly made as of an earlier date, in which
case as of that earlier date), or (ii) each of the Agreed Representations
of the Company that are contained in the Merger Agreement that are not so
qualified or do not contain any such exceptions, are not true and correct
in all material respects as of the relevant Expiration Date, as if made on
and as of that date (except to the extent expressly made as of an earlier
date, in which case as of that earlier date);
(d) the representations and warranties contained in Sections 4.6(a)
and 4.6(b) of the Merger Agreement (disregarding, for this purpose, all
exceptions in those representations and warranties relating to
materiality, Company Material Adverse Effect or any similar standard or
qualification), are not true and correct on the relevant Expiration Date,
as if made on and as of that date (except to the extent expressly made as
of an earlier date, in which case as of that earlier date), and any such
inaccuracy(ies) has (have) had or is (are) reasonably likely to have,
whether individually or in the aggregate, a Company Material Adverse
Effect as of the relevant Expiration Date;
(e) there shall have been instituted, pending or threatened in
writing any Action that has been brought by any Governmental Entity which
has a reasonable prospect of success: (i) challenging or seeking to, or
which is reasonably likely to, make illegal or otherwise directly or
indirectly restrain or prohibit the consummation of the transactions
contemplated by the Offer or the Merger; (ii) seeking to obtain any
material damages relating to the transactions contemplated by the Offer or
the Merger; (iii) seeking to prohibit, or impose any material limitations
on, Parent's or Purchaser's ownership or operation of all or any material
portion of their or the Company's business, license or other assets
(including the business, license or other assets of their respective
affiliates and Subsidiaries), or to compel Parent or Purchaser to dispose
of or hold separate all or any material portion of Parent's or Purchaser's
or the Company's business or assets (including the business or assets of
their respective affiliates and Subsidiaries) as a result of the
transactions contemplated by the Offer or the Merger; (iv) seeking to
impose material limitations on the ability of Parent or Purchaser
effectively to acquire or hold or to exercise full rights of ownership of
the shares of Company Common Stock including, without limitation, the
right to vote the shares of Company Common Stock purchased by them or
their affiliates on an equal basis with all other shares of Company Common
Stock on all matters properly presented to the stockholders; or (v)
seeking to require divestiture by Parent, Purchaser or any other affiliate
of Parent of any shares of Company Common Stock;
(f) any event, change or development shall have occurred or been
discovered before (i) the relevant Expiration Date if a Condition
Termination Date has not
A-2
previously occurred or (ii) the Condition Termination Date, which, in
either such case, on or before that date, has had or is reasonably likely
to have, individually or in the aggregate, a Company Material Adverse
Effect, and which Company Material Adverse Effect, in the case of clause
(ii), shall not have been cured by the relevant Expiration Date;
(g) any applicable law or regulation makes acceptance for payment
of, and payment for, the shares of Company Common Stock pursuant to the
Offer illegal or otherwise prohibited;
(h) any judgment, injunction, order or decree of any court or
Governmental Authority having competent jurisdiction enjoins Purchaser
from accepting for payment of, and paying for, the shares of Company
Common Stock pursuant to the Offer or the Company or Parent from
consummating the Merger is entered;
(i) the Merger Agreement shall have been terminated by the Company
or Parent or Purchaser in accordance with its terms, or Parent or
Purchaser shall have reached an agreement in writing with the Company
providing for termination of the Offer;
Without limiting the parties' respective rights and obligations
under Article VIII of the Merger Agreement, the foregoing conditions are for the
sole benefit of Parent and Purchaser and may be asserted by Parent or Purchaser
regardless of the circumstances (including any action or inaction by Parent or
Purchaser) giving rise to such condition or may be waived by Parent or
Purchaser, by express and specific action to that effect, in whole or in part at
any time and from time to time in its sole discretion, except that Parent and
Purchaser may not waive the Minimum Condition without the prior written consent
of the Company. The failure by Parent or Purchaser at any time to exercise any
of the foregoing rights will not be deemed a waiver of any such right, the
waiver of any such right with respect to particular facts and circumstances will
not be deemed a waiver with respect to any other facts and circumstances, and
each such right will be deemed an ongoing right that may be asserted at any time
and from time to time.
Capitalized terms used, but not defined, herein shall have the
meaning given to such terms in the Merger Agreement. For purposes of the Merger
Agreement and this Annex A, the following terms shall have the following
meanings:
(i) "Condition Termination Date" shall mean June 17, 2003, but
only if, on June 17, 2003, any condition set forth in any of clauses (ii),
(iii)(e), (iii)(g) or (iii)(h) of this Annex A shall not have been
satisfied, other than such as is primarily due to or primarily arising out
of any act or omission for which the Company or any of its affiliates are
responsible; and
(ii) "Agreed Representations" shall mean the representations and
warranties of the Company that are contained in Sections 4.2, 4.3, 4.4(i),
4.4(iii), 4.7, 4.9(g), 4.13(b), 4.15, 4.16 and 4.20 of the Merger
Agreement.
A-3
