EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
BY AND AMONG
EXCEL SWITCHING CORPORATION
RACEPOINT ACQUISITION CORP.
RASCOM, INC.
AND
THOSE SHAREHOLDERS LISTED ON THE SIGNATURE PAGE HERETO
Dated as of APRIL 15, 1999
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
TABLE OF CONTENTS
Page
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ARTICLE I.........................................................................................................1
SECTION 1.1 THE MERGER........................................................................................1
SECTION 1.2 EFFECTIVE TIME....................................................................................1
SECTION 1.3 EFFECTS OF THE MERGER.............................................................................1
SECTION 1.4 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION...............................................1
SECTION 1.5 WRITTEN CONSENT OF THE SHAREHOLDERS OF THE COMPANY................................................2
SECTION 1.6 CLOSING; CONSUMMATION OF THE MERGER...............................................................2
SECTION 1.7 TERMINATION OF COMPANY STOCKHOLDERS AGREEMENT.....................................................2
ARTICLE II........................................................................................................3
SECTION 2.1 CONVERSION OF COMPANY SHARES......................................................................3
SECTION 2.2 DELIVERY OF MERGER CONSIDERATION..................................................................5
SECTION 2.3 DISSENTING COMPANY SHARES.........................................................................6
SECTION 2.4 NO FRACTIONAL SHARES..............................................................................7
SECTION 2.5 ADJUSTMENTS.......................................................................................7
SECTION 2.6 STOCK OPTIONS.....................................................................................7
ARTICLE III.......................................................................................................8
SECTION 3.1 ORGANIZATION AND QUALIFICATION....................................................................8
SECTION 3.2 CAPITALIZATION....................................................................................8
SECTION 3.3 AUTHORITY RELATIVE TO THIS AGREEMENT..............................................................8
SECTION 3.4 NON-CONTRAVENTION.................................................................................9
SECTION 3.5 REPORTS AND FINANCIAL STATEMENTS..................................................................9
SECTION 3.6 VALIDITY OF PARENT COMMON STOCK..................................................................10
SECTION 3.7 CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES...............................................10
SECTION 3.8 LITIGATION.......................................................................................10
SECTION 3.9 UNDISCLOSED LIABILITIES..........................................................................10
SECTION 3.10 INTELLECTUAL PROPERTY...........................................................................10
ARTICLE IV.......................................................................................................11
SECTION 4.1 ORGANIZATION AND QUALIFICATION...................................................................11
SECTION 4.2 CAPITALIZATION...................................................................................11
SECTION 4.3 SUBSIDIARIES.....................................................................................12
SECTION 4.4 AUTHORITY RELATIVE TO THIS AGREEMENT.............................................................13
SECTION 4.5 NON-CONTRAVENTION................................................................................13
SECTION 4.6 REQUIRED AND OTHER CONSENTS......................................................................14
SECTION 4.7 FINANCIAL STATEMENTS AND REPORTS.................................................................14
SECTION 4.8 TITLE TO PROPERTIES AND ASSETS...................................................................15
SECTION 4.9 ABSENCE OF CERTAIN CHANGES OR EVENTS.............................................................15
SECTION 4.10 DISCLOSURE OF LIABILITIES.......................................................................17
SECTION 4.11 ACCOUNTS, NOTES AND RECEIVABLES.................................................................17
SECTION 4.12 LITIGATION......................................................................................18
SECTION 4.13 AGREEMENTS......................................................................................18
SECTION 4.14 LICENSES AND PERMITS............................................................................19
SECTION 4.15 INTELLECTUAL PROPERTY...........................................................................20
SECTION 4.16 EMPLOYEES.......................................................................................22
SECTION 4.17 ENFORCEABILITY OF CONTRACTS, ETC................................................................23
SECTION 4.18 TAXES............................................................................................24
SECTION 4.19 INSURANCE.......................................................................................26
SECTION 4.20 BOOKS AND RECORDS...............................................................................26
SECTION 4.21 COMPLIANCE WITH GOVERNMENTAL REGULATIONS........................................................26
SECTION 4.22 ENVIRONMENTAL COMPLIANCE........................................................................27
SECTION 4.23 FIRE, FLOOD, ACCIDENT, ETC......................................................................27
SECTION 4.24 REAL ESTATE.....................................................................................27
SECTION 4.25 BANK ACCOUNTS...................................................................................27
SECTION 4.26 EMPLOYEE BENEFIT PLANS..........................................................................28
SECTION 4.27 CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES..............................................28
SECTION 4.28 CONFLICTS OF INTEREST...........................................................................28
SECTION 4.29 ACCURACY OF REPRESENTATIONS.....................................................................28
SECTION 4.30 INFORMATION STATEMENT...........................................................................29
ARTICLE IV-A.....................................................................................................29
ARTICLE V........................................................................................................30
SECTION 5.1 CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER............................................30
SECTION 5.2 ACCESS AND INFORMATION; CONFIDENTIALITY..........................................................32
SECTION 5.3 REASONABLE EFFORTS...............................................................................33
SECTION 5.4 NO SOLICITATION..................................................................................33
SECTION 5.5 PUBLIC ANNOUNCEMENTS.............................................................................33
SECTION 5.6 INSURANCE........................................................................................34
SECTION 5.7 POOLING..........................................................................................34
SECTION 5.8 SHAREHOLDER APPROVAL.............................................................................34
SECTION 5.9 RESALE REGISTRATION STATEMENTS...................................................................34
SECTION 5.10 REQUIRED NOTIFICATION...........................................................................34
ARTICLE VI.......................................................................................................35
SECTION 6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.......................................35
SECTION 6.2 CONDITIONS TO OBLIGATION OF THE COMPANY AND THE COMPANY SHAREHOLDERS TO EFFECT THE MERGER........35
SECTION 6.3 CONDITIONS TO OBLIGATIONS OF PARENT AND MERGER SUB TO EFFECT THE MERGER..........................37
ARTICLE VII......................................................................................................39
SECTION 7.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS............................................39
ARTICLE VIII.....................................................................................................40
SECTION 8.1 TERMINATION......................................................................................40
SECTION 8.2 EFFECT OF TERMINATION............................................................................41
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SECTION 8.3 AMENDMENT........................................................................................41
SECTION 8.4 WAIVER...........................................................................................41
ARTICLE IX.......................................................................................................41
SECTION 9.1 BROKERS..........................................................................................41
SECTION 9.2 NOTICES..........................................................................................42
SECTION 9.3 SUBSIDIARIES.....................................................................................42
SECTION 9.4 HEADINGS.........................................................................................43
SECTION 9.5 ENTIRE AGREEMENT; ASSIGNMENT.....................................................................43
SECTION 9.6 PARTIES IN INTEREST..............................................................................43
SECTION 9.7 VALIDITY.........................................................................................43
SECTION 9.8 COUNTERPARTS.....................................................................................43
SECTION 9.9 EXPENSES.........................................................................................43
SECTION 9.10 GOVERNING LAW....................................................................................44
SIGNATURES
EXHIBITS
EXHIBIT A Certificate of Merger
EXHIBIT B Form of Escrow Agreement
EXHIBIT C Form of Opinion to be Issued by Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
EXHIBIT D Form of Registration Rights Agreement
EXHIBIT E Form of Opinion to be Issued by Xxxxx, Xxxx & Xxxxx LLP
EXHIBIT F Form of Employee Non Disclosure, Invention & Covenant Not to
Compete Agreement
EXHIBIT G Form of Representation by President or Chief Financial Officer
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AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
Agreement and Plan of Merger and Reorganization, dated as of April 15,
1999, by and among Excel Switching Corporation, a Massachusetts corporation
("PARENT"), Racepoint Acquisition Corp., a Delaware corporation and a
wholly-owned subsidiary of Parent ("MERGER SUB"), RAScom, Inc., a Delaware
corporation (the "COMPANY"), those certain shareholders of the Company set forth
on the signature pages hereto, and Xxxx X. Xxxxxx (the "INDEMNIFICATION
REPRESENTATIVE").
ARTICLE I
THE MERGER
SECTION 1.1 THE MERGER. Subject to the terms and conditions hereof, and
in accordance with the Delaware General Corporation Law (the "DCL"), Merger Sub
will be merged with and into the Company (the "MERGER"), as soon as practicable
following the satisfaction or waiver of the conditions set forth in Article VI
hereof. Following the Merger, the Company shall continue as the surviving
corporation (the "SURVIVING CORPORATION") under the laws of the State of
Delaware and the separate corporate existence of Merger Sub shall cease.
SECTION 1.2 EFFECTIVE TIME. The Merger shall become effective upon the
filing of a duly executed Certificate of Merger substantially in the form of
Exhibit A hereto (the "CERTIFICATE OF MERGER") with the Secretary of State of
the State of Delaware (the date and time of such filing being hereinafter
referred to as the "EFFECTIVE TIME").
SECTION 1.3 EFFECTS OF THE MERGER. The Merger shall have the effects
set forth in Section 259 of the DCL. As of the Effective Time, the Company shall
be a wholly-owned subsidiary of Parent. The Merger is intended to be a
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "CODE").
SECTION 1.4 CERTIFICATE OF INCORPORATION; BY-LAWS; DIRECTORS AND
OFFICERS OF THE SURVIVING CORPORATION. The Certificate of Incorporation of the
Surviving Corporation (other than Article First thereof) shall, from and after
the Effective Time, be as set forth in the Certificate of Incorporation of
Company as in effect immediately prior to the Effective Time until changed as
permitted by law or by such Certificate of Incorporation. The By-laws of the
Surviving Corporation shall, from and after the Effective Time, be the by-laws
of the Merger Sub as in effect immediately prior to the Effective Time until
changed as permitted by law, by the Certificate of Incorporation of the
Surviving Corporation or by such By-laws. At the Effective Time, each director
of the Company shall cease to hold such office, and the directors of the
Surviving Corporation shall be the directors of Merger Sub immediately prior to
the Effective Time, each of whom shall hold such office until the next annual
meeting of shareholders of the Surviving Corporation and until his or her
successor shall have been elected or appointed and qualified to serve, or
otherwise as provided in the Certificate of Incorporation or By-laws of the
Surviving Corporation. At the Effective Time, the officers of Merger Sub
immediately prior to
the Effective Time shall be the officers of the Surviving Corporation, in the
same capacity or capacities, to serve until his or her successor shall have been
duly elected and qualified to serve.
SECTION 1.5 WRITTEN CONSENT OF THE SHAREHOLDERS OF THE COMPANY. The
Company will take all action necessary in accordance with applicable law and its
Restated Certificate of Incorporation and By-laws to solicit from each holder of
capital stock of the Company outstanding on the date of this Agreement the
approval of this Agreement, the Merger and all the transactions contemplated
hereby, by the shareholders of the Company, by means of a Written Consent of
Shareholders (the "COMPANY'S SHAREHOLDERS' CONSENT"). The record date set for
such solicitation shall be the date of this Agreement. The Company shall use its
best efforts to obtain such shareholder approval. The Company represents and
warrants that its Board of Directors, at a meeting duly called and held, has (i)
approved the Merger and this Agreement and declared its advisability and (ii)
resolved to recommend to the shareholders of the Company that they adopt this
Agreement, the Merger and all the transactions contemplated hereby.
SECTION 1.6 CLOSING; CONSUMMATION OF THE MERGER. The closing of the
transactions contemplated by this Agreement (the "CLOSING") shall take place:
(a) at the offices of Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, High Street Tower, 000
Xxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, on or before May 15, 1999, or (b) at
such other date and place as Parent and the Company may agree. The date of the
Closing, determined pursuant to this Section 1.6, is hereinafter referred to as
the "CLOSING DATE." If all conditions set forth in Article VI hereof are
determined to be satisfied (or duly waived) at the Closing, as soon as
practicable the parties hereto will cause the Merger to be consummated by the
filing of the Certificate of Merger with the Secretary of State of the State of
Delaware, in such form as required by and executed in accordance with the
requirements of the DCL, and the Closing shall be consummated.
SECTION 1.7 TERMINATION OF COMPANY STOCKHOLDERS AGREEMENT. The
shareholders of the Company executing this Agreement are parties to that certain
Amended and Restated Stockholders Agreement dated as of August 22, 1997 by and
among the Company and certain of its stockholders (the "Company Stockholders
Agreement"). By execution and delivery of this Agreement, such shareholders
constituting a sufficient percentage of the shares held by all of the parties to
the Company Stockholders Agreement as well as each other person required to take
such action, agree that, as of the Effective Time, the Company Stockholders
Agreement shall be terminated in accordance with Section 12 thereof and shall be
of no further force and effect.
ARTICLE II
CONVERSION OF SHARES; EXCHANGE OF SHARES; DISSENTING SHARES
SECTION 2.1 CONVERSION OF COMPANY SHARES.
(a) Subject, without limitation, to the provisions of Section
2.2 hereof, at the Effective Time, (i) all of the shares of common stock, $.001
par value per
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share, of the Company (the "COMPANY COMMON STOCK") issued and outstanding
immediately prior to the Effective Time and each share of Series A Convertible
Redeemable Preferred Stock, $0.001 par value per share (including Series A-1
Preferred Stock and Series A-2 Preferred Stock), Series B Convertible Redeemable
Preferred Stock, $0.001 par value per share (including Series B-1 Preferred
Stock) and Series C Convertible Redeemable Preferred Stock, $0.001 par value per
share (collectively, the "PREFERRED STOCK") issued and outstanding immediately
prior to the Effective Time, (together, the "COMPANY SHARES") (excluding any
Company Shares held by Parent or Merger Sub or any other subsidiary of Parent or
by the Company, which shares shall be canceled in the Merger, and Dissenting
Company Shares (as defined in Section 2.3 hereof)) shall automatically, by
virtue of the Merger and without any action on the part of the holder thereof,
be converted into shares of common stock, $.01 par value per share, of Parent
(the "PARENT COMMON STOCK") in accordance with Sections 2.1(c) and (d) (rounded
down to the nearest whole share), and cash (rounded to the nearest whole cent)
in lieu of fractional shares, if any, pursuant to Section 2.4 below, and (ii)
all Outstanding Options (as defined in Section 2.6 hereof) shall be assumed by
Parent and shall automatically, by virtue of the Merger and without any action
on the part of the holder thereof, be converted into options to purchase shares
of Parent Common Stock in accordance with Section 2.6 (such Parent Common Stock
and cash being referred to herein as the "MERGER CONSIDERATION").
(b) The number of shares of Parent Common Stock to be issued
in exchange for the acquisition of all Company Shares and Outstanding Options
(as defined in Section 2.6 hereof) shall be One Million One Hundred Thousand
(1,100,000) shares, provided that such number shall be adjusted to the extent
required by Section 2.5 herein. Such number of shares is herein referred to as
the "CONSIDERATION SHARES". The Consideration Shares shall be delivered in
exchange for all outstanding shares of capital stock of the Company of any kind,
class or series, and all securities convertible or exchangeable for any class or
series of capital stock, including all options, warrants, convertible
securities, purchase rights or commitments, accrued, declared or cumulative
dividends, and whether such rights or securities are vested or unvested,
exercisable or unexercisable, accrued or contingent. Parent shall not be
obligated to deliver any Parent Common Stock in excess of the Consideration
Shares.
(c) Allocation of the Consideration Shares shall be as set
forth in the Parent Disclosure Schedule, which amounts were determined according
to the following formulae: The number of shares of Parent Common Stock to be
issued in exchange for the acquisition of all the shares of each series of
Preferred Stock shall be equal to (i) the aggregate Liquidation Amount payable
in respect of such series of Preferred Stock as of the Effective Time,
determined in accordance with Section (A)(4)(a) of Article Fourth of the
Restated Certificate of Incorporation of the Company, divided by (ii) $25.64375,
which represents the ten (10) trading day average of the closing sale price per
share of the Parent Common Stock on the Nasdaq National Market from March 15,
1999 through March 26, 1999, which has been determined by the Board of Directors
of the Company to be the fair market value of the Parent Common Stock for
purposes of Section (A)(4)(c) of such Restated Certificate of Incorporation. The
aggregate number of shares of Parent Common Stock to be issued in exchange for
all the Preferred Stock may hereinafter be referred to as the "Preferred
Consideration Shares" and the total number of Consideration Shares less the
number of Preferred Consideration Shares may hereinafter be referred to as the
"Common Consideration Shares." Subject to Section 2.4 below, each holder of
shares of a series of Preferred Stock shall be entitled to receive that number
of shares of Parent Common Stock equal to the product of the number of shares of
such series of Preferred Stock
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held by such holder multiplied by the quotient of (x) the aggregate number of
Preferred Consideration Shares issuable in respect of such series divided by (y)
the aggregate number of shares of such series issued and outstanding at the
Effective Time.
(d) The ratio at which each share of Company Common Stock and
each Outstanding Option will be converted into shares of Parent Common Stock at
the Effective Time is herein called the "CONVERSION RATIO" and shall be
calculated as set forth in this Section 2.1(d). Subject to Section 2.4, at the
Effective Time, each share of Company Common Stock and each Outstanding Option
shall be converted into the right to receive that number (which may be a
fraction) of shares of Parent Common Stock that equals the quotient (rounded to
the fifth decimal place) obtained by dividing the Common Consideration Shares
(as may be adjusted pursuant to Section 2.5) by the sum of the number of shares
of Company Common Stock outstanding immediately prior to the Effective Time and
the number of shares of Company Common Stock issuable upon exercise in full of
all Outstanding Options. Each holder of Company Common Stock (each, a "COMPANY
COMMON SHAREHOLDER") shall be entitled to receive that aggregate number of
shares of Parent Common Stock equal to the Conversion Ratio multiplied by the
number of shares of Company Common Stock held by such holder immediately prior
to the Effective Time, subject to Section 2.4 herein.
(e) As of the Effective Time, all Company Shares shall no
longer be outstanding and shall automatically be canceled and retired and shall
cease to exist, and each holder of a certificate representing any such Company
Shares (each a "Company Shareholder") shall cease to have any rights with
respect thereto, except the right to receive the Merger Consideration in respect
thereof. Each holder of Outstanding Options shall be entitled to receive an
option to purchase shares of Parent Common Stock as determined pursuant to
Section 2.6 hereof.
(f) At the Effective Time, each Company Share held by the
Company shall automatically, by virtue of the Merger, be retired and returned to
the status of authorized and unissued shares of capital stock of the Company
without payment of any consideration therefor and without any conversion
thereof.
(g) At the Effective Time, each Company Share held by Parent
or Merger Sub or any other subsidiary of Parent shall automatically, by virtue
of the Merger, be canceled without payment of any consideration therefor and
without any conversion thereof.
(h) At the Effective Time, each share of common stock, $.01
par value per share, of Merger Sub issued and outstanding immediately prior to
the Effective Time shall, by virtue of the Merger and without any action on the
part of the holder hereof, be converted into one share of common stock, $.01 par
value per share, of the Surviving Corporation.
SECTION 2.2 DELIVERY OF MERGER CONSIDERATION.
(a) Promptly after the Effective Time, Parent, on behalf of
the Surviving Corporation, shall deliver certificates to State Street Bank and
Trust Company (the "INDEMNIFICATION ESCROW AGENT") and the holders of Company
Shares representing the shares
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of Parent Common Stock and the cash (in immediately available funds) to which
holders of Company Shares shall be entitled pursuant to Sections 2.1 and 2.4
hereof.
(b) At the Closing or as soon as practicable thereafter, each
holder of record (other than Parent or Merger Sub or any other subsidiary of
Parent) of a certificate or certificates which immediately prior to the
Effective Time represented issued and outstanding Company Shares (individually a
"CERTIFICATE" and collectively the "CERTIFICATES") shall deliver to the Exchange
Agent (as defined below) such shareholder's Certificates. The holder of such
Certificate(s) shall be entitled to receive in exchange therefor a certificate
representing all of the shares of Parent Common Stock (excluding those shares
being placed in escrow as described below) and all the cash, if any, that such
holder is entitled to receive pursuant to Sections 2.1 and 2.4 hereof. State
Street Bank and Trust Company shall act as the agent for the Company
Shareholders for purposes of mailing and receiving transmittal letters and
distributing the Merger Consideration to the Company Shareholders (the "EXCHANGE
AGENT"). Of the shares otherwise issuable to the Company Shareholders, an
aggregate number of shares equal to 10% of the Parent Common Stock to be issued
in exchange for the acquisition of all Company Shares (the "INDEMNIFICATION
ESCROW SHARES") rounded up to the nearest whole share shall be deposited by the
Parent with the Indemnification Escrow Agent in accordance with the terms and
provisions of the Escrow Agreement to be executed as of the Closing between the
Parent, Merger Sub, the Company, the Indemnification Representatives and the
Indemnification Escrow Agent (the "ESCROW AGREEMENT"). The delivery of the
Indemnification Escrow Shares by Parent to the Indemnification Escrow Agent
shall be made on behalf of the Company Shareholders in accordance with the
provisions hereof, with the same force and effect as if such shares had been
delivered by Parent directly to such holders and subsequently delivered by such
holders to the Indemnification Escrow Agent. The shares so deposited shall be
evidenced by a separate certificate in the name of the Escrow Agent on behalf of
the Company Shareholders and shall be subject to the restrictions on transfer
and assignment provided in the Escrow Agreement.
Xxxx X. Xxxxxx has been selected as the initial representative of the
Company Shareholders (the "INDEMNIFICATION REPRESENTATIVE") and, in the event of
his inability or unwillingness prior to the execution of the Escrow Agreement to
act as Indemnification Representative, a substitute Indemnification
Representative will be selected by the holders of a majority of the Company
Shares. In the event of the inability or unwillingness of the then current
Indemnification Representative to act as Indemnification Representative after
the Closing, a substitute Indemnification Representative will be selected by the
holders of a majority of the shares of Parent Common Stock issued as Merger
Consideration. Such Indemnification Representative is authorized by this
Agreement, as a specific term of the Merger provided for herein, to act as
Indemnification Representative of the Company Shareholders in accordance with
the provisions hereof, with the powers and authority provided for in the Escrow
Agreement. The written consent to the Merger by a Company Shareholder and
adoption and approval of this Agreement and receipt of any Merger Consideration
by any Company Shareholder shall also constitute approval by such Company
Shareholder of the terms and provisions of the Escrow Agreement, including the
indemnification provided for therein, their confirmation of the appointment of
State Street Bank and Trust to act as Indemnification Escrow Agent, and their
approval of the terms and provisions therein relating to the Indemnification
Representative,
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including the provisions relating to the appointment of replacements, and their
confirmation of the appointment of Xx. Xxxxxx to act as the initial
Indemnification Representative.
(c) If any certificate for shares of Parent Common Stock is to
be issued in a name other than that in which the certificate surrendered in
exchange therefor is registered, it will be a condition of the issuance thereof
that such transfer be in compliance with any applicable state and federal
securities laws and that the certificate so surrendered will be properly
endorsed and otherwise in proper form for transfer and that the person
requesting such exchange will have paid to Parent or any agent designated by it
any transfer or other taxes required by reason of the issuance of a certificate
for shares of Parent Common Stock in any name other than that of the registered
holder of the certificate surrendered, or established to the satisfaction of
Parent or any agent designated by it that such tax has been paid or is not
payable.
(d) Until surrendered, each Certificate shall, after the
Effective Time, represent only the right to receive shares of Parent Common
Stock and the right to receive cash into which the Company Shares formerly
represented thereby shall have been converted pursuant to Section 2.1 hereof.
Any dividends or other distribution declared after the Effective Time with
respect to Parent Common Stock shall be paid to the holder of any Certificate
when the holder thereof surrenders such Certificate. At and after the Effective
Time, the holders of Certificates shall cease to have any rights as shareholders
of the Company, except for the right to surrender certificates pursuant to
Section 2.2(b). After the Closing there shall be no transfers on the stock
transfer books of the Company (the stock transfer books of which shall be
closed).
SECTION 2.3 DISSENTING COMPANY SHARES. Company Shares for which the
Company's Shareholders' Consent has not been executed and delivered and with
respect to which a demand for payment and appraisal shall have been properly
made in accordance with the DCL ("DISSENTING COMPANY SHARES") shall not be
converted into the right to receive the Merger Consideration at or after the
Effective Time unless and until the holder of such Company Shares withdraws his
or her demand or becomes ineligible pursuant to the provisions of the DCL for
such payment and appraisal. If a holder of Dissenting Company Shares shall
withdraw his or her demand for such payment and appraisal or shall become
ineligible for such payment and appraisal, then, as of the Effective Time or the
occurrence of such event of withdrawal or ineligibility, whichever last occurs,
such holder's Dissenting Company Shares shall cease to be Dissenting Company
Shares and shall be converted into the right to receive, and shall be
exchangeable for, the Merger Consideration into which such Dissenting Company
Shares would have been converted pursuant to Section 2.1 hereof.
SECTION 2.4 NO FRACTIONAL SHARES. No certificates or scrip for
fractional shares of Parent Common Stock will be issued, no Parent stock split
or dividend shall be paid in respect of any fractional share interest, and no
such fractional shares interest shall entitle the owner thereof to vote or to
any rights of or as a stockholder of Parent. In lieu of such fractional shares,
any holder of Company Shares who would otherwise be entitled to a fraction of a
share of Parent Common Stock at the Effective Time (after aggregating all
fractional shares of Parent Common Stock to be received by such holder) will be
paid the cash value of such fraction (rounded down to the nearest cent), which
shall be equal to the fraction multiplied by $25.64375, which
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represents the ten (10) trading day average of the closing sale price per share
of the Parent Common Stock on the Nasdaq National Market from March 15, 1999
through March 26, 1999.
SECTION 2.5 ADJUSTMENTS. If, between the date hereof and the Effective
Time, the outstanding shares of Parent Common Stock shall be changed into a
different number of shares or a different class by reason of any
reclassification, recapitalization, split-up, exchange of shares or
readjustment, or if a stock dividend thereon shall be declared with a record
date within such period, the number of shares of Parent Common Stock to be
issued and delivered in the Merger for each outstanding Company Share as
provided in this Agreement shall be correspondingly adjusted.
SECTION 2.6 STOCK OPTIONS. At or prior to the Effective Time, Parent
and the Company shall take all action necessary to cause the assumption by
Parent as of the Effective Time of the options to purchase Common Stock of the
Company outstanding as of the Effective Time (the "OUTSTANDING OPTIONS"). Each
of the Outstanding Options shall be converted without any action on the part of
the holder thereof into an option to purchase shares of Parent Common Stock as
of the Effective Time. The number of shares of Parent Common Stock that the
holder of an assumed Outstanding Option shall be entitled to receive upon the
exercise of such option shall be a number of shares (rounded down to the nearest
whole number) determined by multiplying the number of shares of Common Stock of
the Company subject to such option, determined immediately before the Effective
Time, by the Conversion Ratio. The option price of each share of Parent Common
Stock subject to an assumed Outstanding Option shall be the amount (rounded up
to the nearest whole cent) obtained by dividing the exercise price per share of
Common Stock of the Company at which such option is exercisable immediately
before the Effective Time by the Conversion Ratio applicable to the Company
Shares. The assumption and substitution of Outstanding Options as provided
herein shall not give the holders of such options additional benefits which they
did not have immediately prior to the Effective Time or relieve the holders of
any obligations or restrictions applicable to their options or the shares
obtainable upon exercise of the options. Parent shall (i) reserve out of its
authorized but unissued shares of Common Stock sufficient shares to provide for
the exercise of the Outstanding Options and (ii) use all commercially reasonable
efforts to register under the Securities Act, as promptly as practicable after
the Effective Time and in no event later than ten (10) business days after the
Effective Time, those shares of Parent Common Stock to be issued upon the
exercise of the Outstanding Options for a period up to and ending on the first
date by which all Outstanding Options have been exercised, which registration
shall initially be effective under a registration statement on Form S-8 or such
other form as may be permitted under the Securities Act.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Except as set forth in the disclosure schedule of Parent dated as of
the date hereof and delivered herewith to the Company (the "PARENT DISCLOSURE
SCHEDULE") (it being agreed that with respect to any matter that is clearly
disclosed in any Section of the Parent Disclosure Schedule in such a way as to
make its relevance to the information called for by another Section
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readily apparent, such matter shall be deemed to have been included in the
Parent Disclosure Schedule in response to such other Section, notwithstanding
the omission of any appropriate cross-reference thereto) Parent and Merger Sub
represent and warrant to the Company and to each Company Shareholder as follows:
SECTION 3.1 ORGANIZATION AND QUALIFICATION. Each of Parent and Merger
Sub is a corporation duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation and has the requisite corporate
power to carry on its business as it is now being conducted. Parent is duly
qualified as a foreign corporation to do business, and is in good standing, in
each jurisdiction where the character of its properties owned or leased or the
nature of its activities makes such qualification necessary, except where the
failure to be so qualified would not have, individually or in the aggregate, a
material adverse effect on the business, assets, condition (financial or
otherwise) or result of operations of Parent and its subsidiaries taken as a
whole.
SECTION 3.2 CAPITALIZATION. The authorized capital stock of Parent
consists of 10,000,000 shares of preferred stock, $.01 par value per share, of
which no shares are issued or outstanding or held in Parent's treasury, and
100,000,000 shares of Parent Common Stock, of which, as of March 22, 1999, (a)
34,465,955 shares were validly issued and outstanding, fully paid and
nonassessable and (b) 12,602,175 shares were reserved for issuance pursuant to
options granted under the Parent's stock option and stock purchase plans for its
employees, consultants and directors. Except as set forth above, there are no
options, warrants, conversion privileges or preemptive or other rights or
agreements outstanding to purchase or otherwise acquire any shares of Parent
Common Stock.
SECTION 3.3 AUTHORITY RELATIVE TO THIS AGREEMENT. Each of Parent and
Merger Sub has the requisite corporate power and authority to enter into this
Agreement, the Escrow Agreement and the Registration Rights Agreement (as
defined in Section 6.2(d)) and to carry out its obligations hereunder. The
execution and delivery of this Agreement, the Escrow Agreement and the
Registration Rights Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by the respective
Boards of Directors of Parent and Merger Sub and the sole shareholder of Merger
Sub and no other corporate proceedings on the part of Parent or Merger Sub are
necessary to authorize this Agreement, the Escrow Agreement and the Registration
Rights Agreement and the transactions contemplated hereby and thereby. This
Agreement, the Escrow Agreement and the Registration Rights Agreement have been
duly and validly executed and delivered by each of Parent and Merger Sub and,
assuming this Agreement, the Escrow Agreement and the Registration Rights
Agreement constitute valid and binding obligations of each Party hereto and
thereto other than Parent and Merger Sub, this Agreement, the Escrow Agreement
and the Registration Rights Agreement each constitutes a valid and binding
agreement of each of Parent and Merger Sub enforceable against each of Parent
and Merger Sub in accordance with their respective terms, except as the
enforceability hereof or thereof may be subject to or limited by bankruptcy,
insolvency, reorganization, arrangement or similar laws affecting the rights of
creditors generally, judicial limitations upon the specific performance of
certain types of obligations and public policy.
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SECTION 3.4 NON-CONTRAVENTION. Neither Parent nor Merger Sub is subject
to or obligated under any charter, by-law or contract provision or any license,
franchise or permit, or any order, writ, injunction, decree, statute, rule or
regulation which would be breached or violated or in respect of which a right of
acceleration would be created by its executing and carrying out this Agreement,
other than any such breach, violation or right which would not have,
individually or in the aggregate, a material adverse effect on the business,
assets, condition (financial or otherwise) or result of operations of Parent and
its subsidiaries taken as a whole, or the transactions contemplated by this
Agreement.
SECTION 3.5 REPORTS AND FINANCIAL STATEMENTS. Parent has previously
furnished to the Company true and correct copies of its (i) Annual Report on
Form 10-K for the period ended December 31, 1998, as amended, (ii) its Quarterly
Reports on Form 10-Q for the periods ended March 28, 1998, June 27, 1998 and
September 26, 1998, (iii) its Current Report on Form 8-K filed as of December
14, 1998, (iv) its definitive Proxy Statement dated April 9, 1999, (v) its
Annual Report to Stockholders for the fiscal year ended December 31, 1998, (vi)
all other reports or registration statements filed by it with the Securities and
Exchange Commission (the "COMMISSION") under the Exchange Act since December 31,
1998 and (vi) Parent hereby agrees to furnish to the Company true and correct
copies of all reports or registration statements filed by it with the Commission
after the date hereof prior to the Closing all in the form so filed
(collectively, the "REPORTS"). As of their respective dates, the Reports
complied or will comply in all material respects with the then applicable
published rules and regulations of the Commission with respect thereto at the
date of their issuance and did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading. Each of the audited consolidated financial statements
and unaudited interim financial statements included in Parent's Reports has been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis (except as may be indicated therein or in the notes thereto)
and fairly presents the financial position of the Parent as at its date, subject
to normal year-end adjustments and any other adjustments described therein,
which adjustments are not expected to be material in amount or effect.
SECTION 3.6 VALIDITY OF PARENT COMMON STOCK. The shares of Parent
Common Stock to be issued in the Merger will, when issued, be duly authorized,
validly issued, fully paid and nonassessable.
SECTION 3.7 CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES. Except
for (a) the requirements of state securities (or "BLUE SKY") laws, (b) the
filing and recording of appropriate documents as provided by the laws of the
State of Delaware, (c) the filing of appropriate documents with the Nasdaq
National Market and (d) the filing of a Form D with the Commission, if
applicable, no consent, approval or authorization of, or declaration, filing or
registration with, any governmental or regulatory authority is required to be
made or obtained by Parent or Merger Sub in connection with the execution,
delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby.
SECTION 3.8 LITIGATION. Except as set forth on the Parent Disclosure
Schedule or in the Reports, there is no action, suit, claim, investigation or
proceeding pending against or threatened
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against the Parent or Merger Sub or their properties and assets before any court
or arbitrator or any governmental body, agency, official or authority.
SECTION 3.9 UNDISCLOSED LIABILITIES. Except as disclosed in the Reports
or in the Parent Disclosure Schedule, neither Parent nor any of its subsidiaries
has any liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) required by generally accepted accounting principles to
be recognized or disclosed on a consolidated balance sheet of Parent and its
subsidiaries or in the notes thereto, except (i) liabilities reflected in the
consolidated balance sheet of the Parent as of September 26, 1998 and (ii)
liabilities incurred since September 26, 1998, in the ordinary course of
business and consistent with past practice, none of which individually, or in
the aggregate has resulted in, is causing or will cause a material adverse
effect on the business, assets, condition (financial or otherwise) of Parent.
SECTION 3.10 INTELLECTUAL PROPERTY. The "PARENT INTELLECTUAL PROPERTY"
consists of all material trade secrets, copyrights, patents, trademarks, service
marks, trade dress, all registrations and applications with respect thereto and
all material licenses or rights under the same, that are owned or used by
Parent. Except as set forth in the Parent Disclosure Schedule, (a) no claim has
been asserted or, to the knowledge of Parent, threatened by any person against
Parent with respect to the ownership or use of any Parent Intellectual Property
by Parent (including infringement claims) nor has Parent asserted any similar
claim against any person and, to the knowledge of Parent, there exists no set of
circumstances which would likely give rise to any such claim; and (b) Parent is
not in breach or violation of any agreement under which it holds or uses any
Parent Intellectual Property which breach or material violation would have a
material adverse effect on the business, prospects, results of operations or
financial condition of Parent and (c) Parent owns or has the right to use all
Parent Intellectual Property that is necessary for the conduct of Parent's
business as presently conducted.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure schedule of the Company dated as
of the date hereof and delivered herewith to Parent (the "COMPANY DISCLOSURE
SCHEDULE") (it being agreed that with respect to any matter that is clearly
disclosed in any Section of the Company Disclosure Schedule in such a way as to
make its relevance to the information called for by another Section readily
apparent, such matter shall be deemed to have been included in the Company
Disclosure Schedule in response to such other Section, notwithstanding the
omission of any appropriate cross-reference thereto and that any reference to
the Company in this Article IV shall also include any and all subsidiaries), the
Company represent and warrant to Parent and Merger Sub as follows:
SECTION 4.1 ORGANIZATION AND QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has the requisite corporate power and all material
governmental licenses, authorizations, consents
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and approvals required for the ownership and operation of its properties and the
carrying on of its business as it is now being conducted and as it is now
proposed to be conducted through the Closing. The Company is duly qualified as a
foreign corporation to do business, and is in good standing, in the
jurisdictions identified in Section 4.1 of the Company Disclosure Schedule,
which are all the jurisdictions in which the character of its properties owned
or leased or the nature of its activities makes such qualification necessary,
except where the failure to be so qualified will not, individually or in the
aggregate, have a material adverse effect on the business, assets, condition
(financial or otherwise) or result of operations of the Company.
SECTION 4.2 CAPITALIZATION.
(a) The authorized capital stock of the Company consists
20,000,000 shares of common stock of the Company and 10,696,402 shares of
preferred stock of the Company.
(b) The issued and outstanding capital stock of the Company,
which are and as of the Closing will be held of record and beneficially by the
shareholders of the Company, is as set forth on the Company Disclosure Schedule.
All of the issued and outstanding shares of capital stock of the Company have
been duly authorized and validly issued, are fully paid and nonassessable, are
not subject to any right of rescission and have been offered, issued, sold and
delivered by the Company in compliance with all registration or qualification
requirements (or applicable exemptions therefrom) of applicable federal and
state securities laws. Except as set forth on the Company Disclosure Schedule,
there are no options, warrants, conversion privileges or preemptive or other
rights or agreements outstanding to purchase or otherwise acquire any shares of
common stock of the Company. Except as set forth in the Company Disclosure
Schedule, there are, to the Company's knowledge, no options, warrants,
conversion privileges or preemptive or other rights or agreements as to which
the Company is not a party involving the purchase or other acquisition of any
capital stock in the Company, and there is no liability for dividends accrued
but unpaid. Except as set forth on the Company Disclosure Schedule, there are no
voting agreements, rights of first refusal or other restrictions (other than
normal restrictions on transfer under applicable federal and state securities
laws) applicable to any of the Company's capital stock. Each shareholder of the
Company holds of record and owns beneficially the number of shares of common
stock set forth opposite his, her or its name in the Company Disclosure
Schedule, free and clear of any restrictions on transfer, taxes, security
interests, options, warrants, purchase rights, contracts, commitments, equities,
claims, and demands, except for transfer restrictions arising under applicable
securities laws. No person other than the shareholders and holders of options to
purchase shares of the Company's capital stock listed in the Company Disclosure
Schedule holds any interest in any of the capital stock of the Company. True and
correct copies of the stock records of the Company, showing all issuances and
transfers of shares of capital stock of the Company since inception, have been
provided to Parent.
(c) Except as set forth in the Company Disclosure Schedule,
there are no outstanding rights of first refusal, preemptive rights, options,
warrants, conversion rights or other agreements, either directly or indirectly,
for the purchase or acquisition from the Company or any shareholder of the
Company of any shares of the Company's capital stock.
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(d) Except as set forth on the Company Disclosure Schedule,
the Company is not a party or subject to any agreement or understanding, and
there is no agreement or understanding between any of the shareholders of the
Company that affects or relates to the voting or giving of written consents with
respect to any securities of the Company. Except as set forth on the Company
Disclosure Schedule, no shareholder of the Company or any affiliate thereof is
indebted to the Company, and the Company is not indebted to any shareholder of
the Company or any affiliate thereof. Except as set forth in the Company's
Disclosure Schedule, the Company is not under any contractual or other
obligation to register any of its presently outstanding securities or any of its
securities which may hereafter be issued.
SECTION 4.3 SUBSIDIARIES. Except as disclosed in Section 4.3 of the
Company Disclosure Schedule, the Company has never owned, nor does it currently
own, directly or indirectly, any capital stock or other equity securities of any
corporation or have direct or indirect equity or ownership interest in any
association, partnership, joint venture or other entity other than RAScom
International, Inc., a Delaware corporation and wholly-owned subsidiary of the
Company and RAScom GmbH, a company organized under the laws of Germany and a
wholly-owned subsidiary of RAScom International Inc. (collectively, the
"SUBSIDIARIES"). Except for RAScom GmbH, no Subsidiary has conducted any
business operations or incurred any liability. All of the outstanding shares of
capital stock of each of the Subsidiaries are owned beneficially and of record
by the Company, one of the Subsidiaries, or any combination of the Company
and/or one or more of the Subsidiaries, in each case free and clear of any
liens, charges, restrictions, claims or encumbrances of any nature whatsoever;
and there are no outstanding subscriptions, warrants, options, convertible
securities, or other rights (contingent or other) pursuant to which any of the
Subsidiaries is or may become obligated to issue any shares of its capital stock
to any person other than the Company or one of the other Subsidiaries. Each
Subsidiary is duly organized, validly existing and in good standing in its
jurisdiction of organization and has the requisite corporate power and all
material governmental licenses, authorizations, consents and approvals required
for the ownership and operation of its properties and the carrying on of its
business as it is now being conducted and as it is now proposed to be conducted
through the Closing. Each Subsidiary is in good standing in each jurisdiction
where the character of its properties owned or leased or the nature of its
activities makes such qualification necessary, except where the failure to be so
qualified will not, individually or in the aggregate, have a material adverse
effect on the business, assets, condition (financial or otherwise) or result of
operations of the Company.
SECTION 4.4 AUTHORITY RELATIVE TO THIS AGREEMENT. The Company has the
requisite corporate power and authority to enter into this Agreement and the
Escrow Agreement and to carry out its obligations hereunder and thereunder. The
execution and delivery of this Agreement and the Escrow Agreement and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by the Company's Board of Directors and, other than the adoption of
this Agreement by the Company Shareholders pursuant to the DCL, no other
corporate proceedings on the part of the Company are necessary to authorize this
Agreement and the Escrow Agreement and the transactions contemplated hereby and
thereby. This Agreement and the Escrow Agreement have been duly and validly
executed and delivered by the Company and, assuming this Agreement and the
Escrow Agreement constitute valid and binding obligations of each of Parent,
Merger Sub and each of the Company Shareholders that is a party
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hereto and thereto, and assuming its adoption by the Company Shareholders, this
Agreement and the Escrow Agreement constitute valid and binding agreements of
the Company, enforceable against the Company in accordance with their terms,
except as the enforceability hereof may be subject to or limited by bankruptcy,
insolvency, reorganization, arrangement or similar laws affecting the rights of
creditors generally, judicial limitations upon the specific performance of
certain types of obligations and public policy.
SECTION 4.5 NON-CONTRAVENTION. Assuming the receipt of all Required
Consents and Other Consents (each as defined in Section 4.6 below), neither the
execution, delivery or performance of this Agreement or the Escrow Agreement by
the Company, nor the consummation of the Merger or any other transaction
described herein, does or will, after the giving of notice, or the lapse of
time, or otherwise:
(a) conflict with, result in a breach of, or constitute a
default under, the Restated Certificate of Incorporation or the By-laws of the
Company or any federal, foreign, state or local court or administrative order or
process, or any contract, agreement or commitment to which the Company is a
party, or under which the Company is obligated, or by which the Company or any
of the rights, properties or assets of the Company are subject or bound;
(b) result in the creation of any mortgage, pledge, lien,
claim, charge, encumbrance or assessment upon, or otherwise adversely affect,
any of the rights, properties or assets of the Company;
(c) terminate, amend or modify, or give any party the right to
terminate, amend, modify, abandon or refuse to perform or comply with, any
contract, agreement or commitment to which the Company is a party, or under
which the Company is obligated, or by which the Company or any of the rights,
properties or assets of the Company are subject or bound; or
(d) accelerate, postpone or modify, or give any party the
right to accelerate, postpone or modify, the time within which, or the terms and
conditions under which, any liabilities, duties or obligations are to be
satisfied or performed, or any rights or benefits are to be received, under any
contract, agreement or commitment to which the Company is a party, or under
which the Company may be obligated, or by which the Company or any of the
rights, properties or assets of the Company are subject or bound.
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SECTION 4.6 REQUIRED AND OTHER CONSENTS.
(a) Section 4.6(a) of the Company Disclosure Schedule sets
forth each agreement, contract or other instrument binding upon the Company or
any Permit (as defined in Section 4.14 below) requiring a consent as a result of
the execution, delivery and performance of this Agreement and the Escrow
Agreement and the consummation of the transactions contemplated hereby and
thereby (each such consent, a "REQUIRED CONSENT"), except such consents as would
not, individually or in the aggregate, result in a material adverse change in
the business, assets, condition (financial or otherwise) or result of operations
of the Company, if not received by the Closing Date.
(b) Section 4.6(b) of the Company Disclosure Schedule sets
forth every other consent (each such consent, an "OTHER CONSENT") under such
agreements, contracts or other instruments or such Permits that are required
with respect to the execution, delivery and performance of this Agreement and
the Escrow Agreement and the consummation of the transactions contemplated
hereby and thereby.
SECTION 4.7 FINANCIAL STATEMENTS AND REPORTS. The audited consolidated
balance sheets of the Company as of December 31, 1996 and December 31, 1997 and
the related consolidated audited statements of operations, stockholders' equity
and cash flows for each of the years ended December 31, 1996 and December 31,
1997 (the "COMPANY AUDITED FINANCIAL STATEMENTS"), delivered to Parent in
accordance with Section 6.3(i), in each case, present fairly, in all material
respects, the financial position of the Company and any subsidiaries as of the
dates thereof and their results of operations and changes in financial position
for the periods then ended in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods then ended. The
Company has also furnished Parent with a true and complete copy of the unaudited
consolidated statements of operations, stockholder's equity and cash flows of
the Company and any subsidiaries for the twelve months ended December 31, 1998
and the unaudited consolidated balance sheet of the Company and any subsidiaries
as of December 31, 1998 (the "BALANCE SHEET DATE") (collectively, the "COMPANY
UNAUDITED FINANCIAL STATEMENTS"). The consolidated balance sheets included in
the Company Unaudited Financial Statements fairly present the financial position
of the Company and any subsidiaries as of their dates and the other statements
included in the Company Unaudited Financial Statements fairly present the
results of operations, shareholders' equity and changes in financial position,
as the case may be, of the Company and any subsidiaries for the period therein
set forth, in each case in accordance with generally accepted accounting
principles consistently applied during the periods involved except as otherwise
stated therein and provided that the Company Unaudited Financial Statements lack
footnotes and other presentation items required by generally accepted accounting
principles and are subject to normal year-end adjustments which adjustments are
not expected to be material in amount.
SECTION 4.8 TITLE TO PROPERTIES AND ASSETS. On December 31, 1998, the
Company had, and now has, good and valid title to all of the properties and
assets, tangible or intangible, owned by it, whether or not reflected in the
balance sheet dated December 31, 1998 or subsequently acquired by it, subject to
no mortgages, pledges, liens, encumbrances or other charges of any kind except
for those mortgages, pledges, liens, encumbrances or charges disclosed in
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Section 4.8 of the Company Disclosure Schedule. Except as aforesaid, the assets
and properties owned by the Company at the Effective Time shall be free and
clear of mortgages, pledges, liens, encumbrances or charges of any kind. There
is no tangible asset used or required by the Company in the conduct of its
business as presently operated which is not either owned by it or licensed or
leased to it under a license or lease listed in Section 4.13 of the Company
Disclosure Schedule. All of the fixtures, machinery, equipment, tools and other
tangible personal property owned, leased or licensed by the Company are, and at
the Effective Time will be, sufficient to carry on the Company's business as
presently conducted.
SECTION 4.9 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31,
1998, except as disclosed in Section 4.9 of the Company Disclosure Schedule or
reflected in the Company Unaudited Financial Statements, there has not been:
(a) any material adverse change in the business, assets,
condition (financial or otherwise) or result of operations of the Company, or
any fact, or anticipated event which, individually or in the aggregate, may
reasonably be expected to give rise to any material adverse change in the
business, assets, condition (financial or otherwise), results of operations or
prospects of the Company;
(b) any change in any method of accounting or accounting
practice of the Company;
(c) any declaration, setting aside or payment of any dividend
or other distribution with respect to any shares of capital stock of the
Company, or any repurchase, redemption, retirement or other acquisition by the
Company of any outstanding shares of capital stock or other securities of, or
other equity or ownership interests in, the Company;
(d) any change in the Restated Certificate of Incorporation or
By-laws of the Company or any amendment of any term of any outstanding security
of the Company;
(e) any incurrence, assumption or guarantee by the Company of
any indebtedness for borrowed money, other than in the ordinary course of
business and in an aggregate amount not exceeding $10,000;
(f) any creation or assumption by the Company of any lien on
any asset;
(g) any making of any loan, advance or capital contributions
to, or investment in, any person other than the Subsidiaries;
(h) any sale, lease, pledge, transfer or other disposition of
any capital asset;
(i) any transaction or commitment made, or any material
contract or agreement entered into, by the Company relating to its assets or
business (including the acquisition or disposition of any assets) other than in
the ordinary course of business and consistent with past practice or any
relinquishment by the Company of any contract or other right;
-15-
(j) any (A) grant of any severance or termination pay to any
director, officer or employee of the Company, (B) entering into of any
employment, severance, management, consulting, deferred compensation or other
similar agreement (or any amendment to any such existing agreement) with any
director, officer or employee of the Company, (C) change in benefits payable
under existing severance or termination pay policies or employment, severance,
management, consulting or other similar agreements, (D) change in compensation,
bonus or other benefits payable to directors or officers or, other than in the
ordinary course of business and consistent with past practice, to employees of
the Company or (E) change in the payment or accrual policy with respect to any
of the foregoing;
(k) any labor dispute or any activity or proceeding by a labor
union or representative thereof to organize any employees of the Company, or any
lockouts, strikes, slowdowns, work stoppages or threats thereof by or with
respect to any employees of the Company;
(l) any notes or accounts receivable or portions thereof
written off by the Company as uncollectible in an aggregate amount exceeding
$10,000;
(m) any issuance or sale of any stock, bonds or other
securities of which the Company is the issuer other than pursuant to the
exercise of employee stock options, or the grant, issuance or change of any
stock options, warrants, or other rights to purchase securities of the Company;
(n) any discharge or satisfaction of any lien or encumbrance
or payment or satisfaction of any obligation or liability (whether absolute,
accrued, contingent or otherwise and whether due or to become due) other than
current liabilities shown on the Balance Sheet and current liabilities incurred
since the Balance Sheet Date in the ordinary course of business and consistent
with past practice;
(o) any cancellation of any debts or claims or waiver of any
rights of substantial value in an aggregate amount exceeding $10,000;
(p) any sale, assignment or transfer of any Company
Intellectual Property (as defined in Section 4.15) or other similar assets,
including licenses therefore, other than in the ordinary course of business and
consistent with past practice;
(q) any capital expenditures, or commitment to make any
capital expenditures, for additions to property, plant or equipment in an
individual amount exceeding $5,000;
(r) payment of any amounts to, or liability incurred to or in
respect of, or sale of any properties or assets (real, personal or mixed,
tangible or intangible) to, or any transaction or any agreement or arrangement
with, any corporation or business in which the Company or any of its corporate
officers or directors, or any "affiliate" or "associate" (as such terms are
defined in the rules and regulations promulgated under the Securities Act of
1933, as amended (the "SECURITIES ACT") of any such person, has any direct or
indirect ownership interests; or
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(s) any agreement undertaking or commitment to do any of the
foregoing.
SECTION 4.10 DISCLOSURE OF LIABILITIES. On December 31, 1998, the
Company had no liability of any nature (whether accrued, absolute, contingent or
otherwise) required by generally accepted accounting principles to be reflected
on the balance sheet dated December 31, 1998 or otherwise disclosed that was not
fully disclosed, reflected or reserved against in the balance sheet dated
December 31, 1998. Except for the Secured Promissory Note dated October 26, 1998
payable to the Parent and the Security Agreement dated October 26, 1998 by and
between the Parent and the Company and liabilities which have been incurred
since December 31, 1998 in the ordinary and regular course of business, none of
which individually or in the aggregate has resulted in, is causing, or will
cause a material adverse effect on the business, assets, condition (financial or
otherwise) or result of operations of the Company, and except for liabilities
incurred by the Company in connection with the preparation and execution of this
Agreement and the consummation of the transactions contemplated herein since
December 31, 1998, the Company has not incurred any liability of any nature
(whether accrued, absolute, contingent or otherwise) which would be required by
generally accepted accounting principles to be reflected in a balance sheet
dated the date hereof.
SECTION 4.11 ACCOUNTS, NOTES AND RECEIVABLES. All of the accounts,
notes and other receivables which are reflected in the balance sheet dated
December 31, 1998 were acquired in the ordinary and regular course of business;
and, except to the extent reserved against in the balance sheet dated December
31, 1998, all of the accounts, notes and other receivables which are reflected
therein have been collected in full, or are reasonably believed by the Company
to be good and collectible, in the ordinary and regular course of business; and
all of the accounts, notes and other receivables which have been acquired by the
Company since December 31, 1998 were acquired in the ordinary and regular course
of business and have been collected in full, or are reasonably believed by the
Company to be good and collectible, subject to an appropriate reserve determined
in a manner consistent with past practices of the Company, in the ordinary and
regular course of business. Except as set forth on the Company Disclosure
Schedule, no accounts, notes or other receivables are contingent upon the
performance by the Company after the date hereof of any material obligation or
contract. Except as disclosed in Section 4.11 of the Company Disclosure
Schedule, no person has any lien, charge, pledge, security interest or other
encumbrance on any of such receivables and no agreement for deduction or
discount has been made with respect thereto.
SECTION 4.12 LITIGATION. Except as set forth in Section 4.12 of the
Company Disclosure Schedule, there is no action, suit, claim, investigation or
proceeding pending against or threatened against the Company or its properties
and assets before any court or arbitrator or any governmental body, agency,
official or authority.
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SECTION 4.13 AGREEMENTS.
(a) Section 4.13 of the Company Disclosure Schedule sets forth
a list of each agreement, contract or commitment of the following types under
which the Company is obligated:
(i) any agreements of guarantee or indemnification;
(ii) any contract for personal services or employment
which is not terminable at will by the Company without penalty or obligation to
make payments related to such termination;
(iii) any agreement or commitment containing a covenant
limiting or purporting to limit the freedom of the Company to compete with any
person in any geographic area or engage in any line of business;
(iv) any lease to which the Company is a party as lessor
or lessee;
(v) any joint venture contract or similar arrangement or
any other similar agreement which involves a sharing of profits or future
payments to other persons;
(vi) except for trade indebtedness incurred in the
ordinary course of business, any loan or credit agreements providing for the
extension of credit to the Company or any instrument evidencing or related in
any way to indebtedness incurred in the acquisition of companies or other
entities or indebtedness for borrowed money by way of direct loan, sale of debt
securities, purchase money obligation, conditional sale, guarantee, or other
debt obligation or instrument which individually is in the amount of $1,000 or
more;
(vii) any distributor, dealer, franchise, manufacturer's
representative, sales agency or other similar contract or commitment;
(viii) any license agreement, either as licensor or
licensee or any other similar contract or commitment;
(ix) any contract or agreement for the future sale,
license or sublicense by the Company of materials, products, services or
supplies;
(x) any contract, purchase order or agreement for the
future purchase by the Company of any materials, equipment, services or
supplies, which provides for payments which cannot be terminated by the Company
without penalty upon less than thirty (30) days' notice;
(xi) any contract or commitment for the sale by the
Company of any materials, products, services or supplies;
-18-
(xii) any agreement or arrangement for the assignment,
sale or other transfer by the Company of any contract or lease (or right to
payment thereunder);
(xiii) any contract or commitment for the acquisition,
construction or sale of fixed assets;
(xiv) any agreement pertaining to the Company's
maintenance or support of its products, services or supplies;
(xv) any agreement or arrangement for the sale of any of
the assets, properties or rights of the Company or for the grant of any
preferential rights to purchase any of its assets, properties or rights or which
requires the consent of any third party to the transfer and assignment of any of
its assets, properties or rights; or
(xvi) any contract or agreement, not elsewhere
specifically disclosed pursuant to this Agreement, involving the payment or
receipt by the Company of more than $10,000 in the aggregate.
(b) Since the Balance Sheet Date, the Company has not amended,
modified or terminated the terms of the contracts or agreements referred to in
Section 4.13(a) hereof unless such amendment, modification or termination was in
the ordinary course of business and the Company has provided Parent with written
notification of such.
SECTION 4.14 LICENSES AND PERMITS. Section 4.14 of the Company
Disclosure Schedule correctly describes each material license, franchise, permit
or other similar governmental authorization affecting, or relating in any way
to, the business of the Company, together with the name of the government agency
or entity issuing such license or permit (the "PERMITS"). Such Permits are valid
and in full force and effect and, assuming the related Required Consents and
Other Consents have been obtained prior to the Closing Date, will not be
terminated or impaired or become terminable as a result of the transactions
contemplated hereby. Upon consummation of the transactions contemplated hereby,
the Surviving Corporation will, assuming the related Required Consents and Other
Consents have been obtained prior to the Closing Date, have all of the right,
title and interest in all the Permits.
SECTION 4.15 INTELLECTUAL PROPERTY.
(a) The "COMPANY INTELLECTUAL PROPERTY" consists of all material trade
secrets, copyrights, patents, trademarks, service marks, trade dress, all
registrations and applications with respect thereto and all licenses or rights
under the same, that are owned or used by the Company, including without
limitation, any of the foregoing embodied or contained in any of the following:
net lists; textual information contained in web sites; schematics; manufacturing
processes; customer lists and supplier lists; know-how and show-how; computer
software programs, source code and object code; complete system build software;
development and test tools, documentation, specifications, programmer and user
manuals used by the Company to install, operate, maintain, correct, test, repair
enhance, extend, modify, prepare derivative works based upon, design, develop,
reproduce and package software; all license and other rights in any third-
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party product, intellectual property, proprietary or personal rights,
documentation, or tangible or intangible property; all documents, record and
electronic files relating to the design, end user documentation, manufacturing,
quality control, sales, marketing, or customer support; and all products of the
Company currently being licensed or sold or that are currently being developed,
including all hardware products and tools, software products and tools, and
services that are currently licensed, offered or under development by the
Company ("COMPANY PRODUCTS").
As used in this Agreement "SOFTWARE" means any and all current and
prior and currently under development versions and releases, and predecessors of
the software and computer programs and applications of the Company to the extent
related to the business as currently being conducted or as currently required or
as reasonably can be anticipated to be conducted in the future, including all
such software and computer programs in machine readable source code forms and in
machine executable object code forms and all related specifications (including
all logic architectures, algorithms and logic flows and all physical,
functional, operating and design parameters), any data used by or related to
software, work in progress relating to corrections, modifications, revisions,
upgrades, translations or enhancements, all Company and third party development
and test tools used to develop or test the software, third party application
program interfaces to the software written by them and all methods of
implementation and packaging, together with all associated know-how and show-how
and all related Documentation. As used in this Agreement, "DOCUMENTATION" means
all documentation, specifications, manuals and other materials relating to the
software, including programmer and user manuals which are used by the Company to
install, operate, maintain, correct, test, repair, enhance, extend, modify,
prepare derivative works based upon, design, develop, reproduce and package such
software.
(b) The Company Disclosure Schedule lists: (i) all patents, copyright
registrations, mask works, trademarks, service marks, trade dress, any renewal
rights for any of the foregoing, and any applications and registrations for any
of the foregoing, which are included in the Company Intellectual Property and
owned by or on behalf of the Company; (ii) all Company Products; and (iii) all
licenses, sublicenses and other agreements to which the Company is a party and
pursuant to which the Company or any other person is authorized to use the
Company Intellectual Property or exercise any other right with regard thereto
and (iv) any customer, supplier or other person expressly permitted by the
Company to purchase equipment directly from a third party manufacturer which
equipment would otherwise be supplied by the Company. The Company has delivered
to Parent true and complete copies of the agreements described in (iii) hereof.
(c) The Company Intellectual Property consists solely of items and
rights which are either: (i) owned by the Company; (ii) in the public domain; or
(iii) rightfully used and authorized for use by the Company and its successors
pursuant to a valid license. All Company Intellectual Property which consists of
licenses or other rights to third party intellectual property is set forth in
the Company Disclosure Schedule. The Company has all rights in the Company
Intellectual Property necessary to commercially exploit the same in connection
with the Company's current, former, and planned or scheduled (whether for
release or development) activities in all geographic locations and fields of use
in which the Company currently operates or is scheduled to operate, and to
sublicense any or all such rights to third parties, including the right to grant
further sublicenses. All software created by the Company is as described in the
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Documentation and performs in all material respects in accordance with the
specifications included in the Documentation.
(d) The Company is not, nor as a result of the execution or delivery of
this Agreement and all other agreements contemplated hereby, or performance of
the Company's obligations hereunder, will the Company be, in violation of any
license, sublicense or other agreement to which the Company is a party. The
Company Disclosure Schedule lists all contracts or agreements under which the
Company is obligated to provide any consideration (whether financial or
otherwise) to any third party, or under which any third party otherwise would be
entitled to any consideration, with respect to any exercise of rights by the
Company or Buyer in the Company Intellectual Property.
(e) The use, reproduction, modification, distribution, licensing,
sublicensing, sale or any other exercise of rights by the Company with respect
to any of the Company Products does not infringe any copyright, trade secret,
trademark, service xxxx, trade name, trade dress or mask work, or any patent,
moral right or other intellectual property right, right of privacy, or right in
personal data of any person. No claims (i) challenging the validity,
effectiveness or ownership by the Company of any of the Company Intellectual
Property, or (ii) to the effect that the use, reproduction, modification,
manufacturing, distribution, licensing, sublicensing, sale or any other exercise
of rights by the Company with respect to any of the Company Products infringes
or will infringe on any intellectual property or other proprietary or personal
right of any person, have been asserted to the Company or, to the knowledge of
the Company, are threatened by any person, nor to the knowledge of the Company
are there any valid grounds for any bona fide claim of any such kind. All
granted or issued patents and mask works and all registered trademarks listed on
the Company Disclosure Schedule and all registered copyrights held by the
Company are valid, enforceable and subsisting. To the knowledge of the Company,
there are no pending or unissued patent rights which infringe upon or impair the
Company Intellectual Property. To the knowledge of the Company, there is no
unauthorized use, infringement or misappropriation of any of the Company
Intellectual Property by any third party, employee or former employee.
(f) No parties other than the Company possess any current or contingent
rights to any source code that is part of the Company Intellectual Property.
None of the Company Intellectual Property is subject to any source code, escrow
or similar agreement.
(g) The Company Disclosure Schedule lists all parties who have created
any portion of, or otherwise have any rights in or to, the Company Intellectual
Property, other than employees of the Company who have no rights in or to any
Company Intellectual Property. The Company has secured from all parties who have
created any portion of, or otherwise have any rights in or to, the Company
Intellectual Property valid and enforceable written assignments of any such work
or other rights to Company and has provided true and complete copies of such
assignments to Parent.
(h) "YEAR 2000 COMPLIANCE" refers to the ability of (i) the Company's
Products; (ii) the Company's internal computer system and (iii) the computer and
data processing systems of the Company's suppliers and other third parties on
whose products and services the Company relies to accurately recognize, process,
manage and manipulate date and time data from, into and
-21-
between the 20th and 21st centuries, including the years 1999, 2000 and leap
year calculations, such that neither performance nor functionality will be
affected by dates prior to, during or after the year 2000 and without causing a
disruption, failure of operation or substantial defect in such computer systems.
The Company has provided Parent with a memorandum (the "COMPANY YEAR 2000
MEMORANDUM") describing the Company's plan for achieving Year 2000 Compliance,
the current status of such effort, the costs expended by the Company in 1997 and
1998 towards year 2000 Compliance, and the anticipated future expenditures
related to Year 2000 Compliance. The Company has taken and is taking all
reasonably necessary and appropriate actions to achieve Years 2000 Compliance,
and the annual cost of such reasonably anticipated actions and expenditures to
achieve Year 2000 Compliance is not expected to be materially in excess of the
amounts set forth in the Company Year 2000 Memorandum. The costs of attaining
Year 2000 Compliance are not expected to have a material adverse effect on the
results or operations or liquidity of the Company.
(i) The Company Disclosure Schedule includes a true and complete list
of support and maintenance agreements relating to Company Intellectual Property
including the identity of the parties entitled to receive such service or
maintenance, and the term of such agreements.
(j) Company has obtained written agreements from all employees and
third parties with whom Company has shared confidential proprietary information
(i) of the Company, or (ii) received from others which the Company is obligated
to treat as confidential, which agreements require such employees and third
parties to keep such information confidential. The Company has delivered or
given access to all copies of such written agreements, as executed, to Parent.
None of the present or former employees, officers or directors of the Company
owns directly or indirectly, in whole or in part, any Company Intellectual
Property or application therefor.
SECTION 4.16 EMPLOYEES.
(a) Section 4.16 of the Company Disclosure Schedule identifies
a list of (a) the names, titles, annual salaries and all other compensation of
all employees of the Company and (b) the wage rates for non-salaried employees
of the Company (by classification) delivered to Parent. Neither the Company nor
its officers or directors have any knowledge that any key employee of the
Company intends to resign or retire as a result of the transactions contemplated
by this Agreement or otherwise within 6 months after the Closing Date.
(b) Each current and former officer, employee and consultant
of the Company having access to confidential or proprietary information of the
Company has executed and delivered to the Company an agreement regarding the
protection of such confidential or proprietary information and the assignment of
inventions to the Company; copies of the currently used forms of all such
agreements have been delivered to Parent. The Company is not and never has been
engaged in any dispute or litigation with an employee or former employee
regarding matters pertaining to intellectual property or assignment of
inventions.
(c) The Company (i) has never been and is not now subject to a
union organizing effort, (ii) is not subject to any collective bargaining
agreement with respect to any of its employees, (iii) is not subject to any
other contract, written or oral, with any trade or labor
-22-
union, employees' association or similar organization, and (iv) has no material
current labor dispute. The Company has good labor relations, and has no
knowledge of any facts indicating that the consummation of the transactions
provided for herein will have a material adverse effect on its labor relations.
(d) Hours worked by and payments made to employees of the
Company have not been in violation of the Fair Labor Standards Act or any other
applicable federal, foreign, state or local laws dealing with such matters.
(e) All payments due from the Company on account of employee
health and welfare insurance in respect of years and periods (and portions
thereof) ended on or prior to the Closing Date were or will be paid prior to the
Closing Date or accrued as a liability on the Company's balance sheet dated
December 31, 1998 and previously disclosed to Parent.
(f) All severance and vacation payments which are or were due
under the terms of any agreement, oral or written, in respect of years and
periods (and portions thereof) ended on or prior to the Closing Date, were or
will be paid prior to the Closing Date or accrued as a liability on the
Company's balance sheet dated December 31, 1998 and previously disclosed to
Parent.
SECTION 4.17 ENFORCEABILITY OF CONTRACTS, ETC.
(a) No person, firm, corporation or entity who is a party to
any contract, agreement, commitment or plan to which the Company is a party
(excluding warranty claims arising in the ordinary course of business and
consistent with past practice, which are not expected by the Company to be
material in the aggregate) involving potential liability or obligation in excess
of $10,000 has a valid defense, on account of non-performance or malfeasance by
the Company, which would make any such contracts, agreement, commitment or plan
not valid and binding upon or enforceable against such parties in accordance
with their terms, except to the extent such enforceability may be subject to or
limited by bankruptcy, insolvency, reorganization, arrangement or similar laws
affecting the rights of creditors generally and usual equity principles.
(b) Neither the Company, nor, to the knowledge of the Company,
any other person, firm, corporation or entity, is in breach or violation of, or
default under, any material contract, agreement, arrangement, commitment or plan
to which the Company is a party, and no event or action has occurred, is
pending, or, to the knowledge of the Company, is threatened, which, after the
giving of notice, or the lapse of time, or otherwise, would constitute a breach
or a default by the Company or, to the knowledge of the Company, any other
person, firm, corporation or entity, under any material contract, agreement,
arrangement, commitment or plan to which the Company is a party. The Company is
not in breach or violation of, or default under, its Restated Certificate of
Incorporation or By-laws, and no event or action has occurred, is pending, or is
threatened, which, after the giving of notice, or the lapse of time, or
otherwise, would constitute a breach or a default by the Company under its
Restated Certificate of Incorporation or By-laws.
-23-
SECTION 4.18 TAXES.
(a) The term "TAXES" as used herein means all federal, state,
local, foreign net income, alternative or add-on minimum tax, estimated, gross
income, gross receipts, sales, use, ad valorem, value added, transfer,
franchise, capital profits, lease, service, license, withholding, payroll,
employment, excise, severance, stamp, occupation, premium, property,
environmental or windfall profit taxes, customs, duties and other taxes,
governmental fees and other like assessments and charges of any kind whatsoever,
together with all interest, penalties, additions to tax and additional amounts
with respect thereto, and the term "TAX" means any one of the foregoing Taxes.
The term "TAX RETURNS" as used herein means all returns, declarations, reports,
claims for refund, information statements and other documents relating to Taxes,
including all schedules and attachments thereto, and including all amendments
thereof, and the term "TAX RETURN" means any one of the foregoing Tax Returns.
"TAX AUTHORITY" means any governmental authority responsible for the imposition
of any Tax. "CODE" as used herein means the Internal Revenue Code of 1986, as
amended. For purposes of this Section 4.18, "Company" shall include the Company
and its subsidiaries.
(b) The Company has timely filed all Tax Returns required to
be filed and has paid all Taxes owed (whether or not shown as due on such
returns), including, without limitation, all Taxes which the Company is
obligated to withhold for amounts paid or owing to employees, creditors and
third parties. All Tax Returns filed by the Company were complete and correct in
all material respects, and such Tax Returns correctly reflected the material
facts regarding the income, business, assets, operations, activities, status and
other matters of the Company and any other information required to be shown
thereon. Except as set forth on Section 4.18 of the Company Disclosure Schedule,
none of the Tax Returns filed by the Company or Taxes payable by the Company
have been the subject of an audit, action, suit, proceeding, claim, examination,
deficiency or assessment by any governmental authority, and no such audit,
action, suit, proceeding, claim, examination, deficiency or assessment is
currently pending or, to the knowledge of the Company, threatened. Except as set
forth on the Company Disclosure Schedule, the Company is not currently the
beneficiary of any extension of time within which to file any Tax Return, and
the Company has not waived any statute of limitation with respect to any Tax or
agreed to any extension of time with respect to a Tax assessment or deficiency.
All material elections with respect to Taxes affecting the Company, as of the
date hereof, are set forth in the Company Audited Financial Statements or in the
Company Disclosure Schedule. None of the Tax Returns filed by the Company
contain a disclosure statement under former Section 6661 of the Code or Section
6662 of the Code (or any similar provision of state, local or foreign Tax law).
(c) The Company is not a party to any agreement, contract,
arrangement or plan that has resulted or would result, separately or in the
aggregate, in the payment of (i) any "excess parachute payments" within the
meaning of Section 280G of the Code (without regard to the exceptions set forth
in Sections 280G(b)(4) and 280G(b)(5) of the Code) or (ii) any amount for which
a deduction would be disallowed or deferred under Section 162 or Section 404 of
the Code. The Company has not agreed to make any adjustment under Section 481(a)
of the Code (or any corresponding provision of state, local or foreign Tax law)
by reason of a change in accounting method or otherwise, and will not be
required to make such an adjustment as a result
-24-
of the transactions contemplated by this Agreement. The Company is not, and has
not been, a U.S. real property holding company (as defined in Section 897(c)(2)
of the Code) during the applicable period specified in Section 897(c)(1)(A)(ii)
of the Code. No claim has ever been made by a Tax Authority in a jurisdiction
where the Company does not file Tax Returns that it is or may be subject to Tax
in that jurisdiction. The Company has not participated in an international
boycott as defined in Section 999 of the Code. No portion of the Merger
Consideration is subject to the Tax withholding provisions of Section 3406 of
the Code, or of Subchapter A of Chapter 3 of the Code or of any other provision
of law. The Company is not a party to any joint venture, partnership, or other
arrangement or contract which could be treated as a partnership for federal
income tax purposes. The Company does not have, and has not had, a permanent
establishment in any foreign country, as defined in any applicable Tax treaty or
convention between the United States and such foreign country. None of the
shares of outstanding capital stock of the Company are subject to a "substantial
risk of forfeiture" within the meaning of Section 83 of the Code. The Company
has never filed a consent pursuant to Section 341(f) of the Code, relating to
collapsible corporations.
(d) The Company is not a party to any Tax sharing agreement or
similar arrangement. The Company has never been a member of a group filing a
consolidated federal income Tax Return (other than a group the common parent of
which was the Company), and the Company does not have any liability for the
Taxes of any Person (other than the Company) under Treasury Regulation Section
1.1502-6 (or any corresponding provision of state, local or foreign Tax law), as
a transferee or successor, by contract, or otherwise. The Company has no net
operating losses or other tax attributes presently subject to limitation under
Sections 382, 383 or 384 of the Code, or the federal consolidated return
regulations (other than limitations imposed as a result of the transactions
contemplated pursuant to this Agreement).
(e) There are no liens for Taxes upon any of the assets, other
than for Taxes not yet due and payable. The unpaid Taxes of the Company did not,
as of December 31, 1998, exceed the reserve for actual Taxes (as opposed to any
reserve for deferred Taxes established to reflect timing differences between
book and Tax income) as shown on the Company Unaudited Balance Sheet dated
December 31, 1998, and will not exceed such reserve as adjusted for the passage
of time through the Closing Date in accordance with the past custom and practice
of the Company in filing their Tax Returns. Schedule 4.18 hereto contains a list
of all jurisdictions (whether foreign or domestic) to which the Company, to the
best of its knowledge, has been or will be liable for any Tax for any taxable
period after December 31, 1995 and ending on or before December 31, 1998.
SECTION 4.19 INSURANCE. Section 4.19 of the Company Disclosure Schedule
sets forth a list of, and true and complete copies have previously been made
available to Parent and Merger Sub of, all insurance policies and fidelity bonds
covering the assets, business, operations and employees of the Company. There is
no claim by the Company pending under any of such policies or bonds as to which
coverage has been questioned, denied or disputed by the underwriters of such
policies or bonds. All premiums payable under all such policies and bonds have
been paid and the Company is otherwise in full compliance with the material
terms and conditions of all such policies and bonds. Such policies of insurance
and bonds (or other policies
-25-
and bonds providing substantially similar insurance coverage) have been in
effect since January 1, 1996 and remain in full force and effect.
SECTION 4.20 BOOKS AND RECORDS.
(a) The books, records and accounts of the Company (i) are
accurate and complete in all material respects and have been maintained in
accordance with good business practices on a basis consistent with prior years,
(ii) are stated in reasonable detail and accurately and fairly reflect the
transactions and dispositions of the assets of the Company and (iii) accurately
and fairly reflect the basis for the Company Unaudited Financial Statements.
(b) The Company has implemented and maintained a system of
internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary (A) to
permit preparation of financial statements in conformity with generally accepted
accounting principles consistently applied and (B) to maintain accountability
for assets; and (iii) the amount recorded for assets on the books and records of
the Company is compared with the existing assets at reasonable intervals in
connection with the preparation of annual audits of the Company's financial
statements and appropriate action is taken with respect to any differences.
SECTION 4.21 COMPLIANCE WITH GOVERNMENTAL REGULATIONS. The Company is
not in violation of any federal, foreign, state or local law, statute,
ordinance, rule, regulation or court or administrative order or process relating
to the operation, conduct or ownership of the property, business or affairs of
the Company except for violations that, individually or in the aggregate would
not have a material adverse effect on the Company.
SECTION 4.22 ENVIRONMENTAL COMPLIANCE. (a) the Company has materially
complied with all applicable international, federal, state and/or local laws
(including without limitation case law, rules, regulations, orders, judgments,
decrees, permits, licenses and governmental approvals) that are intended to
protect the environment and/or human health or safety (collectively,
"ENVIRONMENTAL LAWS"); (b) the Company has not handled, generated, used, stored,
transported or disposed of any substance or waste which is regulated by
Environmental Laws, except for those reasonably incidental to its business which
have been handled in compliance with Environmental Laws; and (c) there are no
"Environmental Liabilities." For purposes of this Agreement "ENVIRONMENTAL
LIABILITIES" are any liabilities which (i) arise out of or in any way relate to
the Company or any real estate at any time owned, used or leased by the Company,
or the Company's use or ownership thereof, whether vested or unvested,
contingent or fixed, actual or potential, and (ii) arise from or relate to
actions (including any failure to act) occurring or conditions existing on or
before the Closing Date.
SECTION 4.23 FIRE, FLOOD, ACCIDENT, ETC. Since the Balance Sheet Date,
the Company has not sustained any loss on account of fire, flood, accident or
other calamity of such character as to interfere with the continued operation of
its business, regardless of whether or not such loss shall have been insured
against.
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SECTION 4.24 REAL ESTATE.
(a) Section 4.24 of the Company Disclosure Schedule contains a
schedule setting forth and describing all real estate which is owned or leased
by the Company, or in which the Company has any other right, title or interest.
True and complete copies of each lease have been provided or made available to
Parent and such leases constitute the entire understanding relating to the
Company's use and occupancy of the leased premises. The leases are presently in
full force and effect without further amendment or modification. The Company is
not in default in any material respect in the performance of obligations under
any lease, and the Company does not know of any state of facts which with the
giving of notice or the passage of time, or both, would constitute a default by
the Company or any other party thereunder.
(b) To the knowledge of the Company, the improvements located
on the real estate described in Section 4.24 of the Company Disclosure Schedule
are not the subject of any official complaint or notice of violation of any
applicable zoning ordinance or building code and there is no use or occupancy
restriction or condemnation proceeding pending, or threatened against the
Company.
SECTION 4.25 BANK ACCOUNTS. Section 4.25 of the Company Disclosure
Schedule contains a schedule setting forth and describing (i) all bank accounts
owned or maintained by the Company and all authorized signatories with respect
thereto; and (ii) safety deposit boxes maintained by the Company and all persons
having access with respect thereto.
SECTION 4.26 EMPLOYEE BENEFIT PLANS. Except as disclosed on Schedule
4.26, neither the Company nor any person that together with the Company would be
treated as a single employer (an "ERISA AFFILIATE") under Section 414 of the
Internal Revenue Code of 1986, as amended (the "CODE") has established or
maintains or is obligated to contribute to (a) any bonus, severance, stock
option, or other type of incentive compensation plan, program, agreement,
policy, commitment, contract or arrangement (written or oral), (b) any pension,
profit-sharing, retirement or other plan, program or arrangement, or (c) any
other employee benefit plan, fund or program, including, but not limited to,
those described in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"). All such plans (individually, a "PLAN" and
collectively, the "PLANS") have been operated and administered in all material
respects in accordance with their terms, as applicable, with the requirements
prescribed by any and all statutes, orders, rules and regulations, including but
not limited to ERISA and the Code. Each Plan which is intended to be qualified
under Section 401(a) of the Code is so qualified and has been so qualified
during the period from its adoption to date. No act or failure to act by the
Company has resulted in, nor does the Company have knowledge of a non-exempt
"PROHIBITED TRANSACTION" (as defined in ERISA) with respect to the Plans.
Neither the Company nor any ERISA Affiliate maintains or has ever maintained or
contributed to any Plan subject to Title IV of ERISA. Except as disclosed on
Schedule 4.26, none of the Plans covers any non-United States employee or former
employee of the Company or any subsidiary. With respect to the employees and
former employees of the Company, there are no employee post-retirement medical
or health plans in effect, except as required by Section 4980B of the Code.
-27-
SECTION 4.27 CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES. Except
for (a) the requirements of state securities laws and (b) the filing and
recording of appropriate documents as provided by the laws of the State of
Delaware, no consent, approval or authorization of, or declaration, filing or
registration with, any governmental or regulatory authority is required to be
made or obtained by the Company in connection with the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby.
SECTION 4.28 CONFLICTS OF INTEREST. To the knowledge of the Company and
the Company Shareholders, none of the directors, officers, employees or
shareholders of the Company (a) has any material direct or indirect interest in
any entity which does business with the Company; (b) has any direct or indirect
interest in any property, asset or right which is used by the Company in the
conduct of its business; or (c) has any contractual relationship with the
Company other than such relationships which occur from being an officer,
employee, director or security holder of the Company.
SECTION 4.29 ACCURACY OF REPRESENTATIONS. The representations made by
the Company herein, subject to and supplemented by the Company Disclosure
Schedule, are true and correct, and, when taken as a whole, do not contain any
untrue statement of a material fact or knowingly omit to state any material fact
necessary in order to make the statements included herein or therein, in light
of the circumstances under which they were made, not misleading.
SECTION 4.30 INFORMATION STATEMENT. The information regarding the Company
and its officers, directors and shareholders included in the information to be
sent to the Company Shareholders in connection with the consideration and
approval of the Merger, this Agreement and the other transactions contemplated
in the Company's Shareholders' Consent (such information statement as amended or
supplemented is referred to herein as the "INFORMATION STATEMENT") shall not, on
the date the Information Statement (or any amendment thereof or supplement
thereto) is first mailed to the Company's Shareholders, at the time of the
execution and delivery of the Company's Shareholders' Consent and at the
Effective Time, contain any statement which, at such time and in light of the
circumstances under which it shall be made, is false or misleading with respect
to any material fact, or shall omit to state any material fact necessary in
order to make the statements made therein not false or misleading; or omit to
state any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of signatures to the Company
Shareholders' Consent which has become false or misleading. If at any time prior
to the Effective Time any event relating to the Company or any of its
affiliates, officers or directors should be discovered by the Company which
should be set forth in an amendment or a supplement to the Information
statement, the Company shall promptly inform Parent and Merger Sub.
Notwithstanding the foregoing, the Company makes no representation or warranty
with respect to any information regarding Parent or Merger Sub which is
contained in any of the foregoing documents.
-28-
ARTICLE IV-A
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY SHAREHOLDERS
Each Company Shareholder executing and delivering this Agreement
severally represents and warrants to Parent and Merger Sub, as to itself,
himself or herself only, as follows:
(a) Subject to applicable community property laws, such
Company Shareholder is the lawful owner of the Company Shares to be exchanged
for shares of Parent Common Stock pursuant to this Agreement and has, and on the
Closing Date will have, good and clear title to such Company Shares, free of all
restrictions on transfer, liens, encumbrances, security interests and claims
whatsoever, other than as set forth in the Amended and Restated Stockholders
Agreement dated as of August 22, 1997 among the Company, such Company
Shareholder and certain other shareholders of the Company.
(b) Such Company Shareholder has, and on the Closing Date will
have, full legal right, power and authority to enter into this Agreement and to
sell and deliver the Company Shares in the manner provided herein, and this
Agreement, the Escrow Agreement and the Registration Rights Agreement have been
duly authorized, executed and delivered by such Company Shareholder and this
Agreement, the Escrow Agreement and the Registration Rights Agreement are valid
and binding agreements of such Company Shareholder enforceable in accordance
with their respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, arrangement or similar laws affecting the rights of creditors
generally, judicial limitations upon equitable remedies including the specific
performance of certain types of obligations and public policy.
(c) The execution, delivery and performance of this Agreement,
the Registration Rights Agreement and the Escrow Agreement by such Company
Shareholder, compliance by such Company Shareholder with all the provisions
hereof and thereof and the consummation of the transactions contemplated hereby
or thereby will not require any consent, approval, authorization or other order
of any court, regulatory body, administrative agency or other governmental body,
or any agreement, indenture or other instrument to which such Company
Shareholder is a party or by which such Company Shareholder or property of such
Company Shareholder is bound, or violate or conflict with any laws,
administrative regulation or ruling or court decree applicable to such Company
Shareholder or property of such Company Shareholder.
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ARTICLE V
COVENANTS
The following covenants shall apply to the period of time from the date
hereof until the Effective Time unless otherwise specifically provided. All
references to the Company in Article V shall refer to the Company and any and
all subsidiaries.
SECTION 5.1 CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER.
Except as contemplated by this Agreement, during the period from the date of
this Agreement to the Effective Time, the Company will conduct its operations
only in the ordinary and usual course of business and consistent with past
practice and will use its best efforts to preserve intact its present business
organization, keep available the services of its present officers and key
employees and preserve its relationships with customers, suppliers and others
having business dealings with it to the end that its goodwill and on-going
business shall not be impaired at the Effective Time. During such period the
Company shall promptly report to Parent any occurrence or omission which shall
have caused any representation or warranty of the Company hereunder to become
untrue as of the time of such occurrence or omission, and shall confer on a
regular and frequent basis with representatives of Parent to report operational
matters of a material nature and to report the general status of the ongoing
operations of the business of the Company. Without limiting the generality of
the foregoing, and except as contemplated by this Agreement and the Company
Disclosure Schedule, the Company will not, prior to the Effective Time, without
the prior written consent of Parent in each instance:
(a) issue, sell or pledge, or authorize or propose the
issuance, sale or pledge of (i) any shares of capital stock of any class of the
Company (including Company Shares), or securities convertible into any such
shares, or any rights, warrants or options to acquire any such shares or
convertible securities, or (ii) any other securities in respect of, in lieu of
or in substitution for Outstanding Company Shares;
(b) purchase or redeem or otherwise acquire, or propose to
purchase or redeem or otherwise acquire, any outstanding shares of capital stock
of any class (including Company Shares), or securities convertible into any such
shares, or any rights, warrants or options to acquire any such shares or
convertible securities;
(c) declare or pay any dividend or distribution on any shares
of its capital stock other than as approved in writing by Parent;
(d) authorize, recommend, propose or announce an intention to
authorize, recommend or propose, or enter into a letter of intent (whether or
not binding), an agreement in principle or an agreement with respect to any
merger, consolidation or business combination (other than the Merger), any
acquisition of assets or securities, any disposition of assets or securities, or
any change in the Company's capitalization, or an entry into a material contract
other than in the ordinary course of business or any amendment or modification
of any material contract rights;
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(e) except as may be contemplated herein, take any action
which would make any representation or warranty in this Agreement (other than
any representation or warranty that speaks as of a particular date) untrue or
incorrect, as if made as of such time;
(f) enter into any agreement, contract or commitment (other
than in the ordinary course of business and other than agreements, contracts or
commitments which were under negotiation on the date hereof and which are
disclosed on the Company Disclosure Schedule) which, if entered into prior to
the date hereof, would be required to be listed in Section 4.13 of the Company
Disclosure Schedule and which involves a payment, obligation or commitment in
excess of $10,000;
(g) enter into any contract, agreement, license or commitment
which would be breached or violated or in respect of which a right of
acceleration would be created by the Company's execution, delivery and
performance of this Agreement and the transactions contemplated hereby;
(h) (i) increase or agree to increase the compensation payable
or to become payable to its officers or employees, (ii) grant any severance or
termination pay to, or enter into any employment or severance agreement, with
any employee, (iii) enter into any collective bargaining agreement, (iv)
establish, adopt, enter into or amend in any material respect any bonus, profit
sharing, thrift, compensation, stock option, restricted stock, pension,
retirement, deferred compensation, employment, termination, severance or other
plan, trust, fund, policy or arrangement for the benefit of any directors,
officers or employees; or
(i) agree in writing or otherwise to take any of the foregoing
actions.
SECTION 5.2 ACCESS AND INFORMATION; CONFIDENTIALITY.
(a) The Company shall afford to Parent and to Parent's
accountants, counsel and other representatives access throughout the period
prior to the Effective Time to its senior management, properties, books,
contracts, commitments and records (including but not limited to tax returns)
and all other information concerning its business, properties and personnel as
Parent may reasonably request.
(b) Parent shall afford to the Company and to its counsel and
to the Company Shareholders access throughout the period prior to the Effective
Time to its senior management, and all other information concerning Parent as
the Company or a Company Shareholder may reasonably request. The Company
Shareholders shall also be afforded the opportunity to ask questions and to
receive accurate and complete answers from Parent concerning the terms and
conditions of the Merger and the issuance of shares of Parent Common Stock
pursuant thereto.
(c) The Company and its affiliates will hold, and will use
their best efforts to cause their respective officers, directors, employees,
accountants, counsel, consultants, advisors and agents to hold, in confidence,
unless compelled to disclose by judicial or administrative process or by other
requirements of law, (i) all confidential documents and information concerning
Parent and its affiliates furnished to the Company or its affiliates or
representatives in
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connection with the transactions contemplated by this Agreement, and (ii) (after
the Closing Date) all confidential documents and information concerning the
Company, except to the extent that such information can be shown to have been
(A) previously known on a nonconfidential basis by the Company, (B) in the
public domain through no fault of the Company or (C) later lawfully acquired by
the Company from sources other than the Company (with respect to information
described in clause (ii) above) or Parent; provided that the Company may
disclose such information to its affiliates, stockholders, officers, directors,
employees, accountants, counsel, consultants, advisors and agents in connection
with the transactions contemplated by this Agreement so long as such persons are
informed by the Company of the confidential nature of such information and are
directed by the Company to treat such information confidentially. The obligation
of the Company to hold any such information in confidence shall be satisfied if
it exercises the same care with respect to such information as it would take to
preserve the confidentiality of its own similar information.
(d) Prior to the Closing Date and after any termination of
this Agreement, Parent and its affiliates will hold, and will use their best
efforts to cause their respective officers, directors, employees, accountants,
counsel, consultants, advisors and agents to hold, in confidence, unless
compelled to disclose by judicial or administrative process or by other
requirements of law, all confidential documents and information concerning the
Company furnished to Parent or its affiliates in connection with the
transactions contemplated by this Agreement, except to the extent that such
information can be shown to have been (i) previously known on a nonconfidential
basis by Parent, (ii) in the public domain through no fault of Parent or (iii)
later lawfully acquired by Parent from sources other than the Company; provided
that Parent may disclose such information to its officers, directors, employees,
accountants, counsel, consultants, advisors and agents in connection with the
transactions contemplated by this Agreement so long as such persons are informed
by Parent of the confidential nature of such information and are directed by
Parent to treat such information confidentially. The obligation of Parent to
hold any such information in confidence shall be satisfied if it exercises the
same care with respect to such information as they would take to preserve the
confidentiality of its own similar information.
(e) If this Agreement is terminated in accordance with Section
8.1 hereof, Parent shall, and shall cause its accountants, counsel and other
representatives to immediately destroy or deliver to the Company all documents
and other material, and all copies thereof, obtained by Parent or on its behalf
from the Company in connection with this Agreement, whether so obtained before
or after the execution hereof, and will not disclose any such information or
documents to any third parties or make any use of such. If this Agreement is
terminated in accordance with Section 8.1 hereof, the Company shall, and shall
cause its accountants, counsel and other representatives to, immediately destroy
or deliver to Parent all documents and other material, and all copies thereof,
obtained by the Company or on its behalf from Parent in connection with this
Agreement, whether so obtained before or after the execution hereof, and will
not disclose any such information or documents to any third parties or make any
use of such.
SECTION 5.3 REASONABLE EFFORTS. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use all reasonable efforts
to take, or cause to be taken, all
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action and to do, or cause to be done, all things necessary, proper or advisable
under applicable laws and regulations expeditiously and practicably to
consummate and make effective the transactions contemplated by this Agreement,
including using its reasonable efforts to obtain all necessary actions or
non-actions, waivers, consents and approvals from governmental or regulatory
bodies and to effect all necessary registrations and filings.
SECTION 5.4 NO SOLICITATION. Unless and until this Agreement shall have
been terminated pursuant to Section 8.1 hereof, the Company agrees that it will
not directly or indirectly (or authorize its subsidiaries, agents, investment
bankers, officers, directors, employees, affiliates or representatives or any of
their respective family members to) solicit, entertain, negotiate or discuss
with any person or entity (other than Parent) the sale or licensing of the
Company's products (other than transactions consistent with the Company's
ordinary course of business) or the sale or transfer of the Company or the
Company's business, whether by asset sale, stock sale, merger or any other form
of business combination, joint venture or strategic alliance or enter into any
agreement or understanding with respect thereto. If the Company (or any of its
subsidiaries, agents, investment bankers, officers, directors, employees,
affiliates or representatives or any of their respective family members) shall
receive any bona fide offer or proposal concerning the above, such offer or
proposal shall be promptly delivered to Parent.
SECTION 5.5 PUBLIC ANNOUNCEMENTS. Parent and the Company will consult
with each other before issuing any press release or otherwise making any public
statements with respect to the transactions contemplated hereby and shall not
issue any such press release or make any such public statement prior to such
consultation, except as may be required by law.
SECTION 5.6 INSURANCE. The Company will use its best efforts to
maintain in force at the Effective Time policies of insurance of the same
character and coverage as those described in Section 4.19 of the Company
Disclosure Schedule and the Company will promptly notify Parent in writing of
any changes in such insurance coverage occurring prior to the Effective Time.
SECTION 5.7 POOLING. Parent, the Merger Sub, the Company and each of
the Company Shareholders shall use all reasonable efforts, shall cooperate fully
and shall take all actions as are reasonably necessary to allow the Merger and
other transactions contemplated by this Agreement to be accounted for as a
"pooling of interests" in accordance with United States generally accepted
accounting principles.
SECTION 5.8 SHAREHOLDER APPROVAL. The Company shall use its best
efforts to obtain the approval of the Merger, this Agreement and the
transactions contemplated herein by the Company Shareholders by means of a
shareholder solicitation in compliance with the terms and conditions of
Regulation D under the Securities Act.
SECTION 5.9 RESALE REGISTRATION STATEMENTS. Within sixty (60) days
after the Effective Time, Parent shall file a registration statement (the
"RESALE REGISTRATION STATEMENT") on Form S-3 registering fifty percent (50%) of
the shares of Parent Common Stock issued to each of the Company Shareholders
upon consummation of the Merger under the Securities Act and shall use all
commercially reasonable efforts to cause the Resale Registration Statement to be
declared effective by the Commission on, or as expeditiously as possible after,
the publication by Parent
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of financial results including at least thirty (30) days' post-Closing combined
results of operations of Parent and the Company and to cause such Resale
Registration Statement to remain effective until the first anniversary of the
Effective Time, all as more fully described in the Registration Rights
Agreement. Parent agrees to cause a registration statement under the Securities
Act on Form S-3 relating to the remaining fifty percent (50%) of the shares of
Parent Common Stock issued to each Company Shareholder pursuant to the Merger
Agreement to be filed within one year after the Closing Date, and shall use
commercially reasonable efforts to cause such registration statement to be
declared effective by the Commission as expeditiously as possible, and to
maintain the effectiveness of such registration statement for at least nine
months thereafter.
SECTION 5.10 REQUIRED NOTIFICATIONS. The Company shall, within a
reasonable time after the Closing, notify the parties to those contracts listed
in Section 4.6(a) of the Company Disclosure Schedule and identified as requiring
notification upon a merger or a change in control affecting the Company.
ARTICLE VI
CONDITIONS
SECTION 6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.
The respective obligations of each party to effect the Merger shall be subject
at its option to the fulfillment at or prior to the Effective Time of the
following conditions:
(a) this Agreement and the transactions contemplated hereby
shall have been approved and adopted by at least 95% in interest of the
shareholders of the Company;
(b) all statutory requirements for the valid consummation by
the Company, Parent and Merger Sub of the transactions contemplated by this
Agreement shall have been fulfilled; and all authorizations, waivers, consents,
approvals and actions of all federal and state governmental agencies and
authorities or other regulatory bodies required to be obtained in order to
permit consummation by the Company, the Company Shareholders, Parent and Merger
Sub of the transactions contemplated by this Agreement shall have been obtained,
without the imposition of a Burdensome Condition ("BURDENSOME CONDITION" shall
mean the imposition of a material restriction on Parent's ability to operate the
Company following the Effective Time or requiring the Parent to dispose of
assets of the Company or the Parent following the Effective Time), unless any of
the Parent, the Company Shareholders, or the Company voluntarily agrees to
satisfactorily resolve the Burdensome Condition;
(c) no court of competent jurisdiction shall have issued any
order, decree or injunction restraining or preventing the consummation of the
Merger or otherwise materially adversely affecting the transactions contemplated
by this Agreement;
(d) no investigation, action, suit or proceeding by any
governmental or regulatory commission, agency, body or authority, and no action,
suit or proceeding by any other
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person, firm, corporation or entity, shall be pending on the Closing Date which
challenges, or might reasonably be expected to result in a challenge to, this
Agreement or the Merger or any other transaction contemplated hereby, or which
claims, or might reasonably be expected to give rise to a claim for, damages in
a material amount as a result of the consummation of the Merger or any other
transaction contemplated hereby;
(e) the Company, the Indemnification Representative, Merger
Sub, and Parent shall have executed and delivered the Escrow Agreement in
substantially the form of Exhibit B.
SECTION 6.2 CONDITIONS TO OBLIGATION OF THE COMPANY AND THE COMPANY
SHAREHOLDERS TO EFFECT THE MERGER. The obligation of the Company and the Company
Shareholders to effect the Merger shall be subject at the option of the Company
to the fulfillment at or prior to the Effective Time of the following
conditions:
(a) Parent and Merger Sub shall have performed in all material
respects their agreements contained in this Agreement required to be performed
on or prior to the Effective Time; and the representations and warranties of
Parent and Merger Sub set forth in Article III hereof shall be true, correct and
complete as of the Effective Time as if made as of such time, except as
contemplated or permitted by this Agreement; and at the Closing the Company
shall have received certificates executed by the Presidents or Chief Executive
Officers of Parent and Merger Sub to the foregoing effects;
(b) no action, suit, claim, investigation or proceeding shall
be pending or threatened against the Parent or its properties and assets which,
if adversely determined, could reasonably be expected to have a material adverse
effect on the business, assets, condition (financial or otherwise) or result of
operations of Parent and its subsidiaries taken as a whole.
(c) at the Closing, there shall be delivered to the Company
and the Company Shareholders the opinion of Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP,
counsel for Parent and Merger Sub, dated the Closing Date, in form and substance
satisfactory to the Company and its counsel and substantially as set forth in
Exhibit C.
(d) Parent shall have executed a Registration Rights Agreement
(the "REGISTRATION RIGHTS AGREEMENT") in substantially the form of Exhibit D;
(e) all corporate and other proceedings to be taken by Parent
and Merger Sub in connection with the transactions contemplated hereby and all
documents incident thereto shall be satisfactory in form and substance to the
Company and its counsel, and the Company and its counsel shall have received all
such counterpart originals or certified or other copies of such documents as
they reasonably may request;
(f) at the Closing, the Company and its counsel shall have
received copies of the following documents:
(i) (A) the Articles of Organization and Certificate of
Incorporation of Parent and Merger Sub, respectively, certified as of a recent
date by the Secretary of the
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Commonwealth of the Commonwealth of Massachusetts and the Secretary of State of
the State of Delaware, and (B) a certificate of each said Secretary dated as of
a recent date as to the due incorporation and good standing of each of Parent
and Merger Sub, and listing all documents of each on file with said Secretary.
(ii) a certificate of the Clerk or Secretary of each of
Parent and Merger Sub dated the Closing Date and certifying: (A) that attached
thereto is a true and complete copy of the By-laws of the Parent and Merger Sub,
as the case may be, as in effect on the date of such certification; (B) that
attached thereto is a true and complete copy of all resolutions adopted by the
Board of Directors or the shareholders of Parent and Merger Sub, as the case may
be, authorizing the execution, delivery and performance of this Agreement and
the Merger, and that all such resolutions are in full force and effect and are
all the resolutions adopted in connection with the transactions contemplated by
this Agreement; (C) that the Articles of Organization or Certificate of
Incorporation of Parent and Merger Sub, as the case may be, have not been
amended since the date of the last amendment referred to in the certificate
delivered pursuant to clause (i)(B) above; and (D) to the incumbency and
specimen signature of each officer of Parent or Merger Sub, as the case may be,
executing this Agreement, and any certificate or instrument furnished pursuant
hereto, and a certification by another officer of Parent or Merger Sub, as the
case may be, as to the incumbency and signature of the officer signing the
certificate referred to in this clause.
(iii) a certificate of the President or Chief Financial
Officer of Parent dated the Closing Date and certifying as to the matters set
forth in Exhibit G.
(g) no material adverse change in the business, assets,
condition (financial or otherwise) or results of operations of Parent and its
subsidiaries taken as a whole shall have occurred; and
(h) the Company shall have the right to waive in writing any
of the foregoing conditions precedent.
SECTION 6.3 CONDITIONS TO OBLIGATIONS OF PARENT AND MERGER SUB TO
EFFECT THE MERGER. The obligations of Parent and Merger Sub to effect the Merger
shall be subject at the option of Parent and Merger Sub to the fulfillment at or
prior to the Effective Time of the following conditions:
(a) the Company and each of the Company Shareholders shall
have performed in all material respects its agreements contained in this
Agreement required to be performed on or prior to the Effective Time and the
representations and warranties of the Company and the Company Shareholders set
forth in Article IV and IVA hereof, respectively, shall be true, correct and
complete as of the Effective Time as if made as of such time other than
representations or warranties that speak as of a particular date, which shall
continue to be true, correct and complete as of such date, and except as
contemplated or permitted by this Agreement; and at the Closing Parent and
Merger Sub shall have received a certificate executed by the President of the
Company and each Company Shareholder executing a counterpart signature page to
this Agreement to the foregoing effects;
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(b) no action, suit, claim, investigation or proceeding shall
be pending or threatened against the Company or its properties and assets which,
if adversely determined, could reasonably be expected to have a material adverse
effect on the business, assets, condition (financial or otherwise) or results of
operations of the Company;
(c) At the Closing, there shall be delivered to Parent and
Merger Sub the opinion of Xxxxx, Xxxx & Xxxxx LLP, counsel for the Company and
the Company Shareholders, dated the Closing Date, in form and substance
satisfactory to Parent and Merger Sub and their counsel and substantially as set
forth in Exhibit E:
(d) Parent shall have received an unqualified written opinion
from Xxxxxx Xxxxxxxx, L.L.P., Parent's independent accountants, that both
parties to the Merger are poolable and that the Merger qualifies as a "pooling
of interests" under generally accepted accounting principles.
(e) the Company shall have received all Required Consents and
all consents, authorizations or approvals from the governmental agencies, as
well as all consents and waivers required under the Company's Restated
Certificate of Incorporation in each case in form and substance satisfactory to
Parent and Merger Sub and their counsel, and no such consent, authorization or
approval shall have been withdrawn;
(f) all corporate and other proceedings to be taken by the
Company in connection with the transactions contemplated hereby and all
documents incident thereto shall be satisfactory in form and substance to Parent
and Merger Sub and their counsel, and Parent and Merger Sub and their counsel
shall have received all such counterpart originals or certified or other copies
of such documents as they reasonably may request;
(g) At or prior to the Closing, Parent shall have received
copies of the following documents:
(i) (A) the Restated Certificate of Incorporation of the
Company and each subsidiary, certified as of a recent date by the Secretary of
State of the State of Delaware or a similar official in its jurisdiction of
incorporation and (B) a certificate of said Secretary dated as of a recent date
as to the due incorporation and good standing of the Company and each
subsidiary, and listing all documents of the Company and each subsidiary on file
with said Secretary.
(ii) A certificate of the Secretary of the Company dated
the Closing Date and certifying: (A) that attached thereto is a true and
complete copy of the By-laws of the Company and each subsidiary as in effect on
the date of such certification; (B) that attached thereto is a true and complete
copy of all resolutions adopted by the Board of Directors or the shareholders of
the Company authorizing the execution, delivery and performance of this
Agreement, and that all such resolutions are in full force and effect and are
all the resolutions adopted in connection with the transactions contemplated by
this Agreement; (C) that the Restated Certificate of Incorporation of the
Company has not been amended since the date of the
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last amendment referred to in the certificate delivered pursuant to clause
(i)(B) above; and (D) as to the incumbency and specimen signature of each
officer of the Company executing this Agreement, and any certificate or
instrument furnished pursuant hereto, and a certification by another officer of
the Company as to the incumbency and signature of the officer signing the
certificate referred to in this clause (ii).
(iii) Such additional supporting documents and other
information with respect to the operations and affairs of the Company as Parent
and Merger Sub or their counsel reasonably may request.
(h) Parent shall be satisfied, in its sole discretion after
consultation with its counsel, that the issuance of Parent Common Stock
hereunder shall have been conducted in compliance with Regulation D of the
Securities Act;
(i) The Company shall have furnished Parent with a true and
complete copy of the audited balance sheets of the Company as of December 31,
1996 and December 31, 1997 and the audited statements of operations,
shareholders' equity and cash flows for the twelve months ended December 31,
1996 and December 31, 1997 .
(j) The Company shall have delivered to Parent a properly
executed statement satisfying the requirements of Treasury Regulation Sections
1.897-2(h) and 1.1445-2(c)(3) in a form reasonably acceptable to Parent;
(k) No material adverse change in the business, assets,
condition (financial or otherwise) or results of operations of the Company or
any subsidiary shall have occurred since the date of this Agreement.
(l) Holders of Outstanding Company Shares representing at
least ninety-five percent (95%) of the voting power of Company Shares entitled
to approve the Merger and the form of this Agreement shall have executed and
delivered the Company's Shareholders' Consent in favor of the transactions
contemplated herein.
(m) Each of Xxxx Xxxxxx, Xxxx Xxxxxxx and Xxxxx Xxxxxxxxx
shall have executed an Employee Non-Disclosure, Invention and Covenant Not to
Compete Agreement in substantially the form of Exhibit F.
(n) With respect to all payments that would constitute "excess
parachute payments" (within the meaning of Section 280G of the Code) but for the
exceptions set forth in Sections 280G(b)(4) and 280G(b)(5) of the Code, the
Company shall obtain the shareholder approval described in Section 280G(b)(5)(B)
of the Code so that such payments will not be nondeductible under Section 280G
of the Code and will not be subject to the tax imposed under Section 4999 of the
Code.
(o) Parent and Merger Sub shall have the right in their sole
discretion to waive in writing any of the foregoing conditions precedent.
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(p) Each Company Shareholder shall have executed a counterpart
signature page to this Agreement and the Escrow Agreement for purposes of
Article IV, Article IV-A and Article VII.
ARTICLE VII
SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS;
INDEMNIFICATION
SECTION 7.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All
representations, warranties and covenants of the Company, Company Shareholders,
Parent and Merger Sub contained herein or in any schedule, document, written
statement, certificate or other instrument referred to herein or in the Escrow
Agreement shall survive the execution and delivery of this Agreement and the
Escrow Agreement, any investigation by or on behalf of the Company, the Company
Shareholders, Parent or Merger Sub, as the case may be, and the completion of
the transactions contemplated hereby and shall terminate on the first
anniversary of the Closing or, if sooner, the date of publication of audited
financial statements of Parent for the fiscal year ending December 31, 1999 (the
"INDEMNIFICATION TERMINATION DATE"); provided, however, that the aggregate
liability of each Company Shareholder under the Escrow Agreement shall be
limited as set forth in Section 1 of the Escrow Agreement; provided further,
however, that nothing in this Agreement or the Escrow Agreement shall be deemed
to limit any right or remedy for criminal activity or fraud, or to limit any
right or remedy against a Company Shareholder for breaches of covenants or
inaccuracies in any representations or warranties set forth in Section 4.18 or
Article IV-A hereof or the Registration Rights Agreement or for any expenses
incurred by Parent in connection with the Merger and on behalf of the Company in
excess of the limits set forth in Section 9.9 hereof.
ARTICLE VIII
TERMINATION; AMENDMENT AND WAIVER
SECTION 8.1 TERMINATION. This Agreement may be terminated at any time
prior to the Effective Time:
(a) By mutual written consent of Parent, Merger Sub and
Company;
(b) By Parent or Merger Sub, if there has been a material
breach of this Agreement on the part of the Company or any of the Company
Shareholders with respect to any of their covenants, representations or
warranties contained herein and such breach has not been cured by the earlier of
the time scheduled for the Closing under Section 1.6 hereof or within 10
business days after written notice thereof from Parent or Merger Sub;
(c) By Company, or a Company Shareholder if there has been a
material breach of this Agreement on the part of Parent or Merger Sub with
respect to any of their
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covenants, representations or warranties contained herein and such breach has
not been cured by the earlier of the time scheduled for the Closing under
Section 1.6 hereof or within 10 business days after written notice thereof from
Company; or
(d) By Parent, Merger Sub or by Company if, at or before the
Closing, any conditions set forth herein for the benefit of Parent, Merger Sub
or Company, as the case may be, (i) shall not have been timely met or (ii) shall
have become impossible to satisfy; or
(e) By Parent, Merger Sub or by Company if: (i) the Closing of
the transactions contemplated by this Agreement shall not have occurred on or
before May 15, 1999 or such later date as may have been agreed upon in writing
by the parties hereto; provided, that the right to terminate this Agreement
under this clause (i) shall not be available to any party if such party's breach
of any representation, warranty or agreement contained in this Agreement has
been the cause of or resulted in the failure of the Closing to occur on or
before such date; (ii) there shall be a final nonappealable order of a federal
or state court in effect preventing consummation of the Merger; (iii) there
shall be any action taken, or any statute, rule, regulation or order enacted,
promulgated or issued or deemed applicable to the Merger by any governmental
agency or entity which would make consummation of the Merger illegal; or (iv)
there shall be any action taken, or any statute, rule, regulation or order
enacted, promulgated or issued or deemed applicable to the Merger by any
governmental agency or entity, which would (A) prohibit Parent's or the
Company's ownership or operation of all or a material portion of the business of
the Company, or compel Parent or the Company to dispose of or hold separate all
or a material portion of the business or assets of the Company or Parent as a
result of the Merger or (B) render Parent, Merger Sub or the Company unable to
consummate the Merger.
The party desiring to terminate this Agreement shall give written
notice of such termination to the other parties.
SECTION 8.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement as provided above, this Agreement shall forthwith become void and
there shall be no liability on the part of either Parent, Merger Sub or the
Company, except (i) the provisions of Section 5.2(c) hereof shall survive
indefinitely; (ii) in the event this Agreement is terminated pursuant to Section
8.1(b), the reasonable, documented expenses incurred by the Parent on behalf of
the Parent shall be paid by the Company; and (iii) in the event this Agreement
is terminated pursuant to Section 8.1(c), the reasonable, documented expenses
incurred by the Company on behalf of the Company shall be paid by Parent. All
payments pursuant to this section shall be made within 30 days of a written
claim.
SECTION 8.3 AMENDMENT. This Agreement may not be amended except by an
instrument in writing signed on behalf of the Company, a majority of the Company
Shareholders and the Parent.
SECTION 8.4 WAIVER. At any time prior to the Effective Time, the
Company and Parent may (a) extend the time for the performance of any of the
obligations or other acts of the parties hereto, (b) waive any inaccuracies in
the representations and warranties contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any of the agreements or
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conditions contained herein. Any agreement on the part of the party hereto to
any such extension or waiver shall be valid if set forth in an instrument in
writing signed on behalf of such party.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.1 BROKERS. Except for NationsBanc Xxxxxxxxxx Securities LLC,
neither the Company nor the Company Shareholders have retained any investment
banker, broker, finder or other intermediary to act on behalf of such party and
who may be entitled to a fee or commission from the Parent or the Company, or
any affiliate thereof, in connection with, or upon consummation of, the
transactions contemplated by this Agreement.
SECTION 9.2 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given if delivered in
person, by overnight courier, electronic facsimile or telex (and shall be deemed
to have been duly given on the date of delivery if so given), or by first class
mail (postage prepaid) (and shall be deemed to have been duly given the second
business day after the date of the postmark if so given) to the respective
parties as follows:
If to Parent or Merger Sub:
Excel Switching Corporation
000 Xxxxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
If to the Company:
RAScom, Inc.
0 Xxxxxxxxxx Xxx
Xxxxx, XX 00000
If the Indemnification Representative:
Xxxx Xxxxxx
RAScom, Inc.
0 Xxxxxxxxxx Xxx
Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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If the Indemnification Escrow Agent:
State Street Bank and Trust
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Corporate Trust Department
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of changes of address shall
only be effective upon receipt.
SECTION 9.3 SUBSIDIARIES. When a reference is made in this Agreement to
subsidiaries of Parent or the Company, the word "SUBSIDIARIES" means any
corporation or other entity of which voting securities possessing voting power
sufficient to elect a majority of the Board of Directors or similar body are, at
the time which any determination is being made, beneficially owned by Parent or
Company, as the case may be.
SECTION 9.4 HEADINGS. The descriptive headings in this Agreement have
been inserted for convenience only and shall not be deemed to limit or otherwise
affect the construction of any provision hereof.
SECTION 9.5 ENTIRE AGREEMENT; ASSIGNMENT. This Agreement, including the
Parent and Company Disclosure Schedules, the Escrow Agreement and the
Registration Rights Agreement constitute the entire agreement among the parties
with respect to the subject matter hereof and thereof and supersede all other
prior agreements and understandings, both written and oral, among the parties or
any of them with respect to the subject matter hereof and thereof. This
Agreement shall not be assigned by operation of law or otherwise.
SECTION 9.6 PARTIES IN INTEREST. This Agreement shall be binding upon
and inure solely to the benefit of the parties hereto, and nothing in this
Agreement, express or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
SECTION 9.7 VALIDITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, each of which shall remain in full force
and effect, provided that enforcement of such other provisions in the absence of
the invalid or unenforceable provisions does not deprive either the Company, the
Company Shareholders or Parent of the benefit of the bargain.
SECTION 9.8 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
shall constitute one and same Agreement.
SECTION 9.9 EXPENSES. Except as provided in Section 8.2, all costs and
expenses incurred in connection with the transactions contemplated by this
Agreement shall be paid by Parent if such costs and expenses were incurred on
behalf of Parent, its shareholders or Merger Sub and by the Company Shareholders
if such costs and expenses were incurred on behalf of the
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Company or the Company Shareholders; all fees and expenses of Xxxxxx Xxxxxxxx,
L.L.P. shall be deemed to be incurred on behalf of Parent. If the Merger is
consummated, Parent shall pay (i) the reasonable, documented expenses incurred
by the Company for accountants and attorneys incurred on behalf of the Company
and in connection with the Merger up to a maximum amount not to exceed $125,000,
and (ii) the fee of NationsBanc Xxxxxxxxxx Securities LLC in connection with the
Merger, which fee shall be $750,000; provided, any amounts in excess of such
$125,000 or $750,000 amount, as applicable, shall be borne by the Company
Shareholders and not the Company, Merger Sub or Parent and shall be paid in full
at the Closing. To the extent such expenses in excess of $875,000 become a
liability or debt of the Company, Merger Sub or Parent, such excess shall be
offset against the Indemnification Escrow Shares. Except as provided in Section
8.2, in the event the Merger is not consummated, all costs and expenses incurred
by the Company shall be paid by the Company.
SECTION 9.10 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
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IN WITNESS WHEREOF, Parent, Merger Sub, the Company, the Company
Shareholders and the Indemnification Representative have caused this Agreement
to be signed by their respective officers thereunto duly authorized, and their
respective seals to be affixed hereto, as of the date first written above.
EXCEL SWITCHING CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------
Title: President and Chief
Executive Officer
---------------------------
RACEPOINT ACQUISITION CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------
Title: President
---------------------------
RASCOM, INC.
By: /s/ Xxxx X. Xxxxxx
-----------------------------
Title: President
---------------------------
/s/ Xxxx X. Xxxxxx
----------------------------------
Name: Xxxx X. Xxxxxx
as Indemnification Representative
Company Shareholders:
/s/ Xxxx X. Xxxxxx
----------------------------------
Xxxx Xxxxxx
Address: 00 Xxxxxx Xxxxx Xxxx
Xxxx Xxxxxxxxx, XX 00000
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/s/ Xxxxx X. Xxxxxx
/s/ Xxxxxx Xxxxxx
----------------------------------
Xxxxx X. Xxxxxx and Xxxxxx Xxxxxx
Address: 000 Xx. Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
/s/ Xxxxx X. Xxxxx
----------------------------------
Xxxxx X. Xxxxx
Address: 00 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
/s/ Xxxxx X. Xxxx
----------------------------------
Xxxxx X. Xxxx
Address: 00 Xxxxxxxxx Xxxx
Xxxxx, XX 00000
/s/ Xxxxxx X. Xxxxxx
----------------------------------
Xxxxxx X. Xxxxxx
Address: 00 Xxx Xxxxxxxx
Xxxxx, XX 00000
/s/ X.X. Xxxx
----------------------------------
X.X. Xxxx
Address: 00 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
XXXXXXX RIVER PARTNERSHIP VII
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
By: /s/ Xxxxxxx Xxx
------------------------------
Title: General Partner
---------------------------
/s/ Xxxxx Xxxxxxx
----------------------------------
Xxxxx Xxxxxxx
Address: 000 Xxxx Xxxxxx
Xxxxx Xxxxxxx, XX 00000
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/s/ Xxxxxx X. Xxxxxx
----------------------------------
Xxxxxx X. Xxxxxx
Address: 00 Xxxx Xxxx Xxxx
Xxxxxx, XX 00000
/s/ Xxxxxx X. Los
----------------------------------
Xxxxxx X. Los
Address: 0 Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
FIRST ALBANY CORPORATION
CUSTODIAN FBO XXXXX X. XXXXXXXX XXX
0 Xxxxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
By: /s/ Xxxxxxx Xxxxxx
-----------------------------
Title: Supervisor
---------------------------
By: /s/ Xxxxx Xxxxxxx
-----------------------------
Title: Guarantor
---------------------------
/s/ Xxxxxxxx Xxxxx
----------------------------------
Xxxxxxxx Xxxxxx
Address: X.X. Xxx 000
Xxxxx, XX 00000
/s/ Xxxxxx X. Xxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxx
Address: 0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
/s/ Xxxxxxx X. Xxxxxxx
----------------------------------
Xxxxxxx X. Xxxxxxx
Address: 00 Xxxxx Xxxx Xxxx
Xxxxx, XX 00000
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HARBOURVEST PARTNERS V -
DIRECT FUND L.P.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
By: HVP V - Direct Associates L.L.C.
Its: General Partner
By: Harbour Vest Partners, LLC
Its: Managing Member
By: /s/ Xxxx Xxxxxxxxxx
-----------------------------
Title: Managing Director
---------------------------
/s/ Xxxxx Xxxxxx
----------------------------------
Xxxxx Xxxxxx
Address: 00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
INTERSTOCK ANSTALT
Xxxxxxxxxxx 00
P.O. Box 339
FL-9490 Vaduz
XXXXXXXXXXXX
By: /s/ Xxxxx Xxxxxxxx
/s/ Xxxxx Xxxxxx
-------------------------------
Title: Directors
----------------------------
/s/ Xxxxx X. Xxxxxxxx
----------------------------------
Xxxxx X. Xxxxxxxx
Address:
/s/ Xxxxxxx X. Xxxxxx
----------------------------------
Xxxxxxx X. Xxxxxx
Address: 00 Xxxxxxxxx Xxxx
Xxxxxx, XX 00000
/s/ Xxxxxx X. Xxxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxxx
Address: 00 Xxxx Xxxxxx
Xxxxxxx, XX 00000
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/s/ Xxxxxx X. Xxxxxx
----------------------------------
Xxxxxx X. Xxxxxx
Address: 00 Xxxxxxx Xxxxxx, #000
Xxxxxxxxx, XX 00000
/s/ Xxxxxxx Xxxxxx
----------------------------------
Xxxxxxx Xxxxxx
Address: 000 Xxxxxxxxx Xxxx Xxxx
Xxxxxxx, XX 00000
/s/ Xxxxxxx X. Xxxxx
----------------------------------
Xxxxxxx X. Xxxxx
Address: 00 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
/s/ Xxxxx X. Xxxxx
/s/ Xxxxxxx X. Xxxxx
----------------------------------
Xxxxx X. and Xxxxxxx X. Xxxxx
Address: 00 Xxxxxx Xxxxx
Xxxxxx, Xxxxxxx X0X 0X0
XXXXXX
/s/ Xxxxx Xxxx
----------------------------------
Xxxxx Xxxx
Address: 00 Xxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
/s/ Xxxxxxxx X. Xxxx
----------------------------------
Xxxxxxxx X. Xxxx
Address: 0 Xxxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
-48-
LE SERRE
c/o Xxxxx X. Xxxxxxxx
Ascent Venture Management, Inc.
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
By: /s/ Xxxxx Xxxxxxxx
------------------------------
Title: Partner
---------------------------
/s/ Xxxxx Xxxxx
----------------------------------
Xxxxx Xxxxx
Address: 00 Xxxxxx Xxxxx Xxxx
Xxxxxx, XX 00000
/s/ Xxxxx Xxxxxx
----------------------------------
Xxxxx Xxxxxx
Address: 00 Xxxxxx Xxxx
Xxxxxxx, XX 00000
/s/ Xxxxxx Xxxxxx
----------------------------------
Xxxxxx Xxxxxx
Address: 0 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
/s/ Xxxxx Xxx
/s/ Xxxxxxxx Xxx
----------------------------------
Xxxxx and Xxxxxxxx Xxx
Address: 000 Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
/s/ Xxxxxxx Xxxxx
----------------------------------
Xxxxxxx Xxxxx
Address: 00 Xxxxx Xxxx
Xxxxxxxx Xxxx, XX 00000
/s/ Xxxxxxx X. Xxxx
----------------------------------
Xxxxxxx X. Xxxx
Address: 00 Xxxx Xxxx
Xxxxx, XX 00000
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/s/ Xxxxxxx Xxxxxx
/s/ Xxxxx X. Xxxxxxxxx
----------------------------------
Xxxxxxx Xxxxxx and Xxxxx X. Xxxxxxxxx
Address: 00 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
/s/ Xxxxxx X. Xxxxxx
----------------------------------
Xxxxxx X. Xxxxxx
Address: 00 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
/s/ Xxxxx Xxxxxxxxxxx
----------------------------------
Xxxxx Xxxxxxxxxxx
Address: 0 Xxxxxxx Xxxxxx, Xxx. 00
Xxxxxxxxxx, XX 00000
/s/ Xxxxx X. Xxxx
----------------------------------
Xxxxx X. Xxxx
Address: 0 Xxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
/s/ Xxxxxx Xxxxxx
/s/ Xxxxxxx Xxxxxx
----------------------------------
Xxxxxx Xxxxxx and Xxxxxxx Xxxxxx
Address: 74 Governor Xxxxxxxx
Xxxxxxx, XX 00000
PCC TRANSFER LIMITED
PARTNERSHIP
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
By: /s/ Xxxxx Xxxxxxxx
------------------------------
Title: Manager
---------------------------
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PIONEER VENTURES LIMITED
PARTNERSHIP II
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
By: /s/ Xxxxx Xxxxxxxx
------------------------------
Title: President
---------------------------
/s/ R. Xxxxxxx Xxxxxxx
----------------------------------
R. Xxxxxxx Xxxxxxx
Address: 000 Xxxx'x Xxx
Xxxxxxx, XX 00000
/s/ Xxxx X. Xxxxxxx
----------------------------------
Xxxx X. Xxxxxxx
Address: 000 Xxxxxxxxx Xxxx
Xxxxxxx, XX 00000
/s/ Xxxxxx X. Xxxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxxx
Address: 0 Xxxxxxxxxxxx Xxxxxx
Xxxxx, XX 00000
/s/ Xxxxxx X. Xxxxxxxx
/s/ Xxxxx X. Xxxxxxxx
----------------------------------
Xxxxxx X.Xxxxxxxx and Xxxxx X.Xxxxxxxx,
JTWROS
Address: 0 Xxxxxxxxxxxx Xxxxxx
Xxxxx, XX 00000
-51-
/s/ Xxxxxx X. Xxxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxxx
Address: c/o Nordblom Company
00 Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
/s/ Xxx Xxxxxx
----------------------------------
Xxx Xxxxxx
Address: 00000 X.X. 000xx Xxxxx
Xxxxx Xxxx, XX 00000
/s/ Xxxxx Xxxxxx
----------------------------------
Xxxxx Xxxxxx
Address: 000 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
/s/ Xxxxxx Xxxxxxxx
----------------------------------
Xxxxxx Xxxxxxxx
Address: Xxxxxxxxxx 0X
00000 Xxxxxx
XXXXXXX
/s/ Xxxxxx X. Xxxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxxx
Address: 0 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
SVE STAR VENTURES ENTERPRISES NO. V,
a German Civil Law Partnership
(with Limitation of Liability)
Xxxxxxx Xxxxxxx 0
X-00000 Xxxxxx
XXXXXXX
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
Its: Managing Partner
By: /s/ Xxxx Xxxxx
------------------------------
Title: Managing Director
---------------------------
-52-
SVM STAR VENTURES
MANAGEMENTGESELLSCHAFT MBH
Nr. 3 & Co. XX
Xxxxxxx Xxxxxxx 0
X-00000 Xxxxxx
XXXXXXX
By: SVM Star Ventures
Managementgesellschaft mbH Nr. 3
Its: Managing Partner
By: /s/ Xxxx Xxxxx
------------------------------
Title: Managing Partner
---------------------------
/s/ Xxxxx X. Xxxxx
----------------------------------
Xxxxx X. Xxxxx
Address: 0 Xxxxx Xxxxxx
Xxxxx, XX 00000
THE MHF SYLVAN FUND
00 Xxxxxx Xxxx
Xxxxxx, XX 00000
By: /s/ Xxxxxx Xxxx
------------------------------
Title: Trustee
---------------------------
/s/ Xxxxxx X. Xxxxxxxx, Xx.
----------------------------------
Xxxxxx X. Xxxxxxxx, Xx.
Address: 00 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
/s/ Xxxxxx X. Xxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxx
Address: 00 Xxxx Xxxx
Xxxxxxx, XX 00000
-53-
WATERLINE CAPITAL, LLC
c/o Xxxxxxxxx X. Xxxxxx
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
By: /s/ Xxxxxxxxx X. Xxxxxx
------------------------------
Title: Managing Director
---------------------------
/s/ Xxxxxxx Xxxxxxxx
----------------------------------
Xxxxxxx Xxxxxxxx
Address:
/s/ Xxxxxx X. Xxxxxx
----------------------------------
Xxxxxx X. Xxxxxx
Address: 000 Xxxxx Xxxx
Xxxxxxxx, XX 00000
XXXXXX XXXXXX STESS TRUST
c/o Xxxxxxx Xxxxx
By: /s/ Xxxxxxx Xxxxx
------------------------------
Title: Trustee
---------------------------
In accordance with Item 601 (b)(2) of Regulation S-K, the Schedules and certain
Exhibits to this Agreement have not been filed. Specifically, the Parent
Disclosure Schedule and the Company Disclosure Schedule (as those terms are
defined in the Merger Agreement) have been omitted. The omitted schedules
principally contain disclosure information with respect to Excel and RAScom
which supplement both Excel's and RAScom's representations and warranties and
consist of, among other things, various corporate matters, financial matters,
liabilities, properties, employee matters, material contracts, and other
matters. In addition, Exhibit A (Certificate of Merger), Exhibit C (Form of
Opinion to be issued by Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP), Exhibit E (Form of
Opinion to be issued by Xxxxx, Xxxx & Xxxxx LLP), Exhibit F (Form of Employee
Non Disclosure, Invention & Covenant Not to Compete Agreement) and Exhibit G
(Form of Representation by President or Chief Financial Officer of Excel) have
been omitted. Exhibit G contains representations of Excel concerning certain tax
matters. The Registrant hereby agrees to furnish supplementally a copy of any
omitted schedule or exhibit to the Commission upon request.
