EXHIBIT 99.1(A)
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
AGILENT TECHNOLOGIES, INC.,
TAHOE ACQUISITION CORP.
AND
OBJECTIVE SYSTEMS INTEGRATORS, INC.
TABLE OF CONTENTS
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ARTICLE I THE OFFER............................................................................. 1
1.1 The Offer............................................................................ 1
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1.2 Company Actions...................................................................... 3
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1.3 Boards of Directors and Committees; Section 14(f) of Exchange Act.................... 5
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ARTICLE II THE MERGER............................................................................ 6
2.1 The Merger........................................................................... 6
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2.2 Effective Time; Closing.............................................................. 6
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2.3 Effect of the Merger................................................................. 6
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2.4 Certificate of Incorporation; Bylaws................................................. 6
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2.5 Directors and Officers............................................................... 7
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2.6 Effect on Capital Stock.............................................................. 7
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2.7 Surrender of Certificates............................................................ 8
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2.8 No Further Ownership Rights in Company Common Stock.................................. 9
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2.9 Lost, Stolen or Destroyed Certificates............................................... 9
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2.10 Dissenters' Rights................................................................... 9
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2.11 Taking of Necessary Action; Further Action........................................... 9
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ARTICLE III REPRESENTATIONS AND WARRANTIES OF COMPANY............................................. 9
3.1 Organization and Qualification; Subsidiaries......................................... 10
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3.2 Certificate of Incorporation and Bylaws.............................................. 10
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3.3 Capitalization....................................................................... 11
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3.4 Authority Relative to this Agreement................................................. 12
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3.5 No Conflict; Required Filings and Consents........................................... 13
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3.6 Compliance; Permits.................................................................. 13
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3.7 SEC Filings; Financial Statements.................................................... 14
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3.8 No Undisclosed Liabilities........................................................... 15
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3.9 Absence of Certain Changes or Events................................................. 15
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3.10 Absence of Litigation................................................................ 16
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3.11 Employee Matters and Benefit Plans................................................... 16
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3.12 Proxy Statement...................................................................... 21
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3.13 Restrictions on Business Activities.................................................. 22
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3.14 Title to Property.................................................................... 22
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3.15 Taxes................................................................................ 23
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3.16 Brokers.............................................................................. 24
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3.17 Intellectual Property................................................................ 25
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3.18 Agreements, Contracts and Commitments................................................ 26
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3.19 Opinion of Financial Advisor......................................................... 27
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3.20 Insurance............................................................................ 27
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3.21 State Takeover Statutes.............................................................. 28
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TABLE OF CONTENTS
(continued)
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3.22 Application of California Statute................................................... 28
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB.............................. 28
4.1 Organization and Qualification; Subsidiaries........................................ 28
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4.2 Certificate of Incorporation and Bylaws............................................. 28
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4.3 Authority Relative to this Agreement................................................ 29
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4.4 No Conflict; Required Filings and Consents.......................................... 29
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4.5 Funds............................................................................... 30
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4.6 Share Ownership..................................................................... 30
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4.7 Ownership of Merger Sub; No Prior Activities........................................ 30
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4.8 Brokers or Finders.................................................................. 30
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ARTICLE V CONDUCT PRIOR TO THE EFFECTIVE TIME.................................................. 30
5.1 Conduct of Business by Company...................................................... 30
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ARTICLE VI ADDITIONAL AGREEMENTS................................................................ 33
6.1 Proxy Statement..................................................................... 33
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6.2 Stockholder Meetings................................................................ 34
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6.3 Confidentiality; Access to Information.............................................. 35
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6.4 No Solicitation..................................................................... 35
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6.5 Public Disclosure................................................................... 37
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6.6 Commercially Reasonable Efforts; Notification....................................... 37
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6.7 Third Party Consents................................................................ 38
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6.8 Stock Options and Employee Benefits................................................. 38
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6.9 Adjustments to Exchange Ratio....................................................... 40
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6.10 [Intentionally omitted.............................................................. 40
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6.11 Indemnification..................................................................... 40
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6.12 Regulatory Filings; Reasonable Efforts.............................................. 41
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ARTICLE VII CONDITIONS TO THE MERGER............................................................. 41
7.1 Conditions.......................................................................... 41
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ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER.................................................... 41
8.1 Termination......................................................................... 41
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8.2 Notice of Termination; Effect of Termination........................................ 43
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8.3 Fees and Expenses................................................................... 43
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8.4 Amendment........................................................................... 44
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8.5 Extension; Waiver................................................................... 44
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TABLE OF CONTENTS
(continued)
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ARTICLE IX GENERAL PROVISIONS.................................................................... 45
9.1 Non-Survival of Representations and Warranties....................................... 45
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9.2 Notices.............................................................................. 45
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9.3 Interpretation; Knowledge............................................................ 46
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9.4 Counterparts......................................................................... 47
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9.5 Entire Agreement; Third Party Beneficiaries.......................................... 47
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9.6 Severability......................................................................... 47
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9.7 Other Remedies; Specific Performance................................................. 48
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9.8 Governing Law........................................................................ 48
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9.9 Rules of Construction................................................................ 48
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9.10 Assignment........................................................................... 48
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9.11 WAIVER OF JURY TRIAL................................................................. 48
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER is made and entered into as of November
24, 2000, by and among Agilent Technologies, Inc., a Delaware corporation
("Parent"), Tahoe Acquisition Corp., a Delaware corporation and a wholly-owned
subsidiary of Parent ("Merger Sub"), and Objective Systems Integrators, Inc., a
Delaware corporation (the "Company" or "Company").
RECITALS
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A. The Boards of Directors of the Company, Parent and Merger Sub have
each (i) determined that the Merger (as defined in Section 2.1) is advisable and
fair and in the best interests of their respective stockholders and (ii)
approved the Merger upon the terms and subject to the conditions set forth in
this Agreement;
B. In furtherance thereof, it is proposed that Merger Sub shall, as
promptly as practicable, commence a tender offer (the "Offer") to acquire all of
the outstanding shares (the "Shares") of Company Common Stock (as defined in
Section 2.6), at a price of Seventeen Dollars and Seventy Five Cents ($17.75)
per Share, net to the seller in cash (such amount, or any greater amount per
share paid pursuant to the Offer, being hereinafter referred to as the "Offer
Price"), in accordance with the terms and subject to the conditions provided
herein; and
C. Concurrently with the execution of this Agreement, as a condition and
inducement to Parent's willingness to enter into this Agreement, certain
affiliates of Company are entering into Tender and Voting Agreements in
substantially the form attached hereto as Exhibit A (the "Company Tender and
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Voting Agreements").
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, the Company, Parent and Merger Sub hereby
agree as follows:
ARTICLE I
THE OFFER
1.1 The Offer.
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(a) Provided that this Agreement shall not have been terminated and
subject to the terms hereof, as promptly as practicable, but in no event later
than ten business days after the date hereof, Merger Sub shall (and Parent shall
cause Merger Sub to) commence (within the meaning of Rule 14d-2 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")), the Offer for
any and all of the Shares, at the Offer Price. The obligation of Merger Sub to
accept for payment and to pay for any Shares tendered (and the obligation of
Parent to cause Merger Sub to accept for payment and to pay for any Shares
tendered) shall be subject only to (i) the condition that each of (A) a majority
of Shares on a fully-diluted basis (including for purposes of such calculation
all Shares issuable upon exercise of all vested Company Stock Options (as
defined in Section 6.8(a)) and unvested Company Stock Options that vest prior to
the End Date (as defined in Section 8.1, but excluding any Shares held by the
Company or any of its subsidiaries) and (B) a majority of those Shares not held
by persons who have executed Company Tender and Voting Agreements be validly
tendered (but excluding any Shares held by Parent, Merger Sub or their
respective affiliates) (collectively, the "Minimum Condition"), and (ii) the
other conditions set forth in Annex A. Merger Sub expressly reserves the right
to increase the Offer Price or to make any other changes in the terms and
conditions of the Offer; provided, however, that unless previously approved by
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the Company in writing, no change may be made that (i) decreases the Offer
Price, (ii) changes the form of consideration to be paid in the Offer, (iii)
reduces the maximum number of Shares to be purchased in the Offer, (iv) imposes
any other conditions to the Offer or amends the conditions set forth in Annex A
to broaden the scope of such conditions, (v) extends the Offer except as
provided in Section 1.1(b), (vi) amends or waives the Minimum Condition or (vii)
amends any other terms of the Offer in a manner adverse to the holders of the
Shares. It is agreed that the conditions set forth in Annex A are for the sole
benefit of Parent and Merger Sub and may be waived by Parent and Merger Sub, in
whole or in part at any time and from time to time, in their sole discretion,
other than the Minimum Condition, as to which prior written Company approval is
required. The failure by Parent and Merger Sub at any time to exercise any of
the foregoing rights shall not be deemed a waiver of any such right, and each
such right shall be deemed an ongoing right that may be asserted at any time and
from time to time. The Company agrees that no Shares held by the Company or any
of its subsidiaries will be tendered in the Offer.
(b) Subject to the terms and conditions thereof, the Offer shall
expire at midnight, New York Time, on the date that is twenty (20) business days
after the date the Offer is commenced; provided, however, that without the
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consent of the Company's Board of Directors (the "Company Board"), Merger Sub
may (i) from time to time extend the Offer, if at the scheduled expiration date
of the Offer any of the conditions to the Offer shall not have been satisfied or
waived, until such time as such conditions are satisfied or waived; (ii) extend
the Offer for any period required by any rule, regulation, interpretation or
position of the Securities and Exchange Commission (the "SEC") or the staff
thereof applicable to the Offer; (iii) if the number of Shares tendered pursuant
to the Offer is less than 90% of the outstanding Shares but at least 80% of the
outstanding Shares, extend the Offer for any reason on one or more occasions for
an aggregate period of not more than ten (10) business days beyond the latest
expiration date that would otherwise be permitted under clause (i) or (ii) of
this sentence if on such expiration date there shall not have been tendered (and
not properly withdrawn) at least 90% of the outstanding Shares; or (iv) include
a subsequent offering period (as such term is defined in Rule 14d-1 under the
Exchange Act) to the Offer for a period up to twenty (20) business days. Parent
and Merger Sub agree that, if any one or more of the conditions to the Offer set
forth on Annex A are not satisfied and none of the events set forth in
paragraphs (b), (d), (e) or (h) of Annex A that would permit Merger Sub not to
accept tendered Shares for payment has occurred and is continuing at the time of
any scheduled expiration date of the Offer, then, provided that such conditions
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are reasonably capable of being satisfied in Parent and Merger Sub's reasonable
judgment, Merger Sub shall, at the request of the Company, extend the Offer from
time to time unless any such condition is no longer reasonably capable of being
satisfied or any such event has
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occurred; provided, however, that in no event shall Merger Sub be required to
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extend the Offer beyond January 31, 2001. Subject to the terms and conditions of
the Offer and this Agreement, Merger Sub shall (and Parent shall cause Merger
Sub to) accept for payment, and pay for, all Shares validly tendered and not
withdrawn pursuant to the Offer that Merger Sub becomes obligated to accept for
payment and pay for pursuant to the Offer, as promptly as practicable after the
expiration of the Offer.
(c) As soon as practicable on the date the Offer is commenced, Parent
and Merger Sub shall file with the SEC a Tender Offer Statement on Schedule TO
(together with all amendments and supplements thereto, and including all
exhibits thereto, the "Schedule TO") with respect to the Offer. The Schedule TO
shall contain as an exhibit or incorporate by reference the Offer to Purchase
(or portions thereof) and forms of the related letter of transmittal and summary
advertisement. Parent and Merger Sub agree that they shall cause the Schedule
TO, the Offer to Purchase and all amendments or supplements thereto (which
together constitute the "Offer Documents") to comply in all material respects
with the Exchange Act and the rules and regulations thereunder and other Legal
Requirements (as defined in Section 3.3). Parent and Merger Sub further agree
that the Offer Documents, on the date first published, sent or given to the
Company's stockholders, shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that no representation or
warranty is made by Parent or Merger Sub with respect to information supplied by
the Company or any of its stockholders in writing specifically for inclusion or
incorporation by reference in the Offer Documents. The Company agrees that the
information provided by the Company in writing specifically for inclusion or
incorporation by reference in the Offer Documents shall not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. Each of Parent,
Merger Sub and the Company agrees promptly to correct any information provided
by it for use in the Offer Documents if and to the extent that such information
shall have become false or misleading in any material respect, and Parent and
Merger Sub further agree to take all steps necessary to cause the Schedule TO as
so corrected to be filed with the SEC and the other Offer Documents as so
corrected to be disseminated to the Company's stockholders, in each case as and
to the extent required by applicable federal securities laws. The Company and
its counsel shall be given reasonable opportunity to review and comment on the
Offer Documents prior to the filing thereof with the SEC. Parent and Merger Sub
agree to provide in writing to the Company and its counsel with any comments
Parent, Merger Sub or their counsel may receive from the SEC or its staff with
respect to the Offer Documents promptly after receipt of such comments.
1.2 Company Actions.
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(a) The Company hereby approves of and consents to the Offer and
represents that the Company Board, at a meeting duly called and held, has,
subject to the terms and conditions set forth herein, (i) after evaluating the
Merger, determined that this Agreement and the transactions contemplated hereby,
including the Offer and the Merger, taken together, are at a price and on terms
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that are fair to and in the best interests of the Company and its stockholders;
(ii) approved this Agreement and the transactions contemplated hereby, including
the Offer and the Merger, in all respects; and (iii) resolved to recommend that
the stockholders of the Company accept the Offer, tender their Shares thereunder
to Merger Sub and approve and adopt this Agreement and the Merger, in each case,
subject to the right of the Company Board to withhold, withdraw, amend or modify
its recommendation and to recommend a Superior Proposal in accordance with the
terms of Section 6.4. To the extent that such recommendation is not so withheld,
withdrawn, amended or modified, the Company consents to the inclusion of such
recommendation and approval in the Offer Documents.
(b) The Company shall file with the SEC, concurrently with the filing
of the Schedule TO, a Solicitation/Recommendation Statement on Schedule 14D-9
(together with all amendments and supplements thereto, and including all
exhibits thereto, the "Schedule 14D-9") containing the recommendations described
in and subject to Section 1.2(a) and shall cause the Schedule 14D-9 to be mailed
to the stockholders of the Company, together with the Offer Documents, promptly
after the commencement of the Offer. The Company agrees that it shall cause the
Schedule 14D-9 to comply in all material respects with the Exchange Act and the
rules and regulations thereunder and other Legal Requirements. The Company
further agrees that the Schedule 14D-9, on the date first published, sent or
given to the Company's stockholders, shall not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation or warranty is made by the Company with respect to information
supplied by Parent or Merger Sub in writing specifically for inclusion or
incorporation by reference in the Schedule 14D-9. Parent and Merger Sub agree
that the information provided by them specifically in writing for inclusion or
incorporation by reference in the Schedule 14D-9 shall not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. Each of the
Company, Parent and Merger Sub agrees promptly to correct any information
provided by it for use in the Schedule 14D-9 or the Offer Documents if and to
the extent that such information shall have become false or misleading in any
material respect, and the Company further agrees to take all steps necessary to
cause the Schedule 14D-9 as so corrected to be filed with the SEC and be
disseminated to the Company's stockholders, in each case as and to the extent
required by applicable federal securities laws. Parent and its counsel shall be
given reasonable opportunity to review and comment on the Schedule 14D-9 prior
to the filing thereof with the SEC. The Company agrees to provide in writing to
Parent and its counsel any comments the Company or its counsel may receive from
the SEC or its staff with respect to the Schedule 14D-9 promptly after receipt
of such comments.
(c) In connection with the Offer, the Company shall, or shall cause
its transfer agent, promptly following a request by Parent, to furnish Parent
with such information, including updated lists of the stockholders of the
Company, mailing labels and updated lists of security positions, and such
assistance as Parent or its agents may reasonably request in communicating the
Offer to the record and beneficial holders of Shares. Subject to any Legal
Requirements, and except for such steps as are necessary to disseminate the
Offer Documents and any other documents
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necessary to consummate the Merger, Parent and Merger Sub and their agents shall
hold in confidence the information contained in any such labels, listings and
files, will use such information only in connection with the Offer and the
Merger and, if this Agreement shall be terminated, will deliver, and will use
their reasonable efforts to cause their agents to deliver, to the Company all
copies and any extracts or summaries from such information then in their
possession or control.
(d) Solely in connection with the tender and purchase of Shares
pursuant to the Offer and the consummation of the Merger, the Company hereby
waives any and all rights of first refusal it may have with respect to Shares
owned by, or issuable to, any person, other than rights to repurchase unvested
shares, if any, that may be held by persons pursuant to the grant of restricted
stock purchase rights or following exercise of employee stock options.
1.3 Boards of Directors and Committees; Section 14(f) of Exchange Act.
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(a) Promptly upon the purchase by Merger Sub of Shares pursuant to
the Offer and from time to time thereafter, if the Minimum Condition has been
met, and subject to the second to last sentence of this Section 1.3(a), Parent
shall be entitled to designate up to such number of directors, rounded up to the
next whole number, on the Company Board as will give Parent representation on
the Company Board equal to the product of the number of directors on the Company
Board (giving effect to any increase in the number of directors pursuant to this
Section 1.3) and the percentage that such number of Shares so purchased bears to
the total number of outstanding Shares, and the Company shall use its best
efforts to, upon request by Parent, promptly, at the Company's election, either
increase the size of the Company Board or secure the resignation of such number
of directors as is necessary to enable Parent's designees to be elected to the
Company Board and to cause Parent's designees to be so elected. At such times,
and subject to the second to last sentence of this Section 1.3(a), the Company
shall use its best efforts to cause the individuals designated by Parent to
constitute the same percentage as is on the Company Board of (i) each committee
of the Company Board, (ii) each board of directors of each subsidiary of the
Company (subject to Legal Requirements and except to the extent described in
Section 1.3(a) of the Company Disclosure Schedule) and (iii) each committee of
each such board of directors. Notwithstanding the foregoing, the Company shall
use its best efforts to ensure that two of the members of the Company Board as
of the date hereof (the "Continuing Directors") shall remain members of such
Board until the Effective Time. If a Continuing Director resigns from the
Company Board, Parent, Merger Sub and the Company shall permit the remaining
Continuing Director or Directors to appoint the resigning Director's successor
who shall be deemed to be a Continuing Director.
(b) The Company's obligation to appoint designees to the Company
Board shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder. The Company shall promptly take all action required
pursuant to such Section and Rule in order to fulfill its obligations under this
Section 1.3 and shall include in the Schedule 14D-9 such information with
respect to the Company and its officers and directors as is required under such
Section and Rule in order to fulfill its obligations under this Section 1.3.
Parent shall supply to the Company in writing
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and be solely responsible for any information with respect to itself and its
nominees, officers, directors and affiliates required by such Section and Rule.
(c) Following the date of the election or appointment of Parent's
designees to the Company Board pursuant to this Section 1.3 and prior to the
Effective Time (the "Appointment Date"), if there shall be any Continuing
Directors, any amendment of this Agreement, any termination of this Agreement by
the Company, any extension by the Company of the time for the performance of any
of the obligations or other acts of Parent or Merger Sub or any waiver of any of
the Company's rights hereunder or any other determination with respect to any
action to be taken or not to be taken by the Company relating to this Agreement,
will require the concurrence of a majority of such Continuing Directors.
ARTICLE II
THE MERGER
2.1 The Merger. At the Effective Time (as defined in Section 2.2) and
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subject to and upon the terms and conditions of this Agreement and the
applicable provisions of Delaware Law, Merger Sub shall be merged with and into
Company (the "Merger"), the separate corporate existence of Merger Sub shall
cease and Company shall continue as the surviving corporation. Company as the
surviving corporation after the Merger is hereinafter sometimes referred to as
the "Surviving Corporation."
2.2 Effective Time; Closing. Subject to the provisions of this Agreement,
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the parties hereto shall cause the Merger to be consummated by filing this
Agreement with the Secretary of State of the State of Delaware in accordance
with the relevant provisions of Delaware Law (the "Merger Documents") (the time
of such filing, or such later time as may be agreed in writing by Company and
Parent and specified in the Merger Documents, being the "Effective Time") as
soon as practicable on or after the Closing Date (as herein defined). Unless the
context otherwise requires, the term "Agreement" as used herein refers
collectively to this Agreement and Plan of Reorganization and the Certificate of
Merger. The closing of the Merger (the "Closing") shall take place at the
offices of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation, 000 Xxxx
Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx, at a time and date to be specified by the
parties, which shall be no later than the second business day after the
satisfaction or waiver of the conditions set forth in Article VII, or at such
other time, date and location as the parties hereto agree in writing (the
"Closing Date").
2.3 Effect of the Merger. At the Effective Time, the effect of the Merger
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shall be as provided in this Agreement and the applicable provisions of Delaware
Law. Without limiting the generality of the foregoing, and subject thereto, at
the Effective Time all the property, rights, privileges, powers and franchises
of Company and Merger Sub shall vest in the Surviving Corporation, and all
debts, liabilities and duties of Company and Merger Sub shall become the debts,
liabilities and duties of the Surviving Corporation.
2.4 Certificate of Incorporation; Bylaws.
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(a) At the Effective Time, the Certificate of Incorporation of Merger
Sub, as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation; provided, however,
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that at the Effective Time the Certificate of Incorporation of the Surviving
Corporation shall be amended so that the name of the Surviving Corporation shall
be "Objective Systems Integrators, Inc.."
(b) The Bylaws of Merger Sub, as in effect immediately prior to the
Effective Time, shall be, at the Effective Time, the Bylaws of the Surviving
Corporation until thereafter amended.
2.5 Directors and Officers. The initial directors of the Surviving
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Corporation shall be the directors of Merger Sub immediately prior to the
Effective Time, each to hold office in accordance with the Certificate of
Incorporation and Bylaws of the Surviving Corporation until their respective
successors are duly elected or appointed and qualified. The initial officers of
the Surviving Corporation shall be the officers of Merger Sub immediately prior
to the Effective Time, each to hold office in accordance with the Certificate of
Incorporation and Bylaws of the Surviving Corporation until their respective
successors are duly appointed.
2.6 Effect on Capital Stock. Subject to the terms and conditions of this
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Agreement, at the Effective Time, by virtue of the Merger and without any action
on the part of Merger Sub, Company, or the holders of any of the following
securities, the following shall occur:
(a) Conversion of Company Common Stock. Each share of Common Stock,
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$0.001 par value per share, of Company (the "Company Common Stock") issued and
outstanding immediately prior to the Effective Time (other than shares owned by
Parent, Merger Sub or any other subsidiary of Parent or shares which are held by
shareholders exercising dissenters' rights pursuant to Section 262 of the DGCL
("Dissenting Shares") will be canceled and extinguished and automatically
converted into the right to receive cash in the amount of the Offer Price upon
surrender of the certificate representing such share of Company Common Stock in
the manner provided in Section 2.7 (or in the case of a lost, stolen or
destroyed certificate, upon delivery of an affidavit (and bond, if required) in
the manner provided in Section 2.9). Company shall take all action that may be
necessary to ensure that, from and after the Effective Time, Parent is entitled
to exercise any such repurchase option or other right set forth in any such
restricted stock purchase agreement or other agreement.
(b) Cancellation of Parent-Owned Stock. Each share of Company Common
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Stock held by Company or owned by Merger Sub, Parent or any direct or indirect
wholly-owned subsidiary of Company or of Parent immediately prior to the
Effective Time shall be cancelled and extinguished without any conversion
thereof.
(c) Stock Options; Employee Stock Purchase Plans. At the Effective
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Time, all options to purchase Company Common Stock then outstanding under
Company's Stock Option Plan, 1994 Stock Option Plan, as amended and 1995
Director Stock Option Plan or other compensatory option plans or agreements,
including option plans or agreements assumed by the Company pursuant
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to a merger or acquisition (the "Company Option Plans") shall be substituted by
Parent in accordance with Section 6.8 hereof. Purchase rights outstanding under
Company's 1995 Employee Stock Purchase Plan (the "ESPP") shall be treated as set
forth in Section 6.8.
2.7 Surrender of Certificates.
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(a) Payment Agent. Parent shall select a bank or trust company
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reasonably acceptable to Company to act as the exchange agent (the "Payment
Agent") in the Merger.
(b) Parent to Provide Cash. Promptly after the Effective Time,
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Parent shall make available to the Payment Agent, for exchange in accordance
with this Article II, the cash issuable pursuant to Section 2.6 in exchange for
outstanding shares of Company Common Stock.
(c) Exchange Procedures. Promptly after the Effective Time, Parent
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shall cause the Payment Agent to mail to each holder of record (as of the
Effective Time) a certificate or certificates (the "Certificates"), which
immediately prior to the Effective Time represented outstanding shares of
Company Common Stock (i) a letter of transmittal in customary form (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Payment
Agent, and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for cash. Upon surrender of Certificates for
cancellation to the Payment Agent or to such other agent or agents as may be
appointed by Parent, together with such letter of transmittal, duly completed
and validly executed in accordance with the instructions thereto, the holders of
such Certificates shall be entitled to receive in exchange therefor the cash
payment, and the Certificates so surrendered shall forthwith be canceled. Until
so surrendered, outstanding Certificates will be deemed from and after the
Effective Time, to evidence only the right to receive the cash payment.
(d) Transfers of Ownership. If certificates representing shares of
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Parent Common Stock are to be issued in a name other than that in which the
Certificates surrendered in exchange therefor are registered, it will be a
condition of the issuance thereof that the Certificates so surrendered will be
properly endorsed and otherwise in proper form for transfer and that the persons
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 certificates
representing shares of Parent Common Stock in any name other than that of the
registered holder of the Certificates surrendered, or established to the
satisfaction of Parent or any agent designated by it that such tax has been paid
or is not payable.
(e) Required Withholding. Each of the Payment Agent, Parent and the
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Surviving Corporation shall be entitled to deduct and withhold from any
consideration payable or otherwise deliverable pursuant to this Agreement to any
holder or former holder of Company Common Stock such amounts as may be required
to be deducted or withheld therefrom under U.S. federal or state, local or
foreign law. To the extent such amounts are so deducted or withheld, such
amounts shall be treated for all purposes under this Agreement as having been
paid to the person to whom such amounts would otherwise have been paid.
8
(f) No Liability. Notwithstanding anything to the contrary in this
------------
Section 2.7, neither the Payment Agent, Parent, the Surviving Corporation nor
any party hereto shall be liable to a holder of shares of Parent Common Stock or
Company Common Stock for any amount properly paid to a public official pursuant
to any applicable abandoned property, escheat or similar law.
2.8 No Further Ownership Rights in Company Common Stock. The cash
---------------------------------------------------
consideration issued in accordance with the terms hereof shall be deemed to have
been issued in full satisfaction of all rights pertaining to such shares of
Company Common Stock. There shall be no further registration of transfers on the
records of the Surviving Corporation of shares of Company Common Stock which
were outstanding immediately prior to the Effective Time. From and after the
Effective Time, Certificates presented to the Surviving Corporation for any
reason shall be canceled and exchanged as provided in this Article II.
2.9 Lost, Stolen or Destroyed Certificates. In the event that any
--------------------------------------
Certificates shall have been lost, stolen or destroyed, the Payment Agent shall
issue in exchange for such lost, stolen or destroyed Certificates, upon the
making of an affidavit of that fact by the holder thereof, the cash
consideration pursuant to Section 2.6; provided, however, that Parent may, in
-------- -------
its discretion and as a condition precedent to the issuance of such cash and
other distributions, require the owner of such lost, stolen or destroyed
Certificates to deliver a bond in such sum as it may reasonably direct as
indemnity against any claim that may be made against Parent, the Surviving
Corporation or the Payment Agent with respect to the Certificates alleged to
have been lost, stolen or destroyed.
2.10 Dissenters' Rights. If any Dissenting Shareholder shall be entitled
------------------
to be paid the "fair market value" of such Dissenting Shareholder's Shares, as
provided in Section 262 of the DGCL, Company shall give Parent notice thereof
and Parent shall have the right to direct in all negotiations and proceedings
with respect to any such demands. Neither Company nor the Surviving Corporation
shall, except with the prior written consent of Parent, voluntarily make any
payment with respect to, or settle or offer to settle, any such demand for
payment. If any Dissenting Shareholder shall fail to perfect or shall have
effectively withdrawn or lost the right to dissent, the Shares held by such
Dissenting Shareholder shall thereupon be treated as though such Shares had been
converted into the right to receive the merger consideration set forth in
Article II.
2.11 Taking of Necessary Action; Further Action. If, at any time after
------------------------------------------
the Effective Time, any further action is necessary or desirable to carry out
the purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of Company and Merger Sub, the officers and directors of Company
and Merger Sub will take all such lawful and necessary action.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF COMPANY
Company represents and warrants to Parent and Merger Sub, subject to such
exceptions as are disclosed in writing in the disclosure letter supplied by
Company to Parent dated as of the date
9
hereof (the "Company Schedule"), which disclosure shall provide an exception to
or otherwise qualify the representations and warranties of Company contained in
the section of this Agreement corresponding by number to such disclosure, as
follows:
3.1 Organization and Qualification; Subsidiaries.
--------------------------------------------
(a) Each of Company and its subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the requisite corporate power and
authority to own, lease and operate its assets and properties and to carry on
its business as it is now being conducted, except where the failure to do so
would not, individually, or in the aggregate, have a Material Adverse Effect (as
defined in Section 9.3 below) on Company. Each of Company and its subsidiaries
is in possession of all franchises, grants, authorizations, licenses, permits,
variances, easements, consents, certificates, approvals and orders ("Approvals")
necessary to own, lease and operate the properties it purports to own, operate
or lease and to carry on its business as it is now being conducted, except where
the failure to have such Approvals would not, individually or in the aggregate,
have a Material Adverse Effect on Company. Company and its subsidiaries have
been and are in compliance with the terms of the Approvals, except where the
failure to or have been in compliance would not result in a Material Adverse
Effect on Company.
(b) Section 3.1(b) of the Company Schedule lists each of Company's
subsidiaries, the jurisdiction of incorporation of each such subsidiary, and
Company's equity interest therein. Neither Company nor any of its subsidiaries
has agreed nor is obligated to make nor is bound by any written or oral
agreement, contract, subcontract, lease, binding understanding, instrument,
note, option, warranty, purchase order, license, sublicense, insurance policy,
benefit plan, commitment or undertaking of any nature, as of the date hereof or
as may hereafter be in effect (a "Contract") under which it may become obligated
to make, any future investment in or capital contribution to any other entity.
Neither Company nor any of its subsidiaries directly or indirectly owns any
equity or similar interest in or any interest convertible, exchangeable or
exercisable for, any equity or similar interest in, any corporation,
partnership, joint venture or other business, association or entity.
(c) Company and each of its subsidiaries is qualified to do business
as a foreign corporation, and is in good standing, under the laws of all
jurisdictions where the nature of their business requires such qualification and
where the failure to so qualify would have a Material Adverse Effect on Company.
3.2 Certificate of Incorporation and Bylaws. Company has previously
---------------------------------------
furnished to Parent a complete and correct copy of its Certificate of
Incorporation and Bylaws as amended to date (together, the "Company Charter
Documents"). Such Company Charter Documents and equivalent organizational
documents of each of its subsidiaries are in full force and effect. Company is
not in violation of any of the provisions of the Company Charter Documents, and
no subsidiary of Company is in violation of its equivalent organizational
documents except where the violation of any
10
such equivalent organizational documents of a subsidiary of Company would not,
individually or in the aggregate, have a Material Adverse Effect on Company.
3.3 Capitalization.
--------------
(a) The authorized capital stock of Company consists of 100,000,000
shares of Company Common Stock, $0.001 par value per share. As of November 17,
2000, (i) 37,446,183 shares of Company Common Stock were issued and outstanding,
all of which were validly issued, fully paid and nonassessable; (ii) no shares
of Company Common Stock were held by subsidiaries of Company; (iii) 390,329
shares of Company Common Stock were available for future issuance pursuant to
Company's ESPP; (iv) 9,048,409 shares of Company Common Stock were reserved for
issuance upon the exercise of outstanding options to purchase Company Common
Stock under the Company Option Plans; and (v) 5,148,153 shares of Company Common
Stock are issued and outstanding or reserved for issuance upon the exercise of
outstanding options to purchase Company Common Stock. Other than as listed
above, Company has no other securities authorized, reserved for issuance, issued
or outstanding. Section 3.3(a) of the Company Schedule sets forth the following
information with respect to each Company Stock Option (as defined in Section
6.8) outstanding as of the date of this Agreement: (i) the name and address of
the optionee; (ii) the number of shares of Company Common Stock subject to such
Company Stock Option; (iii) the exercise price of such Company Stock Option;
(iv) the date on which such Company Stock Option was granted; (v) the applicable
vesting schedule, including the vesting commencement date; (vi) the date on
which such Company Stock Option expires; and (vii) whether the exercisability of
such option will be accelerated in any way by the transactions contemplated by
this Agreement, and indicates the extent of acceleration. Company has made
available to Parent accurate and complete copies of all stock option plans
pursuant to which Company has granted such Company Stock Options that are
currently outstanding and the form of all stock option agreements evidencing
such Company Stock Options. All shares of Company Common Stock subject to
issuance as aforesaid, upon issuance on the terms and conditions specified in
the instrument pursuant to which they are issuable, would be duly authorized,
validly issued, fully paid and nonassessable. Except as set forth in Section
3.3(a) of the Company Schedule, there are no commitments or agreements of any
character to which Company is bound obligating Company to accelerate the vesting
of any Company Stock Option as a result of the Merger. All outstanding shares of
Company Common Stock, all outstanding Company Stock Options, and all outstanding
shares of capital stock of each subsidiary of Company have been issued and
granted in compliance with, in all material respects (i) all applicable
securities laws and other applicable Legal Requirements (as defined below) and
(ii) all requirements set forth in applicable Contracts. For the purposes of
this Agreement, "Legal Requirements" means any federal, state, local, municipal,
foreign or other law, statute, constitution, principle of common law,
resolution, ordinance, code, edict, decree, rule, regulation, ruling or
requirement issues, enacted, adopted, promulgated, implemented or otherwise put
into effect by or under the authority of any Governmental Entity (as defined
below).
(b) Except for securities Company owns free and clear of all liens,
pledges, hypothecations, charges, mortgages, security interests, encumbrances,
claims, infringements,
11
interferences, options, right of first refusals, preemptive rights, community
property interests or restrictions of any nature (including any restriction on
the voting of any security, any restriction on the transfer of any security or
other asset, any restriction on the possession, exercise or transfer of any
other attribute of ownership of any asset) directly or indirectly through one or
more subsidiaries, and except for shares of capital stock or other similar
ownership interests of subsidiaries of Company that are owned by certain nominee
equity holders as required by the applicable Law of the jurisdiction of
organization of such subsidiaries (which shares or other interests do not
materially affect Company's control of such subsidiaries), there are no equity
securities, partnership interests or similar ownership interests of any class of
equity security of any subsidiary of Company, or any security exchangeable or
convertible into or exercisable for such equity securities, partnership
interests or similar ownership interests, issued, reserved for issuance or
outstanding. Except as set forth in Section 3.3(b) of Company Schedule or as set
forth in Section 3.3(a) hereof, there are no subscriptions, options, warrants,
equity securities, partnership interests or similar ownership interests, calls,
rights (including preemptive rights), commitments or agreements of any character
to which Company or any of its subsidiaries is a party or by which it is bound
obligating Company or any of its subsidiaries to issue, deliver or sell, or
cause to be issued, delivered or sold, or repurchase, redeem or otherwise
acquire, or cause the repurchase, redemption or acquisition of, any shares of
capital stock, partnership interests or similar ownership interests of Company
or any of its subsidiaries or obligating Company or any of its subsidiaries to
grant, extend, accelerate the vesting of or enter into any such subscription,
option, warrant, equity security, call, right, commitment or agreement. Except
as contemplated by this Agreement, there are no registration rights and there
is, except for the Company Tender and Voting Agreements, no voting trust, proxy,
rights plan, antitakeover plan or other agreement or understanding to which
Company or any of its subsidiaries is a party or by which they are bound with
respect to any equity security of any class of Company or with respect to any
equity security, partnership interest or similar ownership interest of any class
of any of its subsidiaries.
3.4 Authority Relative to this Agreement. Company has all necessary
------------------------------------
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder and, subject to obtaining the approval of the
stockholders of Company of the Merger (if required), to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement by Company and the consummation by Company of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action on the part of Company and no other corporate proceedings on
the part of Company are necessary to authorize this Agreement or to consummate
the transactions so contemplated (other than the approval and adoption of this
Agreement and the Merger by holders of a majority of the outstanding shares of
Company Common Stock in accordance with Delaware Law and the Company Charter
Documents, if required). This Agreement has been duly and validly executed and
delivered by Company and, assuming the due authorization, execution and delivery
by Parent and Merger Sub, constitute legal and binding obligation of Company,
enforceable against Company in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditor rights and for general
equitable principles.
12
3.5 No Conflict; Required Filings and Consents.
------------------------------------------
(a) The execution and delivery of this Agreement by Company does not,
and the performance of this Agreement by Company shall not, (i) conflict with or
violate the Company Charter Documents or the equivalent organizational documents
of any of Company's subsidiaries, (ii) subject to obtaining the approval of
Company's stockholders of this Agreement and the Merger (if required) and
compliance with the requirements set forth in Section 3.5(b) below, cause the
Company to be in conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to Company or any of its subsidiaries or by which
its or any of their respective properties is bound or affected, or (iii) result
in any breach by the Company of or constitute a default by the Company (or an
event that with notice or lapse of time or both would become a default) under,
or impair Company's or any of its subsidiaries' rights or alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the properties or assets of Company
or any of its subsidiaries pursuant to, any material note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Company or any of its subsidiaries is a party
or by which Company or any of its subsidiaries or its or any of their respective
properties are bound or affected, except with respect to clauses (ii) and (iii)
for any such conflicts, violations, breaches, defaults or other occurrences that
have not had, and could not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect with respect to Company.
(b) The execution and delivery of this Agreement by Company does not,
and the performance of this Agreement by Company shall not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
court, administrative agency, commission, governmental or regulatory authority,
domestic or foreign (a "Governmental Entity"), except (i) for applicable
requirements, if any, of the Securities Act of 1933, as amended (the "Securities
Act"), the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
state securities laws ("Blue Sky Laws"), the pre-merger notification
requirements (the "HSR Approval") of the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), the applicable
requirements of antitrust or competition laws and regulations of foreign
Governmental Entities ("Foreign Filings"), the rules and regulations of the NYSE
and the Nasdaq National Market (the "Nasdaq"), and the filing and recordation of
the Agreement of Merger as required by Delaware Law and (ii) where the failure
to obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, (A) could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on Company or, after
the Effective Time, Parent, or (B) would not prevent consummation of the Merger
or otherwise prevent the parties hereto from performing their obligations under
this Agreement.
3.6 Compliance; Permits
-------------------
(a) Definitions.
13
(i) "Hazardous Material" is any material or substance that is
------------------
prohibited or regulated by any Environmental Law or that has been designated by
any governmental authority to be radioactive, toxic, hazardous or otherwise a
danger to health, reproduction or the environment.
(ii) "Environmental Laws" are all applicable Laws, rules,
------------------
regulations, orders, treaties, statutes, and codes promulgated by any
governmental authority which prohibit, regulate or control any Hazardous
Material or any Hazardous Material activity, including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
the Resource Recovery and Conservation Act of 1976, the Federal Water Pollution
Control Act, the Clean Air Act, the Hazardous Materials Transportation Act, the
Clean Water Act, comparable laws, rules, regulations, ordinances, orders,
treaties, statutes, and codes of other governmental authorities, the regulations
promulgated pursuant to any of the foregoing, and all amendments and
modifications of any of the foregoing, all as amended to date.
(b) Neither Company nor any of its subsidiaries is in conflict with,
or in default or violation of, any law, rule (including Environmental Laws),
regulation, order, judgment or decree applicable to Company or any of its
subsidiaries or by which its or any of their respective properties is bound or
affected, except where such conflict, default or violation does not have or
could not reasonably be expected to have a Material Adverse Effect. No
investigation or review by any governmental or regulatory body or authority is
pending or, to the knowledge of Company, threatened against Company or its
subsidiaries, nor has any governmental or regulatory body or authority indicated
to Company an intention to conduct the same, other than, in each such case,
those the outcome of which could not, individually or in the aggregate,
reasonably be expected to have the effect of prohibiting or materially impairing
any business practice of Company or any of its subsidiaries, any acquisition of
material property by Company or any of its subsidiaries or the conduct of
business by Company or any of its subsidiaries.
(c) The Company has not disposed of, released, discharged or emitted
any Hazardous Materials into the soil or groundwater at any properties owned or
leased at any time by the Company, or at any other property, or exposed any
employee or other individual to any Hazardous Materials or any workplace or
environmental condition in such a manner as would result in any material
liability or clean-up obligation of any kind or nature to the Company. To the
knowledge of Company, no Hazardous Materials are present in, on, or under any
properties owned, leased or used at any time by the Company, and no reasonable
likelihood exists that any Hazardous Materials will come to be present in, on,
or under any properties owned, leased or used at any time by the Company, so as
to give rise to any material liability or clean-up obligation under any
Environmental Laws.
3.7 SEC Filings; Financial Statements.
---------------------------------
(a) Company has made available to Parent a correct and complete copy
of each report, schedule, registration statement and definitive proxy statement
filed by Company with the Securities and Exchange Commission ("SEC") since
December 31, 1998 (the "Company SEC
14
Reports"), which are all the forms, reports and documents required to be filed
by Company with the SEC since such time. The Company SEC Reports (i) in all
material respects were prepared in accordance with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder, and (ii) did not at the time they
were filed contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. None of Company's subsidiaries is required to file any reports
or other documents with the SEC.
(b) Each set of consolidated financial statements (including, in each
case, any related notes thereto) contained in the Company SEC Reports, (i)
complied as to form in all material respects with the published rules and
regulations of the SEC with respect thereto, (ii) was prepared in accordance
with generally accepted accounting principles ("GAAP") applied on a consistent
basis throughout the periods involved (except as may be indicated in the notes
thereto or, in the case of unaudited statements, do not contain footnotes as
permitted by Form 10-Q of the Exchange Act) and each fairly presents in all
material respects the consolidated financial position of Company and its
subsidiaries at the respective dates thereof and the consolidated results of its
operations and cash flows for the periods indicated, except that the unaudited
interim financial statements were or are subject to normal adjustments which
were not or are not expected to be material in amount.
(c) Company has previously furnished to Parent a complete and correct
copy of any amendments or modifications, which have not yet been filed with the
SEC but which are required to be filed, to agreements, documents or other
instruments which previously had been filed by Company with the SEC pursuant to
the Securities Act or the Exchange Act.
(d) Company has furnished monthly unaudited balance sheets, income
statements and, if available, statements of cash flows within 30 days of the end
of the month then ended, and such financial statements have been prepared in
accordance with GAAP applied on a consistent basis throughout the periods
involved and fairly present in all material respects the financial position of
the Company as of and for each month then ended.
3.8 No Undisclosed Liabilities. Neither Company nor any of its
--------------------------
subsidiaries has any liabilities (absolute, accrued, contingent or otherwise) of
a nature required to be disclosed on a balance sheet or in the related notes to
the consolidated financial statements prepared in accordance with GAAP which
are, individually or in the aggregate, material to the business, results of
operations, assets or financial condition of Company and its subsidiaries taken
as a whole, except (i) liabilities provided for in Company's balance sheet as of
September 30, 2000 set forth in the Company SEC Reports or (ii) liabilities
incurred since September 30, 2000 in the ordinary course of business, none of
which is material to the business, results of operations or financial condition
of Company and its subsidiaries, taken as a whole.
3.9 Absence of Certain Changes or Events. Since September 30, 2000, there
------------------------------------
has not been: (i) any Material Adverse Effect on Company, (ii) any declaration,
setting aside or payment of
15
any dividend on, or other distribution (whether in cash, stock or property) in
respect of, any of Company's or any of its subsidiaries' capital stock, or any
purchase, redemption or other acquisition by Company of any of Company's capital
stock or any other securities of Company or its subsidiaries or any options,
warrants, calls or rights to acquire any such shares or other securities except
for repurchases from employees following their termination pursuant to the terms
of their pre-existing stock option or purchase agreements, (iii) any split,
combination or reclassification of any of Company's or any of its subsidiaries'
capital stock, (iv) any granting by Company or any of its subsidiaries of any
increase in compensation or fringe benefits, except for normal increases of cash
compensation in the ordinary course of business consistent with past practice,
or any payment by Company or any of its subsidiaries of any bonus, except for
bonuses made in the ordinary course of business consistent with past practice,
or any granting by Company or any of its subsidiaries of any increase in
severance or termination pay or any entry by Company or any of its subsidiaries
into any currently effective employment, severance, termination or
indemnification agreement or any agreement the benefits of which are contingent
or the terms of which are materially altered upon the occurrence of a
transaction involving Company of the nature contemplated hereby, (v) entry by
Company or any of its subsidiaries into any licensing or other agreement with
regard to the acquisition or disposition of any Intellectual Property (as
defined in Section 3.17) other than licenses in the ordinary course of business
consistent with past practice or any amendment or consent with respect to any
licensing agreement filed or required to be filed by Company with the SEC, (vi)
any material change by Company in its accounting methods, principles or
practices, except as required by concurrent changes in GAAP, or (vii) any
revaluation by Company of any of its assets, including, without limitation,
writing down the value of capitalized inventory or writing off notes or accounts
receivable or any sale of assets of Company other than in the ordinary course of
business consistent with past practice.
3.10 Absence of Litigation. Except as specifically disclosed in the
---------------------
Company SEC Reports as of the date hereof, there are no claims, actions, suits
or proceedings pending or, to the knowledge of Company, no material claims,
actions, suits or proceedings threatened (or, to the knowledge of Company, any
governmental or regulatory investigation pending or threatened) against Company
or any of its subsidiaries or any properties or rights of Company or any of its
subsidiaries, before any court, arbitrator or administrative, governmental or
regulatory authority or body, domestic or foreign.
3.11 Employee Matters and Benefit Plans.
----------------------------------
(a) Definitions. With the exception of the definition of
-----------
"Affiliate" set forth in Section 3.11(a)(i) below (which definition shall apply
only to this Section 3.11), for purposes of this Agreement, the following terms
shall have the meanings set forth below:
(i) "Affiliate" shall mean any other person or entity under
common control with Company within the meaning of Section 414(b), (c), (m) or
(o) of the Code and the regulations issued thereunder;
16
(ii) "COBRA" shall mean the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended;
(iii) "Code" shall mean the Internal Revenue Code of 1986, as
amended;
(iv) "Company Employee Plan" shall mean any plan, program,
policy, practice, contract, agreement or other arrangement providing for
compensation, severance, termination pay, deferred compensation, performance
awards, stock or stock-related awards, fringe benefits, pensions, lump-sum death
benefits or other employee benefits or remuneration of any kind, whether written
or unwritten or otherwise, funded or unfunded, including without limitation,
each "employee benefit plan," within the meaning of Section 3(3) of ERISA which
is or has been maintained, contributed to, or required to be contributed to, by
Company or any Affiliate for the benefit of any Employee, or with respect to
which Company or any Affiliate has or may have any liability or obligation;
(v) "DOL" shall mean the Department of Labor;
(vi) "Employee" shall mean any current or former or retired
employee, consultant or director of Company or any Affiliate;
(vii) "Employment Agreement" shall mean each management,
employment, severance, consulting, relocation, repatriation, expatriation,
visas, work permit or other agreement, contract or understanding between Company
or any Affiliate and any Employee;
(viii) "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended;
(ix) "FMLA" shall mean the Family Medical Leave Act of 1993,
as amended;
(x) "International Employee Plan" shall mean each Company
Employee Plan that has been adopted or maintained by Company or any Affiliate,
whether informally or formally, or with respect to which Company or any
Affiliate will have, has had or may have any liability, for the benefit of
Employees who perform services outside the United States and their dependents;
(xi) "IRS" shall mean the Internal Revenue Service;
(xii) "Multiemployer Plan" shall mean any "Pension Plan" (as
defined below) which is a "multiemployer plan," as defined in Section 3(37) of
ERISA; and
(xiii) "Pension Plan" shall mean each Company Employee Plan
which is an "employee pension benefit plan," within the meaning of Section 3(2)
of ERISA.
17
(b) Schedule. Schedule 3.11(b) contains an accurate and complete
--------
list of each Company Employee Plan and each International Employee Plan. Company
does not have any plan and has made no commitment (in writing or otherwise) to
establish any new Company Employee Plan or International Employee Plan, to
modify any Company Employee Plan or International Employee Plan (except to the
extent required by law or to conform any such Company Employee Plan or
International Employee Plan to the requirements of any applicable Law, in each
case as previously disclosed to Parent in writing, or as required by this
Agreement), or to adopt or enter into any Company Employee Plan or International
Employee Plan.
(c) Documents. Company has provided or made available to Parent
---------
correct and complete copies of: (i) all documents embodying or governing each
Company Employee Plan and International Employee Plan, including (without
limitation) all amendments thereto and all related trust documents,
administrative service agreements, group annuity contracts, group insurance
contracts, and policies pertaining to fiduciary liability insurance covering the
fiduciaries for each Plan and (ii) in relation to each unfunded International
Employee Plan, details of the liabilities under that International Employee
Plan; (iii) the most recent annual actuarial valuations, if any, prepared for
each Company Employee Plan, and each International Employee Plan (and if there
is no such actuarial valuation, details of the funding position of the relevant
Company Employee Plan or International Employee Plan), (iv) the three (3) most
recent annual reports (Form Series 5500 and all schedules and financial
statements attached thereto), if any, required under ERISA or the Code in
connection with each Company Employee Plan; (v) if Company Employee Plan is
funded, the most recent annual and periodic accounting of Company Employee Plan
assets; (vi) the most recent summary plan description together with the
summary(ies) of material modifications thereto, if any, required under ERISA
with respect to each Company Employee Plan; (vii) all IRS determination,
opinion, notification and advisory letters, and all applications and
correspondence to or from the IRS or the DOL with respect to any such
application or letter; (viii) all written communications material to any
Employee or Employees relating to any Company Employee Plan and any proposed
Company Employee Plans, in each case, relating to any amendments, terminations,
establishments, increases or decreases in benefits, acceleration of payments or
vesting schedules or other events which would result in any material liability
to Company; (ix) all correspondence to or from any governmental agency relating
to any Company Employee Plan; (x) all COBRA forms and related notices (or such
forms and notices as required under comparable law); (xi) the three (3) most
recent plan years discrimination tests for each Company Employee Plan subject to
non-discrimination testing; (xii) all registration statements, annual reports
(Form 11-K and all attachments thereto) and prospectuses prepared in connection
with each Company Employee Plan and (xiii) in relation to each unfunded
International Employee Plan, details of how the liabilities under the
International Employee Plan are accounted for, including details of how any
provisions in respect of those liabilities has been calculated.
(d) Employee Plan Compliance. Except as set forth on Schedule
------------------------
3.11(d), (i) Company has performed in all respects all obligations required to
be performed by it under, is not in default or violation of, and has no
knowledge of any default or violation by any other party to each Company
Employee Plan and each International Employee Plan, except where such non-
18
performance, default or violation does not or could not reasonably be expected
to have a Material Adverse Effect, and each Company Employee Plan and each
International Employee Plan has been established and maintained in all material
respects in accordance with its terms and in compliance with all applicable
Laws, statutes, orders, rules and regulations, including but not limited to
ERISA or the Code; (ii) each Company Employee Plan intended to qualify under
Section 401(a) of the Code and each trust intended to qualify under Section
501(a) of the Code has either received (or was adopted using a prototype plan
that received) a favorable determination, opinion, notification or advisory
letter from the IRS with respect to each such Company Employee Plan as to its
qualified status under the Code, including all amendments to the Code effected
by the Tax Reform Act of 1986 and subsequent legislation, or has remaining a
period of time under applicable Treasury regulations or IRS pronouncements in
which to apply for such a letter and make any amendments necessary to obtain a
favorable determination as to the qualified status of each such Company Employee
Plan and each International Plan meets, and since its establishment has met, the
requirements for tax exemption or contributions, benefits, and/or invested
assets which apply under local law (in the jurisdiction in which the relevant
plan operates), and the tax exempt status of no International Plan is the
subject of examination or pending cancellation, (iii) no "prohibited
transaction," within the meaning of Section 4975 of the Code or Sections 406 and
407 of ERISA, and not otherwise exempt under Section 4975 of the Code or Section
408 of ERISA (or any administrative class exemption issued thereunder), has
occurred with respect to any Company Employee Plan; (iv) there are no actions,
suits or claims pending, or, to the knowledge of Company, threatened (other than
routine claims for benefits) against any Company Employee Plan or International
Employee Plan against the assets of any Company Employee Plan or International
Employee Plan; (v) each Company Employee Plan (other than any stock option plan)
can be amended, terminated or otherwise discontinued after the Effective Time,
without material liability to Parent, Company or any of its Affiliates (other
than ordinary administration expenses); (vi) there are no audits, inquiries or
proceedings pending or, to the knowledge of Company or any Affiliates,
threatened by the IRS or DOL with respect to any Company Employee Plan or
International Employee Plan; and (vii) neither Company nor any Affiliate is
subject to any penalty or tax with respect to any Company Employee Plan under
Section 502(i) of ERISA or Sections 4975 through 4978 and 4980 of the Code and
neither the Company nor any subsidiary or Affiliate of it is subject to any
penalty or tax with respect to any International Employee Plan.
(e) Pension Plan. Neither Company nor any Affiliate has ever
------------
maintained, established, sponsored, participated in, or contributed to, any
Pension Plan which is subject to Title IV of ERISA or Section 412 of the Code.
(f) Collectively Bargained, Multiemployer and Multiple Employer
-----------------------------------------------------------
Plans. At no time has Company or any Affiliate contributed to or been obligated
-----
to contribute to any Multiemployer Plan. Except as set forth on Schedule
3.11(f), neither Company, nor any Affiliate currently and to their knowledge has
at any time ever maintained, established, sponsored, participated in, or
contributed to any multiple employer plan (including any International Employee
Plan) or to any plan described in Section 413 of the Code.
19
(g) No Post-Employment Obligations. Except as set forth in Schedule
------------------------------
3.11(g), no Company Employee Plan or International Employee Plan provides, or
reflects or represents any liability to provide retiree health to any person for
any reason, except as may be required by COBRA or other applicable statute, and
Company has never represented, promised or contracted (whether in oral or
written form) to any Employee (either individually or to Employees as a group)
or any other person that such Employee(s) or other person would be provided with
retiree health, except to the extent required by statute.
(h) Health Care Compliance. Neither Company nor any Affiliate has,
----------------------
prior to the Effective Time and in any material respect, violated any of the
health care continuation requirements of COBRA, the requirements of FMLA, the
requirements of the Health Insurance Portability and Accountability Act of 1996,
the requirements of the Women's Health and Cancer Rights Act of 1998, the
requirements of the Newborns' and Mothers' Health Protection Act of 1996, or any
amendment to each such act, or any similar provisions of state law applicable to
its Employees.
(i) Effect of Transaction. Except as set forth on Schedule 3.11(i),
---------------------
the execution of this Agreement and the consummation of the transactions
contemplated hereby will not (either alone or upon the occurrence of any
additional or subsequent events) constitute an event under any Company Employee
Plan, International Employee Plan, trust or loan that will or may result in any
payment (whether of severance pay or otherwise), acceleration, forgiveness of
indebtedness, vesting, distribution, increase in benefits or obligation to fund
benefits with respect to any Employee (other than distribution in the ordinary
course of business consistent with past practice resulting from employee
turnover).
(j) Employment Matters. Company: (i) is in compliance in all
------------------
respects with all applicable foreign, federal, state and local laws, rules and
regulations respecting employment, employment practices, terms and conditions of
employment and wages and hours, in each case, with respect to Employees, except
where such compliance does not have and could not be reasonably expected to have
a Material Adverse Effect on Company; (ii) has withheld and reported all
material amounts required by law or by agreement to be withheld and reported
with respect to wages, salaries and other payments to Employees; (iii) is not
liable for any material arrears of wages or any taxes or any penalty for failure
to comply with any of the foregoing; and (iv) is not liable for any material
payment to any trust or other fund governed by or maintained by or on behalf of
any governmental authority, with respect to unemployment compensation benefits,
social security or other benefits or obligations for Employees (other than
routine payments to be made in the normal course of business and consistent with
past practice). There are no pending, threatened or reasonably anticipated
claims or actions against Company under any worker's compensation policy or
long-term disability policy (other than routine claims for benefits).
(k) Labor. No work stoppage or labor strike against Company is
-----
pending or, to the knowledge of Company, threatened. Company does not know of
any activities or proceedings of any labor union to organize any Employees.
Except as set forth in Schedule 3.11(k), there are no actions, suits, claims,
labor disputes or grievances pending, or, to the knowledge of Company,
20
threatened or reasonably anticipated relating to any labor, safety or
discrimination matters involving any Employee, including, without limitation,
charges of unfair labor practices or discrimination complaints, which, if
adversely determined, would, individually or in the aggregate, result in any
material liability to Company. Neither Company nor any of its subsidiaries has
engaged in any unfair labor practices within the meaning of the National Labor
Relations Act. Except as set forth in Schedule 3.11(k), Company is not
presently, nor has it been in the past, a party to, or bound by, any collective
bargaining agreement or union contract with respect to Employees and no
collective bargaining agreement is being negotiated by Company.
(l) International Employee Plans. Each International Employee Plan
----------------------------
has been established, maintained and administered in compliance with its terms
and conditions and with the requirements prescribed by any and all statutory or
regulatory laws that are applicable to such International Employee Plan, except
where such compliance does not have and could not be reasonably expected to have
a Material Adverse Effect on Company. Except as required by law, no condition
exists that would prevent the Company or Parent from terminating or amending any
International Employee Plan at any time for any reason without liability to the
Company or its Affiliates (other than ordinary administration expenses or
routine claims for benefits). Each International Employee Plan will be fully
financed as of the consummation of the Offer. For this purpose fully financed
means (i) (in relation to each funded International Employee Plan) that the
value of the assets in the relevant International Employee Plan are at least
equal to the value of all retirement benefit and other rights payable or
prospectively or contingently payable under that International Employee Plan,
valued in accordance with the actuarial assumptions used for that plan's most
recent actuarial valuation or, if there is no such valuation, in accordance with
local law and practice, and consistently with the local funding basis applying
to the relevant International Employee Plan at the time of the calculation, and
(ii) (in relation to each unfunded International Employee Plan) that the
provision in the Company's accounts (or the accounts of any subsidiary or
Affiliate) in relation to that unfunded International Employee Plan is at least
equal to the value of the retirement benefits and other rights under that
International Employee Plan (valued in accordance with local law and practice).
There are no unfunded liabilities in respect of Employees who perform services
outside the United States that have not been reflected in the Company's
financial statements in accordance with applicable accounting standards.
Employer contributions to the International Employee Plans, including, but not
limited to, the Central Provident Fund in Singapore, accrued as of the date of
this Agreement and all outstanding and accrued insurance premiums payable in
respect of the International Employee Plans have been paid in full as of the
date of this Agreement, in each case to the extent they are required to have
been paid.
3.12 Proxy Statement. None of the information supplied or to be supplied
---------------
by Company for inclusion in the proxy statement to be filed with the SEC by
Company pursuant to Section 6.1(a) hereof (if such proxy statement is required)
(the "Proxy Statement") will, at the date or dates mailed to the stockholders of
Company, at the times of the stockholders meeting of Company (the "Company
Stockholders' Meeting") in connection with the transactions contemplated hereby
and as of the Effective Time, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the
21
circumstances under which they are made, not misleading. The Proxy Statement
will comply as to form in all material respects with the provisions of the
Exchange Act and the rules and regulations promulgated by the SEC thereunder. If
at any time prior to the Effective Time, any event relating to Company or any of
its affiliates, officers or directors should be discovered by Company which
should be set forth in a supplement to the Proxy Statement, Company shall
promptly inform Parent. Notwithstanding the foregoing, Company makes no
representation or warranty with respect to any information supplied by Parent or
Merger Sub which is contained in any of the foregoing documents.
3.13 Restrictions on Business Activities. There is no agreement,
-----------------------------------
commitment, judgment, injunction, order or decree binding upon Company or its
subsidiaries or to which Company or any of its subsidiaries is a party which has
or could reasonably be expected to have the effect of prohibiting or materially
impairing any business practice of Company or any of its subsidiaries, any
acquisition of property by Company or any of its subsidiaries or the conduct of
business by Company or any of its subsidiaries as currently conducted.
3.14 Title to Property.
-----------------
(a) Neither Company nor any of its subsidiaries owns any material
real property. Company and each of its subsidiaries have good and defensible
title to all of their material properties and assets, free and clear of all
liens, charges and encumbrances except liens for taxes not yet due and payable
and such liens or other imperfections of title, if any, as do not materially
detract from the value of or materially interfere with the present use of the
property affected thereby.
(b) All leases (the "Leases") pursuant to which Company or any of
its subsidiaries lease from others material real or personal property are valid
and effective in accordance with their respective terms, and there is not, under
any of such leases, any existing material default or event of default of Company
or any of its subsidiaries or, to Company's knowledge, any other party (or any
event which with notice or lapse of time, or both, would constitute a material
default and in respect of which Company or subsidiary has not taken adequate
steps to prevent such default from occurring).
(c) Schedule 3.14 sets forth a list of all real property currently
-------------
leased by Company. Company has provided Parent with true, complete and correct
copies of each such Lease; no term or condition of any such Lease has been
modified, amended or waived except as shown in such copies; each such Lease
constitutes the entire agreement of the landlord and the tenant thereunder; and
there are no other agreements or arrangements whatsoever relating to Company's
use or occupancy of any of the premises described in such Leases. Company has
not transferred or assigned any interest in any such Lease, nor has Company
subleased or otherwise granted rights of use or occupancy of any of the premises
described therein to any other person or entity.
(d) As of the date of this Agreement, to the knowledge of the
Company, the landlord under each Lease has complied with all of the
requirements, conditions, representations, warranties and covenants of the
landlord thereunder, including, without limitation, the timely
22
completion of construction of the leased premises in a good and workmanlike
manner and otherwise in accordance with the Leases.
(e) There is no pending or, to Company's knowledge, threatened
condemnation or similar proceeding affecting any leased property or any portion
thereof.
3.15 Taxes.
-----
(a) Definition of Taxes. For the purposes of this Agreement, "Tax" or
-------------------
"Taxes" refers to any and all federal, state, local and foreign taxes,
assessments and other governmental charges, duties, impositions and liabilities
relating to taxes, including taxes based upon or measured by gross receipts,
income, profits, sales, use and occupation, and value added, ad valorem,
transfer, franchise, withholding, payroll, recapture, employment, excise and
property taxes, together with all interest, penalties and additions imposed with
respect to such amounts and any obligations under any agreements or arrangements
with any other person with respect to such amounts and including any liability
for Taxes of a predecessor or transferor entity.
(b) Tax Returns and Audits.
----------------------
(i) Company and each of its subsidiaries have timely filed all
federal, state, local and foreign returns, estimates, forms, information
statements and reports ("Returns") relating to Taxes required to be filed by
Company and each of its subsidiaries with any Tax authority, except such Returns
which are not, individually or in the aggregate, material to Company and its
subsidiaries, taken as a whole. All such Returns were correct and complete in
all material respects and each of its subsidiaries have paid all Taxes shown to
be due on such Returns, other than any Taxes being contested in good faith
through appropriate procedures.
(ii) Company and each of its subsidiaries as of the Effective
Time will have withheld with respect to its employees or other persons all
federal and state income Taxes, Taxes pursuant to the Federal Insurance
Contribution Act, Taxes pursuant to the Federal Unemployment Tax Act and other
Taxes required to be withheld, except such Taxes which are not, individually or
in the aggregate, material to Company and its subsidiaries, taken as a whole.
(iii) There is no material Tax nor is there any material Tax
deficiency outstanding, proposed or assessed against Company or any of its
subsidiaries. Neither Company or any of its subsidiaries has executed any
unexpired waiver of any statute of limitations on or extension of any period for
the assessment or collection of any Tax.
(iv) To the knowledge of Company, no audit or other examination
of any Return of Company or any of its subsidiaries by any Tax authority is
presently in progress, nor has Company or any of its subsidiaries been notified
of any request for such an audit or other examination.
23
(v) No adjustment relating to any Returns filed or required
to be filed by Company or any of its subsidiaries has been proposed in writing,
formally or informally, by any Tax authority to Company or any of its
subsidiaries or any representative thereof.
(vi) Neither Company nor any of its subsidiaries has any
liability for any material unpaid Taxes (whether or not required to be shown on
any Return) which has not been accrued for or reserved on Company balance sheet
dated June 30, 2000 in accordance with GAAP, whether asserted or unasserted,
contingent or otherwise, which are, individually or in the aggregate material to
Company, other than any liability for unpaid Taxes that may have accrued since
June 30, 2000 in connection with the operation of the business of Company and
its subsidiaries in the ordinary course. There are no liens with respect to
Taxes on any of the assets of Company or any of its subsidiaries, other than
liens which are not individually or in the aggregate material, or customary
liens for current Taxes not yet due and payable
(vii) There is no contract, agreement, plan or arrangement to
which Company or any of its subsidiaries is a party as of the date of this
Agreement, including but not limited to the provisions of this Agreement, that,
individually or collectively, could give rise to the payment of any amount that
would not be deductible pursuant to Sections 280G, 404 or 162(m) of the Code.
There is no contract, agreement, plan or arrangement to which Company or any of
its subsidiaries is a party or by which it is bound to compensate any individual
for excise taxes paid pursuant to Section 4999 of the Code.
(viii) Neither Company nor any of its subsidiaries has filed any
consent agreement under Section 341(f) of the Code.
(ix) Neither Company nor any of its subsidiaries is party to
or has any obligation under any tax sharing, tax indemnity or tax allocation
agreement or arrangement.
(x) Neither Company nor any of its subsidiaries has
constituted either a "distributing corporation" or a "controlled corporation" in
a distribution of stock qualifying for tax-free treatment under Section 355 of
the Code (x) in the two years prior to the date of this Agreement or (y) in a
distribution which could otherwise constitute part of a "plan" or "series of
related transactions" (within the meaning of Section 355(e) of the Code) in
conjunction with the Merger.
(xi) To the knowledge of Company, Company and each of its
subsidiaries is in substantial compliance with the material terms and conditions
of agreements with any foreign taxing authority to which Company or a subsidiary
is a party relating to any tax exemption, tax holiday or other reduction of tax
and the consummation of the Merger will not have an adverse effect on the
continued validity and effectiveness of such agreements.
3.16 Brokers. Except for fees payable to Xxxxx, Xxxxxxxx & Xxxx, Inc.
-------
and Xxxxxx Xxxxxx & Xxxxxxxx & Co., Inc. pursuant to engagement letters true and
correct copies of which have been provided to Parent, Company has not incurred,
nor will it incur, directly or indirectly, any liability for
24
brokerage or finders fees or agent's commissions or any similar charges in
connection with this Agreement or any transaction contemplated hereby.
3.17 Intellectual Property.
---------------------
(a) Company and its subsidiaries own, or possess, free and clear of
any material liens, adequate licenses or other valid rights to use (including
the right to sublicense to customers, suppliers, or others as needed), all of
the material Company Intellectual Property (as defined below) that is used in
the conduct of Company's or subsidiaries' businesses. Section 3.17(a) of Company
Disclosure Schedule sets forth a complete list in all material respects of all
Registered Company Intellectual Property. Section 3.17(a) of the Company
Schedule lists all material contracts, licenses and agreements to which Company
or any of its subsidiaries is a party: (i) with respect to Company Intellectual
Property licensed or transferred to any third party (other than agreements
relating to the sale or distribution of the Company's products entered into in
the ordinary course); or (ii) pursuant to which a third party has licensed or
transferred any material Intellectual Property to Company which is incorporated
in the Company's current products.
(b) Neither the Company nor any of the subsidiaries has received
from a third party any written notice of infringement or misappropriation of or
conflict with, in any material respects, Company Intellectual Property. To the
knowledge of the Company, the use of such Company Intellectual property in
connection with the business and operations of the Company and its Subsidiaries
does not infringe, in any material respects, on the rights of any person or
entity. No material claim by any third party contesting the validity,
enforceability, use or ownership of any of the Company Intellectual property
owned by the Company or any of its subsidiaries, is currently outstanding or is,
to the knowledge of the Company, threatened. The Company has not received any
written notices of any material infringement or misappropriation by any third
party with respect to the Company Intellectual Property. Company and each of its
subsidiaries has taken reasonable actions to maintain and protect its Company
Intellectual Property, except for those actions, which the failure to take,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect.
(c) As used herein, "Company Intellectual Property" means all
trademarks, trademark registrations, trademark rights and renewals thereof,
trade names, trade name rights, patent, patent rights, patent applications,
industrial models, inventions, designs, utility models, inventor rights,
software, computer programs, computer systems, copyrights, copyright
registrations and renewals thereof, servicemarks, servicemark registrations and
renewals thereof, servicemark rights, trade secrets, applications for trademark
and servicemark registrations, know-how, confidential information and other
proprietary rights, used or held for use in connection with the businesses of
the Company and/or its Subsidiaries as currently conducted by the Company,
together with all applications currently pending or in process for any of the
foregoing.
(d) Company and each of its subsidiaries has taken reasonable steps
to protect Company's and its subsidiaries' rights in Company's confidential
information and trade secrets that
25
it wishes to protect or any trade secrets or confidential information of third
parties provided to Company or any of its subsidiaries, and, without limiting
the foregoing, each of Company and its subsidiaries has and uses its best
efforts to enforce a policy requiring each employee and contractor to execute a
proprietary information/confidentiality agreement substantially in the form
provided to Parent and all current and former employees and contractors of
Company and any of its subsidiaries have executed such an agreement, except
where the failure to do so is not reasonably expected to be material to Company.
3.18 Agreements, Contracts and Commitments. Neither Company nor any of its
-------------------------------------
subsidiaries is a party to or is bound by:
(a) any written employment or consulting agreement, contract or
commitment with any officer, director, Company employee or member of Company's
Board of Directors, other than (i) those that are terminable by Company or any
of its subsidiaries on no more than thirty (30) days' notice without liability
or financial obligation to Company, all Company Benefit Plans and International
Benefit Plans and (ii) employment or similar agreements with foreign employees;
(b) any agreement or plan, including, without limitation, any stock
option plan, stock appreciation right plan or stock purchase plan, any of the
benefits of which will be increased, or the vesting of benefits of which will be
accelerated, by the occurrence of any of the transactions contemplated by this
Agreement or the value of any of the benefits of which will be calculated on the
basis of any of the transactions contemplated by this Agreement;
(c) any material agreement of indemnification or any guaranty other
than any agreement of indemnification entered into in connection with the sale
of products in the ordinary course of business;
(d) any material agreement, contract or commitment containing any
covenant limiting in any respect the right of Company or any of its subsidiaries
to compete with any person or entity in any line of business or granting any
exclusive distribution rights;
(e) any agreement, contract or commitment currently in force
relating to the disposition or acquisition by Company or any of its subsidiaries
after the date of this Agreement of a material amount of assets not in the
ordinary course of business or pursuant to which Company or any of its
subsidiaries has any material ownership interest in any corporation,
partnership, joint venture or other business enterprise other than Company's
subsidiaries;
(f) any dealer, distributor, joint marketing or development
agreement currently in force under which Company or any of its subsidiaries have
continuing material obligations to jointly market any product, technology or
service and which may not be canceled without penalty upon notice of ninety (90)
days or less, or any material agreement pursuant to which Company or any of its
subsidiaries have continuing material obligations to jointly develop any
intellectual property that will not be owned, in whole or in part, by Company or
any of its subsidiaries and which may not be canceled without penalty upon
notice of ninety (90) days or less;
26
(g) any agreement, contract or commitment currently in force to
license any third party to manufacture or reproduce any Company product, service
or technology or any agreement, contract or commitment currently in force to
sell or distribute any Company products, service or technology except (i)
agreements with distributors or sales representative in the normal course of
business cancelable without penalty upon notice of ninety (90) days or less and
substantially in the form previously provided to Parent and (ii) agreements,
contracts or commitments involving revenues to the Company for the fiscal year
ended June 30, 2000 of greater than $1,485,000;
(h) any agreement, contract or commitment currently in force to
provide source code to any third party for any product or technology that is
material to Company and its subsidiaries taken as a whole;
(i) any mortgages, indentures, guarantees, loans or credit
agreements, security agreements or other agreements or instruments evidencing
the borrowing of money or extension of credit;
(j) any material settlement agreement under which Company has
ongoing obligations; or
(k) any agreement with a customer of the Company involving revenues
to the Company for the fiscal year ended June 30, 2000 in excess of $1,485,000.
Neither Company nor any of its subsidiaries, nor to Company's knowledge any
other party to a Company Contract (as defined below), is in material breach,
violation or default under, and neither Company nor any of its subsidiaries has
received written notice that it has materially breached, violated or defaulted
under, any of the material terms or conditions of any of the agreements,
contracts or commitments to which Company or any of its subsidiaries is a party
or by which it is bound that are required to be disclosed in the Company
Schedule (any such agreement, contract or commitment, a "Company Contract").
3.19 Opinion of Financial Advisor. Company has been advised by its
----------------------------
financial advisor, Xxxxxx Xxxxxx & Xxxxxxxx & Co., Inc., that in its opinion, as
of the date of this Agreement, the Offer Price is fair to the holders of shares
of Company Common Stock from a financial point of view, and Company will provide
a copy of the written confirmation of such opinion to Parent as soon as
reasonably practicable.
3.20 Insurance. Company maintains insurance policies and fidelity bonds
---------
covering the assets, business, equipment, properties, operations, employees,
officers and directors of Company and its subsidiaries (collectively, the
"Insurance Policies") which are of the type and in amounts customarily carried
by persons conducting businesses similar to those of Company and its
subsidiaries. There is no material claim by Company or any of its subsidiaries
pending under any of the material Insurance Policies as to which coverage has
been questioned, denied or disputed by the underwriters of such policies or
bonds.
27
3.21 State Takeover Statutes. The Board of Directors of Company has
-----------------------
approved the Offer, this Agreement and the Transaction Documents contemplated
hereby, and such approval is sufficient to render inapplicable to the Offer, the
Merger, the Transaction Documents and the transactions contemplated by the
Transaction Documents, the provisions of Section 203 of the Delaware Law to the
extent, if any, such section is applicable to the Offer, the Merger, the
Transaction Documents and the transactions contemplated by the Transaction
Documents. To the knowledge of Company, no other state takeover statute or
similar statute or regulation applies to or purports to apply to the Offer, the
Merger, the Transaction Documents or the transactions contemplated by the
Transaction Documents.
3.22 Application of California Statute. Company is not a foreign
---------------------------------
corporation subject to Section 2115 of the California General Corporation Law.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub jointly and severally represent and warrant to
Company, subject to such exceptions as are disclosed in writing in the
disclosure letter supplied by Parent to Company dated as of the date hereof (the
"Parent Schedule"), which disclosure shall provide an exception to or otherwise
qualify the representations and warranties of Parent and Merger Sub contained in
the section of this Agreement corresponding by number to such disclosure, as
follows:
4.1 Organization and Qualification; Subsidiaries. Each of Parent and its
--------------------------------------------
subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has the
requisite corporate power and authority to own, lease and operate its assets and
properties and to carry on its business as it is now being conducted, except
where the failure to do so would not, individually or in the aggregate, have a
Material Adverse Effect on Parent. Each of Parent and its subsidiaries is in
possession of all Approvals necessary to own, lease and operate the properties
it purports to own, operate or lease and to carry on its business as it is now
being conducted, except where the failure to have such Approvals would not,
individually or in the aggregate, have a Material Adverse Effect on Parent. Each
of Parent and its subsidiaries is duly qualified or licensed as a foreign
corporation to do business, and is in good standing, in each jurisdiction where
the character of the properties owned, leased or operated by it or the nature of
its activities makes such qualification or licensing necessary, except for such
failures to be so duly qualified or licensed and in good standing that would
not, either individually or in the aggregate, have a Material Adverse Effect on
Parent.
4.2 Certificate of Incorporation and Bylaws. Parent has previously
---------------------------------------
furnished to Company complete and correct copies of its Certificate of
Incorporation and Bylaws as amended to date (together, the "Parent Charter
Documents"). Such Company Charter Documents and equivalent organizational
documents of each of its subsidiaries are in full force and effect. Parent is
not in violation of any of the provisions of the Company Charter Documents, and
no subsidiary of Company is in violation of any of its equivalent organizational
documents.
28
4.3 Authority Relative to this Agreement. Each of Parent and/or Merger
------------------------------------
Sub has all necessary corporate power and authority to execute and deliver this
Agreement and the Noncompetition Agreements and to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the Noncompetition Agreements
by Parent and/or Merger Sub and the consummation by Parent and/or Merger Sub of
the transactions contemplated hereby have been duly and validly authorized by
all necessary corporate action on the part of Parent and/or Merger Sub, and no
other corporate proceedings on the part of Parent or Merger Sub are necessary to
authorize this Agreement or to consummate the transactions so contemplated. Each
of the Transaction Agreements has been duly and validly executed and delivered
by Parent and/or Merger Sub and, assuming the due authorization, execution and
delivery by the other parties thereto, constitutes a legal and binding
obligation of Parent and/or Merger Sub, enforceable against Parent and/or Merger
Sub in accordance with its terms, except with respect to clauses (ii) and (iii)
for any such conflicts, violations, breaches, defaults or other occurrences that
have not had, and could not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect with respect to Parent.
4.4 No Conflict; Required Filings and Consents.
------------------------------------------
(a) The execution and delivery of this Agreement, by Parent and
Merger Sub and the Company Tender and Voting Agreement by Parent do not, and the
performance of this Agreement, by Parent and Merger Sub and the Company Tender
and Voting Agreement by Parent shall not, (i) conflict with or violate the
Parent Charter Documents or equivalent organizational documents or any of
Parent's subsidiaries, (ii) subject to compliance with the requirements set
forth in Section 4.5(b) below, conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to Parent or any of its
subsidiaries or by which it or their respective properties are bound or
affected, or (iii) result in any breach of or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or
impair Parent's or any such subsidiary's rights or alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the properties or assets of Parent
or any of its subsidiaries pursuant to, any material note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Parent or any of its subsidiaries is a party
or by which Parent or any of its subsidiaries or its or any of their respective
properties are bound or affected, except to the extent such conflict, violation,
breach, default, impairment or other effect could not in the case of clauses
(ii) or (iii), individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect on Parent.
(b) The execution and delivery of this Agreement and the
Noncompetition Agreements, by Parent and Merger Sub do not, and the performance
of this Agreement by Parent and Merger Sub shall not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
Governmental Entity except (i) for applicable requirements, if any, of the
Securities Act, the Exchange Act, Blue Sky Laws, the pre-merger notification
requirements of the HSR Act , the Foreign Filings, the rules and regulations of
the NYSE and the Nasdaq, and the filing
29
and recordation of the Agreement of Merger as required by Delaware Law and (ii)
where the failure to obtain such consents, approvals, authorizations or permits,
or to make such filings or notifications, (A) would not prevent consummation of
the Merger or otherwise prevent Parent or Merger Sub from performing their
respective obligations under this Agreement or (B) could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on
Parent.
4.5 Funds. Parent has or will have the funds necessary to consummate the
-----
Offer and the Merger and to pay all fees and expenses of Parent and Merger Sub
related to the transactions contemplated hereby.
4.6 Share Ownership. None of Parent, Merger Sub or any of their
---------------
respective subsidiaries beneficially owns any Shares as of the date of this
Agreement.
4.7 Ownership of Merger Sub; No Prior Activities. Merger Sub was formed
--------------------------------------------
solely for the purpose of engaging in the Offer and Merger and has not engaged
in any business activities or conducted any operations other than in connection
with the transactions contemplated by the Offer and Merger.
(a) As of the Effective Time, all of the outstanding capital stock of
Merger Sub will be owned directly by Parent.
(b) As of the date hereof and the Effective Time, except for
obligations or liabilities incurred in connection with its incorporation or
organization and the transactions contemplated by this agreement, Merger Sub has
not and will not have incurred, directly or indirectly, through any subsidiary
or Affiliate, any obligations or liabilities or engaged in any business
activities of any type or kind whatsoever or entered into any agreements or
arrangements with any person.
4.8 Brokers or Finders. Neither Parent nor any of its subsidiaries or
------------------
their respective Affiliates has entered into as of the date of this agreement
any agreement or arrangement entitling any agent, broker, investment banker,
financial advisor or other firm or person to any brokers' or finders' fee or any
other commission or similar fee in connection with any of the transactions
contemplated by the Offer and Merger (other than an agreement with Xxxxxx
Xxxxxxx & Co. Incorporated).
ARTICLE V
CONDUCT PRIOR TO THE EFFECTIVE TIME
5.1 Conduct of Business by Company. During the period from the date of
------------------------------
this Agreement and continuing until the earlier of the termination of this
Agreement pursuant to its terms or the Appointment Date, Company and each of its
subsidiaries shall, except as permitted by this Agreement, as set forth in
Section 5.1 of the Company Schedule or to the extent that Parent shall otherwise
consent in writing (which consent shall not be unreasonably delayed or
withheld), carry on its business in the usual, regular and ordinary course in
substantially the same manner as heretofore
30
conducted and in compliance with all applicable Laws and regulations, pay its
debts and taxes when due subject to good faith disputes over such debts or
taxes, pay or perform other material obligations when due, and use its
commercially reasonable efforts consistent with past practices and policies to
(i) preserve intact its present business organization, (ii) keep available the
services of its present officers and employees and (iii) preserve its
relationships with customers, suppliers, distributors, licensors, licensees and
others with which it has significant business dealings.
In addition, except as permitted by the terms of this Agreement and except
as provided in Section 5.1 of the Company Schedule, without the prior written
consent of Parent (which consent shall not be unreasonably delayed or withheld),
during the period from the date of this Agreement and continuing until the
earlier of the termination of this Agreement pursuant to its terms or the
Appointment Date, Company shall not do any of the following and shall not permit
its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the
period of exercisability of options or restricted stock (except as specified in
Section 6.8(d) hereof), or reprice options granted under any employee,
consultant, director or other stock plans or authorize cash payments in exchange
for any options granted under any of such plans;
(b) Grant any severance or termination pay to any officer or employee
except pursuant to written agreements outstanding, or policies existing, on the
date hereof and as previously disclosed in writing or made available to Parent,
or adopt any new severance plan, or amend or modify or alter in any manner any
severance plan, agreement or arrangement existing on the date hereof;
(c) Transfer or license to any person or entity or otherwise extend,
amend or modify any rights to the Company Intellectual Property, or enter into
grants to transfer or license to any person future patent rights, other than in
the ordinary course of business consistent with past practices, provided that in
--------
no event shall Company license on an exclusive basis or sell any Company
Intellectual Property (other than in connection with the abandonment of
immaterial Company Intellectual Property after the provision of at least five
business days' written notice to Parent);
(d) Declare, set aside or pay any dividends on or make any other
distributions (whether in cash, stock, equity securities or property) in respect
of any capital stock or split, combine or reclassify any capital stock or issue
or authorize the issuance of any other securities in respect of, in lieu of or
in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any
shares of capital stock of Company or its subsidiaries, except repurchases of
unvested shares at cost in connection with the termination of the employment
relationship with any employee pursuant to stock option or purchase agreements
in effect on the date hereof (or any such agreements entered into in the
ordinary course consistent with past practice by Company with employees hired
after the date hereof);
31
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or
propose any of the foregoing with respect to any shares of capital stock or any
securities convertible into shares of capital stock, or subscriptions, rights,
warrants or options to acquire any shares of capital stock or any securities
convertible into shares of capital stock, or enter into other agreements or
commitments of any character obligating it to issue any such shares or
convertible securities, other than (x) the issuance delivery and/or sale of (i)
shares of Company Common Stock pursuant to the exercise of stock options
outstanding as of the date of this Agreement, and (ii) shares of Company Common
Stock issuable to participants in the ESPP consistent with the terms thereof and
(y) the granting of stock options (and the issuance of Common Stock upon
exercise thereof), in the ordinary course of business and consistent with past
practices, in an amount not to exceed options to purchase (and the issuance of
Company Common Stock upon exercise thereof) 150,000 shares in the aggregate.
(g) Cause, permit or propose any amendments to the Company's
Certificate of Incorporation or Bylaws (or similar governing instruments of any
of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or
by purchasing any equity interest in or a material portion of the assets of, or
by any other manner, any business or any corporation, partnership, association
or other business organization or division thereof, or otherwise acquire or
agree to enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any
properties or assets except sales of inventory in the ordinary course of
business consistent with past practice, except for the sale, lease or
disposition (other than through licensing permitted by clause (c)) of property
or assets which are not material, individually or in the aggregate, to the
business of Company and its subsidiaries; modify or amend in any material
respect or terminate any existing lease, license or contract affecting the use,
possession or operation of any such properties or assets; grant or otherwise
create or consent to the creation of any easement, covenant, restriction,
assessment or charge affecting any owned property or leased property or any part
thereof; convey, assign, sublease, license or otherwise transfer all or any
portion of any owned property or leased property or any interest or rights
therein; or make any material changes in the construction or condition of any
such property;
(j) Incur any indebtedness for borrowed money or guarantee any such
indebtedness of another person (other than (i) in the ordinary course of
business consistent with past practice in an amount not to exceed $500,000 and
(ii) performance guarantees, letters of credit and similar arrangements entered
into with respect to the commercial contracts in the ordinary course of business
consistent with past practice), issue or sell any debt securities or options,
warrants, calls or other rights to acquire any debt securities of Company, enter
into any "keep well" or other agreement to maintain any financial statement
condition or enter into any arrangement having the economic effect of any of the
foregoing other than in connection with the financing of working capital
consistent with past practice;
(k) Adopt or amend any employee benefit plan, policy or arrangement;
any employee stock purchase or employee stock option plan; or enter into any
employment contract or
32
collective bargaining agreement (other than offer letters and letter agreements
entered into in the ordinary course of business consistent with past practice
with employees who are terminable "at will"); pay any special bonus or special
remuneration to any director or employee; or increase the salaries or wage rates
or fringe benefits (including rights to severance or indemnification) of its
directors, officers, employees or consultants (other than the payment of bonuses
and salary increases and the issuance of retention options (in compliance with
Section 5.1(f)(y)), in each case in the ordinary course of business consistent
with past practice) except, in each case, as may be required by law;
(l) (i) pay, discharge, settle or satisfy any material litigation
(whether or not commenced prior to the date of this Agreement) or any material
claims, liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge, settlement or
satisfaction, in the ordinary course of business consistent with past practice
or in accordance with their terms, or liabilities recognized or disclosed in the
most recent consolidated financial statements (or the notes thereto) of Company
included in the Company SEC Reports or incurred since the date of such financial
statements, or (ii) waive any material benefits of, agree to modify in any
manner, terminate, release any person from or knowingly fail to enforce any
confidentiality or similar agreement to which Company or any of its subsidiaries
is a party or of which Company or any of its subsidiaries is a beneficiary;
(m) Except in the ordinary course of business consistent with past
practice, modify, amend or terminate any material contract or agreement to which
Company or any subsidiary thereof is a party or waive, delay the exercise of,
release or assign any material rights or claims thereunder;
(n) Except as required by GAAP, revalue any of its assets or make any
change in accounting methods, principles or practices;
(o) Incur or enter into any agreement, contract or commitment
requiring Company or any of its subsidiaries to pay in excess of $500,000;
(p) Make any Tax election or accounting method change inconsistent
with past practice that, individually or in the aggregate, would be reasonably
likely to adversely affect in any material respect the Tax liability or Tax
attributes of Company or any of its subsidiaries, settle or compromise any
material Tax liability, or consent to any extension or waiver of any limitation
period with respect to Taxes;
(q) Agree in writing or otherwise to take any of the actions described
in Section 5.1 (a) through (p) above.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Proxy Statement.
---------------
33
(a) After the Appointment Date, if required, Parent and Company shall
jointly prepare and shall file with the SEC a document or documents that will
constitute the Proxy Statement. Parent or Company, as the case may be, shall
furnish all information concerning Parent or Company as the other party may
reasonably request in connection with such actions and the preparation of the
Proxy Statement. As promptly as practicable, the Proxy Statement shall be
mailed to the stockholders of Company. Each of the parties hereto shall cause
the Proxy Statement to comply as to form and substance to such party in all
material respects with the applicable requirements of (i) the Exchange Act, (ii)
the Securities Act, (iii) the rules and regulations of the NYSE and (iv) the
rules and regulations of the Nasdaq.
(b) The Proxy Statement shall include the approval of this Agreement
and the Merger and the recommendation of the Board of Directors of Company to
Company's stockholders that they vote in favor of adoption of this Agreement,
subject to the right of the Board of Directors of Company to withdraw its
recommendation and to recommend a Superior Proposal determined to be such in
compliance with Section 6.4 of this Agreement; provided, however, that the Board
-------- -------
of Directors of Company shall submit this Agreement to Company's stockholders
whether or not at any time subsequent to the date hereof such board determines
that it can no longer make such recommendation; provided, further, that nothing
-------- -------
in this Agreement shall prevent the Company Board from withholding, withholding,
amending or modifying its recommendation if the Company Board determines in good
faith (after consultation with its outside legal counsel) that its fiduciary
duties under applicable Law require it to do so.
(c) No amendment or supplement to the Proxy Statement shall be made
without the approval of Parent and Company, which approval shall not be
unreasonably withheld or delayed. Each of the parties hereto shall advise the
other parties hereto, promptly after it receives notice thereof, of any request
by the SEC for amendment of the Proxy Statement or comments thereon and
responses thereto or requests by the SEC for additional information.
6.2 Stockholder Meeting. If required, the Company shall call and hold the
-------------------
Company Stockholders' Meeting after the Appointment Date for the purpose of
voting upon the adoption and approval of this Agreement and the approval of the
Merger pursuant to the Proxy Statement, and Company shall use all reasonable
efforts to hold the Company Stockholders' Meeting as soon as practicable.
Nothing herein shall prevent Company from adjourning or postponing the Company
Stockholders' Meeting if there are insufficient shares of Company Common Stock
necessary to conduct business at the Company Stockholders' Meeting. Company
shall call and hold the Company Stockholders' Meeting for the purpose of voting
upon the adoption and approval of this Agreement and the approval of the Merger
whether or not Company's Board of Directors at any time subsequent to the date
hereof determines that this Agreement is no longer advisable or recommends that
Company's shareholders reject it.
(a) Notwithstanding Section 6.1 hereof or this Section 6.2, in the
event that Parent, Merger Sub or any other subsidiary of Parent, shall acquire
at least 90 percent of the Shares pursuant to the Offer or otherwise, each of
the parties hereto shall take all necessary and appropriate
34
action to cause the Merger to become effective as soon as practicable after such
acquisition, without a meeting of stockholders in accordance with Section 253 of
the DGCL.
6.3 Confidentiality; Access to Information. The parties acknowledge that
--------------------------------------
Company and Parent have previously executed a Mutual Confidentiality Agreement,
dated as of September 18, 2000, (the "Confidentiality Agreement"), which
Confidentiality Agreement will continue in full force and effect in accordance
with its terms. Company will afford Parent and its accountants, counsel and
other representatives reasonable access during normal business hours, upon
reasonable notice, to the properties, books, records and personnel of Company
during the period prior to the Effective Time to obtain all information
concerning the business, including the status of product development efforts,
properties, results of operations and personnel of Company, as Parent may
reasonably request. No information or knowledge obtained by Parent in any
investigation pursuant to this Section 6.3 will affect or be deemed to modify
any representation or warranty contained herein or the conditions to the
obligations of the parties to consummate the Merger.
6.4 No Solicitation.
---------------
(a) From and after the date of this Agreement until the Effective Time
or termination of this Agreement pursuant to Article VIII, Company and its
subsidiaries will not, nor will they authorize or permit any of their respective
officers, directors, affiliates or employees or any investment banker, attorney
or other advisor or representative retained by any of them to, directly or
indirectly, (i) solicit, initiate, induce or knowingly encourage the making,
submission or announcement of any Acquisition Proposal (as defined below), (ii)
participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to, or take any other action to facilitate
any inquiries or the making of any proposal that constitutes or may reasonably
be expected to lead to, any Acquisition Proposal, (iii) engage in discussions
with any person with respect to any Acquisition Proposal, (iv) approve, endorse
or recommend any Acquisition Proposal or (v) enter into any letter of intent or
similar document or any contract, agreement or commitment contemplating or
otherwise relating to any Acquisition Transaction (as defined below); provided,
--------
however, that nothing contained in this Section 6.4 shall prohibit the Company,
-------
the Company Board (or any duly appointed and empowered committee thereof (a
"Special Committee")) or any director of the Company from (i) complying with
Rule 14d-9 or 14e-2(a) promulgated under the Exchange Act with regard to a
tender or exchange offer not made after a violation of this Section 6.4, (ii)
making such disclosures to Company's stockholders as in the good faith judgment
of the Company Board (or a Special Committee), after consultation with its
outside legal counsel, is required under applicable Law or (iii) in response to
an unsolicited, bona fide written Acquisition Proposal that the Company Board
(or a Special Committee) concludes in good faith constitutes a Superior Proposal
(as defined below), engaging in discussions or participating in negotiations
with and furnishing information to the party making such Acquisition Proposal to
the extent (A) the Company Board determines in good faith after consultation
with its outside legal counsel that its fiduciary obligations under applicable
Law require it to do so, (B) (x) at least two business days prior to furnishing
any such nonpublic information to, or entering into discussions or negotiations
with, such party, Company gives Parent written notice of Company's intention to
furnish nonpublic information to, or
35
enter into discussions or negotiations with, such party and (y) Company receives
from such party an executed confidentiality agreement containing customary
limitations on the use and disclosure of all nonpublic written and oral
information furnished to such party by or on behalf of Company, and (C)
contemporaneously with furnishing any such nonpublic information to such party,
Company furnishes such nonpublic information to Parent (to the extent such
nonpublic information has not been previously furnished by Company to Parent).
Company and its subsidiaries will immediately cease any and all existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any Acquisition Proposal. Without limiting the foregoing, it is
understood that any violation of the restrictions set forth in this Section 6.4
by any officer, director, affiliate or employee of Company or any of its
subsidiaries or any investment banker, attorney or other advisor or
representative of Company or any of its subsidiaries shall be deemed to be a
breach of this Section 6.4 by Company.
For purposes of this Agreement: (i) "Acquisition Proposal" shall mean any
expression of interest, offer or proposal (other than an offer or proposal by
Parent) relating to any Acquisition Transaction; (ii) "Acquisition Transaction"
shall mean any transaction or series of related transactions other than the
transactions contemplated by this Agreement involving: (A) any acquisition or
purchase from Company by any person or "group" (as defined under Section 13(d)
of the Exchange Act and the rules and regulations thereunder) of more than a 15%
interest in the total outstanding voting securities of Company or any of its
subsidiaries or any tender offer or exchange offer that if consummated would
result in any person or "group" (as defined under Section 13(d) of the Exchange
Act and the rules and regulations thereunder) beneficially owning 15% or more of
the total outstanding voting securities of Company or any of its subsidiaries or
any merger, consolidation, business combination or similar transaction involving
Company pursuant to which the shareholders of Company immediately preceding such
transaction hold less than 85% of the equity interests in the surviving or
resulting entity of such transaction; (B) any sale, lease (other than in the
ordinary course of business), exchange, transfer, license (other than in the
ordinary course of business), acquisition or disposition of more than 15% of the
assets of Company; or (C) any liquidation, dissolution, recapitalization or
other significant corporate reorganization of Company; and (iii) "Superior
Proposal" shall mean an Acquisition Proposal relating to the acquisition (by
means of any of the structural means described in clauses (A) or (B) of the
definition of Acquisition Transaction) of a majority of the outstanding voting
securities, or all or substantially all of the assets, of the Company with
respect to which (A) if any cash consideration is involved, no financing
contingency exists or the Company Board shall have concluded in good faith
(after consultation with Company's financial advisors) that the acquiring party
is reasonably likely to obtain any necessary financing, and (B) the Company
Board shall have concluded in good faith that the proposed Acquisition
Transaction provides greater value to the stockholders of Company than the Offer
and the Merger (based upon the advice of Company's financial advisors).
(b) In addition to the obligations of Company set forth in paragraph
(a) of this Section 6.4, Company as promptly as practicable, and in any event
within one business day, shall advise Parent orally and in writing of any
request for information which Company reasonably believes would lead to an
Acquisition Proposal or of any Acquisition Proposal, or any inquiry with
36
respect to or which Company reasonably believes would lead to any Acquisition
Proposal; the material terms and conditions of such request, Acquisition
Proposal or inquiry; and the identity of the person or group making any such
request, Acquisition Proposal or inquiry. Company will keep Parent informed in
all material respects of the status and details (including material amendments
or proposed amendments) of any such request, Acquisition Proposal or inquiry. In
addition to the foregoing, Company shall (i) provide Parent with at least 48
hours prior written notice (or such lesser prior notice as provided to the
members of the Company Board but in no event less than eight hours) of any
meeting of the Company Board at which Company's Board is reasonably expected to
consider an Acquisition Proposal and (ii) provide Parent with at least two (2)
business days prior written notice (or such lesser prior notice as provided to
members of the Company Board but in no event less than eight hours) of a meeting
of the Company Board at which the Company Board is reasonably expected to
recommend a Superior Proposal to its shareholders and together with such notice
a copy of the definitive documentation relating to such Superior Proposal.
6.5 Public Disclosure. Parent and Company will consult with each other,
-----------------
and to the extent practicable, agree, before issuing any press release or
otherwise making any public statement with respect to the Offer, this Agreement
or an Acquisition Proposal and will not issue any such press release or make any
such public statement prior to such consultation, except as may be required by
law or any listing agreement with a national securities exchange, in which case
reasonable efforts to consult with the other party will be made prior to any
such release or public statement.
6.6 Commercially Reasonable Efforts; Notification.
---------------------------------------------
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties agrees to use all commercially reasonable efforts
to take, or cause to be taken, all actions, and to do, or cause to be done, and
to assist and cooperate with the other parties in doing, all things necessary,
proper or advisable to consummate and make effective, in the most expeditious
manner practicable, the transactions contemplated by this Agreement, including
using commercially reasonable efforts to accomplish the following: (i) the
taking of all commercially reasonable acts necessary to cause the conditions
precedent set forth in Article VII to be satisfied, (ii) the obtaining of all
necessary actions or nonactions, waivers, consents, approvals, orders and
authorizations from Governmental Entities and the making of all necessary
registrations, declarations and filings (including registrations, declarations
and filings with Governmental Entities, if any) and the taking of all
commercially reasonable steps as may be necessary to avoid any suit, claim,
action, investigation or proceeding by any Governmental Entity, (iii) the
defending of any suits, claims, actions, investigations or proceedings, whether
judicial or administrative, challenging this Agreement or the consummation of
the transactions contemplated hereby, including seeking to have any stay or
temporary restraining order entered by any court or other Governmental Entity
vacated or reversed and (iv) the execution or delivery of any additional
instruments reasonably necessary to consummate the transactions contemplated by,
and to fully carry out the purposes of, this Agreement. In connection with and
without limiting the foregoing, Company and its Board of Directors shall, if any
state takeover statute or similar statute or regulation is or becomes applicable
to this Agreement or any of the transactions contemplated by this Agreement, use
all commercially reasonable efforts to
37
ensure that the transactions contemplated by this Agreement may be consummated
as promptly as practicable on the terms contemplated by this Agreement and
otherwise to minimize the effect of such statute or regulation on this Agreement
and the transactions contemplated hereby. Notwithstanding anything herein to the
contrary, nothing in this Agreement shall be deemed to require Parent or Company
or any subsidiary or affiliate thereof to agree to any divestiture by itself or
any of its affiliates of shares of capital stock or of any business, assets or
property, or the imposition of any material limitation on the ability of any of
them to conduct their business or to own or exercise control of such assets,
properties and stock.
(b) Company shall give prompt notice to Parent upon becoming aware
that any representation or warranty made by it contained in this Agreement has
become untrue or inaccurate, or of any failure of Company to comply with or
satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement; provided, however, that
-------- -------
no such notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement.
(c) Parent shall give prompt notice to Company upon becoming aware
that any representation or warranty made by it or Merger Sub contained in this
Agreement has become untrue or inaccurate, or of any failure of Parent or Merger
Sub to comply with or satisfy in any material respect any covenant, condition or
agreement to be complied with or satisfied by it under this Agreement; provided,
--------
however, that no such notification shall affect the representations, warranties,
-------
covenants or agreements of the parties or the conditions to the obligations of
the parties under this Agreement.
6.7 Third Party Consents. As soon as practicable following the date
--------------------
hereof, Parent and Company will each use best efforts to obtain any consents,
waivers and approvals under any of its or its subsidiaries' respective
agreements, contracts, licenses or leases required to be obtained in connection
with the consummation of the transactions contemplated hereby.
6.8 Stock Options and Employee Benefits.
-----------------------------------
(a) Stock Options. At the Effective Time, each outstanding option to
-------------
purchase shares of Company Common Stock (each, a "Company Stock Option") under
the Company Option Plans, whether or not vested, shall by virtue of the Merger
be substituted with an equivalent option under Parent's option plan. Each
Company Stock Option so substituted by Parent under this Agreement and will be
exercisable (or will become exercisable in accordance with its terms) for that
number of whole shares of Parent Common Stock equal to the product of the number
of shares of Company Common Stock that were issuable upon exercise of such
Company Stock Option immediately prior to the Effective Time multiplied by the
product of that fraction of a share of Common Stock, $0.01 par value per share,
of Parent (the "Parent Common Stock") obtained by dividing $17.75 by the average
of the closing prices of Parent's Common Stock as quoted on the New York Stock
Exchange ("NYSE") for the five (5) trading days immediately preceding the
closing date (the "Exchange Ratio"), rounded down to the nearest whole number of
shares of Parent
38
Common Stock and (ii) the per share exercise price for the shares of Parent
Common Stock issuable upon exercise of such substituted Company Stock Option
will be equal to the quotient determined by dividing the exercise price per
share of Company Common Stock at which such Company Stock Option was exercisable
immediately prior to the Effective Time by the product of the Exchange Ratio,
rounded up to the nearest whole cent. Parent shall comply with the terms of all
such substituted Company Stock Options and use its best efforts to ensure, to
the extent required by, and subject to the provisions of, the Company Option
Plans and permitted under the Code that any Company Stock Options that qualified
for tax treatment under Section 424(b) of the Code prior to the Effective Time
continue to so qualify after the Effective Time. Parent shall take all corporate
actions necessary to reserve for issuance a sufficient number of shares of
Parent Common Stock for delivery pursuant to the terms set forth in this Section
6.8 (a).
(b) Employee Stock Purchase Plan. Company agrees that it shall take
----------------------------
such actions as is necessary(i) to provide that the shares of the Company Common
Stock to be purchased under the Company Employee Stock Purchase Plan shall be
purchased under the Company Employee Stock Purchase Plan on a "New Exercise
Date" (as such term is defined in the Company Employee Stock Purchase Plan) set
by the Board of Directors, which Exercise Date shall be on the last trading day
immediately prior to the Effective Time, and (ii) to provide that immediately
following such purchase of shares of Company Common Stock the Company Employee
Stock Purchase Plan shall terminate.
(c) 401(k) Plan. Company shall terminate, effective as of the day
-----------
immediately preceding the Effective Time, any and all 401(k) plans unless Parent
provides notice to Company that such 401(k) plan(s) shall not be terminated.
Parent shall receive from Company evidence that Company's plan(s) and /or
program(s) have been terminated pursuant to resolutions of each such entity's
Board of Directors (the form and substance of such resolutions shall be subject
to review and approval of Parent), effective as of the day immediately preceding
the Effective Time.
(d) Benefit Plans; Credit for Past Service. Parent shall cause Merger
--------------------------------------
Sub and the Surviving Corporation to provide employees of the Company and its
Subsidiaries with benefits (including welfare benefits) that are substantially
similar as it provides to its similarly-situated employees. To the extent that
service is relevant for eligibility, vesting or allowances (including flexible
time off) under any plan, program or arrangement of the Merger Sub and/or
Surviving Corporation, then Parent shall ensure that such plan, program or
arrangement shall credit employees for service prior to the Effective Time with
the Company and its Subsidiaries; provided, however, no such service shall be
credited for any purpose under Parent's pension plan and Parent's retiree health
plan. Notwithstanding anything in this Section 6.8(d) to the contrary, nothing
in this Section 6.8(d) shall be deemed to limit or otherwise affect the right of
the Parent, Merger Sub or the Surviving Corporation to terminate employment or
change the place of work, responsibilities, status or description of any
employee or group of employees as the Parent, Merger Sub or Surviving
Corporation may determine in its discretion.
39
6.9 Adjustments to Exchange Ratio. The Exchange Ratio shall be adjusted
-----------------------------
to reflect appropriately the effect of any stock split, reverse stock split,
stock dividend (including any dividend or distribution of securities convertible
into Parent Common Stock or Company Common Stock), extraordinary cash dividends,
reorganization, recapitalization, reclassification, combination, exchange of
shares or other like change with respect to Parent Common Stock or Company
Common Stock occurring on or after the date hereof and prior to the Effective
Time.
6.10 [Intentionally omitted.]
----------------------
6.11 Indemnification.
---------------
(a) From and after the Effective Time, Parent will cause the Surviving
Corporation to fulfill and honor in all respects the obligations of Company
pursuant to any indemnification agreements between Company and its directors and
officers in effect immediately prior to the Effective Time (the "Indemnified
Parties") and any indemnification provisions under the Company Charter Documents
as in effect on the date hereof. The Certificate of Incorporation and Bylaws of
the Surviving Corporation will contain provisions with respect to exculpation
and indemnification that are at least as favorable to the Indemnified Parties as
those contained in the Company Charter Documents as in effect on the date
hereof, which provisions will not be amended, repealed or otherwise modified for
a period of six (6) years from the Effective Time in any manner that would
adversely affect the rights thereunder of individuals who, immediately prior to
the Effective Time, were directors, officers, employees or agents of Company,
unless such modification is required by law.
(b) For a period of six (6) years after the Effective Time, Parent
will cause to be maintained in effect, if available, directors' and officers'
liability insurance covering those persons who are currently covered by
Company's directors' and officers' liability insurance policy with respect to
claims arising from or related to facts or events which occurred at or before
the Effective Time in an amount and on terms comparable to those applicable to
the current directors and officers of Company; provided, however, that in no
-------- -------
event will Parent or the Surviving Corporation be required to expend an annual
premium for such coverage in excess of 150% of the annual premium currently paid
by Company; provided, further, that if the premium for such coverage exceeds
-------- -------
such amount, Parent and/or the Surviving Corporation shall purchase a policy
with the greatest coverage available for 150% of the annual premium currently
paid by Company.
(c) In the event Company or the Surviving Corporation or any of their
respective successors or assigns (i) consolidates with or merges into any other
person and shall not be the continuing or surviving corporation or entity of
such consolidation or merger or (ii) transfers a material amount of its
properties and assets to any person in a single transaction or a series of
transactions, then, and in each such case, Parent will either guaranty the
indemnification obligations referred to in this Section 6.11 or will make or
cause to be made proper provision so that the successors and assigns of Company
or the Surviving Corporation, as the case may be, assume the indemnification
obligations described herein for the benefit of the Indemnified Parties.
40
(d) The provisions of this Section 6.11 are (i) intended to be for
the benefit of, and will be enforceable by, each of the Indemnified Parties and
(ii) in addition to, and not in substitution for, any other rights to
indemnification or contribution that any such person may have by contract or
otherwise.
6.12 Regulatory Filings; Reasonable Efforts. As soon as may be reasonably
--------------------------------------
practicable, Company and Parent each shall file with the United States Federal
Trade Commission (the "FTC") and the Antitrust Division of the United States
Department of Justice ("DOJ") Notification and Report Forms relating to the
transactions contemplated herein as required by the HSR Act, as well as
comparable pre-merger notification forms required by the merger notification or
control laws and regulations of any applicable jurisdiction, as agreed to by the
parties. Except where prohibited by applicable Law, and subject to the
Confidentiality Agreement, Company and Parent each shall promptly (a) supply the
other with any information which may be required in order to effectuate such
filings and (b) supply any additional information which reasonably may be
required by the FTC, the DOJ or the competition or merger control authorities of
any other jurisdiction and which the parties may reasonably deem appropriate.
ARTICLE VII
CONDITIONS TO THE MERGER
7.1 Conditions. The respective obligations of each party to consummate
----------
the Merger shall be subject to the satisfaction or waiver, where permissible,
prior to the Effective Time, of the following conditions:
(a) Stockholder Approval. If approval of the Merger by the holders
--------------------
of Shares is required by applicable Law, the Merger shall have been duly
approved by the holders of a majority of the outstanding shares of each class of
the Company entitled to vote on the Merger, in accordance with applicable Law
and the Certificate of Incorporation and Bylaws of the Company;
(b) Purchase of Shares. Merger Sub (or Parent) shall have purchased
------------------
Shares pursuant to the Offer; and
(c) No Order. No court or other Governmental Entity of competent
--------
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, judgment, decree, injunction or other order (whether
temporary, preliminary or permanent) which is in effect and prohibits
consummation of the Merger (collectively, an "Order").
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.1 Termination. This Agreement may be terminated and the Merger may be
-----------
abandoned at any time prior to the Effective Date (notwithstanding any approval
of this Agreement by the stockholders of Company):
41
(a) by mutual written agreement of Company and Parent; or
(b) by either Company or Parent, if:
(i) the Offer shall have expired or been terminated in
accordance with the terms of this Agreement without Parent or Merger Sub having
accepted for exchange any Shares pursuant to the Offer, provided that Parent and
--------
Merger Sub shall not be permitted to terminate this Agreement pursuant to this
Section 8.1(b)(i) if the Offer is terminated or expires without Shares having
been accepted for exchange as a result of a breach by Parent or Merger Sub of
this Agreement; or
(ii) the Offer has not been consummated on or before January 31,
2001 (the "End Date"); provided, however, that the right to terminate this
-------- -------
Agreement under this Section 8.1(b)(ii) shall not be available to any party
whose failure to fulfill any obligation under this Agreement has been the
principal cause of or resulted in the failure of the Offer to have been
consummated on or before such date and such action or failure to act constitutes
a material breach of this Agreement; or
(iii) there shall be any applicable Law or regulation that makes
consummation of the Merger illegal or otherwise prohibited or any judgment,
injunction, order or decree of any court or governmental body having competent
jurisdiction enjoining Company or Parent from consummating the Merger is entered
and such judgment, injunction, judgment or order shall have become final and
nonappealable; or
(iv) Prior to the Appointment Date (A) any of the
representations and warranties of the other party set forth in this Agreement
shall not be true and correct in all respects (unless such failures to be true
and correct, without giving effect to any materiality or Material Adverse Effect
qualifications or exceptions contained therein, do not, or could not reasonably
be expected to, constitute a Material Adverse Effect with respect to Company),
in each case (i) as of the date referred to in any representation or warranty
which addresses matters as of a particular date, or (ii) as to all other
representations and warranties of the other party, as of the date of this
Agreement and as of the scheduled expiration of the Offer, or (B) the other
party shall have failed to perform in any material respect any material
obligation or to comply in any material respect with any material agreement or
covenant of such party to be performed or complied with by it under this
Agreement; provided, however, that such inaccuracy or failure to perform has not
-------- -------
been or is incapable of being cured by such other party within 30 days following
receipt by the terminating party of notice of such inaccuracy or failure to
perform;
(c) by Parent if a Triggering Event shall have occurred; or
(d) by Company, if the Offer has not been commenced by the Parent or
Merger Sub on or prior to ten (10) business days following the date of the
initial public announcement of the Offer, provided, that Company may not
--------
terminate this agreement pursuant to this Section 8.1(d) if Company is in
material breach of this Agreement.
42
For purposes of this Agreement, a "Triggering Event" shall be deemed to
have occurred if, prior to the Effective Time: (i) the Board of Directors of
Company or any committee thereof shall have approved or recommended to Company
stockholders any Acquisition Proposal, (ii) the Board of Directors of Company or
any committee thereof shall for any reason have withdrawn or shall have amended
or modified in a manner adverse to Parent its recommendation in favor of the
Offer, the adoption and approval of the Agreement or the approval of the Merger
(the "Recommendations"); (iii) Company shall have failed to include the
Recommendations in the Offer Documents or the Schedule 14D-9; (iv) Company shall
have breached the provisions of Section 6.4; or (v) an Acquisition Proposal
shall have been commenced or otherwise publicly announced by a person
unaffiliated with Parent, and Company shall not, within 10 business days after
such commencement or public announcement, publicly recommended to the Company's
stockholders rejection of such Acquisition Proposal.
The party desiring to terminate this Agreement pursuant to this Section 8.1
(other than pursuant to Section 8.1(a)) shall give notice of such termination to
the other party.
8.2 Notice of Termination; Effect of Termination. Any proper termination
--------------------------------------------
of this Agreement under Section 8.1 above will be effective immediately upon the
delivery of written notice of the terminating party to the other parties hereto.
In the event of the termination of this Agreement under Section 8.1, this
Agreement shall be of no further force or effect without liability of any party
(or any stockholder, director, officer, employee, agent, consultant or
representative of such party) to the other parties hereto, except (i) as set
forth in this Section 8.2, Section 8.3 and Article IX, each of which shall
survive the termination of this Agreement, and (ii) that nothing herein shall
relieve any party from liability for any willful breach of or fraud in
connection with this Agreement. No termination of this Agreement shall affect
the obligations of the parties contained in the Confidentiality Agreement, all
of which obligations shall survive termination of this Agreement in accordance
with their terms. In the event that Company gives Parent notice of an inaccuracy
or failure to perform such that this Agreement would be subject to termination
pursuant to Section 8.1(b)(iv), Parent shall cause Merger Sub to not consummate
the Offer until such inaccuracy or failure to perform is cured.
8.3 Fees and Expenses.
-----------------
(a) General. Except as set forth in this Section 8.3, all fees and
-------
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses whether
or not the Merger is consummated; provided, however, that Parent and Company
-------- -------
shall share equally all fees and expenses, other than attorneys' and accountants
fees and expenses, in relation to the printing, filing and mailing of the
Schedule TO and the Schedule 14D-9 and any amendments or supplements thereto.
(b) Company Payments. If this Agreement is terminated by Parent or
----------------
Company, as applicable, prior to the Effective Time pursuant to Sections
8.1(b)(i) or (ii) or Section 8.1(c), Company shall promptly, but in any event no
later than two days after the date of such termination,
43
pay Parent a fee equal to $22,600,000 in immediately available funds (the
"Termination Fee"); provided, that in the case of a termination under Section
--------
8.1(b)(i) or (ii) prior to which no Triggering Event has occurred, (i) such
payment shall be made only if (A) following the date of this Agreement and prior
to the termination of this Agreement, any Acquisition Proposal shall have been
publicly announced or shall have become publicly known, and (B) within 12 months
following the termination of this Agreement, either a Company Acquisition (as
defined below) is consummated, or Company enters into an agreement providing for
a Company Acquisition and such Company Acquisition is later consummated, and
(ii) such payment shall be made promptly, but in any event no later than two
days after the consummation of such Company Acquisition. Company acknowledges
that the agreements contained in this Section 8.3(b) are an integral part of the
transactions contemplated by this Agreement, and that, without these agreements,
Parent would not enter into this Agreement. Accordingly, if Company fails to pay
in a timely manner the amounts due pursuant to this Section 8.3(b), and, in
order to obtain such payment, Parent makes a claim that results in a judgment
against Company, Company shall pay to Parent its reasonable costs and expenses
(including reasonable attorneys' fees and expenses) in connection with such
suit, together with interest on the amounts set forth in this Section 8.3(b) at
the prime rate Bank of America N.T. and S.A. in effect on the date such payment
was required to be made. Parent agrees that the payment provided for in this
Section 8.3(b) shall be the sole and exclusive remedy of Parent and Merger Sub
upon termination of this Agreement where such fee has been paid, and such
remedies shall be limited to the sum stipulated in this Section 8.3(b),
regardless of the circumstances giving rise to such termination; provided,
---------
however, that nothing herein shall relieve the Company from liability for the
-------
willful breach of, or fraud in connection with, any of its representations,
warranties, covenants or agreements set forth in this Agreement.
For the purposes of this Agreement, "Company Acquisition" shall mean any of
the following transactions (other than the transactions contemplated by this
Agreement): (i) a sale or other disposition by Company of a business or assets
representing 40% or more of the consolidated net revenues, net income or assets
of Company immediately prior to such sale; (ii) the acquisition by any person or
group (including by way of a tender offer or an exchange offer or issuance by
Company), directly or indirectly, of beneficial ownership or a right to acquire
beneficial ownership of shares representing 40% or more of any class of equity
securities of Company; or (iii) a merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving
Company (other than a transaction in which Company is the Parent and in which
the current Company stockholders retain more than 60%, directly or indirectly,
of the surviving or successor corporation); it being understood that a widely
distributed offering of Company Common Stock shall not constitute a Company
Acquisition.
8.4 Amendment. Subject to applicable Law and to Section 1.3(c), this
---------
Agreement may be amended by the parties hereto at any time by execution of an
instrument in writing signed on behalf of each of Parent and Company.
8.5 Extension; Waiver. At any time prior to the Effective Time any party
-----------------
hereto may, to the extent legally allowed and except as otherwise set forth
herein, (i) extend the time for the
44
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto and (iii)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. Delay in exercising any right under this
Agreement shall not constitute a waiver of such right.
ARTICLE IX
GENERAL PROVISIONS
9.1 Non-Survival of Representations and Warranties. The representations,
----------------------------------------------
warranties and covenants of Company, Parent and Merger Sub contained in this
Agreement shall terminate at the Effective Time, and only the covenants that by
their terms survive the Effective Time shall survive the Effective Time.
9.2 Notices. All notices and other communications hereunder shall be in
-------
writing and shall be deemed given if delivered personally or by commercial
delivery service, or sent via telecopy (receipt confirmed) to the parties at the
following addresses or telecopy numbers (or at such other address or telecopy
numbers for a party as shall be specified by like notice):
(a) if to Parent or Merger Sub, to:
Agilent Technologies, Inc.
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: General Counsel
Telecopy No.: (000) 000-0000
with copies to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
Xxxx X. Xxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
and
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
45
Xxx Xxxxxx
Xxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
(b) if to Company, to:
Objective Systems Integrators, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxxxxx LLP
000 Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
9.3 Interpretation; Knowledge.
-------------------------
(a) When a reference is made in this Agreement to Exhibits, such
reference shall be to an Exhibit to this Agreement unless otherwise indicated.
When a reference is made in this Agreement to Sections, such reference shall be
to a Section of this Agreement. Unless otherwise indicated the words "include,"
"includes" and "including" when used herein shall be deemed in each case to be
followed by the words "without limitation." The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. When reference is
made herein to "the business of" an entity, such reference shall be deemed to
include the business of all direct and indirect subsidiaries of such entity.
Reference to the subsidiaries of an entity shall be deemed to include all direct
and indirect subsidiaries of such entity.
(b) For purposes of this Agreement, the term "knowledge" means with
respect to a party hereto, with respect to any matter in question, actual
knowledge of the executive officers or directors of such party.
(c) The word "agreement" when used herein shall be deemed in each
case to mean any contract, commitment or other agreement, whether oral or
written, that is legally binding.
(d) For purposes of this Agreement, the term "person" shall mean any
individual, corporation (including any non-profit corporation), general
partnership, limited partnership, limited
46
liability partnership, joint venture, estate, trust, company (including any
limited liability company or joint stock company), firm or other enterprise,
association, organization, entity or Governmental Entity.
(e) When used in connection with Parent or Company, as the case may
be, the term "Material Adverse Effect" means any change or effect that,
individually or when taken together with all other such changes or effects that
have occurred prior to the date of determination of the occurrence of the
Material Adverse Effect, is or is reasonably likely to be materially adverse to
the business, assets (including intangible assets), financial condition or
results of operations of such entity and its subsidiaries, taken as a whole, or
on the ability of such entity to consummate the Offer or the Merger, but other
than those adverse effects occurring directly and primarily as a result of (i)
the execution and public announcement of this Agreement, the pendency of this
Agreement or the consummation of the transactions contemplated hereby
(including, without limitation, loss of customers, vendors, suppliers or
employees directly and primarily resulting therefrom) or (ii) general market or
industry conditions (including, without limitation, any change in trading prices
of the Company's outstanding publicly-traded equity securities resulting from
the events described in clauses (i) and (ii) above).
9.4 Counterparts. This Agreement may be executed in one or more
------------
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
9.5 Entire Agreement; Third Party Beneficiaries. This Agreement and the
-------------------------------------------
documents and instruments and other agreements among the parties hereto as
contemplated by or referred to herein, including the Company Disclosure Schedule
and the Parent Disclosure Schedule (a) constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof, it being understood that the
Confidentiality Agreement shall continue in full force and effect until the
Closing and shall survive any termination of this Agreement; and (b) are not
intended to confer upon any other person any rights or remedies hereunder.
9.6 Severability. In the event that any provision of this Agreement, or
------------
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
47
9.7 Other Remedies; Specific Performance. Except as otherwise provided
------------------------------------
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to seek an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity.
9.8 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 law thereof.
9.9 Rules of Construction. The parties hereto agree that they have been
---------------------
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
9.10 Assignment. No party may assign either this Agreement or any of its
----------
rights, interests, or obligations hereunder without the prior written approval
of the other parties. Subject to the preceding sentence, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
9.11 WAIVER OF JURY TRIAL. EACH OF PARENT, COMPANY AND MERGER SUB HEREBY
--------------------
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE ACTIONS OF PARENT, COMPANY OR MERGER SUB IN
THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.
*****
48
The foregoing Agreement is hereby executed as of the date first above
written.
"PARENT"
AGILENT TECHNOLOGIES, INC.,
a Delaware corporation
By:_______________________________________
Name: Xxxx Xxxxx
----------
Title: Vice President
--------------
"MERGER SUB"
TAHOE ACQUISITION CORP.,
a Delaware corporation
By:_______________________________________
Name: Xxxx Xxxxx
----------
Title: Vice President
--------------
"COMPANY"
OBJECTIVE SYSTEMS INTEGRATORS, INC.,
a Delaware corporation
By:______________________________________
Name:
Title:
ANNEX A
Certain Conditions of the Offer. Notwithstanding any other provisions of
-------------------------------
the Offer, and in addition to (and not in limitation of) the Parent's rights to
extend and amend the Offer at any time in its sole discretion (subject to the
provisions of the Agreement), the Parent shall not be required to accept for
payment or, subject to any applicable rules and regulations of the SEC,
including Rule 14e-1(c) under the Exchange Act (relating to the Parent's
obligation to pay for or return tendered Shares promptly after termination or
withdrawal of the Offer), pay for, and may delay the acceptance for payment of
or, subject to the restriction referred to above, the payment for, any tendered
Shares, and may terminate or amend the Offer as to any Shares not then paid for,
if (i) any applicable waiting period under the HSR Act or any Foreign Filing has
not expired or terminated, (ii) the Minimum Condition has not been satisfied, or
(iii) at any time on or after the date of the Agreement and before the time of
acceptance for payment for any such Shares, any of the following events shall
occur or shall be determined by the Parent to have occurred:
(a) there shall be threatened or pending any suit, action or
proceeding by any Governmental Entity against the Parent, Merger Sub, the
Company or any subsidiary of the Company (i) seeking to prohibit or impose any
material limitations on Parent's or Merger Sub ownership or operation (or that
of any of their respective subsidiaries or affiliates) of all or a material
portion of their or the Company's businesses or assets, or to compel Parent,
Merger Sub or their respective subsidiaries and affiliates to dispose of or hold
separate any material portion of the business or assets of the Company or Parent
and their respective subsidiaries, in each case taken as a whole, (ii)
challenging the acquisition by Parent or Merger Sub of any Shares under the
Offer or pursuant to the Stockholder Agreements, seeking to restrain or prohibit
the making or consummation of the Offer or the Merger or the performance of any
of the other transactions contemplated by this Agreement or the Company Tender
and Voting Agreements (including the voting provisions thereunder), or seeking
to obtain from the Company, Merger Sub or the Parent any damages that are
material in relation to the Company and its subsidiaries taken as a whole, (iii)
seeking to impose material limitations on the ability of Merger Sub, or render
Merger Sub unable, to accept for payment, pay for or purchase some or all of the
Shares pursuant to the Offer and the Merger or (iv) seeking to impose material
limitations on the ability of the Parent or Merger Sub effectively to exercise
full rights of ownership of the Shares, including, without limitation, the
right, to vote the Shares purchased by it on all matters properly presented to
the Company's stockholders;
(b) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated, or deemed applicable,
pursuant to an authoritative interpretation by or on behalf of a Government
Entity, to the Offer or the Merger, or any other action shall be taken by any
Governmental Entity, other than the application to the Offer or the Merger of
applicable waiting periods under the HSR Act, that is reasonably likely to
result, directly or indirectly, in any of the consequences referred to in
clauses (i) through (iv) of paragraph (a) above;
A-1
(c) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on the NYSE or in the Nasdaq, for a
period in excess of 24 hours (excluding suspensions or limitations resulting
solely from physical damage or interference with such exchanges not related to
market conditions), (ii) a declaration of a banking moratorium or any suspension
of payments in respect of banks in the United States (whether or not mandatory),
(iii) a declaration of war by the United States or (iv) in the case of any of
the foregoing existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof;
(d) there shall have occurred and be continuing any Material Adverse
Effect with respect to the Company;
(e) a Triggering Event;
(f) any of the representations and warranties of the Company set
forth in this Agreement shall fail to be true and correct or as of the date of
this Agreement or as of the scheduled expiration of the Offer, to an extent that
would entitle Parent to terminate this Agreement pursuant to Section
8.1(b)(iv)(A) (disregarding for this purpose the notice and cure provisions
thereof);
(g) the Company shall have failed to perform in any material respect
any material obligation or to comply in any material respect with any material
agreement or covenant of the Company to be performed or complied with by it
under this Agreement; or
(h) the Agreement shall have been terminated in accordance with its
terms which in the reasonable good faith judgment of Parent or Merger Sub, in
any such case, and regardless of the circumstances (including any action or
inaction by Parent or Merger Sub) giving rise to such condition makes it
inadvisable to proceed with the Offer and/or with such acceptance for payment of
or payment for Shares.
The foregoing conditions are for the sole benefit of Parent and Merger Sub
and may be waived by Parent or Merger Sub, in whole or in part at any time and
from time to time in the sole discretion of Parent or Merger Sub. The failure
by Parent or Merger Sub at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right and each such right shall be
deemed an ongoing right which may be asserted at any time and from time to time.
A-2
