AGREEMENT AND PLAN OF MERGER
dated as of April 25, 2000
by and among
XXXXXXX.XXX, LTD.,
RESUMIX ACQUISITION CORP.,
RESUMIX, INC.,
CERIDIAN CORPORATION,
GENERAL ATLANTIC PARTNERS 48, L.P.,
GAP COINVESTMENT PARTNERS, L.P.,
GENERAL ATLANTIC PARTNERS 60, L.P.,
GAP COINVESTMENT PARTNERS II, L.P.,
DOUBLE DIAMOND ASSOCIATES, LLC
and
XXXXXXX X. XXXXXXXXX
TABLE OF CONTENTS
This Table of Contents is not part of the Agreement
to which it is attached but is inserted for convenience only.
Page
No.
ARTICLE I
THE MERGER
1.01 The Merger.........................................................................................2
1.02 Closing............................................................................................2
1.03 Effective Time.....................................................................................3
1.04 Certificate of Incorporation and Bylaws of the Surviving Corporation...............................3
1.05 Directors and Officers of the Surviving Corporation................................................3
1.06 Effects of the Merger..............................................................................3
1.07 Further Assurances.................................................................................3
ARTICLE II
CONVERSION OF SHARES
2.01 Conversion of Capital Stock........................................................................3
2.02 Employee Stock Options.............................................................................5
2.03 Exchange of Certificates...........................................................................6
2.04 Withholding Rights.................................................................................7
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
3.01 Authority..........................................................................................7
3.02 Execution and Delivery.............................................................................8
3.03 Organization of the Company........................................................................8
3.04 Capital Stock......................................................................................8
3.05 Subsidiaries.......................................................................................8
3.06 No Conflicts.......................................................................................9
3.07 Governmental Approvals and Filings................................................................10
3.08 Books and Records.................................................................................10
3.09 Financial Statements..............................................................................10
3.10 Absence of Changes................................................................................11
3.11 No Undisclosed Liabilities........................................................................13
3.12 Taxes.............................................................................................13
3.13 Legal Proceedings.................................................................................15
3.14 Compliance With Laws and Orders...................................................................16
3.15 Benefit Plans; ERISA..............................................................................16
3.16 Real Property.....................................................................................17
3.17 Tangible Personal Property; Investment Assets.....................................................18
3.18 Intellectual Property Rights......................................................................18
3.19 Contracts.........................................................................................19
3.20 Licenses..........................................................................................21
3.21 Insurance.........................................................................................21
3.22 Affiliate Transactions............................................................................22
3.23 Employees; Labor Relations........................................................................22
3.24 Environmental Matters.............................................................................23
3.25 Substantial Customers and Suppliers...............................................................24
3.26 Bank and Brokerage Accounts; Investment Assets....................................................24
3.27 No Powers of Attorney.............................................................................25
3.28 Disclosure........................................................................................25
ARTICLE III-A
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER PARTIES
3A.01. Authority........................................................................................25
3A.02. Execution and Delivery...........................................................................25
3A.03. Organization.....................................................................................25
3A.04. No Conflicts.....................................................................................26
3A.05. Governmental Approvals and Filings...............................................................26
3A.06 Nature of Purchase; Accredited Investor..........................................................26
3A.07 Brokers..........................................................................................27
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
4.01 Organization......................................................................................27
4.02 Authority.........................................................................................27
4.03 Capital Stock.....................................................................................27
4.04 No Conflicts......................................................................................28
4.05 Governmental Approvals and Filings................................................................28
4.06 Legal Proceedings.................................................................................29
4.07 SEC Reports and Financial Statements..............................................................29
4.08 Absence of Certain Changes or Events..............................................................29
4.09 Absence of Undisclosed Liabilities................................................................29
4.10 Brokers...........................................................................................30
4.11 Intellectual Property Rights......................................................................30
4.12 Merger Sub........................................................................................30
ARTICLE V
COVENANTS OF THE SHAREHOLDER PARTIES AND THE COMPANY
5.01 Regulatory and Other Approvals....................................................................30
5.02 HSR Filings.......................................................................................31
5.03 Investigation by Parent...........................................................................31
5.04 Standstill........................................................................................31
5.05 Conduct of Business...............................................................................32
5.06 Financial Statements and Reports; Filings.........................................................32
5.07 Employee Matters..................................................................................33
5.08 Certain Restrictions..............................................................................34
5.09 Affiliate Transactions............................................................................35
5.10 Notice and Cure...................................................................................35
5.11 Company Employees.................................................................................36
5.12 Fulfillment of Conditions.........................................................................36
ARTICLE VI
COVENANTS OF PARENT AND MERGER SUB
6.01 Regulatory and Other Approvals....................................................................36
6.02 HSR Filings.......................................................................................37
6.03 Notice and Cure...................................................................................37
6.04 Fulfillment of Conditions.........................................................................37
6.05 Indemnification of Directors and Officers.........................................................37
6.06 Tax Treatment.....................................................................................38
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF PARENT AND MERGER SUB
7.01 Representations and Warranties....................................................................38
7.02 Performance.......................................................................................38
7.03 Certificates......................................................................................39
7.04 Orders and Laws...................................................................................39
7.05 Regulatory Consents and Approvals.................................................................39
7.06 Third Party Consents..............................................................................39
7.07 Escrow Agreement..................................................................................40
7.08 Officer Employment Agreement......................................................................40
7.09 Existing Shareholder Party Agreements.............................................................40
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF THE SHAREHOLDER PARTIES
AND THE COMPANY
8.01 Representations and Warranties....................................................................40
8.02 Performance.......................................................................................41
8.03 Certificates......................................................................................41
8.04 Registration Rights Agreement.....................................................................41
8.05 Orders and Laws...................................................................................41
8.06 Regulatory Consents and Approvals.................................................................41
ARTICLE IX
SURVIVAL OF REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS
9.01 Survival of Representations, Warranties, Covenants and Agreements.................................42
ARTICLE X
INDEMNIFICATION
10.01 Indemnification...................................................................................42
ARTICLE XI
TERMINATION
11.01 Termination......................................................................................45
11.02 Effect of Termination............................................................................45
ARTICLE XII
DEFINITIONS
12.01 Definitions......................................................................................46
ARTICLE XIII
MISCELLANEOUS
13.01 Notices..........................................................................................55
13.02 Entire Agreement.................................................................................56
13.03 Expenses.........................................................................................56
13.04 Public Announcements.............................................................................57
13.05 Confidentiality..................................................................................57
13.06 Waiver...........................................................................................58
13.07 Amendment........................................................................................58
13.08 No Third Party Beneficiary.......................................................................58
13.09 No Assignment; Binding Effect....................................................................58
13.10 Headings.........................................................................................58
13.11 Invalid Provisions...............................................................................58
13.12 Governing Law....................................................................................59
13.13 Counterparts.....................................................................................59
ANNEXES AND EXHIBITS
ANNEX I Shareholder Parties
ANNEX II Company Employees Signing Employment Agreements with Parent
EXHIBIT A Registration Rights Agreement
EXHIBIT B Escrow Agreement
EXHIBIT C Officer's Certificate of the Company
EXHIBIT D Secretary's Certificate of the Company
EXHIBIT E Officer's Certificate of Parent and Merger Sub
EXHIBIT F Secretary's Certificate of Parent and Merger Sub
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of April 25, 2000,
is made and entered into by and among XXXXXXX.XXX, LTD., a Delaware corporation
("PARENT"), RESUMIX ACQUISITION CORP., a Delaware corporation and a wholly-owned
subsidiary of Parent ("MERGER SUB"), RESUMIX, INC., a Delaware corporation (the
"COMPANY"), CERIDIAN CORPORATION, a Delaware corporation ("CERIDIAN"), GENERAL
ATLANTIC PARTNERS 48, L.P., a Delaware limited partnership, GAP COINVESTMENT
PARTNERS, L.P., a Delaware limited partnership, GENERAL ATLANTIC PARTNERS 60,
L.P., a Delaware limited partnership, GAP COINVESTMENT PARTNERS II, L.P., a
Delaware limited partnership (each of the four immediately preceding
partnerships, a "GENERAL ATLANTIC PARTNERSHIP," and, collectively, the "GENERAL
ATLANTIC PARTNERSHIPS"), DOUBLE DIAMOND ASSOCIATES, LLC, a California limited
liability company ("DOUBLE DIAMOND"), and XXXXXXX X. XXXXXXXXX, a resident of
the State of California ("XXXXXXXXX", and together with Ceridian, the General
Atlantic Partnerships and Double Diamond, the "SHAREHOLDER PARTIES," and each, a
"SHAREHOLDER PARTY"). Capitalized terms not otherwise defined herein have the
meanings set forth in SECTION 12.01.
W I T N E S S E T H:
WHEREAS, the Boards of Directors of Parent, Merger Sub and the
Company have each determined that it is advisable and in the best interests of
their respective stockholders to consummate, and have approved, the business
combination transaction provided for herein in which Merger Sub would merge with
and into the Company and the Company would become a wholly-owned subsidiary of
Parent (the "MERGER");
WHEREAS, each Shareholder Party owns the number of shares of
(i) Series D Senior Convertible Preferred Stock, par value $.01 per share, of
the Company ("SERIES D STOCK"), (ii) Series E Junior Convertible Preferred
Stock, par value $.01 per share, of the Company ("SERIES E STOCK"), and (iii)
common stock, par value $.01 per share, of the Company ("COMPANY COMMON STOCK")
indicated opposite such Shareholder Party's name on ANNEX I hereto, constituting
in the aggregate approximately 99.6% of the issued and outstanding shares of
capital stock of the Company (such shares collectively being referred to herein
as the "Shares");
WHEREAS, simultaneously herewith, each Shareholder Party is
executing and delivering to the Company a written consent of stockholders
pursuant to which each Shareholder Party is voting his or its Shares in favor of
the Merger and the other transactions contemplated by this Agreement and each
Shareholder Party who owns share of Series D Stock and for Series E Stock has
waived its rights under the terms thereof to receive cash in exchange for their
shares in the Merger;
WHEREAS, simultaneously herewith, the employees of the Company
listed on ANNEX II hereto have entered into employment agreements with the
Company or, in the case of Xxxxxxxxx, Parent (the "OFFICER EMPLOYMENT
AGREEMENTS");
WHEREAS, contemporaneously with the Closing, Parent and the
Shareholder Parties will enter into a registration rights agreement in the form
of EXHIBIT A hereto (the "REGISTRATION RIGHTS AGREEMENT") pursuant to which on
or prior to August 31, 2000 Parent will file a registration statement on Form
S-3 (or on such other appropriate form if Form S-3 is not available) registering
under the Securities Act the resale pursuant to Rule 415 of the Securities Act
by the Shareholder Parties of the shares of common stock, par value $.01 per
share, of Parent ("PARENT COMMON STOCK") to be issued to the Shareholder Parties
in the Merger;
WHEREAS, each of the Shareholder Parties is an "accredited
investor" as such term is defined in Rule 501(a) of the Securities Act (as
defined herein); and
WHEREAS, for federal income tax purposes, it is intended that
the transactions contemplated by this Agreement shall qualify as a
reorganization within the meaning of Section 368 of the Code;
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements herein contained and for other good and valuable
consideration, the receipt and sufficiency of which whereof are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
THE MERGER
1.01 THE MERGER. Upon the terms and subject to the conditions
of this Agreement, at the Effective Time, Merger Sub shall be merged with and
into the Company in accordance with the General Corporation Law of the State of
Delaware (the "DGCL"), whereupon the separate existence of Merger Sub shall
cease and the Company shall continue as the surviving corporation (the
"SURVIVING CORPORATION"). Merger Sub and the Company are sometimes referred to
herein as the "CONSTITUENT CORPORATIONS". As a result of the Merger, the
outstanding shares of capital stock of the Constituent Corporations shall be
converted or cancelled in the manner provided in ARTICLE II.
1.02 CLOSING. Unless this Agreement shall have been terminated
and the transactions herein contemplated shall have been abandoned pursuant to
SECTION 11.01, and subject to the satisfaction or waiver (where applicable) of
the conditions set forth in ARTICLES VII and VIII, the closing of the Merger
(the "CLOSING") will take place at the offices of Milbank, Tweed, Xxxxxx &
XxXxxx LLP, 1 Chase Manhattan Plaza, New York, New York, at 10:00 a.m., local
time, on the Closing Date, or at such other place and time as is agreed to in
writing by Parent and the Company. At the Closing there shall be delivered to
the Shareholder Parties, Parent, Merger Sub and the Company the certificates and
other documents and instruments required to be delivered under SECTION 2.03 and
ARTICLES VII and VIII.
2
1.03 EFFECTIVE TIME. At the Closing, a certificate of merger
(the "CERTIFICATE OF MERGER") shall be duly prepared and executed by the
Surviving Corporation and thereafter delivered to the Secretary of State of the
State of Delaware (the "SECRETARY OF STATE") for filing, as provided in Section
251 of the DGCL, as soon as practicable on the Closing Date. The Merger shall
become effective at the time of the filing of the Certificate of Merger with the
Secretary of State (the date and time of such filing being referred to herein as
the "EFFECTIVE TIME").
1.04 CERTIFICATE OF INCORPORATION AND BYLAWS OF THE SURVIVING
CORPORATION. At the Effective Time, (i) 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 until thereafter
amended as provided by law and such Certificate of Incorporation; PROVIDED that
such Certificate of Incorporation shall be amended to change the name of such
corporation to "Resumix, Inc.", and (ii) the Bylaws of Merger Sub as in effect
immediately prior to the Effective Time shall be the Bylaws of the Surviving
Corporation until thereafter amended as provided by law, the Certificate of
Incorporation of the Surviving Corporation and such Bylaws.
1.05 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. The
directors of Merger Sub and the officers of the Company immediately prior to the
Effective Time shall, from and after the Effective Time, be the directors and
officers, respectively, of the Surviving Corporation until their successors
shall have been duly elected or appointed and qualified or until their earlier
death, resignation or removal in accordance with the Surviving Corporation's
Articles of Incorporation and Bylaws.
1.06 EFFECTS OF THE MERGER. Subject to the foregoing, the
effects of the Merger shall be as provided in the applicable provisions of the
DGCL.
1.07 FURTHER ASSURANCES. At any time or from time to time
after the Effective Time, each party hereto will execute such further documents,
instruments, deeds, bills of sale, assignments and assurances, provide such
materials and information and take such further actions as may reasonably be
requested by one or more of the others to consummate the Merger, to vest the
Surviving Corporation with full title to all assets, properties, rights,
approvals, immunities and franchises of either of the Constituent Corporations,
to cause the Shareholder Parties to fulfill their obligations under this
Agreement and the Operative Agreements or to effect the other purposes of this
Agreement.
ARTICLE II
CONVERSION OF SHARES
2.01 CONVERSION OF CAPITAL STOCK. At the Effective Time, by
virtue of the Merger and without any action on the part of the holder thereof:
3
(a) CAPITAL STOCK OF MERGER SUB. Each issued and
outstanding share of the common stock, par value $.01 per share, of Merger Sub
("MERGER SUB COMMON STOCK") shall be converted into and become one fully paid
and nonassessable share of common stock, par value $.01 per share, of the
Surviving Corporation ("SURVIVING CORPORATION COMMON STOCK"). Each certificate
representing outstanding shares of Merger Sub Common Stock shall at the
Effective Time represent an equal number of shares of Surviving Corporation
Common Stock.
(b) CANCELLATION OF TREASURY STOCK. All shares of Company
Common Stock that are owned by the Company as treasury stock shall be canceled
and retired and shall cease to exist and no stock of Parent or other
consideration shall be delivered in exchange therefor.
(c) CONVERSION OF COMPANY CAPITAL STOCK. The capital
stock of the Company shall be converted as follows:
(i) The issued and outstanding shares of Series D
Stock shall be converted into the right to
receive the number of shares of Parent Common
Stock set forth on ANNEX I hereto;
(ii) The issued and outstanding shares of Series E
Stock shall be converted into the right to
receive the number of shares of Parent Common
Stock set forth on ANNEX I hereto;
(iii) The issued and outstanding shares of Company
Common Stock held by the Shareholder Parties
shall be converted into the right to receive the
number of shares of Parent Common Stock set forth
on ANNEX I hereto; and
(iv) Each issued and outstanding share of Company
Common Stock held by any Shareholder on the
Closing Date (other than the Shareholder
Parties) shall be converted into the right to
receive the Cash Merger Price; PROVIDED,
HOWEVER, that any such Shareholder who
demonstrates to the reasonable satisfaction of
Parent that such Shareholder is an "accredited
investor," as such term is defined in Rule
501(a) of the Securities Act, may elect, by
written notice given to Parent at least two (2)
Business Days prior to the Closing Date, to
receive, in lieu of the Cash Merger Price, a
number of shares of Parent Common Stock
(disregarding fractions) equal to the product of
(A) the number of shares of Company Common Stock
owned by such Shareholder and (b) the Conversion
Number.
The shares of Parent Common Stock issued pursuant to this SECTION 2.01(c) shall
be referred to herein as "PARENT SHARES."
4
(d) DISSENTING SHARES. (i) Notwithstanding any provision
of this Agreement to the contrary, each outstanding share of Company Common
Stock the holder of which has not voted in favor of the Merger, has perfected
such holder's right to an appraisal of such holder's shares in accordance with
the applicable provisions of the DGCL and has not effectively withdrawn or lost
such right to appraisal (a "DISSENTING SHARES "), shall not be converted into or
represent a right to receive Parent Shares or the Cash Merger Price pursuant to
SECTION 2.01(c), but the holder thereof shall be entitled only to such rights as
are granted by the applicable provisions of the DGCL; PROVIDED, HOWEVER, that
any Dissenting Shares held by a person at the Effective Time who shall, after
the Effective Time, withdraw the demand for appraisal or lose the right of
appraisal, in either case pursuant to the DGCL, shall be deemed to be converted
into, as of the Effective Time, the right to receive the Cash Merger Price
pursuant to SECTION 2.01(c).
(ii) The Company shall give Parent (x) prompt notice
of any written demands for appraisal,
withdrawals of demands for appraisal and any
other instruments served pursuant to the
applicable provisions of the DGCL relating to
the appraisal process received by the Company
and (y) the opportunity to direct all
negotiations and proceedings with respect to
demands for appraisal under the DGCL. The
Company will not voluntarily make any payment
with respect to any demands for appraisal and
will not, except with the prior written consent
of Parent, settle or offer to settle any such
demands.
2.02 EMPLOYEE STOCK OPTIONS. (a) Subject to the terms and
conditions of the Company's 1998 Equity Incentive Plan, 1999 Non-Employee
Directors' Stock Option Plan and 2000 Stock Option Plan (together, the "COMPANY
OPTION PLANS") and the stock option agreements executed pursuant thereto, the
Company Option Plans and each option to purchase Company Common Stock granted
thereunder that is outstanding at the Effective Time shall be assumed by Parent
and continued in accordance with their respective terms and each such option
shall become a right to purchase a number of shares of Parent Common Stock, as
more fully described below.
(b) At the Effective Time, each outstanding option to
purchase shares of Company Common Stock (a "COMPANY STOCK OPTION") under the
Company Option Plans, whether vested or unvested, shall be deemed to constitute
an option to acquire, on the same terms and conditions as were applicable under
such Company Stock Option, a number of shares of Parent Common Stock equal to
the product (rounded down to the nearest whole share) of (i) the number of
shares of Company Common Stock issuable upon exercise of the option immediately
prior to the Effective Time and (ii) the Conversion Number; and the option
exercise price per share of Parent Common Stock at which such option is
exercisable shall be the amount (rounded up to the nearest whole cent) obtained
by dividing (iii) the option exercise price per share of Company Common Stock at
which such option is exercisable immediately prior to the Effective Time by (iv)
the Conversion Number; PROVIDED, HOWEVER, that, in the case of any Company Stock
Option to which Section 421 of the Code applies by reason of its qualification
under any of Sections 422-424 of the Code ("QUALIFIED STOCK OPTIONS"), the
option exercise price, the number of shares purchasable pursuant to such option
and the terms and conditions of exercise of such option shall be determined in
order to comply with Section 425(a) of the Code.
5
(c) As soon as practicable after the Effective Time,
Parent shall deliver to the participants in the Company Option Plans appropriate
notices setting forth such participants' rights pursuant thereto and that the
grants pursuant to the Company Option Plans shall continue in effect on the same
terms and conditions (subject to the adjustments required by this Section after
giving effect to the Merger), and providing for the assumption by Parent of such
participant options. Parent shall comply with the terms of the Company Option
Plans and ensure, to the extent required by, and subject to the provisions of,
the Company Option Plans, that the Company Stock Options which qualified as
qualified stock options prior to the Effective Time continue to qualify as
qualified stock options after the Effective Time.
(d) Parent shall take all corporate action necessary to
reserve for issuance a sufficient number of shares of Parent Common Stock for
delivery under the Company Option Plans as adjusted in accordance with this
Section. As soon as practicable after the Effective Time, and in no event later
than thirty (30) days following the Effective Time, Parent shall file a
registration statement on Form S-8 promulgated by the SEC under the Securities
Act (or any successor or other appropriate form) with respect to the Parent
Common Stock subject to the Company Stock Options and shall use its reasonable
best efforts to maintain the effectiveness of such registration statement or
registration statements (and maintain the current status of the prospectus or
prospectuses contained therein) for so long as such options remain outstanding.
With respect to those individuals who subsequent to the Merger will be subject
to the reporting requirements under Section 16(a) of the Exchange Act, where
applicable, Parent shall administer the Company Option Plans in a manner that
complies with Rule 16b-3 promulgated under the Exchange Act.
2.03 EXCHANGE OF CERTIFICATES. (a) At the Effective Time,
Parent shall deliver to each Shareholder Party a certificate or certificates
representing the Parent Shares that such Shareholder Party is to receive under
SECTION 2.01(c), reduced, in the case of each Shareholder Party, by the number
of escrow shares set forth in ANNEX I hereto (the "ESCROW SHARES") to be
deposited in escrow as set forth below. Simultaneously, each Shareholder Party
will deliver to Parent a certificate or certificates for the Shares owned by
such Shareholder Party, in genuine and unaltered form. At the Effective Time,
certificates representing the Escrow Shares shall be delivered to an escrow
agent reasonably satisfactory to Parent and the Company (the "ESCROW AGENT")
under an Escrow Agreement to be entered into on the Closing Date by the
Shareholders Parties, Parent and the Escrow Agent in the form of EXHIBIT B
hereto (the "ESCROW AGREEMENT").
(b) As soon as reasonably practicable after the
Effective Time, the Parent shall mail to each holder of record of a
certificate or certificates which immediately prior to the Effective Time
represented outstanding shares of Company Common Stock (the "CERTIFICATES")
whose shares are converted pursuant to SECTION 2.01(c)(iv) into the right to
receive the Cash Merger Price (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Parent
and shall be in such form and have such other provisions as the Parent may
reasonably specify) and (ii) instructions for use in effecting the surrender
of the Certificates in exchange for the Cash Merger Price. Upon surrender of
a Certificate for cancellation to the Parent, together
6
with such letter of transmittal duly executed and completed in accordance
with its terms, the holder of such Certificate shall be entitled to receive
in exchange therefor a check representing the Cash Merger Price per share of
Company Common Stock represented thereby, which such holder has the right to
receive pursuant to the provisions of this ARTICLE II, and the Certificate so
surrendered shall forthwith be canceled. In no event shall the holder of any
Certificate be entitled to receive interest on any funds to be received in
the Merger. In the event of a transfer of ownership of Company Common Stock
which is not registered in the transfer records of the Company, the Cash
Merger Price may be issued to a transferee if the Certificate representing
such Company Common Stock is presented to the Parent accompanied by all
documents required to evidence and effect such transfer and by evidence that
any applicable stock transfer taxes have been paid. Until surrendered as
contemplated by this SECTION 2.03(a), each Certificate shall be deemed at any
time after the Effective Time to represent only the right to receive upon
such surrender the Cash Merger Price per share of Company Common Stock
represented thereby as contemplated by this ARTICLE II.
(c) The Cash Merger Price paid and the Parent Shares
delivered upon the surrender for exchange of Certificates in accordance with the
terms hereof shall be deemed to have been paid in full satisfaction of all
rights pertaining to the shares of capital stock of the Company represented
thereby. From and after the Effective Time, the stock transfer books of the
Company shall be closed and there shall be no further registration of transfers
on the stock transfer books of the Surviving Corporation of the shares of
capital stock of the Company which were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are presented to the
Surviving Corporation for any reason, they shall be canceled and exchanged as
provided in this Section.
2.04 WITHHOLDING RIGHTS. Parent shall be entitled to deduct
and withhold from the consideration otherwise payable pursuant to this Agreement
to any Shareholder such amounts as Parent is required to deduct and withhold
with respect to the making of such payment under the Code, or any provision of
state, local or foreign tax law. To the extent that amounts are so withheld by
Parent, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to such Shareholder in respect of which such
deduction and withholding was made by Parent.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and
Merger Sub as follows:
3.01 AUTHORITY. The Company has full corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The execution
and delivery by the Company of this Agreement, and the performance by the
Company of its obligations hereunder, have been duly
7
and validly authorized by the Board of Directors and the stockholders of the
Company and no other corporate action on the part of the Company or any of the
stockholders of the Company is necessary.
3.02 EXECUTION AND DELIVERY. This Agreement has been duly and
validly executed and delivered by the Company and constitutes, and upon the
execution and delivery by the Company of the Operative Agreements to which it is
a party, such Operative Agreements will constitute, legal, valid and binding
obligations of the Company enforceable against the Company in accordance with
their terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights of
creditors generally.
3.03 ORGANIZATION OF THE COMPANY. The Company is a corporation
duly organized, validly existing and in good standing under the Laws of the
State of Delaware, and has full corporate power and authority to conduct its
business as and to the extent now conducted and to own, use and lease its Assets
and Properties. The Company is duly qualified, licensed or admitted to do
business and is in good standing in those jurisdictions specified in SECTION
3.03 OF THE DISCLOSURE SCHEDULE, which are the only jurisdictions in which the
ownership, use or leasing of its Assets and Properties, or the conduct or nature
of its business, makes such qualification, licensing or admission necessary,
except where the failure to be so qualified would not have a material adverse
effect on the Business or Condition of the Company. The name of each director
and officer of the Company on the date hereof, and the position with the Company
held by each, are listed in SECTION 3.03 OF THE DISCLOSURE SCHEDULE. The Company
has prior to the execution of this Agreement delivered to Parent true and
complete copies of the certificate of incorporation and by-laws of the Company
as in effect on the date hereof.
3.04 CAPITAL STOCK. SECTION 3.04 OF THE DISCLOSURE SCHEDULE
sets forth (i) authorized capital stock of the Company and (ii) the record
holder of all outstanding shares of Series D Stock, Series E Stock and Company
Common Stock (the "ISSUED SHARES"). There are no other shares of the capital
stock of the Company issued and outstanding other than the Issued Shares. The
Issued Shares are duly authorized, validly issued, outstanding, fully paid and
nonassessable. Each Shareholder Party owns the number of Shares indicated
opposite such Shareholder Party's name on ANNEX I hereto, beneficially and of
record, free and clear of all Liens. Except for this Agreement and as disclosed
in SECTION 3.04 OF THE DISCLOSURE SCHEDULE, there are no outstanding Options
with respect to the Company.
3.05 SUBSIDIARIES. SECTION 3.05 OF THE DISCLOSURE SCHEDULE
lists the name of each Subsidiary. Each Subsidiary is a corporation duly
organized, validly existing and in good standing under the Laws of its
jurisdiction of incorporation identified in SECTION 3.05 OF THE DISCLOSURE
SCHEDULE, and has full corporate power and authority to conduct its business as
and to the extent now conducted and to own, use and lease its Assets and
Properties. Each Subsidiary is duly qualified, licensed or admitted to do
business and is in good standing in those jurisdictions specified in SECTION
3.05 OF THE DISCLOSURE SCHEDULE, which are the only jurisdictions in which the
ownership, use or leasing of such Subsidiary's Assets and Properties, or the
conduct or nature
8
of its business, makes such qualification, licensing or admission necessary,
except where the failure to be so qualified would not have a material adverse
effect on the Business or Condition of the Company. Except as disclosed in
SECTION 3.05 OF THE DISCLOSURE SCHEDULE, all of the outstanding shares of
capital stock of each Subsidiary have been duly authorized and validly issued,
are fully paid and nonassessable, and are owned, beneficially and of record, by
the Company or Subsidiaries wholly owned by the Company free and clear of all
Liens. Except as disclosed in SECTION 3.05 OF THE DISCLOSURE SCHEDULE, there are
no outstanding Options with respect to any Subsidiary. The name of each director
and officer of each Subsidiary on the date hereof, and the position with such
Subsidiary held by each, are listed in SECTION 3.05 OF THE DISCLOSURE SCHEDULE.
Shareholders have prior to the execution of this Agreement delivered to Parent
true and complete copies of the certificate or articles of incorporation and
by-laws (or other comparable corporate charter documents) of each of the
Subsidiaries as in effect on the date hereof.
3.06 NO CONFLICTS. The execution and delivery by the Company
of this Agreement and the Operative Agreements to which it is a party do not,
and the performance by the Company of its obligations under this Agreement and
the Operative Agreements to which it is a party and the consummation of the
transactions contemplated hereby and thereby will not:
(a) except as set forth in Section 3.06 of the Disclosure
Schedule, conflict with or result in a violation or breach of any of the terms,
conditions or provisions of the certificate or articles of incorporation or
by-laws (or other comparable corporate charter documents) of the Company or any
Subsidiary;
(b) subject to obtaining the consents, approvals and actions,
making the filings and giving the notices disclosed in SECTION 3.07 and in
SECTION 3.07 OF THE DISCLOSURE SCHEDULE, conflict with or result in a violation
or breach of any term or provision of any Law or Order applicable to the Company
or any Subsidiary or any of their respective Assets and Properties (other than
any immaterial foreign Law or Order); or
(c) except as disclosed in SECTION 3.06 OF THE DISCLOSURE
SCHEDULE, (i) conflict with or result in a violation or breach of, (ii)
constitute (with or without notice or lapse of time or both) a default under,
(iii) require the Company or any Subsidiary to obtain any consent, approval or
action of, make any filing with or give any notice to any Person as a result or
under the terms of, (iv) result in or give to any Person any right of
termination, cancellation, acceleration or modification in or with respect to,
(v) result in or give to any Person any additional rights or entitlement to
increased, additional, accelerated or guaranteed payments under, or (vi) result
in the creation or imposition of any Lien the Company or any Subsidiary or any
of their respective Assets and Properties under, any material Contract or
License to which the Company or any Subsidiary is a party or by which any of
their respective Assets and Properties is bound; PROVIDED that no representation
or warranty is made with respect to Contracts with suppliers of goods and/or
services used in the operation of the business of the Company and the
Subsidiaries to whom the Company and the Subsidiaries have paid less than
$100,000 since January 1, 1999 (the "EXCLUDED SUPPLIERS") and whose services are
not material,
9
individually or together with any other Excluded Suppliers, to the Business and
Condition of the Company.
3.07 GOVERNMENTAL APPROVALS AND FILINGS. Except as disclosed
in SECTION 3.07 OF THE DISCLOSURE SCHEDULE, and except for the filing of the
Certificate of Merger with the Secretary of State and the filing of an HSR
notification and report form, no consent, approval or action of, filing with or
notice to any Governmental or Regulatory Authority on the part of the Company or
any Subsidiary is required in connection with the execution, delivery and
performance of this Agreement or any of the Operative Agreements or the
consummation of the transactions contemplated hereby or thereby (other than
pursuant to any immaterial foreign Law or Order).
3.08 BOOKS AND RECORDS. The minute books and other similar
records of the Company and the Subsidiaries as made available to Parent prior to
the execution of this Agreement contain a true and complete record, in all
material respects, of all action taken at all meetings and by all written
consents in lieu of meetings of the stockholders, the boards of directors and
committees of the boards of directors of the Company and the Subsidiaries. The
stock transfer ledgers and other similar records of the Company and the
Subsidiaries as made available to Parent prior to the execution of this
Agreement accurately reflect all record transfers prior to the execution of this
Agreement in the capital stock of the Company and the Subsidiaries. Except as
set forth in SECTION 3.08 OF THE DISCLOSURE SCHEDULE, to the Company's Knowledge
neither the Company nor any Subsidiary has any of its Books and Records
recorded, stored, maintained, operated or otherwise wholly or partly dependent
upon or held by any means (including any electronic, mechanical or photographic
process, whether computerized or not) which (including all means of access
thereto and therefrom) are not under the exclusive ownership and direct control
of the Company or a Subsidiary.
3.09 FINANCIAL STATEMENTS. (a) Prior to the execution of this
Agreement, the Company has delivered to Parent true and complete copies of (i)
the audited balance sheets of the Company and its consolidated subsidiaries as
of December 31, 1998 and 1997, and the related audited consolidated statements
of operations, stockholders' equity and cash flows for each of the fiscal years
then ended, together with a true and correct copy of the report on such audited
information by KPMG Peat Marwick LLP, and all formal letters from such
accountants to management or the Board of Directors of the Company (or any
committee thereof) with respect to the Company's accounting controls or
practices or similar matters and (ii) the unaudited balance sheet of the Company
and its consolidated subsidiaries as of December 31, 1999 (the "DECEMBER 31
BALANCE SHEET"), and the related unaudited consolidated statements of
operations, stockholders equity and cash flows for the fiscal year then ended.
(b) Except as set forth in the notes thereto and as disclosed
in SECTION 3.09 OF THE DISCLOSURE SCHEDULE, all such financial statements (i)
were prepared in accordance with GAAP (subject, in the case of the financial
statements for the fiscal year ended December 31, 1999, to adjustments as a
result of an audit of such statements, none of which, individually or in the
aggregate, will be material to the Business or Condition of the Company), (ii)
fairly present in all
10
material respects the consolidated financial condition and results of operations
of the Company and its consolidated subsidiaries as of the respective dates
thereof and for the respective periods covered thereby, and (iii) were compiled
from the Books and Records of the Company and the Subsidiaries regularly
maintained by management and used to prepare the financial statements of the
Company and the Subsidiaries in accordance with the principles stated therein.
The Company and the Subsidiaries have maintained their respective Books and
Records in a manner sufficient to permit the preparation of financial statements
in accordance with GAAP. Except for those Subsidiaries listed in SECTION 3.09 OF
THE DISCLOSURE SCHEDULE, the financial condition and results of operations of
each Subsidiary are, and for all periods referred to in this SECTION 3.09 have
been, consolidated with those of the Company.
3.10 ABSENCE OF CHANGES. Except for the execution and delivery
of this Agreement and the transactions to take place pursuant hereto on or prior
to the Closing Date and except as set forth in SECTION 3.10 OF THE DISCLOSURE
SCHEDULE, since December 31, 1999 there has not been any material adverse
change, or any event or development which, individually or together with other
such events, would reasonably be expected to result in a material adverse
change, in the Business or Condition of the Company. Except as set forth in
SECTION 3.10 OF THE DISCLOSURE SCHEDULE, without limiting the foregoing, there
has not occurred between December 31, 1999 and the date hereof:
(i) any declaration, setting aside or payment of any dividend
or other distribution in respect of the capital stock of the Company or
any Subsidiary not wholly owned by the Company, or any direct or
indirect redemption, purchase or other acquisition by the Company or
any Subsidiary of any such capital stock of or any Option with respect
to the Company or any Subsidiary not wholly owned by the Company;
(ii) any authorization, issuance, sale or other disposition by
the Company or any Subsidiary of any shares of capital stock of or
Option with respect to the Company or any Subsidiary, or any
modification or amendment of any right of any holder of any outstanding
shares of capital stock of or Option with respect to the Company or any
Subsidiary;
(iii) any (A) increase in the compensation or fringe benefits
of any present or former director, officer or employee of the Company
or its Subsidiaries (except for increases in salary or wages in the
ordinary course of business consistent with past practice), (B)
entering into of any agreement or arrangement providing for the making
of any severance or termination payment to any present director,
officer or employee of the Company or its Subsidiaries, (C) loan or
advance of money or other property by the Company or its Subsidiaries
to any of their present or former directors, officers or employees or
(D) establishment, adoption, entrance into, amendment or termination of
any Company Plan other than such Company Plans listed in SECTION 3.15
OF THE DISCLOSURE SCHEDULE;
11
(iv) (A) incurrences by the Company or any Subsidiary of
Indebtedness in an aggregate principal amount exceeding $100,000, or
(B) any voluntary purchase, cancellation, prepayment or complete or
partial discharge in advance of a scheduled payment date with respect
to, or waiver of any right of the Company or any Subsidiary under, any
Indebtedness of or owing to the Company or any Subsidiary;
(v) any physical damage, destruction or other casualty loss
(whether or not covered by insurance) affecting any of the plant, real
or personal property or equipment of the Company or any Subsidiary in
an aggregate amount exceeding $100,000;
(vi) any material change in (x) any pricing, investment,
accounting, financial reporting, inventory, credit, allowance or Tax
practice or policy of the Company or any Subsidiary, or (y) any method
of calculating any bad debt, contingency or other reserve of the
Company or any Subsidiary for accounting, financial reporting or Tax
purposes, or any change in the fiscal year of the Company or any
Subsidiary;
(vii) any write-off or write-down of or any determination to
write off or write down any of the Assets and Properties of the Company
or any Subsidiary in an aggregate amount exceeding $100,000;
(viii) any acquisition or disposition of, or incurrence of a
Lien (other than a Permitted Lien) on, any Assets and Properties of the
Company or any Subsidiary, other than in the ordinary course of
business consistent with past practice;
(ix) any (A) amendment of the certificate or articles of
incorporation or by-laws (or other comparable corporate charter
documents) of the Company or any Subsidiary, (B) recapitalization,
reorganization, liquidation or dissolution of the Company or any
Subsidiary or (C) merger or other business combination involving the
Company or any Subsidiary and any other Person;
(x) any entering into, amendment, modification, termination
(partial or complete) or granting of a waiver under or giving any
consent with respect to (A) any Contract which is required (or had it
been in effect on the date hereof would have been required) to be
disclosed in the Disclosure Schedule pursuant to SECTION 3.19(a); (B)
any Contract (other than for accounts or trade receivables or payables)
with a term greater than six months; or (C) any material License held
by the Company or any Subsidiary;
(xi) capital expenditures or commitments for additions to
property, plant or equipment of the Company and the Subsidiaries
constituting capital assets in an aggregate amount exceeding $100,000;
(xii) any commencement or termination by the Company or any
Subsidiary of any line of business;
12
(xiii) any transaction by the Company or any Subsidiary, on
the one hand, with any Shareholder or Affiliate (other than the Company
or any Subsidiary) of any Shareholder, on the other hand, other than
(A) pursuant to an employment agreement disclosed pursuant to SECTION
3.19(a)(vii) OF THE DISCLOSURE SCHEDULE; and (B) any transaction
referred to in SECTION 3.22;
(xiv) any entering into of a Contract to do or engage in any
of the foregoing after the date hereof; or
(xv) any other transaction involving the Company or any
Subsidiary outside the ordinary course of business consistent with past
practice.
3.11 NO UNDISCLOSED LIABILITIES. Except as set forth in
SECTION 3.11 OF THE DISCLOSURE SCHEDULE or as reflected or reserved against in
the December 31 Balance Sheet or in the notes thereto, neither the Company nor
any Subsidiary had on December 31, 1999, or has incurred since such date, any
Liabilities that would be required by GAAP to be reflected on the December 31
Balance Sheet or in the notes thereto, other than Liabilities incurred since
December 31, 1999 which were incurred in the ordinary course of business. As of
the date hereof, there is no Indebtedness outstanding under the Loan and
Security Agreement dated as of December 10, 1999 between Silicon Valley Bank and
the Company.
3.12 TAXES. Except as disclosed in SECTION 3.12 OF THE
DISCLOSURE SCHEDULE (with paragraph references corresponding to those set forth
below):
(a) (i) the Company and each Subsidiary has timely filed
(taking into account all available extensions) all Tax Returns (or such Tax
Returns have been filed on behalf of the Company and Subsidiaries) required to
be filed by or with respect to the Company and each Subsidiary, (ii) all such
Tax Returns are true, correct and complete in all material respects; (iii) all
Taxes shown to be due thereon or otherwise required to be paid have been timely
paid; and (iv) the Company and each Subsidiary has collected and withheld all
amounts required to be collected and withheld by it and any such amounts that
are required to be remitted to any taxing authority have been duly remitted;
(b) the accruals and reserves for Taxes (other than deferred
Taxes) established in the Books and Records of the Company and its Subsidiaries
are complete and adequate to cover any Liabilities for Taxes that are
attributable to the period beginning after December 31, 1999 and ending on the
Closing Date;
(c) true and complete copies or portions of copies of all Tax
Returns filed by or with respect to the Company and Subsidiaries, that have been
filed from and after December 31, 1994 through the date hereof, have been made
available by the Company and Subsidiaries to Parent prior to the date hereof.
The Company and Subsidiaries have made available to Parent true and complete
copies of all revenue agent's reports and other written assertions of
13
deficiencies or other liabilities that relate to Taxes of the Company and
Subsidiaries with respect to past periods for which the limitations period has
not run;
(d) (i) none of the Company or any of its Subsidiaries has
executed any outstanding waivers or comparable consents regarding the
application of the statute of limitations with respect to any Taxes or Tax
Returns, (ii) no extension of time within which to file any Tax Return that
relates to the Company or any Subsidiary has been requested, which Tax Return
has not since been filed if such extension of time has lapsed, (iii) none of the
Company or any of its Subsidiaries has agreed and is required to include in
income any adjustment pursuant to Section 481(a) of the Code (or analogous
provisions of foreign, state or local law) by reason of a change in accounting
method or otherwise, nor does any Shareholder Party, the Company or any
Subsidiary have any knowledge that the IRS (or other taxing authority) has
proposed, or is considering, any such change in accounting method, (iv) none of
the Company or any of its Subsidiaries has agreed and is required to include in
income any adjustment pursuant to Section 482 of the Code (or analogous
provisions of foreign, state or local law) which could affect the liability for
Taxes of the Company or its Subsidiaries for any period (or portion of a period)
after the date hereof, and the IRS (or other taxing authority) has not proposed,
and, to the Knowledge of the Company, is not considering, any such adjustment
which could have any effect, (v) there is no action, suit, proceeding,
investigation, audit, claim or assessment pending or proposed with respect to
any liability for Tax for which the Company or any Subsidiary could be liable,
(vi) no taxing authority in a jurisdiction where the Company or any Subsidiary
does not file Tax Returns has made a claim or assertion or that the Company or
any Subsidiary is or may be subject to taxation by such jurisdiction, (vii)
there are no tax rulings, requests for rulings, or closing agreements relating
to the Company or any Subsidiary that could affect the liability for Taxes of
the Company or its Subsidiaries for any period (or portion of a period) after
the Closing Date, (viii) all federal, state and local income Tax Returns of the
Company and Subsidiaries with respect to taxable periods through the period
ended December 31, 1997 have been examined and closed or are Tax Returns with
respect to which the applicable statute of limitations has expired without
extension or waiver, (ix) no power of attorney has been granted by any
Shareholder, the Company or any Subsidiary with respect to any matter relating
to Taxes of the Company or any Subsidiary that is currently in force, (x) any
adjustment of Taxes of the Company and Subsidiaries made by the IRS in any
examination which is required to be reported to the appropriate state, local or
foreign taxing authorities has been reported, and any additional Taxes due with
respect thereto have been paid, (xi) the Company and each Subsidiary is, and has
been for any period with respect to which the applicable statute of limitations
has not run, a member of an affiliated group (A) of which the Company is (or
was) the common parent and (B) that files consolidated federal income Tax
Returns, (xii) none of the Company or any of its Subsidiaries is a party to or
liable under any Tax Sharing Agreement or tax indemnity agreement which any
Person not presently included in the consolidated federal income Tax Return
filed by the Company or any Subsidiary is a party, (xiii) the Company and each
Subsidiary has made all payments of estimated Taxes required to be made under
Section 6655 of the Code and any analogous provisions of state, local or foreign
Law, (xiv) none of the assets of the Company or a Subsidiary (A) is property
that is required to be treated as being owned by any other Person pursuant to
the "safe harbor lease" provisions of Section 168(f)(8) of the Code, (B) is "tax
14
exempt use property" within the meaning of Section 168(h) of the Code, or (C)
directly or indirectly secures any debt the interest of which is tax-exempt
under Code Section 103(a), (xv) none of the Company or any of its Subsidiaries
has deferred gain (A) arising from intercompany transactions (as described in
Treasury Regulation 1.1502-13) or (B) with respect to stock or obligations of
the Company or any Subsidiary which could affect the Liability for Taxes of the
Company or any Subsidiary for any period or portion thereof ending after the
Closing Date, (xvi) none of the Company or any of its Subsidiaries has made an
election under Section 341(f) of the Code (or any predecessor provision) (xvii)
neither the Company nor any Subsidiary has made any, or is obligated to make any
payments, or is a party to any agreement that under certain circumstances could
obligate it to make any payments, that under Code Section 280G or Code Section
162 were, or will not be, deductible; and (xviii) the Company has disclosed on
its federal income Tax returns each position taken therein that could give rise
to a substantial understatement of United States federal income Tax within the
meaning of Code Section 6662; and
(e) there are no Liens with respect to any Taxes upon any of
the assets or properties of the Company or any Subsidiary, other than (i) Taxes,
the payment of which is not yet due, or (ii) Taxes being contested in good
faith.
3.13 LEGAL PROCEEDINGS. Except as disclosed in SECTION 3.13 OF
THE DISCLOSURE SCHEDULE (with paragraph references corresponding to those set
forth below):
(a) there are no Actions or Proceedings pending or, to the
Knowledge of the Company threatened against, relating to or affecting any
Shareholder Party, the Company or any Subsidiary or any of their respective
Assets and Properties (regardless of whether any of such Persons is a plaintiff
or defendant) which (i) would reasonably be expected to result in the issuance
of an Order restraining, enjoining or otherwise prohibiting or making illegal
the consummation of any of the transactions contemplated by this Agreement or
any of the Operative Agreements or otherwise result in a material diminution of
the benefits contemplated by this Agreement or any of the Operative Agreements
to Parent, (ii) relates to employment discrimination (including, without
limitation, race, gender, age, religion or disabilities), employee harassment,
immigration or equal employment opportunity or other employee-related matters or
(iii) if determined adversely to any Shareholder Party, the Company or a
Subsidiary, would reasonably be expected to result in (x) any injunction or
other equitable relief against the Company or any Subsidiary that would
interfere in any material respect with its business or operations, or (y) Losses
by the Company or any Subsidiary, individually or in the aggregate with Losses
in respect of other such Actions or Proceedings, exceeding $100,000; and
(b) there are no Orders outstanding against the Company or any
Subsidiary.
Prior to the execution of this Agreement, the Company has delivered to Parent
all responses of counsel for the Company and the Subsidiaries to auditors'
requests for information delivered in connection with the Audited Financial
Statements (together with any updates provided by such
15
counsel) regarding Actions or Proceedings pending or threatened against,
relating to or affecting the Company or any Subsidiary.
3.14 COMPLIANCE WITH LAWS AND ORDERS. Except as disclosed in
SECTION 3.14 OF THE DISCLOSURE SCHEDULE, neither the Company nor any Subsidiary
is or has at any time within the last three years been, or has received any
written or, to the Knowledge of the Company, oral notice that it is or has at
any time within the last three years been, in violation of or in default under,
in any material respect, any Law or Order applicable to the Company or any
Subsidiary or any of their respective Assets and Properties, including, without
limitation, any Law or Order relating to employment discrimination (including,
without limitation, race, gender, age, religion or disabilities), employee
harassment, immigration or equal employment opportunity or any other
employee-related matter.
3.15 BENEFIT PLANS; ERISA. (a) SECTION 3.15 OF THE DISCLOSURE
SCHEDULE contains a true and complete list of each "employee benefit plan"
(within the meaning of section 3(3) of ERISA, including, without limitation,
multiemployer plans within the meaning of ERISA section 3(37)), stock purchase,
stock option, severance, employment, change-in-control, fringe benefit,
collective bargaining, bonus, incentive, deferred compensation and all other
employee benefit plans, agreements, programs, policies or other arrangements,
whether or not subject to ERISA (including any funding mechanism therefor now in
effect or required in the future as a result of the transaction contemplated by
this Agreement or otherwise), whether formal or informal, oral or written,
legally binding or not, under which any employee or former employee of the
Company or its Subsidiaries has any present or future right to benefits or under
which the Company or its Subsidiaries has any present or future liability. All
such plans, agreements, programs, policies and arrangements shall be
collectively referred to as the "COMPANY PLANS".
(b) With respect to each Company Plan, the Company has
delivered to Parent a current, accurate and complete copy (or, to the extent no
such copy exists, an accurate description) thereof and, to the extent
applicable: (i) any related trust agreement or other funding instrument; (ii)
the most recent determination letter, if applicable; (iii) any summary plan
description and other written communications (or a description of any oral
communications) by the Company or its Subsidiaries to their employees concerning
the extent of the benefits provided under a Company Plan; and (iv) for the three
most recent years (A) the Form 5500 and attached schedules, (B) audited
financial statements, (C) actuarial valuation reports and (D) attorney's
response to an auditor's request for information.
(c) (i) Each Company Plan has been established and
administered in accordance with its terms, and in compliance with the applicable
provisions of ERISA, the Code and other applicable laws, rules and regulations;
(ii) each Company Plan which is intended to be qualified within the meaning of
Code Section 401(a) is so qualified and has received a favorable determination
letter as to its qualification, and nothing has occurred, whether by action or
failure to act, that could reasonably be expected to cause the loss of such
qualification; (iii) no event has occurred and no condition exists that would
subject the Company or its Subsidiaries, either directly or by reason of their
affiliation with any member of their "CONTROLLED GROUP" (defined as
16
any organization which is a member of a controlled group of organizations within
the meaning of Code Sections 414(b), (c), (m) or (o)), to any tax, fine, lien,
penalty or other liability imposed by ERISA, the Code or other applicable laws,
rules and regulations; (iv) for each Company Plan with respect to which a Form
5500 has been filed, no material change has occurred with respect to the matters
covered by the most recent Form since the date thereof; (v) no "reportable
event" (as such term is defined in ERISA Section 4043), "prohibited transaction"
(as such term is defined in ERISA Section 406 and Code Section 4975) or
"accumulated funding deficiency" (as such term is defined in ERISA Section 302
and Code Section 412 (whether or not waived)) has occurred with respect to any
Company Plan; (vi) no Company Plan provides retiree welfare benefits and neither
the Company nor its Subsidiaries have any obligations to provide any retiree
welfare benefits; and (vii) all awards, grants or bonuses made pursuant to any
Company have been, or will be, fully deductible to the Company or its
Subsidiaries notwithstanding the provisions of Section 162(m) of the Code.
(d) There are no Company Plans subject to Title IV of ERISA.
(e) None of the Company, its Subsidiaries or any member of
their Controlled Group has any liability or contributes (or has at any time
contributed or had an obligation to contribute) to any multiemployer plan within
the meaning of ERISA Section 4001(a)(3).
(f) With respect to any Company Plan, (i) no Actions or
Proceedings (other than routine claims for benefits in the ordinary course) are
pending or threatened, (ii) no facts or circumstances exist that could give rise
to any such Actions or Proceedings, and (iii) no written or oral communication
has been received from the PBGC in respect of any Company Plan subject to Title
IV of ERISA concerning the funded status of any such plan or any transfer of
assets and liabilities from any such plan in connection with the transactions
contemplated herein.
(g) Except as set forth in SECTION 3.15(g) OF THE DISCLOSURE
LETTER, no Company Plan exists that could result in the payment to any present
or former employee of the Company or its Subsidiaries of any money or other
property or accelerate or provide any other rights or benefits to any present or
former employee of the Company or its Subsidiaries as a result of the
transaction contemplated by this Agreement, whether or not such payment would
constitute a parachute payment within the meaning of Code section 280G.
3.16 REAL PROPERTY. (a) None of the Company or its
Subsidiaries owns or has any interest in fee simple to any real property.
SECTION 3.16(a) OF THE DISCLOSURE SCHEDULE contains a true and correct list of
each parcel of real property leased by the Company or any Subsidiary (as lessor
or lessee).
(b) The Company or a Subsidiary has a valid and subsisting
leasehold estate in and the right of quiet enjoyment to the real properties
leased by it for the full term of the lease thereof. Each lease referred to in
clause (ii) of paragraph (a) above is a legal, valid and binding agreement,
enforceable in accordance with its terms (except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of
17
creditors generally) of the Company or a Subsidiary and, to the Knowledge of
the Company, of each other Person that is a party thereto, and except as set
forth in SECTION 3.16(c) OF THE DISCLOSURE SCHEDULE, there is no, and neither
the Company nor any Subsidiary has received notice of any, default (or any
condition or event which, after notice or lapse of time or both, would
constitute a default) thereunder. Neither the Company nor any Subsidiary owes
any brokerage commissions with respect to any such leased space.
(c) The Company has delivered to Parent prior to the execution
of this Agreement true and complete copies of all leases (including any
amendments and renewal letters) and, to the extent reasonably available, all
other documents with respect to the real property leased by the Company and the
Subsidiaries.
3.17 TANGIBLE PERSONAL PROPERTY; INVESTMENT ASSETS. (a) The
Company or a Subsidiary is in possession of and has good title to, or has valid
leasehold interests in or valid rights under Contract to use, all material
tangible personal property used in or reasonably necessary for the conduct of
their business, including all tangible personal property reflected on the
December 31 Balance Sheet and tangible personal property acquired since December
31, 1999 other than property disposed of since such date in the ordinary course
of business consistent with past practice. All such tangible personal property
is free and clear of all Liens, other than Permitted Liens, and is in good
working order and condition, ordinary wear and tear excepted, and its use
complies in all material respects with all applicable Laws.
(b) SECTION 3.17(b) OF THE DISCLOSURE SCHEDULE describes each
Investment Asset owned by the Company or any Subsidiary on the date hereof.
Except as disclosed in SECTION 3.17(b) OF THE DISCLOSURE SCHEDULE, all such
Investment Assets are owned by the Company or a Subsidiary free and clear of all
Liens other than Permitted Liens.
3.18 INTELLECTUAL PROPERTY RIGHTS. The Company and the
Subsidiaries have interests in or the right to use only the Intellectual
Property disclosed in SECTION 3.18 OF THE DISCLOSURE SCHEDULE (other than
Intellectual Property used by the Company and the Subsidiaries pursuant to any
Contract which, individually or in the aggregate, is not material to the
Business and Condition of the Company), each of which the Company or a
Subsidiary either has all right, title and interest in or a valid and binding
rights under Contract to use free and clear of all Liens. No other Intellectual
Property is used or necessary in the conduct of the business of the Company or
any Subsidiary. Except as disclosed in SECTION 3.18 OF THE DISCLOSURE SCHEDULE,
(i) the Company or a Subsidiary has the exclusive right to use the Intellectual
Property disclosed in SECTION 3.18 OF THE DISCLOSURE SCHEDULE which is owned by
the Company and the Subsidiaries, (ii) all registrations with and applications
to Governmental or Regulatory Authorities in respect of such Intellectual
Property which is owned by the Company and the Subsidiaries are valid and in
full force and effect and are not subject to the payment of any Taxes or
maintenance fees or the taking of any other actions by the Company or a
Subsidiary to maintain their validity or effectiveness, (iii) there are no
restrictions on the direct or indirect transfer of any Contract, or any interest
therein, held by the Company or any Subsidiary in respect of Intellectual
Property, (iv) the Company has delivered to Parent prior to the execution of
this Agreement documentation
18
with respect to any invention, process, design, computer program or other
know-how or trade secret included in such Intellectual Property which is owned
by the Company and the Subsidiaries, which documentation is accurate in all
material respects and reasonably sufficient in detail and content to identify
and explain such invention, process, design, computer program or other know-how
or trade secret and to facilitate its full and proper use without reliance on
the special knowledge or memory of any Person, (v) the Company and the
Subsidiaries have taken reasonable security measures to protect the secrecy,
confidentiality and value of their trade secrets, (vi) neither the Company nor
any Subsidiary is, or has received any notice that it is, in default (or with
the giving of notice or lapse of time or both, would be in default) under any
material Contract to use Intellectual Property, (vii) to the Knowledge of the
Company, no such Intellectual Property which is owned by the Company and the
Subsidiaries is being infringed by any other Person and (viii) none of such
Intellectual Property which is owned by the Company and the Subsidiaries is
subject to any outstanding Order, written restriction, undertaking or Contract
which would limit the scope of use of such Intellectual Property. Neither the
Company, any Subsidiary nor any Shareholder Party has received notice that the
Company or any Subsidiary is infringing any Intellectual Property of any other
Person, no claim is pending or, to the Knowledge of the Company, has been made
to such effect that has not been resolved and, to the Knowledge of the Company,
neither the Company nor any Subsidiary is infringing any Intellectual Property
of any other Person.
3.19 CONTRACTS. (a) SECTION 3.19(a) OF THE DISCLOSURE SCHEDULE
contains a true and complete list of each of the following Contracts or other
arrangements (true and complete copies or, if none, reasonably accurate written
descriptions of which, together with all amendments and supplements thereto and
all waivers of any terms thereof, have been delivered to Parent prior to the
execution of this Agreement), to which the Company or any Subsidiary is a party
or by which any of their respective Assets and Properties is bound:
(i) (A) all Contracts (excluding Company Plans)
providing for a commitment of employment or
consultation services for a specified or
unspecified term or otherwise relating to
employment or the termination of employment,
the name, position and rate of compensation
of each Person party to such a Contract and
the expiration date of each such Contract;
and (B) any written or unwritten
representations, commitments, promises,
communications or courses of conduct
(excluding Company Plans and any such
Contracts referred to in clause (A))
involving an obligation of the Company or
any Subsidiary to make payments in any year,
other than with respect to salary or
incentive compensation payments in the
ordinary course of business, to any employee
exceeding $25,000 or any group of employees
exceeding $100,000 in the aggregate;
(ii) all Contracts with any Person containing any
provision or covenant prohibiting or
limiting the ability of the Company or any
19
Subsidiary to engage in any business
activity or compete with any Person or
prohibiting or limiting the ability of any
Person to compete with the Company or any
Subsidiary;
(iii) all partnership, joint venture,
shareholders' or other similar Contracts
with any Person;
(iv) all Contracts relating to Indebtedness of
the Company or any Subsidiary in excess of
$25,000 or to preferred stock that remains
outstanding issued by the Company or any
Subsidiary;
(v) all Contracts with suppliers, distributors,
dealers, manufacturer's representatives,
sales agencies or franchisees providing for
payments to or by the Company in excess of
$25,000 per annum;
(vi) all Contracts relating to (A) the future
disposition or acquisition of any Assets and
Properties, other than dispositions or
acquisitions in the ordinary course of
business consistent with past practice, and
(B) any merger or other business combination;
(vii) all Contracts between or among the Company
or any Subsidiary, on the one hand, and any
Shareholder or Affiliate (other than the
Company or any Subsidiary) of any
Shareholder, on the other hand;
(viii) all collective bargaining or similar labor
Contracts;
(ix) all Contracts that (A) limit or contain
restrictions on the ability of the Company
or any Subsidiary to declare or pay
dividends on, to make any other distribution
in respect of or to issue or purchase,
redeem or otherwise acquire its capital
stock, to incur Indebtedness, to incur or
suffer to exist any Lien, to purchase or
sell any Assets and Properties, to change
the lines of business in which it
participates or engages or to engage in any
merger or other business combination or (B)
require the Company or any Subsidiary to
maintain specified financial ratios or
levels of net worth or other indicia of
financial condition; and
(x) all other Contracts (other than Company
Plans, leases listed in SECTION 3.16(a) OF
THE DISCLOSURE SCHEDULE and insurance
policies listed in SECTION 3.21 OF THE
DISCLOSURE SCHEDULE) that (i) involve the
payment or potential payment, pursuant to
the terms of any such Contract, by or to the
Company or any Subsidiary of more than
$50,000 annually (other than accounts or
trade receivables or
20
payables) or (ii) is otherwise material to
the Business and Condition of the Company.
(b) Each Contract required to be disclosed in SECTION 3.19(a)
OF THE DISCLOSURE SCHEDULE is in full force and effect and constitutes a legal,
valid and binding agreement, enforceable in accordance with its terms (except as
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights of creditors generally), of the
Company and, to the Knowledge of the Company, each other Person party thereto;
and except as disclosed in SECTION 3.19(b) OF THE COMPANY neither the Company,
any Subsidiary nor, to the Knowledge of the Company, any other party to such
Contract is, or has received notice that it is, in violation or breach of or
default under any such Contract (or with notice or lapse of time or both, would
be in violation or breach of or default under any such Contract) in any material
respect.
3.20 LICENSES. SECTION 3.20 OF THE DISCLOSURE SCHEDULE
contains a true and complete list of all Licenses used in and material,
individually or in the aggregate, to the business or operations of the Company
or any Subsidiary (and all pending applications for any such Licenses), setting
forth the grantor, the grantee and the expiration and renewal date of each.
Prior to the execution of this Agreement, the Company has delivered to Parent
true and complete copies of all such Licenses. Except as disclosed in SECTION
3.20 OF THE DISCLOSURE SCHEDULE:
(i) the Company and each Subsidiary owns or
validly holds all Licenses that are
material, individually or in the aggregate,
to its business or operations;
(ii) each License listed in SECTION 3.20 OF THE
DISCLOSURE SCHEDULE is valid, binding and in
full force and effect; and
(iii) neither the Company nor any Subsidiary is,
or has received any notice that it is, in
default (or with the giving of notice or
lapse of time or both, would be in default)
under any such License.
3.21 INSURANCE. SECTION 3.21 OF THE DISCLOSURE SCHEDULE
contains a true and complete list (including the names and addresses of the
insurers, the names of the Persons to whom such Policies have been issued, the
expiration dates thereof, the annual premiums and payment terms thereof, whether
it is a "claims made" or an "occurrence" policy and a brief description of the
interests insured thereby) of all liability, property, workers' compensation,
directors' and officers' liability and other insurance policies currently in
effect that insure the business, operations or employees of the Company or any
Subsidiary or affect or relate to the ownership, use or operation of any of the
Assets and Properties of the Company or any Subsidiary and that (i) have been
issued to the Company or any Subsidiary or (ii) have been issued to any Person
(other than the Company or any Subsidiary) for the benefit of the Company or any
Subsidiary. The insurance coverage provided by any of the policies described in
clause (i) above will not terminate or lapse by reason of the transactions
contemplated by this
21
Agreement. Each policy listed in SECTION 3.21 OF THE DISCLOSURE SCHEDULE is
valid and binding and in full force and effect, no premiums due thereunder have
not been paid and neither the Company, any Subsidiary nor the Person to whom
such policy has been issued has received any notice of cancellation or
termination in respect of any such policy or is in default thereunder. The
insurance policies listed in SECTION 3.21 OF THE DISCLOSURE SCHEDULE are placed
with financially sound and reputable insurers and, in light of the respective
business, operations and Assets and Properties of the Company and the
Subsidiaries, are in amounts and have coverages that are reasonable and
customary for Persons engaged in such businesses and operations and having such
Assets and Properties. Neither the Company, any Subsidiary nor the Person to
whom such policy has been issued has received notice that any insurer under any
policy referred to in this Section is denying liability with respect to a claim
thereunder or defending under a reservation of rights clause.
3.22 AFFILIATE TRANSACTIONS. Except as disclosed in SECTION
3.19(a)(vii) or SECTION 3.22(a) OF THE DISCLOSURE SCHEDULE, (i) there are no
intercompany Liabilities between the Company or any Subsidiary, on the one hand,
and any Shareholder or Affiliate (other than the Company or any Subsidiary) of
any Shareholder, on the other, (ii) neither any Shareholder nor any such
Affiliate provides or causes to be provided any assets, services or facilities
to the Company or any Subsidiary, (iii) neither the Company nor any Subsidiary
provides or causes to be provided any assets, services or facilities to any
Shareholder or any such Affiliate and (iv) neither the Company nor any
Subsidiary beneficially owns, directly or indirectly, any Investment Assets
issued by any Shareholder or any such Affiliate. Except as disclosed in SECTION
3.22(b) OF THE DISCLOSURE SCHEDULE, each of the Liabilities and transactions
listed in SECTION 3.22(a) OF THE DISCLOSURE SCHEDULE was incurred or engaged in,
as the case may be, on an arm's-length basis. Except as disclosed in SECTION
3.22(c) OF THE DISCLOSURE SCHEDULE, since December 31, 1999, all settlements of
intercompany Liabilities between the Company or any Subsidiary, on the one hand,
and any Shareholder or any such Affiliate, on the other, have been made, and all
allocations of intercompany expenses have been applied, in the ordinary course
of business consistent with past practice.
3.23 EMPLOYEES; LABOR RELATIONS. (a) SECTION 3.23(a) OF THE
DISCLOSURE SCHEDULE contains a list of the name of each officer and employee of
the Company and the Subsidiaries at the date hereof, together with each such
person's position or function, annual base salary or wages and any incentive or
bonus arrangement with respect to such person in effect on such date. To the
Knowledge of the Company, there is no reason to believe that a material number
of such persons will or may cease to be employees, or will refuse offers of
continued employment from Parent (as long as such offers are for comparable
positions and at equal or greater compensation, including stock options),
because of the consummation of the transactions contemplated by this Agreement.
(b) Except as disclosed in SECTION 3.23(b) OF THE DISCLOSURE
SCHEDULE, (i) no employee of the Company or any Subsidiary is presently a member
of a collective bargaining unit and, to the Knowledge of the Company, there are
no threatened or contemplated attempts to organize for collective bargaining
purposes any of the employees of the Company or any
22
Subsidiary, and (ii) no unfair labor practice complaint or sex, age, race or
other discrimination claim has been brought during the last three years against
the Company or any of the Subsidiaries before the National Labor Relations
Board, the Equal Employment Opportunity Commission or any other Governmental or
Regulatory Authority. Since December 31, 1996, there has been no work stoppage,
strike or other concerted action by employees of the Company or any Subsidiary.
During that period, the Company and the Subsidiaries have complied in all
material respects with all applicable Laws relating to the employment of labor,
including, without limitation those relating to wages, hours and collective
bargaining.
3.24 ENVIRONMENTAL MATTERS. Each of the Company and the
Subsidiaries has obtained all material Licenses which are required under
applicable Environmental Laws in connection with the conduct of the business or
operations of the Company or such Subsidiary. Each of such Licenses is in full
force and effect and each of the Company and the Subsidiaries is in compliance
in all material respects with the terms and conditions of all such Licenses and
with any applicable Environmental Law. In addition, except as set forth in
SECTION 3.24 OF THE DISCLOSURE SCHEDULE (with paragraph references corresponding
to those set forth below):
(a) No Order has been issued, no Environmental Claim has been
filed, no penalty has been assessed and no investigation or review is pending
or, to the Knowledge of Shareholder Parties, threatened by any Governmental or
Regulatory Authority with respect to any alleged failure by the Company or any
Subsidiary to have any License required under applicable Environmental Laws in
connection with the conduct of the business or operations of the Company or any
of the Subsidiaries or with respect to any generation, treatment, storage,
recycling, transportation, discharge, disposal or Release of any Hazardous
Material generated by the Company or any Subsidiary, and to the Knowledge of the
Company, there are no facts or circumstances in existence which could reasonably
be expected to form the basis for any such Order, Environmental Claim, penalty
or investigation which would reasonably be expected to be materially adverse to
the Business and Condition of the Company.
(b) Neither the Company nor any Subsidiary owns, operates or
leases a treatment, storage or disposal facility requiring a permit under the
Resource Conservation and Recovery Act, as amended, or under any other
comparable state or local Law; and, without limiting the foregoing, (i) no
polychlorinated biphenyl is or has been present, (ii) no asbestos or
asbestos-containing material is or has been present, (iii) there are no
underground storage tanks or surface impoundments for Hazardous Materials,
active or abandoned, and (iv) no Hazardous Material has been Released in a
quantity reportable under, or in violation of, any Environmental Law or
otherwise Released, in the cases of clauses (i) through (iv), at, on or under
any site or facility now or previously owned, operated or leased by the Company
or any Subsidiary.
(c) Neither the Company nor any Subsidiary has transported or
arranged for the transportation of any Hazardous Material to any location that
is (i) listed on the NPL under CERCLA, (ii) listed for possible inclusion on the
NPL by the Environmental Protection Agency in CERCLIS or on any similar state or
local list or (iii) the subject of enforcement actions by
23
federal, state or local Governmental or Regulatory Authorities that may lead to
Environmental Claims against the Company or any Subsidiary.
(d) No Hazardous Material generated by the Company or any
Subsidiary has been recycled, treated, stored, disposed of or Released by the
Company or any Subsidiary at any location.
(e) No oral or written notification of a Release of a
Hazardous Material has been filed by or on behalf of the Company or any
Subsidiary and no site or facility now or previously owned, operated or leased
by the Company or any Subsidiary is listed or proposed for listing on the NPL,
CERCLIS or any similar state or local list of sites requiring investigation or
clean-up.
(f) No Liens have arisen under or pursuant to any
Environmental Law on any site or facility owned, operated or leased by the
Company or any Subsidiary, and no federal, state or local Governmental or
Regulatory Authority action has been taken or, to the Knowledge of the Company,
is in process that could subject any such site or facility to such Liens, and
neither the Company nor any Subsidiary would be required to place any notice or
restriction relating to the presence of Hazardous Materials at any site or
facility owned by it in any deed to the real property on which such site or
facility is located.
(g) There have been no environmental investigations, studies,
audits, tests, reviews or other analyses conducted by, or that are in the
possession of, the Company or any Subsidiary in relation to any site or facility
now or previously owned, operated or leased by the Company or any Subsidiary
which have not been delivered to Parent prior to the execution of this
Agreement.
3.25 SUBSTANTIAL CUSTOMERS AND SUPPLIERS. SECTION 3.25(a) OF
THE DISCLOSURE SCHEDULE lists the 20 largest customers of the Company and the
Subsidiaries, on the basis of revenues for goods or services sold for the most
recently-completed fiscal year. SECTION 3.25(b) OF THE DISCLOSURE SCHEDULE lists
the 20 largest suppliers of the Company and the Subsidiaries, on the basis of
cost of goods or services purchased for the most recently-completed fiscal year.
Except as disclosed in SECTION 3.25(c) OF THE DISCLOSURE SCHEDULE, no such
customer or supplier has ceased or materially reduced its purchases from, use of
the services of, or sales or provision of services to the Company and the
Subsidiaries since December 31, 1999, or to the Knowledge of the Company, has
threatened in writing (other than as a result of the public announcement of the
transactions contemplated by this Agreement) to cease or materially reduce such
purchases, use, sales or provision of services after the date hereof.
3.26 BANK AND BROKERAGE ACCOUNTS; INVESTMENT ASSETS. SECTION
3.26 OF THE DISCLOSURE SCHEDULE sets forth (a) a true and complete list of the
names and locations of all banks, trust companies, securities brokers and other
financial institutions at which the Company or any Subsidiary has an account or
safe deposit box or maintains a banking, custodial, trading or other similar
relationship; (b) a true and complete list and description of each such account,
box and relationship, indicating in each case the account number and the names
of the respective
24
officers, employees, agents or other similar representatives of the Company or
any Subsidiary having signatory power with respect thereto; and (c) a list of
each Investment Asset, the name of the record and beneficial owner thereof, the
location of the certificates, if any, therefor, the maturity date, if any, and
any stock or bond powers or other authority for transfer granted with respect
thereto.
3.27 NO POWERS OF ATTORNEY. Except as set forth in SECTION
3.27 OF THE DISCLOSURE SCHEDULE, neither the Company nor any Subsidiary has any
powers of attorney or comparable delegations of authority outstanding.
3.28 DISCLOSURE. No representation or warranty contained in
this Agreement, and no statement contained in the Disclosure Schedule or in any
certificate furnished to Parent pursuant to any provision of this Agreement,
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements herein or therein, in the light
of the circumstances under which they were made, not misleading.
ARTICLE III-A
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER PARTIES
Each Shareholder Party hereby represents and warrants,
severally as to such Shareholder Party only, to the Parent and Merger Sub as
follows:
3A.01. AUTHORITY. Each Shareholder Party has full power
(corporate or otherwise), capacity and authority to execute and deliver this
Agreement and the Operative Agreements and to perform its obligations hereunder
and thereunder and to consummate the transactions contemplated hereby and
thereby, including without limitation to own, hold, sell and transfer the
Shares. The execution and delivery by each Shareholder Party (other than any
natural person) of this Agreement, and the performance by it of its obligations
hereunder, have been duly and validly authorized by the board of directors, the
partnership or other managing body of such Shareholder Party, no other action on
the part of such Shareholder Party being necessary.
3A.02. EXECUTION AND DELIVERY. This Agreement has been duly
and validly executed and delivered by each Shareholder Party and constitutes the
legal, valid and binding obligations of such Shareholder Party enforceable
against it in accordance with the terms of this Agreement, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights of creditors generally.
3A.03. ORGANIZATION. Such Shareholder Party (other than any
natural person) is duly organized, validly existing and in good standing under
the Laws of the state of its organization, and has full power and authority to
conduct its business as and to the extent now conducted and to own, use and
lease its Assets and Properties. Such Shareholder Party is duly qualified,
licensed or admitted to do business and is in good standing in these
jurisdictions in
25
which the ownership , use or leasing of its Assets and Properties, or the
conduct or nature of its business, makes such qualification, licensing or
admission necessary, except where such failure would not have a material adverse
effect on such Shareholder Party.
3A.04. NO CONFLICTS. The execution and delivery of this
Agreement by each Shareholder Party do not, and the execution and delivery by
such Shareholder Party of the Operative Agreements, the performance by it of its
obligations under this Agreement and the Operative Agreements and the
consummation of the transactions contemplated hereby and thereby will not: (i)
conflict with or result in a violation or breach of any of the terms, conditions
or provisions of the certificate or articles of incorporation or by-laws (or
other comparable organizational documents) of such Shareholder Party; or (ii)
subject to obtaining the consents, approvals and actions, making the filings and
giving the notices required under the HSR Act, conflict with or result in a
violation or breach of any term or provision of any Law or Order applicable to
such Shareholder Party or any of its Assets and Properties; or except as
disclosed in SECTION 3.02(b) OF THE DISCLOSURE SCHEDULE, (i) conflict with or
result in a violation or breach of, (ii) constitute (with or without notice or
lapse of time or both) a default under, (iii) require any Shareholder Party to
obtain any consent, approval or action of, make any filing with or give any
notice to any Person as a result or under the terms of, or (iv) result in the
creation or imposition of any Lien upon any Shares owned by any Shareholder
Party under, any Contract or License to which such Shareholder Party is a party
or by which any of its respective Assets and Properties is bound.
3A.05. GOVERNMENTAL APPROVALS AND FILINGS. No consent,
approval or action of, filing with or notice to any Governmental or Regulatory
Authority or the part of such Shareholder Party is required in connection with
the execution, deliver and performance of this Agreement or any of the Operative
Agreements or the consummation of the transactions contemplated hereby or
thereby.
3A.06 NATURE OF PURCHASE; ACCREDITED INVESTOR. (a) Each
Shareholder Party is acquiring the Parent Shares to be issued pursuant to this
Agreement for such Shareholder Party's own account for investment, not as a
nominee or agent, and not with a view to the resale or distribution of such
shares or any part thereof, and such Shareholder Party has no present intention
of selling, granting any participation in, or otherwise distributing the same,
except as contemplated by the Registration Rights Agreement. Each Shareholder
Party acknowledges that the issuance of the Parent Shares pursuant to this
Agreement will not be registered under the Securities Act or any state
securities or blue sky law, on the grounds that the offering and sale of the
Parent Shares contemplated by this Agreement are exempt from registration
pursuant to exceptions available under such laws, and that Parent's reliance
upon such exemptions is predicated upon such Shareholder Party's representations
set forth in this Agreement. Each Shareholder Party acknowledges and understands
that such shares must be retained by such Shareholder Party until they are
subsequently registered under the Securities Act and/or applicable state
securities or blue sky laws or an exemption from such registration is available.
26
(b) Each Shareholder Party is an "accredited investor" within
the meaning of Regulation D promulgated under the Securities Act.
3A.07 BROKERS. Except for those Persons set forth in SECTION
3A.07 OF THE DISCLOSURE SCHEDULE, whose fees, commissions and expenses are the
sole responsibility of the Shareholder Parties to the extent such fees,
commissions and expenses, together with all other costs and expenses to be paid
by Parent or the Company pursuant to SECTION 13.03, exceed the Fee Limit, all
negotiations relative to this Agreement and the transactions contemplated hereby
have been carried out by the Shareholder Parties and the Company directly with
Parent and Merger Sub without the intervention of any Person on behalf of any
Shareholder Party or the Company in such manner as to give rise to any valid
claim by any Person against Parent, Merger Sub, the Company or any Subsidiary
for a finder's fee, brokerage commission or similar payment.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub hereby represent and warrant to the
Company and the Shareholders Parties as follows:
4.01 ORGANIZATION. Each of Parent and Merger Sub is a
corporation duly organized, validly existing and in good standing under the Laws
of the State of Delaware. Each of Parent and Merger Sub has full corporate power
and authority to execute and deliver this Agreement and the Operative Agreements
to which it is a party, to perform its obligations hereunder and thereunder and
to consummate the transactions contemplated hereby and thereby.
4.02 AUTHORITY. The execution and delivery by Parent and
Merger Sub of this Agreement and the Operative Agreements to which it is a
party, and the performance by Parent and Merger Sub of its obligations hereunder
and thereunder, have been duly and validly authorized by the Board of Directors
of Parent and Merger Sub, respectively, and by Parent as sole shareholder of
Merger Sub, no other corporate action (whether under Delaware Law or the
requirements of NASDAQ) on the part of Parent or Merger Sub or their respective
stockholders being necessary. This Agreement has been duly and validly executed
and delivered by Parent and Merger Sub and constitutes, and upon the execution
and delivery by Parent of the Operative Agreements, the Operative Agreements
will constitute, legal, valid and binding obligations of Parent and Merger Sub,
respectively, enforceable against Parent and Merger Sub in accordance with their
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights of
creditors generally.
4.03 CAPITAL STOCK. (a) The authorized capital stock of Parent
consists solely of 100,000,000 shares of Parent Common Stock and 10,000,000
shares of preferred stock, par value $.01 per share ("PARENT PREFERRED STOCK").
As of April 25, 2000, 31,854,827 shares of Parent Common Stock were issued and
outstanding and no shares were held in the treasury of Parent.
27
As of the date hereof, no shares of Parent Preferred Stock are issued and
outstanding. All of the issued and outstanding shares of Parent Common Stock
are, and the Parent Shares will be upon issuance in accordance with the terms
specified in this Agreement, duly authorized, validly issued, fully paid and
nonassessable. Except pursuant to this Agreement and as set forth in SECTION
4.03 OF THE PARENT DISCLOSURE LETTER, there are no outstanding Options
obligating Parent or any of its subsidiaries to issue or sell any shares of
capital stock of Parent or to grant, extend or enter into any Option with
respect thereto.
(b) Except as disclosed in SECTION 4.03 OF THE PARENT
DISCLOSURE LETTER, there are no outstanding contractual obligations of Parent or
any of its subsidiaries to repurchase, redeem or otherwise acquire any capital
stock of Parent or any capital stock of any subsidiary of Parent or to provide
funds to, or make any investment (in the form of a loan, capital contribution or
otherwise) in, any subsidiary of Parent or any other person.
4.04 NO CONFLICTS. The execution and delivery by Parent and
Merger Sub of this Agreement do not, and the execution and delivery by Parent of
the Operative Agreements, the performance by Parent and Merger Sub of their
respective obligations under this Agreement and the Operative Agreements and the
consummation of the transactions contemplated hereby and thereby will not:
(a) conflict with or result in a violation or breach of any of
the terms, conditions or provisions of the certificate of incorporation or
by-laws (or other comparable corporate charter document) of Parent or Merger
Sub;
(b) subject to obtaining the consents, approvals and actions,
making the filings and giving the notices disclosed in SECTION 4.05 and in
SECTION 4.05 OF THE PARENT DISCLOSURE LETTER, conflict with or result in a
violation or breach of any term or provision of any Law or Order applicable to
Parent or Merger Sub or any of their Assets and Properties; or
(c) except as disclosed in SECTION 4.04 OF THE PARENT
DISCLOSURE LETTER, (i) conflict with or result in a violation or breach of, (ii)
constitute (with or without notice or lapse of time or both) a default under,
(iii) require Parent or Merger Sub to obtain any consent, approval or action of,
make any filing with or give any notice to any Person as a result or under the
terms of, or (iv) result in the creation or imposition of any Lien upon Parent
or Merger Sub or any of their Assets or Properties under, any Contract or
License to which Parent or Merger Sub is a party or by which any of their Assets
and Properties is bound.
4.05 GOVERNMENTAL APPROVALS AND FILINGS. Except as disclosed
in SECTION 4.05 OF THE PARENT DISCLOSURE LETTER, and except for the filing of
the applicable Certificate of Merger with the Secretary of State no consent,
approval or action of, filing with or notice to any Governmental or Regulatory
Authority on the part of Parent or Merger Sub is required in connection with the
execution, delivery and performance of this Agreement or the Operative
Agreements or the consummation of the transactions contemplated hereby or
thereby.
28
4.06 LEGAL PROCEEDINGS. There are no Actions or Proceedings pending or,
to the knowledge of Parent or Merger Sub, threatened against, relating to or
affecting Parent or Merger Sub or any of their Assets and Properties which could
reasonably be expected to (a) result in the issuance of an Order restraining,
enjoining or otherwise prohibiting or making illegal the consummation of any of
the transactions contemplated by this Agreement or any of the Operative
Agreements and (b) have a material adverse effect on the business, operations,
financial condition or results of operations of Parent and its subsidiaries
taken as a whole.
4.07 SEC REPORTS AND FINANCIAL STATEMENTS. Each form, report, schedule,
registration statement, definitive proxy statement and other document (together
with all amendments thereof and supplements thereto) filed by Parent or any of
its subsidiaries with the Securities and Exchange Commission (the "SEC") since
June 10, 1999 (as such documents have since the time of their filing been
amended or supplemented, the "PARENT SEC REPORTS"), which are all the documents
(other than preliminary material) that Parent and its subsidiaries were required
to file with the SEC since such date, (i) complied as to form in all material
respects with the requirements of the Securities Act or the Exchange Act, as the
case may be, and (ii) did not 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. The audited consolidated financial statements
and unaudited interim consolidated financial statements (including, in each
case, the notes, if any, thereto) included in the Parent SEC Reports (the
"PARENT FINANCIAL STATEMENTS") complied as to form in all material respects with
the published rules and regulations of the SEC with respect thereto, were
prepared in accordance with GAAP applied on a consistent basis during the
periods involved (except as may be indicated therein or in the notes thereto and
except with respect to unaudited statements as permitted by Form 10-Q of the
SEC) and fairly present (subject, in the case of the unaudited interim financial
statements, to normal, recurring year-end audit adjustments (which are not
expected to be, individually or in the aggregate, materially adverse to Parent
and its subsidiaries taken as a whole)) the consolidated financial position of
Parent and its consolidated subsidiaries as at the respective dates thereof and
the consolidated results of their operations and cash flows for the respective
periods then ended.
4.08 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in the
Parent SEC Reports filed prior to the date of this Agreement, since December 31,
1999 there has not been any change, event or development having, or that could
be reasonably expected to have, individually or in the aggregate, a material
adverse effect on Parent and its subsidiaries taken as a whole.
4.09 ABSENCE OF UNDISCLOSED LIABILITIES. Except for matters reflected
or reserved against in the balance sheet for the period ended December 31, 1999
included in the Parent Financial Statements or as disclosed in SECTION 4.09 OF
THE PARENT DISCLOSURE LETTER, neither Parent nor any of its subsidiaries had at
such date, or has incurred since that date, any Liabilities or obligations
(whether absolute, accrued, contingent, fixed or otherwise, or whether due or to
become due) of any nature that would be required by GAAP to be reflected on a
consolidated balance sheet of Parent and its consolidated subsidiaries
(including the notes thereto), except
29
Liabilities or obligations (i) which were incurred in the ordinary course of
business consistent with past practice or (ii) which have not been, and could
not be reasonably expected to be, individually or in the aggregate, materially
adverse to Parent and its subsidiaries taken as a whole.
4.10 BROKERS. Except for Deutsche Bank Xxxx Xxxxx, whose fees,
commissions and expenses are the sole responsibility of Parent, all negotiations
relative to this Agreement and the transactions contemplated hereby have been
carried out by Parent and Merger Sub directly with the Shareholder Parties and
the Company without the intervention of any Person on behalf of the Parent or
Merger Sub in such manner as to give rise to any valid claim by any Person
against the Shareholder Parties, the Company or any Subsidiary for a finder's
fee, brokerage commission or similar payment.
4.11 INTELLECTUAL PROPERTY RIGHTS. Parent and its subsidiaries have all
right, title and interest in, or a valid and binding license to use, all
Intellectual Property individually or in the aggregate material to the conduct
of the businesses of Parent and its subsidiaries taken as a whole. Neither
Parent nor any of its subsidiaries is in default (or with the giving of notice
or lapse of time or both, would be in default) under any license to use such
Intellectual Property, such Intellectual Property is not being infringed by any
third party, and neither Parent nor any of its subsidiaries is infringing any
Intellectual Property of any third party, except for such defaults and
infringements which, individually or in the aggregate, are not having and would
not be reasonably expected to have a material adverse effect on Parent and its
subsidiaries taken as a whole.
4.12 MERGER SUB. Merger Sub has not conducted any activities other than
in connection with its organization, the negotiation and execution of this
Agreement and the consummation of the transactions contemplated hereby. Merger
Sub does not have any subsidiaries.
ARTICLE V
COVENANTS OF THE SHAREHOLDER PARTIES AND THE COMPANY
The Company and each Shareholder Party covenant and agree with Parent
and Merger Sub that, at all times from and after the date hereof until the
Closing and, with respect to any covenant or agreement by its terms to be
performed in whole or in part after the Closing, for the period specified
therein, the Company and each Shareholder Party will comply with all covenants
and provisions of this ARTICLE V, except to the extent Parent may otherwise
consent in writing.
5.01 REGULATORY AND OTHER APPROVALS. The Shareholder Parties, the
Company and the Subsidiaries will, as promptly as practicable (a) take all
commercially reasonable steps necessary or desirable to obtain all consents,
approvals or actions of, make all filings with and give all notices to
Governmental or Regulatory Authorities or any other Person required of the
30
Shareholder Parties, the Company or any Subsidiary to consummate the
transactions contemplated hereby and by the Operative Agreements, including
without limitation those described in SECTIONS 3.06 and 3.07 OF THE DISCLOSURE
SCHEDULE, (b) provide such other information and communications to such
Governmental or Regulatory Authorities or other Persons as Parent, Merger Sub or
such Governmental or Regulatory Authorities or other Persons may reasonably
request in connection therewith and (c) cooperate with Parent and Merger Sub in
connection with the performance of their obligations under SECTIONS 6.01 and
6.02. The Shareholder Parties or the Company will provide prompt notification to
Parent when any such consent, approval, action, filing or notice referred to in
clause (a) above is obtained, taken, made or given, as applicable, and will
advise Parent of any communications (and, unless precluded by Law, provide
copies of any such communications that are in writing) with any Governmental or
Regulatory Authority or other Person regarding any of the transactions
contemplated by this Agreement or any of the Operative Agreements.
5.02 HSR FILINGS. In addition to and not in limitation of the
Shareholder Parties and the Company's covenants contained in SECTION 5.01, the
Shareholder Parties and the Company will (a) take promptly all actions necessary
to make the filings required of the Shareholder Parties, the Company or their
Affiliates under the HSR Act and (b) comply at the earliest practicable date
with any request for additional information received by the Shareholder Parties,
the Company or their Affiliates from the Federal Trade Commission or the
Antitrust Division of the Department of Justice pursuant to the HSR Act. The
Shareholder Parties and the Company will cooperate with Parent in connection
with Parent's filing under the HSR Act and in connection with resolving any
investigation or other inquiry concerning the transactions contemplated by this
Agreement commenced by either the Federal Trade Commission or the Antitrust
Division of the Department of Justice or state attorneys general.
5.03 INVESTIGATION BY PARENT. The Company and the Subsidiaries will (a)
provide Parent and its officers, directors, employees, agents, counsel,
accountants, financial advisors, consultants and other representatives
(together, "REPRESENTATIVES") with reasonable access, upon reasonable prior
notice and during normal business hours, to all officers, employees, agents and
accountants of the Company and the Subsidiaries and their Assets and Properties
and Books and Records, and (b) furnish Parent and such other Persons with all
such information and data (including without limitation copies of Contracts,
Company Plans and other Books and Records) concerning the business and
operations of the Company and the Subsidiaries as Parent or any of such other
Persons reasonably may request in connection with such investigation.
5.04 STANDSTILL. From the date hereof until the earlier of the
Effective Time or termination of this Agreement under ARTICLE XI hereof, no
Shareholder Party shall (i) transfer (which term shall include, without
limitation, for the purpose of this Agreement, any sale, gift, pledge,
assignment, encumbrance or other disposition) or consent to any transfer of, any
or all of such Shareholder Party's Shares or any interest therein, except
pursuant to the Merger, (ii) enter into any contract, option or other agreement
or understanding with respect to any transfer of any or all such Shares or any
interest therein, (iii) grant any proxy, power-of-attorney or other
31
authorizations in or with respect to such Shares or (iv) deposit such Shares
into a voting trust or enter into a voting agreement or arrangement with respect
to the Shares.
5.05 CONDUCT OF BUSINESS. The Company and the Subsidiaries will conduct
business only in the ordinary course consistent with past practice. Without
limiting the generality of the foregoing, the Company will:
(a) use, and will cause the Subsidiaries to use, commercially
reasonable efforts to (i) preserve intact the present business organization and
reputation of the Company and the Subsidiaries, (ii) keep available (subject to
dismissals and retirements in the ordinary course of business consistent with
past practice) the services of the present officers, employees and consultants
of the Company and the Subsidiaries, (iii) maintain the Assets and Properties of
the Company and the Subsidiaries in good working order and condition, ordinary
wear and tear excepted, (iv) maintain the good will of customers, suppliers,
lenders and other Persons to whom the Company or any Subsidiary sells goods or
provides services or with whom the Company or any Subsidiary otherwise has
significant business relationships and (v) continue all current sales, marketing
and promotional activities relating to the business and operations of the
Company and the Subsidiaries;
(b) except to the extent required by applicable Law, (i) cause the
Books and Records to be maintained in the usual, regular and ordinary manner,
(ii) not permit any material change in (A) any pricing, investment, accounting,
financial reporting, inventory, credit, allowance or Tax practice or policy of
the Company or any Subsidiary, or (B) any method of calculating any bad debt,
contingency or other reserve of the Company or any Subsidiary for accounting,
financial reporting or Tax purposes and (iii) not permit any change in the
fiscal year of the Company or any Subsidiary;
(c) (i) use, and will cause the Subsidiaries to use, commercially
reasonable efforts to maintain in full force and effect until the Closing
substantially the same levels of coverage as the insurance afforded under the
Contracts listed in SECTION 3.21 OF THE DISCLOSURE SCHEDULE and (ii) cause any
and all benefits under such Contracts paid or payable (whether before or after
the date of this Agreement) with respect to the business, operations, employees
or Assets and Properties of the Company and the Subsidiaries to be paid to the
Company and the Subsidiaries; and
(d) comply, and cause the Subsidiaries to comply, in all material
respects, with all Laws and Orders applicable to the business and operations of
the Company and the Subsidiaries, and promptly following receipt thereof to give
Parent copies of any notice received from any Governmental or Regulatory
Authority or other Person alleging any violation of any such Law or Order.
5.06 FINANCIAL STATEMENTS AND REPORTS; FILINGS. (a) As promptly as
practicable and in any event no later than 45 days after the end of each fiscal
quarter ending after December 31, 1999 and before the Closing Date, the Company
will deliver to Parent true and complete
32
copies of the consolidated balance sheet, and the related consolidated
statements of operations, stockholders' equity and cash flows, of the Company
and its consolidated subsidiaries, in each case as of and for such fiscal
quarter and the portion of the fiscal year then ended, together with the notes,
if any, relating thereto, which financial statements shall be prepared on a
basis consistent with the financial statements referred to in SECTION 3.09.
(b) As promptly as practicable, the Company will deliver to Parent true
and complete copies of such other financial statements, reports and analyses as
may be prepared or received by any Shareholder Party, the Company or any
Subsidiary relating to the business or operations of the Company or any
Subsidiary or as Parent may otherwise reasonably request.
(c) As promptly as practicable, the Company will deliver copies of all
License applications and other filings made by the Company or any Subsidiary
after the date hereof and before the Closing Date with any Governmental or
Regulatory Authority (other than routine, recurring filings made in the ordinary
course of business consistent with past practice).
5.07 EMPLOYEE MATTERS. Except as may be required by Law, the Company
will refrain from, and will cause the Subsidiaries to refrain from,
directly or indirectly:
(a) making any representation or promise, oral or written, to any
officer, employee or consultant of the Company or any Subsidiary concerning any
Company Plan, except for statements as to the rights or accrued benefits of any
officer, employee or consultant under the terms of any Company Plan;
(b) altering the salary, wages or other compensation of any officer,
employee or consultant of the Company or any Subsidiary;
(c) (i) adopting, entering into or becoming bound by any
employment-related Contract or collective bargaining agreement, or amending,
modifying or terminating (partially or completely) any employment-related
Contract or collective bargaining agreement, except to the extent required by
applicable Law and, in the event compliance with legal requirements presents
options, only to the extent that the option which the Company or Subsidiary
reasonably believes to be the least costly is chosen; (ii) altering the
compensation or fringe benefits of any present or former director, officer or
employee of the Company or its Subsidiaries; (iii) granting any severance or
termination pay to any present or former director, officer or employee of the
Company or its Subsidiaries; (iv) loaning or advancing any money or other
property to any present or former director, officer or employee of the Company
or its Subsidiaries; (v) establishing, adopting, entering into, amending or
terminating any Company Plan or any plan, agreement, program, policy, trust,
fund or other arrangement that would be a Company Plan if it were in existence
as of the date of this Agreement; or (vi) paying any bonuses; or
(d) establishing or modifying any (i) targets, goals, pools or similar
provisions in respect of any fiscal year under any Company Plan,
employment-related Contract or other employee compensation arrangement or (ii)
salary ranges, increase guidelines or similar
33
provisions in respect of any Company Plan, employment-related Contract or other
employee compensation arrangement.
The Company will, and will cause the Subsidiaries to, administer each
Company Plan, or cause the same to be so administered, in all material respects
in accordance with the applicable provisions of the Code, ERISA and all other
applicable Laws. The Company will promptly notify Parent in writing of each
receipt by the Company or any Subsidiary (and furnish Parent with copies) of any
notice of investigation or administrative proceeding by the IRS, Department of
Labor, PBGC or other Person involving any Company Plan.
5.08 CERTAIN RESTRICTIONS. The Company will, and will cause the
Subsidiaries to, refrain from:
(a) amending their certificates or articles of incorporation or by-laws
(or other comparable corporate charter documents) or taking any action with
respect to any such amendment or any recapitalization, reorganization,
liquidation or dissolution of any such corporation;
(b) authorizing, issuing, selling or otherwise disposing of any shares
of capital stock of (except in connection with the exercise of Options
outstanding on the date hereof), or any Option with respect to, the Company or
any Subsidiary, or modifying or amending any right of any holder of outstanding
shares of capital stock of or Option with respect to the Company or any
Subsidiary;
(c) declaring, setting aside or paying any dividend or other
distribution in respect of the capital stock of the Company or any Subsidiary
not wholly owned by the Company, or directly or indirectly redeeming, purchasing
or otherwise acquiring any capital stock of or any Option with respect to the
Company or any Subsidiary not wholly owned by the Company;
(d) acquiring or disposing of, or incurring any Lien (other than a
Permitted Lien) on, any Assets and Properties, other than in the ordinary course
of business consistent with past practice;
(e) (i) other than in the ordinary course of the business, entering
into, amending, modifying, terminating (partially or completely), granting any
waiver under or giving any consent with respect to (A) any of the Officer
Employment Agreements, (B) any Contract that would, if in existence on the date
of this Agreement, be required to be disclosed in the Disclosure Schedule
pursuant to SECTION 3.19(a) or (C) any material License; (ii) granting any
irrevocable powers of attorney; or (iii) entering into any Contract with a term
greater than six months;
(f) violating, breaching or defaulting under in any material respect,
or taking or failing to take any action that (with or without notice or lapse of
time or both) would constitute a material violation or breach of, or default
under, any term or provision of any License held or
34
used by the Company or any Subsidiary or any Contract to which the Company or
any Subsidiary is a party or by which any of their respective Assets and
Properties is bound;
(g) (i) incurring Indebtedness in an aggregate principal amount
exceeding $100,000, or (ii) voluntarily purchasing, canceling, prepaying or
otherwise providing for a discharge in advance of a scheduled payment date with
respect to, or waiving any right of the Company or any Subsidiary under, any
Indebtedness of or owing to the Company or any Subsidiary;
(h) engaging with any Person in any merger or other business
combination;
(i) making capital expenditures or commitments for additions to
property, plant or equipment constituting capital assets which, together with
all such other expenditures since December 31, 1999, exceed $100,000;
(j) making any change in the lines of business in which they
participate or are engaged;
(k) writing off or writing down any of their Assets and Properties
outside the ordinary course of business consistent with past practice, except as
required by GAAP, PROVIDED that Parent is promptly notified of such write-off or
write-down; or
(l) entering into any Contract to do or engage in any of the foregoing.
5.09 AFFILIATE TRANSACTIONS. Except as set forth in SECTION 5.09 OF THE
DISCLOSURE SCHEDULE, immediately prior to the Closing, all Indebtedness and
other amounts owing under Contracts between any Shareholder Party or Affiliate
(other than the Company or any Subsidiary) of any Shareholder Party, on the one
hand, and the Company or any of the Subsidiaries, on the other, will be paid in
full, and the Shareholder Parties will terminate and will cause any such
officer, director or Affiliate to terminate each Contract with the Company or
any Subsidiary. Prior to the Closing, neither the Company nor any Subsidiary
will enter into any Contract or amend or modify any existing Contract, and will
not engage in any transaction outside the ordinary course of business consistent
with past practice or not on an arm's-length basis (other than pursuant to
Contracts disclosed pursuant to SECTION 3.19(a)(VII) OF THE DISCLOSURE
SCHEDULE), with Shareholders or any such Affiliate.
5.10 NOTICE AND CURE. The Shareholder Parties and the Company will
notify Parent in writing (where appropriate, through updates to the Disclosure
Schedule) of, and contemporaneously will provide Parent with true and complete
copies of any and all information or documents relating to, and will use all
commercially reasonable efforts to cure before the Closing, any event,
transaction or circumstance, as soon as practicable after it becomes Known to
the Company occurring after the date of this Agreement that causes or will cause
any covenant or agreement of the Shareholder Parties or the Company under this
Agreement to be breached or that renders or will render untrue any
representation or warranty of Shareholder Party or the
35
Company contained in this Agreement as if the same were made on or as of the
date of such event, transaction or circumstance. No notice given pursuant to
this Section shall have any effect on the representations, warranties, covenants
or agreements contained in this Agreement for purposes of determining
satisfaction of any condition contained herein or shall in any way limit
Parent's right to seek indemnity under ARTICLE X.
5.11 COMPANY EMPLOYEES. (a) The Shareholder Parties and the Company
will use their reasonable best efforts to assist Parent to cause any employee of
the Company identified by Parent to enter into an employment agreement with the
Company.
(b) The Company will promptly give Parent notice of the receipt on or
after the date of this Agreement of any exercise notice from any holder of
options granted under the Company Option Plans.
5.12 FULFILLMENT OF CONDITIONS. The Shareholder Parties and the Company
will execute and deliver at the Closing the Operative Agreements to which they
are a party, and will take all commercially reasonable steps necessary or
desirable and proceed diligently and in good faith to satisfy each other
condition to the obligations of Parent or Merger Sub contained in this Agreement
and will not, and will not permit any Subsidiary to, take or fail to take any
action that could reasonably be expected to result in the nonfulfillment of any
such condition.
ARTICLE VI
COVENANTS OF PARENT AND MERGER SUB
Parent and Merger Sub covenant and agree with the Shareholder Parties
and the Company that Parent and Merger Sub will comply with all covenants and
provisions of this ARTICLE VI, except to the extent as the Shareholder Parties
and the Company may otherwise consent in writing, at all times from and after
the date hereof until the Closing.
6.01 REGULATORY AND OTHER APPROVALS. Parent and Merger Sub will as
promptly as practicable (a) take all commercially reasonable steps necessary or
desirable to obtain all consents, approvals or actions of, make all filings with
and give all notices to Governmental or Regulatory Authorities or any other
Person required of Parent or Merger Sub to consummate the transactions
contemplated hereby and by the Operative Agreements, including without
limitation those described in SCHEDULES 6.03 and 6.04 hereto, (b) provide such
other information and communications to such Governmental or Regulatory
Authorities or other Persons as the Shareholder Parties, the Company or such
Governmental or Regulatory Authorities or other Persons may reasonably request
in connection therewith and (c) cooperate with the Shareholder Parties, the
Company and the Subsidiaries in connection with the performance of their
obligations under SECTIONS 5.01 and 5.02. Parent will provide prompt
notification to the Shareholder Parties when any such consent, approval, action,
filing or notice referred to in clause (a) above is obtained, taken, made or
given, as applicable, and will advise the Shareholder
36
Parties of any communications (and, unless precluded by Law, provide copies of
any such communications that are in writing) with any Governmental or Regulatory
Authority or other Person regarding any of the transactions contemplated by this
Agreement or any of the Operative Agreements.
6.02 HSR FILINGS. In addition to and without limiting Parent's and
Merger Sub's covenants contained in SECTION 6.01, Parent and Merger Sub will (i)
take promptly all actions necessary to make the filings required by Parent,
Merger Sub or their Affiliates under the HSR Act and (ii) comply at the earliest
practicable date with any request for additional information received by Parent,
Merger Sub or their Affiliates from the Federal Trade Commission or the
Antitrust Division of the Department of Justice pursuant to the HSR Act. Parent
will cooperate with and assist the Shareholder Parties and the Company in
connection with the Shareholder Parties' and the Company's filing under the HSR
Act and in connection with resolving any investigation or other regulatory
inquiry concerning the transactions contemplated by this Agreement commenced by
either the Federal Trade Commission or the Antitrust Division of the Department
of Justice or state attorneys general.
6.03 NOTICE AND CURE. Parent will notify the Company in writing of, and
contemporaneously will provide it with true and complete copies of any and all
information or documents relating to, and will use all commercially reasonable
efforts to cure before the Closing, any event, transaction or circumstance, as
soon as practicable after it becomes known to Parent, occurring after the date
of this Agreement that causes or will cause any covenant or agreement of Parent
under this Agreement to be breached or that renders or will render untrue any
representation or warranty of Parent or Merger Sub contained in this Agreement
as if the same were made on or as of the date of such event, transaction or
circumstance. No notice given pursuant to this Section shall have any effect on
the representations, warranties, covenants or agreements contained in this
Agreement for purposes of determining satisfaction of any condition contained
herein or shall in any way limit the Shareholder Parties' right to seek
indemnity under ARTICLE X.
6.04 FULFILLMENT OF CONDITIONS. Parent will execute and deliver at the
Closing the Operative Agreements, will take all commercially reasonable steps
necessary or desirable and proceed diligently and in good faith to satisfy each
other condition to the obligations of the Shareholder Parties and the Company
contained in this Agreement and will not take or fail to take any action that
could reasonably be expected to result in the nonfulfillment of any such
condition.
6.05 INDEMNIFICATION OF DIRECTORS AND OFFICERS. (a) The Parent shall
cause the Surviving Corporation and the Subsidiaries to keep in effect
provisions in their certificates or articles of incorporation and bylaws
providing for exculpation of director liability, advancement of expenses prior
to disposition any of any claim, action, suit, proceeding or investigation and
indemnification of the present and former officers, directors, employees and
agents of the Company, in each case to the fullest extent permitted under the
laws of their jurisdictions of incorporation, which provisions shall not be
amended except as required by applicable Law or
37
except to make changes permitted by law that would enlarge the right of
indemnification of such Persons.
(b) The provisions of this Section 6.05 shall survive the consummation
of the Merger and are expressly intended to benefit each of the Covered Persons.
6.06 TAX TREATMENT. Each of the Merger Sub and Parent shall take such
actions, or refrain from taking such actions, as may reasonably be necessary so
that the Merger will qualify as a reorganization under the provisions of Section
368(a) of the Code.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF PARENT AND MERGER SUB
The obligations of Parent and Merger Sub hereunder to consummate the
transactions contemplated by this Agreement are subject to the fulfillment, at
or before the Closing, of each of the following conditions (all or any of which
may be waived in whole or in part by Parent in its sole discretion):
7.01 REPRESENTATIONS AND WARRANTIES. The representations and warranties
made by the Shareholder Parties and the Company in this Agreement (other than
those made as of a specified date earlier than the Closing Date) shall be true
and correct on and as of the Closing Date as though such representations and
warranties were made on and as of the Closing Date, and any representation or
warranty made as of a specified date earlier than the Closing Date shall have
been true and correct on and as of such earlier date, except to the extent that
the failure of any such representation or warranty to be true and correct as of
such dates could not, individually or in the aggregate, be reasonably expected
to have a material adverse effect on the business, operations, financial
condition or results of operations of the Company and the Subsidiaries taken as
a whole. Notwithstanding the foregoing, for purposes of this SECTION 7.01, none
of the following shall be considered, either alone or in combination, in
determining whether a "material adverse effect" has occurred: (i) conditions
affecting the business in which the Company and the Subsidiaries operates
generally but do not affect the Company and the Subsidiaries disproportionately,
(ii) any adverse change, event or effect that is caused by conditions affecting
the economy of the United States or any region thereof or any foreign country or
region generally, (iii) any adverse change, event or effect with respect to the
financial or securities markets in the United States and (iv) any adverse change
in the Business or Condition of the Company resulting from the announcement of
the transactions contemplated hereby.
7.02 PERFORMANCE. The Shareholder Parties and the Company shall have
performed and complied with, in all material respects, each agreement, covenant
and obligation required by this Agreement to be so performed or complied with by
the Shareholder Parties or the Company at or before the Closing.
38
7.03 CERTIFICATES. The Company shall have delivered to Parent a
certificate, dated the Closing Date and executed in the name and on behalf of
the Company by the President or any Vice President of the Company, substantially
in the form and to the effect of EXHIBIT C hereto, and a certificate dated the
Closing Date and executed by the Secretary or Assistant Secretary of the
Company, substantially in the form and to the effect of EXHIBIT D hereto.
7.04 ORDERS AND LAWS. There shall not be in effect on the Closing Date
any Order or Law restraining, enjoining or otherwise prohibiting or making
illegal the consummation of any of the transactions contemplated by this
Agreement or any of the Operative Agreements or which would reasonably be
expected to otherwise result in a material diminution of the benefits of the
transactions contemplated by this Agreement or any of the Operative Agreements
to Parent or Merger Sub, and there shall not be pending on the Closing Date any
Action or Proceeding in, by any Governmental or Regulatory Authority which would
reasonably be expected to result in the issuance of any such Order or the
enactment, promulgation or deemed applicability to Parent, Merger Sub, the
Company, any Subsidiary or the transactions contemplated by this Agreement or
any of the Operative Agreements of any such Law.
7.05 REGULATORY CONSENTS AND APPROVALS. All consents, approvals and
actions of, filings with and notices to any Governmental or Regulatory Authority
necessary to permit Parent, Merger Sub, the Company and the Shareholder Parties
to perform their obligations under this Agreement and the Operative Agreements
and to consummate the transactions contemplated hereby and thereby (a) shall
have been duly obtained, made or given, (b) shall be in form and substance
reasonably satisfactory to Parent, (c) shall not be subject to the satisfaction
of any condition that has not been satisfied or waived and (d) shall be in full
force and effect, and all terminations or expirations of waiting periods imposed
by any Governmental or Regulatory Authority necessary for the consummation of
the transactions contemplated by this Agreement and the Operative Agreements,
including under the HSR Act, shall have occurred except where such failure would
not have a material adverse effect on the transactions contemplated hereby.
7.06 THIRD PARTY CONSENTS. The consents (or in lieu thereof waivers)
listed in SECTION 7.06 OF THE DISCLOSURE SCHEDULE, and all other consents (or in
lieu thereof waivers) to the performance by Parent, Merger Sub, the Company and
the Shareholder Parties of their obligations under this Agreement and the
Operative Agreements or to the consummation of the transactions contemplated
hereby and thereby as are required under any Contract to which Parent, Merger
Sub, the Shareholder Parties, the Company or any Subsidiary is a party or by
which any of their respective Assets and Properties are bound (a) shall have
been obtained, (b) shall be in form and substance reasonably satisfactory to
Parent, (c) shall not be subject to the satisfaction of any condition that has
not been satisfied or waived and (d) shall be in full force and effect, except
(other than in the case of the consents listed in SECTION 7.06 OF THE DISCLOSURE
SCHEDULE) where the failure to obtain any such consent (or in lieu thereof
waiver) could not reasonably be expected, individually or in the aggregate with
other such failures, to materially adversely affect Parent, Merger Sub or the
Business or Condition of the Company or otherwise result in a material
diminution of the benefits of the transactions contemplated by this Agreement
and the Operative Agreements to Parent or Merger Sub.
39
7.07 ESCROW AGREEMENT. The Shareholder Parties and the Escrow Agent
shall have entered into the Escrow Agreement.
7.08 OFFICER EMPLOYMENT AGREEMENT. Each of the Officer Employment
Agreements shall remain in full force and effect and shall not have been amended
in any respect without Parent's consent, and Xxxxxxxxx and at least five of the
other individuals listed on ANNEX II hereto shall have affirmed to Parent their
intention to commence performance of their obligations under their Officer
Employment Agreements.
7.09 EXISTING SHAREHOLDER PARTY AGREEMENTS. Each of (a) the Securities
Exchange Agreement by and among the Company, General Atlantic Partners 48, L.P.,
GAP Coinvestment Partners, L.P. and Ceridian, dated as of January 6, 2000, (b)
the Stock Purchase Agreement by and among the Company, General Atlantic Partners
60, L.P. and GAP Coinvestment Partners II, L.P., dated as of January 6, 2000,
(c) the Amended and Restated Registration Rights Agreement, among the Company,
the General Atlantic Partnerships, Ceridian and Double Diamond, dated as of
January 6, 2000, and (d) the Amended and Restated Stockholders Agreement, among
the Company, the General Atlantic Partnerships, Ceridian and Double Diamond,
dated as of January 6, 2000, shall have been terminated and no longer be of any
force or effect, and the parties thereto shall have waived any rights they may
have thereunder against the Company or any of the Subsidiaries.
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF THE SHAREHOLDER PARTIES
AND THE COMPANY
The obligations of the Shareholder Parties and the Company hereunder to
consummate the transactions' contemplated by this Agreement are subject to the
fulfillment, at or before the Closing, of each of the following conditions (all
or any of which may be waived in whole or in part by the Shareholder Parties in
their sole discretion):
8.01 REPRESENTATIONS AND WARRANTIES. The representations and warranties
made by Parent and Merger Sub in this Agreement (other than those made as of a
specified date earlier than the Closing Date) shall be true and correct on and
as of the Closing Date as though such representations and warranties were made
on and as of the Closing Date, and any representation or warranty made as of a
specified date earlier than the Closing Date shall have been true and correct on
and as of such earlier date, except to the extent that the failure of any such
representation or warranty to be true and correct as of such dates could not,
individually or in the aggregate, be reasonably expected to have a material
adverse effect on the business, operations, financial condition or results of
operations of Parent and its subsidiaries taken as a whole. Notwithstanding the
foregoing, for purposes of this SECTION 8.01, none of the following shall be
considered, either alone or in combination, in determining whether a "material
adverse effect" has occurred: (i) conditions affecting the business in which
Parent and its subsidiaries operate
40
generally but do not affect Parent and its subsidiaries disproportionately, (ii)
any adverse change, event or effect that is caused by conditions affecting the
economy of the United States or any region thereof generally, (iii) any adverse
change, event or effect with respect to the financial or securities markets in
the United States or (iv) any adverse change resulting from the public
announcement of the transactions contemplated hereby.
8.02 PERFORMANCE. Parent and Merger Sub shall have performed and
complied with, in all material respects, each agreement, covenant and obligation
required by this Agreement to be so performed or complied with by Parent or
Merger Sub at or before the Closing.
8.03 CERTIFICATES. Parent and Merger Sub each shall have delivered to
the Shareholder Parties and the Company a certificate, dated the Closing Date
and executed in the name and on behalf of Parent and Merger Sub by the President
or any Vice President of Parent and Merger Sub, respectively, substantially in
the form and to the effect of EXHIBIT E hereto, and certificates, each dated the
Closing Date and executed by the Secretary or any Assistant Secretary of Parent
and Merger Sub, respectively, substantially in the form and to the effect of
EXHIBIT F hereto.
8.04 REGISTRATION RIGHTS AGREEMENT. Parent shall have executed and
delivered to the Shareholder Parties the Registration Rights Agreement.
8.05 ORDERS AND LAWS. There shall not be in effect on the Closing Date
any Order or Law that became effective after the date of this Agreement
restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement or any of
the Operative Agreements.
8.06 REGULATORY CONSENTS AND APPROVALS. All consents, approvals and
actions of, filings with and notices to any Governmental or Regulatory Authority
necessary to permit the Shareholder Parties, the Company, Merger Sub and Parent
to perform their obligations under this Agreement and the Operative Agreements
and to consummate the transactions contemplated hereby and thereby (a) shall
have been duly obtained, made or given, (b) shall not be subject to the
satisfaction of any condition that has not been satisfied or waived and (c)
shall be in full force and effect, and all terminations or expirations of
waiting periods imposed by any Governmental or Regulatory Authority necessary
for the consummation of the transactions contemplated by this Agreement and the
Operative Agreements, including under the HSR Act, shall have occurred.
ARTICLE IX
SURVIVAL OF REPRESENTATIONS, WARRANTIES,
41
COVENANTS AND AGREEMENTS
9.01 SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS.
Notwithstanding any right of Parent (whether or not exercised) to investigate
the affairs of the Company and the Subsidiaries or any right of any party
(whether or not exercised) to investigate the accuracy of the representations
and warranties of the other party contained in this Agreement, the Shareholder
Parties and Parent have the right to rely fully upon the representations,
warranties, covenants and agreements of the other contained in this Agreement.
The representations, warranties, covenants and agreements of Shareholders, the
Company, Merger Sub and Parent contained in this Agreement will survive the
Closing (a) indefinitely with respect to (i) the representations and warranties
contained in SECTIONS 3A.06, 3A.07 and 4.10 and (ii) the covenants and
agreements contained in SECTIONS 1.07, 6.06, 13.03 and 13.05; (b) until the
first anniversary of the Closing Date in the case of all other representations
and warranties and any covenant or agreement to be performed in whole or in part
on or prior to the Closing; or (c) with respect to each other covenant or
agreement contained in this Agreement, until 60 days following the last date on
which such covenant or agreement is to be performed; PROVIDED that any
representation, warranty, covenant or agreement that would otherwise terminate
in accordance with clause (b), (c) or (d) above will continue to survive if an
Indemnity Notice shall have been timely given under ARTICLE X on or prior to
such termination date, until the related claim for indemnification has been
satisfied or otherwise resolved as provided in ARTICLE X; PROVIDED that each
party's sole and exclusive remedy with respect to any such breach of
representation, warranty, covenant or agreement shall be pursuant to ARTICLE X
hereof and no party shall be entitled to bring any other action with respect
thereto, whether considered in law, equity or otherwise, except in the case of
fraud.
ARTICLE X
INDEMNIFICATION
10.01 INDEMNIFICATION. (a) Subject to paragraphs (c) and (d) of this
Section and the other Sections of this ARTICLE X and subject to the consummation
of the Merger, (i) the Shareholder Parties shall indemnify the Parent
Indemnified Parties in respect of, and hold each of them harmless from and
against, any and all Losses suffered, incurred or sustained by any of them or to
which any of them becomes subject, resulting from, arising out of or relating to
any breach of representation or warranty or nonfulfillment of or failure to
perform any covenant or agreement on the part of the Company contained in this
Agreement. The allocation of Losses among the Shareholder Parties shall be as
set forth in the Escrow Agreement.
(b) Subject to the other Sections of this ARTICLE X, Parent shall
indemnify the Shareholder Indemnified Parties in respect of, and hold each of
them harmless from and against, any and all Losses suffered, incurred or
sustained by any of them or to which any of them becomes subject, resulting
from, arising out of or relating to any breach of representation or warranty or
nonfulfillment of or failure to perform any covenant or agreement on the part of
Parent or Merger Sub contained in this Agreement.
42
(c) No amounts of indemnity shall be payable in the case of a claim by
a Parent Indemnified Party under SECTION 10.01(a) arising out of or relating to
any breach of representation or warranty unless and until the Parent Indemnified
Parties have suffered, incurred, sustained or become subject to Losses referred
to in such Section in excess of $415,000 in the aggregate, in which event the
Parent Indemnified Parties shall be entitled to claim indemnity for the full
amount of such Losses in excess of $415,000; PROVIDED that this paragraph (c)
shall not apply to a breach of a representation or warranty contained in
SECTIONS 3A.06 or 3A.07.
(d) Except for claims arising from the breach of any representations
contained in SECTION 3A.06 and 3A.07 or in the case of fraud, (i) the amount of
any indemnity that become payable after the Closing in the case of a claim by
any Parent Indemnified Party under SECTION 10.01(a) shall be paid solely in
accordance with the terms of the Escrow Agreement and only to the extent there
are Escrow Shares held by the Escrow Agent pursuant to the terms of the Escrow
Agreement and (ii) the Parent Indemnified Parties' sole remedy with respect to
any claim for indemnification shall be pursuant to the Escrow Agreement and only
to the extent of the Escrow Shares.
(e) If any insurance policy maintained by an Indemnified Party provides
coverage against any Loss for which the Indemnified Party may assert a claim for
indemnification under this ARTICLE X, the Indemnified Party shall use all
commercially reasonable efforts to recover any insurance proceeds to which it is
entitled under the terms of that policy in respect of the Loss, and the amount
of indemnification payable under this ARTICLE X shall not include that amount of
any insurance proceeds actually recovered by the Indemnified Party with respect
to such Loss.
(f) Promptly after receipt by an Indemnified Party of notice of the
commencement of any claim or demand asserted by a third party (a "THIRD PARTY
CLAIM"), such Indemnified Party will, if a claim in respect thereof is to be
made against an Indemnifying Party, notify the Indemnifying Party in writing of
the commencement thereof, PROVIDED that (i) the omission so to notify the
Indemnifying Party will not relieve it from any liability which it may have
hereunder unless and except to the extent such failure results in the forfeiture
by the Indemnifying Party of substantial rights and defenses, so long as any
such notice shall have been given on or prior to the first anniversary of the
Closing Date, and (ii) the omission so to notify the Indemnifying Party will not
relieve it from liability which it may have to an Indemnified Party otherwise
than on account of this indemnity or in connection with the transactions
contemplated under this Agreement. In case any such proceedings are brought
against any Indemnified Party and it notifies an Indemnifying Party of the
commencement thereof, the Indemnifying Party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to the
Indemnified Party, to assume the defense thereof, with counsel reasonably
satisfactory to such Indemnified Party; PROVIDED that, if the defendants in any
such proceedings include both the Indemnified Party and an Indemnifying Party,
and the Indemnified Party shall have concluded that there may be legal defenses
available to it which are different from or additional to those available to the
Indemnifying Party, the Indemnified Party shall have
43
the right to select separate counsel to assert such legal defenses on behalf of
such Indemnified Party if, in the reasonable judgment of the Indemnified Party,
(x) the Indemnifying Party has a conflicting or contrary defense or position or
(y) the Indemnifying Party fails to adequately assert such defense. Upon receipt
of notice from an Indemnifying Party to such Indemnified Party of the
Indemnifying Party's election so to assume the defense of such proceedings and
approval by the Indemnified Party of counsel, the Indemnifying Party will not be
liable to such Indemnified Party for expenses incurred thereafter by the
Indemnified Party in connection with the defense thereof unless (i) the
Indemnified Party shall have employed separate counsel in connection with the
assertion of legal defenses in accordance with the proviso to the next preceding
sentence (it being understood, however, that the Indemnifying Party shall not be
liable for the expenses of more than one separate counsel (in addition to one
local counsel firm in the jurisdiction in which any proceeding is brought),
approved by the Indemnified Parties, representing all the Indemnified Parties
who are parties to such proceedings), (ii) the Indemnifying Party shall not have
employed counsel reasonably satisfactory to the Indemnified Party to represent
the Indemnified Party within a reasonable time after notice of commencement of
the proceedings or (iii) the Indemnifying Party has authorized in writing the
employment of counsel for the Indemnified Party. The indemnity and reimbursement
obligations of an Indemnifying Party hereunder shall be binding upon and inure
to the benefit of any successors of the Indemnifying Party and any Indemnified
Party. If an Indemnified Party seeks to settle any Third Party Claim and in
respect of which Third Party Claim such Indemnified Party might seek indemnity
under this SECTION 10.01, then such Indemnified Party shall obtain the prior
written consent of the Indemnifying Party to such settlement, which consent
shall not be unreasonably withheld.
(g) In the event of any claim or demand, including Third Party Claims,
in respect of which an Indemnified Party might seek indemnity under this SECTION
10.01, the Indemnified Party shall deliver an Indemnity Notice with reasonable
promptness to the Indemnifying Party. The failure by any Indemnified Party to
give the Indemnity Notice shall not impair such party's rights hereunder except
to the extent that an Indemnifying Party demonstrates that it has been
irreparably prejudiced thereby. The Indemnifying Party will notify the
Indemnified Party within the 30 day period following its actual receipt of such
Indemnity Notice (the "DISPUTE PERIOD") as to whether the Indemnifying Party
disputes its liability to the Indemnified Party hereunder. If the Indemnifying
Party notifies the Indemnified Party that it does not dispute the claim
described in such Indemnity Notice, or fails to notify the Indemnified Party
within the Dispute Period whether the Indemnifying Party disputes the claim
described in such Indemnity Notice, the Loss specified in the Indemnity Notice
will be conclusively deemed a liability of the Indemnifying Party under this
SECTION 10.01 and the Indemnifying Party shall pay the amount of such Loss, when
it has been finally determined, to the Indemnified Party on demand. If the
Indemnifying Party has timely disputed its liability with respect to such claim,
the Indemnifying Party and the Indemnified Party will proceed in good faith to
negotiate a resolution of such dispute, and if not resolved through negotiations
within 60 days following the Indemnified Party's receipt of a written notice
from the Indemnifying Party disputing such claim, such dispute shall be finally
settled by litigation in a court of competent jurisdiction.
44
ARTICLE XI
TERMINATION
11.01 TERMINATION. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned:
(a) at any time before the Closing, by mutual written agreement of the
Shareholder Parties and Parent;
(b) at any time before the Closing, by the Shareholder Parties or
Parent, in the event (i) of a material breach hereof by the non-terminating
party if such non-terminating party fails to cure such breach within thirty (30)
Business Days following notification thereof by the terminating party or (ii)
upon notification of the non-terminating party by the terminating party that the
satisfaction of any condition to the terminating party's obligations under this
Agreement becomes impossible or impracticable with the use of commercially
reasonable efforts if the failure of such condition to be satisfied is not
caused by a breach hereof by the terminating party; or
(c) at any time after July 31, 2000 by the Shareholder Parties or
Parent upon notification of the non-terminating party by the terminating party
if the Closing shall not have occurred on or before such date and such failure
to consummate is not caused by a breach of this Agreement by the terminating
party.
11.02 EFFECT OF TERMINATION. (a) If this Agreement is validly
terminated pursuant to SECTION 11.01, this Agreement will forthwith become null
and void, and there will be no liability or obligation on the part of any
Shareholder Party, the Company, Merger Sub or Parent (or any of their respective
officers, directors, employees, agents or other representatives or Affiliates),
except as provided in paragraph (b) below and except that the provisions with
respect to expenses in SECTION 13.03 and confidentiality in SECTION 13.05 will
continue to apply following any such termination.
(b) Notwithstanding any other provision in this Agreement to the
contrary, upon termination of this Agreement pursuant to SECTION 11.01(b) or
(c), the Company will remain liable to Parent for any willful breach of this
Agreement by any Shareholder Party or the Company existing at the time of such
termination, and Parent and Merger Sub will remain liable to the Company for any
willful breach of this Agreement by Parent or Merger Sub existing at the time of
such termination, and the Company or Parent may seek such remedies, including
damages and fees of attorneys, against the other with respect to any such breach
as are provided in this Agreement or as are otherwise available at Law or in
equity.
45
ARTICLE XII
DEFINITIONS
12.01 DEFINITIONS. (a) DEFINED TERMS. As used in this Agreement, the
following defined terms have the meanings indicated below:
"ACQUISITION PROPOSAL" means any proposal for a merger or other
business combination to which the Company or any Subsidiary is a party or the
direct or indirect acquisition of any equity interest in, or a substantial
portion of the assets of, the Company or any Subsidiary, other than the
transactions contemplated by this Agreement.
"ACTIONS OR PROCEEDINGS" means any action, suit, proceeding,
arbitration or Governmental or Regulatory Authority investigation or audit.
"AFFILIATE" means any Person that directly, or indirectly through one
of more intermediaries, controls or is controlled by or is under common control
with the Person specified. For purposes of this definition, control of a Person
means the power, direct or indirect, to direct or cause the direction of the
management and policies of such Person whether by Contract or otherwise and, in
any event and without limitation of the previous sentence, any Person owning 10%
or more of the voting securities of another Person shall be deemed to control
that Person and with respect to a natural person, any natural person with a
familial relationship with such natural person.
"AGREEMENT" means this Agreement and the Exhibits, the Disclosure
Schedule and the Schedules hereto and the certificates delivered in accordance
with SECTIONS 8.03 and 9.03, as the same shall be amended from time to time.
"ASSETS AND PROPERTIES" of any Person means all assets and properties
of every kind, nature, character and description (whether real, personal or
mixed, whether tangible or intangible, whether absolute, accrued, contingent,
fixed or otherwise and wherever situated), including the goodwill related
thereto, operated, owned or leased by such Person, including without limitation
cash, cash equivalents, Investment Assets, accounts and notes receivable,
chattel paper, documents, instruments, general intangibles, real estate,
equipment, inventory, goods and Intellectual Property.
"BOOKS AND RECORDS" means all files, documents, instruments, papers,
books and records relating to the Business or Condition of the Company,
including without limitation financial statements, Tax Returns and related work
papers and letters from accountants, budgets, pricing guidelines, ledgers,
journals, deeds, title policies, minute books, stock certificates and books,
stock transfer ledgers, Contracts, Licenses, customer lists, computer files and
programs, retrieval programs, operating data and plans and environmental studies
and plans.
46
"BUSINESS DAY" means a day other than Saturday, Sunday or any day on
which banks located in the States of California or New York are authorized or
obligated to close.
"BUSINESS OR CONDITION OF THE COMPANY" means the business, condition
(financial or otherwise), Assets and Properties, Liabilities and results of
operations of the Company and the Subsidiaries taken as a whole.
"CASH MERGER PRICE" means the product of (A) the arithmetic average of
the closing sales price of a share of Parent Common Stock, as reported in the
Nasdaq National Market System for each of the ten (10) Trading Days ending on
and including the third Trading Day prior to the Closing Date multiplied by (B)
the Conversion Number.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, and the rules and regulations promulgated
thereunder.
"CERCLIS" means the Comprehensive Environmental Response and Liability
Information System, as provided for by 40 C.F.R. Section 300.5.
"CERIDIAN" has the meaning ascribed to it in the forepart of this
Agreement.
"CERTIFICATES" has the meaning ascribed to it in SECTION 2.03(b).
"CERTIFICATE OF MERGER" has the meaning ascribed to it in SECTION 1.03.
"XXXXXXXXX" has the meaning ascribed to it in the forepart of this
Agreement.
"CLOSING" has the meaning ascribed to it in SECTION 1.02.
"CLOSING DATE" means (a) the second Business Day after the day on which
the waiting period with respect to the parties' filing under the HSR Act has
expired or been terminated, or (b) such other date as Parent and the Shareholder
Parties mutually agree upon in writing.
"CODE" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
"COMPANY" has the meaning ascribed to it in the forepart of this
Agreement.
"COMPANY COMMON STOCK" has the meaning ascribed to it in the forepart
of this Agreement.
"COMPANY OPTION PLANS" has the meaning ascribed to it in SECTION
2.02(a).
"COMPANY PLANS" has the meaning ascribed to it in SECTION 3.15(a).
47
"COMPANY STOCK OPTION" has the meaning ascribed to it in SECTION
2.02(b).
"CONSTITUENT CORPORATIONS" has the meaning ascribed to it in SECTION
1.01.
"CONTROLLED GROUP" has the meaning ascribed to it in SECTION 3.15(c).
"CONTRACT" means any agreement, lease, license, evidence of
Indebtedness, mortgage, indenture, security agreement or other contract (whether
written or oral).
"CONVERSION NUMBER" means .2352941.
"DECEMBER 31 BALANCE SHEET" has the meaning ascribed to it in SECTION
3.09.
"DGCL" has the meaning ascribed to it in SECTION 1.01.
"DISCLOSURE SCHEDULE" means the record delivered to Parent by the
Company and the Shareholder Parties herewith and dated as of the date hereof,
containing all lists, descriptions, exceptions and other information and
materials as are required to be included therein by the Company and the
Shareholder Parties pursuant to this Agreement.
"DISPUTE PERIOD" means the closing of the transactions contemplated by
SECTION 10.01(g).
"DISSENTING SHARES" has the meaning ascribed to it in SECTION 2.01(d).
"DOUBLE DIAMOND" has the meaning ascribed to it in the forepart of this
Agreement.
"EFFECTIVE TIME" has the meaning ascribed to it in SECTION 1.03.
"ENVIRONMENTAL CLAIM" means, with respect to any Person, any written or
oral notice, claim, demand or other communication (collectively, a "CLAIM") by
any other Person alleging or asserting such Person's liability for investigatory
costs, cleanup costs, Governmental or Regulatory Authority response costs,
damages to natural resources or other property, personal injuries, fines or
penalties arising out of, based on or resulting from (a) the presence, or
Release into the environment, of any Hazardous Material at any location, whether
or not owned by such Person, or (b) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law. The term
"Environmental Claim" shall include, without limitation, any claim by any
Governmental or Regulatory Authority for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and any claim by any third party seeking damages,
contribution, indemnification, cost recovery, compensation or injunctive relief
resulting from the presence of Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment.
48
"ENVIRONMENTAL LAW" means any Law or Order relating to the regulation
or protection of human health, safety or the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals or industrial, toxic or hazardous substances or wastes into the
environment (including, without limitation, ambient air, soil, surface water,
ground water, wetlands, land or subsurface strata), or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals or industrial,
toxic or hazardous substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"ERISA AFFILIATE" means any Person who is in the same controlled group
of corporations or who is under common control with Shareholder or, before the
Closing, the Company or any Subsidiary (within the meaning of Section 414 of the
Code).
"ESCROW AGENT" and "ESCROW AGREEMENT" have the respective meanings
ascribed to them in Section 2.03(a).
"ESCROW SHARES" has the meaning ascribed to it in SECTION 2.03(a).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules promulgated thereunder.
"FEE LIMIT" has the meaning ascribed to it in SECTION 13.03.
"GAAP" means generally accepted accounting principles, consistently
applied throughout the specified period and in the immediately prior comparable
period.
"GENERAL ATLANTIC PARTNERSHIP" and "GENERAL ATLANTIC PARTNERSHIPS" have
the meaning ascribed to them in the forepart of this Agreement.
"GOVERNMENTAL OR REGULATORY AUTHORITY" means any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
the United States, any foreign country or any domestic or foreign state, county,
city or other political subdivision.
"HAZARDOUS MATERIAL" means (A) any petroleum or petroleum products,
flammable explosives, radioactive materials, asbestos in any form that is or
could become friable, urea formaldehyde foam insulation and transformers or
other equipment that contain dielectric fluid containing levels of
polychlorinated biphenyls (PCBs); (B) any chemicals or other materials or
substances which are now or hereafter become defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous materials,"
"extremely hazardous wastes," "restricted hazardous wastes," "toxic substances,"
"toxic pollutants" or words of similar import under any Environmental Law; and
(C) any other chemical or other material or
49
substance, exposure to which is now or hereafter prohibited, limited or
regulated by any Governmental or Regulatory Authority under any Environmental
Law.
"HSR ACT" means Section 7A of the Xxxxxxx Act (Title II of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended) and the rules
and regulations promulgated thereunder.
"INDEBTEDNESS" of any Person means all obligations of such Person (i)
for borrowed money, (ii) evidenced by notes, bonds, debentures or similar
instruments, (iii) for the deferred purchase price of goods or services (other
than trade payables or accruals incurred in the ordinary course of business),
(iv) under capital leases and (v) in the nature of guarantees of the obligations
described in clauses (i) through (iv) above of any other Person.
"INDEMNIFIED PARTY" means any Person claiming indemnification under any
provision of ARTICLE X, including without limitation a Person asserting a claim
pursuant to SECTION 10.01(f).
"INDEMNIFYING PARTY" means any Person against whom a claim for
indemnification is being asserted under any provision of ARTICLE X, including
without limitation a Person against whom a claim is asserted pursuant to SECTION
10.01(f).
"INDEMNITY NOTICE" means written notification pursuant to SECTION
10.01(f) of a claim for indemnity under ARTICLE X by an Indemnified Party,
specifying the nature of such claim, together with the amount or, if not then
reasonably determinable, the estimated amount, determined in good faith, of the
Loss arising from such claim.
"INTELLECTUAL PROPERTY" means all patents and patent rights, trademarks
and trademark rights, trade names and trade name rights, service marks and
service xxxx rights, service names and service name rights, domain names and
domain name rights, brand names, inventions, processes, formulae, copyrights and
copyright rights, trade dress, business and product names, logos, slogans, trade
secrets, industrial models, processes, designs, methodologies, computer programs
(including all source codes) and related documentation, technical information,
manufacturing, engineering and technical drawings, know-how and all pending
applications for and registrations of patents, trademarks, service marks, domain
names and copyrights.
"INVESTMENT ASSETS" means all debentures, notes and other evidences of
Indebtedness, stocks, securities (including rights to purchase and securities
convertible into or exchangeable for other securities), interests in joint
ventures and partnerships, mortgage loans and other investment or portfolio
assets owned of record or beneficially by the Company or any Subsidiary.
"IRS" means the United States Internal Revenue Service.
50
"ISSUED SHARES" has the meaning ascribed to it in SECTION 3.04.
"KNOWLEDGE OF THE COMPANY" or "KNOWN TO THE COMPANY" means the
knowledge of any Shareholder Party or any officer or director of the Company or
any other Person listed on SECTION 12.01 OF THE DISCLOSURE SCHEDULE.
"LAWS" means all laws, statutes, rules, regulations, ordinances and
other pronouncements having the effect of law of the United States, any foreign
country or any domestic or foreign state, county, city or other political
subdivision or of any Governmental or Regulatory Authority.
"LIABILITIES" means all Indebtedness, obligations and other liabilities
of a Person (whether absolute, accrued, contingent, fixed or otherwise, or
whether due or to become due).
"LICENSES" means all licenses, permits, certificates of authority,
authorizations, approvals, registrations, franchises and similar consents
granted or issued by any Governmental or Regulatory Authority.
"LIENS" means any mortgage, pledge, assessment, security interest,
lease, lien, adverse claim, levy, charge or other encumbrance of any kind, or
any conditional sale Contract, title retention Contract or other Contract to
give any of the foregoing.
"LOSS" means any and all damages, fines, fees, Taxes, penalties,
deficiencies, losses and expenses (including without limitation interest, court
costs, fees of attorneys, accountants and other experts or other expenses of
litigation or other proceedings or of any claim, default or assessment)
calculated on an after-Tax basis, taking into account any Tax benefit or Tax
cost (including any loss of a Tax benefit otherwise available) recognized by the
applicable Indemnified Party as a result of the Loss and the indemnification
payment.
"MERGER" has the meaning ascribed to it in the forepart of this
Agreement.
"MERGER SUB" has the meaning ascribed to it in the forepart of this
Agreement.
"MERGER SUB COMMON STOCK" has the meaning ascribed to it in SECTION
2.01(a).
"NPL" means the National Priorities List under CERCLA.
"OFFICER EMPLOYMENT AGREEMENTS" has the meaning ascribed to it in the
forepart of this Agreement.
"OPERATIVE AGREEMENTS" means the Escrow Agreement and the Registration
Rights Agreement.
51
"OPTION" with respect to any Person means any security, right,
subscription, warrant, option, or Contract that gives the right to (i) purchase
or otherwise receive or be issued any shares of capital stock of such Person or
any security of any kind convertible into or exchangeable or exercisable for any
shares of capital stock of such Person or (ii) receive or exercise any benefits
or rights similar to any rights enjoyed by or accruing to the holder of shares
of capital stock of such Person, including any rights to participate in the
equity or income of such Person or to participate in or direct the election of
any directors or officers of such Person or the manner in which any shares of
capital stock of such Person are voted.
"ORDER" means any writ, judgment, decree, injunction or similar order
of any Governmental or Regulatory Authority (in each such case whether
preliminary or final).
"PARENT" has the meaning ascribed to it in the forepart of this
Agreement.
"PARENT COMMON STOCK" has the meaning ascribed to it in the forepart of
this Agreement.
"PARENT DISCLOSURE LETTER" means the record delivered to the Company
and the Shareholder Parties herewith and dated as of the date hereof, containing
all lists, descriptions, exceptions and other information and materials as are
required to be included therein by the Parent pursuant to this Agreement.
"PARENT FINANCIAL STATEMENTS" has the meaning ascribed to it in SECTION
4.07.
"PARENT INDEMNIFIED PARTIES" means Parent and its officers, directors,
employees, agents and Affiliates.
"PARENT PREFERRED STOCK" has the meaning ascribed to it in SECTION
4.03(a).
"PARENT SHARES" has the meaning ascribed to it in SECTION 2.01(c).
"PARENT SEC REPORTS" has the meaning ascribed to it in SECTION 4.07.
"PBGC" means the Pension Benefit Guaranty Corporation established under
ERISA.
"PERMITTED LIEN" means (i) any Lien for Taxes not yet due or delinquent
or being contested in good faith by appropriate proceedings for which adequate
reserves have been established in accordance with GAAP, (ii) any statutory Lien
arising in the ordinary course of business by operation of Law with respect to a
Liability that is not yet due or delinquent and (iii) any minor imperfection of
title or similar Lien which individually or in the aggregate with other such
Liens does not materially impair the value of the property subject to such Lien
or the use of such property in the conduct of the business of the Company or any
Subsidiary.
52
"PERSON" means any natural person, corporation, limited liability
company, general partnership, limited partnership, proprietorship, other
business organization, trust, union, association or Governmental or Regulatory
Authority.
"PLAN" means any bonus, incentive compensation, deferred compensation,
pension, profit sharing, retirement, stock purchase, stock option, stock
ownership, stock appreciation rights, phantom stock, leave of absence, layoff,
vacation, day or dependent care, legal services, cafeteria, life, health,
accident, disability, workmen's compensation or other insurance, severance,
separation or other employee benefit plan, practice, policy or arrangement of
any kind, whether written or oral, including, but not limited to, any "employee
benefit plan" within the meaning of Section 3(3) of ERISA.
"RELEASE" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment, including, without limitation, the movement
of Hazardous Materials through ambient air, soil, surface water, ground water,
wetlands, land or subsurface strata.
"REGISTRATION RIGHTS AGREEMENT" has the meaning ascribed to it in the
forepart of this Agreement.
"REPRESENTATIVES" has the meaning ascribed to it in SECTION 5.03.
"RESOLUTION PERIOD" means the period ending 30 days following receipt
by an Indemnified Party of a written notice from an Indemnifying Party stating
that it disputes all or any portion of a claim set forth in an Indemnity Notice.
"SEC" has the meaning ascribed to it in SECTION 4.07.
"SECRETARY OF STATE" has the meaning ascribed to it in SECTION 1.03.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"SERIES D STOCK" has the meaning ascribed to it in the forepart of this
Agreement.
"SERIES E STOCK" has the meaning ascribed to it in the forepart of this
Agreement.
"SHAREHOLDER" and "SHAREHOLDERS" means any Person, and all Persons,
being the record owner of Series D Stock, Series E Stock and Company Common
Stock.
"SHAREHOLDER INDEMNIFIED PARTIES" means any Shareholder Party and its
agents and Affiliates.
53
"SHAREHOLDER PARTIES" and "SHAREHOLDER PARTY" have the meaning ascribed
to them in the forepart of this Agreement.
"SHARES" has the meaning ascribed to it in the forepart of this
Agreement.
"SUBSIDIARY" means any Person in which the Company, directly or
indirectly through Subsidiaries or otherwise, beneficially owns more than 50% of
either the equity interests in, or the voting control of, such Person.
"SURVIVING CORPORATION" has the meaning ascribed to it in SECTION 1.01.
"SURVIVING CORPORATION COMMON STOCK" has the meaning ascribed to it in
SECTION 2.01(a).
"TAXES" means any and all federal, state, county, local, foreign or
other taxes, charges, imposts, rates, fees, levies or other assessments imposed
by any Governmental or Regulatory Authority, including, without limitation, all
net income, alternative minimum, gross income, sales and use, ad valorem,
transfer, gains, profits, excise, franchise, real and personal property, gross
receipt, capital stock, production, business and occupation, disability,
employment, payroll, license, estimated, stamp, custom duties, severance,
withholding or other taxes, fees, assessments or other similar charges of any
kind whatsoever, together with any interest and penalties (civil or criminal) on
or additions to any such taxes.
"TAX RETURN" means a report, return or other information (including any
amendments) required to be supplied to a governmental entity with respect to
Taxes including, where permitted or required, combined or consolidated returns
for any group of entities that includes Company or any Subsidiary.
"THIRD PARTY CLAIM" has the meaning ascribed to it in SECTION 10.01(f).
"TRANSFER TAXES" means any sales, use, transfer, real property
transfer, recording, gains, stock transfer and other similar taxes and fees
arising out of or in connection with the transactions effected pursuant to this
Agreement.
"TRADING DATE" means any day for which quotations are available in
respect of shares of Parent Common Stock on the Nasdaq National Market System.
(b) CONSTRUCTION OF CERTAIN TERMS AND PHRASES. Unless the context of
this Agreement otherwise requires, (i) words of any gender include each other
gender; (ii) words using the singular or plural number also include the plural
or singular number, respectively; (iii) the terms "hereof," "herein," "hereby"
and derivative or similar words refer to this entire Agreement; (iv) the terms
"Article" or "Section" refer to the specified Article or Section of this
Agreement; and (v) the phrases "ordinary course of business" and "ordinary
course of business consistent with past practice" refer to the business and
practice of the Company or a Subsidiary.
54
Whenever this Agreement refers to a number of days, such number shall refer to
calendar days unless Business Days are specified. All accounting terms used
herein and not expressly defined herein shall have the meanings given to them
under GAAP.
ARTICLE XIII
MISCELLANEOUS
13.01 NOTICES. All notices, requests and other communications hereunder
must be in writing and will be deemed to have been duly given only if delivered
personally or by facsimile transmission or mailed (first class postage prepaid)
to the parties at the following addresses or facsimile numbers:
If to Parent, to:
XxxXxxx.xxx, Ltd.
00 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxx X. Xxxxxxxxxx, Esq.
with a copy to:
Milbank, Tweed, Xxxxxx & XxXxxx LLP
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxx X. Xxxxx, Esq.
If to Company, to:
Resumix, Inc.,
000 Xxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxxxx
55
with a copy to:
Xxxx Xxxxx, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxx X. Xxxx, Esq.
If to any Shareholder Party, to the address
beneath such Shareholder Party's name
on ANNEX I hereto,
with a copy to:
Xxxx Xxxxx, Xxxxxxx, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxx X. Xxxx, Esq.
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt, and (iii) if delivered
by mail in the manner described above to the address as provided in this
Section, be deemed given upon receipt (in each case regardless of whether such
notice, request or other communication is received by any other Person to whom a
copy of such notice, request or other communication is to be delivered pursuant
to this Section). Any party from time to time may change its address, facsimile
number or other information for the purpose of notices to that party by giving
notice specifying such change to the other party hereto.
13.02 ENTIRE AGREEMENT. This Agreement and the Operative Agreements
supersede all prior discussions and agreements between the parties with respect
to the subject matter hereof and thereof and contain the sole and entire
agreement between the parties hereto with respect to the subject matter hereof
and thereof.
13.03 EXPENSES. In the event that the Merger is consummated, Parent
shall pay, or cause to be paid, all documented expenses of the Company and the
Subsidiaries incurred in connection with the negotiation, execution and closing
of this Agreement and the Operative Agreements and the transactions contemplated
hereby and thereby, including the fees and expenses of those brokers listed in
SECTION 3A.07 OF THE DISCLOSURE SCHEDULE and the reasonable fees and expenses of
the Company's attorneys and accountants, up to a maximum of $500,000 (the "FEE
LIMIT"), and the Shareholder Parties shall pay all such expenses in excess of
the FEE LIMIT. Except as otherwise expressly provided in this Agreement
(including without limitation
56
as provided in SECTION 11.02 and in the first sentence of this SECTION 13.03),
whether or not the transactions contemplated hereby are consummated, each party
will pay its own costs and expenses incurred in connection with the negotiation,
execution and closing of this Agreement and the Operative Agreements and the
transactions contemplated hereby and thereby.
13.04 PUBLIC ANNOUNCEMENTS. At all times at or before the Closing, the
Company, the Shareholder Parties and Parent will not issue or make any reports,
statements or releases to the public or generally to the employees, customers,
suppliers or other Persons to whom the Company and the Subsidiaries sell goods
or provide services or with whom the Company and the Subsidiaries otherwise have
significant business relationships with respect to this Agreement or the
transactions contemplated hereby without the consent of the other, which consent
shall not be unreasonably withheld. If either party is unable to obtain the
approval of its public report, statement or release from the other party and
such report, statement or release is, in the opinion of legal counsel to such
party, required by Law in order to discharge such party's disclosure
obligations, then such party may make or issue the legally required report,
statement or release and promptly furnish the other party with a copy thereof.
The Company, the Shareholder Parties and Parent will jointly prepare a press
release to be issued immediately following the Closing announcing the
consummation of the transactions contemplated by this Agreement.
13.05 CONFIDENTIALITY. Each party hereto will hold, and will use its
best efforts to cause its Affiliates and their respective Representatives to
hold, in strict confidence from any Person (other than any such Affiliate or
Representative) unless (i) compelled to disclose by judicial or administrative
process (including without limitation in connection with obtaining the necessary
approvals of this Agreement and the transactions contemplated hereby of
Governmental or Regulatory Authorities) or by other requirements of Law or (ii)
disclosed in an Action or Proceeding brought by a party hereto in pursuit of its
rights or in the exercise of its remedies hereunder, all documents and
information concerning the other party or any of its Affiliates furnished to it
by the other party or such other party's Representatives in connection with this
Agreement or the transactions contemplated hereby, except to the extent that
such documents or information can be shown to have been (a) previously known by
the party receiving such documents or information, (b) in the public domain
(either prior to or after the furnishing of such documents or information
hereunder) through no fault of such receiving party or (c) later acquired by the
receiving party from another source if the receiving party is not aware that
such source is under an obligation to another party hereto to keep such
documents and information confidential; PROVIDED that following the Closing the
foregoing restrictions will not apply to Parent's use of documents and
information concerning the Company and the Subsidiaries furnished by the Company
or the Shareholder Parties hereunder. In the event the transactions contemplated
hereby are not consummated, upon the request of the other party, each party
hereto will, and will cause its Affiliates and their respective Representatives
to, promptly (and in no event later than five Business Days after such request)
redeliver or cause to be redelivered all copies of documents and information
furnished by the other party in connection with this Agreement or the
transactions contemplated hereby and destroy or cause to be destroyed all notes,
memoranda, summaries, analyses, compilations and other writings related
57
thereto or based thereon prepared by the party furnished such documents and
information or its Representatives.
13.06 WAIVER. Any term or condition of this Agreement may be waived at
any time by the party that is entitled to the benefit thereof, but no such
waiver shall be effective unless set forth in a written instrument duly executed
by or on behalf of the party waiving such term or condition. No waiver by any
party of any term or condition of this Agreement, in any one or more instances,
shall be deemed to be or construed as a waiver of the same or any other term or
condition of this Agreement on any future occasion. All remedies, either under
this Agreement or by Law or otherwise afforded, will be cumulative and not
alternative.
13.07 AMENDMENT. This Agreement may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each
party hereto.
13.08 NO THIRD PARTY BENEFICIARY. Subject SECTION 6.05 hereof, the
terms and provisions of this Agreement are intended solely for the benefit of
each party hereto and their respective successors or permitted assigns, and it
is not the intention of the parties to confer third-party beneficiary rights
upon any other Person other than any Person entitled to indemnity under ARTICLE
X.
13.09 NO ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor any
right, interest or obligation hereunder may be assigned by any party hereto
without the prior written consent of the other party hereto and any attempt to
do so will be void, except (a) for assignments and transfers by operation of Law
and (b) that Parent may assign any or all of its rights, interests and
obligations hereunder (including without limitation its rights under ARTICLE X)
to (i) a wholly-owned subsidiary, provided that any such subsidiary agrees in
writing to be bound by all of the terms, conditions and provisions contained
herein or (ii) any post-Closing parent of all of the issued and outstanding
stock of the Company or a substantial part of its assets, but no such assignment
referred to in clause (i) or (ii) shall relieve Parent of its obligations
hereunder. Subject to the preceding sentence, this Agreement is binding upon,
inures to the benefit of and is enforceable by the parties hereto and their
respective successors and assigns.
13.10 HEADINGS. The headings used in this Agreement have been inserted
for convenience of reference only and do not define or limit the provisions
hereof.
13.11 INVALID PROVISIONS. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under any present or future Law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof, and (c)
the remaining provisions of this Agreement will remain in full force and effect
and will not be affected by the illegal, invalid or unenforceable provision or
by its severance herefrom.
58
13.12 GOVERNING LAW. Except to the extent that the provisions of the
DGCL are mandatorily applicable to any of the transactions contemplated by this
Agreement, this Agreement shall be governed by and construed in accordance with
the Laws of the State of New York applicable to a Contract executed and
performed in such State, without giving effect to the conflicts of laws
principles thereof.
13.13 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
59
IN WITNESS WHEREOF, each party hereto has duly executed and delivered
this Agreement, or caused this Agreement to be executed and delivered by its
officers thereunto, as of the date first above written.
XXXXXXX.XXX, LTD.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
RESUMIX ACQUISITION CORP.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
60
RESUMIX INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President and CEO
DOUBLE DIAMOND ASSOCIATES, LLC
By: /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title:
/s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------------
XXXXXXX X. XXXXXXXXX
61
CERIDIAN CORPORATION
By: /s/ A. Xxxx Xxxx
-------------------------------------
Name: A. Xxxx Xxxx
Title: VP and Asst. Sec.
62
GENERAL ATLANTIC PARTNERS 48, L.P.
By: General Atlantic Partners, LLC,
its general partner
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: A Managing Member
GAP COINVESTMENT PARTNERS, L.P.
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: A General Partner
GENERAL ATLANTIC PARTNERS 60, L.P.
By: General Atlantic Partners, LLC,
its general partner
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: A Managing Member
GAP COINVESTMENT PARTNERS II, L.P.
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: A General Partner
63
ANNEX I
NAME COMMON SERIES D SERIES E CONVERSION
SHARES PREFERRED PREFERRED NUMBER
STOCK STOCK
Ceridian Corporaiton 100 6,715,000 0.2352941
[Address]
General Atlantic Partners 48, L.P. 4,925,134 0.2352941
[Address]
GAP Coinvestment Partners, L.P. 939,866 0.2352941
[Address]
General Atlantic Partners 60, L.P. 701,686 0.2352941
[Address]
GAP Coinvestment Partners II, L.P. 148,314 0.2352941
[Address]
Double Diamond LLC 1,450,000 0.2352941
[Address]
Xxxxxxxxx, Xxxxxxx X. 250,000 0.2352941
[Address]
TOTAL # SHARES 1,700,100 850,000 12,580,000
NAME XXXXXXX.XXX ESCROW
COMMON SHARES SHARES
TO BE RECEIVED
Ceridian Corporaiton 1,580,023 159,459
[Address]
General Atlantic Partners 48, L.P. 1,158,854 116,954
[Address]
GAP Coinvestment Partners, L.P. 221,144 22,318
[Address]
General Atlantic Partners 60, L.P. 165,102 16,662
[Address]
GAP Coinvestment Partners II, L.P. 34,897 3,521
[Address]
Double Diamond LLC 341,176 34,432
[Address]
Xxxxxxxxx, Xxxxxxx X. 58,823 5,936
[Address]
Total # Shares 3,560,019 359,282
ANNEX II
PERSONS SIGNING OFFICER EMPLOYMENT AGREEMENTS
Xxxxxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxx
Xxxx Xxxxx
Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxxxxx Xxxxxx
Xxxx X. Xxxxxx
Xxxx X. Winner
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
dated as of May __, 2000
by and among
XXXXXXX.XXX, LTD.
and
THE SHAREHOLDERS LISTED ON SCHEDULE I HERETO
TABLE OF CONTENTS
THIS TABLE OF CONTENTS IS NOT PART OF THE REGISTRATION RIGHTS AGREEMENT
TO WHICH IT IS ATTACHED BUT IS INSERTED FOR CONVENIENCE ONLY.
Page
No.
----
1. Registration of Registrable Securities...................................................................1
(a) Filing of Shelf Registration Statement..............................................................1
(b) Registration Expenses...............................................................................1
2. Registration Procedures..................................................................................1
3. Holdback Agreement.......................................................................................4
4. Indemnification..........................................................................................4
(a) Indemnification by the Company......................................................................4
(b) Indemnification by the Shareholders.................................................................5
(c) Notices of Claims, etc..............................................................................5
(d) Contribution........................................................................................6
(e) Other Indemnification...............................................................................7
(f) Indemnification Payments............................................................................7
5. Covenants Relating to Rule 144...........................................................................7
6. Other Registration Rights................................................................................7
(a) No Existing Agreements..............................................................................7
(b) Future Agreements...................................................................................7
(c) Resumix Agreements..................................................................................8
7. Definitions..............................................................................................8
8. Miscellaneous............................................................................................9
(a) Notices.............................................................................................9
(b) Entire Agreement...................................................................................10
(c) Amendment..........................................................................................11
(d) Waiver.............................................................................................11
(e) No Third Party Beneficiary.........................................................................11
(f) No Assignment; Binding Effect......................................................................11
(g) Headings...........................................................................................11
(h) Invalid Provisions.................................................................................11
(i) Remedies; Legal Expenses...........................................................................11
(j) Governing Law......................................................................................12
(k) Counterparts.......................................................................................12
This REGISTRATION RIGHTS AGREEMENT dated as of May __, 2000 is made and
entered by and among XxxXxxx.xxx, Ltd., a Delaware corporation (the "COMPANY"),
and the shareholders listed on SCHEDULE I hereto (collectively, the
"SHAREHOLDERS" and each individually, a "SHAREHOLDER"). Capitalized terms not
otherwise defined herein have the meanings set forth in SECTION 7.
WHEREAS, the Company, Resumix Acquisition Corp., a Delaware corporation
wholly owned by the Company ("RAC"), Resumix, Inc., a Delaware corporation
("RESUMIX"), and the Shareholders have entered into an Agreement and Plan of
Merger dated as of April 25, 2000, (the "MERGER AGREEMENT"), pursuant to which,
on the date hereof, RAC is merging with and into Resumix and Resumix is becoming
a wholly-owned subsidiary of the Company; and
WHEREAS, as a condition to the Shareholders' willingness to enter into
the Merger Agreement, the Company has agreed to enter into this Registration
Rights Agreement providing for the Company's registration for sale of
Registrable Securities to be acquired by the Shareholders pursuant to the Merger
Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Registration Rights Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. REGISTRATION OF REGISTRABLE SECURITIES. (a) FILING OF SHELF
REGISTRATION STATEMENT. The Company shall prepare and file with the Commission,
on or prior to August 31, 2000, and use its reasonable best efforts to cause to
be declared effective as soon as practicable after the date of the filing, a
registration statement on Form S-3 (or any other appropriate form if a
registration of the Registrable Securities for resale by the Shareholders on
Form S-3 is not available) under the Securities Act registering the Registrable
Securities. Such registration statement shall provide for the offering and sale
of such Registrable Securities to or through dealers, directly to one or more
other purchasers, through brokers and agents or through a combination of any
such methods of sale, including but not limited to a bulk sale to a brokerage
firm, but not pursuant to an underwritten Public Offering.
(b) REGISTRATION EXPENSES. The Company will pay all Registration
Expenses incurred in connection with a registration of Registrable Securities
pursuant to PARAGRAPH (A) above.
2. REGISTRATION PROCEDURES. In connection with its obligations under
SECTION 1 to effect the registration and sale of the Registrable Securities, the
Company shall:
(a) prepare and file with the Commission such amendments and
supplements to the shelf registration statement filed pursuant to SECTION 1
and any prospectus used in connection therewith as may be necessary to
maintain the effectiveness of such registration statement and to comply
with the provisions of the Securities Act with respect to the disposition
of all Registrable Securities covered by such registration statement, in
accordance with the intended methods of disposition thereof on a
continuous basis in accordance with Rule 415 promulgated under the
Securities Act, until the earlier of (i) two (2) years following the date
of the Closing (plus a number of days equal to any period during which
Shareholders are not permitted to engage in sales of Registrable Securities
pursuant to SECTION 3) and (ii) such time as there are no shares of Common
Stock outstanding which constitute Registrable Securities;
(b) promptly notify the Shareholders:
i. when such registration statement or any prospectus used
in connection therewith, or any amendment or supplement thereto,
has been filed and, with respect to such registration statement or
any post-effective amendment thereto, when the same has become
effective;
ii. of any written request by the Commission for amendments
or supplements to such registration statement or prospectus;
iii. of the notification to the Company by the Commission of
its initiation of any proceeding with respect to the issuance by
the Commission of, or of the issuance by the Commission of, any
stop order suspending the effectiveness of such registration
statement; and
iv. of the receipt by the Company of any notification with
respect to the suspension of the qualification of any Registrable
Securities for sale under the applicable securities or blue sky
laws of any jurisdiction;
(c) furnish to the Shareholders such number of conformed copies of
such registration statement and of each amendment and supplement thereto
(in each case including all exhibits and documents incorporated by
reference), such number of copies of the prospectus contained in such
registration statement (including each preliminary prospectus and any
summary prospectus) and any other prospectus filed under Rule 424
promulgated under the Securities Act, and such other documents, as the
Shareholders may reasonably request to facilitate the disposition of the
Registrable Securities covered by such registration statement;
(d) use its reasonable best efforts to register or qualify all
Registrable Securities covered by such registration statement under such
other securities or blue sky laws of such jurisdictions as the Shareholders
shall reasonably request, to keep such registration or qualification in
effect for so long as such registration statement remains in effect, and
take any other action which may be reasonably necessary or advisable to
enable the Shareholders to consummate the disposition in such jurisdictions
of their Registrable Securities covered by such registration statement,
except that the Company shall not for any such purpose be required (i) to
qualify generally to do business as a foreign corporation in any
jurisdiction wherein it would not but for the requirements of this
paragraph be obligated to be so qualified, (ii) to subject itself to
taxation in any such jurisdiction or (iii) to consent to general service of
process in any such jurisdiction;
(e) use its best efforts to cause all Registrable Securities
covered by such registration statement to be registered with or approved by
such other governmental
-2-
agencies or authorities as may be necessary to enable the Shareholders to
consummate the disposition of such Registrable Securities;
(f) promptly notify the Shareholders, at any time when a
prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which any
prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and at the request of the Shareholders promptly
prepare and furnish to the Shareholders a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such securities, such
prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading and the effectiveness of such registration
statement shall be extended equitably to permit complete disposition of the
Registrable Securities;
(g) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission, and make available to
its securityholders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve (12) months, but not more
than eighteen (18) months, beginning with the first full calendar month
after the effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities
Act and Rule 158 promulgated thereunder;
(h) make available for inspection by the Shareholders and any
attorney, accountant or other agent retained by the Shareholders
(collectively, the "INSPECTORS"), all financial and other records,
pertinent corporate documents and properties of the Company (collectively,
the "RECORDS") as shall be reasonably necessary to enable them to exercise
their due diligence responsibility and cause the Company's officers,
directors and employees to supply all information reasonably requested by
any such Inspector in connection with such registration statement; PROVIDED
that records which the Company determines, in good faith, to be
confidential and which it notifies the Inspectors are confidential shall
not be disclosed by the Inspectors unless (i) the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in the
registration statement, (ii) the release of such Records is ordered
pursuant to a subpoena or other order from a court of competent
jurisdiction or (iii) the information in such Records has been made
generally available to the public;
(i) provide a transfer agent and registrar for all Registrable
Securities covered by such registration statement not later than the
effective date of such registration statement; and
(j) use its reasonable best efforts to cause all Registrable
Securities covered by such registration statement to be listed, upon
official notice of issuance, on any securities exchange on which any of the
securities of the same class as the Registrable Securities are then listed.
-3-
In the event of the issuance of any stop order suspending the
effectiveness of the registration statement which includes Registrable
Securities, or any order suspending or preventing the use of any related
prospectus or suspending the qualification of any Registrable Securities
included in such registration statement for sale in any jurisdiction, the
Company will use its reasonable best efforts to promptly obtain the withdrawal
of such order.
The Company may require the Shareholders to furnish the Company with
such information and affidavits regarding the Shareholders and the distribution
of their Registrable Securities as the Company may from time to time reasonably
request in writing in connection with such registration.
The Shareholders agree, by acquisition of such Registrable Securities,
that upon receipt of any notice from the Company of the happening of any event
of the kind described in PARAGRAPH (f), the Shareholders will forthwith
discontinue their disposition of Registrable Securities pursuant to the
registration statement relating to such Registrable Securities until their
receipt of the copies of the supplemented or amended prospectus contemplated by
PARAGRAPH (f) and, if so directed by the Company, will deliver to the Company
(at the Company's expense) all copies, other than permanent file copies, then in
their possession of the prospectus relating to such Registrable Securities
current at the time of receipt of such notice.
3. HOLDBACK AGREEMENT. In the case of an underwritten Public Offering
by the Company in which shares of Common Stock (or securities convertible into
or exercisable or exchangeable for shares of Common Stock) are being offered for
the account of the Company and each of the Company's officers, directors and 5%
stockholders agree to identical agreements as set forth in this Section 3 with
respect to such Public Offering, unless the Managing Underwriter otherwise
agrees, each Shareholder, by acquisition of its Registrable Securities, agrees
not to effect any public sale or distribution (including a sale under Rule 144)
of such securities, or any securities convertible into or exchangeable or
exercisable for such securities, during the seven (7) days prior to and the
ninety (90) days after the effective date of any registration statement filed by
the Company in connection with such Public Offering (or for such shorter period
of time as is sufficient and appropriate, in the opinion of the Managing
Underwriter, in order to complete the sale and distribution of the securities
included in such registration); PROVIDED that the restrictions contained in this
Section shall not apply (i) prior to the later of (A) December 31, 2000 or (B)
the date 90 days following the date that the registration statement which
registers the Registrable Securities is declared effective by the Commission
(extended by any period referred to in SECTION 2(f) in which the Shareholders
are restricted from selling) or (ii) to any Shareholder owning Registrable
Securities representing less than 1% of the outstanding shares of Common Stock.
4. INDEMNIFICATION. (a) INDEMNIFICATION BY THE COMPANY. The Company
shall, to the full extent permitted by law, indemnify and hold harmless each
Shareholder, its officers, directors, partners and affiliates, and each other
Person, if any, who controls such Shareholder within the meaning of the
Securities Act (each an "INDEMNIFIED PERSON"), against any losses, claims,
damages, expenses or liabilities, joint or several (together, "LOSSES"), to
which such Indemnified Person may become subject under the Securities Act or
otherwise, insofar as such Losses (or actions or proceedings, whether commenced
or threatened, in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact
-4-
contained in the shelf registration statement filed pursuant to SECTION 1(a),
any preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of a prospectus, in the
light of the circumstances under which they were made) not misleading, and the
Company will reimburse such Indemnified Person for all reasonable legal or any
other expenses reasonably incurred by such Indemnified Person in connection with
investigating or defending any such Loss (or action or proceeding in respect
thereof); PROVIDED that the Company shall not be liable in any such case to any
Indemnified Person to the extent that any such Loss (or action or proceeding in
respect thereof) arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any such registration
statement, preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of such Indemnified Person
specifically for use in the preparation thereof. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
any Indemnified Person, and shall survive the transfer of such securities by the
Shareholders.
(b) INDEMNIFICATION BY THE SHAREHOLDERS. Each Shareholder, as a
condition to including Registrable Securities in the shelf registration
statement filed pursuant to SECTION 1(a), shall, to the full extent permitted by
law, indemnify and hold harmless the Company, its directors and officers, and
each other Person, if any, who controls the Company within the meaning of the
Securities Act, against any Losses to which the Company or any such director or
officer or controlling Person may become subject under the Securities Act or
otherwise, insofar as such Losses (or actions or proceedings, whether commenced
or threatened, in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any such
registration statement, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in the case of a
prospectus, in the light of the circumstances under which they were made) not
misleading, if such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of such Shareholder
specifically for use in the preparation of such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement; PROVIDED that no Shareholder shall be liable under this paragraph
for any amount in excess of the net proceeds to such Shareholder of the
Registrable Securities sold by it. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the Company or
any such director, officer or controlling Person and shall survive the transfer
of such securities by any such Shareholder.
(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an Indemnified
Party of notice of the commencement of any action or proceeding involving a
claim referred to in the preceding PARAGRAPH (a) OR (b) of this SECTION 4, such
Indemnified Party will, if a claim in respect thereof is to be made against an
Indemnifying Party pursuant to such paragraphs, give written notice to the
latter of the commencement of such action, PROVIDED that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under the preceding paragraphs of this
SECTION 4, except to the extent that the Indemnifying Party is actually
prejudiced by such failure to give notice. In case any such action
-5-
is brought against an Indemnified Party, the Indemnifying Party shall be
entitled to participate in and to assume the defense thereof, with counsel
reasonably satisfactory to such Indemnified Party, and after notice from the
Indemnifying Party to such Indemnified Party of its election so to assume the
defense thereof, the Indemnifying Party shall not be liable to such Indemnified
Party for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof; PROVIDED that the Indemnified Party may
participate in such defense at the Indemnified Party's expense. If (i) the
Indemnifying Party is not entitled to, or elects not to, assume the defense of a
claim, (ii) the Indemnifying Party fails to take reasonable steps necessary to
defend diligently the claim within twenty (20) days after receiving notice from
the Indemnified Party that the Indemnified Party believes it has failed to do
so, (iii) the Indemnified Party who is the defendant in any action which is also
brought against the Indemnifying Party reasonably shall have concluded that
there shall be one or more legal defenses available to the Indemnified Party
which are not available to the Indemnifying Party, or (iv) representation by
both parties by the same counsel is otherwise inappropriate under applicable
standards of professional conduct, the Indemnified Party shall have the right to
assume or continue its own defense as set forth above (but with no more than one
firm of counsel for all Indemnified Parties in each jurisdiction except to the
extent any Indemnified Party reasonably shall have concluded that there may be
legal defenses available to such Indemnified Party which are not available to
other Indemnified Parties or to the extent representation of all Indemnified
Parties by the same counsel is otherwise inappropriate under applicable
standards of professional conduct) and the Indemnifying Party shall be liable
for any reasonable expenses therefor. No Indemnifying Party shall consent to
entry of any judgment or enter into any settlement without the consent of the
Indemnified Party, which consent will not be unreasonably withheld or delayed.
No Indemnifying Party shall be subject to any liability for any settlement made
without its consent, which consent shall not be unreasonably withheld or
delayed. The indemnification provided for under this Registration Rights
Agreement will remain in full force and effect regardless of any investigation
made by or on behalf of the Indemnified Party or any officer, director or
controlling Person of such Indemnified Party and will survive the transfer of
securities.
(d) CONTRIBUTION. If the indemnity and reimbursement obligation
provided for in any paragraph of this SECTION 4 is unavailable or insufficient
to hold harmless an Indemnified Party in respect of any Losses (or actions or
proceedings in respect thereof) referred to therein, then the Indemnifying Party
shall contribute to the amount paid or payable by the Indemnified Party as a
result of such Losses (or actions or proceedings in respect thereof) in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party on the one hand and the Indemnified Party on the other hand in connection
with statements or omissions which resulted in such Losses, as well as any other
relevant equitable considerations, including the relative benefits received in
connection with the transaction. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Indemnifying Party or the Indemnified
Party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The parties
hereto agree that it would not be just and equitable if contributions pursuant
to this paragraph were to be determined by PRO RATA allocation or by any other
method of allocation which does not take account of the equitable considerations
referred to in the first sentence of this paragraph. The amount paid by an
Indemnified Party as a result of the Losses referred to in the first sentence of
this paragraph shall be deemed to include any legal and other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any
-6-
Loss which is the subject of this paragraph. Notwithstanding anything to the
contrary contained herein, no Shareholder shall be liable under this paragraph
for any amount in excess of the net proceeds to such Shareholder of the
Registrable Securities sold by it.
No Indemnified Party guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from the Indemnifying Party if the Indemnifying Party was not
guilty of such fraudulent misrepresentation.
(e) OTHER INDEMNIFICATION. Indemnification similar to that specified in
the preceding paragraphs of this SECTION 4 (with appropriate modifications)
shall be given by the Company and the Shareholders with respect to any required
registration or other qualification of securities under any federal or state law
or regulation of any governmental authority other than the Securities Act. The
provisions of this SECTION 4 shall be in addition to any other rights to
indemnification or contribution which an Indemnified Party may have pursuant to
law, equity, contract or otherwise.
(f) INDEMNIFICATION PAYMENTS. The indemnification required by this
SECTION 4 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or Losses
are incurred.
5. COVENANTS RELATING TO RULE 144. The Company will, for a period of up
to two (2) years following the date of the Closing, file reports in compliance
with the Exchange Act, will comply with all rules and regulations of the
Commission applicable in connection with the use of Rule 144 and will take such
other actions and furnish the Shareholders with such other information as the
Shareholders may reasonably request to the extent necessary to permit the
Shareholders to sell the Registrable Securities pursuant to Rule 144.
6. OTHER REGISTRATION RIGHTS. (a) NO EXISTING AGREEMENTS. The Company
represents and warrants to the Shareholders that there is not in effect on the
date hereof any agreement by the Company pursuant to which any holders of
securities of the Company have a right to cause the Company to register or
qualify such securities under the Securities Act or any securities or blue sky
laws of any jurisdiction that would conflict or be inconsistent with any
provision of this Registration Rights Agreement.
(b) FUTURE AGREEMENTS. The Company shall not hereafter agree with the
holders of any securities issued or to be issued by the Company to register or
qualify such securities under the Securities Act or any securities or blue sky
laws of any jurisdiction that would conflict or be inconsistent with any
provision of this Registration Rights Agreement. Nothing contained in this
Registration Rights Agreement is meant to explicitly or implicitly restrict the
Company from granting to any such holder priority with respect to registration
rights over any shares issued to the Shareholders.
-7-
(c) RESUMIX AGREEMENTS. The Shareholders represent and warrant to the
Company that they have terminated any and all agreements relating to the
registration of their shares of Resumix capital stock.
7. DEFINITIONS. (a) Except as otherwise specifically indicated, the
following terms will have the following meanings for all purposes of this
Registration Rights Agreement:
"BUSINESS DAY" means a day other than Saturday, Sunday or any other day
on which banks located in the State of New York are authorized or obligated to
close.
"CLOSING" has the meaning ascribed to it in the Merger Agreement.
"COMMISSION" means the United States Securities and Exchange
Commission, or any successor governmental agency or authority.
"COMMON STOCK" means shares of common stock, par value $.01 per share,
of the Company, as constituted on the date hereof, and any stock into which such
Common Stock shall have been changed or any stock resulting from any
reclassification of such Common Stock.
"COMPANY" has the meaning ascribed to it in the preamble.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"INDEMNIFIED PARTY" means any party referred to in SECTION 4 as being
entitled to indemnity in accordance with such Section.
"INDEMNIFYING PARTY" means a party obligated to provide indemnity in
accordance with SECTION 4.
"INSPECTORS" has the meaning ascribed to it in SECTION 2(i).
"LOSSES" has the meaning ascribed to it in SECTION 4(a).
"MANAGING UNDERWRITER" means, with respect to any Public Offering, the
underwriter or underwriters managing such Public Offering.
"MERGER AGREEMENT" has the meaning ascribed to it in the preamble.
"NASD" means the National Association of Securities Dealers.
"PERSON" means any natural person, corporation, limited liability
company, general partnership, limited partnership, proprietorship, other
business organization, trust, union or association.
"PUBLIC OFFERING" means any offering of Common Stock (or securities
convertible into or exercisable or exchangeable for shares of Common Stock) to
the public, either on behalf
-8-
of the Company or any of its securityholders, pursuant to an effective
registration statement under the Securities Act (other than on Forms S-4 or S-8
or any successor forms thereto).
"RECORDS" has the meaning ascribed to it in SECTION 2(i).
"REGISTRABLE SECURITIES" means (i) the shares of Common Stock received
by the Shareholders pursuant to ARTICLE II of the Merger Agreement, and (ii) any
additional shares of Common Stock issued or distributed by way of a dividend,
stock split or other distribution in respect of such shares, or acquired by way
of any rights offering or similar offering made in respect of such shares. As to
any particular Registrable Securities, such securities shall cease to be
Registrable Securities when (i) a registration statement with respect to the
sale of such securities shall have become effective under the Securities Act and
such securities shall have been disposed of in accordance with such registration
statement, (ii) they shall have been distributed to the public pursuant to Rule
144, or (iii) they shall have ceased to be outstanding.
"REGISTRATION EXPENSES" means all expenses incident to the Company's
performance of or compliance with its obligations under this Registration Rights
Agreement to effect the registration of Registrable Securities pursuant to
SECTION 1(a), including, without limitation, all registration, filing,
securities exchange listing and NASD fees, all registration, filing,
qualification and other fees and expenses of complying with securities or blue
sky laws, all word processing, duplicating and printing expenses, messenger and
delivery expenses, the fees and disbursements of legal counsel retained by the
Company to act for the Company and of the Company's independent public
accountants; BUT EXCLUDING transfer taxes, if any, in respect of Registrable
Securities and the fees and disbursements of any legal counsel, accountant,
Inspector or other representative retained by any Shareholder to act exclusively
for such Shareholder, which shall be payable by the Shareholders.
"REGISTRATION RIGHTS AGREEMENT" means this Registration Rights
Agreement, as the same shall be amended from time to time.
"RULE 144" means Rule 144 promulgated by the Commission under the
Securities Act, and any successor provision thereto.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"SHAREHOLDERS" has the meaning ascribed to it in the preamble.
(b) Unless the context of this Registration Rights Agreement otherwise
requires, (i) words of any gender include each other gender; (ii) words using
the singular or plural number also include the plural or singular number,
respectively; (iii) the terms "hereof," "herein," "hereby" and derivative or
similar words refer to this entire Registration Rights Agreement; and (iv) the
term "Section" refers to the specified Section of this Registration Rights
Agreement. Whenever this Registration Rights Agreement refers to a number of
days, such number shall refer to calendar days unless Business Days are
specified.
8. MISCELLANEOUS. (a) NOTICES. All notices, requests and other
communications hereunder must be in writing and will be deemed to have been duly
given only if delivered
-9-
personally or by facsimile transmission or mailed by certified or registered
mail, return receipt requested, to the parties at the following addresses or
facsimile numbers:
If to the Shareholders, to the addresses
set forth on SCHEDULE I hereto
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile: 212-757-3990
Attn: Xxxxxxx X. Xxxx, Esq.
If to the Company, to:
XxxXxxx.xxx, Ltd.
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxx X. Xxxxxxxxxx, Esq.
with a copy to:
Milbank, Tweed, Xxxxxx & XxXxxx LLP
0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxx X. Xxxxx, Esq.
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt if received on a Business
Day during normal business hours, and if not then received, on the next Business
Day, and (iii) if delivered by mail in the manner described above to the address
as provided in this Section, be deemed given upon receipt (in each case
regardless of whether such notice, request or other communication is received by
any other Person to whom a copy of such notice is to be delivered pursuant to
this Section). Any party from time to time may change its address, facsimile
number or other information for the purpose of notices to that party by giving
notice specifying such change to the other parties hereto.
(b) ENTIRE AGREEMENT. This Registration Rights Agreement supersedes all
prior discussions and agreements between the parties with respect to the subject
matter hereof, and contains the sole and entire agreement between the parties
hereto with respect to the subject matter hereof.
-10-
(c) AMENDMENT. This Registration Rights Agreement may be amended,
supplemented or modified only by a written instrument (which may be executed in
any number of counterparts) duly executed by or on behalf of the Company and the
Shareholders.
(d) WAIVER. Any term or condition of this Registration Rights Agreement
may be waived at any time by the party that is entitled to the benefit thereof,
but no such waiver shall be effective unless set forth in a written instrument
duly executed by or on behalf of the party waiving such term or condition. No
waiver by any party of any term or condition of this Registration Rights
Agreement, in any one or more instances, shall be deemed to be or construed as a
waiver of the same term or condition of this Registration Rights Agreement on
any future occasion.
(e) NO THIRD PARTY BENEFICIARY. The terms and provisions of this
Registration Rights Agreement are intended solely for the benefit of each party
hereto and it is not the intention of the parties to confer third-party
beneficiary rights upon any other Person other than any Person entitled to
indemnity under SECTION 4.
(f) NO ASSIGNMENT; BINDING EFFECT. Neither this Registration Rights
Agreement nor any right, interest or obligation hereunder may be assigned by any
party hereto without the prior written consent of the other parties hereto and
any attempt to do so will be void, PROVIDED that each Shareholder may assign its
rights hereunder to such Shareholder's successors, heirs or legal
representatives. Subject to the foregoing, this Registration Rights Agreement is
binding upon, inures to the benefit of and is enforceable by the parties hereto
and their respective successors and assigns.
(g) HEADINGS. The headings used in this Registration Rights Agreement
have been inserted for convenience of reference only and do not define or limit
the provisions hereof.
(h) INVALID PROVISIONS. If any provision of this Registration Rights
Agreement is held to be illegal, invalid or unenforceable under any present or
future law, and if the rights or obligations of any party hereto under this
Registration Rights Agreement will not be materially and adversely affected
thereby, (i) such provision will be fully severable, (ii) this Registration
Rights Agreement will be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof and (iii) the
remaining provisions of this Registration Rights Agreement will remain in full
force and effect and will not be affected by the illegal, invalid or
unenforceable provision or by its severance herefrom.
(i) REMEDIES; LEGAL EXPENSES. Except as otherwise expressly provided
for herein, no remedy conferred by any of the specific provisions of this
Registration Rights Agreement is intended to be exclusive of any other remedy,
and each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute or otherwise. The election of any one or more remedies by any party
hereto shall not constitute a waiver by any such party of the right to pursue
any other available remedies.
Damages in the event of breach of this Registration Rights Agreement by
a party hereto would be difficult, if not impossible, to ascertain, and it is
therefore agreed that each such party, in addition to and without limiting any
other remedy or right it may have, will have the
-11-
right to an injunction or other equitable relief in any court of competent
jurisdiction, enjoining any such breach, and enforcing specifically the terms
and provisions hereof and the Company and the Shareholders each hereby waives
any and all defenses it may have on the ground of lack of jurisdiction or
competence of the court to grant such an injunction or other equitable relief.
The existence of this right will not preclude any such party from pursuing any
other rights and remedies at law or in equity which such party may have.
The parties hereto agree that, in the event that any party to this
Registration Rights Agreement shall bring any legal action or proceeding to
enforce or to seek damages or other relief arising from an alleged breach of any
term or provision of this Registration Rights Agreement by the other party, the
prevailing party in any such action or proceeding shall be entitled to an award
of, and the other party to such action or proceeding shall pay, the reasonable
fees and expenses of legal counsel to the prevailing party.
(j) GOVERNING LAW. This Registration Rights Agreement shall be governed
by and construed in accordance with the laws of the State of New York applicable
to a contract executed and performed in such State, without giving effect to the
conflicts of laws principles thereof.
(k) COUNTERPARTS. This Registration Rights Agreement may be executed in
any number of counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
-12-
IN WITNESS WHEREOF, this Registration Rights Agreement has been duly
executed and delivered by the duly authorized officer of each party hereto as of
the date first above written.
XXXXXXX.XXX, LTD.
By:
-------------------------------------
Name:
Title:
DOUBLE DIAMOND ASSOCIATES, LLC
By:
-------------------------------------
Name:
Title:
----------------------------------------
XXXXXXX X. XXXXXXXXX
CERIDIAN CORPORATION
By:
-------------------------------------
Name:
Title:
GENERAL ATLANTIC PARTNERS 48, L.P.
By: General Atlantic Partners, LLC,
its general partner
By:
---------------------------------
Name:
Title:
-13-
GAP COINVESTMENT PARTNERS, L.P.
By:
-------------------------------------
Name:
Title:
GENERAL ATLANTIC PARTNERS 60, L.P.
By: General Atlantic Partners, LLC,
its general partner
By:
---------------------------------
Name:
Title:
GAP COINVESTMENT PARTNERS II, L.P.
By:
-------------------------------------
Name:
Title:
-14-
SCHEDULE I
-15-
EXHIBIT B
ESCROW AGREEMENT
ESCROW AGREEMENT, dated as of May __, 2000, among XxxXxxx.xxx, Ltd., a
Delaware corporation ("PARENT"), the individuals and entities listed on SCHEDULE
I hereto (each, a "SHAREHOLDER" and together, the "SHAREHOLDERS"), and
_____________, as escrow agent (the "ESCROW AGENT").
WHEREAS, concurrently with the execution and delivery of this Agreement
and pursuant to an Agreement and Plan of Merger dated as of April 25, 2000 (the
"MERGER AGREEMENT"; capitalized terms not defined herein shall have the meanings
ascribed to them in the Merger Agreement) among Parent, Resumix Acquisition
Corp., a Delaware corporation, Resumix, Inc., a Delaware corporation
("RESUMIX"), and the Shareholders, Parent is issuing to the Shareholders shares
of common stock, par value $.01 per share, of Parent ("PARENT COMMON STOCK") and
Resumix is becoming a wholly-owned subsidiary of Parent;
WHEREAS, the Merger Agreement provides that Parent, the Shareholders
and the Escrow Agent enter into this Agreement and that the Shareholders deposit
with the Escrow Agent a portion of the shares of Parent Common Stock received by
them on the date hereof pursuant to the Merger Agreement in order to provide a
fund for indemnity payments that the Shareholders become obligated to make to
the Indemnified Parties as and to the extent provided in Article X of the Merger
Agreement; and
WHEREAS, the Shareholders have appointed General Atlantic Partners 60,
L.P. as their representative to give and receive all notices to be given to and
received by the Shareholders under SECTION 5 of this Agreement (the
"REPRESENTATIVE");
NOW, THEREFORE, Parent, the Shareholders and the Escrow Agent hereby
agree as follows:
1. APPOINTMENT OF THE ESCROW AGENT; DEPOSIT OF ESCROW SHARES. The
Shareholders and Parent hereby constitute and appoint the Escrow Agent as, and
the Escrow Agent hereby agrees to assume and perform the duties of, the escrow
agent under and pursuant to this Agreement. The Escrow Agent acknowledges
receipt of an executed copy of the Merger Agreement and this Agreement and of a
certificate from each Shareholder with duly endorsed stock powers attached,
representing the number of shares of Parent Common Stock set forth opposite such
Shareholder's name on SCHEDULE 1 hereto (such shares being referred to herein
collectively as the "ESCROW SHARES").
2. HOLDING OF THE ESCROW SHARES. The Escrow Agent shall hold each
Shareholder's Escrow Shares in escrow in the separate account maintained for the
benefit of such
Shareholder and Parent. The Escrow Shares shall not be subject to lien or
attachment by any creditor of any party hereto and shall be used solely for the
purpose set forth in this Agreement. The Escrow Shares or any proceeds thereof
shall not be available to, and shall not be used by, the Escrow Agent to set off
any obligations of any of the Shareholders or of Parent owing to the Escrow
Agent in any capacity.
3. DIVIDENDS AND OTHER DISTRIBUTIONS. The Escrow Agent shall, upon
receipt thereof, deposit any dividends or other distributions made in respect of
any Shareholder's Escrow Shares in a separate account of the Escrow Agent
maintained for such Shareholder for such purpose (which account will, in the
case of cash dividends or other cash distributions, be an interest-bearing
account). In the event that the Escrow Shares are exchanged for any other
securities and/or cash or other property by reason of a merger, consolidation,
recapitalization, reorganization or similar corporate transaction, such
securities and/or cash or other property shall be substituted for the Escrow
Shares for purposes of this Agreement, and the parties shall agree to such
equitable adjustments in the provisions of this Agreement as may be necessary to
give effect to this sentence.
4. VOTING. Prior to the Termination Date, the Escrow Agent will vote
the Escrow Shares as directed by the respective Shareholders in writing and will
execute any written consents to stockholder action or proxies as directed in
writing by the respective Shareholders. In the absence of such written
direction, the Escrow Agent shall not vote the Escrow Shares for any purpose and
will not execute any consents to stockholder action or proxies.
5. CLAIMS FOR INDEMNITY.
(a) Concurrently with the delivery of an Indemnity Notice under the
Merger Agreement, Parent will deliver to the Escrow Agent a certificate in
substantially the form of ANNEX I attached hereto (a "CERTIFICATE OF
INSTRUCTION"). No Certificate of Instruction may be delivered by Parent after
the close of business on the business day immediately preceding the Termination
Date. The Escrow Agent shall give written notice to the Shareholders of its
receipt of a Certificate of Instruction not later than the second business day
next following receipt thereof, together with a copy of such Certificate of
Instruction.
(b) If the Escrow Agent (i) shall not, within thirty (30) calendar days
following its receipt of a Certificate of Instruction (the "OBJECTION PERIOD"),
have received from the Shareholders a certificate in substantially the form of
ANNEX II attached hereto (an "OBJECTION CERTIFICATE") disputing their obligation
to pay the Owed Amount referred to in such Certificate of Instruction, or (ii)
shall have received such an Objection Certificate within the Objection Period
and shall thereafter have received either (A) a certificate from Parent and the
Shareholders substantially in the form of ANNEX III attached hereto (a
"RESOLUTION CERTIFICATE") stating that Parent and the Shareholders have agreed
that the Owed Amount referred to in such Certificate of Instruction (or a
specified portion thereof) is payable to one or more of the Indemnified Parties
or (B) a copy of a final, nonappealable order of a court of competent
jurisdiction (accompanied by a certificate of Parent substantially in the form
of ANNEX IV attached hereto (a "LITIGATION CERTIFICATE")) stating that the Owed
Amount referred to in such Certificate of Instruction (or a specified portion
thereof) is payable to one or more of the Indemnified Parties by the
Shareholders, then the Escrow Agent shall, on the second business day next
following (A) the expiration of the Objection Period or (B) the Escrow Agent's
receipt
2
of a Resolution Certificate or a Litigation Certificate, as the case may be,
deliver to Parent from each Shareholder's portion of the Escrow Shares (pro rata
in accordance with paragraph (g) of this SECTION 5 hereto) a certificate or
certificates evidencing in the aggregate that number of whole Escrow Shares
(ignoring fractions), equal to the quotient obtained by dividing (x) the Owed
Amount (or, if such Resolution Certificate or Litigation Certificate specifies
that a lesser amount than such Owed Amount is payable, such lesser amount) by
(y) the Per Share Price (as hereinafter defined), calculated as of the date of
the Litigation Certificate or the Resolution Certificate, as applicable, or if
no Objection Certificate is received, the Certificate of Instruction. For
purposes of this Agreement:
(A) "PER SHARE PRICE" as of any date, shall mean the arithmetic
average of the closing sales price of a share of Parent Common Stock, as
reported in the NASDAQ National Market System ("NMS") or any other exchange or
quotation system on which the shares of Parent Common Stock are then listed or
quoted, on each of the ten (10) Trading Days ending on and including the second
Trading Day prior to such date; and
(B) "TRADING DAY" shall mean any day for which quotations are
available in respect of shares of Parent Common Stock on the NMS.
(c) The Escrow Agent shall give written notice to Parent of its receipt
of an Objection Certificate not later than the second business day next
following receipt thereof, together with a copy of such Objection Certificate.
The Escrow Agent shall give written notice to the Shareholders of its receipt of
a Litigation Certificate not later than the second business day next following
receipt thereof, together with a copy of such Litigation Certificate.
(d) Upon the payment by the Escrow Agent of the Owed Amount referred to
in a Certificate of Instruction, such Certificate of Instruction shall be deemed
canceled. Upon the receipt by the Escrow Agent of a Resolution Certificate or a
Litigation Certificate and the payment by the Escrow Agent of the Owed Amount
referred to therein, the related Certificate of Instruction shall be deemed
canceled.
(e) Upon Parent's determination that it has no claim or has released
its claim with respect to an Owed Amount referred to in a Certificate of
Instruction (or a specified portion thereof), Parent will promptly deliver to
the Escrow Agent a certificate substantially in the form of ANNEX V attached
hereto (a "PARENT CANCELLATION CERTIFICATE") canceling such Certificate of
Instruction (or such specified portion thereof, as the case may be), and such
Certificate of Instruction (or portion thereof) shall thereupon be deemed
canceled. The Escrow Agent shall give written notice to the Shareholders of its
receipt of a Parent Cancellation Certificate not later than the second business
day next following receipt thereof, together with a copy of such Parent
Cancellation Certificate.
(f) Upon receipt of a final nonappealable order of a court of competent
jurisdiction stating that none of the Owed Amount referred to in a Certificate
of Instruction as to which the Shareholders delivered an Objection Certificate
within the Objection Period is payable to any Indemnified Party by the
Shareholders, the Shareholders may deliver a copy of such order (accompanied by
a certificate of the Shareholders substantially in the form of ANNEX VI attached
hereto (a "SHAREHOLDER CANCELLATION CERTIFICATE")) canceling such Certificate of
Instruction, and such Certificate of Instruction shall thereupon be deemed
canceled. The Escrow Agent shall
3
give written notice to Parent of its receipt of a Shareholder Cancellation
Certificate not later than the second business day next following receipt
thereof, together with a copy of such Shareholder Cancellation Certificate.
(g) To the extent that the Escrow Agent is required to deliver Escrow
Shares to Parent hereunder, it shall obtain such shares from the escrow accounts
maintained for the Shareholders on a PRO RATA basis based on the respective
ownership of Escrow Shares set forth on SCHEDULE I hereto. Parent shall cause
the transfer agent for the Parent Common Stock to cooperate with the Escrow
Agent in providing replacement stock certificates for shares of Parent Common
Stock in substitution for those held by the Escrow Agent in order to enable the
Escrow Agent to make the distributions of Escrow Shares required under this
Agreement.
(h) No certificate shall be delivered pursuant to this SECTION 5 unless
it shall have been prepared in good faith by the party delivering such
certificate and represent a bona fide notice for purposes of this Agreement.
6. RELEASE OF ESCROW SHARES. The Escrow Agent shall on May __, 2001
(the "TERMINATION DATE") deliver to each Shareholder any dividends or other
distributions received pursuant to SECTION 3 and a certificate or certificates
evidencing the remaining number of such Shareholder's Escrow Shares, if any,
less that number of Escrow Shares as shall represent (at the Per Share Price,
calculated as of the date of receipt by the Escrow Agent of the Certificate of
Instruction) any amounts designated in Certificates of Instruction received by
the Escrow Agent prior to the Termination Date that have not been canceled in
accordance with paragraph (d), (e) or (f) of SECTION 5. At such time on or
following the Termination Date as all Certificates of Instruction received by
the Escrow Agent prior to the Termination Date have been canceled in accordance
with paragraph (d), (e) or (f) of SECTION 5, the Escrow Agent shall promptly
deliver to each Shareholder the certificate or certificates evidencing such
Shareholder's remaining Escrow Shares, if any, and this Agreement (other than
SECTIONS 7, 8 and 9) shall automatically terminate.
7. DUTIES AND OBLIGATIONS OF THE ESCROW AGENT. The duties and
obligations of the Escrow Agent shall be limited to and determined solely by the
provisions of this Agreement and the certificates delivered in accordance
herewith, and the Escrow Agent is not charged with knowledge of or any duties or
responsibilities in respect of any other agreement or document. In furtherance
and not in limitation of the foregoing:
(i) the Escrow Agent shall be fully protected in relying in good
faith upon any written certification, notice, direction, request, waiver,
consent, receipt or other document (including any such certification,
notice, direction, request, waiver, consent, receipt or other document
delivered by the Representative pursuant to SECTION 5 of this Agreement
purportedly on behalf of the Shareholders) that the Escrow Agent reasonably
believes to be genuine and duly authorized, executed and delivered;
(ii) the Escrow Agent shall not be liable for any error of
judgment, or for any act done or omitted by him, or for any mistake in fact
or law, or for anything that he may do or refrain from doing in connection
herewith; PROVIDED, HOWEVER, that notwithstanding any other provision in
this Agreement, the Escrow Agent shall be liable for its willful misconduct
or gross negligence or breach of this Agreement;
4
(iii) the Escrow Agent may seek the advice of legal counsel
selected with reasonable care in the event of any dispute or question as to
the construction of any of the provisions of this Agreement or its duties
hereunder, and the Escrow Agent shall incur no liability and shall be fully
protected in respect of any action taken, omitted or suffered by it in good
faith in accordance with the opinion of such counsel;
(iv) in the event that the Escrow Agent shall in any instance,
after seeking the advice of legal counsel pursuant to the immediately
preceding clause, in good faith be uncertain as to its duties or rights
hereunder, the Escrow Agent shall be entitled to refrain from taking any
action in that instance and its sole obligation, in addition to those of
its duties hereunder as to which there is no such uncertainty, shall be to
keep safely all property held in escrow until the Escrow Agent shall be
directed otherwise in writing by each party hereto or by a final,
nonappealable order of a court of competent jurisdiction; PROVIDED,
HOWEVER, in the event that the Escrow Agent has not received such written
direction or court order within one hundred eighty (180) calendar days
after requesting the same, the Escrow Agent shall have the right to
interplead Parent and the Shareholders in any court of competent
jurisdiction and request that such court determine his rights and duties
hereunder; and
(v) the Escrow Agent may execute any of its powers or
responsibilities hereunder and exercise any rights hereunder either
directly or by or through agents or attorneys selected with reasonable
care, nothing in this Agreement shall be deemed to impose upon the Escrow
Agent any duty to qualify to do business or to act as fiduciary or
otherwise in any jurisdiction other than the State of New York, and the
Escrow Agent shall not be responsible for and shall not be under a duty to
examine into or pass upon the validity, binding effect, execution or
sufficiency of this Agreement or of any agreement amendatory or
supplemental hereto.
8. COOPERATION. Parent and the Shareholders shall provide to the Escrow
Agent all instruments and documents within their respective powers to provide
that are necessary for the Escrow Agent to perform its duties and
responsibilities hereunder.
9. FEES AND EXPENSES; INDEMNITY. Parent shall pay the fees of the
Escrow Agent for its services hereunder as and when billed by the Escrow Agent,
and each shall reimburse and indemnify the Escrow Agent for, and hold the Escrow
Agent harmless against any loss, damages, cost or expense, including but not
limited to attorneys' fees, reasonably incurred by the Escrow Agent in
connection with the Escrow Agent's performance of its duties and obligations
under this Agreement, as well as the reasonable costs and expenses of defending
against any claim or liability relating to this Agreement; PROVIDED that
notwithstanding the foregoing, Parent shall not be required to indemnify the
Escrow Agent for any such loss, liability, cost or expense arising as a result
of the Escrow Agent's willful misconduct or gross negligence or breach of this
Agreement.
5
10. RESIGNATION AND REMOVAL OF THE ESCROW AGENT.
(a) The Escrow Agent may resign as such not less than thirty (30)
calendar days following the giving of prior written notice thereof to the
Shareholders and Parent. In addition, the Escrow Agent may be removed and
replaced on a date designated in a written instrument signed by the Shareholders
and Parent and delivered to the Escrow Agent. Notwithstanding the foregoing, no
such resignation or removal shall be effective until a successor escrow agent
has acknowledged its appointment as such as provided in paragraph (c) below. In
either event, upon the effective date of such resignation or removal, the Escrow
Agent shall deliver the Escrow Shares and any dividends and other distributions
received in respect thereof and not previously distributed to Parent or the
Shareholders, together with earnings thereon, if any, to such successor escrow
agent, together with such records maintained by the Escrow Agent in connection
with its duties hereunder and other information with respect to the Escrow
Shares as such successor may reasonably request.
(b) If a successor escrow agent shall not have acknowledged its
appointment as such as provided in paragraph (c) below, in the case of a
resignation, prior to the expiration of thirty (30) calendar days following the
date of a notice of resignation or, in the case of a removal, on the date
designated for the Escrow Agent's removal, as the case may be, because the
Shareholders and Parent are unable to agree on a successor escrow agent, or for
any other reason, the Escrow Agent may select a successor escrow agent (which
shall be a depositary institution or trust company with offices in New York, New
York having combined capital and surplus of at least $100 million) and any such
resulting appointment shall be binding upon all of the parties to this
Agreement.
(c) Upon written acknowledgment by a successor escrow agent appointed
in accordance with the foregoing provisions of this Section of its agreement to
serve as escrow agent hereunder and the receipt of the Escrow Shares and
dividends and other distributions received in respect thereof and not previously
distributed to Parent or the Shareholders, together with earnings thereon, if
any, the Escrow Agent shall be fully released and relieved of all duties,
responsibilities and obligations under this Agreement, subject to the proviso
contained in clause (ii) of SECTION 7, and such successor escrow agent shall for
all purposes hereof be the Escrow Agent.
11. NOTICES. All notices, requests and other communications hereunder
must be in writing and will be deemed to have been duly given if delivered
personally or by facsimile transmission or mailed by certified or registered
mail, return receipt requested, to the parties at the following addresses or
facsimile numbers:
If to Parent, to:
XxxXxxx.xxx, Ltd.
00 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxx Xxxxxxxxxx, Esq.
6
with a copy to:
Milbank, Tweed, Xxxxxx & XxXxxx LLP
0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxx X. Xxxxx, Esq.
If to any Shareholder, to the Representative, to:
General Atlantic Partners 60, L.P.
c/o General Atlantic Service Corp.
0 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Facsimile No.: 000-000-0000
Attn: Xxxxxx Xxxxxx
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxx X. Xxxx, Esq.
If to the Escrow Agent, to:
[__________________]
[__________________]
[__________________]
Facsimile No.: [__________________]
Attn: [__________________]
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt if received on a business
day during normal business hours, and if not then received, on the next business
day, and (iii) if delivered by mail in the manner described above to the address
as provided in this Section, be deemed given upon receipt (in each case
regardless of whether such notice, request or other communication is received by
any other Person to whom a copy of such notice is to be delivered pursuant to
this Section). Any party from time to time may change its address, facsimile
number or other information for the purpose of notices to that party by giving
notice specifying such change to the other parties hereto.
12. AMENDMENTS, ETC. This Agreement may be amended or modified, and any
of the terms hereof may be waived, only by a written instrument duly executed by
or on behalf of Parent and the Shareholders and, with respect to any amendment
that would adversely affect the
7
Escrow Agent, the Escrow Agent. No waiver by any party of any term or condition
contained of this Agreement, in any one or more instances, shall be deemed to be
or construed as a waiver of the same or any other term or condition of this
Agreement on any future occasion.
13. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to a contract
executed and performed in such State, without giving effect to the conflicts of
laws principles thereof.
14. BUSINESS DAY. For all purposes of this Agreement, the term
"business day" shall mean a day other than Saturday, Sunday or any day on which
banks located in the State of New York are authorized or obligated to close.
15. MISCELLANEOUS. This Agreement is binding upon and will inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. The headings used in this Agreement have been inserted for convenience
of reference only and do not define or limit the provisions hereof. This
Agreement may be executed in any number of counterparts, each of which will be
deemed an original, but all of which together will constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
XXXXXXX.XXX, LTD.
By:
-------------------------------------
Name:
Title:
8
DOUBLE DIAMOND ASSOCIATES, LLC
By:
-------------------------------------
Name:
Title: Trustee
----------------------------------------
XXXXXXX X. XXXXXXXXX
CERIDIAN CORPORATION
By:
-------------------------------------
Name:
Title:
GENERAL ATLANTIC PARTNERS 48, L.P.
By: General Atlantic Partners, LLC,
its general partner
By:
---------------------------------
Name:
Title:
GAP COINVESTMENT PARTNERS, L.P.
By:
-------------------------------------
Name:
Title:
9
GENERAL ATLANTIC PARTNERS 60, L.P.
By: General Atlantic Partners, LLC,
its general partner
By:
---------------------------------
Name:
Title:
GAP COINVESTMENT PARTNERS II, L.P.
By:
-------------------------------------
Name:
Title:
10
[ESCROW AGENT]
By:
-------------------------------------
Name:
Title:
11
SCHEDULE I
SHAREHOLDER NUMBER OF ESCROW SHARES
ANNEX I
CERTIFICATE OF INSTRUCTION
TO
[----------------------],
AS ESCROW AGENT
The undersigned, XxxXxxx.xxx, Ltd., a Delaware corporation ("PARENT"),
pursuant to Section 5(a) of the Escrow Agreement dated as of May __, 2000 among
Parent, the other individuals and entities signatory thereto (collectively, the
"SHAREHOLDERS") and you (terms defined in said Escrow Agreement have the same
meanings when used herein), hereby:
(a) certifies that (i) Parent or another Indemnified Party has
sent to the Shareholders an Indemnity Notice (as such term is defined in
the Merger Agreement), a copy of which is attached hereto, and (ii) the
amount of $___________ (the "OWED AMOUNT") is payable to the Indemnified
Parties by the Shareholders pursuant to Section 12.01 of the Merger
Agreement by reason of the matter described in such Indemnity Notice;
(b) certifies that the Indemnity Notice has been rendered by
Parent in good faith and that the Shareholders and the Escrow Agent may
rely on such good faith determination; and
(c) instructs you to deliver to Parent certificates evidencing in
the aggregate that number of whole Escrow Shares (ignoring fractions),
valued at the Per Share Price, equal to the Owed Amount (i) within two
business days following the expiration of the Objection Period, unless you
receive an Objection Certificate from the Shareholders prior to the
expiration of the Objection Period or (ii) if you receive an Objection
Certificate within the Objection Period, within two business days following
your receipt of a Resolution Certificate or an Arbitration Certificate.
XXXXXXX.XXX, LTD.
By:
-------------------------------------
Name:
Title:
Dated:____________, ____
ANNEX II
OBJECTION CERTIFICATE
TO
[--------------------],
AS ESCROW AGENT
The undersigned, [__________________________], acting in its capacity
as the Representative pursuant to Section 5(b) of the Escrow Agreement dated as
of May __, 2000 among XxxXxxx.xxx, Ltd., a Delaware corporation ("PARENT"), the
other individuals and entities signatory thereto (collectively, the
"SHAREHOLDERS") and you (terms defined in said Escrow Agreement have the same
meanings when used herein), hereby:
(a) disputes that the Owed Amount referred to in the Certificate
of Instruction dated _________, ____ is payable to the Indemnified Parties
by the Shareholders pursuant to Section 12.01 of the Merger Agreement;
(b) certifies that the undersigned has sent to Parent a written
statement dated ___________, ____, a copy of which is attached hereto,
disputing the liability of the Shareholders to the Indemnified Parties for
the Owed Amount;
(c) objects to your making payment to Parent as provided in such
Certificate of Instruction; and
(d) certifies that this Objection Certificate is being rendered by
the Shareholders in good faith and that Parent and the Escrow Agent may
rely on such good faith determination.
--------------------------------
[Representative]
Dated: _____________, ____
ANNEX III
RESOLUTION CERTIFICATE
TO
[-----------------------],
AS ESCROW AGENT
The undersigned, XxxXxxx.xxx, Ltd., a Delaware corporation ("PARENT"),
and [________________________], acting in its capacity as the Representative
pursuant to Section 5(b) of the Escrow Agreement dated as of May __, 2000 among
Parent, the other individuals and entities signatory thereto (collectively, the
"SHAREHOLDERS") and you (terms defined in said Escrow Agreement have the same
meanings when used herein), hereby:
(a) certify that (i) Parent and the Shareholders have resolved
their dispute as to the matter described in the Certificate of Instruction
dated __________, ____ and the related Objection Certificate dated
___________, ____ and (ii) the final Owed Amount with respect to the matter
described in such Certificates is $______________;
(b) instruct you to deliver to Parent certificates evidencing in
the aggregate that number of whole Escrow Shares (ignoring fractions),
valued at the Per Share Price, equal to the Owed Amount referred to in
clause (ii) of paragraph (a) above within two business days following your
receipt of this Certificate;
(c) agree that the Owed Amount designated in such Certificate of
Instruction, to the extent, if any, it exceeds the Owed Amount referred to
in clause (ii) of paragraph (a) above, shall be deemed not payable by the
Shareholders to the Indemnified Parties and such Certificate of Instruction
is hereby canceled; and
(d) certify that this Resolution Certificate is being rendered by
Parent and the Shareholders in good faith and that the Escrow Agent may
rely on such good faith determination.
XXXXXXX.XXX, LTD.
By:
-------------------------------------
Name:
Title:
-------------------------------
[Representative]
Dated:______________, ____
ANNEX IV
LITIGATION CERTIFICATE
TO
[--------------------],
AS ESCROW AGENT
The undersigned, XxxXxxx.xxx, Ltd., a Delaware corporation ("PARENT"),
pursuant to Section 5(b) of the Escrow Agreement dated as of May __, 2000 among
Parent, the other individuals and entities signatory thereto (collectively, the
"SHAREHOLDERS") and you (terms defined in said Escrow Agreement have the same
meanings when used herein), hereby:
(a) certifies that (i) attached hereto is a final, nonappealable
order of a court of competent jurisdiction resolving the dispute between
Parent and the Shareholders as to the matter described in the Certificate
of Instruction dated ____________, ____ and the related Objection
Certificate dated ____________, ____ and (ii) the final Owed Amount with
respect to the matter described in such Certificates, as provided in such
order, is $______________;
(b) instructs you to deliver to Parent certificates evidencing in
the aggregate that number of whole Escrow Shares (ignoring fractions),
valued at the Per Share Price, equal to the Owed Amount referred to in
clause (ii) of paragraph (a) above, within two business days following your
receipt of this Certificate;
(c) agrees that the Owed Amount designated in such Certificate of
Instruction, to the extent, if any, it exceeds the Owed Amount referred to
in clause (ii) of paragraph (a) above, shall be deemed not payable by the
Shareholders to the Indemnified Parties and such Certificate of Instruction
is hereby canceled; and
(d) certifies that this Litigation Certificate is being rendered
by Parent in good faith and that Parent and the Shareholders and the Escrow
Agent may rely on such good faith determination.
XXXXXXX.XXX, LTD.
By:
-------------------------------------
Name:
Title:
Dated:______________, ____
ANNEX V
PARENT CANCELLATION CERTIFICATE
TO
[-------------------],
AS ESCROW AGENT
The undersigned, XxxXxxx.xxx, Ltd., a Delaware corporation ("PARENT"),
pursuant to Section 5(e) of the Escrow Agreement dated as of May __, 2000 among
Parent, the other individuals and entities signatory thereto (collectively, the
"SHAREHOLDERS") and you (terms defined in said Escrow Agreement have the same
meanings when used herein), hereby:
(a) certifies that (i) it hereby releases its claim against the
Shareholders with respect to [all] [specify portion] of the Owed Amount
designated in the Certificate of Instruction dated _____________, ____ and
(ii) as a result the Owed Amount with respect to such Certificate of
Instruction is $__________;
(b) agrees that such Certificate of Instruction is, to the extent
released as provided in clause (i) of paragraph (a) above, canceled; and
(c) certifies that this Parent Cancellation Certificate is being
rendered by Parent in good faith and that Parent and the Shareholders and
the Escrow Agent may rely on such good faith determination.
XXXXXXX.XXX, LTD.
By:
-------------------------------------
Name:
Title:
Dated:______________, ____
ANNEX VI
SHAREHOLDER CANCELLATION CERTIFICATE
TO
[-----------------------],
AS ESCROW AGENT
The undersigned, [___________________], acting in its capacity as
Representative pursuant to Section 5(f) of the Escrow Agreement dated as of May
__, 2000 among XxxXxxx.xxx, Ltd., a Delaware corporation ("PARENT"), the other
individuals and entities signatory thereto (collectively, the "SHAREHOLDERS")
and you (terms defined in said Escrow Agreement have the same meanings when used
herein), hereby certifies that (i) attached hereto is a final, nonappealable
order of a court of competent jurisdiction resolving the dispute between Parent
and the Shareholders as to the matter described in the Certificate of
Instruction dated ____________, ____ and the related Objection Certificate dated
____________, ____, (ii) as provided in such order, there is no Owed Amount with
respect to the matter described in such Certificate, and (iii) certifies that
this Shareholder Cancellation Certificate is being rendered by the Shareholders
in good faith and that Parent and the Escrow Agent may rely on such good faith
determination.
-----------------------------
[Representative]
Dated: _____________, ____
EXHIBIT C
RESUMIX, INC.
OFFICER'S CERTIFICATE
Resumix, Inc., a Delaware corporation (the "COMPANY"), pursuant to
SECTION 7.03 of the Merger Agreement dated as of April __, 2000 by and among
XxxXxxx.xxx, Ltd., Resumix Acquisition Corp., the Company, Ceridian Corporation,
General Atlantic Partners 48, L.P., GAP Coinvestment Partners, L.P., General
Atlantic Partners 60, L.P., GAP Coinvestment Partners II, L.P., Double Diamond
Associates, LLC and Xxxxxxx X. Xxxxxxxxx (the "MERGER AGREEMENT"; capitalized
terms not defined herein shall have the meanings ascribed to them in the Merger
Agreement) HEREBY CERTIFIES that:
(1) Each of the representations and warranties made by the Company in
the Merger Agreement (other than those made as of a specified date earlier than
the Closing Date) is true and correct, on and as of the Closing Date as though
such representations and warranties were made on and as of the Closing Date, and
any representation or warranty made as of a specified date earlier than the
Closing Date is true and correct on and as of such earlier date, except to the
extent that the failure of any such representation or warranty to be true and
correct as of such date could not, individually or in the aggregate, be
reasonably expected to have a material adverse effect (as such term is limited
in SECTION 7.03 of the Merger Agreement) on the business, operations, financial
condition or results of operations of the Company and its subsidiaries taken as
a whole..
(2) Each of the agreements, covenants and obligations required by the
Merger Agreement to be performed or complied with by the Company at or before
the Closing has been duly performed or complied with in all material respects.
IN WITNESS WHEREOF, the Company has caused this Certificate to be
executed on its behalf by the undersigned on and as of the __ day of May __,
2000.
RESUMIX, INC.
By:
-------------------------------------
Name:
Title:
EXHIBIT D
RESUMIX, INC.
SECRETARY'S CERTIFICATE
I, _________, Secretary of Resumix, Inc., a Delaware corporation (the
"COMPANY"), pursuant to SECTION 8.03 of the Merger Agreement dated as of April
__, 2000 by and among XxxXxxx.xxx, Ltd., Resumix Acquisition Corp., the Company,
Ceridian Corporation, General Atlantic Partners 48, L.P., GAP Coinvestment
Partners, L.P., General Atlantic Partners 60, L.P., GAP Coinvestment Partners
II, L.P., Double Diamond Associates, LLC and Xxxxxxx X. Xxxxxxxxx (the "MERGER
AGREEMENT"; capitalized terms not defined herein shall have the meanings
ascribed to them in the Merger Agreement), DO HEREBY CERTIFY on behalf of the
Company as follows:
(1) Attached hereto as EXHIBIT A is a true, complete and correct copy
of the Restated Certificate of Incorporation of the Company and all amendments
thereto (as so amended, the "CERTIFICATE OF INCORPORATION"), and no amendment to
the Certificate of Incorporation has been authorized or become effective since
the date of the last of such amendments, no amendment or other document relating
to or affecting the Certificate of Incorporation has been filed in the office of
the Secretary of State of the State of Delaware since such date and no action
has been taken by the Company, its shareholders, directors or officers in
contemplation of the filing of any such amendment or other document or in
contemplation of the liquidation or dissolution of the Company.
(2) Attached hereto as EXHIBIT B is a true, complete and correct copy
of the By-Laws of the Company as in full force and effect on the date hereof and
at all times since August 13, 1998.
2
(3) Attached hereto as EXHIBIT C is a true, complete and correct copy
of resolutions adopted by the Board of Directors of the Company with respect to
the Merger Agreement and the Operative Agreements to which it is a party and the
transactions contemplated thereby, which resolutions were duly and validly
adopted at a meeting of the Board of Directors of the Company on __________,
____, at which a quorum was present and acting throughout. All such resolutions
are in full force and effect on the date hereof in the form in which adopted and
no other resolutions have been adopted by the Board of Directors of the Company
or any committee thereof relating to the Merger Agreement and such Operative
Agreements and the transactions contemplated thereby.
(4) Each of the following named individuals is a duly elected or
appointed, qualified and acting officer of the Company who holds, and at all
times since April __, 2000 has held, the offices set opposite such individual's
name, and the signature written opposite the name and title of such officer is
such officer's genuine signature:
[Name] [Title] ______________________________
[Name] [Title] ______________________________
[Name] [Title] ______________________________
[Name] [Title] ______________________________
3
IN WITNESS WHEREOF, the Company has caused this Certificate to be
executed on its behalf by the undersigned on and as of the __ day of May __,
2000.
RESUMIX, INC.
By:
-------------------------------------
Name:
Title:
I, __________, [title of officer] of the Company, DO HEREBY CERTIFY on
behalf of the Company that __________ is the duly elected or appointed,
qualified and acting Secretary of the Company, and the signature set forth above
is the genuine signature of such officer.
-------------------------------------
Name:
Title:
May __, 2000
EXHIBIT E
XXXXXXX.XXX, LTD.
OFFICER'S CERTIFICATE
XxxXxxx.xxx, Ltd., a Delaware corporation ("Parent"), pursuant to
SECTION 8.03 of the Merger Agreement dated as of April __, 2000 by and among
Parent, Resumix Acquisition Corp., a Delaware corporation and wholly owned
subsidiary of Parent ("MERGER SUB"), Resumix, Inc., Ceridian Corporation,
General Atlantic Partners 48, L.P., GAP Coinvestment Partners, L.P., General
Atlantic Partners 60, L.P., GAP Coinvestment Partners II, L.P., Double Diamond
Associates, LLC and Xxxxxxx X. Xxxxxxxxx (the "MERGER AGREEMENT"; capitalized
terms not defined herein shall have the meanings ascribed to them in the Merger
Agreement), HEREBY CERTIFIES that:
(1) Each of the representations and warranties made by Parent and
Merger Sub in the Merger Agreement (other than those made as of a specified date
earlier than the Closing Date) is true and correct, on and as of the Closing
Date as though such representations and warranties were made on and as of the
Closing Date, and any representation or warranty made as of a specified date
earlier than the Closing Date is true and correct on and as of such earlier
date, except to the extent that the failure of any such representation or
warranty to be true and correct as of such date could not, individually or in
the aggregate, be reasonably expected to have a material adverse effect (as such
term is limited in SECTION 8.03 of the Merger Agreement) on the business,
operations, financial condition or results of operations of Parent and its
subsidiaries taken as a whole.
(2) Each of the agreements, covenants and obligations required by the
Merger Agreement to be performed or complied with by Parent at or before the
Closing has been duly performed or complied with in all material respects.
IN WITNESS WHEREOF, Parent has caused this Certificate to be executed
on its behalf by the undersigned on and as of the __ day of May, 2000.
2
XXXXXXX.XXX, LTD.
By:
-------------------------------------
Name:
Title:
EXHIBIT F
XXXXXXX.XXX, LTD.
SECRETARY'S CERTIFICATE
I, __________, Secretary of XxxXxxx.xxx, Ltd., a Delaware corporation
("PARENT"), pursuant to SECTION 8.03 of the Merger Agreement dated as of
April,__ 2000 by and among Parent, Resumix Acquisition Corp, a Delaware
corporation and wholly-owned subsidiary of Parent ("MERGER SUB"), Resumix, Inc.,
Ceridian Corporation, General Atlantic Partners 48, L.P., GAP Coinvestment
Partners, L.P., General Atlantic Partners 60, L.P., GAP Coinvestment Partners
II, L.P., Double Diamond Associates, LLC and Xxxxxxx X. Xxxxxxxxx (the "MERGER
AGREEMENT"), DO HEREBY CERTIFY on behalf of Parent as follows:
(1) Attached hereto as EXHIBIT A is a true, complete and correct copy
of resolutions adopted by the Board of Directors of Parent with respect to the
Merger Agreement and the Operative Agreements to which it is a party and the
transactions contemplated thereby, which resolutions were duly and validly
adopted at a meeting of the Board of Directors of Parent on __________, ____, at
which a quorum was present and acting throughout. All such resolutions are in
full force and effect on the date hereof in the form in which adopted and no
other resolutions have been adopted by the Board of Directors of Parent or any
committee thereof relating to the Merger Agreement and such Operative Agreements
and the transactions contemplated thereby.
(2) Each of the following named individuals is a duly elected or
appointed, qualified and acting officer of Parent who holds, and at all times
since April __, 2000 has held, the office set opposite such individual's name,
and the signature written opposite the name and title of such officer is such
officer's genuine signature:
2
[Name] [Title] ________________________________
[Name] [Title] ________________________________
[Name] [Title] ________________________________
[Name] [Title] ________________________________
IN WITNESS WHEREOF, Parent has caused this Certificate to be executed
on its behalf by the undersigned on and as of the ____ day of _____________, __.
XXXXXXX.XXX, LTD.
By:
-------------------------------------
Name:
Title:
I, __________, [title of officer] of Parent, DO HEREBY CERTIFY on
behalf of Parent that __________ is the duly elected or appointed, qualified and
acting Secretary of Parent, and the signature set forth above is the genuine
signature of such officer.
-------------------------------------
Name:
Title:
May __, 2000
