EXHIBIT 1
Agreement of Merger
dated November 8, 1999
among
Oracle Corporation
DM Acquisition Corp.
and
Carleton Corporation
TABLE OF CONTENTS
PAGE
Section 1 The Merger.................................................. 1
1.1 The Closing................................................. 1
1.2 Effective Date of Merger.................................... 1
1.3 Effects of Merger........................................... 1
Section 2 Representations and Warranties of the Company............... 1
2.1 Capital Stock............................................... 1
2.2 Organization; Good Standing................................. 3
2.3 Authority; Enforceability................................... 3
2.4 No Violation................................................ 3
2.5 Subsidiaries, Other Interests............................... 4
2.6 Financial Statements........................................ 4
(a) Financial Statements.................................. 4
(b) Certain Indebtedness.................................. 4
(c) Absence of Certain Liabilities........................ 4
(d) Absence of Certain Changes............................ 5
2.7 Taxes....................................................... 5
2.8 Title to Properties......................................... 6
2.9 Inventories................................................. 7
2.10 Accounts Receivable......................................... 7
2.11 Leases...................................................... 7
2.12 Facilities, Equipment....................................... 7
2.13 Insurance................................................... 7
2.14 Employment and Benefit Matters.............................. 8
2.15 Contracts................................................... 10
2.16 Officers and Directors...................................... 10
2.17 Corporate Documents......................................... 10
2.18 Legal Proceedings........................................... 10
2.19 Compliance with Instruments, Orders and Legal Requirements.. 11
2.20 Permits..................................................... 11
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TABLE OF CONTENTS
(Continued)
PAGE
2.21 Intellectual Property................................................... 11
2.22 Capital Expenditures.................................................... 15
2.23 Environmental Matters................................................... 15
2.24 Illegal Payments........................................................ 15
2.25 SEC Information......................................................... 15
2.26 Board of Directors Approval; Fairness Opinion........................... 16
2.27 Representations......................................................... 16
Section 3 Representations and Warranties of Buyer................................. 16
3.1 Organization, Standing of Buyer and Buyer Subsidiary.................... 16
3.2 Authority; Enforceability............................................... 16
3.3 Litigation.............................................................. 17
Section 4 Conditions to Obligations of Buyer and Buyer Subsidiary at Closing...... 17
4.1 Representations and Warranties.......................................... 17
4.2 Proxy Statement......................................................... 17
4.3 Closing Certificate..................................................... 17
4.4 Performance............................................................. 18
4.5 Stockholder Approval; Dissenting Notices................................ 18
4.6 Third-Party Action...................................................... 18
4.7 Opinion of Counsel...................................................... 18
4.8 Transactional Litigation................................................ 18
4.9 Interim Events.......................................................... 18
4.10 Management Changes, Technical Employees................................. 19
4.11 Warrants................................................................ 19
4.12 Employment and Noncompetition Agreements................................ 19
4.13 Transaction Expenses.................................................... 19
4.14 Corporate and Other Proceedings......................................... 19
Section 5 Conditions to Company's Obligations at Closing.......................... 19
5.1 Representations and Warranties.......................................... 19
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TABLE OF CONTENTS
(Continued)
PAGE
5.2 Closing Certificate.......................................................... 19
5.3 Performance.................................................................. 19
5.4 Stockholder Approval......................................................... 19
5.5 Third-Party Action........................................................... 20
5.6 Transactional Litigation..................................................... 20
5.7 Corporate and Other Proceedings.............................................. 20
Section 6 Covenants of Company, Subsidiary and Buyer................................... 20
6.1 Non-Disclosure............................................................... 20
6.2 Nonsurvival of Representations and Warranties................................ 20
6.3 Termination of this Agreement; Termination Fee............................... 21
6.4 Reasonable Business Efforts, No Inconsistent Action.......................... 21
6.5 Access....................................................................... 21
6.6 No Solicitation or Negotiation............................................... 21
6.7 Interim Financial Information................................................ 24
6.8 Interim Conduct of Business.................................................. 24
6.9 Section 338 Election; Tax Status............................................. 24
6.10 Option to Purchase........................................................... 25
6.11 SEC Reports.................................................................. 28
6.12 Stock Option Plan, Stock Purchase Plan....................................... 28
6.13 Notice of Certain Events..................................................... 28
6.14 Takeover Statutes............................................................ 29
6.15 Pay-Off...................................................................... 29
Section 7 Miscellaneous................................................................ 29
7.1 No Brokers, Finders.......................................................... 29
(a) Company................................................................ 29
(b) Buyer.................................................................. 30
7.2 Expenses..................................................................... 30
7.3 Complete Agreement; Waiver and Modification; No Third Party Beneficiaries.... 30
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TABLE OF CONTENTS
(Continued)
PAGE
7.4 Notices.................................................... 30
7.5 Law Governing.............................................. 31
7.6 Headings; References; "Hereof;" Interpretation............. 31
7.7 Successors and Assigns..................................... 31
7.8 Counterparts, Separate Signature Pages..................... 32
7.9 Severability............................................... 32
Section 8 Glossary................................................... 32
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Agreement of Merger
This Agreement of Merger dated November 8, 1999 is entered into by
Oracle Corporation, a Delaware corporation (the "Buyer"), DM Acquisition Corp.,
a Minnesota corporation and wholly owned subsidiary of the Buyer ("Buyer
Subsidiary"), and Carleton Corporation, a Minnesota corporation (the "Company").
The Company is a developer and marketer of enterprise data warehousing and
custom data management software, including without limitation the Pure-View
customer data management solution (the "Business"). The Company is the successor
by merger to Apertus Technologies, Inc., a Minnesota corporation, and Carleton
Corporation, a Massachusetts corporation ("Old Carleton").
Capitalized terms used herein have the meanings stated in Section 8.
The Buyer and the Company desire that the Buyer acquire the Company
through a merger of Buyer Subsidiary with and into the Company (the "Merger"),
and the Company desires to consummate the Merger, under the terms of this
Agreement.
Therefore, in consideration of the mutual agreements contained herein,
the parties hereby agree as follows:
Section 1 The Merger
1.1 Closing. The closing (the "Closing") under this Agreement shall
take place at the offices of Xxxxxx & Xxxxxxx LLP within three business days
after the satisfaction (or waiver by the party entitled to waive) of all
conditions stated in Sections 4 and 5, or at such other place or on such other
date as the parties may agree in writing.
1.2 Effective Date of Merger. The Merger shall take effect upon filing
of articles of merger with respect to the Plan of Merger in the form attached as
Exhibit A (the "Plan of Merger") with the Minnesota Secretary of State in
accordance with Minnesota law (the "Effective Time").
1.3 Effects of Merger. The effects of the Merger are set forth in the
Plan of Merger.
Section 2 Representations and Warranties of the Company
2.1 Capital Stock.
(a) The authorized and outstanding capital stock of the Company, as of
November 3, 1999, is as follows:
Shares
Designation of Class Authorized Shares Outstanding
Common Stock, par value $.25 per share 6,000,000 3,349,804
There is no capital stock of the Company authorized or outstanding except as
stated in this Section 2.1(a). The outstanding Stock Rights of the Company, as
of November 3, 1999, are as follows:
Class of Shares Subject to Stock
Designation of Stock Right Stock Right
Options under 1990 Long Term Incentive Common 333,675
Plan
Options under the 1994 Stock Option Plan of Common 38,509
Old Carleton
Warrants assumed on acquisition of Old Common 26,469
Carleton
Warrants issued to Silicon Valley Bank Common 47,059
Rights under Amended and Restated Rights Common One-half of the number
Agreement dated as of September 4, 1996 (the of Common Stock out-
"Rights") standing from time to
time
There are no Stock Rights outstanding with respect to the Company except as set
forth in this Section 2.1(a), and the terms of such Stock Rights are as set
forth in Schedule 2.1. Except as disclosed in Schedule 2.1, the Company is not a
party to any stockholders agreement, registration rights agreement, repurchase
agreement or other Contract with respect to capital stock or Stock Right issued
or to be issued by it.
(b) All of the issued and outstanding capital stock of the Company has
been duly and validly authorized and issued and is fully paid and
non-assessable, and has not been issued in violation of any preemptive or
similar rights of any stockholder or any applicable securities law. Except as
disclosed in Schedule 2.1, no Person has any right to require the Company to
redeem, purchase or otherwise reacquire any capital stock issued by the Company
or any Stock Rights with respect to any capital stock issued by the Company.
There are no preemptive or similar rights in respect of any capital stock of the
Company except as set forth in Schedule 2.1.
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(c) Except for the Rights, the Company has never declared or paid any
dividend or made any distribution in respect of any of its capital stock or any
Stock Rights with respect thereto. Since June 27, 1999, except as set forth in
Schedule 2.1, the Company has not directly or indirectly redeemed, purchased or
otherwise acquired any of the capital stock issued by it or any Stock Rights
with respect thereto.
2.2 Organization; Good Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of Minnesota and
has all requisite corporate power and authority to own, lease and operate its
Properties and to conduct the Business as currently conducted. Schedule 2.2 sets
forth (i) each jurisdiction in which the Company is qualified to do business as
a foreign corporation, (ii) the jurisdiction of incorporation of each Subsidiary
and (iii) each jurisdiction in which a Subsidiary is qualified to do business as
a foreign corporation. Except as set forth in Schedule 2.2, the Company and each
Subsidiary is in good standing in each jurisdiction shown in Schedule 2.2, and
neither the Company nor any Subsidiary is required to qualify to do business as
a foreign corporation in any other jurisdiction in which the failure to so
qualify would have a Material Adverse Effect. Neither the Company nor any
Subsidiary is a partner in any general or limited partnership or a member in any
limited liability company.
2.3 Authority; Enforceability. The Company has all requisite power and
authority under applicable corporate law to execute and deliver this Agreement
and to perform the transactions contemplated hereby and, subject to approval of
the Plan of Merger by the stockholders of the Company as contemplated hereby
(the "Stockholder Approval"), to consummate the Merger. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all requisite corporate action on the part
of the Company (subject to the Stockholder Approval), and no other approval on
the part of the Company is necessary under applicable corporate law for the
execution, delivery and performance of this Agreement. This Agreement
constitutes a legal, valid and binding obligation of the Company, enforceable in
accordance with its terms, subject to general limitations on the availability of
equitable remedies and the effect of bankruptcy, insolvency, reorganization and
other laws of general application affecting the enforcement of creditors'
rights.
2.4 No Violation. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby do not and will not violate
or conflict with the articles of incorporation or by-laws of the Company or any
Subsidiary, or, to the knowledge of the Company, violate any Legal Requirement
or Order applicable to the Company or any Subsidiary. The execution and delivery
of this Agreement and, except as set forth in Schedule 2.4, the consummation of
the transactions contemplated hereby do not and will not (i) require any
Third-Party Action with respect to the Company or any Subsidiary under, or (ii)
conflict with or constitute a default under, or result in the acceleration or
right of acceleration of any obligations, or any termination or right of
termination under, (x) as of the date hereof, any Contract, (y) as of the
Effective Time, any Contract (other than a Designated Contract) where such
failure to secure Third-Party Action, conflict, default, acceleration or
termination would have a Material Adverse Effect or (z) as of the Effective
Time, any Designated Contract. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby do not and will not
result in the creation or imposition of any Lien, claim, charge, restriction,
equity or encumbrance of any kind upon or give any Person any interest or right
in or with respect to any of the Properties, assets, business or Contracts of
the Company or any Subsidiary pursuant to a Designated Contract. The execution
and delivery of this
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Agreement and the consummation of the transactions contemplated hereby do not
and will not result in the creation or imposition of any material Lien, claim,
charge, restriction, equity or encumbrance of any kind upon or give any Person
any interest or right in or with respect to any of the Properties, assets,
business or Contracts of the Company or any Subsidiary due to anything other
than a Designated Contract.
2.5 Subsidiaries, Other Interests. Except as set forth in Schedule
2.5, neither the Company nor any Subsidiary beneficially owns, directly or
indirectly, any Equity Interest in or debt obligation (except as a creditor in
the ordinary course of business and except for debt obligations of the Company
or a Subsidiary as specified in Schedule 2.5) of, any Person. The owner shown in
Schedule 2.5 owns the interest shown free and clear of all Third-Party Rights.
2.6 Financial Statements.
(a) Financial Statements. Except as set forth in Schedule 2.6(a), the
audited consolidated balance sheets and consolidated statements of operations
and retained earnings and of cash flows for the Company at and for each of the
years ended March 28, 1999 (the "Last Fiscal Year-End"), March 29, 1998 and
March 30, 1997 (the "Audited Statements") and the unaudited consolidated balance
sheets and consolidated statements of operations and cash flows for the Company
at and for the period ended June 27, 1999 (the "Interim Statements" and,
together with the Audited Statements, the "Financial Statements") fairly present
the consolidated financial condition of the Company at the dates indicated and
the consolidated results of operations and cash flows of the Company for the
periods indicated in accordance with GAAP consistently applied throughout the
periods indicated (except as stated therein and, in the case of the Interim
Statements, the omission of certain footnote disclosures and subject to normal
year-end adjustments).
(b) Certain Indebtedness. Schedule 2.6(b) sets forth all obligations of
the Company and its Subsidiaries with respect to borrowed money, debt
securities, capitalized leases and the deferred payment of the purchase price of
property or services over an original term of 6 months or more, and the Property
of the Company, if any, subject to a Lien to secure any of such obligations.
Schedule 2.6(b) also sets forth a complete and accurate summary of all
adjustments and offsets made by the Company to the notes issued in the
acquisition of Old Carleton and of all responses thereto, if any. The
adjustments and offsets summarized therein were made in compliance with the
applicable provisions of the agreements under which such notes were issued.
(c) Absence of Certain Liabilities. Neither the Company nor any
Subsidiary has any liability or obligation of any nature, whether absolute,
accrued, contingent or otherwise, arising out of acts or omissions heretofore
occurring, or circumstances currently or heretofore existing, except: (i) as
expressly set forth in this Agreement (including without limitation disclosures
in the Schedules hereto); (ii) as accrued in the balance sheet included in the
Interim Statements (the "Interim Balance Sheet"); (iii) for liabilities and
obligations incurred since the date of the Interim Balance Sheet in the ordinary
course of business consistent in nature and amount with past practice; and (iv)
liabilities and obligations of a kind not required to be accrued in a balance
sheet at the date hereof prepared in accordance with GAAP which individually (or
in the aggregate for related events, transactions, defects or circumstances)
will not subject the Company or any Subsidiary to obligations in excess of
$50,000.
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(d) Absence of Certain Changes. Since the date of the Interim Balance
Sheet, except as set forth in Schedule 2.6(d):
(i) The Company and each Subsidiary has operated their
consolidated business in the ordinary course.
(ii) There has been no change or changes which, individually
or in the aggregate, has or have had or is or are reasonably likely to
have a Material Adverse Effect.
(iii) There has not been any damage, destruction or
condemnation known to the Company with respect to Property having an
aggregate net book value on the Company's consolidated books in excess
of $50,000, net of any insurance recoveries.
(iv) There has not been any material change in the
accounting methods, practices or principles of the Company.
(v) Neither the Company nor any Subsidiary has sold,
transferred or otherwise disposed of (or agreed or committed to sell,
transfer or otherwise dispose of) any Property other than the sale of
inventory in the ordinary course, or canceled, compromised, released or
assigned any debt or claim in its favor, where the aggregate amount of
such sales, transfers, dispositions, cancellations, compromises,
releases or assignments exceeds $50,000.
(vi) Neither the Company nor any Subsidiary has instituted,
settled or agreed to settle any litigation, action or proceeding before
any Governmental Agency.
(vii) Neither the Company nor any Subsidiary has assumed,
guaranteed, endorsed or otherwise become responsible (or otherwise
agreed to become responsible) for the obligations of any other Person,
except for the endorsement of negotiable instruments in the ordinary
course of business.
(viii) Neither the Company nor any Subsidiary has granted (or
agreed or committed to grant) any increase in compensation or fringe
benefits other than normal salary increases consistent with prior
periods.
(ix) Neither the Company nor any Subsidiary has entered into
any licensing or other Contract with regard to the acquisition or
disposition of any material Intellectual Property other than non-
exclusive licenses granted in the ordinary course of business
consistent with past practice.
2.7 Taxes. Except as set forth in Schedule 2.7:
(a) The Company and each Subsidiary has properly completed and filed,
within the time and in the manner prescribed by law, all Tax returns and other
documents required to be filed in respect of all Taxes, and all such returns and
other documents are true, correct and complete. The Company has furnished to the
Buyer copies of all income Tax returns of the Company for the past three years.
The Company and each Subsidiary has, within the time and in the manner
prescribed by law, paid all Taxes that are due and payable. The Company has
established reserves on its consolidated books that are at least equal to those
required by GAAP.
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(b) (i) None of such returns contained a disclosure statement
under Section 6662 of the Code or any similar provision of foreign
law;
(ii) The Company has not received written notice from any
federal or foreign taxing authority asserting any deficiency against
the Company or any Subsidiary or claim for additional Taxes in
connection therewith, other than any deficiency or claim which has been
previously settled or for which appropriate reserves are included in
the Interim Statements;
(iii) There is no pending action, audit, proceeding or
investigation with respect to the assessment or collection of federal
or foreign Taxes or a claim for refund made by the Company or any
Subsidiary with respect to federal or foreign Taxes previously paid;
(iv) All amounts that are required to be collected or
withheld by the Company and each Subsidiary with respect to federal or
foreign Taxes have been duly collected or withheld, and all such
amounts that are required to be remitted to any federal or foreign
taxing authority have been duly remitted;
(v) No audit has been conducted of any federal or foreign
income tax return filed by the Company or any Subsidiary. The time
during which such returns remain open for examination has expired in
accordance with applicable statute and regulations, except for those
returns for which the normally applicable statutory/regulatory period
has not yet elapsed;
(vi) Neither the Company nor any Subsidiary has requested
nor been granted any currently effective waiver or extension of any
statute of limitations with respect to the assessment or filing of any
federal or foreign Tax or return with respect thereto ;
(vii) No consent has been filed under Section 341(f) of the
Code with respect to the Company or any Subsidiary;
(viii) The Company is not required to include in income any
adjustment pursuant to Section 481(a) of the Code (or similar
provisions of foreign laws or regulations) by reason of a change in
accounting method nor does the Company have any knowledge that the
Internal Revenue Service (or other federal or foreign taxing authority)
has proposed, or is considering, any such change in accounting method;
and
(ix) Neither the Company nor any Subsidiary is a party to or
bound by nor has any continuing obligation under any tax sharing or
similar agreement or arrangement with any Person.
2.8 Title to Properties.
(a) Neither the Company nor any Subsidiary owns any real Property.
(b) Schedule 2.8(b) is a true and complete summary based on the books
and records of the Company of all items of personal Property owned by the
Company or any Subsidiary with a consolidated net book value at the Last Fiscal
Year-End in excess of $5,000 per item or, in the case
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of items located at the Company's Billerica, MA facility, with an estimated
replacement cost in excess of $10,000 per item.
(c) Except as set forth in Schedule 2.8(c), the Company and each
Subsidiary has good title to all tangible personal Property, in each case free
and clear of all Third-Party Rights.
(d) The Company and its Subsidiaries, taken together, own all material
items of non-inventory tangible and intangible personal Property that were owned
as of the Last Fiscal Year-End and used in generating the revenue shown in the
audited consolidated statement of operations of the Company for the fiscal year
ending on the Last Fiscal Year-End, subject to any sales or dispositions of
tangible personal Property since the Last Fiscal Year-End in the ordinary course
of business.
2.9 Inventories. Except as set forth in Schedule 2.9, since the Last
Fiscal Year-End, all sales of inventory by the Company and its Subsidiaries have
been made in the ordinary course of business and no inventory has been pledged
as collateral.
2.10 Accounts Receivable. The consolidated accounts receivable of the
Company and its Subsidiaries (i) are bona fide and arose from valid sales in the
ordinary course of business in material conformity with all applicable Legal
Requirements, (ii) are valid and binding obligations of the debtors requiring no
further performance by the Company or any Subsidiary, and (iii) subject to the
allowance for doubtful accounts receivable in the Interim Balance Sheet, are
fully collectible and not subject to any offsets or counterclaims and do not
represent guaranteed sale, sell-or-return transactions or any other similar
understanding. Except as shown on Schedule 2.6(b), no accounts receivable have
been pledged as collateral to any Person. The amounts shown for accounts
receivable in the Financial Statements reflect an allowance for doubtful
accounts receivable in accordance with GAAP.
2.11 Leases. Schedule 2.11 lists all leases, rental agreements,
conditional sales contracts and other similar Contracts under which the Company
or any Subsidiary leases (as lessor or lessee) any real or personal Property
with rental payments exceeding $10,000 per year (collectively, the "Disclosable
Leases"). All Disclosable Leases are, in all material respects, valid and
enforceable by the Company in accordance with their terms. Neither the Company
nor any Subsidiary nor, to the knowledge of the Company, any other party to any
Disclosable Lease is in material breach thereof. The Company and each Subsidiary
enjoys peaceable possession of all real estate premises subject to Disclosable
Leases to which it is a party and to all personal Property subject to
Disclosable Leases to which it is a party.
2.12 Facilities, Equipment. The Company owns or leases all material
land, buildings and equipment used in the operation of its business. The Company
has not received any notice of any material violation of any Legal Requirement
or Order relating to the Company's facilities which has not been corrected, and
no facility of the Company is in material violation of any Legal Requirement or
Order.
2.13 Insurance. Schedule 2.13 lists and describes briefly all binders
and policies of liability, theft, life, fire and other forms of insurance and
surety bonds, insuring the Company or any Subsidiary or their respective
Properties, assets and business as of the date hereof. Except as noted in
Schedule 2.13, all listed policies and binders insure on an occurrence, rather
than claims-made,
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basis. All policies and binders listed in Schedule 2.13 are valid and in good
standing and in full force and effect and the premiums have been paid when due.
Except for any claims set forth in Schedule 2.13, there are no outstanding
unpaid claims under such policy or binder, and, except as set forth in Schedule
2.13, neither the Company nor any Subsidiary has received any notice of
cancellation, general disclaimer of liability or non-renewal of any such policy
or binder.
2.14 Employment and Benefit Matters.
(a) Schedule 2.14(a) lists each of the following for each employee of
the Company and each Subsidiary: name, hire date and current salary. None of the
employees listed on Schedule 2.14(a) has given the Company or such Subsidiary
notice of his or her intention to resign his or her position with the Company or
such Subsidiary and neither the Company nor such Subsidiary has any present
intention to terminate such employees.
(b) Schedule 2.14(b) lists all of the following items which are
applicable to the Company or any Subsidiary: (i) employment Contracts with any
employee, officer or director; and (ii) Contracts or arrangements with any
Person providing for bonuses, profit sharing payments, deferred compensation,
stock options, stock purchase rights, retainer, consulting, incentive, severance
pay or retirement benefits, life, medical or other insurance, payments triggered
by a change in control or any other employee benefits or any other payments,
"fringe benefits" or perquisites which are not terminable at will without
liability to the Company or any Subsidiary or which are subject to ERISA. The
contracts or arrangements referred to in the foregoing clause (ii) are herein
called "Benefit Plans."
(c) Neither the Company nor any of its ERISA Affiliates has any union
contracts, collective bargaining, union or labor agreements or other Contract
with any group of employees, labor union or employee representative(s), nor has
the Company or any ERISA Affiliate ever participated in or contributed to any
single employer defined benefit plan or multi-employer plan within the meaning
of ERISA Section 3(37), nor is the Company currently engaged in any labor
negotiations, excepting minor grievances, nor is the Company the subject of any
union organization effort. The Company and each Subsidiary is in material
compliance with applicable Legal Requirements respecting employment and
employment practices and terms and conditions of employment, including without
limitation health and safety and wages and hours. No complaint or other
proceeding by or on behalf of any current or former employee or group of
employees is pending against the Company or any Subsidiary before any
Governmental Agency, and no claim by any current or former employee or group of
employees that the Company or any Subsidiary is not in compliance with any Legal
Requirement relating to employees or employment or that any compensation owing
has not been paid is pending against the Company or any Subsidiary. There is no
labor dispute, strike, slowdown or work stoppage pending or threatened against
the Company or any Subsidiary.
(d) True and correct copies of each Benefit Plan listed in Schedule
2.14(b) that is subject to ERISA (a "Company ERISA Plan") and related trust
agreements, insurance contracts, and summary descriptions have been delivered or
made available to the Buyer by the Company. The Company has also delivered or
made available to the Buyer a copy of the most recently filed IRS Form 5500,
with attached financial statements and accountant's opinions, if applicable, for
each Company ERISA Plan. The Company has also delivered or made available to the
Buyer a copy of, in the case of each Company ERISA Plan intended to qualify
under Section 401(a) of the Code, the most recent
8
Internal Revenue Service letter as to its qualification under Section 401(a) of
the Code. Nothing has occurred prior to or since the issuance of such letters to
cause the loss of qualification under the Code of any of such plans.
(e) With respect to each Company ERISA Plan, (i) there has been no
"prohibited transaction," as such term is defined in Section 406 of ERISA and
Section 4975 of the Code, (ii) each Company ERISA Plan has been administered in
accordance with its terms and in material compliance with all Legal Requirements
(including without limitation ERISA and the Code), (iii) the Company (or, as
appropriate, an ERISA Affiliate) has prepared in good faith and timely filed all
requisite governmental reports in true and correct form and has properly and
timely filed and distributed or posted all notices and reports to participants
and beneficiaries required to be filed, distributed or posted, (iv) no suit,
administrative proceeding, action, litigation or claim has been brought or
asserted, or to the knowledge of the Company is threatened, against any Company
ERISA Plan or against the Company with respect to any Company ERISA Plan,
including without limitation any audit or inquiry by the Internal Revenue
Service or United States Department of Labor, (v) the Company and each ERISA
Affiliate have performed all material obligations required to be performed by
them under, and are not in any material respect in default under or in violation
of, and have no knowledge of any material default or violation of, any Company
ERISA Plan, (vi) neither the Company nor any ERISA Affiliate is subject to any
liability or penalty under Sections 4976 through 4980 of the Code or Title I of
ERISA, (vii) all contributions required to be made by the Company or any ERISA
Affiliate have been made on or before their due dates, (viii) no "reportable
event" within the meaning of Section 4043 of ERISA (excluding any such event for
which the 30-day notice requirement has been waived under the regulations to
Section 4043 of ERISA) nor any event described in Section 4062, 4063 or 4041 of
ERISA has occurred, (ix) no Company ERISA Plan is covered by, and neither the
Company nor any ERISA Affiliate has incurred or expects to incur any material
liability under, Title IV of ERISA or Section 412 of the Code, and (x) neither
the Company nor any ERISA Affiliate is a party to, or has made any contribution
to or otherwise incurred any obligation under, any "multi-employer plan" as
defined in Section 3(37) of ERISA.
(f) The Company has complied in all material respects with (i) the
applicable health care continuation and notice provisions of the Consolidated
Omnibus Budget Reconciliation Act of 1985 ("COBRA") and the proposed regulations
thereunder, (ii) the applicable requirements of the Family and Medical Leave Act
of 1993 and the regulations thereunder, and (iii) the applicable requirements of
the Health Insurance Portability and Accountability Act of 1996 and the
temporary regulations thereunder. The Company has no material obligations under
COBRA with respect to any former employees or qualifying beneficiaries
thereunder.
(g) There has been no amendment to, written interpretation or
announcement (whether or not written) by the Company or other ERISA Affiliate
relating to, or change in participation or coverage under, any Benefit Plan
which would materially increase the expense of maintaining such Plan above the
level of expense incurred with respect to that Plan for the most recent fiscal
year included in the Audited Statements.
(h) Schedule 2.14(h) contains a true and correct list of each employee,
former employee, director or consultant who holds any stock option as of
November 3, 1999, together with (i) the number of shares of Company Common Stock
subject thereto, (ii) the date of grant, (iii) the extent to which such stock
option is currently vested and, to the extent such stock option is not fully
vested,
9
the vesting schedule, (iv) the exercise price, (v) whether such stock option is
intended to qualify as an incentive stock option within the meaning of Section
422(b) of the Code (an "ISO"), and (vi) the expiration date of such stock
option. Schedule 2.14(h) also sets forth the aggregate number of ISO's and
nonqualified stock options outstanding as of the date hereof.
(i) Neither the Company nor any Subsidiary is a party to any Contract
or plan, including, without limitation, any stock option plan, stock
appreciation right plan or stock purchase plan, as to which any benefits will be
increased, or the vesting of benefits will be accelerated, by the occurrence of
any of the transactions contemplated by this Agreement or the value of any
benefits will be calculated on the basis of any of the transactions contemplated
by this Agreement.
(j) Except as disclosed in Schedule 2.14(j), the Company and its ERISA
Affiliates do not maintain any plans providing benefits within the meaning of
Section 3(1) of ERISA (other than group health plan continuation coverage under
Section 601 of ERISA and 4980B(f) of the Code) to former employees or retirees.
2.15 Contracts. Except as shown on Schedules 2.11 and 2.15, and except
for Contracts fully performed or terminable at will without liability to the
Company, neither the Company nor any Subsidiary is a party to any Contract which
contemplates performance by the Company or such Subsidiary during a remaining
period of more than 180 days or involves remaining commitments for sale or
purchase in excess of $25,000. True and complete copies of each Contract
disclosable on Schedule 2.15 (a "Disclosable Contract") have been delivered to
the Buyer. Each Disclosable Contract is, in all material respects, valid and
enforceable by the Company in accordance with its terms. Neither the Company nor
any Subsidiary nor, to the knowledge of the Company, any other party to any
Disclosable Contract is in material breach thereof.
2.16 Officers and Directors. Schedule 2.16 is a true and complete list
of:
(a) the names and addresses of each of the Company's and each
Subsidiaries' officers and directors;
(b) the name of each bank or other financial institution in which the
Company or any Subsidiary has an account, deposit or safe deposit box and the
names of all persons authorized to draw thereon or to have access thereto; and
(c) the name of each bank or other financial institution in which the
Company or any Subsidiary has a line of credit or other loan facility.
2.17 Corporate Documents. The Company has furnished or made available
to the Buyer or its representatives true, correct and complete copies of (i) the
articles or certificate of incorporation and by-laws of the Company and each
Subsidiary, (ii) the minute books of the Company and each Subsidiary containing
all records required to be set forth of all proceedings, consents, actions and
meetings of the stockholders and board of directors of the Company or such
Subsidiary; and (iii) all material Permits and Orders with respect to the
Company and any Subsidiary.
2.18 Legal Proceedings.
10
(a) There is no action, suit, proceeding or investigation pending in
any court or before any arbitrator or before or by any Governmental Agency
against the Company or any Subsidiary or any of their respective Properties or
businesses, and to the knowledge of the Company, there is no such action, suit,
proceeding or investigation threatened.
(b) Neither the Company nor any Subsidiary has ever been notified in
writing that it has been subject to an audit, compliance review, investigation
or like contract review by the U.S. General Services Administration or any other
Governmental Entity or agent thereof in connection with any government contract
(a "Government Audit"). To the Company's knowledge, no Government Audit is
threatened and no basis exists for a finding of noncompliance with any material
provision of any government contract or for a material refund of any amounts
paid or owed to the Company or any Subsidiary by any Governmental Entity
pursuant to such government contract.
(c) Except as listed in Schedule 2.18(c), no claim has been made or
threatened against the Company or a Subsidiary under the agreements applicable
to the sale of the Company's former Internet Solutions Division to Computer
Network Technology Corporation or its affiliate.
2.19 Compliance with Instruments, Orders and Legal Requirements.
Neither the Company nor any Subsidiary is in material violation of, or in
default in any material respect with respect to, any term or provision of its
articles or certificate of incorporation or bylaws, or, to the knowledge of the
Company, any Order or any Legal Requirement applicable to the Company or such
Subsidiary.
2.20 Permits. The Company and each Subsidiary holds all Permits
material to the conduct their consolidated business as and where now conducted.
To the knowledge of the Company, there is not pending nor threatened any
proceedings to terminate, revoke, limit or impair any material Permit.
2.21 Intellectual Property.
(a) "Company Intellectual Property" means all Intellectual Property,
including without limitation the Pure-View customer data management solution,
used in the business of the Company and its Subsidiaries as currently conducted
or as presently planned to be conducted or embedded in the products currently
being provided or marketed, or presently proposed to be provided or marketed, by
the Company or a Subsidiary to its customers, other than Third-Party
Intellectual Property, and all Intellectual Property owned by the Company or a
Subsidiary. Except as set forth on Schedule 2.21(a) and except for Third-Party
Intellectual Property licensed to the Company or a Subsidiary pursuant to an
agreement listed in Schedule 2.21(c)(ii), the Company or a Subsidiary owns,
solely and exclusively (subject to the right of other Persons who have
independently developed know-how or trade secrets similar to the know-how or
trade secrets included in the Company Intellectual Property to use such
independently-developed know-how and trade secrets), and free and clear of any
Third-Party Right, all title to and rights in all Intellectual Property that is
used in the business of the Company and its Subsidiaries as currently conducted
or as presently planned to be conducted, including without limitation, the
development, licensing and use of the Pure-View customer data management
solution. "Intellectual Property" means patents, patent rights, trademarks,
trademark rights, trade names, trade name rights, service marks, copyright
11
registrations, copyrights, and any applications for any of the foregoing, net
lists, schematics, industrial models, inventions, technology, know-how, trade
secrets, computer software programs or applications (in both source code and
object code form), development documentation, programming tools, data, technical
information, and tangible or intangible proprietary information or material.
"Third-Party Intellectual Property" means Intellectual Property owned in whole
or in part by any Person other than the Company or a Subsidiary.
(b) Schedule 2.21(b) lists all patents, patent applications,
trademarks, trade names, service marks and copyrights included in the Company
Intellectual Property which have been registered, issued or applied for and the
jurisdictions in which such Company Intellectual Property right has been issued,
registered or applied for.
(c) Schedule 2.21(c)(i) lists all licenses, sublicenses and other
agreements, written or unwritten, to which the Company or any Subsidiary is a
party and pursuant to which any Person is authorized to use, resell, sublicense
or market or distribute any product currently marketed or presently planned to
be marketed by the Company or a Subsidiary or any component of any such product.
Schedule 2.21(c)(ii) lists all written, and all material unwritten, licenses,
sublicenses and other agreements to which the Company or any Subsidiary is a
party and pursuant to which the Company or any Subsidiary is authorized to use,
resell or distribute any Third-Party Intellectual Property, including without
limitation software, opensource, freeware, shareware and hardware, which are
incorporated in or are a part of any products which the Company or any
Subsidiary has sold, resold, licensed or sublicensed, or which is material to
the current operations of the Company and its Subsidiaries, other than (in the
case of Third-Party Intellectual Property used internally only)
readily-obtainable standard products with wide retail distribution. The Company
and each Subsidiary has, and at the relevant times in the past had, all
necessary rights to resell or distribute any hardware and software of a third
party which it resells or distributes or has resold or distributed. Neither the
Company nor any Subsidiary is in material violation of any license, sublicense
or agreement described in Schedule 2.21(c)(i) or (ii). To the knowledge of the
Company, neither the Company nor any Subsidiary, or any of the products or
operations of either, is in material violation of or materially infringes any
Third-Party Intellectual Property. Except as set forth on Schedule 2.21(c)(i) or
(ii), neither the Company nor any Subsidiary has received any claim that it has
lost or will lose any rights of the Company or any Subsidiary under any licenses
to Third-Party Intellectual Property to which the Company or such Subsidiary is
a party. The execution and delivery of this Agreement by the Company and, except
as set forth in Schedule 2.21(c)(ii), the consummation of the transactions
contemplated hereby will neither cause the Company or any Subsidiary to be in
violation or default under any such license, sublicense or agreement nor entitle
any other party to any such license, sublicense or agreement to terminate or
modify such license, sublicense or agreement. Except as listed on Schedule
2.21(c)(i), neither the Company nor any Subsidiary has assigned or licensed to
any third party any right, title or interest in the Company Intellectual
Property. Except as listed on Schedule 2.21(c)(ii), neither the Company nor any
Subsidiary is contractually obligated to pay any compensation to any third party
for the use of the Company Intellectual Property or the Third-Party Intellectual
Property.
(d) To the Company's knowledge there is no material unauthorized use,
disclosure, infringement or misappropriation of any Company Intellectual
Property or any Third-Party Intellectual Property licensed by or through the
Company by any third party, including without limitation any employee or former
employee of the Company or any Subsidiary. Neither the
12
Company nor any Subsidiary has entered into any agreement to indemnify any other
person against any charge of infringement of any Third-Party Intellectual
Property, other than indemnification provisions contained in purchase orders
arising in the ordinary course of business.
(e) To the Company's knowledge, all patents, registered trademarks,
registered service marks and registered copyrights held by the Company and its
Subsidiaries are valid and subsisting. To the Company's knowledge, there is no
assertion or claim (or basis therefor) challenging the validity of any Company
Intellectual Property. Neither the Company nor any Subsidiary has been sued in
any suit, action or proceeding, or otherwise notified of any claim, which
involves a claim of infringement of any patent, trademark, service xxxx,
copyright or violation of any trade secret or other proprietary right of any
third party. Neither the conduct of the business of the Company and its
Subsidiaries as currently conducted nor the manufacture, sale, licensing or use
of any of the products of the Company and its Subsidiaries as now manufactured,
sold or licensed or used, infringes on or conflicts with, in any way, any
trademark, trademark right, trade name, trade name right, service xxxx or
copyright, or, to the Company's knowledge, any patent, patent right, industrial
model or invention, of any third party that individually or in the aggregate has
or is reasonably likely to have a Material Adverse Effect. To the Company's
knowledge and except as set forth on Schedule 2.21(e), no third party is
challenging the ownership by the Company nor any Subsidiary, or the validity or
effectiveness of, any of the Company Intellectual Property. Neither the Company
nor any Subsidiary has brought any action, suit or proceeding for infringement
of Company Intellectual Property or breach of any license or agreement involving
Company Intellectual Property against any third party. There are no pending, or
to the Company's knowledge, threatened interference, re-examinations,
oppositions or nullities involving any patents, patent rights or applications
therefor of the Company or any Subsidiary. Except as set forth on Schedule
2.21(e), to the Company's knowledge, there is no breach or violation by a third
party of, or actual or threatened, loss of rights under, any licenses to which
the Company is a party.
(f) Except as set forth in Schedule 2.21(f), the Company or a
Subsidiary has secured written assignments from all current and former
consultants and employees who contributed to the creation or development of the
Company Intellectual Property currently being provided or marketed, or presently
planned to be provided or marketed, to customers or currently being used by the
Company or a Subsidiary of the rights to such contributions that the Company or
such Subsidiary does not already own by operation of law, recognizing the
Company's or Subsidiary's ownership of all such Company Intellectual Property
and agreeing to hold such of it as is not protected by patents, patent
applications or copyright ("Confidential Information") in confidence and not to
use any Confidential Information except in connection with such consultant's or
employee's work for the Company or a Subsidiary. No current or former consultant
or employee has claimed any rights to, interest in or right to compensation for
the use of any of the Company Intellectual Property currently being provided or
marketed, or presently planned to be provided or marketed, to customers or
currently being used by the Company or a Subsidiary. The work done all current
and former consultants listed in Schedule 2.21(f) consisted of producing code to
design furnished by the Company or a Subsidiary, and not software design, and
any right assertable by such consultants would not materially interfere with the
Company's provision, marketing or use, or presently proposed provision,
marketing or use, of such code.
(g) The Company and each of its Subsidiaries has taken all commercially
reasonable steps to protect and preserve the confidentiality of all Confidential
Information. Except as set forth on
13
Schedule 2.21(g), all use, disclosure or appropriation of Confidential
Information by or to a third party has been pursuant to the terms of a written
confidentiality or nondisclosure agreement between the Company or any Subsidiary
and such third party. Schedule 2.21(g) lists all such agreements currently in
effect.
(h) Schedule 2.21(h) lists (including names, addresses, contact names,
telephone numbers and termination date and next renewal date) all Contracts or
other arrangements currently in effect pursuant to which the Company or any
Subsidiary is obligated to provide installation, maintenance or other support
services (collectively, the "Support Agreements"). Except for any nonstandard
maintenance agreements specified as such in Schedule 2.21(h), all of the Support
Agreements are in all material respects in the form of the license agreement
identified as the standard maintenance agreement set forth in Schedule 2.21(h).
The versions of the products currently supported by the Company are set forth in
Schedule 2.21(h).
(i) There are no material defects in the Company's products, and there
are no material errors in any documentation, specifications, manuals, user
guides, promotional material, internal notes and memos, technical documentation,
drawings, flow charts, diagrams, source language statements, demo disks,
benchmark test results, and other written materials related to, associated with
or used or produced in the development of the Company's or its Subsidiaries'
products, which defects or errors have or are reasonably like to have,
individually or in the aggregate, a Material Adverse Effect. To the Company's
knowledge, the current versions of Pure-View, including, without limitation, any
time-and-date-related codes, data entry features and internal subroutines
thereof, (a) automatically accommodate the change in the date from December 31,
1999 to January 1, 2000 without negatively affecting Pure-View's performance;
and (b) accurately accept, reflect and calculate all dates that are relevant to
Pure-View's performance, when used with products that properly exchange date
data with Pure-View.
(j) Schedule 2.21(j) lists, as of the date hereof, all written
agreements or other arrangements under which the Company or any Subsidiary has
provided or agreed to provide source code of Pure-View or any other Company
Intellectual Property to any third Person, whether pursuant to escrow
arrangements or otherwise.
(k) The Company has made available to the Buyer copies of the Company's
standard forms of end-user license. Schedule 2.21(k) sets forth all end-user
licenses currently in effect for products currently marketed by the Company or a
Subsidiary and any component of any such product.
(l) No government funding or university or college facilities were used
in the development of Pure-View and Pure-View was not developed pursuant to any
contract or other agreement with any person or entity except pursuant to
contracts or agreements listed in Schedule 2.21(l).
(m) The Company has no customer warranty obligations currently in
effect other than as set forth in end-user agreements listed in Schedule
2.21(k). The Company categorizes software problems reported by its or its
Subsidiaries' customers into priority 1 items (software is inoperative;
inability to use has a critical impact on customer's operations), priority 2
items (software is partially inoperative and inoperative portion is considered
severely restrictive), priority 3 items (software is usable with some limited
functions; error condition is not critical to continued operations) and priority
4 items (software is usable; error condition is cosmetic or trivial). Schedule
2.21(m) lists all
14
currently pending priority 1, 2 and 3 items related to products currently or
previously marketed by the Company or a Subsidiary and the nature thereof that
are pending or were made within the past twelve months. Except as set forth in
Schedule 2.21(m), to the knowledge of the Company, the Company has not made any
material oral or written representations or warranties with respect to its
products or services.
2.22 Capital Expenditures. Schedule 2.22 sets forth, by nature and
amount, all budgeted capital expenditures of the Company and its Subsidiaries
for which commitments have been or are budgeted to be made, or for which
payments or current liabilities have been made or incurred or are budgeted to be
made or incurred, after the Last Fiscal Year-End in excess of $5,000.
2.23 Environmental Matters. There are no Hazardous Materials used or
present at any location used by the Company or a Subsidiary or any predecessor
of either in the conduct of the Business, except for any Hazardous Materials
constituting normal office supplies. To the knowledge of the Company, no
location currently or previously used by the Company or a Subsidiary or any
predecessor of either is contaminated by any Hazardous Material or was
previously used for any purpose other than office space. There are no
environmental materials or conditions, including on-site or off-site disposal or
releases of Hazardous Materials that could reasonably be expected to have a
Material Adverse Effect. To the knowledge of the Company, no event has occurred
and no activity has been or is being conducted by the Company, a Subsidiary or
any other Person which has resulted or could reasonably result in contamination
of any location currently or previously used by the Company or a Subsidiary or
any predecessor of either by any Hazardous Material. Neither the Company, any
Subsidiary nor any predecessor of either has received any written communication
from any Governmental Entity alleging that the Company, Subsidiary or
predecessor or any premises currently or previously occupied by any of such
Persons is contaminated by any Hazardous Materials or in violation of any
Environmental Requirement. To the knowledge of the Company, no Government Agency
has commenced any investigation or proceeding with respect to the contamination
of any location currently or previously used by the Company or a Subsidiary or
any predecessor of either by any Hazardous Material.
2.24 Illegal Payments. To the best knowledge the Company, none of the
Company, any Subsidiary or any director, officer, employee, or agent of the
Company or any Subsidiary has, directly or indirectly, paid or delivered any
fee, commission, or other sum of money or item of property however characterized
to any broker, finder, agent, government official, or other person, in the
United States or any other country, in any manner related to the business or
operations of the Company or any Subsidiary, which the Company, any Subsidiary
or any such director, officer, employee, or agent knows or has reason to believe
to have been illegal under any law.
2.25 SEC Information. Except as set forth in Schedule 2.25, as of their
respective filing dates (except as thereafter amended) all documents that the
Company has filed with the SEC (the "Company SEC Documents") have complied in
all material respects with the applicable requirements of the Act or the
Exchange Act, and none of the Company SEC Documents has contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading except to
the extent corrected by a subsequently filed Company SEC Document filed prior to
the date hereof.
15
2.26 Board of Directors Approval; Fairness Opinion.
(a) The Board of Directors of the Company has unanimously approved
this Agreement and the Plan of Merger and unanimously recommended this Agreement
and the Plan of Merger to the Company's stockholders. Such approval and
recommendation have not been modified or withdrawn and are in full force and
effect on the date hereof. The Amended and Restated Rights Agreement dated as of
September 4, 1996 has been duly amended to exempt the Merger and the other
transactions contemplated by this Agreement from the operation of such Agreement
and, accordingly, Section 13 of such Agreement does not apply to the Merger. All
Rights will expire automatically upon the consummation of the Merger. The
Company's financial adviser, Xxxxxxxxx Summit Securities, LLC, has rendered its
opinion to the Board of Directors of the Company that the consideration to be
received in the Merger is fair to the Company's stockholders from a financial
point of view. Prior to the Company's entry into this Agreement, each of the
Company's officers and directors has granted the Buyer an irrevocable proxy to
vote all Shares beneficially owned by such officer or director in favor of the
Merger.
(b) The transactions contemplated by this Agreement (i) are not
subject to the "fair price," "moratorium," "control share acquisition" or other
similar statute (a "Takeover Statute") of any jurisdiction other than the State
of Minnesota. None of the transactions contemplated by this Agreement (including
without limitation the proxies referred to in Section 2.26(a)) involve a
"control share acquisition" within the meaning of Section 302A.671 of the
Minnesota Business Corporation Act. A committee of the Board of Directors of the
Company formed pursuant to Section 302A.673(d) of such Act has unanimously
approved the transactions contemplated by this Agreement, and the restriction of
Section 306A.673(a) of such Act accordingly does not apply. There are no other
Takeover Statutes of the State of Minnesota applicable to the Company or any
Subsidiary.
2.27 Representations. No representation or warranty by the Company in
this Agreement (including without limitation the Schedules and Exhibits attached
hereto), or in any document furnished by the Company at the Closing pursuant
hereto contains any untrue statement of a material fact or omits to state a fact
necessary to make the statements contained in such representation or warranty
not misleading.
Section 3 Representations and Warranties of Buyer
The Buyer hereby represents and warrants to the Company that, on and as
of the date hereof:
3.1 Organization, Standing of Buyer and Buyer Subsidiary. The Buyer is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. Buyer Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of the State of Minnesota.
The Buyer and Buyer Subsidiary have full power and authority under applicable
corporate law to own, lease and operate their Properties and to carry on the
business in which they are engaged.
3.2 Authority; Enforceability. The Buyer and Buyer Subsidiary have all
necessary power and authority under applicable corporate law to execute, deliver
and perform their obligations under this Agreement. The execution, delivery and
performance of this Agreement by the Buyer and
16
Buyer Subsidiary has been duly authorized by all necessary action under
applicable corporate law. This Agreement constitutes a legal, valid and binding
obligation of the Buyer and Buyer Subsidiary, enforceable in accordance with its
terms, subject to general limitations on the availability of equitable remedies
and the effect of bankruptcy, insolvency, reorganization and other laws of
general application affecting the enforcement of creditors' rights. The
execution, delivery and performance of this Agreement by the Buyer and
Subsidiary and the consummation by the Buyer and Buyer Subsidiary of all of the
transactions contemplated hereby, (x) do not require any Third-Party Action
relating to the Buyer or Subsidiary except those listed on Schedule 3.2, (y) do
not violate any Legal Requirement or Order applicable to the Buyer or Buyer
Subsidiary and (z) do not conflict with or constitute a default (with or without
the giving of notice or the passage of time or both) under, or result in any
acceleration or right of acceleration of any obligations under, any Contract to
which the Buyer or Buyer Subsidiary is a party, where, in each case, the absence
of such Third-Party Action or such violation, conflict, default or acceleration
would in any way adversely affect the transactions contemplated hereby.
3.3 Litigation. There are no claims, actions, suits or other
proceedings pending, or to the knowledge of the Buyer, threatened, at law or in
equity, by or before any Governmental Agency or any arbitrator against the Buyer
which could reasonably be expected to have an adverse effect on the ability of
the Buyer to perform its obligations under this Agreement.
Section 4 Conditions to Obligations of Buyer and Buyer Subsidiary at Closing
The obligations of the Buyer and Buyer Subsidiary hereunder to be
performed at the Closing are subject to the satisfaction at or prior to the
Closing of the following conditions, except for any condition the Buyer may
waive in writing in accordance with Section 7.3.
4.1 Representations and Warranties. The representations and warranties
contained in Section 2 shall have been true in all material respects on the date
of this Agreement and shall be true in all material respects at and as of
immediately prior to the Closing with the same effect as though made at and as
of immediately prior to the Closing. The updating of Schedules to disclose any
changes in the underlying matters disclosed therein occurring from the date
hereof to the Effective Time, which changes arise only in the ordinary course of
business as currently conducted and do not involve a reasonable possibility of a
material loss to or restriction on the Company and its Subsidiaries taken as a
whole or a Material Adverse Effect, shall not constitute a failure of the
condition set forth in this Section 4.1.
4.2 Proxy Statement. The Proxy Statement shall comply as to form in
all material respects with the applicable requirements of the Exchange Act and
the rules and regulations promulgated thereunder, and shall not, at the time of
(i) first mailing thereof or (ii) the stockholders' meeting to be held in
connection with the Merger, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, except that this condition shall not apply with
respect to information supplied by the Buyer or any affiliates or
representatives of the Buyer for inclusion in the Proxy Statement.
4.3 Closing Certificate. The Company shall have delivered to the Buyer
its certificate dated the date of the Closing that the conditions specified in
Sections 4.1 and 4.2 are satisfied. Such
17
certificate shall be deemed a representation and warranty of the Company under
Section 2 for all purposes of this Agreement.
4.4 Performance. The Company shall have performed and complied in all
material respects with all covenants required herein to be performed or complied
with by it on or before the Closing.
4.5 Stockholder Approval, Dissenting Notices. The Stockholder Approval
shall have been given, and notices of intent to dissent under Section 302A.473.3
of the Minnesota Business Corporation Act shall not have been filed with respect
to more than 10% of the outstanding Shares immediately before the Effective
Time.
4.6 Third-Party Action. All of the following actions shall have been
taken:
(a) All Third-Party Action required under the Designated
Contracts in order to consummate the Closing on the terms hereof shall have been
taken.
(b) All Third-Party Action required (other than under the
Designated Contracts) in order to consummate the Closing on the terms hereof,
other than any such Third-Party Actions which in the aggregate would not have a
Material Adverse Effect, shall have been taken.
(c) Merant, successor to Intersolv, Inc., shall have renewed the
Intersolv Driver Distributor License Agreement dated December 11, 1996, as
amended, for a term continuing through at least December 31, 2000.
(d) Computer Network Technology Corporation shall have agreed,
in form and substance reasonably satisfactory to the Buyer, that the
restrictions of the Non-Competition Agreement dated October 31, 1997 between it
and the Company do not apply to the Buyer and that the Company has no further
obligation or liability, contingent or absolute, with respect to the Italian
litigation referred to in Schedule 2.18(c) and any other claims, and the
consideration for such agreement shall not exceed the release of the $60,000
plus interest being held in escrow as described in Schedule 2.18(c).
4.7 Opinion of Counsel. The Buyer shall have received from Xxxxxx &
Xxxxxxx, LLP, counsel to the Company, an opinion dated the date of the Closing,
in form and substance substantially as set forth in Exhibit B.
4.8 Transactional Litigation. No action, suit or proceeding before any
Governmental Agency shall have been commenced and not dismissed, and no
investigation by any Governmental Agency shall have been commenced or overtly
threatened, against the Company, the Buyer, Subsidiary, or any of their
respective principals, officers, directors or shareholders seeking to restrain,
prevent or change the transactions contemplated hereby or questioning the
validity or legality of any of such transactions or seeking damages in
connection with any of such transactions.
4.9 Interim Events. None of the events listed in Sections 6.8(a)
through (h) shall have occurred without the Buyer's written consent.
18
4.10 Management Changes, Technical Employees. No change in the Chief
Executive Officer, Executive Vice President Sales, Vice President Marketing,
Vice President Engineering or Vice President Professional Services of the
Company shall have occurred from the date hereof, and not less than 80% of the
Company's employees listed on Schedule 4.10 shall have indicated to the Buyer,
in form reasonably satisfactory to the Buyer, their intention to continue their
employment with the Company or the Buyer on substantially their current terms
following the Merger.
4.11 Warrants. All issued and outstanding warrants of the Company shall
have been exercised and/or canceled for an amount not to exceed the number of
Shares subject thereto times the excess, if any, of the Merger Consideration (as
defined in the Plan of Merger) over the per-Share exercise price stated therein.
4.12 Employment and Noncompetition Agreements. The individuals
designated in Schedule 4.12 shall have entered into (i) employment agreements
with the Buyer in form satisfactory to the Buyer, in replacement of the
employment agreements, if any, currently in effect between each of them and the
Company and (ii) noncompetition agreements with the Buyer substantially in the
form attached as Exhibit C.
4.13 Transaction Expenses. All legal fees and other transaction
expenses incurred by the Company in conjunction with the Merger shall have been
disclosed to the Buyer and the Buyer shall not have reasonably objected thereto.
4.14 Corporate and Other Proceedings. All corporate and other
proceedings on the part of the Company in connection with the transactions to be
consummated at the Closing, and all documents and instruments incident to such
transactions, shall be reasonably satisfactory in substance and form to the
Buyer.
Section 5 Conditions to Company's Obligations at Closing
The obligations of the Company hereunder to be performed at the Closing
are subject to the satisfaction at or prior to the Closing of the following
conditions, except for any condition the Company may waive in accordance with
Section 7.3.
5.1 Representations and Warranties. The representations and warranties
of the Buyer contained in Section 3 shall have been true in all material
respects on the date of this Agreement and shall be true in all material
respects at and as of immediately prior to the Closing with the same effect as
though made at and as of immediately prior to the Closing.
5.2 Closing Certificate. The Buyer shall have delivered to the Company
a certificate dated the date of the Closing that the conditions specified in
Section 5.1 are satisfied. Such certificate shall be deemed a representation and
warranty of the Buyer under Section 3 for all purposes of this Agreement.
5.3 Performance. The Buyer shall have performed and complied in all
material respects with all covenants required herein to be performed or complied
with by the Buyer on or before the Closing.
5.4 Stockholder Approval. The Stockholder Approval shall have been
given.
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5.5 Third-Party Action. All Third-Party Action required in order to
consummate the Closing on the terms hereof, other than any the absence of which
in the aggregate would not have a material effect on the transactions
contemplated hereby, shall have been taken.
5.6 Transactional Litigation. No action, suit or proceeding before any
Governmental Agency shall have been commenced, and no investigation by any
Governmental Agency shall have been commenced or overtly threatened, against the
Company, the Buyer, Buyer Subsidiary or any of their respective principals,
officers, directors or stockholders seeking to restrain, prevent or change the
transactions contemplated hereby or questioning the validity or legality of any
of such transactions or seeking damages in connection with any of such
transactions.
5.7 Corporate and Other Proceedings. All corporate and other
proceedings on the part of the Buyer and Buyer Subsidiary in connection with the
transactions to be consummated at the Closing, and all documents and instruments
incident to such transactions, shall be reasonably satisfactory in substance and
form to the Company.
Section 6 Covenants of Company, Subsidiary and Buyer
6.1 Non-Disclosure. Each party agrees not to divulge or communicate,
or use for any purpose other than evaluating this transaction or exercising
rights as a party hereto, any information or materials concerning this
Agreement, the negotiation between the parties hereto and the transactions
contemplated hereby, except to the extent that such information (v) is or
hereafter becomes lawfully obtainable from other sources, (w) is independently
developed by the party without use of any of such information, (x) is required
to be disclosed to a Governmental Agency having jurisdiction over the party or
its Affiliates, (y) is otherwise required by law to be disclosed or (z) is
disclosed following a waiver in writing from the other parties. Promptly after
the date hereof and after the Effective Time, the Buyer and the Company will
issue a mutually agreeable press release concerning the transactions
contemplated hereby. The parties hereto will consult and cooperate with each
other and agree upon the terms and substance of all press releases,
announcements and public statements with respect to this Agreement and the
Merger, provided, however, that such consultation and cooperation shall not
interfere with any obligation of either party hereto to disclose any information
as required by applicable law. Any press release or other announcement by any
party with respect to the Merger will be subject to the consent and approval of
the other party, which consent or approval will not be unreasonably withheld.
The parties also hereby ratify and confirm the Non-Disclosure Agreement dated
September 22, 1999, which shall continue in effect.
6.2 Nonsurvival of Representations and Warranties. The representations
and warranties of the Company set forth in this Agreement will expire at the
Effective Time, and the Surviving Corporation (as defined in the Plan of Merger)
shall have no liability with respect to any representation or warranty and shall
not be subject to any contribution, indemnity or similar claims with respect
thereto by any Person. However, nothing in this Section 6.2 will relieve any
Person from liability for his, her or its knowing personal fraud.
20
6.3 Termination of this Agreement; Termination Fees.
(a) If any condition of the Closing stated in Section 4 is not
satisfied on or before March 31, 2000, then, provided the Buyer is not in
material default hereunder, the Buyer may at any time thereafter terminate any
further obligations under this Agreement by giving written notice thereof to the
Company. If any condition of the Closing stated in Section 5 is not satisfied on
or before such date, then, provided the Company is not in material default
hereunder, the Company may at any time thereafter terminate any further
obligations under this Agreement by giving written notice thereof to the Buyer.
This Agreement may be so terminated, or terminated by mutual agreement of the
parties upon the authorization of their respective boards of directors,
notwithstanding approval of this Agreement by the stockholders of any or all
parties.
(b) In addition, the Board of Directors of the Company may terminate
this Agreement pursuant to Section 6.6(d) in the circumstances there specified
if, simultaneously with such termination, the Company pays the Buyer $390,000 by
wire transfer of immediately available funds.
(c) In the event the Board of Directors of the Company withdraws or
modifies its approval or recommendation of the Merger or approves or recommends
a Superior Proposal pursuant to Section 6.6(d), or the Merger is voted down by
the Company's stockholders, or this Agreement is terminated by any party prior
to the Effective Time after the date specified in Section 6.3(a), or if this
Agreement is terminated by the Buyer due to a material breach hereof by the
Company, and in any such case a Third-Party Transaction is announced within 12
months after such withdrawal, modification, approval, recommendation, vote or
termination which is thereafter consummated (or is consummated within such
12-month period, irrespective of any announcement), the Company will,
simultaneously with such consummation, pay the Buyer $390,000 by wire transfer
of immediately available funds.
(d) In the event the Board of Directors of the Company withdraws or
modifies its approval or recommendation of the Merger or approves or recommends
a Superior Proposal pursuant to Section 6.6(d), or the Merger is voted down by
the Company's stockholders, the Buyer may, at any time thereafter, at its sole
option by notice given to the Company, terminate any obligation on its or
Subsidiary's part to consummate the Merger. Any such termination will not affect
the Buyer's rights under Section 6.3(c), or, in the case of breach by the
Company, be in lieu of or adversely affect in any way any right or remedy
otherwise available to the Buyer.
(e) Any termination pursuant to this Section 6.3 will not, however,
terminate or otherwise affect the obligations of the parties under Sections 6.1,
7.1 or 7.2.
6.4 Reasonable Business Efforts, No Inconsistent Action. Each party
will use its reasonable business efforts to cause the conditions over which it
has control to be satisfied on or before the Closing. No party will take any
action which will foreseeably result in the nonsatisfaction of any condition
stated in Section 4 or 5 on or before the Closing.
6.5 Access. Between the date of this Agreement and the Closing or any
earlier termination of this Agreement in accordance with its terms, the Company
will (i) give the Buyer and its authorized representatives access to its books,
records, Properties, officers, attorneys and accountants and permit the Buyer to
make inspections and copies of such books and records, and
21
(ii) furnish the Buyer with such financial information and operating data and
other information with respect to its business and Properties, and to discuss
with the Buyer and its authorized representative its affairs, all as the Buyer
may from time to time reasonably request for the purposes of this Agreement,
during normal office hours. Any on-site visit shall be subject to reasonable
advance notice and to being accompanied by an officer or designated employee of
the Company. No information furnished to the Buyer pursuant to this Section 6.5
or otherwise known to the Buyer shall affect any representation, warranty or
condition in this Agreement.
6.6 No Solicitation or Negotiation.
(a) Until the earlier of the termination of this Agreement pursuant to
its terms or the Effective Time, neither the Company nor any Subsidiary nor any
representative of the Company or any Subsidiary shall, directly or indirectly,
take any action to (i) encourage, solicit or initiate the submission of any
Acquisition Proposal or any inquiries with respect thereto, (ii) enter into any
agreement for or relating to a Third-Party Transaction, or (iii) participate in
any way in discussions or negotiations with, or furnish any non-public
information to, any Person in connection with any Acquisition Proposal.
Notwithstanding any other provision of this Section 6.6(a), the Company may,
prior to the Stockholder Approval, in response to an unsolicited bona fide
written offer or proposal made by a third party which is reasonably likely to
lead to a Superior Proposal, provide non-public information to or have
discussions or negotiations with such third party, if and only to the extent
that the Board of Directors has determined in good faith, after receiving the
advice of its outside counsel, that such action is necessary in order for the
Board of Directors to comply with its fiduciary duties to the Company's
stockholders under applicable law. The Company will immediately communicate to
the Buyer the receipt of any third party solicitation, proposal or bona fide
inquiry that the Company, any Subsidiary or any representative of the Company or
any Subsidiary may receive in respect of any such transaction, or of any request
for such information, including in each case a copy thereof and all other
particulars thereof, and keep the Buyer fully apprised of all developments
therein on a current basis, and consider in good faith any counterproposals
which the Buyer, in its sole discretion, elects to make.
(b) "Acquisition Proposal" means any proposed Acquisition Transaction.
"Acquisition Transaction" means any (i) merger, consolidation or similar
transaction involving the Company, (ii) sale, lease or other disposition
directly or indirectly by merger, consolidation, share exchange or otherwise of
any assets of the Company or its subsidiaries representing 15% or more of the
consolidated assets of the Company and its subsidiaries, (iii) issue, sale or
other disposition of (including by way of merger, consolidation, share exchange
or any similar transaction) securities (or options, rights or warrants to
purchase, or securities convertible into, such securities) representing 15% or
more of the votes attached to the outstanding securities of the Company, (iv)
transaction in which any person shall acquire Beneficial Ownership or the right
to acquire Beneficial Ownership, or any Group shall have been formed which has
Beneficial Ownership or has the right to acquire Beneficial Ownership, of 15% or
more of the outstanding shares of common stock of the Company, (v)
recapitalization, restructuring, liquidation, dissolution or other similar type
of transaction with respect to the Company or any of its subsidiaries, or (vi)
transaction which is similar in form, substance or purpose to any of the
foregoing transactions. "Third-Party Transaction" shall mean an Acquisition
Transaction with a party unrelated to the Buyer. "Beneficial Ownership" and
"Group" shall have the meanings stated in Regulation 13D-G under the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
22
(c) The Company will take all action necessary in accordance with
applicable law and its articles of incorporation and by-laws to convene a
meeting of its stockholders as promptly as practicable to consider and vote upon
the Merger and to secure the Stockholder Approval, including without limitation
the preparation of a proxy statement (the "Proxy Statement," which term shall
include all amendments and supplement thereto). The Proxy Statement shall comply
as to form in all material respects with the applicable requirements of the
Exchange Act and the rules and regulations promulgated thereunder, and shall
not, at the time of (i) first mailing thereof or (ii) such stockholders'
meeting, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except that the Company shall not be responsible for information
supplied by the Buyer or any affiliates or representatives of the Buyer for
inclusion in the Proxy Statement. The Company (i) shall promptly prepare and
file with the SEC, use all reasonable efforts to have cleared by the SEC and
thereafter mail to its stockholders as promptly as practicable the Proxy
Statement and all other proxy materials for such meeting, (ii) shall notify the
Buyer of the receipt of any comments of the SEC with respect to the Proxy
Statement and of any requests by the SEC for any amendment or supplement thereto
or for additional information and shall promptly provide the Buyer copies of all
correspondence between the Company or any representative of the Company and the
SEC and (iii) shall give the Buyer and its counsel the opportunity to review the
Proxy Statement prior to its being filed with the SEC and shall give the Buyer
and its counsel the opportunity to review all amendments and supplements to the
Proxy Statement and all responses to requests for additional information and
replies to comments prior to their being filed with, or sent to, the SEC.
(d) The Board of Directors of the Company shall recommend and declare
advisable to its stockholders such approval and the Company shall take all
lawful action to solicit, and use all best efforts to obtain, approval of its
stockholders, and neither the Board of Directors of the Company nor any
committee of such Board of Directors shall (i) withdraw or modify the approval
or recommendation by such Board of Directors or such committee of the Merger,
(ii) approve or recommend any Acquisition Proposal other than the Merger, or
(iii) cause the Company to enter into any letter of intent, agreement in
principle, acquisition agreement or other similar agreement with respect to any
Acquisition Proposal other than the Merger. Notwithstanding the foregoing, the
Board of Directors of the Company may, prior to the Stockholder Approval,
withdraw or modify its approval or recommendation of the Merger, approve or
recommend a Superior Proposal or terminate this Agreement in order to
simultaneously enter into a binding agreement with respect to a Third-Party
Transaction that constitutes a Superior Proposal, but in each case subject to
its compliance with Section 6.3(b) or (c), as applicable, if and only to the
extent that both (i) the Buyer has been given at least five days written notice
of the Company's intent to do so and (ii) the Board of Directors of the Company
has determined in good faith, after receiving the advice of its outside counsel,
that such action is necessary in order for the Board of Directors to comply with
its fiduciary duties to stockholders under applicable law. A "Superior Proposal"
means any bona fide written Acquisition Proposal, the terms of which the Board
of Directors of the Company determines in its good faith judgment, based on the
advice of its financial advisor, to be more favorable to the Company's
stockholders than the Merger and to be already financed or readily financeable.
(e) Nothing in this Section 6.6 shall prohibit the Company from taking
and disclosing to its stockholders a position as contemplated by SEC Rule
14e-2(a), provided that neither the Company
23
nor its Board of Directors nor any committee of its Board of Directors shall
approve or recommend any Third-Party Proposal except as permitted by
Section 6.6(d).
6.7 Interim Financial Information. The Company will supply to the
Buyer unaudited consolidated monthly financial statements within 30 business
days of the end of each month ending between the date of the Interim Balance
Sheet and the Closing or any earlier termination of this Agreement in accordance
with its terms, prepared on a basis consistent with the unaudited consolidated
financial statements for the preceding months. For purposes of these statements,
employee bonuses and similar expenses may be accrued based on actual results for
the year to date and budgeted results for the balance of the year.
6.8 Interim Conduct of Business. From the date of this Agreement until
the Closing or any earlier termination of this Agreement in accordance with its
terms, unless approved by the Buyer in writing, the Company will operate its
business consistently with past practice and in the ordinary course of business,
and will not:
(a) merge or consolidate with or agree to merge or consolidate
with, or sell or agree to sell all or substantially all of its Property
to, or purchase or agree to purchase all or substantially all of the
Property of, or otherwise acquire, any other Person or a division
thereof, except as provided in this Agreement;
(b) amend its articles of incorporation or by-laws;
(c) make any changes in its accounting methods, principles or
practices, except as required by GAAP;
(d) sell, consume or otherwise dispose of any Property, except
in the ordinary course of business consistent with past practices;
(e) authorize for issuance, issue, sell or deliver any
additional shares of its capital stock of any class or any securities
or obligations convertible into shares of its capital stock or issue or
grant any option, warrant or other right to purchase any shares of its
capital stock of any class, other than, in each case, the issuance of
Common Stock pursuant to the exercise of the options and warrants (but
not the Rights) listed in Section 2.1(a);
(f) declare any dividend on, make any distribution with
respect to, or redeem or repurchase, its capital stock except under
existing repurchase agreements or obligations as set forth in
Schedule 2.1;
(g) modify, amend or terminate any Benefit Plans, except as
required under Legal Requirements or any Disclosable Contract; or
(h) authorize or enter into an agreement to do any of the
foregoing.
6.9 Section 338 Election; Tax Status. The parties agree that the Buyer
may make an election under Section 338(a) of the Code with respect to the
Merger. Each party has reviewed the income and other Tax aspects of the
structure of the Merger with its own professional advisers, and
24
no party or representative of a party shall have any obligation or
responsibility to any other party with respect thereto.
6.10 Option to Purchase.
(a) The Company hereby irrevocably grants the Buyer the right (the
"Option"), at the Buyer's option, to purchase from the Company up to 597,882
(subject to adjustment as provided in this Section 6.10) Shares in the aggregate
at the exercise price of $2.45 per share, subject to adjustment as provided in
this Section 6.10 (as so adjusted, the "Exercise Price"), as specified by the
Buyer in its notice or notices of exercise from time to time, but only in
connection with or after a Triggering Event. A "Triggering Event" means the
first to occur of the following events:
(i) the Company terminates this Agreement pursuant to Section
6.6(d), or
(ii) the Board of Directors of the Company withdraws or
modifies its approval or recommendation of the Merger or approves or
recommends a Superior Proposal pursuant to Section 6.6(d), or the
Merger is voted down by the Company's stockholders, or this Agreement
is terminated by any party prior to the Effective Time after the date
specified in Section 6.3(a), or if this Agreement is terminated by the
Buyer due to a material breach hereof by the Company, and in any such
case a Third-Party Transaction is announced within 12 months after such
withdrawal, modification, approval, recommendation, vote or termination
which is thereafter consummated (or is consummated within such 12-month
period, irrespective of any announcement). Such consummation shall
constitute the Triggering Event within the scope of this Section
6.10(a)(ii).
(iii) any Person other than an Affiliate of the Buyer
commences a tender offer (within the meaning of SEC Rule 14d-2) for 15%
of more of the Company's outstanding Shares.
(b) The Company will give the Buyer notice of any proposed Triggering
Event under Section 6.10(a)(ii) or (iii) to which it is a party at least 20 days
prior to the proposed consummation thereof, and will give the Buyer notice of
any other such Triggering Event immediately upon receiving knowledge thereof.
The Option may be exercised, at any time and from time to time, commencing
immediately prior to the Triggering Event and continuing thereafter until 5:00
p.m., California time, on the 5th anniversary of the date of this Agreement, if
a business day, or on the next succeeding business day if it is not. To exercise
the Option, the Buyer shall deliver written notice to the Company at its address
listed in Section 7.4 specifying the number of Shares as to which the Option is
being exercised, accompanied by the Buyer's check or wire transfer in payment of
the aggregate Exercise Price. Alternatively, the Buyer may pay the Exercise
Price by surrender of this Option with respect to a number of shares whose
aggregate Spread Value equals the aggregate Exercise Price. "Spread Value" means
(i) the excess, if any, of the market value of a Share over the Exercise Price
times (ii) the number of Shares so to be surrendered. For this purpose, "market
value" shall mean the average closing price of Shares for the three most recent
trading days ending with the second trading day prior to any such cashless
exercise, if Shares are then traded on a national securities exchange or the
Nasdaq National Market, and will mean the per-Share value of the transaction
associated with the Triggering Event in all other cases.
25
(c) Upon any exercise of the Option as set forth above, the Buyer shall
immediately be the record owner of all Shares subject to such exercise for all
purposes, without any other action being necessary. Within three trading days
after each exercise of the Option, the Company shall deliver certificates for
the Shares so purchased to the Buyer, but the delivery of such certificates
shall not be required in order for the Buyer to exercise any rights as a holder
of the Shares to be represented thereby. Until its exercise, the Option does not
confer on the Buyer any rights of a stockholder of the Company.
(d) The Company need not issue any fractional shares in connection with
any exercise of the Option. Instead, the Buyer may purchase a whole Share from
the Company at the Exercise Price.
(e) During the term of the Option, the Company shall reserve sufficient
authorized but unissued shares of Common Stock or other securities for the full
exercise of the rights represented by the Option. To the extent required for the
lawful exercise of the Option, the Company will promptly make all filings with
Governmental Agencies, including without limitation a premerger notification
under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended,
requested by the Buyer in connection with an intended exercise of the option.
(f) The Exercise Price and the number of Shares that the Company must
issue upon exercise of the Option are subject to adjustment from time to time as
follows:
(1) If the Company at any time or from time to time after the
date hereof: (1) declares or pays, without consideration, any dividend
on Shares payable in Shares; (2) creates any right to acquire Shares
for no consideration; or (3) subdivides the outstanding Shares (by
stock split, reclassification or otherwise), the Company shall increase
the number of Shares that the Buyer may purchase upon exercising the
Option and decrease the Exercise Price in proportion to the increase in
the number of outstanding Shares that results from any such action.
(2) If the Company combines or consolidates the outstanding
Shares, by reclassification or otherwise, into a lesser number of
Shares, the Company shall decrease the number of Shares that the Buyer
may purchase upon exercising the Option and increase the Exercise Price
in proportion to the decrease in the number of outstanding Shares that
results from any such combination or consolidation.
(3) If Shares change into shares of any other class or classes
of security or into any other Property for any reason other than a
subdivision or combination of Shares provided for in Section 6.10(f)(1)
or (2), including without limitation any reorganization,
reclassification, merger or consolidation and any sale of substantially
all of the Company's properties and assets, the Company shall make
lawful provision for giving the Buyer the right, by exercising the
Option, to purchase the kind and amount of securities or other Property
receivable upon any such change by the owner of the number of Shares
subject to this Option immediately before the change.
(4) If the Company spins off any Subsidiary by distributing to
the Company's shareholders as a dividend or otherwise any stock or
other securities of the Subsidiary, the Company shall reserve until the
end of the term of the Option enough such shares or other securities
for delivery to the Buyer upon any exercise of the rights represented
by the Option to
26
the same extent as if the Buyer owned of record all Common Stock or
other securities subject to the Option on the record date for the
distribution of the Subsidiary's shares or other securities.
Upon each adjustment or readjustment required by this Section 6.10(f), the
Company shall promptly compute such adjustment or readjustment and furnish to
the Buyer a certificate setting forth such adjustment or readjustment and
showing in detail the facts giving rise to the adjustment or readjustment. Upon
the Buyer's written request, the Company also shall furnish to the Buyer a
similar certificate setting forth (1) such adjustments and readjustments, (2)
the Option Price in effect on the date of the certificate, and (3) the number of
Shares and the amount of any other property that the Buyer would receive upon
exercising the Option.
(g) The Buyer may not transfer, sell or make any other disposition of
the Option (other than in connection with a succession to or transfer of its
business as a whole), or grant any Lien respecting any of its rights under the
Option, without the Company's prior consent.
(h) By accepting the Option, the Buyer agrees that the Option and the
Shares or other securities issuable upon exercise of the Option may be offered
or sold, only in compliance with the Act and all applicable state and securities
laws. The Buyer hereby agrees to comply with this Section 6.10(h) with respect
to any resale or other disposition of such securities. The Buyer may offer or
sell any such securities only in accordance with (1) an effective registration
statement under the Act; (2) SEC Rule 144; or (3) another exemption from the
registration requirements of the Act and all applicable state securities laws
demonstrated, to the Company's reasonable satisfaction, by an opinion of
securities counsel reasonably acceptable to the Company. The Company may make a
notation on its records, and on the certificates for any Shares or other
securities issued upon the exercise of the Option, to implement the restrictions
set forth in this Section 6.10(h). The Buyer represents and warrants that it is
acquiring the Option, and will acquire the Shares subject thereto, for its own
account and not on behalf of any other Person, and that it is an "accredited
investor," as that term is defined in SEC Regulation D. By accepting the Option,
the Buyer acknowledges that the Company is granting the Option to the Buyer in
reliance on the Buyer's foregoing representations and warranties and the terms
of this Section 6.10(h). Before allowing any transferee of any of the Buyer's
rights under the Option to exercise this Option, the Company may, in its sole
discretion, require the transferee to execute and deliver representations,
warranties and acknowledgments to the Company substantially similar to those set
forth in this Section 6.10(h).
(i) Notwithstanding anything in this Section 6.10, if an exercise of
the Option would otherwise produce a gain (as measured by the difference between
the Exercise Price and the market value, determined in accordance with Section
6.10(b), multiplied by the number of Shares as to which the Option is exercised)
in excess of (i) $520,000 minus (ii) the termination fee, if any, timely paid by
the Company pursuant to Section 6.3(b) or (c) in connection with the Triggering
Event in question, then the exercise of the Option will be effective only as to
the number of Shares which produce a gain (as so measured) equal to such
difference.
(j) In the event the Company proposes to consummate a transaction
(however structured, including without limitation a sale of stock or a merger)
to which it is a party and which involves an acquisition of shares or equity
interest in the Company by a third Person, and immediately following such
transaction such Person together with its parents and subsidiaries
(collectively, the "Acquiring
27
Person") owns a majority of both the voting power and economic interest
represented by the outstanding stock of the Company on a fully-diluted basis,
then the Company (x) shall give the Buyer at least 20 days written notice of the
proposed consummation, including a summary of the transaction and a copy of all
transaction documents (which summary and documents shall be kept current by
further notices to the Buyer) and (y) if it has complied with clause (x), may at
its option, exercised by notice to the Buyer not later than five days prior to
such consummation, redeem the Option (in whole and not in part) simultaneously
with such consummation for an amount per share, paid by wire transfer of same-
day funds to the account designated by the Buyer, equal to the excess, if any,
of the Redemption Price over the Exercise Price then in effect. The "Redemption
Price" is:
(i) if the equity interest the Acquiring Person is acquiring
in such consummation, together with any equity interest acquired by
such Acquiring Person within 180 days prior to such consummation
constitutes a majority of both the voting power and economic interest
represented by the outstanding stock of the Company on a fully-diluted
basis, the highest price per share paid (or to be paid upon such
consummation) by the Acquiring Person in the course of acquiring such
majority ownership, and
(ii) otherwise, the fair market value of a Share (or the other
Property then subject to the Option) as agreed to by the Company and
the Buyer or, in the absence of such agreement, as determined by an
investment bank of national reputation selected by the Company from a
list of three such banks proposed by the Buyer (on its own initiative
or within 15 days after written request by the Company), which bank
shall not have engaged in a transaction with, or advised with respect
to a transaction, either the Company or the Buyer within the prior
three years. If this clause (ii) is applicable, the Company will not
consummate such transaction unless and until the fair market value has
been agreed or determined pursuant to this clause (ii).
6.11 SEC Reports. From and after the date of this Agreement until
the earlier of the termination of this Agreement pursuant to its terms or the
Effective Time, the Company will timely file all reports required to be filed by
it under the Exchange Act.
6.12 Stock Option Plan, Stock Purchase Plan.
(a) Prior to the Effective Time, the Company will take all actions
necessary to give effect to Section 3 of the Plan of Merger and to terminate the
Company's 1990 Long Term Incentive Plan and Old Carleton's 1994 Stock Option
Plan, effective immediately after the Effective Time.
(b) Each employee who has elected to participate in the Company's
Employee Stock Purchase Plan (as though it had not expired) shall receive,
pursuant to a letter agreement between the Company and such employee stating
that such payment constitutes full satisfaction of all the Company's obligations
under such Plan, an amount equal to the Merger Consideration (as defined in the
Plan of Merger) times the number of Shares which the amount held in such Plan
for such employee would have purchased under such Plan had it not expired.
6.13 Notice of Certain Events. The Company shall notify the Buyer,
and the Buyer shall promptly notify the Company, of:
28
(i) receipt of any notice or other communication from any
Person alleging that the consent of such Person is or may be required
in connection with the transactions contemplated by this Agreement;
(ii) receipt of any notice or other communication from any
Governmental Entity in connection with the transactions contemplated by
this Agreement;
(iii) receipt of notice that any action, suit, claim,
investigation or proceeding has been commenced or, to the knowledge of
the Company, threatened, against or involving the Company, any
Subsidiary or the Buyer, as applicable, which, if pending on the date
of this Agreement, would have been required to have been disclosed
pursuant to Section 2.18 or which relates to the transactions
contemplated by this Agreement;
(iv) the occurrence or non-occurrence of any event the
occurrence or non-occurrence of which would be likely to cause any
representation or warranty of it (and, in the case of the Buyer, of
Buyer Subsidiary) contained in this Agreement to be untrue or
inaccurate; and
(v) any failure of the Company, the Buyer or Buyer Subsidiary,
as the case may be, to comply with or satisfy any covenant, condition
or agreement to be complied with or satisfied by it hereunder.
The delivery of any notice pursuant to this Section 6.13 shall not limit or
otherwise affect the remedies available to the party receiving such notice.
6.14 Takeover Statutes. If any Takeover Statute is, becomes or may
become applicable to the Merger or any of the transactions contemplated hereby,
each of the Buyer, Buyer Subsidiary and the Company, and their respective Boards
of Directors, shall grant such approvals and take such lawful actions as are
necessary to ensure that the Merger and such transactions may be consummated as
promptly as practicable on the terms contemplated hereby, and to the extent
permitted by law otherwise act to eliminate the effects of such statute and any
regulations promulgated thereunder on the Merger and such transactions or, if
they cannot be eliminated, to minimize them.
6.15 Pay-Off. The Company will, upon the request of the Buyer,
cooperate with the Buyer in arranging the pay-off or refinancing of any
indebtedness of the Company set forth in Schedule 2.6(b) which the Buyer, in its
business discretion, desires to pay off or refinance in connection with the
consummation of the transactions contemplated hereby.
Section 7 Miscellaneous
7.1 No Brokers, Finders.
(a) Company. The Company has not engaged any agent, broker, finder or
investment or commercial banker in connection with the negotiation, execution or
performance of this Agreement or the transactions contemplated hereby, other
than Xxxxxxxxx Summit Securities, LLC, for whose fees and expenses the Company
will be solely responsible and whose fees and expenses will not exceed $235,000
if the Merger is consummated. The Company shall indemnify, defend and hold the
Buyer harmless against and in respect of any claim for brokerage fees or other
commissions incurred
29
or owing due to any such engagement or alleged engagement, including without
limitation, any fees and expenses of counsel incurred by the Buyer in connection
with enforcing this Section 7.1(a).
(b) Buyer. The Buyer has not engaged any agent, broker, finder or
investment or commercial banker in connection with the negotiation, execution or
performance of this Agreement or the transactions contemplated hereby. The Buyer
shall indemnify, defend and hold the Company and its stockholders harmless
against and in respect of any claim for brokerage fees or other commissions
incurred or owing due to any such engagement or alleged engagement, including
without limitation, any fees and expenses of counsel incurred by the Company or
its stockholders in connection with enforcing this Section 7.1(b).
7.2 Expenses. Whether or not the transactions contemplated by this
Agreement are consummated, the Company and the Buyer shall each pay their own
fees and expenses incident to the negotiation, preparation, execution, delivery
and performance hereof, including, without limitation, the fees and expenses of
their respective counsel, accountants and other experts.
7.3 Complete Agreement; Waiver and Modification; No Third Party
Beneficiaries. This Agreement constitutes the entire agreement between the
parties pertaining to the subject matter hereof and supersedes all prior and
contemporaneous agreements and understandings of the parties other than the
Non-Disclosure Agreement dated September 22, 1999 between the Buyer and the
Company, which shall continue in effect. There are no representations or
warranties by any party except those expressly stated or provided for herein,
any implied warranties being hereby expressly disclaimed. There are no covenants
or conditions except those expressly stated herein. No amendment, supplement or
termination of or to this Agreement, and no waiver of any of the provisions
hereof, shall be binding on a party unless made in a writing signed by such
party. This Agreement may be modified by mutual agreement of the parties as
authorized by their respective boards of directors, notwithstanding approval
hereof and thereof by the stockholders of the parties. Nothing in this Agreement
shall be construed to give any Person other than the express parties hereto any
rights or remedies.
7.4 Notices. All notices, requests, demands, claims and other
communications hereunder shall be in writing and shall be given by delivery (by
mail or otherwise) or transmitted to the address or facsimile number listed
below, and will be effective (in all cases) upon receipt. Without limiting the
generality of the foregoing, a mail, express, messenger or other receipt signed
by any Person at such address shall conclusively evidence delivery to and
receipt at such address, and any printout showing successful facsimile
transmission of the correct total pages to the correct facsimile number shall
conclusively evidence transmission to and receipt at such facsimile number.
(a) If to the Buyer or Subsidiary:
000 Xxxxxx Xxxxxxx, X/X 0xx0
Xxxxxxx Xxxxxx, XX 00000
attention: Xxxxxx Xxxxxxxxx
facsimile: (000) 000-0000
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with copies to:
McCutchen, Doyle, Xxxxx & Xxxxxxx, LLP
0000 Xxxxxx Xxxxx
Xxxx Xxxx, XX 00000
attention: Xxxxxxx X. Xxxxxx
(b) If to the Company:
00000 Xxxx Xxxx Xxxx
Xxxxxxxxxx, XX 00000
attention: Xxxxxx X. Xxxxxx
facsimile: (000) 000-0000
with copies to:
Xxxxxx & Whitney LLP
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
attention: Xxxxxxx X. Xxxxx
Any party may change its address or facsimile number for purposes of this
Section 7.4 by giving the other party written notice of the new address or
facsimile number in accordance with this Section 7.4, provided it is a normal
street address, or normal operating facsimile number, in the continental United
States.
7.5 Law Governing. This Agreement shall be interpreted in accordance
with and governed by the laws of the State of California, without regard to
principles of conflicts of laws, except as to matters manditorily governed by
the Minnesota Business Corporation Act.
7.6 Headings; References; "Hereof;" Interpretation. The Section
headings in this Agreement are provided for convenience only, and shall not be
considered in the interpretation hereof. References herein to Sections, Exhibits
or Schedules refer, unless otherwise specified, to the designated Section of or
Exhibit or Schedule to this Agreement. Terms such as "herein," "hereto" and
"hereof" refer to this Agreement as a whole. This Agreement has been negotiated
at arm's length between parties sophisticated and knowledgeable in the matters
addressed in this Agreement. Each of the parties has been represented by
experienced and knowledgeable legal counsel. Accordingly, any rule of law or
legal decision that would require interpretation of any ambiguities in this
Agreement against the party that has drafted it is not applicable and is waived.
The provisions of this Agreement shall be interpreted in a reasonable manner to
effect the purpose of the parties and this Agreement.
7.7 Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the heirs, executors, administrators and successors of
the parties hereto, but no right or liability or obligation arising hereunder
may be assigned by any party hereto.
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7.8 Counterparts, Separate Signature Pages. This Agreement may be
executed in any number of counterparts, or using separate signature pages. Each
such executed counterpart and each counterpart to which such signature pages are
attached shall be deemed to be an original instrument, but all such counterparts
together shall constitute one and the same instrument.
7.9 Severability. In the event any of the provisions of this Agreement
shall be declared by a court or arbitrator to be void or unenforceable, then
such provision shall be severed from this Agreement without affecting the
validity and enforceability of any of the other provisions hereof, and the
parties shall negotiate in good faith to replace such unenforceable or void
provisions with a similar clause to achieve, to the extent permitted under law,
the purpose and intent of the provisions declared void and unenforceable.
Section 8 Glossary
Acquiring Person - Section 6.10(j).
Acquisition Proposal - Section 6.6(b).
Acquisition Transaction - Section 6.6(b).
Act - the Securities Act of 1933, as amended.
Affiliate - a Person who controls, is controlled by or is under common
control with another Person, or who directly or indirectly owns 10% or more of
the voting power in such other Person, or of whose voting power such other
Person (or a Person holding 10% or more of the voting power in such other
Person) owns 10% or more. For purposes of this definition, "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
Agreement - this Agreement of Merger, including the Exhibits and
Schedules hereto.
Audited Statements - Section 2.6(a).
Beneficial Ownership - Section 6.6(b).
Benefit Plans - Section 2.14(b).
Business - introductory paragraphs.
Buyer - introductory paragraphs.
Buyer Subsidiary - introductory paragraphs.
Closing - Section 1.1.
COBRA - Section 2.14(f).
Code - the Internal Revenue Code of 1986, as amended.
32
Company - introductory paragraphs. In the case of any representation or
warranty relating to events or circumstances occurring or existing prior to the
merger of Old Carleton into the Company, the term "Company" also includes Old
Carleton.
Company ERISA Plan - Section 2.14(d).
Company Intellectual Property - Section 2.21(a).
Company SEC Documents - Section 2.25.
Confidential Information - Section 2.21(g).
Contract - any agreement, written or oral, any license or authorization
by another Person of a contractual nature or any promissory note or other
instrument of a contractual nature, which is intended to be enforceable against
the Person in question or against any Property of such Person. Any Person which
is, or any of whose Property is, subject to enforcement of a Contract shall, for
purposes of this Agreement, be deemed a party to it.
Designated Contract - any of the following:
(a) the leases to the Company referred to in Schedule 2.11 for 00000
Xxxx Xx. X., Xxxxxxxxxx, XX and 000 Xxxxxxxxxx Xx., Xxxx. 0, Xxxxxxxxx, XX
00000, and
(b) the following agreements:
(i) OEM Distribution Agreement by and between Rogue Wave and Old
Carleton dated June 30, 1997;
(ii) Firstlogic Software License Reseller Agreement by and between
FirstLogic, Inc. and Old Carleton dated July 27, 1998, as amended by
amendment effective November 8, 1999 (extending the term of the
Reseller Agreement to June 30, 2000);
(iii) Intersolv Distributor License Agreement by and between Intersolv
and Old Carleton dated December 11, 1996, as amended by Schedule A
(extending term to December 31, 1999);
(iv) Computer Services Agreement by and between Blue Cross and Blue
Shield of Michigan and the Company, dated May 10, 1999;
(v) License Agreement by and between Variable Annuity Life Insurance
Company and Old Carleton executed by Old Carleton on February 25, 1998
and by VALIC on March 6, 1998;
(vi) Software License Agreement by and between Mid-America Dairymen,
Inc. and the Company, dated February 19, 1996;
(vii) License Agreement by and between the Company and RCN Services,
Inc. executed by the Company on December 11, 1997 and RCN Services,
Inc. on December 16, 1998;.
33
(viii) Software Product License by and between Toronto-Dominion Bank
and the Company, dated December 7, 1994;
(ix) Maintenance Agreement by and between the Company and SAG,
effective January 1, 1999 (After expiration of previous service
agreement whose expiration was on December 31, 1998);
(x) Software Product License Agreement by and between the Company
and Philips Semiconductors, Inc., dated August 29, 1997;
(xi) License Agreement by and between Old Carleton and CPC Banking
Business, dated December 28, 1997;
(xii) License Agreement by and between SLM Holding Corporation and the
Company, dated June 18, 1999;
(xiii) Service Address Synchronization Work Order by and between
Ameritech Network Services and the Company, executed by Old Carleton on
December 9, 1996 and Ameritech on December 11, 1996 (Additional Service
Agreement dated December 12, 1996);
(xiv) Software Purchase Agreement by and between Virginia Department
of Transportation and Old Carleton, dated May 20, 1998;
(xv) Addendum B to Reseller Agreement by and between CSC Financial
Services Limited and the Company, dated February 4, 1999; and
(xvi) Reseller Agreement between CSC Continuum, Inc. and Old Carleton,
dated March 26, 1998 and addenda (Xxxxx).
Disclosable Contract - Section 2.15.
Disclosable Leases - Section 2.11.
Effective Time - Section 1.2.
Environmental Requirement - any Legal Requirement relating to
pollution, waste, disposal, industrial hygiene, land use or the protection of
human health, safety or welfare, plant life or animal life, natural resources,
wetlands, endangered or threatened species or habitat, the environment or
property, including without limitation those pertaining to reporting, licensing,
permitting, controlling, investigating or remediating emissions, discharges,
releases or threatened releases of Hazardous Materials, chemical substances,
pollutants, contaminants or toxic substances, materials or wastes, whether
solid, liquid or gaseous in nature, into the air, surface water, groundwater or
land, or relating to the manufacture, generation, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Material,
chemical substances, pollutants, contaminants or toxic substances, materials or
wastes, whether solid, liquid or gaseous in nature.
34
Equity Interest - any common stock, preferred stock, partnership
interest, limited liability company interest or ownership interest in any
Person, and any right to acquire any of the foregoing, whether by exercise of an
option, warrant or other right, by conversion, exchange or subscription or
otherwise.
ERISA - the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute.
ERISA Affiliate - any company which, as of the relevant measuring date
under ERISA, is or was a member of a controlled group of corporations or trades
or businesses (as defined in Sections 414(b), (c), (m) or (o) of the Code) of
which the Company or any Subsidiary or any predecessor of either is or was a
member.
Exchange Act - Section 6.6(b).
Exercise Price - Section 6.10(a).
Financial Statements - Section 2.6(a).
GAAP - generally accepted accounting principles applied on a consistent
basis, as set forth in authoritative pronouncements which are applicable to the
circumstances as of the date in question. The requirement that such principles
be applied on a "consistent basis" means that accounting principles observed in
the period in question are comparable in all material respects to those applied
in the preceding periods, except as change is permitted or required under or
pursuant to such accounting principles.
Government Audit - Section 2.18(b).
Governmental Agency - any agency, department, board, commission,
district or other public organ, whether federal, state, local or foreign.
Group - Section 6.6(b).
Hazardous Material - all or any of the following: (i) any substance the
presence of which requires investigation or remediation under any applicable law
or regulation; (ii) substances that are defined or listed in, or otherwise
classified pursuant to, any applicable laws or regulations as "hazardous
substances," "hazardous materials," "hazardous wastes," "toxic substances," or
any other formulation intended to define, list or classify substances by reason
of deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, reproductive toxicity or "EP toxicity;" (iii) any petroleum
products, explosives or radioactive materials; and (iv) asbestos in any form or
electrical equipment which contains any oil or dielectric fluid containing
levels of polychlorinated biphenyls in excess of fifty parts per million.
Intellectual Property - Section 2.21(a).
Interim Balance Sheet - Section 2.6(c).
Interim Statements - Section 2.6(a).
35
ISO - Section 2.14(h).
Last Fiscal Year-End - Section 2.6(a).
Legal Requirement - a statute, regulation, ordinance or similar legal
requirement, whether federal, state, local or foreign, or any requirement of a
Permit or other authorization issued by a Governmental Agency.
Lien - any lien, security interest, mortgage, deed of trust, pledge,
hypothecation, capitalized lease or interest or right for security purposes.
Material Adverse Effect - a matter will be deemed to have a "Material
Adverse Effect" if such matter would have a material adverse effect on the
business, condition, assets, liabilities, operations, financial performance or
prospects of the Company and its Subsidiaries taken as a whole.
Merger - introductory paragraphs.
Old Carleton - introductory paragraphs.
Option - Section 6.10(a).
Order - any judgment, injunction, order or similar mandatory direction
of, or stipulation or agreement filed with, a Governmental Agency, court,
judicial body, arbitrator or arbitral body.
Permit - a permit, license, franchise, certificate of authority or
similar instrument issued by a Governmental Agency.
Person - an individual, or a corporation, partnership, limited
liability company, trust, association or other entity of any nature, or a
Governmental Agency.
Plan of Merger - Section 1.2.
Property - any interest in any real, personal or mixed property,
whether tangible or intangible.
Proxy Statement - Section 6.6(c).
Rights - Section 2.1(a).
SEC - the Securities and Exchange Commission.
Shares - shares of the Common Stock, $.25 par value, of the Company.
Spread Value - Section 6.10(b).
Stock Right - any right (including without limitation any option or
warrant or subscription right) to acquire any capital stock or any other Stock
Right or any instrument convertible into or exchangeable for any capital stock
or any other Stock Right.
36
Stockholder Approval - Section 2.3.
Subsidiary - any Person which would be included in consolidated
financial statements of the Company prepared in accordance with GAAP, and any
Person in which the Company holds 50% or more of the voting power or 50% or more
of the equity interests, and any former Subsidiary with respect to any of whose
obligations the Company or any current Subsidiary is liable. In the case of any
representation or warranty relating to events or circumstances in the past, the
term "Subsidiary" also includes any Person that at the relevant time was a
Subsidiary, irrespective of such Person's current status as a Subsidiary.
Superior Proposal - Section 6.6(e).
Support Agreements - Section 2.21(h).
Takeover Statute - Section 2.26.
Tax - any federal, state, local or foreign tax, assessment, duty, fee
and other governmental charge or imposition of any kind, whether measured by
properties, assets, wages, payroll, purchases, value added, payments, sales,
use, business, capital stock, surplus or income, and any addition, interest,
penalty, deficiency imposed with respect to any Tax.
Third-Party Action - any consent, waiver, approval, license or other
authorization of, or notice to, or filing with, any other Person, whether or not
a Governmental Agency, and the expiration of any associated mandatory waiting
period.
Third-Party Intellectual Property - Section 2.21(a).
Third-Party Right - any Lien on any Property of the Person in question,
or any right (other than the rights of the Buyer hereunder) (i) to acquire,
lease, use, dispose of, vote or exercise any right or power conferred by any
Property of such Person, or (ii) restricting the Person's right to lease, use,
dispose of, vote or exercise any right or power conferred by any Property of
such Person.
Third-Party Transaction - Section 6.6(b)
Triggering Event - Section 2.10(a).
[remainder of page left blank intentionally]
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IN WITNESS WHEREOF, the parties have executed this Agreement of Merger.
Buyer: ORACLE CORPORATION
By: ___________________________________
Name: Xxxx X. Xxxxx
Title: Executive Vice President
Buyer Subsidiary: DM ACQUISITION CORP.
By: ___________________________________
Name: Xxxxxx Xxxxxxxxx
Title: President, Chief Executive
Officer and Secretary
Company: CARLETON CORPORATION
By: ___________________________________
Name: Xxxxxx X. Xxxxxx
Title: Chairman of the Board, Chief
Executive Officer and President
Exhibits
A Plan of Merger
B Opinion of Company's Counsel
C Form of Noncompetition Agreement
Schedules
38
