AGREEMENT AND PLAN OF MERGER
DATED AS OF DECEMBER 6, 2001
BY AND AMONG
XXXXX SYSTEMS GROUP, INC.
ASG SUB, INC.
AND
LANDMARK SYSTEMS CORPORATION
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of December 6, 2001 (this "Agreement") by
and among Xxxxx Systems Group, Inc., a Delaware corporation ("ASG"), ASG Sub,
Inc., a Virginia corporation ("ASG Sub") and Landmark Systems Corporation, a
Virginia corporation ("Landmark"). Capitalized terms used herein but not
otherwise defined shall have the meanings assigned to them in Section 8.3.
RECITALS
A. The Board of Directors of each of ASG, ASG Sub and Landmark has approved
and declared advisable this Agreement and the merger of ASG Sub with and into
Landmark (the "Merger"), upon the terms and subject to the conditions set forth
in this Agreement, whereby each share of common stock, par value $0.01 per
share, of Landmark (the "Shares") that is (i) issued and outstanding immediately
prior to the Effective Time and (ii) not owned by ASG, ASG Sub or Landmark, will
be converted into the right to receive $4.75 in cash as of the Effective Time.
B. ASG, ASG Sub and Landmark desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and also to
prescribe various conditions to the Merger.
C. Concurrently with the execution and delivery of this Agreement, ASG,
ASG Sub, Xxxxxxx X. XxXxxxxxxx and Xxxxxxxxx X. Xxxxx (both such individuals
collectively, the "Principal Shareholders") have entered into Principal Share
Purchase and Voting Agreements, pursuant to which, among other things, each
Principal Shareholder has agreed to vote the Shares held by such Principal
Shareholder (the "Principal Shares") in favor of the Merger and to sell the
Principal Shares to ASG immediately prior to the conversion of the Shares at the
Effective Time.
THEREFORE, the parties agree as follows:
ARTICLE I
THE MERGER
1.1 Principal Shares. In accordance with the terms of the Principal Share
Purchase and Voting Agreements, each Principal Shareholder has agreed to sell
the Principal Shares held by such Principal Shareholder to ASG, effective
immediately prior to the conversion of the Shares at the Effective Time, in
return for the consideration described in such Principal Share Purchase and
Voting Agreements.
1.2 The Merger. (a) Upon the terms and subject to the conditions set forth
in this Agreement, and in accordance with the VSCA, ASG Sub will be merged with
and into Landmark at the Effective Time (as defined in Section 1.4). Following
the Effective Time, the separate corporate existence of ASG Sub will cease and
Landmark will
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continue as the surviving corporation ("Surviving Corporation") and will succeed
to and assume all the rights and obligations of ASG Sub in accordance with the
VSCA.
(b) At the election of ASG, any other direct or indirect Subsidiary
of ASG may be substituted for ASG Sub as a constituent corporation in the
Merger; provided, however, that any Subsidiary that is substituted for ASG Sub
(i) shall, at the Effective Time, have no assets other than assets used to pay
the Merger Consideration and no liabilities other than those contemplated by
this Agreement and the other Transaction Agreements and (ii) shall be
wholly-owned by ASG or wholly-owned by a wholly-owned subsidiary of ASG. In such
event, the parties agree to execute an appropriate amendment to this Agreement
in order to reflect the foregoing.
(c) Subject to the terms and conditions of this Agreement, ASG and
Landmark agree to use all reasonable efforts to cause the Effective Time to
occur as soon as practicable after the date on which all of the conditions set
forth in Article VI of this Agreement have been met or waived.
1.3 Closing. The closing of the Merger (the "Closing") will take place on a
date to be specified by the parties, which will be no later than the fifth
business day after satisfaction or waiver of the conditions set forth in Article
VI (the "Closing Date"), at the offices of Steptoe & Xxxxxxx LLP, 0000
Xxxxxxxxxxx Xxxxxx X.X., Xxxxxxxxxx, X.X. 00000, unless another date or place is
agreed to in writing by the parties hereto.
1.4 Effective Time. Subject to the terms and conditions of this Agreement,
as soon as practicable on or after the Closing Date, the parties will file
Articles of Merger (the form of which is attached hereto as Exhibit A) with the
Virginia State Corporation Commission in such form as required by, and executed
in accordance with, the relevant provisions of the VSCA. The Merger shall become
effective at the time specified in the Articles of Merger relating to the Merger
issued by the Virginia State Corporation Commission (the time the Merger becomes
effective being hereinafter referred to as the "Effective Time").
1.5 Effects of the Merger. The Merger will have the effects set forth in the
applicable provisions of the VSCA. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, all properties, rights,
privileges, powers and franchises of ASG Sub and Landmark will vest in the
Surviving Corporation, and all debt, liabilities and duties of ASG Sub and
Landmark will become the debts, liabilities and duties of the Surviving
Corporation.
1.6 Articles of Incorporation and Bylaws. The articles of incorporation and
bylaws of the Surviving Corporation shall be the articles of incorporation and
bylaws of Landmark.
1.7 Directors. The directors of ASG Sub immediately prior to the Effective
Time will be the directors of the Surviving Corporation, until the earlier of
their resignation or removal or until their respective successors are duly
elected and qualified, as the case may be.
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1.8 Officers. The officers of ASG Sub immediately prior to the Effective
Time will be the officers of the Surviving Corporation, until the earlier of
their resignation or removal or until their respective successors are duly
elected and qualified, as the case may be.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT
CORPORATIONS; EXCHANGE OF CERTIFICATES
2.1 Effect on Capital Stock. As of the Effective Time, by virtue of the
Merger and without any action on the part of the holder of any Shares or any
shares of capital stock of ASG Sub:
(a) Capital Stock of ASG Sub. Each share of capital stock of ASG Sub
issued and outstanding immediately prior to the Effective Time will be converted
into and become one fully paid and non-assessable share of common stock, par
value $0.01, of the Surviving Corporation.
(b) Cancellation of Treasury Shares and ASG Owned Shares. Each Share
that is owned by Landmark or by any Subsidiary of Landmark and each Share that
is owned by ASG, ASG Sub or any Subsidiary of ASG immediately prior to the
Effective Time (including, as contemplated by the Principal Share Purchase and
Voting Agreements, the Principal Shares purchased by ASG Sub immediately prior
to the conversion of the Shares at the Effective Time), will automatically be
cancelled and will cease to exist, and no consideration will be delivered in
exchange therefor.
(c) Conversion of Shares. Each issued and outstanding Share (other
than Shares to be cancelled in accordance with Section 2.1(b)) will be converted
into the right to receive from the Surviving Corporation $4.75 in cash, without
interest (the "Merger Consideration"), upon the terms and subject to the
conditions set forth in this Agreement. As of the Effective Time, all such
Shares will no longer be outstanding and will automatically be cancelled and
will cease to exist, and each holder of a certificate representing any such
Shares will cease to have any rights with respect thereto, except the right to
receive Merger Consideration, without interest.
(d) Adjustments. The Merger Consideration shall be adjusted to
reflect fully the effect of any reclassification, recapitalization, stock split
or combination, stock dividend, exchange, readjustment, reorganization or like
change with respect to the Shares occurring during the period between the date
of this Agreement and the Effective Time.
2.2 Exchange of Certificates.
(a) Paying Agent. Prior to the Effective Time, ASG will select a
bank or trust company to act as paying agent (the "Paying Agent") for the
payment of the Merger Consideration upon surrender of certificates representing
Shares.
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(b) ASG To Provide Funds. ASG and ASG Sub will take all steps
necessary to provide to the Paying Agent on a timely basis, as and when needed
after the Effective Time, funds necessary to pay for the Shares as a result of
the Merger pursuant to Section 2.1.
(c) Exchange Procedure. As soon as reasonably practicable after the
Effective Time, ASG will instruct the Paying Agent to mail to each holder of
record of a certificate or certificates which immediately prior to the Effective
Time represented outstanding Shares (the "Certificates") whose Shares were
converted pursuant to Section 2.1 into the right to receive the Merger
Consideration: (i) a letter of transmittal (which will specify that delivery
will be effected, and risk of loss and title to the Certificates will pass, only
upon delivery of the Certificates to the Paying Agent and will be in a form and
have such other provisions as ASG may reasonably specify) and (ii) instructions
for use in effecting the surrender of the Certificates in exchange for the
Merger Consideration. Upon surrender of a Certificate for cancellation to the
Paying Agent or to such other agent or agents as may be appointed by ASG,
together with such letter of transmittal, duly executed, and such other
documents as may reasonably be required by the Paying Agent, the holder of such
Certificate will be entitled to receive in exchange therefor the Merger
Consideration, and the Certificate so surrendered will forthwith be cancelled.
In the event of a transfer of ownership of Shares which is not registered in the
transfer records of Landmark, payment may be made to a Person other than the
Person in whose name the Certificate so surrendered is registered, if such
Certificate is properly endorsed or otherwise in proper form for transfer and
the Person requesting such payment pays any transfer or other taxes required by
reason of the payment to a Person other than the registered holder of such
Certificate or establishes to the satisfaction of the Surviving Corporation that
such tax has been paid or is not applicable. Until surrendered as contemplated
by this Section 2.2, each Certificate will be deemed at any time after the
Effective Time to represent only the right to receive upon such surrender the
Merger Consideration. No interest will be paid or will accrue on the cash
payable upon the surrender of any Certificate.
(d) No Further Ownership Rights in Shares. As of the Effective Time,
all cash paid upon the surrender of Certificates in accordance with the terms of
this Article II will be deemed to have been paid in full satisfaction of all
rights pertaining to the Shares previously represented by such Certificates, and
there will be no further registration of transfers on the stock transfer books
of Landmark of the Shares which were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are presented to the
Surviving Corporation or the Paying Agent for any reason, they will be cancelled
and exchanged as provided in this Article II.
(e) Failure to Timely Surrender; No Liability. Promptly following
the date that is six (6) months after the Effective Time, the Paying Agent will
return to the Surviving Corporation all Merger Consideration and other cash,
property and instruments in its possession relating to the transactions
described in this Agreement, and the Paying Agent's duties will terminate.
Thereafter, each holder of a Certificate formerly
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representing a Share may surrender such Certificate to the Surviving Corporation
and (subject to applicable abandoned property, escheat and similar laws) receive
in exchange therefor the Merger Consideration (without interest thereon).
Notwithstanding the foregoing, the Surviving Corporation will be entitled to
receive from time to time all interest or other amounts earned with respect to
any cash deposited with the Paying Agent as such amounts accrue or become
available. If any Certificates will not have been surrendered prior to two (2)
years after the Effective Time (or immediately prior to such earlier date on
which any payment pursuant to this Article II would otherwise escheat to or
become the property of any Governmental Entity (as defined in Section 3.1(d)),
the cash payment in respect of such Certificate will, to the extent permitted by
applicable law, become the property of the Surviving Corporation, free and clear
of all claims or interests of any Person previously entitled thereto. To the
fullest extent permitted by law, none of ASG, ASG Sub, Landmark, the Surviving
Corporation or the Paying Agent will be liable to any Person in respect of any
cash delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law.
(f) Withholding Taxes. The right of any Person to receive any
payment or consideration, including the Merger Consideration, pursuant to this
Agreement and the transactions contemplated herein will be subject to any
applicable requirements with respect to the withholding of Taxes, including
income or employment tax withholding required under the Revenue Code or any
provision of foreign, state or local law.
(g) Lost, Stolen or Destroyed Certificates. If any Certificates
evidencing Shares have been lost, stolen or destroyed, the Paying Agent will pay
to such holder the Merger Consideration required pursuant to Section 2.1, in
exchange for such lost, stolen or destroyed Certificates, upon the making of an
affidavit of that fact by the holder thereof with such assurances as the Paying
Agent, in its discretion and as a condition precedent to the payment of the
Merger Consideration, may reasonably require of the holder of such lost, stolen
or destroyed Certificates and, the Paying Agent, in its discretion and as a
condition precedent to the issuance thereof, may require that the owner of such
lost, stolen or destroyed Certificate give the Paying Agent and ASG a bond in
such sum as it may direct as indemnity against any claim that may be made
against the Paying Agent or ASG with respect to the Certificate.
(h) Supplementary Action. If at any time after the Effective Time,
any further assignments or assurances in law or any other things are necessary
or desirable to vest or to perfect or confirm of record in the Surviving
Corporation the title to any property or rights of Landmark or ASG Sub, or
otherwise to carry out the provisions of this Agreement, the officers and
directors of the Surviving Corporation are hereby authorized and empowered, in
the name of and on behalf of Landmark and ASG Sub to execute and deliver any and
all things necessary or proper to vest or to perfect or confirm title to such
property or rights in the Surviving Corporation, and otherwise to carry out the
purposes and provisions of this Agreement.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of Landmark. Except as set forth in the
disclosure letter delivered by Landmark to ASG concurrently with the execution
of this Agreement (the "Landmark Disclosure Letter"), or in the Supplemental
Disclosure Letter to be provided by Landmark to ASG and ASG Sub in accordance
with Section 5.11 hereof (the "Supplemental Disclosure Letter"), Landmark
represents and warrants to ASG and ASG Sub as follows:
(a) Organization, Standing and Corporate Power. Landmark and each
of its Subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction in which it was organized and
has the requisite corporate power and authority to carry on its business as now
being conducted. Landmark and each of its Subsidiaries is duly qualified or
licensed to do business and is in good standing in each jurisdiction in which
the nature of its business or the ownership or leasing of its properties makes
such qualification or licensing necessary, other than in such jurisdictions
where the failure to be so qualified or licensed individually or in the
aggregate would not have a Material Adverse Effect on Landmark. Landmark has
made available to ASG complete and correct copies of its articles of
incorporation and bylaws and the charter documents of its Subsidiaries, in each
case as amended to the date of this Agreement.
(b) Subsidiaries. Section 3.1(b) of the Landmark Disclosure Letter
lists each Subsidiary of Landmark and contains the capitalization of each
Subsidiary, the jurisdiction in which each Subsidiary is organized or formed and
the current directors and executive officers of each Subsidiary of Landmark.
Except as set forth in Section 3.1(b) of the Supplemental Disclosure Letter, all
the outstanding shares of capital stock of each such Subsidiary have been
validly issued and are fully paid and nonassessable and (except as may be
required by foreign jurisdictions) are owned by Landmark, by another Subsidiary
of Landmark or by Landmark and another such Subsidiary, free and clear of all
pledges, claims, liens, charges, encumbrances, restrictions and security
interests of any kind or nature whatsoever, other than resale restrictions
imposed by applicable securities laws (collectively, "Liens"). Except for the
capital stock of its Subsidiaries, Landmark does not own, directly or
indirectly, any capital stock or other ownership interest in any Person.
(c) Capital Structure.
(i) The authorized capital stock of Landmark consists of
30,000,000 shares of common stock, $0.01 par value and 8,000,000 shares of
preferred stock, $0.01 par value ("Landmark Preferred Stock"). At the close of
business on the date of this Agreement, (A) 12,486,501 shares of common stock
and no shares of Landmark Preferred Stock were issued and outstanding, (B)
781,999 shares of common stock were held by Landmark in its treasury, and (C)
2,530,135 shares of common stock were reserved for issuance upon exercise of
outstanding (x) options granted under any of the Landmark Option Plans (as
defined below), (y) rights granted under the ESPP (as
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defined below) and (z) the warrants identified in Section 3.1(c)(iii) of the
Landmark Disclosure Letter (the "Warrants").
(ii) Except as set forth in Section 3.1(c)(ii) of the
Landmark Disclosure Letter or in the Supplemental Disclosure Letter, the only
plans or arrangements pursuant to which Landmark is obligated to issue Shares or
pursuant to which Options are outstanding are 1989 Stock Incentive Plan, 1994
Stock Incentive Plan, 1992 Executive Stock Incentive Plan and 1996 Advisory
Board and Directors Stock Incentive Plan (the "Landmark Option Plans"), and
Landmark's 1998 Employee Stock Purchase Plan (the "ESPP").
(iii) The Options and Warrants listed in Section 3.1(c)(iii)
of the Landmark Disclosure Letter are exercisable into the number of Shares and
at the purchase prices listed in such Section.
(iv) Except as set forth in this Section 3.1, at the close
of business on the date of this Agreement, no shares of capital stock or other
voting securities of Landmark were issued, reserved for issuance or outstanding,
and Landmark has not issued stock appreciation rights. All outstanding shares of
capital stock of Landmark are duly authorized, validly issued, fully paid and
non assessable and not subject to preemptive rights created by Landmark's
articles of incorporation, bylaws or any agreement to which Landmark is a party.
There are no bonds, debentures, notes or other indebtedness of Landmark having
the right to vote (or convertible into, or exchangeable for, securities having
the right to vote) on any matters on which shareholders of Landmark may vote.
Except as set forth in this Section 3.1, as of the date of this Agreement, there
are no outstanding securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind to which Landmark or any of
its Subsidiaries is a party or by which any of them is bound obligating Landmark
or any of its Subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other voting securities
of Landmark or of any of its Subsidiaries or obligating Landmark or any of its
Subsidiaries to issue, grant, extend or enter into any such security, option,
warrant, call, right, commitment, agreement, arrangement or undertaking. As of
the date of this Agreement, there are no outstanding contractual obligations (x)
of Landmark or any of its Subsidiaries to repurchase, redeem or otherwise
acquire any shares of capital stock of Landmark or any of its Subsidiaries or
(y) of Landmark to vote or to dispose of any shares of the capital stock of any
of its Subsidiaries.
(d) Authority; Noncontravention. (i) Landmark has all the requisite
corporate power and authority to enter into this Agreement. Subject to adoption
and approval of this Agreement by an affirmative vote of the holders of
two-thirds of the outstanding Shares (the "Landmark Shareholder Approval"), and
receipt of the approvals, consents and clearances relating to the filings
described in Section 3.1(d)(ii), Landmark has the authority to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement by Landmark and the consummation by Landmark of the transactions
contemplated by this Agreement have been duly
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authorized by all necessary corporate action on the part of Landmark, subject to
Landmark Shareholder Approval. This Agreement has been duly executed and
delivered by Landmark and constitutes a valid and binding obligation of
Landmark, enforceable against Landmark in accordance with its terms (except as
enforcement hereof may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium and similar laws, both state and federal, affecting the enforcement
of creditors' rights or remedies in general as from time to time in effect or
(ii) the exercise by courts of equity powers). The execution and delivery of
this Agreement do not, and the consummation of the transactions contemplated by
this Agreement and compliance with the provisions of this Agreement will not,
conflict with, or result in any violation of, or default (with or without notice
or lapse of time or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or the loss of a material benefit
under, or result in the creation of any Lien upon any of the properties or
assets of Landmark or any of its Subsidiaries under (i) the articles of
incorporation or bylaws of Landmark or the charter documents of any of its
Subsidiaries, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, franchise
or license applicable to Landmark or any of its Subsidiaries or their respective
properties or assets or (iii) assuming receipt of the approvals, consents and
clearances relating to the filings described in Section 3.1(d)(ii), and the
giving and making of all notices, reports and other filings described in Section
3.1(d)(ii), any judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Landmark or any of its Subsidiaries or their respective
properties or assets, other than, in the case of clause (ii) or (iii) of this
sentence, any such conflicts, violations, defaults, rights or Liens that
individually or in the aggregate would not (x) have a Material Adverse Effect on
Landmark, (y) materially impair the ability of Landmark to perform its
obligations under this Agreement or (z) prevent the consummation of any of the
transactions contemplated by this Agreement.
(ii) No waiver, consent, approval, order or authorization of,
or registration, declaration or filing with, any federal, state or local
government or any court, administrative or regulatory agency or commission or
other governmental authority or agency, domestic or foreign (a "Governmental
Entity") or any other Person, is required by or with respect to Landmark or any
of its Subsidiaries in connection with the execution and delivery by Landmark of
this Agreement or the consummation by Landmark of the transactions contemplated
by this Agreement, except for:
(1) the filing of a pre-merger notification and report form by
Landmark under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx
"XXX Xxx") and any similar filings and approvals required under foreign
jurisdictions,
(2) the filing with the SEC and the National Association of
Securities Dealers, Inc. of proxy soliciting materials relating to Landmark
Shareholder Approval (as amended or supplemented from time to time, the "Proxy
Statement") and a Transaction Statement under Section 13(e) of the Exchange Act
(the "Schedule 13e-3"), if applicable, and (B) and any other applicable
requirements under state securities or "blue sky" laws and state takeover laws,
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(3) the filing of the Articles of Merger and other appropriate
merger documents required by the VSCA and the issuance by the Virginia State
Corporation Commission of the Certificate of Merger pursuant to the VSCA,
(4) the filing of the appropriate documents with the relevant
authorities of other states in which Landmark is qualified to do business,
(5) any waiver, consent, approval, order or authorization of,
registration, declaration or filing required to be made or received by a
Subsidiary of Landmark which is not organized in the U.S., in connection with
the transactions contemplated by this Agreement, and
(6) such other consents, approvals, orders, authorizations,
registrations, declarations and filings as would not individually or in the
aggregate (A) have a Material Adverse Effect on Landmark, (B) materially impair
the ability of Landmark to perform its obligations under this Agreement or (C)
prevent Landmark from consummating, or materially impair the ability of Landmark
to consummate, any of the transactions contemplated by this Agreement.
(iii) Section 3.1(d)(iii) of the Landmark Disclosure Letter
lists all consents, waivers and approvals under any of Landmark's or any of its
Subsidiaries' agreements, contracts, licenses or leases required to be obtained
in connection with the consummation of the transactions contemplated hereby,
which if, individually or in the aggregate, were not obtained, would result in a
Material Adverse Effect on Landmark.
(e) SEC Documents; Financial Statements.
(i) Landmark has filed in a timely manner all required
reports, schedules, forms, statements and other documents with the SEC and any
relevant state securities regulatory bodies since the date on which it became
subject to the requirements of the Securities Act of 1933, as amended, (the
"Securities Act") or the Exchange Act. All such required reports, schedules,
forms, statements and other documents filed by Landmark with the SEC (including
those that Landmark may file subsequent to the date hereof) are referred to
herein as the "SEC Documents". Except as set forth in Section 3.1(e)(i) of the
Landmark Disclosure Letter, as of their respective dates, the SEC Documents
complied in all material respects with the requirements of the Securities Act or
the Exchange Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to such SEC Documents, and none of the SEC
Documents, when filed, 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 therein, in light of the circumstances under which
they were made, not misleading. Except to the extent that information contained
in any SEC Document has been revised or superseded by a later filed SEC
Document, none of the SEC Documents contains any untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary in order to make the
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statements therein, in light of the circumstances under which they were made,
not misleading. None of Landmark's Subsidiaries is required to file any forms,
reports or other documents with the SEC.
(ii) The financial statements of Landmark included in the SEC
Documents comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with GAAP (except, in the case of
unaudited statements, as permitted by the rules and regulations of the SEC)
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present in all material respects the
consolidated financial position of Landmark and its Subsidiaries as of the dates
thereof and the consolidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments). Neither Landmark nor any of its Subsidiaries has
any liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) which are, individually or in the aggregate, material
to the business, results of operations or financial condition of Landmark and
its Subsidiaries taken as a whole, except liabilities (A) provided for in the
most recent consolidated balance sheet included in the SEC Documents (B)
incurred since the date of such balance sheet in the ordinary course of business
consistent with past practices (C) which are Taxes attributable to the
consummation of the transactions contemplated by this Agreement or (D) set forth
in Section 3.1(e)(ii) of the Landmark Disclosure Letter or the Supplemental
Disclosure Letter.
(iii) Maintenance Revenues. Landmark's maintenance revenues
for Landmark's trailing twelve months ended September 30, 2001, as calculated in
accordance with GAAP applied on a consistent basis with prior audited periods
and Landmark's accounting policies, were not less than the amount set forth in
Section 3.1(e)(iii) of the Landmark Disclosure Letter.
(f) Information Supplied. None of the information supplied or to be
supplied by Landmark specifically for inclusion or incorporation by reference in
the Proxy Statement or, if applicable, the Schedule 13e-3, will, at the time the
Proxy Statement or the Schedule 13e-3, if applicable, is first mailed to
Landmark's shareholders or at the time of the Shareholders Meeting (as defined
in Section 5.1(a)), contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading. The Proxy Statement and the Schedule 13e-3 will comply as
to form in all material respects with the requirements of the Exchange Act and
the rules and regulations thereunder, except that no representation or warranty
is made by Landmark with respect to statements made or incorporated by reference
therein based on information supplied by ASG or ASG Sub specifically for
inclusion or incorporation by reference therein.
(g) Absence of Certain Changes or Events. Except as specifically
contemplated by this Agreement, or disclosed in Section 3.1(g) of the Landmark
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Disclosure Letter or the Supplemental Disclosure Letter, since the date of the
most recently audited financial statements included in the SEC Documents,
Landmark has conducted its business only in the ordinary course, and there has
not been (i) any Material Adverse Change affecting Landmark, (ii) any
declaration, setting aside or payment of any dividend or other distribution
(whether in cash, stock or property) with respect to any of Landmark's capital
stock, (iii) any split, combination or reclassification of any of its capital
stock or any issuance or authorization of any issuance of any other securities
in respect of, in lieu of or in substitution for shares of its capital stock,
(iv)(x) any granting by Landmark or any of its Subsidiaries to any employee of
Landmark or any of its Subsidiaries of any increase in excess of $10,000 per
annum in compensation, except in the ordinary course of business consistent with
prior practice or as was required under employment agreements in effect as of
the date of the most recent audited financial statements included in the SEC
Documents, (y) any granting by Landmark or any of its Subsidiaries to any
employee of any increase in excess of $10,000 per annum in severance or
termination pay, except as was required under any employment, severance or
termination agreements in effect as of the date of the most recent audited
financial statements included in the SEC Documents, or (z) any entry by Landmark
or any of its Subsidiaries into any employment, severance or termination
agreement with any executive officer, (v) any damage or destruction of or loss
to any property of Landmark, whether or not covered by insurance, that has or
could reasonably be expected to have a Material Adverse Effect on Landmark, (vi)
any change in accounting methods, principles or practices by Landmark materially
affecting its assets, liabilities or business, except insofar as may have been
required by a change in GAAP or SEC rules and regulations, or (vii) any material
revaluation of any of Landmark's assets, including, without limitation, writing
down the value of capitalized inventory or writing off accounts receivable,
other than in the ordinary course consistent with past practice.
(h) Intellectual Property.
(i) Landmark and its Subsidiaries own, or are licensed or
otherwise possess legally enforceable rights to use, all patents, trademarks,
trade names, service marks, copyrights, and any applications therefor,
maskworks, net lists, schematics, technology, know-how, trade secrets,
inventory, ideas, algorithms, processes, computer software programs or
applications (in both source code and object code form), and tangible or
intangible proprietary information or material ("Intellectual Property") that
are material to the business of Landmark and its Subsidiaries as currently
conducted by Landmark and its Subsidiaries.
(ii) Section 3.1(h)(ii) of the Landmark Disclosure Letter or
the Supplemental Disclosure Letter lists (x) all patents and patent applications
and all registered and unregistered trademarks, trade names and service marks,
registered and unregistered copyrights which Landmark considers to be material
to its business and included in the Intellectual Property, including the
jurisdictions in which each such Intellectual Property right has been issued or
registered or in which any application for such issuance and registration has
been filed, (y) all material licenses, sublicenses, and
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other agreements as to which Landmark is a party and pursuant to which any
Person other than Landmark is authorized to use any Intellectual Property (other
than end-user licenses in Landmark's current standard form provided to ASG's
counsel), and (z) all material licenses, sublicenses and other agreements as to
which Landmark is a party and pursuant to which Landmark is authorized to use
any third party Intellectual Property, including software ("Third Party
Intellectual Property Rights") which are incorporated in, are, or form a part of
any Landmark product that is material to its business.
(iii) To the knowledge of Landmark, there is no unauthorized
use, disclosure, infringement or misappropriation of (A) any Intellectual
Property rights of Landmark or any of its Subsidiaries, (B) any trade secret
material to Landmark or any of its Subsidiaries, or (C) any Intellectual
Property right of any third party to the extent licensed by or through Landmark
or any of its Subsidiaries, by any third party, including any employee or former
employee of Landmark or any of its Subsidiaries. Except as set forth in Section
3.1(h)(iii) of the Landmark Disclosure Letter or the Supplemental Disclosure
Letter, to the knowledge of Landmark, no Landmark Intellectual Property or
product or service of Landmark is subject to any proceeding or outstanding
decree, order, judgment, agreement, or stipulation restricting in any manner the
use, transfer, or licensing thereof by Landmark, or which may affect the
validity, use or enforceability of such Landmark Intellectual Property. Neither
Landmark nor any of its Subsidiaries has entered into any agreement to indemnify
any other Person against any charge of infringement of any Intellectual
Property, other than indemnification provisions contained in licenses, purchase,
service or work orders with customers, distribution and reseller agreements, or
other agreements arising in the ordinary course of business.
(iv) Landmark is not, nor will it be as a result of the
execution and delivery of this Agreement or the performance of its obligations
under this Agreement, in material breach of any license, sublicense or other
agreement relating to Landmark Intellectual Property or Third Party Intellectual
Property Rights, Landmark's service offerings or its ability to exploit its
products which breach could reasonably be expected to result in a Material
Adverse Effect on Landmark.
(v) No suit, action, proceeding or claim involving Landmark
which involves a claim of infringement of any patents, trademarks, service
marks, copyrights or violation of any trade secret or other proprietary right,
or breach of any license or agreement involving Intellectual Property is
currently pending or, to the knowledge of Landmark, is threatened, nor, to the
knowledge of Landmark, is there any reasonable basis therefor. The manufacture,
marketing, licensing or sale of Landmark's products and the provision of
Landmark's services does not, to Landmark's knowledge after due inquiry of each
of Landmark's executive officers, directors and officers in charge of Landmark's
corporate functions, infringe any patent, trademark, service xxxx, copyright,
trade secret or other proprietary right of any third party.
(vi) Landmark has not received notice from any third party
and does not otherwise know or have reason to know that the operation of the
business of Landmark
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or any act, product or service of Landmark, infringes or misappropriates any
Third Party Intellectual Property Rights or constitutes unfair competition or
trade practices under the laws of any jurisdiction.
(vii) Except as set forth in Section 3.1(h)(vii) of the
Landmark Disclosure Letter or the Supplemental Disclosure Letter, to Landmark's
knowledge, no Person has previously infringed or misappropriated or is
infringing or misappropriating any Intellectual Property material to Landmark.
(viii) Except as set forth in Section 3.1(h)(viii) of the
Landmark Disclosure Letter or in the Supplemental Disclosure Letter, all current
and former employees and consultants of Landmark have signed a
confidentiality/nondisclosure agreement substantially in the forms attached to
the Landmark Disclosure Letter or the Supplemental Disclosure Letter. All
current and former employees and consultants of Landmark involved in product
development work have signed an invention assignment agreement in the form
attached to the Landmark Disclosure Letter or the Supplemental Disclosure
Letter. To Landmark's knowledge, no such current or former employees or
consultants of Landmark have violated any such agreement or otherwise
misappropriated any trade secrets of Landmark or of any third party. Landmark is
not utilizing nor will it be necessary to utilize any inventions, trade secrets
or proprietary information of any of its employees made prior to their
employment by Landmark, except for inventions, trade secrets or proprietary
information that have been assigned to Landmark.
(ix) Landmark has taken all reasonable and appropriate steps
to protect and preserve the confidentiality of all Intellectual Property deemed
confidential or trade secret and not otherwise protected by patents or
copyrights ("Confidential Information"). All use, disclosure or appropriation of
material Confidential Information owned by Landmark by or to a third party has
been pursuant to the terms of a written agreement between Landmark and such
third party. All use, disclosure or appropriation by Landmark of Confidential
Information not owned by Landmark has been pursuant to the terms of a written
agreement between Landmark and the owner of such Confidential Information, or is
otherwise lawful.
(x) Except as set forth in Section 3.1(h)(x) of the Landmark
Disclosure Letter, Landmark has fully documented in writing or in other tangible
media all material technology, computer programs or Intellectual Property which
are incorporated in, are, or form a material part of any product licensed or
sold to customers by Landmark or its Subsidiaries and that are material to the
business of Landmark and its Subsidiaries as currently conducted by Landmark and
its Subsidiaries, including without limitation, having a complete annotated
source code listing for all of the foregoing with respect to year 2000
compliance or conformity.
(xi) Except as set forth in Section 3.1(h)(xi) of the
Landmark Disclosure Letter or the Supplemental Disclosure Letter, Landmark does
not know or have reason to know of any outstanding claims by customers relating
to year 2000 products and
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services provided by Landmark to such customers, nor has any such customer
asserted, to the knowledge of Landmark, any reasonable basis for such claims.
(xii) Except as set forth in Section 3.1(h)(xii) of the
Landmark Disclosure Letter or the Supplemental Disclosure Letter, Landmark has
no object and/or source code and/or documentation escrow deposit and/or
maintenance obligations to any third party, including, without limitation,
deposit obligations relating to bug fixes and/or upgrades and/or revisions
and/or new versions in connection with any of Landmark's products, other than
deposit obligations or maintenance obligations arising in the ordinary course of
business.
(xiii) There is no software owned by any third party that is
embedded in or required for the use of or to be used by any of the products of
Landmark or its Subsidiaries that if no longer available to Landmark would have
a Material Adverse Effect on Landmark.
(i) Litigation. Except as disclosed in Section 3.1(i) of the
Landmark Disclosure Letter or the Supplemental Disclosure Letter, there is no
suit, action or proceeding pending or, to the knowledge of Landmark, threatened
against Landmark or any of its Subsidiaries, nor, to the knowledge of Landmark,
is there any reasonable basis therefor, that individually or in the aggregate
could reasonably be expected to (A) have a Material Adverse Effect on Landmark,
(B) challenge or seek to enjoin or seek damages with respect to Landmark's
entering into and performing this Agreement or that impair the ability of
Landmark to perform its obligations under this Agreement or (C) prevent the
consummation of any of the transactions contemplated by this Agreement, nor is
there any judgment, decree, injunction, rule or order of any Governmental Entity
or arbitrator pending, or to the knowledge of Landmark, threatened against
Landmark or any of its Subsidiaries having, or which is reasonably likely to
have, any effect referred to in the foregoing clauses (A), (B) or (C) above.
(j) Absence of Changes in Benefit Plans. Except as disclosed in
Section 3.1(j) of the Landmark Disclosure Letter or in the Supplemental
Disclosure Letter, since the date of the most recent audited financial
statements included in the SEC Documents, there has not been any adoption or
amendment in any material respect by Landmark or any of its Subsidiaries of any
collective bargaining agreement or any bonus, pension, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock purchase, stock
option, phantom stock, retirement, vacation, severance, disability, death
benefit, hospitalization, medical or other plan, arrangement or understanding
(whether or not legally binding) providing benefits to any current or former
employee, officer or director of Landmark or any of its Subsidiaries. Except as
disclosed in Section 3.1(j) or Section 3.1(s) of the Landmark Disclosure Letter
or in the Supplemental Disclosure Letter, there exist no employment, consulting,
severance, termination or indemnification agreements, arrangements or
understandings between Landmark or any of its Subsidiaries and any current or
former employee, officer, consultant or director of Landmark or any of its
Subsidiaries as to which there is or
-15-
could be aggregate liability on the part of Landmark or any of its Subsidiaries
in excess of $10,000.
(k) ERISA Compliance.
(i) Each of Landmark and its Subsidiaries is in material
compliance with all applicable laws relating to the form and operation of each
Landmark Employee Plan, including ERISA and the Revenue Code. Except as set
forth in Section 3.1(k)(i) of the Landmark Disclosure Letter or the Supplemental
Disclosure Letter, Landmark does not have any employment contracts or consulting
agreements currently in effect that are not terminable at will (other than
agreements with the sole purpose of providing for the confidentiality of
proprietary information or assignment of inventions).
(ii) Neither Landmark nor any trade or business which is
under common control with Landmark within the meaning of Section 414 of the
Revenue Code (a "Landmark Tax Affiliate") has a retirement or deferred
compensation plan which is subject to Section 412 of the Revenue Code or subject
to Title IV of ERISA or maintains a "multiemployer plan" as defined in Section
3(37) of ERISA. Except as set forth in Section 3.1(k)(ii) of the Landmark
Disclosure Letter or the Supplemental Disclosure Letter, neither Landmark nor
any Landmark Tax Affiliate maintains, contributes to, or has any liability for
providing medical, health, life, or other welfare benefit coverage for present
or future terminated employees (other than any welfare benefit coverage provided
in compliance with the Consolidated Omnibus Budget Reconciliation Act of 1985 or
similar laws). Neither Landmark nor any Landmark Tax Affiliate has any trusts
that are intended to be qualified under Revenue Code section 501(a)(9) and none
have had such trusts in the past.
(iii) Landmark has made available to ASG a true and complete
copy of, to the extent applicable, (A) each Landmark Employee Plan, as defined
in subparagraph (iv) below (B) each trust agreement related to such Landmark
Employee Plan, (C) the most recent summary plan description for each Landmark
Employee Plan for which such a description is required, (D) the most recent
United States Internal Revenue Service ("IRS") determination letter issued with
respect to any Landmark Employee Plan and Landmark's application to the IRS for
such letter, and (E) for the three most recent years (w) except as set forth in
Section 3.1(k)(iii) of the Landmark Disclosure Letter or the Supplemental
Disclosure Letter, the Form 5500 and attached schedules, (x) audited financial
statements and valuation reports, (y) Forms PBGC-1 (if applicable) and all
attachments thereto, and (z) attorneys' responses to auditors' requests for
information.
(iv) Except as disclosed in Section 3.1(k)(iv) of the
Landmark Disclosure Letter or the Supplemental Disclosure Letter, each
employment, severance or other similar contract, arrangement or policy, each
"employee benefit plan" as defined in Section 3(3) of ERISA and each plan or
arrangement (written or oral) providing for insurance coverage (including any
self-insured arrangements), workers' benefits, vacation benefits, severance
benefits, disability benefits, death benefits,
-16-
hospitalization benefits, retirement benefits, deferred compensation, pension,
profit-sharing, bonuses, stock options, stock purchase, phantom stock, stock
appreciation or other forms of incentive compensation or post-retirement
insurance, compensation or benefits for employees, consultants or directors
which is entered into, maintained or contributed to by Landmark or any Landmark
Tax Affiliate and covers any employee or former employee of Landmark or any
Landmark Tax Affiliate (collectively referred to as "Landmark Employee Plans")
has been maintained in compliance in all material respects with its terms and
with the requirements prescribed by any and all statutes, orders, rules and
regulations that are applicable to such Landmark Employee Plan. Landmark's
Employee Plans are listed in Section 3.1(k)(iv) of the Landmark Disclosure
Letter or the Supplemental Disclosure Letter. Any Landmark Employee Plan which
is intended to be qualified within the meaning of Revenue Code section 401(a) is
so qualified and has received a favorable determination letter as to its
qualified status, and, to Landmark's knowledge, nothing has occurred, whether by
action or failure to act, which would cause the loss of such qualification.
(v) Except as set forth in Section 3.1(k)(v) of the Landmark
Disclosure Letter or the Supplemental Disclosure Letter, all required payments,
insurance premiums, and contributions to any Landmark Employee Plan for all
periods prior to the Effective Time have been timely made or are accrued on
Landmark's financial statements and adequate reserves have been provided for any
accrued payments, premiums or contributions (or portions thereof) attributable
to service on or prior to the Effective Time. No Landmark Employee Plan provides
for an increase in benefits on or after the Effective Time (excluding any
agreements between Landmark and individual employees). Except as set forth in
Section 3.1(k)(v) of the Landmark Disclosure Letter or the Supplemental
Disclosure Letter, no Landmark Employee Plan contains any contractual language
which limits Landmark's (or its successors') ability to amend or terminate such
plan without obligation or liability (other than those obligations or
liabilities for which specific assets have been set aside in a trust or other
funding vehicle) and no participant in any Landmark Employee plan has retained
the right to continue benefits under any predecessor documents governing a
Landmark Employee Plan.
(vi) There has been no amendment to, written interpretation
or announcement (whether or not written) by Landmark relating to, or change in
employee participation or coverage under, any Landmark Employee Plan that would
increase materially the expense of maintaining such Landmark Employee Plan above
the level of the expense incurred in respect thereof for Landmark's fiscal year
ended December 31, 2000. For each Landmark Employee Plan for which a Form 5500
has been filed, no material change has occurred with respect to a matter covered
by the most recent Form 5500 since this date hereof. Such Form 5500s were timely
filed and at the time of filing, such Forms correctly reflected the facts
regarding the income, activities, status or other matters of the Plan or any of
the information required to be shown thereon. Each Landmark Employee Plan that
is required to be amended to reflect changes in recent legislation by December
31, 2001 to remain tax-qualified under Revenue Code section 401(a), has been so
amended by Landmark and has been submitted by Landmark or its
-17-
representatives to the Internal Revenue Service for a determination letter
indicating that the plan, as amended, remains tax-qualified.
(vii) All Landmark Employee Plans, to the extent applicable,
are in compliance, in all material respects, with (x) the continuation coverage
requirements of Section 4980B of the Revenue Code and Sections 601 through 608
of ERISA, (y) the Americans with Disabilities Act of 1990, as amended, and (z)
the Family Medical and Leave Act of 1993, as amended, and the regulations
thereunder. All notices or filings required by ERISA or the Revenue Code or any
state or federal law or any ruling or regulation of any state or federal agency
with respect to Landmark's Employee Plans, including but not limited to notices
required by section 606 of ERISA and section 4980B(f)(6) of the Revenue Code, or
any notices required to be given or made to Landmark's employees or to
beneficiaries of Landmark's Employee Plans as a result of this Merger, have been
timely and appropriately given or made by Landmark. Except as required by law or
as set forth in Section 3.1(k)(vii) of the Landmark Disclosure Letter or the
Supplemental Disclosure Letter, no Landmark Employee Plan provides any retiree
or post-employment benefit coverage.
(viii) Neither Landmark nor any of its respective Subsidiaries
or Affiliates, has engaged, nor does Landmark have any knowledge of any employee
or officer of Landmark or any of its respective Subsidiaries or Affiliates or
any fiduciary (as that term is defined in section 3(21) of ERISA) of any
Landmark Employee Plan ("Fiduciary") having engaged, in a prohibited transaction
as such term is defined in Revenue Code section 4975 or section 406 of ERISA,
nor have any of the above-mentioned entities or individuals engaged in any other
action or failure to act that would subject them to any taxes, penalties, or
other liabilities under Revenue Code sections 4972, 4976, 4977, 4979, 4980 or
4980B, or fines or penalties imposed under ERISA sections 409, 502(i) or 501.
Except as set forth in Section 3.1(k)(viii) of the Landmark Disclosure Letter or
the Supplemental Disclosure Letter, neither Landmark nor any Landmark Tax
Affiliate nor any Landmark Employee Plan has entered into a written agreement or
similar arrangement with the IRS or the Department of Labor with respect to such
Plan, nor have any errors with respect to such Plans been corrected pursuant to
voluntary correction programs established by the IRS or the Department of Labor.
No Governmental Entities, including the IRS and the Department of labor, have
given Landmark, any Landmark Tax Affiliate, any Landmark Employee Plan, any
officer of employee of such entity, or any Fiduciary, notice regarding any
pending claim, charge, complaint or audit with respect to a Landmark Employee
Plan.
(ix) Except as set forth in Section 3.1(k)(ix) of the
Landmark Disclosure Letter or the Supplemental Disclosure Letter, no benefit
payable or which may become payable by Landmark or any of its Subsidiaries
pursuant to any Landmark Employee Plan or otherwise, as a result of or arising
under this Agreement or the Principal Share Purchase and Voting Agreements, will
constitute an "excess parachute payment" (as defined in Section 280G(b)(1) of
the Revenue Code) which is subject to the imposition of an excise Tax under
Section 4999 of the Revenue Code or which would be nondeductible by reason of
Section 280G of the Revenue Code. Except as set forth in
-18-
Section 3.1(k)(ix) of the Landmark Disclosure Letter or the Supplemental
Disclosure Letter, neither Landmark nor its Subsidiaries is a party to any: (x)
agreement (other than as described in (y) below) with any executive officer or
other key employee thereof (A) the benefits of which are contingent, or the
terms of which are materially altered, upon the occurrence of the transactions
contemplated by this Agreement, (B) providing any term of employment or
compensation guarantee, or (C) providing severance benefits or other benefits
after the termination of employment of such employee regardless of the reason
for such termination of employment, or (y) agreement or plan, including, without
limitation, any stock option plan, stock appreciation rights plan or stock
purchase plan, any of the benefits of which will be materially increased, or the
vesting of benefits of which will be materially accelerated, by the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
(x) Landmark has made available to ASG a list of the names
of all employees of Landmark and of any of its Subsidiaries and their salaries
as of the most recent practicable date.
(l) Taxes.
(i) Except as set forth in Section 3.1(l)(i) of the Landmark
Disclosure Letter or in the Supplemental Disclosure Letter, Landmark and each of
its Subsidiaries has duly filed on a timely basis all Returns required to have
been filed by it and has timely paid all Taxes shown as due on such Tax Returns.
All such Returns are true, complete and correct in all material respects. Except
as set forth in Section 3.1(l)(i) of the Landmark Disclosure Letter or the
Supplemental Disclosure Letter, neither Landmark nor any of its Subsidiaries is
delinquent in the payment of any Tax nor is there any Tax deficiency
outstanding, proposed or assessed against Landmark or any of its Subsidiaries,
nor has Landmark or any of its Subsidiaries executed any unexpired waiver of any
statute of limitations on, or extension of the period for the assessment or
collection of, any Tax. Except as set forth in Section 3.1(l)(i) of the Landmark
Disclosure Letter or in the Supplemental Disclosure Letter, neither Landmark nor
any of its Subsidiaries has any liability for any unpaid Taxes which has not
been accrued for or reserved on the balance sheet of Landmark contained in the
most recent financial statements contained in the SEC Documents (the "Landmark
Balance Sheet") in accordance with GAAP, whether asserted or unasserted,
contingent or otherwise, other than any liability for unpaid Taxes that may have
arisen since the date of the Landmark Balance Sheet in connection with the
operation of the business of Landmark and its Subsidiaries in the ordinary
course or as a result of ASG's election regarding the structure of the Merger as
described in Section 1.1(b) or which are Taxes attributable to the consummation
of the transactions contemplated by this Agreement. The most recent financial
statements contained in the SEC Documents properly reflect in accordance with
GAAP all Taxes payable by or properly accruable by Landmark and its Subsidiaries
for all taxable periods and portions thereof with respect to periods covered by
such financial statements. Landmark and each of its Subsidiaries have complied
with all applicable Laws relating to Taxes with respect to information reporting
and withholding in connection with payments made to third parties, including
employees,
-19-
and have timely withheld and paid over to the proper authorities all amounts
required to have been so withheld and paid over under such Laws.
(ii) Except as set forth in Section 3.1(l)(ii) of the
Landmark Disclosure Letter or the Supplemental Disclosure Letter, to the
knowledge of Landmark, none of the Returns of Landmark or of its Subsidiaries
have been examined by the Internal Revenue Service or any other taxing authority
with respect to a material amount (a) during the three-year period ending on the
Closing Date, or (b) during the two-year period immediately preceding such
three-year period in which, solely with respect to this clause (b), the
examining taxing authority asserted a position that if sustained would have had
a Material Adverse Effect on Landmark, and such effect has not been adequately
disclosed in the financial statements included in the SEC Documents. None of
Landmark and its Subsidiaries has entered into any written agreement (other than
any Tax election referred to in Section 3.1(l)(v) below) with a taxing authority
which would have effect in the determination of Tax obligations of Landmark or
any of its Subsidiaries with respect to any taxable year ending after the date
of the Landmark Balance Sheet. Except as set forth in Section 3.1(l)(ii) of the
Landmark Disclosure Letter or the Supplemental Disclosure Letter, there are no
actions, suits, proceedings, audits, investigations or claims now pending, nor
to the knowledge of Landmark, proposed against Landmark or any of its
Subsidiaries by any taxing authority relating to any Taxes, nor are there any
currently outstanding requests from any taxing authority for information with
respect to Landmark or any of its Subsidiaries, nor, to the knowledge of
Landmark, are there any proposed reassessments of any property owned by Landmark
or any of its Subsidiaries, or other proposals by taxing authorities relating
specifically to Landmark or any of its Subsidiaries that could increase the
amount of any Tax to which Landmark or any of its Subsidiaries would be subject.
Landmark and each of its Subsidiaries has disclosed on their federal income tax
returns all positions taken therein that could give rise to a substantial
understatement penalty within the meaning of Revenue Code Section 6662. Neither
Landmark nor any of its Subsidiaries is (nor has ever been) a party to any Tax
sharing agreement with any party other than Landmark or its Subsidiaries. Except
as set forth in Section 3.1(l)(ii) of the Landmark Disclosure Letter or the
Supplemental Disclosure Letter, neither Landmark nor any of its Subsidiaries has
entered into any binding agreement relating to Tax positions to be taken by
Landmark or any of its Subsidiaries in any Return required to be filed after the
Effective Time (other than Tax positions that are required to be taken to be
consistent with positions taken in Returns filed before the Effective Time).
Other than a consolidated, combined, or other similar return for a group of
which Landmark has been or is the common parent, neither Landmark nor any of its
Subsidiaries has ever joined in the filing of a consolidated, combined or
similar Return, for which it may have any liability for Tax of the group filing
such consolidated, combined or similar Return under Treasury Regulation Section
1.1502-6 (or any similar provision of state, local or foreign Law), nor does
Landmark or any of its Subsidiaries have any liability as a transferee or
successor, by contract or otherwise for Taxes of any Person other than Landmark
and its Subsidiaries. There are no Liens or security interests on any of the
assets of Landmark or its Subsidiaries that arose in connection with any failure
(or alleged failure) to pay Taxes.
-20-
(iii) Except as set forth in Section 3.1(l)(iii) of the
Landmark Disclosure Letter or the Supplemental Disclosure Letter, neither
Landmark nor any Subsidiary is a party to any safe harbor lease within the
meaning of Section 168(f)(8) of the Revenue Code, as in effect prior to
amendment by the Tax Equity and Fiscal Responsibility Act of 1982. Landmark is
not and has not been a United States real property holding corporation within
the meaning of Section 897(c)(2) of the Revenue Code during the preceding
five-year period. Neither Landmark nor any Subsidiary has participated in an
international boycott as defined in Revenue Code Section 999. Neither Landmark
nor any Subsidiary is a member of, a partner in, or otherwise owns an interest
in a partnership, limited liability or other "pass through" entity. Neither
Landmark nor any Subsidiary has agreed, nor is it required to make, any
adjustment in computing taxable income for any taxable period ending after the
effective date of the Landmark Balance Sheet under Revenue Code Section 481(a)
by reason of a change in accounting method effected in any taxable period prior
to the Effective Time. Except as set forth in Section 3.1(l)(iii) of the
Landmark Disclosure Letter or the Supplemental Disclosure Letter, neither
Landmark nor any of its Subsidiaries owns any interest in any controlled foreign
corporation (as defined in Section 957 of the Revenue Code), passive foreign
investment company (as defined in Section 1296 of the Revenue Code) or other
entity, the income of which is required to be included in the income of Landmark
or any of its Subsidiaries. Neither Landmark nor any of its Subsidiaries has
been a "distributing" or "controlled" corporation as defined in Section 355 of
the Revenue Code in a transaction intended to qualify under Section 355 and
Section 368(a)(1)(D) of the Revenue Code within the three years immediately
prior to the signing of this Agreement. Except as set forth in Section
3.1(l)(iii) of the Landmark Disclosure Letter or the Supplemental Disclosure
Letter, neither Landmark nor any Subsidiary has granted a power of attorney with
respect to any matter relating to Taxes in the last three years, nor has such a
power outstanding, except with respect to matters for which both (i) the
identity of the attorney or representative appointed, and a description of the
Tax matter covered, by the power of attorney is set forth in Section 3.1(l)(iii)
of the Landmark Disclosure Letter or the Supplemental Disclosure Letter, and
(ii) a copy of the power of attorney is provided to ASG. Except as set forth in
Section 3.1(l)(iii) of the Landmark Disclosure Letter or the Supplemental
Disclosure Letter, neither Landmark nor any of its Subsidiaries has any income
reportable for a period after the Effective Time but attributable to the sale of
property or the provision of services (e.g., an installment sale) occurring in a
period ending on or prior to the Effective Time, the effect of which is the
deferred reporting, in a Return for the taxable period or portion thereof ending
after the Effective Time, of income economically accruing in a period ending on
or before the Effective Time from such transaction.
(iv) Neither Landmark nor any of its Subsidiaries has filed
any consent agreement under Section 341(f) of the Revenue Code or agreed to have
Section 341(f)(2) of the Revenue Code apply to any disposition of a subsection
(f) asset (as defined in Section 341(f)(4) of the Revenue Code) owned by
Landmark or any of its Subsidiaries. Neither Landmark nor any of its
Subsidiaries has been, or is a successor corporation (as defined by Treasury
Regulation Section 1.1362-5(b)) of a corporation
-21-
that has been, an "S corporation" (as defined by Revenue Code Section
1361(a)(1)) or a "qualified subchapter S subsidiary" (as defined by Revenue Code
Section 1361(b)(3)(B)) within the five-year period immediately prior to the
signing of this Agreement.
(v) All material Tax elections for Landmark and its
Subsidiaries are set forth in, or apparent from, the Returns to which such
elections relate or the Returns in which such elections were first made. Except
as set forth in Section 3.1(l)(v) of the Landmark Disclosure Letter or the
Supplemental Disclosure Letter, Landmark and/or each of its Subsidiaries does
not have a net operating loss, capital loss, or tax credits presently subject to
limitation under Revenue Code Sections 382, 383, 384, or the Treasury
Regulations thereunder, or the separate return year limitations applicable under
various Treasury Regulations issued under Revenue Code Section 1502.
(vi) As used in this Agreement, "Tax" or "Taxes" means all
taxes, assessments, duties, levies, fees and other similar governmental charges
(including taxes on or with respect to net or gross income, employment, value
added, rent, excise, environmental, occupancy, licensing, sales, use, transfer,
ad valorem, intangibles, gross receipts, personal property, real property,
franchise, doing business, withholding, payroll, workers' compensation, Pension
Benefit Guaranty Corporation premiums, stamp and capital) of the United States
(federal, state or local) or other applicable jurisdiction (including any
foreign jurisdiction), together with any interest thereon, penalties, additions
to tax or additional amounts with respect thereto, and any interest in respect
of any such penalties, additions or additional amounts. As used in this
Agreement, "Returns" means all reports, estimates, declarations of estimated
tax, information statements and returns required to be filed with a Governmental
Entity in connection with, any Taxes, including information returns or reports
with respect to withholding and other payments to third parties.
(m) No Excess Parachute Payments. Except as set forth in Section
3.1(m) of the Landmark Disclosure Letter or the Supplemental Disclosure Letter,
any amount that could be received (whether in cash or property or the vesting of
property) as a result of any of the transactions contemplated by this Agreement
by any employee, officer or director of Landmark or any of its affiliates who is
a "disqualified individual" (as such term is defined in proposed Treasury
Regulation Section 1.280G-1) under any employment, severance or termination
agreement, other compensation arrangement or benefit plan currently in effect
would not be characterized as an "excess parachute payment" (as such term is
defined in Section 280G(b)(1) of the Revenue Code). Except as set forth in
Section 3.1(m) of the Landmark Disclosure Letter or the Supplemental Disclosure
Letter, there is no agreement, contract or arrangement to which Landmark or any
of its Subsidiaries is a party that may result in the payment of any amount the
deduction of which would be disallowed pursuant to Sections 280G or 162(m) of
the Revenue Code (disregarding for this purpose all payments that, without the
knowledge of Landmark, may be required to be made by ASG or its Affiliates or
which are pursuant to agreements entered into after the Effective Time). Except
as set forth in Section 3.1(m) of the Landmark Disclosure Letter or the
Supplemental Disclosure Letter, all
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contributions made to or under a stock bonus, pension, profit-sharing, or
annuity plan that are subject to Revenue Code Section 404(a) meet the
requirements for deductibility under Revenue Code Section 404(a) and do not
result in an excise tax under Revenue Code Section 4972.
(n) Compliance with Applicable Laws; Environmental Laws.
(i) Landmark and each of its Subsidiaries has in effect all
federal, state, local and foreign governmental approvals, authorizations,
certificates, filings, franchises, licenses, notices, permits and rights
("Permits") necessary for it to own, lease or operate its properties and assets
and to carry on its business as now conducted, and there has occurred no default
under any such Permit, except for the lack of Permits and for defaults under
Permits which individually or in the aggregate would not have a Material Adverse
Effect on Landmark. Landmark and its Subsidiaries are in compliance with all
applicable statutes, laws, ordinances, rules, orders and regulations of any
Governmental Entity, except for noncompliance which individually or in the
aggregate would not have a Material Adverse Effect on Landmark.
(ii) Landmark and its Subsidiaries are, and have been, in
compliance with all applicable Environmental Laws except for noncompliance which
individually or in the aggregate would not have a Material Adverse Effect on
Landmark. The term "Environmental Laws" means any federal, state or local
statute, code, ordinance, rule, regulation, permit, consent, approval, license,
judgment, order, writ, decree, directive, injunction or other authorization,
including the requirement to register underground storage tanks, relating to:
(x) Releases or threatened Releases of Hazardous Material into the environment,
including into ambient air, soil, sediments, land surface or subsurface, surface
water, ground water, or land; or (y) the generation, treatment, storage,
disposal, use, handling, manufacturing, transportation or shipment of Hazardous
Material.
(iii) During the period of ownership or operation by Landmark
and its Subsidiaries of any of their respective current or previously owned or
leased properties, there have been no Releases of Hazardous Material by Landmark
or its Subsidiaries, or, to Landmark's knowledge, any other party, in violation
of Environmental Laws in, on, under or affecting such properties, and none of
Landmark or its Subsidiaries have disposed of any Hazardous Material or any
other substance in a manner that could reasonably be anticipated to lead to a
Release in violation of Environmental Laws, except in each case for those which
individually or in the aggregate would not have a Material Adverse Effect on
Landmark. Prior to the period of ownership or operation by Landmark and its
Subsidiaries of any of their respective currently or previously owned or leased
properties, to the knowledge of Landmark, there were no Releases of Hazardous
Material in, on, under or affecting any such property or any surrounding site.
The term "Release" has the meaning set forth in 42 U.S.C. Sections
9601(22). The term "Hazardous Material" means (1) hazardous materials,
pollutants, contaminants, constituents, medical or infectious wastes, hazardous
wastes and hazardous substances as those terms are defined in the following
statutes and their implementing
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regulations: the Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901
et seq., the Comprehensive Environmental Response, Compensation and Liability
Act, as amended by the Superfund Amendments and Reauthorization Act, 42 U.S.C.
Sections 9601 et seq., the Clean Water Act, 33 U.S.C. Sections 1251 et seq., the
Toxic Substances Control Act, 15 U.S.C. Sections 2601 et seq., and the Clean Air
Act, 42 U.S.C. Sections 7401 et seq., (2) petroleum, including crude oil and any
fractions thereof, and (3) polychlorinated biphenyls (PCBs), or materials or
fluids containing PCBs.
(o) State Takeover Statutes; Rights Agreement. No Virginia takeover
statute or similar statute or regulation applies so as to impede, delay or
otherwise adversely affect, the Merger, this Agreement, or any of the
transactions contemplated by this Agreement. Landmark is not a party to, nor
affected by, any "rights agreement", "poison pill" or similar plan, agreement or
arrangement (a "Rights Arrangement") affecting the capitalization of, or
issuance of capital stock by, Landmark, which would be triggered by the Merger,
this Agreement or any other transaction contemplated hereby. In particular, the
restrictions on business combinations applicable to "affiliated transactions"
contained in Sections 13.1-725 et seq. of the VSCA and the restrictions on
"control share acquisitions" contained in Sections 13.1-728.1 et seq. of the
VSCA will not apply to the Merger and the other transactions contemplated
hereby.
(p) Brokers; Schedule of Fees and Expenses. No broker, investment
banker, financial advisor or other Person, other than Updata Capital, Inc.
("Updata Capital") the fees and expenses of which will be paid by Landmark or
the Surviving Corporation (and a copy of whose engagement letter has been
provided to ASG), is entitled to any broker's, finder's, financial advisor's or
other similar fee or commission, nor to any fee that is contingent on the
closing of the transactions contemplated hereby or that is based on a percentage
of the transaction value, in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of Landmark.
Assuming consummation of the Merger, no such engagement letter obligates
Landmark to continue to use their services or pay fees or expenses in connection
with any future transaction.
(q) Opinion of Financial Advisor. The Special Committee has received
the opinion of Updata Capital, dated December 6, 2001, to the effect that, as of
such date, the consideration to be received in the Merger by Landmark's
shareholders is fair to Landmark's shareholders (other than ASG and ASG Sub)
from a financial point of view, and a signed copy of such opinion has been
delivered to ASG.
(r) Contracts, Debt Instruments.
(i) Set forth in Section 3.1(r) of the Landmark Disclosure
Letter or the Supplemental Disclosure Letter are (x) a list of all loan or
credit agreements, notes, bonds, mortgages, indentures and other agreements and
instruments pursuant to which any indebtedness of Landmark or any of its
Subsidiaries in an aggregate principal amount in excess of $75,000 is
outstanding or may be incurred and (y) the respective principal amounts
currently outstanding thereunder. For purposes of this Agreement,
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"indebtedness" means, with respect to any Person, without duplication, (A) all
obligations of such Person for borrowed money, or with respect to deposits or
advances of any kind to such Person, (B) all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments, (C) all
obligations to pay of such Person upon which interest charges are customarily
paid, (D) all obligations of such Person under conditional sale or other title
retention agreements relating to property purchased by such Person, (E) all
obligations of such Person issued or assumed as the deferred purchase price of
property or services (excluding obligations of such Person to creditors for raw
materials, inventory, services and supplies incurred in the ordinary course of
such Person's business), (F) all capitalized lease obligations of such Person,
(G) all obligations of others secured by any lien on property or assets owned or
acquired by such Person, whether or not the obligations secured thereby have
been assumed, (H) all obligations of such Person under interest rate or currency
hedging transactions (valued at the termination value thereof), (I) all letters
of credit issued for the account of such Person (excluding letters of credit
issued for the benefit of suppliers to support accounts payable to suppliers
incurred in the ordinary course of business) and (J) all guarantees and
arrangements having the economic effect of a guarantee of such Person of any
indebtedness of any other Person.
(ii) Neither Landmark nor any of its Subsidiaries is in
violation of or in default under (nor does there exist any condition which upon
the passage of time or the giving of notice would cause such a violation of or
default under): (x) its certificate of incorporation or bylaws, or (y) any
order, writ, injunction, decree, statute, rule or regulation applicable to
Landmark or any of its Subsidiaries, except for violations or defaults that
individually or in the aggregate would not have a Material Adverse Effect on
Landmark.
(iii) Except as set forth in Section 3.1(r)(iii) of the
Landmark Disclosure Letter or the Supplemental Disclosure Letter, neither
Landmark nor any of its Subsidiaries is a party to or is bound by: (x) any
agreement of indemnification or guaranty not entered into in the ordinary course
of business other than indemnification agreements between Landmark or any of its
Subsidiaries and any of their respective officers or directors; (y) any
agreement, contract or commitment currently in force relating to the disposition
or acquisition of assets not in the ordinary course of business or any ownership
interest in any Person; or (z) any material joint marketing or development
agreement.
(s) Certain Agreements. Except as set forth in Section 3.1(s) or
Section 3.1(j) of the Landmark Disclosure Letter or the Supplemental Disclosure
Letter, or as contemplated by this Agreement, Landmark and its Subsidiaries are
not parties to or subject to any agreement which falls within any of the
following classifications:
(i) any employment, deferred compensation, bonus or contract
of a similar nature requiring payments other than salary in excess of $10,000 by
Landmark or any Subsidiary;
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(ii) any contract or agreement that materially restricts or
materially impairs Landmark or any of its Subsidiaries or, to the knowledge of
Landmark, Landmark employees from carrying on their respective businesses as now
conducted or any part thereof or from competing in any line of business with any
other Person or that grants any exclusive license or distribution rights;
(iii) any collective bargaining agreement or other such
contract or agreement with any labor organization;
(iv) any lease of personal property requiring rental payments
of $200,000 or more throughout its term and having a term of one year or more,
whether as lessor or lessee;
(v) any mortgage, pledge, conditional sales contract,
security agreement, option, or any other similar agreement with respect to any
interest of Landmark or any Subsidiary in personal property;
(vi) any stock purchase, stock option, stock bonus, stock
ownership, profit sharing, group insurance, bonus, deferred compensation,
severance pay, pension, retirement, savings or other incentive, change in
control, welfare or employee plan or material agreement providing benefits to
any present or former employees, officers or directors of Landmark or any of its
Subsidiaries;
(vii) except as set forth in the Supplemental Disclosure
Letter, any agreement to acquire equipment or commitment to make capital
expenditures by Landmark or any Subsidiary of $50,000 or more;
(viii) any agreement for the sale of any material properties
or assets or for the grant of any preferential right to purchase any such
material properties or assets or which requires the consent of any third party
to the transfer and assignment of any such material properties or assets, other
than in the ordinary course of business in connection with Landmark's sale of
properties or assets;
(ix) any agreement requiring Landmark to indemnify any
current or former officer, director, employee or agent;
(x) any agreement of any kind, including any
distributorship, sales, marketing or representative agreement, which involves
future payments or performance of services or delivery of items, requiring
payments of $250,000 or more by Landmark or any Subsidiary;
(xi) any agreement with a customer of Landmark providing for
services to be performed for such customer for a fixed or capped fee or payment
structure, including any maintenance fee caps or limits, other than in the
ordinary course of business;
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(xii) any partnership, joint venture, strategic alliance or
cooperation agreement (or any agreement similar to any of the foregoing), other
than in the ordinary course of business;
(xiii) any voting or other agreement governing how any Shares
shall be voted, or
(xiv) any contract or other agreement which would prohibit or
materially delay the consummation of the Merger or any transactions contemplated
by this Agreement.
Neither Landmark nor any Subsidiary is in default under any contract or
agreement, nor, to the knowledge of Landmark, are any other parties to such
agreements in default, and to Landmark's knowledge, no act or omission has
occurred which, with notice or lapse of time or both, would constitute a default
under any term or provision of any contract or agreement, except in each of the
foregoing cases for such defaults which, individually or in the aggregate, would
not have a Material Adverse Effect on Landmark. To Landmark's knowledge, each
agreement disclosed pursuant to this Section is in full force and effect. True
and complete copies of all such agreements have been provided or made available
to ASG or its representatives.
(t) Title to Properties.
(i) Section 3.1(t) of the Landmark Disclosure Letter or the
Supplemental Disclosure Letter lists all real property interests owned or leased
by Landmark or its Subsidiaries. Landmark and each of its Subsidiaries has good
and marketable title to, or valid leasehold interests in, all of its material
properties and assets, free and clear of all Liens except for defects in title,
easements, restrictive covenants liens and similar encumbrances or impediments
that individually or in the aggregate would not materially interfere with its
ability to conduct its business as currently conducted.
(ii) Landmark and each of its Subsidiaries has complied in
all material respects with the terms of all material leases to which it is a
party and under which it is in occupancy, and all such leases are in full force
and effect. Landmark and each of its Subsidiaries enjoys peaceful and
undisturbed possession under all such material leases.
(u) Labor Matters. Except as set forth in Section 3.1(u) of the
Landmark Disclosure Letter or the Supplemental Disclosure Letter, (i) to
Landmark's knowledge, Landmark and its Subsidiaries are operating and have
operated their businesses in compliance in all material respects with all
applicable laws relating to such businesses respecting employment and employment
practices, terms and conditions of employment and wages and hours, including the
Immigration Reform and Control Act ("IRCA"), the Worker Adjustment and
Retraining Notification Act of 1988 ("WARN Act"), any such applicable laws
respecting employment of foreign nationals, employment discrimination,
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equal opportunity, affirmative action, employee privacy, wrongful or unlawful
termination, workers' compensation, occupational safety and health requirements,
labor/management relations, veterans' rights, leave for military or related
service, unemployment insurance, and the Family and Medical Leave Act or related
matters, and Landmark and its Subsidiaries are not engaged in and have not
engaged in any unlawful practice relating to such businesses under such
applicable laws, or in any unfair labor practice relating to the business of
Landmark or its Subsidiaries; (ii) no Governmental Entity has given Landmark or
any of its Subsidiaries written notice regarding any pending charge, audit,
claim, complaint, investigation or review by or before any Governmental Entity
concerning or requesting in writing to explain any conflicts with or violations
of any such laws relating to the business conducted by Landmark or such
Subsidiary or in connection with the operation of the business, nor, to the
knowledge of Landmark, is any such investigation threatened or pending, nor, to
the knowledge of Landmark, has any such investigation occurred during the last
two years; (iii) there is no labor strike, dispute, slowdown or stoppage
actually pending or, to the knowledge of Landmark, threatened against or
affecting the business, and neither Landmark nor any Subsidiary has experienced
any work stoppage or other material labor difficulty relating to the business in
the last two years; (iv) to the knowledge of Landmark, no union representation
question or union organizational activity exists respecting employees and, to
Landmark's knowledge, no one has petitioned within the last two years, and no
one is now petitioning, for union representation of any employees; (v) there
exists no collective bargaining agreement or other contract or agreement
relating to the business with any labor union or association representing any
employee, and no collective bargaining agreement affecting employees is
currently being negotiated; and (vi) to Landmark's knowledge, Landmark and its
Subsidiaries are in material compliance with all obligations under all Landmark
Employee Plans and all employment contracts and are not delinquent in payments
to any employees for any wages, salaries, commissions, bonuses or other
compensation for any services performed by them relating to the business or
amounts required to be reimbursed to such employees. Except as set forth in
Section 3.1(u) of the Landmark Disclosure Letter or the Supplemental Disclosure
Letter, there are no pending or, to the knowledge of Landmark, threatened
proceedings, formally asserted claims (other than routine claims for benefits),
actions or suits of any nature (x) under or alleging violation of IRCA, WARN or
any law respecting employment of foreign nationals, employment discrimination,
equal opportunity, affirmative action, employee privacy, wrongful or unlawful
termination or demotion, sexual and other harassment, workers' compensation,
occupational safety and health requirements, labor/management relations
(including any grievances or arbitration proceeding arising out of or under any
collective bargaining agreements) veterans' rights, leave for military or
related service, unemployment insurance, or matters involving any employee; (y)
relating to alleged unlawful employment practices or unfair labor practices
involving any employee (or the equivalent thereof under any law); or (z)
relating to alleged breaches of any of Landmark Employee Plans by Landmark, any
Affiliate, any officer or employee of such entities, or by any Fiduciary. Except
as set forth in Section 3.1(u) of the Landmark Disclosure Letter or the
Supplemental Disclosure Letter, to the knowledge of Landmark, no facts or
circumstances exist or have been alleged which could give rise to such
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actions, suits, arbitration, or claims, and Landmark shall promptly notify in
writing of any pending or threatened actions, suits, arbitration, or claims
arising between the date hereof and the Effective Time. To Landmark's knowledge,
no employee of Landmark has in any material respect violated any employment
contract, confidentiality agreement, patent disclosure agreement or
noncompetition agreement between such employee and any former employer of such
employee due to such employee being employed by Landmark or any of its
Subsidiaries or disclosing to Landmark or any of its Subsidiaries trade secrets
or proprietary information of any such employer. Except as set forth in Section
3.1(u) of the Landmark Disclosure Letter or the Supplemental Disclosure Letter,
to Landmark's knowledge, no employee of Landmark or any of its Subsidiaries has
given notice to Landmark or any of its Subsidiaries that any employee intends to
terminate his or her employment with Landmark or any of its Subsidiaries,
although many employees of Landmark and its Subsidiaries are employees at will
and thus may terminate their employment with or without notice. Section 3.1(u)
of the Landmark Disclosure Letter or the Supplemental Disclosure Letter sets
forth a true and complete list of all material manuals, brochures or
publications or similar documents (in print or electronic form) of Landmark and
each Subsidiary regarding office administration, personnel matters and hiring,
evaluation, supervision, training, termination and promotion of employees of
Landmark or any Subsidiary, including but not limited to any affirmative action
plan and procurement policy, if any.
(v) Government Contracts. All representations, certifications and
disclosures made by Landmark or any Subsidiary to any Government Contract Party
have been in all material respects current, complete and accurate at the times
they were made. Except as set forth in Section 3.1(v) of the Landmark Disclosure
Letter or the Supplemental Disclosure Letter, there have been no acts, omissions
or noncompliance with regard to any applicable public contracting statute,
regulation or contract requirement (whether express or incorporated by
reference) relating to any contracts of Landmark or any Subsidiary with any
Government Contract Party in either case that have led to or is reasonably
likely to lead to, either before or after the Closing Date, (a) any material
claim or dispute involving Landmark or any Subsidiary and/or ASG or ASG Sub as
successor in interest to Landmark and any Government Contract Party or (b) any
suspension, debarment or contract termination, or proceeding related thereto.
There has been no act or omission that relates to the marketing, licensing or
selling to any Government Contract Party of any of Landmark technical data,
computer software, products and services and that has led to or is reasonably
likely to lead to, either before or after the Closing Date, any Lien on any of
Landmark's or its Subsidiaries' rights in and to its technical data, computer
software, products and services. There is currently no dispute between Landmark
or any of its Subsidiaries and any Government Contract Party. For purposes of
this Section, the term "Government Contract Party" means any independent or
executive agency, division, subdivision, audit group or procuring office of the
federal, state, county, local or municipal government, including any prime
contractor of the federal government and any higher level subcontractor of a
prime contractor of the federal government and including any employees or agents
thereof, in each case acting in such capacity.
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(w) Warranties, Guarantees and Indemnities. Except as disclosed in
Section 3.1(w) of the Landmark Disclosure Letter or the Supplemental Disclosure
Letter, neither Landmark nor any of its Subsidiaries has provided to its
customers rights to obtain refunds or made any other warranties, guarantees or
indemnities with respect to the products or services it provides to such
customers except where Landmark's liability is limited to (i) amounts paid to
Landmark pursuant to the contract in which such right, warranty, guaranty or
indemnity appears and lost profits and consequential damages are expressly
excluded, and/or (ii) Landmark's obligation to use reasonable efforts to remedy
a deficiency under such contract without further charge to the customer.
(x) Customer Relationships. To Landmark's knowledge, each of
Landmark and its Subsidiaries has good commercial working relationships with its
customers and suppliers. None of Landmark's top fifty customers (based on
Landmark's consolidated revenues for the four fiscal quarters ended September
30, 2001 (each, a "Material Customer")) has, from October 1, 2001 cancelled or
otherwise terminated its relationship with Landmark or any Subsidiary thereof,
decreased or limited materially the amount of product or services ordered from
Landmark or any Subsidiary thereof, or threatened to take any such action other
than in the ordinary course upon completion of customer projects or in
connection with the discontinuation by Landmark or any Subsidiary of Landmark of
products previously offered by Landmark or such Subsidiary.
(y) Product and Service Quality. Except as set forth in Section
3.1(y) of the Landmark Disclosure Letter or the Supplemental Disclosure Letter,
all products manufactured, sold, licensed, leased or delivered by Landmark and
its Subsidiaries and all services provided by Landmark and its Subsidiaries, to
customers on or prior to the Closing Date conform in all material respects to
applicable contractual commitments, express and implied warranties, product
specifications and quality standards and none of Landmark or its Subsidiaries
has any material liability (and to Landmark's knowledge, there is no reasonable
basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand against Landmark or its
Subsidiaries giving rise to any material liability) for replacement or repair
thereof or other damages in connection therewith. To the knowledge of Landmark,
neither Landmark nor its Subsidiaries has received a complaint from a Material
Customer regarding Landmark's or its Subsidiaries' services pursuant to which
such Material Customer is withholding payment of any material amounts payable to
Landmark or such Subsidiary, or which is the subject of an ongoing dispute or
correspondence between Landmark and such customer.
(z) Related Party Transactions. Except as set forth in Section
3.1(z) of the Landmark Disclosure Letter or the Supplemental Disclosure Letter,
no director or officer of Landmark or any of its Subsidiaries, and no member of
their immediate families has any direct or indirect interest in (i) any material
equipment or other property, real or personal, tangible or intangible, including
without limitation, any item of intellectual property, used in connection with
or pertaining to Landmark or any of its Subsidiaries, or (ii) any creditor,
supplier, customer, manufacturer, agent, representative, or distributor of
products of Landmark or any of its Subsidiaries; provided, however, that no such
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director or officer or other Person shall be deemed to have such an interest
solely by virtue of the ownership by such Person, such Person's immediate family
or their respective Affiliates of less than two percent (2%) of the outstanding
voting stock or debt securities of which are traded on a recognized stock
exchange or quoted on the National Association of Securities Dealers Automated
Quotation System.
(aa) Insurance. Section 3.1(aa) of the Landmark Disclosure Letter or
the Supplemental Disclosure Letter sets forth a true and complete list of all
insurance policies carried by, or covering Landmark and its Subsidiaries with
respect to their businesses, assets and properties, together with, in respect of
each such policy, the name of the insurer, the policy number, the type of
policy, the amount of coverage and the deductible. True and complete copies of
each such policy have previously been provided to ASG. All such policies are in
full force and effect, and no notice of cancellation has been received by
Landmark with respect to any such policy. All premiums due on such policies have
been paid in a timely manner, and Landmark and its Subsidiaries have complied in
all material respects with the terms and provisions of such policies.
(bb) Disclosure. To Landmark's knowledge, no representation or
warranty by Landmark in this Agreement or in any Transaction Agreement executed
as of the date hereof, or to be executed at the Share Purchase Closing, contains
any untrue statement of material fact, or omits at the time of execution to
state a material fact necessary to make the statements contained herein or
therein not misleading.
3.2 Representations and Warranties of ASG and ASG Sub. Except as set forth
in the disclosure letter delivered by ASG to Landmark concurrently with the
execution of this Agreement (the "ASG Disclosure Letter"), ASG and ASG Sub
represent and warrant to Landmark as follows:
(a) Organization, Standing and Corporate Power. ASG is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has the requisite corporate power and authority to carry
on its business as now being conducted. ASG Sub is a corporation duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Virginia and has the requisite corporate power and authority to carry on its
business as now being conducted. Each of ASG and ASG Sub is duly qualified or
licensed to do business and is in good standing in each jurisdiction in which
the nature of its business or the ownership or leasing of its properties makes
such qualification or licensing necessary, other than in such jurisdictions
where the failure to be so qualified or licensed individually or in the
aggregate would not have a Material Adverse Effect on ASG. ASG has made
available to Landmark complete and correct copies of its certificate of
incorporation and bylaws, the articles of incorporation and bylaws of ASG Sub,
in each case, as amended to the date of this Agreement.
(b) Authority. ASG and ASG Sub have all requisite corporate power
and authority to enter into this Agreement and the other Transaction Agreements.
Subject
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to receipt of the approvals, consents and clearances relating to the filings
described in Section 3.2(d), ASG and ASG Sub have the authority to consummate
the transactions contemplated by this Agreement and the other Transaction
Agreements. The execution and delivery by ASG and ASG Sub of this Agreement and
the other Transaction Agreements and the consummation by ASG and ASG Sub of the
transactions contemplated by this Agreement and the other Transaction Agreements
have been duly authorized by all necessary corporate action on the part of ASG
and ASG Sub. This Agreement and the other Transaction Agreements have been duly
executed and delivered by ASG and ASG Sub and constitute a valid and binding
obligation of each such party, enforceable against each such party in accordance
with its terms (except as enforcement hereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium and similar laws, both state and federal,
affecting the enforcement of creditors' rights or remedies in general as from
time to time in effect or (ii) the exercise by courts of equity powers).
(c) Noncontravention. The execution and delivery of this Agreement
and the other Transaction Agreements do not, and the consummation of the
transactions contemplated by this Agreement and the other Transaction Agreements
and compliance with the provisions of this Agreement and the other Transaction
Agreements will not, conflict with, or result in any violation of, or default
(with or without notice or lapse of time or both) under, or give rise to a right
of termination, cancellation or acceleration of any obligation or the loss of a
material benefit under, or result in the creation of any Lien upon any of the
properties or assets of ASG or ASG Sub under (i) the certificate of
incorporation or bylaws of ASG or the articles of incorporation or bylaws of ASG
Sub, (ii) any loan or credit agreement, note, bond, mortgage, indenture, lease
or other agreement, instrument, permit, concession, franchise or license
applicable to ASG or ASG Sub or their respective properties or assets or (iii)
assuming receipt of the approvals, consents and clearances relating to the
filings described in Section 3.2(d), and the giving and making of all notices,
reports and other filings described in Section 3.2(d)(ii), any judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to ASG, ASG Sub
or their respective properties or assets, other than, in the case of clause (ii)
or (iii), any such conflicts, violations, defaults, rights or Liens that
individually or in the aggregate would not (x) have a Material Adverse Effect on
ASG, (y) materially impair the ability of ASG or ASG Sub to perform their
obligations under this Agreement or the other Transaction Agreements or (z)
prevent the consummation of any of the transactions contemplated by this
Agreement or the other Transaction Agreements.
(d) Required Filings and Consents. No waiver, consent, approval,
order or authorization of, or registration, declaration or filing with, any
Governmental Entity or any other Person is required by or with respect to ASG or
ASG Sub in connection with the execution and delivery of this Agreement or the
consummation by ASG or ASG Sub, as the case may be, of any of the transactions
contemplated by this Agreement, except for (i) the filing of a pre-merger
notification and report form by ASG under the HSR Act and any similar filings
and approvals required from foreign jurisdictions, (ii) filings as may be
required by any applicable "blue sky" laws, (iii) the filing of the Articles of
Merger
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and other appropriate merger documents required by the VSCA and the issuance by
the Virginia State Corporation Commission of the Certificate of Merger pursuant
to the VSCA and appropriate documents with the relevant authorities of other
states in which Landmark is qualified to do business and (iv) such other
waivers, consents, approvals, orders, authorizations, registrations,
declarations and filings as would not individually or in the aggregate (A) have
a Material Adverse Effect on ASG (B) materially impair the ability of ASG and
ASG Sub to perform their respective obligations under this Agreement or (C)
prevent ASG and ASG Sub from consummating, or materially impair the ability of
ASG and ASG Sub to consummate, any of the transactions contemplated by this
Agreement.
(e) Information Supplied. None of the information supplied or to be
supplied by ASG or ASG Sub specifically for inclusion or incorporation by
reference in the Proxy Statement or, if applicable, the Schedule 13e-3, will, at
the time the Proxy Statement or the Schedule 13e-3, if applicable, is first
mailed to Landmark's shareholders or at the time of the Shareholders 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 are made, not
misleading.
(f) Brokers; Schedule of Fees and Expenses. No broker, investment
banker, financial advisor or other Person, other than Xxxxxxx Xxxxx & Company,
the fees and expenses of which will be paid by ASG, is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission, nor to any fee
that is contingent on the closing of the transactions contemplated hereby or
that is based on a percentage of the transaction value, in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of ASG or ASG Sub.
(g) Litigation. There is no suit, action or proceeding pending or,
to the knowledge of ASG, threatened against ASG or any of its Subsidiaries, nor,
to the knowledge of ASG, is there any reasonable basis therefor, that
individually or in the aggregate could reasonably be expected to (i) have a
Material Adverse Effect on ASG, (ii) challenge or seek to enjoin or seek damages
with respect to ASG's or ASG Sub's entering into and performing this Agreement
or that impair the ability of ASG or ASG Sub to perform its obligations under
this Agreement or (iii) prevent the consummation of any of the transactions
contemplated by this Agreement, nor is there any judgment, decree, injunction,
rule or order of any Governmental Entity or arbitrator pending, or to the
knowledge of ASG, threatened against ASG or any of its Subsidiaries having, or
which is reasonably likely to have, any effect referred to in the foregoing
clauses (i), (ii) or (iii) above.
(h) Financing. Assuming fulfillment of the condition described in
Section 6.2(d), ASG or ASG Sub has or, on or prior to the Closing Date, will
have, sufficient cash to pay the Merger Consideration.
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ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
4.1 Conduct of Business.
(a) Conduct of Business by Landmark. From the date of this Agreement
until the Effective Time and except as contemplated by this Agreement or
otherwise agreed in writing between Landmark and ASG, Landmark will, and will
cause its Subsidiaries to, carry on its and their respective businesses in the
ordinary course consistent with past practice and use all reasonable efforts (i)
to preserve intact their current business organizations, (ii) to keep available
the services of their current employees, (iii) to preserve their relationships
with distributors, licensors, contractors, customers, suppliers, lenders and
others having material business dealings with Landmark or its Subsidiaries and
(iv) to comply in all material respects with all applicable laws and
regulations. Without limiting the generality of the foregoing, except as may be
expressly permitted by other provisions of this Agreement, as set forth in
Section 4.1 of the Landmark Disclosure Letter or the Supplemental Disclosure
Letter, or as may be agreed to in writing by ASG, Landmark will not, and will
not permit any of its Subsidiaries to:
(i) (x) declare, set aside or pay any dividends on, or make
any other distributions in respect of, any of its capital stock, other than
dividends and distributions by any direct or indirect wholly owned Subsidiary of
Landmark to its parent, (y) split, combine or reclassify any of its capital
stock or issue or authorize the issuance of any other securities in respect of,
in lieu of or in substitution for shares of its capital stock or (z) purchase,
redeem or otherwise acquire any shares of capital stock of Landmark or any of
its Subsidiaries or any other securities thereof or any rights, warrants or
options to acquire any such shares or other securities;
(ii) issue, deliver, sell, pledge or otherwise encumber any
shares of its capital stock, any other voting securities or any securities
convertible into, or any rights, warrants or options to acquire, any such
shares, voting securities or convertible securities (other than (A) the issuance
of Shares upon the exercise of Options (as defined in Section 5.4) outstanding
on the date of this Agreement and in accordance with their present terms and (B)
as contemplated by the Option tender); provided that, without the prior written
consent of ASG, in no event (other than such exercise of Options) will Landmark
issue any shares of its capital stock prior to the Effective Time;
(iii) amend its articles of incorporation, bylaws or other
comparable charter or organizational documents;
(iv) acquire or agree to acquire (x) by merging or
consolidating with, or by purchasing a substantial portion of the assets of, or
by any other manner, any business or any Person or (y) any assets that
individually or in the aggregate are material to Landmark and its Subsidiaries
taken as a whole, except in the ordinary course of business consistent with past
practice;
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(v) sell, lease, license, mortgage or otherwise encumber or
subject to any Lien or otherwise dispose of any of its properties or assets
(including Intellectual Property), except for sales, leases, licenses, or
encumbrances of its properties or assets in the ordinary course of business
consistent with past practice;
(vi) (x) incur any indebtedness for borrowed money or draw
down on any credit facility or arrangement or guarantee any indebtedness of
another Person, issue or sell any debt securities or warrants or other rights to
acquire any debt securities of Landmark or any of its Subsidiaries, guarantee
any debt securities of another Person, enter into any "keep well" or other
agreement to maintain any financial statement condition of another Person or
enter into any arrangement having the economic effect of any of the foregoing or
(y) make any loans or advances to, or investments in, any other Person, other
than any Subsidiary of Landmark;
(vii) make or agree to make any new capital expenditure or
expenditures which individually is in excess of $50,000 or which in the
aggregate are in excess of $150,000;
(viii) make any material Tax election or change any method of
accounting with respect to Taxes, settle or compromise any asserted claim for
federal, state, local or foreign tax liability or refund (provided that ASG's
consent to any such settlement or compromise may not be unreasonably withheld),
or file any amended Returns;
(ix) discharge, settle or satisfy any material claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than in the ordinary course of business;
(x) waive, release or assign any rights or claims under any
customer contract or agreement binding on Landmark or any Subsidiary; or enter
into, modify, amend or terminate any contract or agreement binding on Landmark
or any Subsidiary; or enter into any contract or agreement binding on Landmark
or any Subsidiary which would be required to be disclosed in Section 3.1(s) of
the Landmark Disclosure Letter or the Supplemental Disclosure Letter, except as
expressly contemplated hereby or in the ordinary course of business consistent
with past practice;
(xi) adopt or amend in any material respect any employee
benefit or employee stock purchase or employee option plan, or enter into any
employment contract, pay any special bonus or special remuneration to any
director or employee, or increase the salaries or wage rates of its officers or
employees other than in the ordinary course of business, consistent with past
practice, or change in any material respect any management policies or
procedures, waive any stock repurchase rights, accelerate, amend or change the
period of exercisability of any Options, or authorize cash payments in exchange
for any Options, or otherwise alter or commit to any compensation, benefit or
severance arrangement for or with any officer or employee of Landmark or enter
into any related or interested party transaction;
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(xii) grant or provide any severance or termination pay to any
officer or employee except payments pursuant to written plans or agreements
outstanding on the date hereof and described in the Landmark Disclosure Letter
or the Supplemental Disclosure Letter;
(xiii) except as contemplated by this Agreement, pursue any
merger, consolidation, restructuring, recapitalization of Landmark or its
Subsidiaries, or otherwise take any actions (including seeking or soliciting
corporate approvals) directed towards seeking to liquidate or dissolve Landmark
or to take advantage of bankruptcy or other creditor protection laws or that
would or are reasonably likely to render Landmark insolvent or to cause Landmark
to become involved in bankruptcy proceedings, including soliciting creditor
arrangements or moratoria (subject in each case to Landmark's right to take
action consistent with Sections 4.2 and 5.1);
(xiv) initiate any litigation or other proceeding or settle or
compromise any pending suit, action, audit or claim relating to Landmark or its
Subsidiaries;
(xv) take any action that would cause or constitute a
material breach of any representation or warranty made by Landmark in this
Agreement;
(xvi) enter into any Rights Arrangement, or take or permit any
other action which could have the effect of causing the representation made in
Section 3.1(o) to be untrue in any respect; or
(xvii) authorize any of, or commit or agree to take any of, the
foregoing actions.
(b) Other Actions. Landmark and ASG will not, and will not permit
any of their respective Subsidiaries to, knowingly and willfully take any
deliberate action that would cause (i) any of the representations and warranties
of such party set forth in this Agreement to become untrue in any material
respect as of the date when made or (ii) any of the conditions to the Merger set
forth in this Agreement to not be satisfied (subject in each case to Landmark's
right to take action consistent with Sections 4.2 and 5.1).
4.2 No Solicitation. From and after the date of this Agreement until the
earlier of the Effective Time or termination of this Agreement in accordance
with its terms, neither Landmark nor any Subsidiary, officer, director, or
employee of, or any financial advisor, attorney, accountant, agent or other
advisor or representative retained by, Landmark, will directly or indirectly
solicit, discuss, or engage in negotiations with, or provide any information to
any Person, other than ASG, ASG Sub and their respective representatives,
concerning any possible Takeover Proposal. Landmark will promptly notify ASG if
any such inquiries or proposals are received by, or any such information is
required from, or any such negotiations or discussions are sought to be
initiated or continued with Landmark. Notwithstanding the foregoing, nothing
contained in this
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Agreement will prevent Landmark's Board of Directors from furnishing information
to or entering into discussions or negotiations with any unsolicited Person or
taking any other action that may be required of it in order to exercise its
fiduciary duties, as a Board of Directors, under applicable laws. Nothing
contained in this Agreement shall be deemed to prevent Landmark from complying
with Rules 14a-2, 14d-9 or 14e-2 under the Exchange Act or from making such
other disclosures as may be required by applicable laws or to change the
recommendation of Landmark's Board of Directors to the extent permitted by
Section 5.1. For purposes of this Agreement, "Takeover Proposal" means any offer
or proposal relating to any transaction or series of related transactions (other
than the transactions contemplated by this Agreement) involving: (a) any
acquisition or purchase from Landmark by any Person or "group" (as defined under
Section 13(d) of the Exchange Act and the rules and regulations thereunder) of
more than a 10% interest in the total outstanding voting securities of Landmark
or any of its Subsidiaries or any tender offer or exchange offer that if
consummated would result in any Person or "group" (as defined under Section
13(d) of the Exchange Act and the rules and regulations thereunder) beneficially
owning 10% or more of the total outstanding voting securities of Landmark or any
of its Subsidiaries or any merger, consolidation, business combination or
similar transaction involving Landmark pursuant to which the shareholders of
Landmark immediately preceding such transaction hold less than 90% of the equity
interests in the surviving or resulting entity of such transaction; (b) any
sale, lease (other than in the ordinary course of business), exchange, transfer,
license (other than in the ordinary course of business), acquisition or
disposition of more than 10% of the assets of Landmark; or (c) any liquidation
or dissolution of Landmark.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Shareholder Approval; Preparation of Proxy Statement.
(a) Landmark will, as soon as practicable following the clearance or
effectiveness of the Proxy Statement by the SEC, duly call, give notice of,
convene and hold a meeting of its shareholders (the "Shareholders Meeting") for
the purpose of obtaining Landmark Shareholder Approval. Subject to applicable
law and the provisions of Section 5.1(c): (i) Landmark will, through its Board
of Directors, recommend to its shareholders that Landmark Shareholder Approval
be given; (ii) the Proxy Statement will include a statement to the effect that
Landmark's Board of Directors recommends that Landmark Shareholder Approval be
given at the Shareholders Meeting; and (iii) neither Landmark's Board of
Directors nor any committee thereof will withdraw, amend or modify, or propose
or resolve to withdraw, amend or modify in a manner adverse to ASG, the
recommendation of Landmark's Board of Directors that Landmark Shareholder
Approval be given at the Shareholders Meeting; provided, however, that the
foregoing shall not prohibit accurate disclosure (and such disclosure shall not
be deemed to be a withdrawal, amendment or modification, or a proposal to so
resolve, in a manner adverse to ASG) of factual information regarding the
business, financial condition or operations of any party hereto or the fact that
a Takeover Proposal has been made, the identity of the Person making such
proposal or the material terms of
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such proposal; and provided, further, that Landmark's Board of Directors may
change its recommendation to the extent permitted by Section 5.1(c). Without
limiting the generality of the foregoing, Landmark agrees that its obligations
pursuant to the first sentence of this Section 5.1(a) will not be affected by
(i) the commencement, public proposal, public disclosure or communication to
Landmark of any Takeover Proposal (including a superior proposal) or (ii) the
withdrawal or modification by Landmark's Board of Directors of its approval or
recommendation of this Agreement or Landmark Shareholder Approval.
(b) Landmark will, as soon as practicable following the execution of
this Agreement, prepare and file a preliminary Proxy Statement with the SEC and,
if applicable, the Schedule 13e-3, and will use its best efforts to respond to
any comments of the SEC or its staff and to cause the Proxy Statement to be
mailed to Landmark's shareholders as promptly as practicable after clearance or
effectiveness of the Proxy Statement and the Schedule 13e-3 by the SEC or its
staff and the satisfaction of all other conditions required by applicable law
prior to such mailing. Landmark will notify ASG promptly of the receipt of any
comments from the SEC or its staff and of any request by the SEC or its staff
for amendments or supplements to the Proxy Statement or, if applicable, the
Schedule 13e-3 or for additional information and will supply ASG with copies of
all correspondence between Landmark or any of its representatives, on the one
hand, and the SEC or its staff, on the other hand, with respect to the Proxy
Statement, the Schedule 13e-3 or the Merger. If at any time after clearance or
effectiveness of the Proxy Statement by the SEC or its staff and prior to the
Shareholders Meeting there will occur any event that Landmark determines, on
advice of its outside counsel, should be set forth in an amendment or supplement
to the Proxy Statement, Landmark will promptly prepare and mail to its
shareholders such an amendment or supplement.
(c) Nothing in this Agreement will prevent Landmark's Board of
Directors from withholding, withdrawing, amending or modifying its
recommendation in favor of the Merger or Landmark Shareholder Approval if (i)(A)
a superior proposal is made to Landmark and is not withdrawn, (B) Landmark
provides written notice to ASG (a "Notice of Superior Proposal") advising ASG
that Landmark has received a superior proposal, specifying all of the material
terms and conditions of such superior proposal and identifying the Person making
such superior proposal, (C) ASG will not have, within three business days of
ASG's receipt of the Notice of Superior Proposal, made an offer that Landmark's
Board by a majority vote determines in its good faith judgment, after
consultation with its financial adviser, to be at least as favorable to
Landmark's shareholders as such superior proposal (it being agreed that
Landmark's Board of Directors will convene a meeting to consider any such offer
by ASG promptly following the receipt thereof), (D) Landmark's Board of
Directors concludes in good faith, after consultation with outside counsel,
that, in light of such superior proposal, the withholding, withdrawal, amendment
or modification of such recommendation is required in order for Landmark's Board
of Directors to comply with its fiduciary obligations to Landmark's shareholders
under applicable law and (E) Landmark will not have violated any of the
restrictions set forth in Section 4.2 or this Section 5.1; or (ii)
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otherwise required by applicable law. Landmark will provide ASG with at least
three business days prior notice (or such lesser prior notice as provided to the
members of Landmark's Board of Directors but in no event less than twenty-four
hours) of any meeting of Landmark's Board of Directors at which Landmark's Board
of Directors is reasonably expected to consider any Takeover Proposal to
determine whether such Takeover Proposal is a superior proposal. For purposes of
this Agreement, "superior proposal" will mean an unsolicited, bona fide written
offer made by a third party to consummate any of the following transactions: (i)
a merger, consolidation, business combination, sale of assets or similar
transaction involving Landmark pursuant to which the Shares outstanding
immediately preceding such transaction will represent less than 50% of the
equity interest in the surviving or resulting entity of such transaction or (ii)
the acquisition by any Person or group (including by way of a tender offer or an
exchange offer or a two step transaction involving a tender offer followed with
reasonable promptness by a merger involving Landmark), directly or indirectly,
of ownership of 100% of the then-outstanding shares of capital stock of
Landmark, on terms and conditions that Landmark's Board of Directors determines,
in its reasonable judgment, after consultation with its financial adviser, to be
more favorable to Landmark shareholders than the terms of the Merger; provided,
however, that any such offer will not be deemed to be a "superior proposal" if
any financing required to consummate the transaction contemplated by such offer
is not committed and is not likely in the reasonable judgment of Landmark's
Board of Directors (after consultation with its financial adviser) to be
obtained by such third party on a timely basis.
5.2 Access to Information; Confidentiality. Landmark will, and will cause
each of its Subsidiaries to, afford to ASG, and to ASG's officers, employees,
accountants, counsel, financial advisers and other representatives, reasonable
access during normal business hours during the period prior to the Effective
Time to all their respective properties, books, contracts, commitments,
personnel and records and, during such period, Landmark will, and will cause
each of its Subsidiaries to, furnish or make available promptly to ASG (a) a
copy of each report, schedule, registration statement and other document filed
by it during such period pursuant to the requirements of federal or state
securities laws and (b) all other information concerning its business,
properties and personnel as ASG may reasonably request. Any disclosure that may
be required by law, regulation or rule will be coordinated by and between the
parties and their advisors prior to such disclosure. Except as required by law,
ASG will hold, and will cause its officers, employees, accountants, counsel,
financial advisers and other representatives, agents and affiliates to hold, in
confidence any confidential information in accordance with the terms of the
Confidentiality Agreement dated November 13, 2001 between ASG and Landmark (the
"Confidentiality Agreement").
5.3 Reasonable Efforts; Notification.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties agrees to use its reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, and to use its
reasonable efforts to assist and cooperate with the other parties in doing, all
things necessary, proper or advisable to
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consummate and make effective, in the most expeditious manner practicable, the
Merger and the other transactions contemplated by this Agreement, including (i)
obtaining all necessary actions or non actions, waivers, consents and approvals
from Governmental Entities and making all necessary registrations and filings
(including filings with Governmental Entities, if any) and taking all reasonable
steps as may be necessary to obtain an approval or waiver from, or to avoid an
action or proceeding by, any Governmental Entity, (ii) obtaining all necessary
consents, approvals or waivers from third parties, including but not limited to
those set forth in Section 3.1(d) of the Landmark Disclosure Letter or the
Supplemental Disclosure Letter, (iii) defending any lawsuits or other legal
proceedings, whether judicial or administrative, challenging this Agreement or
the consummation of any of the transactions contemplated by this Agreement,
including seeking to have any stay or temporary restraining order entered by any
court or other Governmental Entity vacated or reversed and (iv) executing and
delivering any additional instruments necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of, this Agreement. In
connection with and without limiting the foregoing, if any state takeover
statute or similar statute or regulation becomes applicable to the Merger, this
Agreement, or any other transaction contemplated by this Agreement, Landmark and
its Board of Directors will take all action reasonably necessary to ensure that
the Merger and the other transactions contemplated by this Agreement may be
consummated as promptly as practicable on the terms contemplated by this
Agreement and otherwise to minimize the effect of such statute or regulation on
the Merger and the other transactions contemplated by this Agreement.
(b) Landmark will give prompt notice to ASG, and ASG will give
prompt notice to Landmark, of: (i) the breach of any material representation or
warranty made by it contained in this Agreement, (ii) the failure by it to
comply with or satisfy in any material respect any covenant, condition or
agreement to be complied with or satisfied by it under this Agreement; provided,
however, that no such notification will affect the representations, warranties,
covenants, or agreements of the parties or the conditions to the obligations of
the parties under this Agreement and (iii) any pending or threatened suit,
action or proceeding contemplated by Section 6.1(c) of this Agreement or the
recommendation by the staff of the Federal Trade Commission or the staff of the
Antitrust Division of the Justice Department of the commencement of any suit,
action or proceeding contemplated by Section 6.1(c) of this Agreement.
5.4 Stock Plans.
(a) Options Outstanding. Landmark currently maintains the Landmark
Option Plans, which provide for the granting of options to purchase and awards
of Shares, and the ESPP, which permits employees to purchase Shares. On and
after the date of this Agreement, Landmark shall take all actions necessary to
amend each Landmark Option Plan and the ESPP to provide that no further options,
awards or rights to receive equity shall be granted or offered under any
Landmark Option Plan or the ESPP after the date hereof. Landmark agrees to take
all actions necessary to cause the ESPP to terminate as promptly as practicable
after the date of this Agreement, and all participant
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contributions and deferral amounts credited on behalf of the participants under
the ESPP Plan at the time of such termination shall be paid to the participants,
respectively, in cash by Landmark at such time without interest.
(b) Conversion of Options. On or before the Closing Date, Landmark
will cause each then outstanding and unexercised option to purchase Shares
granted under any of the Landmark Option Plans (the "Options") whether or not
then exercisable or vested, to be cancelled and/or converted into an obligation
of Landmark to pay, and a right of the holder thereof to receive in full
satisfaction of such Option, cash in an amount in respect thereof equal to the
product of (i) the excess, if any, of the per share Merger Consideration over
the exercise price thereof and (ii) the number of Shares subject to such Option.
5.5 Post Merger Employment Benefits.
(a) Employees of Landmark who become employed by ASG or any
Subsidiary thereof after the Effective Time will become eligible to participate
in the same standard employee benefit plans as are generally available to
similarly situated employees of ASG, and such employees will receive credit for
all service with Landmark for purposes of any "employee benefit plan" as such
term is defined in Section 3(3) of ERISA. Notwithstanding the foregoing, neither
ASG nor any Subsidiary thereof will be required to continue any such employee
benefit plan after the Effective Time, and such employee benefit plans may be
amended or terminated in accordance with applicable law. Upon the request of
ASG, to the extent permitted by applicable law, any Landmark Employee Plans will
be terminated immediately prior to the Effective Time.
(b) As soon as practicable after the Effective Time, Landmark shall
provide ASG with a list of all individuals who were participants or received
benefits from any Landmark Employee Plan, together with a list of each such
participant's credited service with respect to each plan (if applicable) and
each participant's benefits in such Plan. Landmark shall, as soon as practicable
after the Effective Time, provide ASG with such additional information in
Landmark's possession as may be reasonably requested by ASG, and necessary for
ASG to administer any Landmark Employee Plan that it has assumed.
5.6 Fees and Expenses.
(a) Except as provided in this Section 5.6, all fees and expenses
incurred in connection with the Merger, this Agreement, the other Transaction
Agreements and the transactions contemplated by this Agreement will be paid by
the party incurring such fees or expenses, whether or not the Merger is
consummated. All fees and expenses incurred by Landmark in connection with this
Agreement, the other Transaction Agreements and the transactions contemplated by
this Agreement, including legal, printing, investment banking and accounting
fees and expenses, shall be paid by ASG or the Surviving Corporation.
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(b) If this Agreement is terminated pursuant to Sections 7.1(e) or
7.1(f), Landmark agrees to promptly assume and pay, or reimburse ASG for, all
reasonable legal, accounting and investment banking fees payable and other
expenses incurred by ASG in connection with this Agreement and the transactions
contemplated hereby, up to a maximum of $200,000.
(c) If this Agreement is terminated pursuant to Sections 7.1(d) or
7.1(g) hereof, ASG agrees to promptly assume and pay, or reimburse Landmark for,
all reasonable legal, accounting and investment banking fees payable and other
expenses incurred by Landmark in connection with this Agreement and the
transactions contemplated hereby, up to a maximum of $200,000.
(d) If this Agreement is terminated pursuant to Section 7.1(c),
Landmark agrees to assume and pay, or reimburse ASG for, all reasonable legal,
accounting and investment banking fees payable and other expenses incurred by
ASG in connection with this Agreement and the transactions contemplated hereby,
up to a maximum of $3,000,000, within thirty (30) days after ASG submits to
Landmark invoices or receipts reflecting such fees and expenses.
5.7 Public Announcements. ASG and ASG Sub, on the one hand, and Landmark,
on the other hand, will consult with each other before issuing, and provide each
other the opportunity to review, comment upon and concur with, any press release
or other public statements with respect to the transactions contemplated by this
Agreement, including the Merger, and will not issue any such press release or
make any such public statement prior to such consultation, except as may be
required by applicable law, court process or by obligations pursuant to any
listing agreement with the NASDAQ National Market. The parties agree that the
initial press release to be issued with respect to the transactions contemplated
by this Agreement will be in the form heretofore agreed to by the parties, and
the parties agree to cooperate to file such press release with the SEC promptly
upon issuance in accordance with applicable law.
5.8 Shareholder Litigation. Landmark will give ASG the opportunity to
participate in the defense or settlement of any shareholder litigation against
Landmark and its directors and officers relating to any of the transactions
contemplated by this Agreement until the Effective Time or the prior termination
of this Agreement in accordance with its terms. After the Effective Time, the
Surviving Corporation shall have the opportunity to direct the defense of such
litigation and, if the Surviving Corporation so chooses to direct such
litigation, the Surviving Corporation shall provide the directors and officers
with the opportunity to participate in such litigation; provided, however, that
no settlement thereof will be agreed to without the Surviving Corporation's
consent, which consent will not be unreasonably withheld, and provided further
that no settlement requiring a payment by an officer, director or other
representative will be agreed to without such Person's consent.
5.9 Indemnification; Directors and Officers Insurance.
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(a) ASG and ASG Sub agree that all rights to indemnification
and advancement of expenses existing in favor of the present or former
directors, officers, employees and consultants of Landmark or any of its
Subsidiaries as provided in Landmark's articles of incorporation or bylaws, or
the articles of organization, bylaws or similar documents of any of Landmark's
Subsidiaries as in effect as of the date hereof with respect to matters
occurring prior to the Effective Time shall survive the Merger and shall
continue in full force and effect for a period of not less than the statute of
limitations applicable to such matters, and ASG agrees to cause the Surviving
Corporation to comply fully with its obligations hereunder and thereunder.
(b) The articles of incorporation and bylaws of the Surviving
Corporation shall not be amended, repealed or otherwise modified for a period of
six years after the Effective Time in any manner that would adversely affect the
rights thereunder of individuals who as of the date hereof were directors,
officers, employees or consultants of Landmark or otherwise entitled to
indemnification and advancement of expenses under the articles of incorporation
and the bylaws (the "Indemnified Parties") and such articles of incorporation of
the Surviving Corporation shall include provisions providing for advancement of
expenses to such Indemnified Parties in accordance with Landmark's articles of
incorporation and bylaws and as permitted by Article 10 of the VSCA. It is
understood and agreed that Landmark shall, to the fullest extent permitted under
Virginia law and regardless of whether the Merger becomes effective, indemnify,
defend and hold harmless, and after the Effective Time, ASG will cause the
Surviving Corporation, to the fullest extent permitted under Virginia law, to
indemnify, defend and hold harmless, each Indemnified Party against any costs or
expenses (including reasonable attorney's fees), judgments, fines, losses,
claims, damages, liabilities and amounts paid in settlement in connection with
any actual or threatened claim, action, suit, proceeding or investigation,
including without limitation, liabilities arising out of the transactions
contemplated by this Agreement, to the extent that it was based, in whole or in
part, on the fact that such Indemnified Party is or was a director, officer or
employee of Landmark and arising out of actions or omissions or alleged actions
or omissions occurring prior to the Effective Time, and in the event of any such
actual or threatened claim, action, suit, proceeding or investigation (whether
arising before or after the Effective Time), (i) Landmark or the Surviving
Corporation, as applicable, shall pay the reasonable fees and expenses of
counsel selected by ASG, which counsel shall be reasonably satisfactory to the
Indemnified Parties (which consent shall not be unreasonably withheld), promptly
as statements therefor are received and (ii) Landmark and the Surviving
Corporation will cooperate in the defense of any such matter; provided, however,
that (x) neither Landmark nor the Surviving Corporation shall be liable for any
settlement effected without its prior written consent (which consent shall not
be unreasonably withheld); any determination required to be made with respect to
whether an Indemnified Party's conduct complies with the standards set forth
under applicable law or the articles of incorporation or by-laws of Landmark or
any Subsidiary of Landmark or any applicable agreement, as the case may be,
shall be made by independent legal counsel selected by such Indemnified Party
and reasonably acceptable to ASG; and (z) nothing in this Section 5.9 shall
impair any rights of any Indemnified Party.
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(c) The Surviving Corporation will cause to be maintained in effect
for a period of six years after the Effective Time, in respect of acts or
omissions occurring prior to the Effective Time (but only in respect thereof),
policies of directors' and officers' liability insurance covering the persons
currently covered by Landmark's existing directors' and officers' liability
insurance policies and providing substantially similar coverage to such existing
policies ("D and O Insurance"); provided, however, that the Surviving
Corporation will not be required in order to maintain such D and O Insurance to
pay an annual premium in excess of $250,000; and provided further that if
equivalent coverage cannot be obtained, or can be obtained only by paying an
annual premium in excess of $250,000, the Surviving Corporation shall only be
required to obtain as much coverage as can be obtained by paying an annual
premium equal to $250,000. Alternatively, upon mutual agreement between ASG and
Landmark, Landmark may purchase on or prior to the Effective Time, "tail" D and
O Insurance coverage insurance for the six-year period described in this Section
5.9(c), which "tail" coverage shall provide coverage in amounts and on terms
consistent with the D and O Insurance coverage immediately prior to the purchase
of such "tail" coverage.
(d) This Section 5.9 shall survive the consummation of the Merger and is
intended to benefit, and shall be enforceable by, any Person entitled to be
indemnified hereunder (whether or not parties to this Agreement).
5.10 Closing of Merger. ASG and ASG Sub agree that immediately following the
closing of the purchase of the Principal Shares by ASG pursuant to the terms of
the Principal Share Purchase and Voting Agreements, ASG and ASG Sub shall cause
the Closing of the Merger to occur pursuant to the terms hereof.
5.11 Supplemental Disclosure Letter. No later than fifteen (15) days after
the date of this Agreement, Landmark shall provide to ASG and ASG Sub the
Supplemental Disclosure Letter which shall contain all of the information
required by this Agreement and not previously provided in the Landmark
Disclosure Letter pertaining solely to Landmark's Subsidiaries which are not
organized in the U.S. (the "Non-U.S. Subsidiaries"). The Supplemental Disclosure
Letter may include exceptions to the representations and warranties related to
the Non-U.S. Subsidiaries even if the terms of the specific representation and
warranty contained herein do not include a reference to the Supplemental
Disclosure Letter. Such Supplemental Disclosure Letter shall be set forth in the
form and manner of the Landmark Disclosure Letter previously delivered to ASG.
ASG shall have a period of five (5) business days to review and have the
opportunity to ask representatives of Landmark about the disclosures. At the end
of the five (5) day period, ASG shall provide written notice of its desire to
continue with the transaction or terminate this Agreement pursuant to Section
7.1(h). In the event that ASG continues to go forward with the transaction, the
terms of this Agreement will continue in full force and effect and all terms,
conditions or covenants shall continue in full force and effect. ASG and ASG Sub
hereby acknowledge and agree that the failure of Landmark to provide disclosure
in the Landmark Disclosure Letter regarding the Non-U.S. Subsidiaries shall not
constitute a breach under the terms of this Agreement.
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5.12 Closing. ASG, ASG Sub and Landmark shall use their best efforts to cause
the Closing to occur no later than five (5) business days after all of the
conditions precedent set forth in Article VI shall have been satisfied or waived
by each of ASG, ASG Sub and Landmark.
5.13 Non-Competition Agreements. Upon the execution and delivery to ASG, ASG
Sub and Landmark of Non-Competition Agreements in substantially the form
attached hereto as Exhibit B by the Persons and in the amounts listed in
Schedule 5.13, ASG and ASG Sub shall execute and deliver such Non-Competition
Agreements to such Persons immediately following the Effective Time.
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligation of each party to effect the Merger is subject to the
satisfaction or waiver on or prior to the Effective Time of the following
conditions:
(a) Landmark Shareholder Approval. Landmark Shareholder Approval
will have been obtained.
(b) Regulatory Approvals. All waiting periods, if any, under the HSR
Act relating to the transactions contemplated hereby will have expired or
terminated and all material foreign antitrust approvals required to be obtained
prior to the Merger in connection with the transactions contemplated hereby will
have been obtained. All regulatory approvals, consents, waivers, or
administrative actions of Governmental Entities that are necessary or
appropriate to the consummation of the transactions contemplated by this
Agreement shall have been procured, and no approval, consent, waiver, or
administrative action shall have included any condition or requirement that
would result in a Material Adverse Effect on ASG or the Surviving Corporation.
(c) No Injunctions or Restraints. No statute, rule, regulation,
executive order, decree, temporary restraining order, preliminary or permanent
injunction, judgment or other order or ruling issued by any court of competent
jurisdiction or other Governmental Entity or other legal restraint or
prohibition will be in effect which would make the Merger or the acquisition or
holding by ASG or its affiliates of Shares or common stock of the Surviving
Corporation illegal or otherwise prevent the consummation of the Merger (each
party agreeing to use all reasonable efforts to have such prohibition lifted).
6.2 Conditions to ASG and ASG Sub's Obligation to Effect the Merger. The
obligations of ASG and ASG Sub to effect the Merger are subject to the
satisfaction or waiver on or prior to the Effective Time of the following
conditions:
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(a) The representations and warranties of Landmark contained herein
that are qualified as to materiality shall be true and correct, and the
representations and warranties of Landmark contained herein that are not so
qualified shall be true and correct in all material respects, in each case as of
the date of this Agreement and as of the Closing Date with the same effect as
though made as of the Closing Date, except that the accuracy of representations
and warranties that by their terms speak as of a specified date will be
determined as of such date. ASG will have received a certificate with respect to
the foregoing signed by a duly authorized officer of Landmark;
(b) Landmark will have performed in all material respects each of
its covenants and obligations under this Agreement required to be performed by
it at or prior to the Effective Time pursuant to the terms hereof, and ASG will
have received a certificate with respect to the foregoing signed by a duly
authorized officer of Landmark;
(c) All third party consents, the failure of which to obtain would
have a Material Adverse Effect on Landmark, will have been obtained;
(d) The Landmark Cash shall not be less than $25,500,000;
(e) Each of the Principal Shareholders shall have executed and
delivered to ASG, ASG Sub and Landmark Non-Competition Agreements substantially
in the form of Exhibit C;
(f) The representations and warranties of each Principal Shareholder
contained in the Principal Share Purchase and Voting Agreements that are
qualified as to materiality shall be true and correct, and the representations
and warranties of each Principal Shareholder contained in the Principal Share
Purchase and Voting Agreements that are not so qualified shall be true and
correct in all material respects, in each case as of the Closing Date with the
same effect as though made as of the Closing Date, except that the accuracy of
representations and warranties that by their terms speak as of a specified date
will be determined as of such date;
(g) Each Principal Shareholder will have performed in all material
respects each of such Person's covenants and obligations under the Principal
Share Purchase and Voting Agreements required to be performed at or prior to the
Effective Time pursuant to the terms thereof;
(h) Each officer and director of Landmark and its Subsidiaries shall
have resigned from such position, effective as of the Effective Time;
(i) Landmark's maintenance revenues for Landmark's fiscal year ended
December 31, 2001, as calculated in accordance with GAAP applied on a consistent
basis with prior audited periods and Landmark's accounting policies, shall be at
least $30,100,000; and
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(j) Each of the conditions precedent set forth in Section 5 of the
Second Amendment and Waiver to Credit Agreement attached as Exhibit D shall have
been satisfied or waived.
6.3 Conditions to Landmark's Obligation to Effect the Merger. The obligation
of Landmark to effect the Merger is subject to the satisfaction or waiver on or
prior to the Effective Time of the following conditions:
(a) The representations and warranties of ASG and ASG Sub contained
herein that are qualified as to materiality shall be true and correct, and the
representations and warranties of ASG and ASG Sub contained herein that are not
so qualified shall be true and correct in all material respects, in each case as
of the date of this Agreement and as of the Closing Date with the same effect as
though made as of the Closing Date, except that the accuracy of representations
and warranties that by their terms speak as of a specified date will be
determined as of such date; and provided further, however, that the
representation and warranty of ASG and ASG Sub contained in Section 3.2(h) shall
be true and correct on the date of this Agreement and as of the Closing Date.
Landmark will have received a certificate with respect to the foregoing signed
by duly authorized officers of ASG and ASG Sub.
(b) Each of ASG and ASG Sub will have performed in all material
respects each of its covenants and obligations under this Agreement required to
be performed by it at or prior to the Effective Time pursuant to the terms
hereof and Landmark will have received a certificate with respect to the
foregoing signed by duly authorized officers of ASG and ASG Sub.
(c) All third party consents, the failure of which to obtain would
have a Material Adverse Effect on ASG, will have been obtained.
(d) Each of ASG and ASG Sub will have performed in all material
respects each of its covenants and obligations under the Principal Share
Purchase and Voting Agreements required to be performed at or prior to the
Effective Time pursuant to the terms thereof.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1 Termination. This Agreement may be terminated at any time prior to the
Effective Time, whether before or after approval of matters presented in
connection with the Merger by the shareholders of Landmark:
(a) by mutual written consent duly authorized by the Boards of
Directors of ASG and Landmark;
(b) by either ASG or Landmark,
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(i) if the Merger has not been consummated on or prior to
April 30, 2002; provided, however, that the right to terminate this Agreement
under this Section 7.1(b)(i) will not be available to any party whose action or
failure to act has been a principal cause of or resulted in the failure of the
Merger to occur on or before such date and such action or failure to act
constitutes a breach of this Agreement;
(ii) if any Governmental Entity issues an order, decree or
ruling or takes any other action permanently enjoining, restraining or otherwise
prohibiting the Merger and such order, decree or ruling or other action becomes
final and nonappealable; or
(iii) if Landmark Shareholder Approval has not been obtained
by reason of the failure to obtain the required vote at the Shareholders Meeting
duly convened therefor and at any adjournment thereof; provided, however, that
the right to terminate this Agreement pursuant to this Section 7.1(b)(iii) will
not be available to Landmark where the failure to obtain Landmark Shareholder
Approval was caused by (x) the action or failure to act of Landmark or (y) a
breach of the Principal Share Purchase and Voting Agreements by any party
thereto other than ASG or ASG Sub;
(c) by ASG, if (i) as of the date of this Agreement, any of the
representations and warranties of Landmark set forth in this Agreement fail to
be true and correct in any material respect, (ii) at any time after the date of
this Agreement and prior to the Effective Time, any of the representations and
warranties of Landmark set forth in this Agreement cease to be true and correct
in any material respect, or (iii) Landmark breaches or fails to perform in any
material respect any obligation or to comply in any material respect with any
material agreement or covenant of Landmark to be performed or complied with by
it; provided that if any such breach or failure in the case of clauses (i), (ii)
or (iii) (other than a breach of Sections 4.2 or 5.1) is curable by Landmark
through the exercise of its reasonable efforts, then ASG may not terminate this
Agreement under this subsection (c) until ten (10) business days after written
notice thereof has been given to Landmark by ASG and unless at such time the
matter has not been cured;
(d) by Landmark, if (i) as of the date of this Agreement, any of the
representations and warranties of ASG or ASG Sub set forth in this Agreement
(other than the representations and warranties set forth in Section 3.2(h)) and
the other Transaction Agreements fail to be true and correct in any material
respect or the representations and warranties set forth in Section 3.2(h) fail
to be true and correct; (ii) at any time after the date of this Agreement and
prior to the Effective Time, any of the representations and warranties of ASG or
ASG Sub set forth in this Agreement (other than the representations and
warranties set forth in Section 3.2(h)) and the other Transaction Agreements
cease to be true and correct in any material respect or the representations and
warranties set forth in Section 3.2(h) cease to be true and correct; or (iii)
ASG or ASG Sub breaches or fails to perform in any material respect any
obligation or to comply in any material respect with any material agreement or
covenant of ASG or ASG Sub to be performed or complied with by either of them;
provided that if
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any such breach or failure in the case of clauses (i), (ii) or (iii) is curable
by ASG or ASG Sub through the exercise of their reasonable efforts, then
Landmark may not terminate this Agreement under this subsection (d) until ten
(10) business days after written notice thereof has been given to ASG and ASG
Sub by Landmark and unless at such time the matter has not been cured.
(e) by ASG or Landmark, if the Board of Directors of Landmark will
have withheld, withdrawn, modified or amended its recommendation in favor of
this Agreement, the Merger or Landmark Shareholder Approval as permitted
pursuant to Section 5.1(c) and will have authorized Landmark to enter into an
agreement with a third party with respect to a superior proposal;
(f) by ASG, if the Landmark Cash shall be less than $25,500,000;
(g) by Landmark, if the condition described in Section 6.2(d) has
been fulfilled and ASG is unable to pay the Merger Consideration at Closing.
(h) by ASG, within five (5) days after the delivery of the
Supplemental Disclosure Letter, if any information contained in the Supplemental
Disclosure Letter would reasonably cause ASG to materially lower its valuation
of Landmark.
7.2 Effect of Termination.
(a) If this Agreement is terminated by either Landmark or ASG as
provided in Section 7.1, this Agreement will forthwith become void and have no
effect, without any liability or obligation on the part of any party or its
directors, officers or shareholders, other than the provisions of the last
sentence of Section 5.2, Section 5.6, this Section 7.2, and Article VIII;
provided, however, that, except as provided in Sections 7.2(b) through 7.2(f),
nothing in this Section 7.2 shall relieve any party to this Agreement of
liability for any breach of this Agreement.
(b) If this Agreement is terminated by ASG or Landmark pursuant to
Section 7.1(e), Landmark will pay or cause to be paid to ASG, as liquidated
damages, a fee equal to Three Million Dollars ($3,000,000) in immediately
available funds within two business days of such termination.
(c) If this Agreement is terminated by ASG pursuant to Section
7.1(f) or by ASG or Landmark pursuant to Sections 7.1(b)(i) or 7.1(b)(iii), and,
prior to such termination under any of such Sections listed in this Section
7.2(c), a third party has publicly announced a Takeover Proposal, the
consummation of which would constitute an Acquisition Event, and within 12
months following the termination of this Agreement, an Acquisition Event with
such third party or its Affiliate is consummated or Landmark enters into a
definitive agreement with such third party or its Affiliates providing for an
Acquisition Event, Landmark will pay or cause to be paid to ASG, as liquidated
damages, a fee equal to Three Million Dollars ($3,000,000) in immediately
available
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funds within two (2) business days after the consummation of such Acquisition
Event or the entry by Landmark into such definitive agreement.
(d) If this Agreement is terminated by Landmark pursuant to Section
7.1(g), ASG will pay or cause to be paid to Landmark, as liquidated damages, a
fee equal to Three Million Dollars ($3,000,000) in immediately available funds
within two (2) business days of such termination.
(e) Landmark, ASG and ASG Sub acknowledge that the liquidated
damages provisions are necessary to compensate ASG, ASG Sub or Landmark, as the
case may be, for the expenses incurred in pursuing this transaction, including
due diligence costs, lost opportunities and professional expenses.
(f) No termination of this Agreement will affect the obligations of
the parties contained in the Confidentiality Agreement, all of which obligations
will survive in accordance with their terms. For the purposes of this Agreement,
"Acquisition Event" means any of the following transactions (other than the
transactions contemplated by this Agreement): (i) a merger, consolidation,
business combination, recapitalization, liquidation, dissolution or similar
transaction involving Landmark pursuant to which the shareholders of Landmark
immediately preceding such transaction hold less than 50% of the aggregate
equity interests in the surviving or resulting entity of such transaction, (ii)
a sale or other disposition by Landmark of assets representing in excess of 50%
of the aggregate fair market value of Landmark's business immediately prior to
such sale or (iii) the acquisition by any Person or group (including by way of a
tender offer or an exchange offer or issuance by Landmark), directly or
indirectly, of beneficial ownership or a right to acquire beneficial ownership
of shares representing in excess of 50% of the voting power of the then
outstanding shares of capital stock of Landmark.
7.3 Amendment. This Agreement may be amended by the parties at any
time before or after obtaining Landmark Shareholder Approval; provided, however,
that after the Landmark Shareholder Approval, there will not be made any
amendment that by law requires further approval by such shareholders without the
further approval of such shareholders. This Agreement may not be amended except
by an instrument in writing signed on behalf of each of the parties.
7.4 Extension; Waiver. At any time prior to the Effective Time, the
parties may (a) extend the time for the performance of any of the obligations or
other acts of the other parties, (b) waive any inaccuracies in the
representations and warranties contained in this Agreement or in any document
delivered pursuant to this Agreement or (c) subject to the proviso of Section
7.3, waive compliance with any of the agreements or conditions contained in this
Agreement. Any agreement on the part of a party to any such extension or waiver
will be valid only if set forth in an instrument in writing signed on behalf of
such party. The failure of any party to this Agreement to assert any of its
rights under this Agreement or otherwise will not constitute a waiver of those
rights.
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7.5 Procedure for Termination, Amendment, Extension or Waiver. A
termination of this Agreement pursuant to Section 7.1, an amendment of this
Agreement pursuant to Section 7.3 or an extension or waiver pursuant to Section
7.4 will, in order to be effective, require in the case of ASG, ASG Sub or
Landmark, action by its Board of Directors or the duly authorized designee of
its Board of Directors.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Agreement exclusive of Exhibits will
survive the Effective Time. This Section 8.1 will not limit any covenant or
agreement of the parties which by its terms contemplates performance after the
Effective Time.
8.2 Notices. All notices, requests, claims, demands and other
communications under this Agreement will be in writing and will be deemed given
if delivered personally, telecopied (which is confirmed) or sent by overnight
courier (providing proof of delivery) to the parties at the following addresses
(or at such other address for a party as will be specified by like notice):
(a) if to ASG or ASG Sub, to:
Xxxxxx X. Xxxxx
President and Chief Executive Officer
Xxxxx Systems Group, Inc.
0000 0xx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
Fax: 000-000-0000
with copies to:
General Counsel
Xxxxx Systems Group, Inc.
0000 0xx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
Fax: 000-000-0000
and
Xxxxxx X. XxXxxxxxxx, Esq.
Steptoe & Xxxxxxx LLP
0000 Xxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Fax: 000-000-0000
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(b) if to Landmark, to
Xxxxxxxxx X. Xxxxx
President and Chief Executive Officer
Landmark Systems Corporation
00000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000-0000
with a copy to:
Xxxxxx X. Xxxxxxx, Esq.
Xxxx Xxxxxxx LLP
0000 Xxxxxx Xxxx.
XxXxxx, XX 00000
Fax: 000-000-0000
and
Xxxxxxxx Xxxxx, Esq.
Xxxx Xxxxxxx LLP
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Fax: 000-000-0000
8.3 Definitions. For purposes of this Agreement:
"Acquisition Event" is defined in Section 7.2(f) of this Agreement.
"Affiliate" of any Person means another Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, such first Person.
"Agreement" means this Agreement and Plan of Merger and all Annexes, Exhibits
and Amendments hereto.
"Certificates" is defined in Section 2.2(c) of this Agreement.
"Closing Date" is defined in Section 1.3 of this Agreement.
"Confidentiality Agreement" is defined in Section 5.2 of this Agreement.
"Confidential Information" is defined in Section 3.1(h)(ix) of this Agreement.
"D and O Insurance" is defined in Section 5.9(c) of this Agreement.
"Effective Time" is defined in Section 1.4 of this Agreement.
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"Environmental Laws" is defined in Section 3.1(n)(ii) of this Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.
"ESPP" is defined in Section 3.1(c) of this Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder
"Fiduciary" is defined in Section 3.1(k)(viii) of this Agreement.
"GAAP" means generally accepted accounting principles.
"Government Contract Party" is defined in Section 3.1(v) of this Agreement.
"Governmental Entity" is defined in Section 3.1(d) of this Agreement.
"Hazardous Material" is defined in Section 3.1(n)(iii) of this Agreement.
"HSR Act" is defined in Section 3.1(d) of this Agreement.
"Intellectual Property" is defined in Section 3.1(h)(i) of this Agreement.
"IRCA" is defined in Section 3.1(u) of this Agreement.
"IRS" means the Internal Revenue Service.
"Liens" is defined in Section 3.1(b) of this Agreement.
"Material Adverse Change" or "Material Adverse Effect" means, when used in
connection with any Person, any change or effect that is or would be materially
adverse to such Person and its Subsidiaries, taken as a whole, taking into
account the business, properties, assets, financial condition or results of
operations of such Person and its Subsidiaries, taken as a whole, other than
adverse effects arising out of events or changes (i) generally affecting the
U.S. economy as a whole or the global economy in a similar manner, provided that
the business of such Person is not affected in a materially disproportionate
manner, (ii) affecting the computer software industry generally, provided that
the business of such Person is not affected in a materially disproportionate
manner, (iii) as a result of the announcement of the transactions contemplated
by this Agreement, (iv) in the trading price of the capital stock of such Person
(provided that the reasons underlying any such change in trading price may be
considered in determining whether or not a Material Adverse Effect has occurred)
or (v) resulting from the worsening of current conditions caused by acts of
terrorism or war (whether declared or undeclared) occurring after the date of
this Agreement.
"Material Customer" is defined in Section 3.1(x) of this Agreement.
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"Merger" is defined in Recital A of this Agreement.
"Merger Consideration" is defined in Section 2.1(c) of this Agreement.
"Non-US Competition Laws" means the competition and antitrust laws of any
country other than the United States.
"Notice of Superior Proposal" is defined in Section 5.1(c) of this Agreement.
"Options" is defined in Section 5.4(b) of this Agreement.
"Paying Agent" is defined in Section 2.2(a) of this Agreement.
"Permits" is defined in Section 3.1(n)(i) of this Agreement.
"Person" means an individual, corporation, limited liability company,
partnership, joint venture, association, trust, unincorporated organization or
other entity.
"Landmark" is defined in the introductory paragraph of this Agreement.
"Landmark Balance Sheet" is defined in Section 3.1(l)(i) of this Agreement.
"Landmark Cash" means as of any date the total amount of cash, cash equivalents
and marketable securities and investments of Landmark and its Subsidiaries,
provided however, that Landmark Cash shall be deemed to include: (i) amounts
paid by Landmark in accordance with Section 5.4(b) to convert Options into cash
in an amount in respect of each such Option equal to the product of (A) the
excess, if any, of the per share Merger Consideration over the exercise price
thereof and (B) the number of Shares subject to such Option, and (ii) amounts
paid by Landmark in respect of (A) filings made in compliance with the HSR Act
and the Exchange Act and (B) annual insurance premiums made pursuant to Section
5.9 of this Agreement, which amounts in this clause (ii) shall not exceed in the
aggregate $200,000.
"Landmark Disclosure Letter" is defined in Section 3.1 of this Agreement.
"Landmark Employee Plans" is defined in Section 3.1(k)(iv) of this Agreement.
"Landmark Option Plans" is defined in Section 3.1(c) of this Agreement.
"Landmark Preferred Stock" is defined in Section 3.1(c) of this Agreement.
"Landmark Shareholder Approval" is defined in Section 3.1(d) of this Agreement.
"Landmark Tax Affiliate" is defined in Section 3.1(k)(ii) of this Agreement.
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"Principal Share Purchase and Voting Agreements" means the Principal Share
Purchase and Voting Agreements dated of even date herewith by and between ASG,
ASG Sub and the Principal Shareholders.
"Proxy Statement" is defined in Section 3.1(d) of this Agreement.
"Returns" is defined in Section 3.1(l)(vi) of this Agreement.
"Revenue Code" means the Internal Revenue Code of 1986, as amended.
"Rights Arrangement" is defined in Section 3.1(o) of this Agreement.
"ASG" is defined in the introductory paragraph of this Agreement.
"ASG Sub" is defined in the introductory paragraph of this Agreement.
"SEC" means the Securities Exchange Commission.
"SEC Documents" is defined in Section 3.1(e) of this Agreement.
"Securities Act" is defined in Section 3.1(e) of this Agreement.
"Share" is defined in Recital A of this Agreement.
"Shareholders Meeting" is defined in Section 5.1(a) of this Agreement.
"Special Committee" means the special committee established by Landmark's Board
of Directors to, among other things, consider the Merger and the other
transactions contemplated by this Agreement.
"Subsidiary" of any Person means another Person, in which an amount of the
voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its Board of Directors or
other governing body (or, if there are no such voting interests, 50% or more of
the equity interests of which) is owned directly or indirectly by such first
Person.
"superior proposal" is defined in Section 5.1(c) of this Agreement.
"Surviving Corporation" is defined in Section 1.2 of this Agreement.
"Takeover Proposal" is defined in Section 4.2 of this Agreement.
"Tax" or "Taxes" is defined in Section 3.1(l)(vi) of this Agreement.
"Third Party Intellectual Property Rights" is defined in Section 3.1(h)(ii) of
this Agreement.
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"Transaction Agreements" means this Agreement, the Principal Share Purchase and
Voting Agreements, the Non-Competition Agreements and the Guarantee and Promise
to Pay executed by Xxxxxx X. Xxxxx in favor of each of the Principal
Shareholders.
"VSCA" means the Virginia Stock Corporation Act.
"Warrant" is defined in Section 3.1(c)(i) of this Agreement.
"WARN Act" is defined in Section 3.1(u) of this Agreement.
8.4 Interpretation. When a reference is made in this Agreement to an
Article, Section, Annex, Exhibit or Schedule, such reference is to an Article or
a Section of, or an Annex, Exhibit or Schedule to, this Agreement unless
otherwise indicated. The headings contained in this Agreement are for reference
purposes only and will not affect in any way the meaning or interpretation of
this Agreement. Whenever the words "include", "includes" or "including" are used
in this Agreement, they will be deemed to be followed by the words "without
limitation." The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement will refer to this Agreement as a whole and
not to any particular provision of this Agreement. When used in this Agreement
with respect to Landmark or ASG, the word "knowledge" and words of similar
import mean the knowledge of those officers, directors and other executive
personnel of such Person and its Subsidiaries with responsibility for the matter
as to which such knowledge is expressed. All terms defined in this Agreement
will have the defined meanings when used in any certificate or other document
made or delivered pursuant hereto unless otherwise defined therein. The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such term. References to a Person are also to its
permitted successors and assigns. References to a law or statute in this
Agreement include all amendments and modifications to such law or statute, and
all rules and regulations promulgated thereunder. References to Landmark in this
Agreement refer also to Landmark's Subsidiaries unless the context would clearly
indicate otherwise.
8.5 Counterparts. This Agreement may be executed in one or more
counterparts, all of which will be considered one and the same agreement and
will become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
8.6 Entire Agreement; No Third-Party Beneficiaries. This Agreement,
the exhibits and schedules hereto, the Landmark Disclosure Letter, the
Supplemental Disclosure Letter, the Transaction Agreements, and the
Confidentiality Agreement constitute the entire agreement, and supersede all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter of this Agreement and are not intended to
confer upon any Person other than the parties any rights or remedies hereunder.
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8.7 Governing Law. This Agreement will be governed by, and construed
in accordance with, the laws of Virginia, regardless of the laws that might
otherwise govern under applicable principles of conflict of laws thereof.
8.8 Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement will be assigned, in whole or in
part, by operation of law or otherwise by any of the parties without the prior
written consent of the other parties, except that ASG Sub may assign, in its
sole discretion, any of or all of its rights, interests and obligations under
this Agreement to ASG or to any direct or indirect wholly owned Subsidiary of
ASG, but no such assignment will relieve ASG Sub and ASG of any of its
obligations under this Agreement. This Agreement will be binding upon, inure to
the benefit of, and be enforceable by, the parties and their respective
successors and assigns.
8.9 Enforcement. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties will be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of Florida or the Eastern District of Virginia located in
the City of Alexandria or in Florida or Virginia state court located in , this
being in addition to any other remedy to which they are entitled at law or in
equity. In addition, each of the parties hereto (a) consents to submit itself to
the personal jurisdiction and venue of any federal court located in the State of
Florida or the Eastern District of Virginia located in the City of Alexandria or
any Florida or Virginia state court in the event any dispute arises out of this
Agreement or any of the transactions contemplated by this Agreement, (b) agrees
that it will not attempt to deny or defeat such personal jurisdiction or choice
of venue by motion or other request for leave from any such court and (c) agrees
that it will not bring any action relating to this Agreement any of the
transactions contemplated by this Agreement in any court other than a federal or
state court sitting in the State of Florida or in the Northern District of
Virginia.
8.10 Disclosure. Nothing in the Landmark Disclosure Letter or the
Supplemental Disclosure Letter will be deemed adequate to disclose an exception
to a representation or warranty made herein unless the disclosure identifies the
exception with reasonable particularity and describes the relevant facts in
reasonable detail; provided that a particular matter need only be disclosed once
in such manner so long as it is cross-referenced wherever else reasonably
applicable in the Landmark Disclosure Letter or the Supplemental Disclosure
Letter in a manner sufficiently clear to identify to which representation or
warranty an exception is being made.
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IN WITNESS WHEREOF, ASG, ASG Sub and Landmark have caused this Agreement
to be signed by their respective officers thereunto duly authorized, all as of
the date first written above.
XXXXX SYSTEMS GROUP, INC. LANDMARK SYSTEMS CORPORATION
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxxxxx X. Xxxxx
----------------------------------- ------------------------------
Name: Xxxxxx X. Xxxxx Name: Xxxxxxxxx X. Xxxxx
Title: President and Chief Executive Officer Title: Chief Executive Officer and President
ASG SUB, INC.
By: /s/ Xxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
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