Exhibit (c)(2)
SHAREHOLDER AGREEMENT
SHAREHOLDER AGREEMENT (this "Agreement"), dated January 27, 1998, by
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and among The Sage Group plc, a company organized under the laws of England
("Parent"), Rose Acquisition Corp., a Delaware corporation and a direct and
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indirect wholly-owned subsidiary of Parent (the "Purchaser") and each of Xxxxx
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X. Xxxxx, Xxxxxx Xxxxxxx and Xxxxxxx X. Gold (each in his individual capacity,
the "Shareholder", and collectively, the "Shareholders").
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WHEREAS, each of the Shareholders is, as of the date hereof, the
record and beneficial owner of the shares of common stock, no par value (the
"Common Stock"), of State of the Art, Inc., a California corporation (the
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"Company") set forth on Annex I hereto;
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WHEREAS, Parent, the Purchaser and the Company concurrently herewith
are entering into an Agreement and Plan of Merger, dated as of the date hereof
(the "Merger Agreement"), which provides, among other things, for the
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acquisition of the Company by Parent by means of a cash tender offer (the
"Offer") for all of the outstanding shares of Common Stock and for the
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subsequent merger (the "Merger") of the Purchaser with and into the Company upon
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the terms and subject to the conditions set forth in the Merger Agreement; and
WHEREAS, as a condition to the willingness of Parent and the Purchaser
to enter into the Merger Agreement, and in order to induce Parent and the
Purchaser to enter into the Merger Agreement, the Shareholders have agreed to
enter into this Agreement.
NOW, THEREFORE, in consideration of the execution and delivery by
Parent and the Purchaser of the Merger Agreement and the foregoing and the
mutual representations, warranties, covenants and agreements set forth herein
and therein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. Representations and Warranties of the Shareholder. Each
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of the Shareholders hereby represents and warrants to Parent and the Purchaser,
severally and not jointly, as follows:
(a) Such Shareholder is the record and beneficial owner of the shares
of Common Stock (as may be adjusted from time to time pursuant to Section 6
hereof, the "Shares") set forth opposite his name on Annex I to this Agreement.
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(b) Such Shareholder has the legal capacity to execute and deliver
this Agreement and to consummate the transactions contemplated hereby.
(c) This Agreement has been validly executed and delivered by such
Shareholder and constitutes the legal, valid and binding obligation of such
Shareholder, enforceable against such Shareholder in accordance with its terms,
except (i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors' rights generally, and (ii) the availability of the remedy of specific
performance or injunctive or other forms of equitable relief may be subject to
equitable defenses and would be subject to the discretion of the court before
which any proceeding therefor may be brought.
(d) Neither the execution and delivery of this Agreement nor the
consummation by such Shareholder of the transactions contemplated hereby will
violate any other agreement to which such Shareholder is a party.
(e) The Shares and the certificates representing the Shares owned by
such Shareholder are now and at all times during the term hereof will be held by
such Shareholder, or by a nominee or custodian for the benefit of such
Shareholder, free and clear of all liens, claims, security interests, proxies,
voting trusts or agreements, understandings or arrangements or any other
encumbrances whatsoever, except for any such encumbrances or proxies arising
hereunder.
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SECTION 2. Representations and Warranties of Parent and the
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Purchaser. Each of Parent and the Purchaser hereby, jointly and severally,
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represents and warrants to the Shareholder as follows:
(a) Parent is a corporation duly organized, validly existing and in
good standing under the laws of England, the Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California, and each of Parent and the Purchaser has all requisite corporate
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby, and has taken all necessary corporate action
to authorize the execution, delivery and performance of this Agreement.
(b) This Agreement has been duly authorized, executed and delivered
by each of Parent and the Purchaser and constitutes the legal, valid and binding
obligation of each of Parent and the Purchaser, enforceable against each of them
in accordance with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors' rights generally and (ii) the availability
of the remedy of specific performance or injunctive or other forms of equitable
relief may be subject to equitable defenses and would be subject to the
discretion of the court before which any proceeding therefor may be brought.
(c) Neither the execution and delivery of this Agreement nor the
consummation by each of Parent and the Purchaser of the transactions
contemplated hereby will result in a violation of, or a default under, or
conflict with, any contract, trust, commitment, agreement, understanding,
arrangement or restriction of any kind to which each of Parent and the Purchaser
is a party or bound. The consummation by each of Parent and the Purchaser of
the transactions contemplated hereby will not violate, or require any consent,
approval, or notice under, any provision of any judgment, order, decree,
statute, law, rule or regulation applicable to either Parent or the Purchaser,
except for any necessary filing under the HSR Act or state takeover laws.
SECTION 3. Purchase and Sale of the Shares. Each of the Shareholders
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hereby agrees that it shall
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tender the Shares into the Offer promptly, and in any event no later than the
tenth business day following the commencement of the Offer pursuant to Section
1.1 of the Merger Agreement, and that such Shareholder shall not withdraw any
Shares so tendered unless the Offer is terminated or has expired. The Purchaser
hereby agrees to purchase all the Shares so tendered at a price per Share equal
to $22.00 per Share or any higher price that may be paid in the Offer; provided,
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however, that the Purchaser's obligation to accept for payment and pay for the
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Shares in the Offer is subject to all the terms and conditions of the Offer set
forth in the Merger Agreement and Annex I thereto.
SECTION 4. Transfer of the Shares. Prior to the termination of this
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Agreement, except as otherwise provided herein, none of the Shareholders shall:
(i) transfer (which term shall include, without limitation, for the purposes of
this Agreement, any sale, gift, pledge or other disposition), or consent to any
transfer of, any or all of the Shares; (ii) enter into any contract, option or
other agreement or understanding with respect to any transfer of any or all of
the Shares or any interest therein; (iii) grant any proxy, power-of-attorney or
other authorization or consent in or with respect to the Shares; (iv) deposit
the Shares into a voting trust or enter into a voting agreement or arrangement
with respect to the Shares or (v) take any other action that would in any way
restrict, limit or interfere with the performance of such Shareholder's
obligations hereunder or the transactions contemplated hereby.
SECTION 5. Grant of Irrevocable Proxy; Appointment of Proxy.
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(a) Each of the Shareholders hereby irrevocably grants to, and
appoints, Parent and any nominee thereof, its proxy and attorney-in-fact (with
full power of substitution), for and in the name, place and stead of such
Shareholder, to vote the Shares, or grant a consent or approval in respect of
the Shares, in connection with any meeting of the Shareholders of the Company
(i) in favor of the Merger, and (ii) against any action or agreement which would
impede, interfere with or prevent the Merger, including any other extraordinary
corporate transaction, such as a merger, reorganization or liquidation involving
the Company and a third party or
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any other proposal of a third party to acquire the Company; provided, however,
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that such irrevocable proxy shall be immediately revoked if, in accordance with
Section 1.1(d) of the Merger Agreement, the Purchaser waives the Minimum
Condition (as defined in the Merger Agreement) and accepts for payment the
Revised Minimum Number of Shares (as defined in the Merger Agreement).
(b) Such Shareholder represents that any proxies heretofore given in
respect of the Shares, if any, are not irrevocable, and that such proxies are
hereby revoked.
(c) Such Shareholder hereby affirms that the irrevocable proxy set
forth in this Section 5 is given in connection with the execution of the Merger
Agreement, and that such irrevocable proxy is given to secure the performance of
the duties of such Shareholder under this Agreement. Such Shareholder hereby
further affirms that the irrevocable proxy is coupled with an interest and,
except as set forth in Section 8 hereof, is intended to be irrevocable in
accordance with the provisions of Section 705 of the California General
Corporation Law.
SECTION 6. Certain Events. In the event of any stock split, stock
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dividend, merger, reorganization, recapitalization or other change in the
capital structure of the Company affecting the Common Stock or the acquisition
of additional shares of Common Stock or other securities or rights of the
Company by the Shareholder, the number of Shares shall be adjusted
appropriately, and this Agreement and the obligations hereunder shall attach to
any additional shares of Common Stock or other securities or rights of the
Company issued to or acquired by each of the Shareholders.
SECTION 7. Certain Other Agreements. Each of the Shareholders will
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notify the Purchaser immediately if any proposals are received by, any
information is requested from, or any negotiations or discussions are sought to
be initiated or continued with such Shareholder or its officers, directors,
employees, investment bankers, attorneys, accountants or other agents, if any,
in each case in connection with any Acquisition Proposal or Acquisition Proposal
Interest (as such terms are defined in the Merger Agreement) indicating, in
connection with
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such notice, the name of the person indicating such Acquisition Proposal
Interest and the terms and conditions of any proposals or offers. Each of the
Shareholders agrees that it will immediately cease and cause to be terminated
any existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any Acquisition Proposal Interest. Such Shareholder
agrees that it shall keep Parent informed, on a current basis, of the status and
terms of any Acquisition Proposal Interest. Such Shareholder agrees that it will
not, directly or indirectly: (i) initiate, solicit or encourage, or take any
action to facilitate the making of, any offer or proposal which constitutes or
is reasonably likely to lead to any Acquisition Proposal, or (ii) in the event
of an unsolicited written Acquisition Proposal engage in negotiations or
discussions with, or provide any information or data to, any person (other than
Parent, any of its affiliates or representatives and except for information
which has been previously publicly disseminated by the Company) relating to any
Acquisition Proposal.
SECTION 8. Further Assurances. Each of the Shareholders shall, upon
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request of Parent or the Purchaser, execute and deliver any additional documents
and take such further actions as may reasonably be deemed by Parent or the
Purchaser to be necessary or desirable to carry out the provisions hereof and to
vest the power to vote the Shares as contemplated by Section 5 hereof in Parent.
SECTION 9. Termination. Subject to Section 5(a) hereof, this
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Agreement, and all rights and obligations of the parties hereunder, shall
terminate immediately upon the earlier of (a) six months following the
termination of the Merger Agreement in accordance with its terms or (b) the
Effective Time (as defined in the Merger Agreement); provided, however, that
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Sections 8 and 10 shall survive any termination of this Agreement.
SECTION 10. Expenses. All fees and expenses incurred by any one
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party hereto shall be borne by the party incurring such fees and expenses.
SECTION 11. Public Announcements. Each of the Shareholders, the
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Parent and the Purchaser agrees that it will not issue any press release or
otherwise make any
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public statement with respect to this Agreement or the transactions contemplated
hereby without the prior consent of the other party, which consent shall not be
unreasonably withheld or delayed; provided, however, that such disclosure can be
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made without obtaining such prior consent if (i) the disclosure is required by
law, and (ii) the party making such disclosure has first used its best efforts
to consult with the other party about the form and substance of such disclosure.
SECTION 12. Miscellaneous.
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(a) Capitalized terms used and not otherwise defined in this
Agreement shall have the respective meanings assigned to such terms in the
Merger Agreement.
(b) All notices and other communications hereunder shall be in
writing and shall be deemed given upon (i) transmitter's confirmation of a
receipt of a facsimile transmission, (ii) confirmed delivery by a standard
overnight carrier or when delivered by hand or (iii) the expiration of five
business days after the day when mailed in the United States by certified or
registered mail, postage prepaid, addressed at the following addresses (or at
such other address for a party as shall be specified by like notice):
(A) if to the Shareholders, to:
State of the Art, Inc.
00 Xxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000-0000
Telephone:(000)000-0000 x0000
Facsimile:(000)000-0000
Attention: Xxxxx X. Xxxxx
with a copy to:
Fenwick & Xxxx
Xxx Xxxx Xxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Telephone: (000)000-0000
Facsimile: (000)000-0000
Attention: Xxxxx Xxxxxxx
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State of the Art, Inc.
00 Xxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxxx
with a copy to:
Fenwick & Xxxx
Xxx Xxxx Xxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Telephone: (000)000-0000
Facsimile: (000)000-0000
Attention: Xxxxx Xxxxxxx
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx Xxx, Xxxxxxxxxx 00000
Telephone: (000) 000 0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Gold
with a copy to:
Fenwick & Xxxx
Xxx Xxxx Xxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Telephone: (000)000-0000
Facsimile: (000)000-0000
Attention: Xxxxx Xxxxxxx
and
(B) if to Parent or the Purchaser, to:
The Sage Group plc
Xxxx Xxxxx
Xxxxxx Xxxx Xxxx
Xxxxxxxxx Xxxx Xxxx
XX0 0XX
Telephone: 000-000-0000
Facsimile: 191-255-0306
Attention: Xxxx X. Xxxxxx
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with a copy to:
Skadden, Arps, Slate, Xxxxxxx
& Xxxx LLP
Four Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Esq.
(c) The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
(d) This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original but all of which shall be considered one
and the same agreement.
(e) This Agreement (including the Merger Agreement and any other
documents and instruments referred to herein) constitutes the entire agreement,
and supersedes all prior agreements and understandings, whether written and
oral, among the parties hereto with respect to the subject matter hereof.
(f) This Agreement shall be governed by, and construed in accordance
with, the laws of the State of California without giving effect to the
principles of conflicts of laws thereof.
(g) Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of the other
parties. Subject to the preceding sentence, this Agreement will be binding
upon, inure to the benefit of and be enforceable by, the parties and their
respective successors and assigns, and the provisions of this Agreement are not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.
(h) If any term, provision, covenant or restriction herein is held by
a court of competent juris-
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diction or other authority to be invalid, void or unenforceable or against its
regulatory policy, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
(i) Each of the parties hereto acknowledges and agrees that in the
event of any breach of this Agreement, each non-breaching party would be
irreparably and immediately harmed and could not be made whole by monetary
damages. It is accordingly agreed that the parties hereto (i) will waive, in
any action for specific performance, the defense of adequacy of a remedy at law
and (ii) shall be entitled, in addition to any other remedy to which they may be
entitled at law or in equity, to compel specific performance of this Agreement
in any action instituted in any state or federal court sitting in San Francisco,
California. The parties hereto consent to personal jurisdiction in any such
action brought in any state or federal court sitting in San Francisco,
California and to service of process upon it in the manner set forth in Section
12(b) hereof.
(j) No amendment, modification or waiver in respect of this Agreement
shall be effective against any party unless it shall be in writing and signed by
such party.
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IN WITNESS WHEREOF, Parent, the Purchaser and the Shareholders have
caused this Agreement to be duly executed and delivered as of the date first
written above.
THE SAGE GROUP PLC
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Title: Chief Executive
ROSE ACQUISITION CORP.
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Title: Vice President and Secretary
XXXXX X. XXXXX
/s/ Xxxxx X. Xxxxx
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XXXXXX XXXXXXX
/s/ Xxxxxx Xxxxxxx
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XXXXXXX X. GOLD
/s/ Xxxxxxx X. Gold
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ANNEX I
Ownership of Company Common Stock
1. Xxxxx X. Xxxxx 110,811 Shares
2. Xxxxxx Xxxxxxx 700,221 Shares
3. Xxxxxxx X. Gold 479,836 Shares
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