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EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION is made and entered into as
of October 13, 1997, among McAfee Associates, Inc., a Delaware corporation
("PARENT"), Mystery Acquisition Corp., a Delaware corporation and a wholly-owned
subsidiary of Parent ("MERGER SUB"), and Network General Corporation, a Delaware
corporation ("COMPANY").
RECITALS
A. Upon the terms and subject to the conditions of this Agreement (as
defined in Section 1.2 below) and in accordance with the Delaware General
Corporation Law ("DELAWARE LAW"), Parent and Company intend to enter into a
business combination transaction.
B. The Boards of Directors of Company and Parent (i) have determined
that the Merger (as defined in Section 1.1) is consistent with and in
furtherance of their respective long-term business strategies and fair to, and
in the best interests of, their respective stockholders, (ii) have approved this
Agreement, the Merger and the other transactions contemplated by this Agreement
and (iii) have, in the case of Company, subject to the provisions of this
Agreement, determined to recommend that the stockholders of Company adopt and
approve this Agreement and approve the Merger and, in the case of Parent,
subject to the provisions of this Agreement, determined to recommend that the
stockholders of Parent approve the issuance of shares of Parent Common Stock (as
defined in Section 1.6(a)) pursuant to the Merger.
C. The Board of Directors of Merger Sub has approved this Agreement,
the Merger and the other transactions contemplated by this Agreement.
D. Concurrently with the execution of this Agreement, and as a
condition and inducement to Parent's and Company's respective willingness to
enter into this Agreement, certain stockholders of Company are entering into
Voting Agreements in substantially the form attached hereto as Exhibit A-1 (the
"COMPANY VOTING AGREEMENTS"), and certain stockholders of Parent are entering
into Voting Agreements in substantially the form attached hereto as Exhibit A-2
(the "PARENT VOTING AGREEMENTS").
E. The parties intend, by executing this Agreement, to adopt a plan of
reorganization within the meaning of Section 368 of the Internal Revenue Code of
1986, as amended (the "CODE").
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F. It is also intended by the parties hereto that the Merger shall
qualify for accounting treatment as a pooling of interests.
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
ARTICLE I
THE MERGER
1.1 The Merger. At the Effective Time (as defined in Section 1.2) and
subject to and upon the terms and conditions of this Agreement and the
applicable provisions of Delaware Law, Merger Sub shall be merged with and into
Company (the "MERGER"), the separate corporate existence of Merger Sub shall
cease and Company shall continue as the surviving corporation. Company as the
surviving corporation after the Merger is hereinafter sometimes referred to as
the "SURVIVING CORPORATION."
1.2 Effective Time; Closing. Subject to the provisions of this
Agreement, the parties hereto shall cause the Merger to be consummated by filing
a Certificate of Merger with the Secretary of State of the State of Delaware in
accordance with the relevant provisions of Delaware Law (the "CERTIFICATE OF
MERGER") (the time of such filing (or such later time as may be agreed in
writing by Company and Parent and specified in the Certificate of Merger) being
the "EFFECTIVE TIME") as soon as practicable on or after the Closing Date (as
herein defined). The closing of the Merger (the "CLOSING") shall take place at
the offices of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation, at a
time and date to be specified by the parties, which shall be no later than the
second business day after the satisfaction or waiver of the conditions set forth
in Article VI, or at such other time, date and location as the parties hereto
agree in writing (the "CLOSING DATE").
1.3 Effect of the Merger. At the Effective Time, the effect of the
Merger shall be as provided in this Agreement and the applicable provisions of
Delaware Law. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time all the property, rights, privileges, powers and
franchises of Company and Merger Sub shall vest in the Surviving Corporation,
and all debts, liabilities and duties of Company and Merger Sub shall become the
debts, liabilities and duties of the Surviving Corporation.
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1.4 Certificate of Incorporation; Bylaws.
(a) At the Effective Time, the Certificate of Incorporation of
Merger Sub, as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation until thereafter
amended as provided by law and such Certificate of Incorporation of the
Surviving Corporation; provided, however, that at the Effective Time the
Certificate of Incorporation of the Surviving Corporation shall be amended so
that the name of the Surviving Corporation shall be "Network General
Corporation."
(b) The Bylaws of Merger Sub, as in effect immediately prior
to the Effective Time, shall be, at the Effective Time, the Bylaws of the
Surviving Corporation until thereafter amended.
1.5 Directors and Officers. The directors of Company immediately prior
to the Effective Time shall continue as directors of the Surviving Corporation
(together with such additional directors as may be elected by Parent effective
as of or after the Effective Time). For transition purposes, Parent intends that
such directors shall continue to serve as directors of the Surviving Corporation
for 180 days or more following the Effective Time. The initial officers of the
Surviving Corporation shall be the officers of Merger Sub immediately prior to
the Effective Time.
1.6 Effect on Capital Stock. At the Effective Time, by virtue of the
Merger and without any action on the part of Merger Sub, Company or the holders
of any of the following securities:
(a) Conversion of Company Common Stock. Each share of Common
Stock, $0.01 par value per share, of Company (including, with respect to each
such share of Company Common Stock, the associated Rights (as defined in that
certain Rights Agreement (the "COMPANY RIGHTS PLAN") dated as of June 26, 1992,
between Company and Chemical Trust Company of California, as Rights Agent, as
amended))(the "COMPANY COMMON STOCK") issued and outstanding immediately prior
to the Effective Time, other than any shares of Company Common Stock to be
canceled pursuant to Section 1.6(b), will be canceled and extinguished and
automatically converted (subject to Sections 1.6(e) and (f)) into the right to
receive 0.4167 (the "EXCHANGE RATIO") shares of Common Stock of Parent (the
"PARENT COMMON STOCK") upon surrender of the certificate representing such share
of Company Common Stock in the manner provided in Section 1.7 (or in the case of
a lost, stolen or destroyed certificate, upon delivery of an affidavit (and
bond, if required) in the manner provided in Section 1.9).
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(b) Cancellation of Parent-Owned Stock. Each share of Company
Common Stock held by Company or owned by Merger Sub, Parent or any direct or
indirect wholly owned subsidiary of Company or of Parent immediately prior to
the Effective Time shall be canceled and extinguished without any conversion
thereof.
(c) Stock Options; Employee Stock Purchase Plans. At the
Effective Time, all options to purchase Company Common Stock then outstanding
under Company's 1989 Stock Option Plan (the "ISO PLAN"), Company's 1989 Outside
Directors Stock Option Plan (the "DIRECTORS' PLAN"), the Cinco Networks, Inc.
1997 Stock Option Plan (the "CINCO PLAN"), and options granted by ProTools, Inc.
and assumed by Company (the "PROTOOLS OPTIONS" and together with the ISO Plan,
the Directors' Plan and the Cinco Plan, the "COMPANY STOCK OPTION PLANS") shall
be assumed by Parent in accordance with Section 5.8 hereof. Rights outstanding
under Company's 1989 Employee Stock Purchase Plan (the "ESPP") shall be treated
as set forth in Section 5.8.
(d) Capital Stock of Merger Sub. Each share of Common Stock,
$0.001 par value per share, of Merger Sub (the "MERGER SUB COMMON STOCK") issued
and outstanding immediately prior to the Effective Time shall be converted into
one validly issued, fully paid and nonassessable share of Common Stock, $0.01
par value per share, of the Surviving Corporation. Each certificate evidencing
ownership of shares of Merger Sub Common Stock shall evidence ownership of such
shares of capital stock of the Surviving Corporation.
(e) Adjustments to Exchange Ratio. The Exchange Ratio shall be
adjusted to reflect appropriately the effect of any stock split, reverse stock
split, stock dividend (including any dividend or distribution of securities
convertible into Parent Common Stock or Company Common Stock), reorganization,
recapitalization, reclassification or other like change with respect to Parent
Common Stock or Company Common Stock occurring on or after the date hereof and
prior to the Effective Time.
(f) Fractional Shares. No fraction of a share of Parent Common
Stock will be issued by virtue of the Merger, but in lieu thereof each holder of
shares of Company Common Stock who would otherwise be entitled to a fraction of
a share of Parent Common Stock (after aggregating all fractional shares of
Parent Common Stock that otherwise would be received by such holder) shall
receive from Parent an amount of cash (rounded to the nearest whole cent) equal
to the product of (i) such fraction, multiplied by (ii) the average closing
price of one share of Parent Common Stock for the five (5) most recent days that
Parent Common Stock has traded ending on the trading day immediately prior to
the Effective Time, as reported on the Nasdaq National Market System ("NASDAQ").
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1.7 Surrender of Certificates.
(a) Exchange Agent. Parent shall select a bank or trust
company reasonably acceptable to Company to act as the exchange agent (the
"EXCHANGE AGENT") in the Merger.
(b) Parent to Provide Common Stock. Promptly after the
Effective Time, Parent shall make available to the Exchange Agent for exchange
in accordance with this Article I, the shares of Parent Common Stock issuable
pursuant to Section 1.6 in exchange for outstanding shares of Company Common
Stock, and cash in an amount sufficient for payment in lieu of fractional shares
pursuant to Section 1.6(f) and any dividends or distributions to which holders
of shares of Company Common Stock may be entitled pursuant to Section 1.7(d).
(c) Exchange Procedures. As soon as practicable after the
Effective Time, and in no event later than five (5) business days thereafter,
Parent shall cause the Exchange Agent to mail to each holder of record (as of
the Effective Time) of a certificate or certificates (the "CERTIFICATES"), which
immediately prior to the Effective Time represented outstanding shares of
Company Common Stock whose shares were converted into shares of Parent Common
Stock pursuant to Section 1.6, cash in lieu of any fractional shares pursuant to
Section 1.6(f) and any dividends or other distributions pursuant to Section
1.7(d), (i) a letter of transmittal in customary form (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates shall
pass, only upon delivery of the Certificates to the Exchange Agent and shall
contain such other provisions as Parent may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for certificates representing shares of Parent Common Stock, cash in lieu of any
fractional shares pursuant to Section 1.6(f) and any dividends or other
distributions pursuant to Section 1.7(d). Upon surrender of Certificates for
cancellation to the Exchange Agent or to such other agent or agents as may be
appointed by Parent, together with such letter of transmittal, duly completed
and validly executed in accordance with the instructions thereto, the holders of
such Certificates shall be entitled to receive in exchange therefor certificates
representing the number of whole shares of Parent Common Stock into which their
shares of Company Common Stock were converted at the Effective Time, payment in
lieu of fractional shares which such holders have the right to receive pursuant
to Section 1.6(f) and any dividends or distributions payable pursuant to Section
1.7(d), and the Certificates so surrendered shall forthwith be canceled. Until
so surrendered, outstanding Certificates will be deemed from and after the
Effective Time, for all corporate purposes, subject to Section 1.7(d) as to the
payment of dividends, to evidence only the ownership of the number of full
shares of Parent Common Stock into which such shares of Company Common Stock
shall have been so converted and
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the right to receive an amount in cash in lieu of the issuance of any fractional
shares in accordance with Section 1.6(f) and any dividends or distributions
payable pursuant to Section 1.7(d).
(d) Distributions With Respect to Unexchanged Shares. No
dividends or other distributions declared or made after the date of this
Agreement with respect to Parent Common Stock with a record date after the
Effective Time will be paid to the holders of any unsurrendered Certificates
with respect to the shares of Parent Common Stock represented thereby until the
holders of record of such Certificates shall surrender such Certificates.
Subject to applicable law, following surrender of any such Certificates, the
Exchange Agent shall deliver to the record holders thereof, without interest,
certificates representing whole shares of Parent Common Stock issued in exchange
therefor along with payment in lieu of fractional shares pursuant to Section
1.6(f) hereof and the amount of any such dividends or other distributions with a
record date after the Effective Time payable with respect to such whole shares
of Parent Common Stock.
(e) Transfers of Ownership. If certificates representing
shares of Parent Common Stock are to be issued in a name other than that in
which the Certificates surrendered in exchange therefor are registered, it will
be a condition of the issuance thereof that the Certificates so surrendered will
be properly endorsed and otherwise in proper form for transfer and that the
persons requesting such exchange will have paid to Parent or any agent
designated by it any transfer or other taxes required by reason of the issuance
of certificates representing shares of Parent Common Stock in any name other
than that of the registered holder of the Certificates surrendered, or
established to the satisfaction of Parent or any agent designated by it that
such tax has been paid or is not payable.
(f) No Liability. Notwithstanding anything to the contrary in
this Section 1.7, neither the Exchange Agent, Parent, the Surviving Corporation
nor any party hereto shall be liable to a holder of shares of Parent Common
Stock or Company Common Stock for any amount properly paid to a public official
pursuant to any applicable abandoned property, escheat or similar law.
1.8 No Further Ownership Rights in Company Common Stock. All shares of
Parent Common Stock issued in accordance with the terms hereof (including any
cash paid in respect thereof pursuant to Section 1.6(f) and 1.7(d)) shall be
deemed to have been issued in full satisfaction of all rights pertaining to such
shares of Company Common Stock, and there shall be no further registration of
transfers on the records of the Surviving Corporation of shares of Company
Common Stock which were outstanding immediately prior to the Effective Time. If
after the
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Effective Time Certificates are presented to the Surviving Corporation for any
reason, they shall be canceled and exchanged as provided in this Article I.
1.9 Lost, Stolen or Destroyed Certificates. In the event any
Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall
issue in exchange for such lost, stolen or destroyed Certificates, upon the
making of an affidavit of that fact by the holder thereof, certificates
representing the shares of Parent Common Stock into which the shares of Company
Common Stock represented by such Certificates were converted pursuant to Section
1.6, cash for fractional shares, if any, as may be required pursuant to Section
1.6(f) and any dividends or distributions payable pursuant to Section 1.7(d);
provided, however, that Parent may, in its discretion and as a condition
precedent to the issuance of such certificates representing shares of Parent
Common Stock, cash and other distributions, require the owner of such lost,
stolen or destroyed Certificates to deliver a bond in such sum as it may
reasonably direct as indemnity against any claim that may be made against
Parent, the Surviving Corporation or the Exchange Agent with respect to the
Certificates alleged to have been lost, stolen or destroyed.
1.10 Tax and Accounting Consequences.
(a) It is intended by the parties hereto that the Merger shall
constitute a reorganization within the meaning of Section 368 of the Code, and
each of the parties hereto will use its commercially reasonable efforts to cause
the Merger to be treated as such a reorganization. The parties hereto adopt this
Agreement as a "plan of reorganization" within the meaning of Sections
1.368-2(g) and 1.368-3(a) of the United States Income Tax Regulations.
(b) It is intended by the parties hereto that the Merger shall
qualify for accounting treatment as a pooling of interests.
1.11 Taking of Necessary Action; Further Action. If, at any time after
the Effective Time, any further action is necessary or desirable to carry out
the purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of Company and Merger Sub, the officers and directors of Company
and Merger Sub will take all such lawful and necessary action. Parent shall
cause Merger Sub to perform all of its obligations relating to this Agreement
and the transactions contemplated thereby.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF COMPANY
Company represents and warrants to Parent and Merger Sub, subject to
the exceptions specifically disclosed in writing in the disclosure letter and
referencing a specific representation supplied by Company to Parent dated as of
the date hereof and certified by a duly authorized officer of Company (the
"COMPANY SCHEDULES"), as follows:
2.1 Organization of Company.
(a) Company and each of its material subsidiaries (i) is a
corporation or other legal entity duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is organized; (ii) has
the corporate or other power and authority to own, lease and operate its assets
and property and to carry on its business as now being conducted; and (iii),
except as would not be material to Company, is duly qualified or licensed to do
business in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its activities makes such
qualification or licensing necessary.
(b) Company has delivered to Parent a true and complete list
of all of Company's subsidiaries as of the date of this Agreement, indicating
the jurisdiction of organization of each subsidiary and Company's equity
interest therein.
(c) Company has delivered or made available to Parent a true
and correct copy of the Certificate of Incorporation and Bylaws of Company and
similar governing instruments of each of its material subsidiaries, each as
amended to date, and each such instrument is in full force and effect. Neither
Company nor any of its material subsidiaries is in violation of any of the
provisions of its Certificate of Incorporation or Bylaws or equivalent governing
instruments.
2.2 Company Capital Structure. The authorized capital stock of Company
consists of 100,000,000 shares of Common Stock, $0.01 par value per share, of
which there were 42,461,275 shares issued and outstanding as of October 10, 1997
(excluding shares held in treasury of which there are none), and 2,000,000
shares of Preferred Stock, $0.01 par value per share, of which no shares are
issued or outstanding. All outstanding shares of Company Common Stock are duly
authorized, validly issued, fully paid and nonassessable and are not subject to
preemptive rights created by statute, the Certificate of Incorporation or Bylaws
of Company or any agreement or document to which Company is a party or by which
it is bound. As of October 10, 1997, Company had reserved an aggregate of
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11,300,548 shares of Company Common Stock, net of exercises, for issuance
pursuant to the Company Stock Option Plans. As of October 10, 1997, there were
options outstanding to purchase an aggregate of 2,699,996 shares of Company
Common Stock pursuant to the Company Stock Option Plans. As of October 10, 1997,
Company had reserved an aggregate of 2,000,000 shares of Company Common Stock
for issuance pursuant to the ESPP. All shares of Company Common Stock subject to
issuance as aforesaid, upon issuance on the terms and conditions specified in
the instruments pursuant to which they are issuable, would be duly authorized,
validly issued, fully paid and nonassessable. The Company Schedules list each
person who holds options to acquire shares of Company Common Stock of which the
exercisability will be accelerated in any way by the transactions contemplated
by this Agreement as well as the number of shares subject to such options and
the extent of such acceleration.
2.3 Obligations With Respect to Capital Stock. Except as set forth in
Section 2.2, there are no equity securities, partnership interests or similar
ownership interests of any class of Company, or any securities exchangeable or
convertible into or exercisable for such equity securities, partnership
interests or similar ownership interests, issued, reserved for issuance or
outstanding. Except for securities Company owns free and clear of all claims and
encumbrances, directly or indirectly through one or more subsidiaries, and
except for shares of capital stock or other similar ownership interests of
certain subsidiaries of Company that are owned by certain nominee equity holders
as required by the applicable law of the jurisdiction of organization of such
subsidiaries, as of the date of this Agreement, there are no equity securities,
partnership interests or similar ownership interests of any class of any
material subsidiary of Company, or any security exchangeable or convertible into
or exercisable for such equity securities, partnership interests or similar
ownership interests, issued, reserved for issuance or outstanding. Except as set
forth in Section 2.2, there are no options, warrants, equity securities,
partnership interests or similar ownership interests, calls, rights (including
preemptive rights), commitments or agreements of any character to which Company
or any of its material subsidiaries is a party or by which it is bound
obligating Company or any of its material subsidiaries to issue, deliver or
sell, or cause to be issued, delivered or sold, or repurchase, redeem or
otherwise acquire, or cause the repurchase, redemption or acquisition of, any
shares of capital stock, partnership interests or similar ownership interests of
Company or any of its material subsidiaries or obligating Company or any of its
material subsidiaries to grant, extend, accelerate the vesting of or enter into
any such option, warrant, equity security, call, right, commitment or agreement.
As of the date of this Agreement, except as contemplated by this Agreement, the
Company Voting Agreement and the Company Affiliate Agreement (as defined in
Section 5.12), there are no registration rights and, to the knowledge of
Company, there are no voting trusts, proxies or other agreements or
understandings to which
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Company is a party or by which it is bound with respect to any equity security
of any class of Company or with respect to any equity security, partnership
interest or similar ownership interest of any class of any of its material
subsidiaries. Stockholders of Company will not be entitled to dissenters rights
under applicable state law in connection with the Merger.
2.4 Authority.
(a) Company has all requisite corporate power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby, subject only to the approval of the Merger and the approval and adoption
of this Agreement by the stockholders of Company. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of Company,
subject only to the approval and adoption of this Agreement and the approval of
the Merger by Company's stockholders and the filing of the Certificate of Merger
pursuant to Delaware Law. A vote of the holders of a majority of the outstanding
shares of the Company Common Stock is sufficient for Company's stockholders to
approve and adopt this Agreement and approve the Merger. This Agreement has been
duly executed and delivered by Company and, assuming the due authorization,
execution and delivery by Parent and Merger Sub, constitutes a valid and binding
obligation of Company, enforceable against Company in accordance with its terms,
except as enforceability may be limited by bankruptcy and other similar laws and
general principles of equity. The execution and delivery of this Agreement by
Company do not, and the performance of this Agreement by Company will not, (i)
conflict with or violate the Certificate of Incorporation or Bylaws of Company
or the equivalent organizational documents of any of its material subsidiaries,
(ii) subject to obtaining the approval and adoption of this Agreement and the
approval of the Merger by Company's stockholders as contemplated in Section 5.2
and compliance with the requirements set forth in Section 2.4(b) below, conflict
with or violate any law, rule, regulation, order, judgment or decree applicable
to Company or any of its material subsidiaries or by which Company or any of its
material subsidiaries or any of their respective properties is bound or
affected, or (iii) result in any material breach of or constitute a material
default (or an event that with notice or lapse of time or both would become a
material default) under, or materially impair Company's material rights or alter
the material rights or material obligations of any third party under, or give to
others any rights of termination, amendment, acceleration or cancellation of, or
result in the creation of a material lien or encumbrance on any of the material
properties or assets of Company or any of its subsidiaries pursuant to, any
material note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which Company or any of
its material subsidiaries is a party or by which Company or any of its material
subsidiaries or its
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or any of their respective properties are bound or affected. The Company
Schedules list all consents, waivers and approvals under any of Company's or any
of its material 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 not obtained,
would result in a material loss of benefits to Company, Parent or the Surviving
Corporation as a result of the Merger.
(b) No consent, approval, order or authorization of, or
registration, declaration or filing with any court, administrative agency or
commission or other governmental authority or instrumentality, foreign or
domestic ("GOVERNMENTAL ENTITY"), is required to be obtained or made by Company
or any of its material subsidiaries in connection with the execution and
delivery of this Agreement or the consummation of the Merger, except for (i) the
filing of the Certificate of Merger with the Secretary of State of the State of
Delaware, (ii) the filing of the Joint Proxy Statement/Prospectus (as defined in
Section 2.18) with the Securities and Exchange Commission ("SEC") in accordance
with the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), (iii)
such consents, approvals, orders, authorizations, registrations, declarations
and filings as may be required under applicable federal, foreign and state
securities (or related) laws and the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended (the "HSR ACT"), and the securities or antitrust laws of
any foreign country, and (iv) such other consents, authorizations, filings,
approvals and registrations which if not obtained or made would not be material
to Company or have a material adverse effect on the ability of Company to
consummate the Merger.
2.5 SEC Filings; Company Financial Statements.
(a) Company has filed all forms, reports and documents
required to be filed by Company with the SEC since September 1, 1994 and has
made available to Parent such forms, reports and documents in the form filed
with the SEC. All such required forms, reports and documents (including those
that Company may file subsequent to the date hereof) are referred to herein as
the "COMPANY SEC REPORTS." As of their respective dates, the Company SEC Reports
(i) were prepared in accordance with the requirements of the Securities Act of
1933, as amended (the "SECURITIES ACT"), or the Exchange Act, as the case may
be, and the rules and regulations of the SEC thereunder applicable to such
Company SEC Reports and (ii) did not at the time they were filed (or if amended
or superseded by a filing prior to the date of this Agreement, then on the date
of such filing) contain any untrue statement of a material fact or omit to state
a material fact required to be stated
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therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. None of Company's
subsidiaries is required to file any forms, reports or other documents with the
SEC.
(b) Each of the consolidated financial statements (including,
in each case, any related notes thereto) contained in the Company SEC Reports
(the "COMPANY FINANCIALS"), including each Company SEC Report filed after the
date hereof until the Closing, (i) complied as to form in all material respects
with the published rules and regulations of the SEC with respect thereto, (ii)
was prepared in accordance with United States generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto or, in the case of
unaudited interim financial statements, as may be permitted by the SEC on Form
10-Q under the Exchange Act) and (iii) fairly presented the consolidated
financial position of Company and its subsidiaries as at the respective dates
thereof and the consolidated results of Company's operations and cash flows for
the periods indicated, except that the unaudited interim financial statements
may not contain footnotes and were or are subject to customary year-end
adjustments which will not have a Material Adverse Effect (as defined in Section
8.3(c)) on Company. The balance sheet of Company contained in Company SEC
Reports as of June 30, 1997 is hereinafter referred to as the "COMPANY BALANCE
SHEET." Except as disclosed in the Company Financials, since the date of the
Company Balance Sheet neither Company nor any of its subsidiaries has any
liabilities required under GAAP to be set forth on a balance sheet (absolute,
accrued, contingent or otherwise) which are, individually or in the aggregate,
material to the business, results of operations or financial condition of
Company and its subsidiaries taken as a whole, except for liabilities incurred
since the date of the Company Balance Sheet in the ordinary course of business
consistent with past practices.
2.6 Absence of Certain Changes or Events. Since the date of the Company
Balance Sheet there has not been: (i) any Material Adverse Effect on Company,
(ii) any declaration, setting aside or payment of any dividend on, or other
distribution (whether in cash, stock or property) in respect of, any of
Company's or any of its material subsidiaries' capital stock, or any purchase,
redemption or other acquisition by Company of any of Company's capital stock or
any other securities of Company or its material subsidiaries or any options,
warrants, calls or rights to acquire any such shares or other securities except
for repurchases from employees following their termination pursuant to the terms
of their pre-existing stock option or purchase agreements, (iii) any split,
combination or reclassification of any of Company's or any of its material
subsidiaries' capital stock, (iv) any granting by Company or any of its
subsidiaries of any increase in compensation or fringe benefits, except for
normal increases of cash compensation in the ordinary course of business
consistent with past practice, or any payment by Company or any of its
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subsidiaries of any bonus, except for bonuses made in the ordinary course of
business consistent with past practice, or any granting by Company or any of its
subsidiaries of any increase in severance or termination pay or any entry by
Company or any of its subsidiaries into any currently effective employment,
severance, termination or indemnification agreement or any agreement the
benefits of which are contingent or the terms of which are materially altered
upon the occurrence of a transaction involving Company of the nature
contemplated hereby, (v) entry by Company or any of its subsidiaries into any
licensing or other agreement with regard to the acquisition or disposition of
any material Intellectual Property (as defined in Section 2.9) other than
licenses in the ordinary course of business consistent with past practice or any
amendment or consent with respect to any licensing agreement filed or required
to be filed by Company with the SEC, (vi) any material change by Company in its
accounting methods, principles or practices, except as required by concurrent
changes in GAAP, or (vii) any material revaluation by Company of any of its
assets, including, without limitation, writing down the value of capitalized
inventory or writing off notes or accounts receivable other than in the ordinary
course of business.
2.7 Taxes.
(a) Definition of Taxes. For the purposes of this Agreement,
"TAX" or "TAXES" refers to any and all federal, state, local and foreign taxes,
assessments and other governmental charges, duties, impositions and liabilities
relating to taxes, including taxes based upon or measured by gross receipts,
income, profits, sales, use and occupation, and value added, ad valorem,
transfer, franchise, withholding, payroll, recapture, employment, excise and
property taxes, together with all interest, penalties and additions imposed with
respect to such amounts and any obligations under any agreements or arrangements
with any other person with respect to such amounts and including any liability
for taxes of a predecessor entity.
(b) Tax Returns and Audits.
(i) Company and each of its subsidiaries have timely filed
all federal, state, local and foreign returns, estimates, information statements
and reports ("RETURNS") relating to Taxes required to be filed by Company and
each of its subsidiaries with any Tax authority, except such Returns which are
not material to Company, and have paid all Taxes shown to be due on such
Returns.
(ii) Company and each of its material subsidiaries as of
the Effective Time will have withheld with respect to its employees all federal
and state income taxes, Taxes pursuant to the Federal Insurance Contribution Act
("FICA"), Taxes pursuant to the Federal Unemployment Tax Act ("FUTA") and other
Taxes required to be withheld.
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(iii) Neither Company nor any of its material subsidiaries
has been delinquent in the payment of any Tax nor is there any Tax deficiency
outstanding, proposed or assessed against Company or any of its material
subsidiaries, nor has Company or any of its material subsidiaries executed any
unexpired waiver of any statute of limitations on or extending the period for
the assessment or collection of any Tax.
(iv) No audit or other examination of any Return of
Company or any of its material subsidiaries by any Tax authority is presently in
progress, nor has Company or any of its material subsidiaries been notified of
any request for such an audit or other examination.
(v) No adjustment relating to any Returns filed by
Company or any of its material subsidiaries has been proposed in writing
formally or informally by any Tax authority to Company or any of its material
subsidiaries or any representative thereof.
(vi) Neither Company nor any of its subsidiaries has
any liability for unpaid Taxes which has not been accrued for or reserved on the
Company Balance Sheet, whether asserted or unasserted, contingent or otherwise,
which is material to Company, other than any liability for unpaid Taxes that may
have accrued since the date of the Company Balance Sheet in connection with the
operation of the business of Company and its subsidiaries in the ordinary
course.
(vii) There is no contract, agreement, plan or
arrangement to which Company is a party as of the date of this Agreement,
including but not limited to the provisions of this Agreement, covering any
employee or former employee of Company or any of its subsidiaries that,
individually or collectively, could give rise to the payment of any amount that
would not be deductible pursuant to Sections 280G, 404 or 162(m) of the Code.
(viii) Neither Company nor any of its subsidiaries
has filed any consent agreement under Section 341(f) of the Code or agreed to
have Section 341(f)(2) of the Code apply to any disposition of a subsection (f)
asset (as defined in Section 341(f)(4) of the Code) owned by Company.
(ix) Neither Company nor any of its material
subsidiaries is party to or has any obligation under any tax-sharing, tax
indemnity or tax allocation agreement or arrangement.
(x) Except as may be required as a result of the Merger,
Company and its material subsidiaries have not been and will not be required to
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include any adjustment in Taxable income for any Tax period (or
portion thereof) pursuant to Section 481 or Section 263A of the Code or any
comparable provision under state or foreign Tax laws as a result of
transactions, events or accounting methods employed prior to the Closing.
(xi) None of Company's or its subsidiaries' assets
are tax exempt use property within the meaning of Section 168(h) of the Code.
2.8 Title to Properties; Absence of Liens and Encumbrances.
(a) The Company Schedules list the real property interests
owned by Company as of the date of this Agreement. The Company Schedules list
all real property leases to which Company is a party as of the date of this
Agreement and which provide for the lease, in each case, of not less than 10,000
square feet ("MATERIAL REAL PROPERTY LEASES"), and each amendment thereto that
is in effect as of the date of this Agreement. All such Material Real Property
Leases are in full force and effect, are valid and effective in accordance with
their respective terms, and there is not, under any of such leases, any existing
default or event of default (or event which with notice or lapse of time, or
both, would constitute a default) that would give rise to a claim in an amount
greater than $100,000.
(b) Company has good and valid title to, or, in the case of
leased properties and assets, valid leasehold interests in, all of its tangible
properties and assets, real, personal and mixed, used or held for use in its
business, free and clear of any liens, pledges, charges, claims, security
interests or other encumbrances of any sort ("LIENS"), except as reflected in
the Company Financials and except for liens for taxes not yet due and payable
and such Liens or other imperfections of title and encumbrances, if any, which
are not material in character, amount or extent, and which do not materially
detract from the value, or materially interfere with the present use, of the
property subject thereto or affected thereby.
2.9 Intellectual Property. For the purposes of this Agreement, the
following terms have the following definitions:
"INTELLECTUAL PROPERTY" shall mean any or all of the following
and all rights in, arising out of, or associated therewith:
(i) all United States, international and foreign patents and
applications therefor and all reissues, divisions, renewals,
extensions, provisionals, continuations and
continuations-in-part thereof; (ii) all inventions (whether
patentable or not), invention disclosures, improvements, trade
secrets, proprietary information, know how, technology,
technical data and customer lists, and all documentation
relating to any of the foregoing;
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(iii) all copyrights, copyright registrations and
applications therefor, and all other rights corresponding
thereto throughout the world; (iv) all industrial designs and
any registrations and applications therefor throughout the
world; (v) all trade names, logos, common law trademarks and
service marks, trademark and service xxxx registrations and
applications therefor throughout the world; (vi) all
databases and data collections and all rights therein
throughout the world; (vii) all moral and economic rights of
authors and inventors, however denominated, throughout the
world, and (viii) any similar or equivalent rights to any of
the foregoing anywhere in the world.
"COMPANY INTELLECTUAL PROPERTY" shall mean any Intellectual
Property that is owned by, or exclusively licensed to, Company
or any of its material subsidiaries.
"REGISTERED INTELLECTUAL PROPERTY" means all United States,
international and foreign: (i) patents and patent applications
(including provisional applications); (ii) registered
trademarks, applications to register trademarks, intent-to-use
applications, or other registrations or applications related
to trademarks; (iii) registered copyrights and applications
for copyright registration; and (iv) any other Intellectual
Property that is the subject of an application, certificate,
filing, registration or other document issued, filed with, or
recorded by any state, government or other public legal
authority.
"COMPANY REGISTERED INTELLECTUAL PROPERTY" means all of the
Registered Intellectual Property owned by, or filed in the
name of, Company.
(a) No material Company Intellectual Property or product or
service of Company is subject to any proceeding or outstanding decree, order,
judgment, agreement, or stipulation restricting in any manner the use, transfer,
or licensing thereof by Company, or which may affect the validity, use or
enforceability of such Company Intellectual Property.
(b) Each material item of Company Registered Intellectual
Property is valid and subsisting, all necessary registration, maintenance and
renewal fees currently due in connection with such Registered Intellectual
Property have been made and all necessary documents, recordations and
certificates in connection with such Registered Intellectual Property have been
filed with the relevant patent, copyright, trademark or other authorities in the
United States or foreign jurisdictions,
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as the case may be, for the purposes of maintaining such Registered Intellectual
Property.
(c) Company owns and has good and exclusive title to, or has
license (sufficient for the conduct of its business as currently conducted and
as proposed to be conducted) to, each material item of Company Intellectual
Property free and clear of any lien or encumbrance (excluding licenses and
related restrictions); and Company is the exclusive owner of all trademarks and
trade names used in connection with the operation or conduct of the business of
Company, including the sale of any products or the provision of any services by
Company.
(d) Company owns exclusively, and has good title to, all
copyrighted works that are Company products or which Company otherwise expressly
purports to own.
(e) To the extent that any material Intellectual Property has
been developed or created by a third party for Company, Company has a written
agreement with such third party with respect thereto and Company thereby either
(i) has obtained ownership of, and is the exclusive owner of, or (ii) has
obtained a license (sufficient for the conduct of its business as currently
conducted and as proposed to be conducted) to all such third party's
Intellectual Property in such Intellectual Property by operation of law or by
valid assignment.
(f) Company has not transferred ownership of, or granted any
exclusive license with respect to, any Intellectual Property that is or was
material Company Intellectual Property, to any third party.
(g) The Company Schedules list all material contracts,
licenses and agreements to which Company is a party (i) with respect to Company
Intellectual Property licensed or transferred to any third party (other than
end-user licenses in the ordinary course); or (ii) pursuant to which a third
party has licensed or transferred any material Intellectual Property to Company.
(h) All material contracts, licenses and agreements relating
to the Company Intellectual Property are in full force and effect. The
consummation of the transactions contemplated by this Agreement will neither
violate nor result in the breach, modification, cancellation, termination, or
suspension of such contracts, licenses and agreements. Company is in material
compliance with, and has not materially breached any term any of such contracts,
licenses and agreements and, to the knowledge of Company, all other parties to
such contracts, licenses and agreements are in compliance with, and have not
materially breached any term of, such contracts, licenses and agreements.
Following the Closing Date, the Surviving
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Corporation will be permitted to exercise all of Company's rights under such
contracts, licenses and agreements to the same extent Company would have been
able to had the transactions contemplated by this Agreement not occurred and
without the payment of any additional amounts or consideration other than
ongoing fees, royalties or payments which Company would otherwise be required to
pay.
(i) The operation of the business of Company as such business
currently is conducted, including Company's design, development, manufacture,
marketing and sale of the products or services of Company (including with
respect to products currently under development) has not, does not and will not
infringe or misappropriate the Intellectual Property of any third party
(provided that with respect to patent rights, such representation is limited to
Company's knowledge) or, to its knowledge, constitute unfair competition or
trade practices under the laws of any jurisdiction.
(j) Company has not received notice from any third party that
the operation of the business of Company or any act, product or service of
Company, infringes or misappropriates the Intellectual Property of any third
party or constitutes unfair competition or trade practices under the laws of any
jurisdiction.
(k) To the knowledge of Company, no Person has or is
infringing or misappropriating any Company Intellectual Property.
(l) Company has taken reasonable steps to protect Company's
rights in Company's confidential information and trade secrets that it wishes to
protect or any trade secrets or confidential information of third parties
provided to Company, and, without limiting the foregoing, Company has and
enforces a policy requiring each employee and contractor to execute a
proprietary information/confidentiality agreement substantially in the form
provided to Parent and all current and former employees and contractors of
Company have executed such an agreement, except where the failure to do so is
not reasonably expected to be material to Company.
2.10 Compliance; Permits; Restrictions.
(a) Neither Company nor any of its subsidiaries is, in any
material respect, in conflict with, or in default or in violation of (i) any
law, rule, regulation, order, judgment or decree applicable to Company or any of
its subsidiaries or by which Company or any of its subsidiaries or any of their
respective properties is bound or affected, or (ii) any material note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which Company or any of its subsidiaries is a
party or by which Company or any of its
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subsidiaries or its or any of their respective properties is bound or affected,
except for conflicts, violations and defaults that (individually or in the
aggregate) would not cause Company to lose any material benefit or incur any
material liability. No investigation or review by any Governmental Entity is
pending or, to Company's knowledge, has been threatened in a writing delivered
to Company against Company or any of its subsidiaries, nor, to Company's
knowledge, has any Governmental Entity indicated an intention to conduct an
investigation of Company or any of its subsidiaries. There is no material
agreement, judgment, injunction, order or decree binding upon Company or any of
its material subsidiaries which has or could reasonably be expected to have the
effect of prohibiting or materially impairing any business practice of Company
or any of its material subsidiaries, any acquisition of material property by
Company or any of its subsidiaries or the conduct of business by Company as
currently conducted.
(b) Company and its subsidiaries hold, to the extent legally
required, all permits, licenses, variances, exemptions, orders and approvals
from governmental authorities that are material to and required for the
operation of the business of Company as currently conducted (collectively, the
"COMPANY PERMITS"). Company and its subsidiaries are in compliance in all
material respects with the terms of the Company Permits, except where the
failure to obtain any Company Permits or to be in compliance with the terms of
the Company Permits would not be material to Company.
2.11 Litigation. There is no action, suit, proceeding, claim,
arbitration or investigation pending, and to Company's knowledge, no person has
threatened in a writing delivered to Company to commence any action, suit,
proceeding, claim, arbitration or investigation against Company or any of its
subsidiaries which would be likely to be material to Company. No Governmental
Entity has at any time challenged or questioned in a writing delivered to
Company the legal right of Company to design, manufacture, offer or sell any of
its products in the present manner or style thereof.
2.12 Brokers' and Finders' Fees. Except for fees payable to Xxxxxxxxx &
Xxxxx LLC pursuant to an engagement letter dated September 22, 1997, a copy of
which has been provided to Parent, Company has not incurred, nor will it incur,
directly or indirectly, any liability for brokerage or finders' fees or agents'
commissions or any similar charges in connection with this Agreement or any
transaction contemplated hereby.
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2.13 Employment Matters.
(a) Definitions. With the exception of the definition of
"Affiliate" set forth in Section 2.13(a)(i) below (which definition shall apply
only to this Section 2.13), for purposes of this Agreement, the following terms
shall have the meanings set forth below:
(i) "AFFILIATE" shall mean any other person or entity
under common control with Company within the meaning of Section 414(b), (c), (m)
or (o) of the Code and the regulations issued thereunder;
(ii) "COMPANY EMPLOYEE PLAN" shall mean (x) all
employee benefit plans (as defined in Section 3(3) of ERISA), (y) all bonus,
stock option, stock purchase, incentive, deferred compensation, supplemental
retirement, severance and other similar employee benefit plans, and (z) all
unexpired severance agreements and arrangements, written or otherwise, for the
benefit of, or relating to, any current or former employee of Company or any
trade or business (whether or not incorporated) which is an Affiliate or any
subsidiary of Company;
(iii) "COBRA" shall mean the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended
(iv) "DOL" shall mean the Department of Labor;
(v) "EMPLOYEE" shall mean any current, former, or
retired employee, officer, or director of Company or any Affiliate;
(vi) "EMPLOYEE AGREEMENT" shall mean each management,
employment, severance, consulting, relocation, repatriation, expatriation,
visas, work permit or similar agreement or contract between Company or any
Affiliate and any individual entitled to receive annual compensation from
Company or any Affiliate with value equal to or greater than $75,000;
(vii) "ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as amended;
(viii) "FMLA" shall mean the Family Medical Leave Act
of 1993, as amended;
(ix) "INTERNATIONAL EMPLOYEE PLAN" shall mean each
Company Employee Plan that has been adopted or maintained by Company, whether
informally or formally, for the benefit of Employees outside the United States;
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(x) "IRS" shall mean the Internal Revenue Service;
(xi) "MULTIEMPLOYER PLAN" shall mean any "Pension
Plan" (as defined below) which is a "multiemployer plan," as defined in Section
3(37) of ERISA;
(xii) "PBGC" shall mean the Pension Benefit Guaranty
Corporation; and
(xiii) "PENSION PLAN" shall mean each Company
Employee Plan which is an "employee pension benefit plan," within the meaning of
Section 3(2) of ERISA.
(b) Schedule. The Company Schedules contain an accurate and
complete list of each Company Employee Plan and each material Employee
Agreement. Company does not have any plan or commitment to establish any new
Company Employee Plan, to modify any Company Employee Plan or Employee Agreement
(except to the extent required by law or to conform any such Company Employee
Plan or Employee Agreement to the requirements of any applicable law, in each
case as previously disclosed to Parent in writing, or as required by this
Agreement), or to enter into any Company Employee Plan or material Employee
Agreement, nor does it have any intention or commitment to do any of the
foregoing.
(c) Documents. Company has provided to Parent: (i) correct and
complete copies of each Company Employee Plan and each Employee Agreement
including all amendments thereto; (ii) the most recent annual actuarial
valuations, if any, prepared for each Company Employee Plan; (iii) the three (3)
most recent annual reports (Form Series 5500 and all schedules and financial
statements attached thereto), if any, required under ERISA or the Code in
connection with each Company Employee Plan or related trust; (iv) if the Company
Employee Plan is funded, the most recent annual and periodic accounting of
Company Employee Plan assets; (v) the most recent summary plan description
together with the summary of material modifications thereto, if any, required
under ERISA with respect to each Company Employee Plan; (vi) all IRS
determination, opinion, notification and advisory letters, and rulings relating
to Company Employee Plans and copies of all applications and correspondence to
or from the IRS or the DOL with respect to any Company Employee Plan (and to the
extent not delivered are not material); (vii) all material written agreements
and contracts relating to each Company Employee Plan, including, but not limited
to, administrative service agreements, group annuity contracts and group
insurance contracts; (viii) forms of all COBRA forms and related
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notices; and (ix) all registration statements and prospectuses prepared in
connection with each Company Employee Plan.
(d) Employee Plan Compliance. (i) Company has performed in all
material respects all obligations required to be performed by it under, is not
in default or violation of, and has no knowledge of any default or violation by
any other party to each Company Employee Plan, and each Company Employee Plan
has been established and maintained in all material respects in accordance with
its terms and in compliance with all applicable laws, statutes, orders, rules
and regulations, including but not limited to ERISA or the Code; (ii) each
Company Employee Plan intended to qualify under Section 401(a) of the Code and
each trust intended to qualify under Section 501(a) of the Code has either
received a favorable determination letter from the IRS with respect to each such
Plan as to its qualified status under the Code, including all amendments to the
Code effected by the Tax Reform Act of 1986 and subsequent legislation, or has
remaining a period of time under applicable Treasury regulations or IRS
pronouncements in which to apply for such a determination letter and make any
amendments necessary to obtain a favorable determination; (iii) no "prohibited
transaction," within the meaning of Section 4975 of the Code or Sections 406 and
407 of ERISA, and not otherwise exempt under Section 408 of ERISA, has occurred
with respect to any Company Employee Plan; (iv) there are no actions, suits or
claims pending, or, to the knowledge of Company, threatened or reasonably
anticipated (other than routine claims for benefits) against any Company
Employee Plan or against the assets of any Company Employee Plan; (v) each
Company Employee Plan can be amended, terminated or otherwise discontinued after
the Effective Time in accordance with its terms, without material (in each case
relative to the liabilities under such Plan) liability to Parent, Company or any
of its Affiliates (other than ordinary administration expenses typically
incurred in a termination event); (vi) there are no audits, inquiries or
proceedings pending or, to the knowledge of Company or any Affiliates,
threatened by the IRS or DOL with respect to any Company Employee Plan; and
(vii) neither Company nor any Affiliate is subject to any penalty or tax with
respect to any Company Employee Plan under Section 502(i) of ERISA or Sections
4975 through 4980 of the Code.
(e) Pension Plans. Company does not now, nor has it ever,
maintained, established, sponsored, participated in, or contributed to, any
Pension Plan which is subject to Title IV of ERISA or Section 412 of the Code.
(f) Multiemployer Plans. At no time has Company contributed to
or been requested to contribute to any Multiemployer Plan.
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(g) No Post-Employment Obligations. No Company Employee Plan
provides, or has any liability to provide, retiree life insurance, retiree
health or other retiree employee welfare benefits to any person for any reason,
except as may be required by COBRA or other applicable statute, and Company has
never represented, promised or contracted (whether in oral or written form) to
any Employee (either individually or to Employees as a group) or any other
person that such Employee(s) or other person would be provided with retiree life
insurance, retiree health or other retiree employee welfare benefit, except to
the extent required by statute.
(h) Neither Company nor any Affiliate has, prior to the
Effective Time, and in any material respect, violated any of the health care
continuation requirements of COBRA, the requirements of FMLA or any similar
provisions of state law applicable to its Employees.
(i) Effect of Transaction
(i) The execution of this Agreement and the
consummation of the transactions contemplated hereby will not (either alone or
upon the occurrence of any additional or subsequent events) constitute an event
under anyCompany Employee Plan, Employee Agreement, trust or loan that will or
may result in any payment (whether of severance pay or otherwise), acceleration,
forgiveness of indebtedness, vesting, distribution, increase in benefits or
obligation to fund benefits with respect to any Employee.
(ii) No payment or benefit which will or may be made
by Company or its Affiliates with respect to any Employee as a result of the
transactions contemplated by this Agreement will be characterized as an "excess
parachute payment," within the meaning of Section 280G(b)(1) of the Code.
(j) Employment Matters. Company and each of its material
subsidiaries: (i) is in compliance in all material respects with the applicable
foreign, federal, state and local laws, rules and regulations respecting
employment, employment practices and wages and hours, in each case, in each
location in which Company or any of its material subsidiaries employs persons;
(ii) has withheld all amounts required by law or by agreement to be withheld
from the wages, salaries and other payments to Employees; (iii) is not liable
for any material arrears of wages or any taxes or any penalty for failure to
comply with any of the foregoing; and (iv) is not liable for any material
payment to any trust or other fund or to any governmental or administrative
authority, with respect to unemployment compensation benefits, social security
or other benefits or obligations for Employees (other than routine payments to
be made in the normal course of business and consistent with past
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practice). There are no pending, threatened or reasonably anticipated claims or
actions for benefits under Company's worker's compensation policy or long-term
disability policy that would not be covered by such policy. To Company's
knowledge, no employee of Company has violated any employment contract,
nondisclosure agreement or noncompetition agreement by which such employee is
bound due to such employee being employed by Company and disclosing to Company
or using trade secrets or proprietary information of any other person or entity.
(k) Labor. No work stoppage or labor strike against Company is
pending, threatened or reasonably anticipated. Company does not know of any
activities or proceedings of any labor union to organize any Employees. There
are no actions, suits, claims, labor disputes or grievances pending, or, to the
knowledge of Company, threatened or reasonably anticipated relating to any
labor, safety or discrimination matters involving any Employee, including,
without limitation, charges of unfair labor practices or discrimination
complaints, which, if adversely determined, would, individually or in the
aggregate, result in any material liability to Company. Neither Company nor any
of its subsidiaries has engaged in any unfair labor practices within the meaning
of the National Labor Relations Act. Company is not presently, nor has it been
in the past, a party to, or bound by, any collective bargaining agreement or
union contract with respect to Employees and no collective bargaining agreement
is being negotiated by Company.
(l) International Employee Plan. Each International Employee
Plan has been established, maintained and administered in material compliance
with its terms and conditions and with the requirements prescribed by any and
all statutory or regulatory laws that are applicable to such International
Employee Plan. Furthermore, no International Employee Plan has unfunded
liabilities, that as of the Effective Time, will not be offset by insurance or
fully accrued. Except as required by law, no condition exists that would prevent
Company or Parent from terminating or amending any International Employee Plan
at any time for any reason.
2.14 Environmental Matters.
(a) Hazardous Material. Except as reasonably would not be
likely to result in material liability to Company, no underground storage tanks
and no amount of any substance that has been designated by any Governmental
Entity or by applicable federal, state or local law to be radioactive, toxic,
hazardous or otherwise a danger to health or the environment, including, without
limitation, PCBs, asbestos, petroleum, urea-formaldehyde and all substances
listed as hazardous substances pursuant to the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, or defined as a
hazardous waste pursuant to the
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United States Resource Conservation and Recovery Act of 1976, as amended, and
the regulations promulgated pursuant to said laws, but excluding office and
janitorial supplies, (a "HAZARDOUS MATERIAL") are present, as a result of the
actions of Company or any of its subsidiaries or any affiliate of Company, or,
to Company's knowledge, as a result of any actions of any third party or
otherwise, in, on or under any property, including the land and the
improvements, ground water and surface water thereof, that Company or any of its
subsidiaries has at any time owned, operated, occupied or leased.
(b) Hazardous Materials Activities. Except as reasonably would
not be likely to result in a material liability to Company (in any individual
case or in the aggregate) (i) neither Company nor any of its subsidiaries has
transported, stored, used, manufactured, disposed of, released or exposed its
employees or others to Hazardous Materials in violation of any law in effect on
or before the Closing Date, and (ii) neither Company nor any of its subsidiaries
has disposed of, transported, sold, used, released, exposed its employees or
others to or manufactured any product containing a Hazardous Material
(collectively "HAZARDOUS MATERIALS ACTIVITIES") in violation of any rule,
regulation, treaty or statute promulgated by any Governmental Entity in effect
prior to or as of the date hereof to prohibit, regulate or control Hazardous
Materials or any Hazardous Material Activity.
(c) Permits. Company and its subsidiaries currently hold all
material environmental approvals, permits, licenses, clearances and consents
(the "COMPANY ENVIRONMENTAL PERMITS") necessary for the conduct of Company's and
its subsidiaries' Hazardous Material Activities and other businesses of Company
and its material subsidiaries as such activities and businesses are currently
being conducted.
(d) Environmental Liabilities. No action, proceeding,
revocation proceeding, amendment procedure, writ or injunction is pending, and
to Company's knowledge, no action, proceeding, revocation proceeding, amendment
procedure, writ or injunction has been threatened by any Governmental Entity
against Company or any of its subsidiaries in a writing delivered to Company
concerning any Company Environmental Permit, Hazardous Material or any Hazardous
Materials Activity of Company or any of its subsidiaries. Company is not aware
of any fact or circumstance which could involve Company or any of its
subsidiaries in any environmental litigation or impose upon Company any material
environmental liability.
2.15 Agreements, Contracts and Commitments. Neither Company nor any
of its material subsidiaries is a party to or is bound by:
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(a) any employment or consulting agreement, contract or
commitment with any officer or director or higher level employee or member of
Company's Board of Directors, other than those that are terminable by Company or
any of its subsidiaries on no more than thirty days notice without liability or
financial obligation, except to the extent general principles of wrongful
termination law may limit Company's or any of its subsidiaries' ability to
terminate employees at will;
(b) any agreement or plan, including, without limitation, any
stock option plan, stock appreciation right plan or stock purchase plan, any of
the benefits of which will be increased, or the vesting of benefits of which
will be accelerated, by the occurrence of any of the transactions contemplated
by this Agreement or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated by this
Agreement;
(c) any agreement of indemnification or any guaranty other
than any agreement of indemnification entered into in connection with the sale
or license of software products in the ordinary course of business;
(d) any agreement, contract or commitment containing any
covenant limiting in any material respect the right of Company or any of its
material subsidiaries to engage in any line of business or to compete with any
person or granting any exclusive distribution rights;
(e) any material agreement, contract or commitment currently
in force relating to the disposition or acquisition by Company or any of its
subsidiaries after the date of this Agreement of a material amount of assets not
in the ordinary course of business or pursuant to which Company has any material
ownership interest in any corporation, partnership, joint venture or other
business enterprise other than Company's subsidiaries;
(f) any material joint marketing or development agreement
currently in force under which Company or any of its subsidiaries have
continuing material obligations to jointly market any product, technology or
service and which may not be canceled without penalty upon notice of 90 days or
less, or any material agreement pursuant to which Company or any of its
subsidiaries have continuing material obligations to jointly develop any
intellectual property that will not be owned, in whole or in part, by Company or
any of its subsidiaries and which may not be canceled without penalty upon
notice of 90 days or less;
(g) any agreement, contract or commitment currently in force
to provide source code to any third party for any product or technology that is
material to Company and its subsidiaries taken as a whole; or
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(h) any agreement, contract or commitment currently in force
to license any third party to manufacture or reproduce any Company product,
service or technology except as a distributor in the normal course of business.
Neither Company nor any of its material subsidiaries, nor to Company's
knowledge any other party to a Company Contract (as defined below), is in
breach, violation or default under, and neither Company nor any of its
subsidiaries has received written notice that it has breached, violated or
defaulted under, any of the material terms or conditions of any of the
agreements, contracts or commitments to which Company or any of its subsidiaries
is a party or by which it is bound that are required to be disclosed in the
Company Schedules pursuant to clauses (a) through (h) above or pursuant to
Section 2.9 hereof (any such agreement, contract or commitment, a "COMPANY
CONTRACT") in such a manner as would permit any other party to cancel or
terminate any such Company Contract, or would permit any other party to seek
material damages or other remedies (for any or all of such breaches, violations
or defaults, in the aggregate).
2.16 Pooling of Interests. To the knowledge of Company, based on
consultation with its independent accountants, neither Company nor any of its
directors, officers, affiliates or stockholders has taken any action which would
preclude Parent's ability to account for the Merger as a pooling of interests.
2.17 Certain Payments. The Company Schedules set forth each plan or
agreement pursuant to which any amounts may become payable (whether currently or
in the future) to current or former officers and directors of Company as a
result of or in connection with the Merger.
2.18 Registration Statement; Joint Proxy Statement/Prospectus. The
information supplied by Company for inclusion in the Registration Statement (as
defined in Section 3.4(b)) shall not at the time the Registration Statement is
filed with the SEC and at the time it becomes effective under the Securities Act
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 information supplied by Company for inclusion in the joint proxy
statement/prospectus to be sent to (a) the stockholders of Company in connection
with the meeting of Company's stockholders to consider the approval and adoption
of this Agreement and the approval of the Merger (the "COMPANY STOCKHOLDERS'
MEETING") and (b) the stockholders of Parent in connection with the meeting of
Parent's stockholders to consider the approval of the issuance of shares of
Parent Common Stock pursuant to the Merger (the "PARENT STOCKHOLDERS' MEETING")
(such joint proxy statement/prospectus as amended or supplemented is referred to
herein as the "JOINT PROXY STATEMENT/PROSPECTUS") shall
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not, on the date the Joint Proxy Statement/Prospectus is first mailed to
Company's stockholders and Parent's stockholders or at the time of the Company
Stockholders' Meeting or the Parent Stockholders' Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not false or misleading; or omit to
state any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Company
Stockholders' Meeting or the Parent Stockholders' Meeting which has become false
or misleading. If at any time prior to the Effective Time any event relating to
Company or any of its affiliates, officers or directors should be discovered by
Company which is required to be set forth in an amendment to the Registration
Statement or a supplement to the Joint Proxy Statement/Prospectus, Company shall
promptly inform Parent. Notwithstanding the foregoing, Company makes no
representation or warranty with respect to any information supplied by Parent or
Merger Sub which is contained in any of the foregoing documents.
2.19 Board Approval. The Board of Directors of Company has, as of the
date of this Agreement, determined (i) that the Merger is fair to, and in the
best interests of Company and its stockholders, and, (ii) subject to the terms
and conditions set forth in this Agreement, to recommend that the stockholders
of Company approve and adopt this Agreement and approve the Merger.
2.20 Fairness Opinion. Company's Board of Directors has received an
opinion from Xxxxxxxxx & Xxxxx LLC dated as of the date hereof, to the effect
that as of the date hereof, the Merger and the Exchange Ratio are fair to
Company's stockholders from a financial point of view and has delivered or will
promptly deliver to Parent a copy of such opinion.
2.21 Section 203 of the Delaware General Corporation Law Not
Applicable; Company Rights Plan. The Board of Directors of Company has taken all
actions so that (a) the restrictions contained in Section 203 of the Delaware
General Corporation Law applicable to a "business combination" (as defined in
such Section 203) will not apply to the execution, delivery or performance of
this Agreement or to the consummation of the Merger or the other transactions
contemplated by this Agreement and (b) the execution, delivery and performance
of this Agreement and the consummation of the Merger will not cause any change,
effect or result under the Company Rights Plan which is adverse to the interests
of Parent. Without limiting the generality of the foregoing, if necessary to
accomplish the foregoing, the Company Rights Plan has been amended to (i) render
the Company Rights Plan inapplicable to the Merger and the other transactions
contemplated by this Agreement, (ii) ensure that (x) none of Parent or its
subsidiaries
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is an Acquiring Person (as defined in the Company Rights Plan) pursuant to the
Company Rights Plan by virtue of the execution of this Agreement or the
consummation of the Merger or the other transactions contemplated hereby and (y)
a Distribution Date, Flip-In Event, Triggering Event or Flip-Over Event (as such
terms are defined in the Company Rights Plan) does not occur by reason of the
execution of this Agreement, the consummation of the Merger, or the consummation
of the transactions contemplated hereby, and such amendment may not be further
amended by Company without the prior consent of Parent in its sole discretion.
2.22 Customs. Company has acted with reasonable care to properly value
and classify, in accordance with applicable tariff laws, rules and regulations,
all goods that Company or any of its subsidiaries import into the United States
or into any other country (the "IMPORTED GOODS"). To Company's knowledge, there
are currently no material claims pending against Company by the U.S. Customs
Service (or other foreign customs authorities) relating to the valuation,
classification or marking of the Imported Goods.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
PARENT AND MERGER SUB
Parent and Merger Sub represent and warrant to Company, subject to the
exceptions specifically disclosed in writing in the disclosure letter and
referencing a specific representation supplied by Parent to Company dated as of
the date hereof and certified by a duly authorized officer of Parent (the
"PARENT SCHEDULES"), as follows:
3.1 Organization of Parent.
(a) Each of Parent, Merger Sub and the material subsidiaries
of Parent (i) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is organized; (ii) has
the corporate or other power and authority to own, lease and operate its assets
and property and to carry on its business as now being conducted; and (iii),
except as would not be material to Parent, is duly qualified or licensed to do
business in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its activities makes such
qualification or licensing necessary.
(b) Parent has delivered or made available to Company a true
and correct copy of the Certificate of Incorporation and Bylaws of Parent, each
as amended to date, and each such instrument is in full force and effect.
Neither Parent
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nor any of its material subsidiaries is in violation of any of the provisions of
its Certificate of Incorporation or Bylaws or equivalent governing instruments.
3.2 Parent and Merger Sub Capital Structure. The authorized capital
stock of Parent consists of 100,000,000 shares of Common Stock, of which there
were 51,259,448 shares issued and outstanding as of September 30, 1997, and
5,000,000 shares of Preferred Stock, of which one share of Series A Preferred
Stock is issued and outstanding. As of September 30, 1997, Parent had reserved
an aggregate of 10,317,588 shares of Parent Common Stock, net of exercises, for
issuance pursuant to Parent's 1997 Stock Incentive Plan, the FSA Stock Option
Plan, Parent's Outside Director Stock Option Plan, the SA93 Stock Option Plan,
the SAII Stock Option Plan, Parent's Non-Officer Stock Option Plan and Parent's
1992 Stock Option Plan. As of September 30, 1997, there were options outstanding
to purchase an aggregate of 8,016,938 shares of Parent Common Stock pursuant to
such plans. As of September 30, 1997, Parent had reserved an aggregate of
354,181 shares of Parent Common Stock, net of purchases, for issuance pursuant
to Parent's Employee Stock Purchase Plan. All outstanding shares of Parent
Common Stock are duly authorized, validly issued, fully paid and nonassessable
and are not subject to preemptive rights created by statute, the Articles of
Incorporation or Bylaws of Parent or any agreement or document to which Parent
is a party or by which it is bound. The authorized capital stock of Merger Sub
consists of 1000 shares of Common Stock, $0.001 par value, all of which, as of
the date hereof, are issued and outstanding and are held by Parent. Merger Sub
was formed on or about October 10, 1997, for the purpose of consummating the
Merger and has no material assets or liabilities except as necessary for such
purpose.
3.3 Obligations With Respect to Capital Stock. Except as set forth in
Section 3.2, there are no equity securities, partnership interests or similar
ownership interests of any class of Parent, or any securities exchangeable or
convertible into or exercisable for such equity securities, partnership
interests or similar ownership interests, issued, reserved for issuance or
outstanding. Except for securities Parent owns free and clear of all claims and
encumbrances, directly or indirectly through one or more subsidiaries, and
except for shares of capital stock or other similar ownership interests of
certain subsidiaries of Parent that are owned by certain nominee equity holders
as required by the applicable law of the jurisdiction of organization of such
subsidiaries, as of the date of this Agreement, there are no equity securities,
partnership interests or similar ownership interests of any class of any
material subsidiary of Parent, or any security exchangeable or convertible into
or exercisable for such equity securities, partnership interests or similar
ownership interests, issued, reserved for issuance or outstanding. Except as set
forth in Section 3.2, there are no options, warrants, equity securities,
partnership interests or similar ownership interests, calls, rights (including
preemptive rights), commitments
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or agreements of any character to which Parent is a party or by which it is
bound obligating Parent to issue, deliver or sell, or cause to be issued,
delivered or sold, or repurchase, redeem or otherwise acquire, or cause the
repurchase, redemption or acquisition of, any shares of capital stock,
partnership interests or similar ownership interests of Company or obligating
Company to grant, extend, accelerate the vesting of or enter into any such
option, warrant, equity security, call, right, commitment or agreement. As of
the date of this Agreement, except as contemplated by this Agreement, the Parent
Voting Agreement and the Parent Affiliate Agreement, there are no voting trusts,
proxies or other agreements or understandings to which Parent is a party or by
which it is bound with respect to any equity security of any class of Parent or
with respect to any equity security, partnership interest or similar ownership
interest of any class of any of its material subsidiaries.
3.4 Authority.
(a) Each of Parent and Merger Sub has all requisite corporate
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby, subject only to the approval of the issuance
of Parent Common Stock pursuant to the Merger by Parent's stockholders. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Parent and Merger Sub, subject only to the
approval of the issuance of Parent Common Stock pursuant to the Merger by
Parent's stockholders and the filing of the Certificate of Merger pursuant to
Delaware Law. Approval by the stockholders of Parent of the issuance of Parent
Common Stock pursuant to the Merger may be obtained by the vote of a majority of
the total votes cast regarding such proposal at a duly called and noticed
meeting of Parent's stockholders at which a quorum is present. This Agreement
has been duly executed and delivered by each of Parent and Merger Sub and,
assuming the due authorization, execution and delivery by Company, constitutes
the valid and binding obligation of Parent and Merger Sub, enforceable against
Parent and Merger Sub in accordance with its terms, except as enforceability may
be limited by bankruptcy and other similar laws and general principles of
equity. The execution and delivery of this Agreement by each of Parent and
Merger Sub does not, and the performance of this Agreement by each of Parent and
Merger Sub will not, (i) conflict with or violate the Certificate of
Incorporation or Bylaws of Parent or Merger Sub, (ii) conflict with or violate
any law, rule, regulation, order, judgment or decree applicable to Parent or
Merger Sub or by which any of their respective properties is bound or affected
or (iii) result in any material breach of or constitute a material default (or
an event that with notice or lapse of time or both would become a material
default) under, or materially impair Parent's material rights or alter the
material rights or material obligations of any third party under, or give to
others any rights of termination, amendment, acceleration or cancellation of, or
result in the
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creation of a material lien or encumbrance on any of the material properties or
assets of Parent or Merger Sub pursuant to, any material note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Parent or Merger Sub is a party or by which
Parent or Merger Sub or any of their respective properties are bound or
affected. The Parent Schedules list all consents, waivers and approvals under
any of Parent's or any of its material 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 not obtained, would result in a material loss of benefits to Parent as
a result of the Merger.
(b) No consent, approval, order or authorization of, or
registration, declaration or filing with any Governmental Entity is required to
be obtained or made by Parent, Merger Sub, or any material subsidiary of Parent
in connection with the execution and delivery of this Agreement or the
consummation of the Merger, except for (i) the filing of a Form S-4 (or any
similar successor form thereto) Registration Statement (the "REGISTRATION
STATEMENT") with the SEC in accordance with the Securities Act, (ii) the filing
of the Certificate of Merger with the Secretary of State of the State of
Delaware, (iii) such consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable federal, foreign
and state securities (or related) laws and the HSR Act and the securities or
antitrust laws of any foreign country, and (iv) such other consents,
authorizations, filings, approvals and registrations which if not obtained or
made would not be material to Parent or have a material adverse effect on the
ability of Parent or Merger Sub to consummate the Merger.
(c) The Board of Directors of Parent has all requisite
corporate power and authority to take the actions described in Section 5.14
hereof.
3.5 SEC Filings; Parent Financial Statements.
(a) Parent has filed all forms, reports and documents required
to be filed by Parent with the SEC since September 1, 1994, and has made
available to Company such forms, reports and documents in the form filed with
the SEC. All such required forms, reports and documents (including those that
Parent may file subsequent to the date hereof) are referred to herein as the
"PARENT SEC REPORTS." As of their respective dates, the Parent SEC Reports (i)
were prepared in accordance with the requirements of the Securities Act or the
Exchange Act, as the case may be, and the rules and regulations of the SEC
thereunder applicable to such Parent SEC Reports, and (ii) did not at the time
they were filed (or if amended or superseded by a filing prior to the date of
this Agreement, then on the date of such filing) contain any untrue statement of
a material fact or omit to state a material fact required to be
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stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. None of
Parent's subsidiaries is required to file any forms, reports or other documents
with the SEC.
(b) Each of the consolidated financial statements (including,
in each case, any related notes thereto) contained in the Parent SEC Reports
(the "PARENT FINANCIALS"), including any Parent SEC Reports filed after the date
hereof until the Closing, (i) complied as to form in all material respects with
the published rules and regulations of the SEC with respect thereto, (ii) was
prepared in accordance with GAAP applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto or, in the
case of unaudited interim financial statements, as may be permitted by the SEC
on Form 10-Q under the Exchange Act) and (iii) fairly presented the consolidated
financial position of Parent and its subsidiaries as at the respective dates
thereof and the consolidated results of Parent's operations and cash flows for
the periods indicated, except that the unaudited interim financial statements
may not contain footnotes and were or are subject to normal and recurring
year-end adjustments. The balance sheet of Parent contained in Parent SEC
Reports as of June 30, 1997 is hereinafter referred to as the "PARENT BALANCE
SHEET." Except as disclosed in the Parent Financials, since the date of the
Parent Balance Sheet neither Parent nor any of its subsidiaries has any
liabilities required under GAAP to be set forth on a balance sheet (absolute,
accrued, contingent or otherwise) which are, individually or in the aggregate,
material to the business, results of operations or financial condition of Parent
and its subsidiaries taken as a whole, except for liabilities incurred since the
date of the Parent Balance Sheet in the ordinary course of business consistent
with past practices.
3.6 Absence of Certain Changes or Events. Since the date of the Parent
Balance Sheet there has not been: (i) any Material Adverse Effect on Parent,
(ii) any declaration, setting aside or payment of any dividend on, or other
distribution (whether in cash, stock or property) in respect of, any of Parent's
capital stock, or any purchase, redemption or other acquisition by Parent of any
of Parent's capital stock or any other securities of Parent or any options,
warrants, calls or rights to acquire any such shares or other securities except
for repurchases from employees following their termination pursuant to the terms
of their pre-existing stock option or purchase agreements, (iii) any split,
combination or reclassification of any of Parent's capital stock, (iv) entry by
Parent or any of its subsidiaries into any licensing or other agreement with
regard to the acquisition or disposition of any material Intellectual Property
other than licenses in the ordinary course of business consistent with past
practice or any amendment or consent with respect to any licensing agreement
filed or required to be filed by Parent with the SEC, (v) any material change by
Parent in its accounting methods, principles or practices, except as required by
concurrent changes in GAAP, or (vi) any material revaluation by Parent of any of
its assets,
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including, without limitation, writing down the value of capitalized
inventory or writing off notes or accounts receivable other than in the ordinary
course of business.
3.7 Taxes.
(a) Parent and each of its subsidiaries have timely filed all
Returns relating to Taxes required to be filed by Parent and each of its
subsidiaries with any Tax authority, except such Returns which are not material
to Parent, and have paid all Taxes shown to be due on such Returns.
(b) Neither Parent nor any of its material subsidiaries has
been delinquent in the payment of any Tax nor is there any Tax deficiency
outstanding, proposed or assessed against Parent or any of its material
subsidiaries, nor has Parent or any of its material subsidiaries executed any
unexpired waiver of any statute of limitations on or extending the period for
the assessment or collection of any Tax.
(c) Neither Parent nor any of its subsidiaries has any
liability for unpaid Taxes which has not been accrued for or reserved on the
Parent Balance Sheet, whether asserted or unasserted, contingent or otherwise,
which is material to Parent, other than any liability for unpaid Taxes that may
have accrued since the date of the Parent Balance Sheet in connection with the
operation of the business of Parent and its subsidiaries in the ordinary course.
3.8 Title to Properties; Absence of Liens and Encumbrances. Parent has
good and valid title to, or, in the case of leased properties and assets, valid
leasehold interests in, all of its tangible properties and assets, real,
personal and mixed, used or held for use in its business, free and clear of any
Liens, except as reflected in the Parent Financials and except for liens for
taxes not yet due and payable and such Liens or other imperfections of title and
encumbrances, if any, which are not material in character, amount or extent, and
which do not materially detract from the value, or materially interfere with the
present use, of the property subject thereto or affected thereby.
3.9 Intellectual Property. For the purposes of this Agreement, the
following terms have the following definitions:
"PARENT INTELLECTUAL PROPERTY" shall mean any Intellectual
Property that is owned by, or exclusively licensed to, Parent
or any of its material subsidiaries.
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"PARENT REGISTERED INTELLECTUAL PROPERTY" means all of the
Registered Intellectual Property owned by, or filed in the
name of, Parent.
(a) No material Parent Intellectual Property or product or
service of Parent is subject to any proceeding or outstanding decree, order,
judgment, agreement, or stipulation restricting in any manner the use, transfer,
or licensing thereof by Parent, or which may affect the validity, use or
enforceability of such Parent Intellectual Property.
(b) Each material item of Parent Registered Intellectual
Property is valid and subsisting, all necessary registration, maintenance and
renewal fees currently due in connection with such Registered Intellectual
Property have been made and all necessary documents, recordations and
certificates in connection with such Registered Intellectual Property have been
filed with the relevant patent, copyright, trademark or other authorities in the
United States or foreign jurisdictions, as the case may be, for the purposes of
maintaining such Registered Intellectual Property.
(c) Parent owns and has good and exclusive title to, or has
license (sufficient for the conduct of its business as currently conducted and
as proposed to be conducted) to, each material item of Parent Intellectual
Property free and clear of any lien or encumbrance (excluding licenses and
related restrictions); and Parent is the exclusive owner of all trademarks and
trade names used in connection with the operation or conduct of the business of
Parent, including the sale of any products or the provision of any services by
Parent.
(d) Parent owns exclusively, and has good title to, all
copyrighted works that are Parent products or which Parent otherwise expressly
purports to own.
(e) To the extent that any material Intellectual Property has
been developed or created by a third party for Parent, Parent has a written
agreement with such third party with respect thereto and Parent thereby either
(i) has obtained ownership of, and is the exclusive owner of, or (ii) has
obtained a license (sufficient for the conduct of its business as currently
conducted and as proposed to be conducted) to all such third party's
Intellectual Property in such Intellectual Property by operation of law or by
valid assignment.
(f) All material contracts, licenses and agreements relating
to the Parent Intellectual Property are in full force and effect. The
consummation of the transactions contemplated by this Agreement will neither
violate nor result in the breach, modification, cancellation, termination, or
suspension of such contracts, licenses and agreements. Parent is in material
compliance with, and has not materially breached any term any of such contracts,
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licenses and agreements and, to the knowledge of Parent, all other parties to
such contracts, licenses and agreements are in compliance with, and have not
materially breached any term of, such contracts, licenses and agreements.
(g) The operation of the business of Parent as such business
currently is conducted, including Parent's design, development, manufacture,
marketing and sale of the products or services of Parent (including with respect
to products currently under development) has not, does not and will not infringe
or misappropriate the Intellectual Property of any third party (provided that
with respect to patent rights, such representation is limited to Parent's
knowledge) or, to its knowledge, constitute unfair competition or trade
practices under the laws of any jurisdiction.
(h) Parent has not received notice from any third party that
the operation of the business of Parent or any act, product or service of
Parent, infringes or misappropriates the Intellectual Property of any third
party or constitutes unfair competition or trade practices under the laws of any
jurisdiction.
(i) To the knowledge of Parent, no Person has or is infringing
or misappropriating any Parent Intellectual Property.
(j) Parent has taken reasonable steps to protect Parent's
rights in Parent's confidential information and trade secrets that it wishes to
protect or any trade secrets or confidential information of third parties
provided to Parent, and, without limiting the foregoing, Parent has and enforces
a policy requiring each employee and contractor to execute a proprietary
information/confidentiality agreement substantially in the form provided to
Parent and all current and former employees and contractors of Parent have
executed such an agreement, except where the failure to do so is not reasonably
expected to be material to Parent.
3.10 Compliance; Permits; Restrictions.
(a) Neither Parent nor any of its subsidiaries is, in any
material respect, in conflict with, or in default or in violation of (i) any
law, rule, regulation, order, judgment or decree applicable to Parent or any of
its subsidiaries or by which Parent or any of its subsidiaries or any of their
respective properties is bound or affected, or (ii) any material note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which Parent or any of its subsidiaries is a
party or by which Parent or any of its subsidiaries or its or any of their
respective properties is bound or affected, except for conflicts, violations
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and defaults that (individually or in the aggregate) would not cause Parent to
lose any material benefit or incur any material liability. No investigation or
review by any Governmental Entity is pending or, to Parent's knowledge, has been
threatened in a writing delivered to Parent against Parent or any of its
subsidiaries, nor, to Parent's knowledge, has any Governmental Entity indicated
an intention to conduct an investigation of Parent or any of its subsidiaries.
There is no material agreement, judgment, injunction, order or decree binding
upon Parent or any of its subsidiaries which has or could reasonably be expected
to have the effect of prohibiting or materially impairing any business practice
of Parent, any acquisition of material property by Parent or the conduct of
business by Parent as currently conducted.
(b) Parent and its subsidiaries hold, to the extent legally
required, all permits, licenses, variances, exemptions, orders and approvals
from governmental authorities that are material to and required for the
operation of the business of Parent as currently conducted (collectively, the
"PARENT PERMITS"). Parent and its subsidiaries are in compliance in all material
respects with the terms of the Parent Permits, except where the failure to be in
compliance with the terms of the Parent Permits would not be material to Parent.
3.11 Litigation. There is no action, suit, proceeding, claim,
arbitration or investigation pending, and to Parent's knowledge, no person has
threatened in a writing delivered to Parent to commence any action, suit,
proceeding, claim, arbitration or investigation against Parent or any of its
subsidiaries which would be likely to be material to Parent. No Governmental
Entity has at any time challenged or questioned in a writing delivered to Parent
the legal right of Parent to design, manufacture, offer or sell any of its
products in the present manner or style thereof.
3.12 Brokers' and Finders' Fees. Except for fees payable to Xxxxxx
Xxxxxxx & Co. pursuant to an engagement letter dated September 9, 1997, a copy
of which has been made available to Company, Parent has not incurred, nor will
it incur, directly or indirectly, any liability for brokerage or finders' fees
or agents' commissions or any similar charges in connection with this Agreement
or any transaction contemplated thereby.
3.13 Statements; Joint Proxy Statement/Prospectus. The information
supplied by Parent for inclusion in the Registration Statement shall not at the
time the Registration Statement is filed with the SEC and at the time it becomes
effective under the Securities Act, 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 information supplied by Parent
for inclusion in the Joint Proxy Statement/Prospectus shall not, on the date the
Joint Proxy Statement/Prospectus is
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first mailed to Company's stockholders or Parent's stockholders or at the time
of the Company Stockholders' Meeting or the Parent Stockholders' Meeting contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not false or
misleading; or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of
proxies for the Company Stockholders' Meeting or the Parent Stockholders'
Meeting which has become false or misleading. If at any time prior to the
Effective Time, any event relating to Parent or any of its affiliates, officers
or directors should be discovered by Parent which is required to be set forth in
an amendment to the Registration Statement or a supplement to the Joint Proxy
Statement/Prospectus, Parent shall promptly inform Company. Notwithstanding the
foregoing, Parent makes no representation or warranty with respect to any
information supplied by Company which is contained in any of the foregoing
documents.
3.14 Valid Issuance. The Parent Common Stock to be issued in the
Merger, when issued in accordance with the provisions of this Agreement: (a)
will be validly issued, fully paid and nonassessable; and (b) will not be
subject to any restrictions on resale under the Securities Act, other than
restrictions imposed by Rule 145 promulgated under the Securities Act.
3.15 No Ownership of Company Common Stock. Parent does not own,
beneficially or of record, any shares of Company Common Stock.
3.16 Pooling of Interests. To the knowledge of Parent, based on
consultation with its independent accountants, neither Parent nor any of its
directors, officers, affiliates or stockholders has taken any action which would
preclude Parent's ability to account for the Merger as a pooling of interests.
3.17 Board Approval. The Board of Directors of Parent has, as of the
date of this Agreement, determined (i) that the Merger is fair to, and in the
best interests of Parent and its stockholders, and, (ii) subject to the terms
and conditions set forth in this Agreement, to recommend that the stockholders
of Parent approve the issuance of shares of Parent Common Stock pursuant to the
Merger.
3.18 Fairness Opinion. Parent's Board of Directors has received an
opinion from Xxxxxx Xxxxxxx & Co. dated as of on or about the date hereof, to
the effect that as of the date hereof, the Merger and the Exchange Ratio are
fair to Parent's stockholders from a financial point of view and has delivered
or will promptly deliver to Company a copy of such opinion.
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ARTICLE IV
CONDUCT PRIOR TO THE EFFECTIVE TIME
4.1 Conduct of Business by Company. During the period from the date of
this Agreement and continuing until the earlier of the termination of this
Agreement pursuant to its terms or the Effective Time, Company and each of its
subsidiaries shall, except to the extent that Parent shall otherwise consent in
writing, carry on its business, in all material respects, in the usual, regular
and ordinary course, in substantially the same manner as heretofore conducted
and in compliance in all material respects with all applicable laws and
regulations, pay its debts and taxes when due subject to good faith disputes
over such debts or taxes, pay or perform other material obligations when due,
and use its commercially reasonable efforts consistent with past practices and
policies to (i) preserve intact its present business organization, (ii) keep
available the services of its present officers and employees and (iii) preserve
its relationships with customers, suppliers, distributors, licensors, licensees,
and others with which it has business dealings. In addition, Company will
promptly notify Parent of any material event involving its business or
operations.
In addition, except as permitted by the terms of this Agreement, and
except as provided in Article 4 of the Company Schedules, without the prior
written consent of Parent, during the period from the date of this Agreement and
continuing until the earlier of the termination of this Agreement pursuant to
its terms or the Effective Time, Company shall not do any of the following and
shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or
change the period of exercisability of options or restricted stock, or reprice
options granted under any employee, consultant, director or other stock plans or
authorize cash payments in exchange for any options granted under any of such
plans;
(b) Grant any severance or termination pay to any officer or
employee except pursuant to written agreements outstanding, or policies
existing, on the date hereof and as previously disclosed in writing or made
available to Parent, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise
extend, amend or modify in any material respect any rights to the Company
Intellectual Property, or enter into grants to future patent rights, other than
non-exclusive licenses in the ordinary course of business and consistent with
past practice;
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(d) Declare, set aside or pay any dividends on or make any
other distributions (whether in cash, stock, equity securities or property) in
respect of any capital stock or split, combine or reclassify any capital stock
or issue or authorize the issuance of any other securities in respect of, in
lieu of or in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or
indirectly, any shares of capital stock of Company or its subsidiaries, except
repurchases of unvested shares at cost in connection with the termination of the
employment relationship with any employee, consultant or director pursuant to
stock option or purchase agreements in effect on the date hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise
encumber or propose any of the foregoing of, any shares of capital stock or any
securities convertible into shares of capital stock, or subscriptions, rights,
warrants or options to acquire any shares of capital stock or any securities
convertible into shares of capital stock, or enter into other agreements or
commitments of any character obligating it to issue any such shares or
convertible securities, other than the issuance delivery and/or sale of (i)
options pursuant to any of the Company Stock Option Plans with strike prices
equal to fair market value at the time of grant or options pursuant to the ESPP,
in each case, in the ordinary course of business, consistent with past practice,
and subject to and in compliance with the restrictions of Section 4.1(p), (ii)
shares of Company Common Stock pursuant to the exercise of stock options
therefor outstanding as of the date of this Agreement and (iii) shares of
Company Common Stock issuable to participants in the ESPP consistent with the
terms thereof;
(g) Cause, permit or propose any amendments to its Certificate
of Incorporation, Bylaws or other charter documents (or similar governing
instruments of any of its material subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating
with, or by purchasing any equity interest in or a material portion of the
assets of, or by any other manner, any business or any corporation, partnership,
association or other business organization or division thereof, or otherwise
acquire or agree to acquire any assets which are material, individually or in
the aggregate, to the business of Company or enter into any material joint
ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any
properties or assets which are material, individually or in the aggregate, to
the business of Company, except sales of product and inventory in the ordinary
course of business consistent with past practice;
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(j) Incur any indebtedness for borrowed money or guarantee any
such indebtedness of another person, issue or sell any debt securities or
options, warrants, calls or other rights to acquire any debt securities of
Company, enter into any "keep well" or other agreement to maintain any financial
statement condition or enter into any arrangement having the economic effect of
any of the foregoing other than (i) in connection with the financing of ordinary
course trade payables consistent with past practice or (ii) pursuant to existing
credit facilities in the ordinary course of business;
(k) Adopt or amend any employee benefit plan or employee stock
purchase or employee stock option plan, or enter into any employment contract or
collective bargaining agreement (other than offer letters and letter agreements
entered into in the ordinary course of business consistent with past practice
with employees who are terminable "at will,"), pay any special bonus or special
remuneration to any director or employee, or increase the salaries or wage rates
or fringe benefits (including rights to severance or indemnification) of its
directors, officers, employees or consultants other than in the ordinary course
of business, consistent with past practice, or change in any material respect
any management policies or procedures;
(l) Make any payments outside of the ordinary course of
business in excess of $1 million;
(m) except in the ordinary course of business, modify, amend
or terminate any material contract or agreement to which Company or any
subsidiary thereof is a party or waive, release or assign any material rights or
claims thereunder;
(n) enter into any contracts, agreements, or obligations
relating to the distribution, sale, license or marketing by third parties of
Company's products or products licensed by Company other than in the ordinary
course of business consistent with past practice;
(o) revalue any of its material assets or, except as required
by GAAP, make any change in accounting methods, principles or practices;
(p) Take any action that would be reasonably likely to
interfere with Parent's ability to account for the Merger as a pooling of
interests whether or not otherwise permitted by the provisions of this Article
IV; or
(q) Agree in writing or otherwise to take any of the actions
described in Section 4.1(a) through (p) above.
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4.2 Conduct of Business by Parent. During the period from the date of
this Agreement and continuing until the earlier of the termination of this
Agreement pursuant to its terms or the Effective Time, (i) Parent shall consult
with Company prior to taking any material action outside of the ordinary course
of business and (ii) Parent shall consult with and seek the advice of Xxxxxx X.
Xxxxxx, Xxxxxxx X. Xxxxx, Xxxxxxxx X. Xxxxxxxx and Xxxxx X. Xxxx (to the extent
such persons continue as directors of Company and are reasonably available for
such consultation), regarding its intention to effect any material acquisition
described in Section 4.2(c) (and will share the material terms of such
acquisition with such persons) prior to the earlier of the public announcement
of such acquisition, the consummation thereof or the execution by Parent of a
definitive written agreement obligating Parent (subject to customary conditions)
to consummate such acquisition. In addition, during the period from the date of
this Agreement and continuing until the earlier of the termination of this
Agreement pursuant to its terms or the Effective Time, except as permitted by
the terms of this Agreement and except as provided in Section 4.2 of the Parent
Schedules, without the prior written consent of Company, during the period from
the date of this Agreement and continuing until the earlier of the termination
of this Agreement pursuant to its terms or the Effective Time, Parent shall not
do any of the following:
(a) Declare, set aside or pay any dividends on or make any
other distributions (whether in cash, stock, equity securities or property) in
respect of any capital stock or split, combine or reclassify any capital stock
or issue or authorize the issuance of any other securities in respect of, in
lieu of or in substitution for any capital stock;
(b) Take any action that would be reasonably likely to
interfere with Parent's ability to account for the Merger as a pooling of
interests; or
(c) Acquire or enter into any agreement to acquire a majority
of the voting securities or all or substantially all of the assets of any
corporation or other business entity (other than Company), whether by merger,
consolidation, stock tender or otherwise, unless the Board of Directors of
Parent determines in good faith that consummation of such transaction and
subsequent integration of the business proposed to be acquired, when considered
in light of the integration of operations of Parent and Company following the
Merger, would be in the best interests of Parent and the stockholders of Parent
following the Merger;
(d) Cause, permit or propose any amendments to its Certificate
of Incorporation, Bylaws or other charter documents; or
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(e) Agree in writing or otherwise to take any of the actions
described in Section 4.1(a) through (d) above.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Joint Proxy Statement/Prospectus; Registration Statement; Other
Filings; Board Recommendations.
(a) As promptly as practicable after the execution of this
Agreement, Company and Parent will prepare, and file with the SEC, the Joint
Proxy Statement/Prospectus and Parent will prepare and file with the SEC the
Registration Statement in which the Joint Proxy Statement/Prospectus will be
included as a prospectus. Each of Company and Parent will respond to any
comments of the SEC, will use its respective commercially reasonable efforts to
have the Registration Statement declared effective under the Securities Act as
promptly as practicable after such filing and each of Company and Parent will
cause the Joint Proxy Statement/Prospectus to be mailed to its stockholders at
the earliest practicable time after the Registration Statement is declared
effective by the SEC. As promptly as practicable after the date of this
Agreement, each of Company and Parent will prepare and file any other filings
required to be filed by it under the Exchange Act, the Securities Act or any
other Federal, foreign or Blue Sky or related laws relating to the Merger and
the transactions contemplated by this Agreement (the "OTHER FILINGS"). Each of
Company and Parent will notify the other promptly upon the receipt of any
comments from the SEC or its staff or any other government officials and of any
request by the SEC or its staff or any other government officials for amendments
or supplements to the Registration Statement, the Joint Proxy
Statement/Prospectus or any Other Filing or for additional information and will
supply the other with copies of all correspondence between such party or any of
its representatives, on the one hand, and the SEC, or its staff or any other
government officials, on the other hand, with respect to the Registration
Statement, the Joint Proxy Statement/Prospectus, the Merger or any Other Filing.
Each of Company and Parent will cause all documents that it is responsible for
filing with the SEC or other regulatory authorities under this Section 5.1(a) to
comply in all material respects with all applicable requirements of law and the
rules and regulations promulgated thereunder. Whenever any event occurs which is
required to be set forth in an amendment or supplement to the Joint Proxy
Statement/Prospectus, the Registration Statement or any Other Filing, Company or
Parent, as the case may be, will promptly inform the other of such occurrence
and cooperate in filing with the SEC or its staff or any other government
officials, and/or mailing to stockholders of Company, such amendment or
supplement.
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(b) The Joint Proxy Statement/Prospectus will include the
recommendation of the Board of Directors of Company in favor of adoption and
approval of this Agreement and approval of the Merger, except to the extent that
the Board of Directors of Company shall have withdrawn or modified its approval
of this Agreement or the Merger in accordance with Section 5.4(a)(ii).
(c) The Joint Proxy Statement/Prospectus will include the
recommendation of the Board of Directors of Parent in favor of approval of
issuance of shares of Parent Common Stock pursuant to the Merger, except that
the Board of Directors of Parent may withdraw, modify or refrain from making
such recommendation to the extent that such Board determines, in good faith,
after consultation with outside legal counsel, that compliance with the Board's
fiduciary duties would require it to do so.
5.2 Meetings of Stockholders. Promptly after the date hereof, each of
Company and Parent will take all action necessary in accordance with the
Delaware Law and its Certificate of Incorporation and Bylaws to convene the
Company Stockholders' Meeting or the Parent Stockholders' Meeting, respectively,
to be held as promptly as practicable, and in any event (to the extent
permissible under applicable law) within 45 days after the declaration of
effectiveness of the Registration Statement, for the purpose of voting upon this
Agreement and the Merger or the issuance of shares of Parent Common Stock
pursuant to the Merger, respectively. Company will use its commercially
reasonable efforts to solicit from its stockholders proxies in favor of the
adoption and approval of this Agreement and the approval of the Merger and will
take all other action necessary or advisable to secure the vote or consent of
its stockholders required by the rules of Nasdaq or Delaware Law to obtain such
approvals, except to the extent that the Board of Directors of Company shall
have withdrawn or modified its approval of this Agreement or the Merger in
accordance with Section 5.4(a)(ii). Parent will use its commercially reasonable
efforts to solicit from its stockholders proxies in favor of approval of
issuance of shares of Parent Common Stock pursuant to the Merger and will take
all other action necessary or advisable to secure the vote or consent of its
stockholders required by the rules of Nasdaq or Delaware Law to obtain such
approvals, except to the extent that the Board of Directors of Parent shall have
withdrawn or modified its approval of such matters in accordance with Section
5.1(c). Company will consult with Parent and use its commercially reasonable
efforts to hold the Company Stockholders' Meeting on the same day and at the
same time as the Parent Stockholders' Meeting.
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5.3 Confidentiality; Access to Information.
(a) The parties acknowledge that Company and Parent have
previously executed a Confidentiality Agreement], dated as of on or about
September 12, 1997 (the "CONFIDENTIALITY AGREEMENT"), which Confidentiality
Agreement will continue in full force and effect in accordance with its terms.
(b) Access to Information. Each of Company and Parent will
afford the other and the other's accountants, counsel and other representatives
reasonable access during normal business hours to its properties, books, records
and personnel during the period prior to the Effective Time to obtain all
information concerning its business, including the status of product development
efforts, properties, results of operations and personnel, as such other party
may reasonably request. No information or knowledge obtained by any party hereto
in any investigation pursuant to this Section 5.3 will affect or be deemed to
modify any representation or warranty contained herein or the conditions to the
obligations of the parties to consummate the Merger.
5.4 No Solicitation.
(a) Obligations of Company.
(i) From and after the date of this Agreement until
the earlier of the Effective Time or termination of this Agreement pursuant to
its terms Company and its subsidiaries will not, nor will they authorize or
permit any of their respective officers, directors or employees or any
investment banker, attorney or other advisor or representative retained by any
of them to, directly or indirectly, (x) solicit, initiate or encourage the
submission of any Alternative Proposal (as hereinafter defined) or (y)
participate in any discussions or negotiations regarding, or furnish to any
person any non-public information with respect to, or take any other action to
facilitate any inquiries or the making of any proposal that constitutes or would
reasonably be expected to lead to, any Alternative Proposal; provided, however,
that if, at any time prior to obtaining the approval of the stockholders of
Company of this Agreement and the Merger by the requisite vote under applicable
law (the "STOCKHOLDER APPROVAL") the Board of Directors of Company determines in
good faith, after consultation with outside legal counsel, that it is necessary
to do so in order to comply with its fiduciary duties to Company's stockholders
under applicable law, Company may, in response to an Alternative Proposal that
was unsolicited or that did not otherwise result from a breach of this Section
5.4(a), and subject to compliance with Section 5.4(a)(iii) and Section
5.4(a)(v), furnish information with respect to Company and participate in
negotiations regarding such Alternative Proposal. Company and its subsidiaries
will immediately cease any and
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all existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any Alternative Proposal. Without limiting the
foregoing, it is understood that any violation of the restrictions set forth in
the preceding two sentences by any officer, director or employee of Company or
any of its subsidiaries or any investment banker, attorney or other advisor or
representative of Company or any of its subsidiaries shall be deemed to be a
breach of this Section 5.4(a) by Company. For purposes of this Agreement,
"ALTERNATIVE PROPOSAL" means any inquiry, proposal or offer from any person or
"group" (as defined under Section 13(d) of the Exchange Act and the rules and
regulations thereunder) relating to any direct or indirect acquisition or
purchase of a substantial amount of assets of Company or any of its subsidiaries
(other than the purchase of Company's products in the ordinary course of
business) or more than a 10% interest in the total outstanding voting securities
of Company or any of its subsidiaries or any tender offer or exchange offer that
if consummated would result in any person or "group" (as defined under Section
13(d) of the Exchange Act and the rules and regulations thereunder) beneficially
owning 10% or more of the total outstanding voting securities of Company or any
of its subsidiaries or any merger, consolidation, business combination, sale of
substantially all the assets, recapitalization, liquidation, dissolution or
similar transaction involving Company or any of its subsidiaries, other than the
transactions contemplated by this Agreement.
(ii) Neither the Board of Directors of Company nor
any committee thereof shall (x) withdraw or modify, or propose publicly to
withdraw or modify, in a manner adverse to Parent or Merger Sub, the approval or
recommendation by such Board of Directors or any such committee of this
Agreement or the Merger or (y) cause Company to enter into any letter of intent,
agreement in principle, acquisition agreement or other similar agreement (an
"ACQUISITION AGREEMENT") with respect to any Alternative Proposal. In addition,
subject to the other provisions of this Section 5.4(a), from and after the date
of this Agreement until the earlier of the Effective Time and termination of
this Agreement pursuant to its terms, Company and its subsidiaries will not, nor
will they authorize or permit any of their respective officers, directors or
employees or any investment banker, attorney or other advisor or representative
retained by any of them to, directly or indirectly, make or authorize any public
statement, recommendation or solicitation in support of any Alternative
Proposal. Notwithstanding the foregoing or anything else contained in this
Agreement, prior to obtaining the Stockholder Approval, the Board of Directors
of Company, to the extent it determines in good faith, after consultation with
outside legal counsel, that it is necessary to do so in order to comply with its
fiduciary duties to Company's stockholders under applicable law, may withdraw or
modify its approval or recommendation of this Agreement or the Merger (and, to
the extent it does so, Company may refrain from soliciting proxies to secure the
vote of its stockholders as may otherwise be required by Section
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5.2) or approve or recommend any Superior Proposal (as hereinafter defined), in
each case at any time after the third business day following Parent's receipt of
bona fide written notice (a "NOTICE OF SUPERIOR PROPOSAL") advising Parent that
the Board of Directors of Company has received a Superior Proposal, specifying
the material terms and conditions of the Superior Proposal and identifying the
person making such Superior Proposal (it being understood that any amendment to
the price or material terms of a Superior Proposal shall require an additional
Notice of Superior Proposal and an additional three business day period
thereafter to the extent permitted under applicable law); provided, that unless
this Agreement is terminated pursuant to Section 7.1, nothing contained in this
Section shall limit Company's obligation to hold and convene the Company
Stockholders' Meeting (regardless of whether the recommendation of the Board of
Directors of Company shall have been withdrawn, modified or not yet made) or to
provide Company stockholders with material information relating to such meeting.
For purposes of this Agreement, a "SUPERIOR PROPOSAL" means any bona fide
proposal made by a third party to acquire, directly or indirectly, including
pursuant to a tender offer, exchange offer, merger, consolidation, business
combination, recapitalization, liquidation, dissolution or similar transaction,
for consideration consisting of cash and/or securities, more than 50% of the
voting power of Company Common Stock or all or substantially all the assets of
Company and otherwise on terms which the Board of Directors of Company
determines in its good faith judgment (after consultation with a financial
advisor of nationally recognized reputation) to be more favorable to Company's
stockholders than the Merger and for which financing, to the extent required, is
then committed or which, in the good faith judgment of the Board of Directors of
Company, is capable of being obtained by such third party.
(iii) In addition to the obligations of Company set
forth in paragraphs (i) and (ii) of this Section 5.4(a), Company as promptly as
practicable shall advise Parent orally and in writing of any request for
non-public information which Company reasonably believes would lead to an
Alternative Proposal or of any Alternative Proposal, the material terms and
conditions of such request or Alternative Proposal, and the identity of the
person making any such request, Alternative Proposal or inquiry. Company will
keep Parent informed in all material respects of the status and details
(including material amendments) of any such request or Alternative Proposal.
(iv) Nothing contained in this Section 5.4(a) or
elsewhere in this Agreement shall prohibit Company from (x) taking and
disclosing to its stockholders a position contemplated by Rules 14d-9 and
14e-2(a) promulgated under the Exchange Act or (y) making any disclosure to
Company's stockholders if, in the good faith judgment of the majority of the
members of the Board of Directors of Company, after consultation with
independent legal counsel, failure to so disclose
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would be inconsistent with applicable laws; provided that none of Company nor
its Board of Directors nor any committee thereof shall, except in accordance
with the provisions of Section 5.4(a)(ii), withdraw or modify, or publicly
propose to withdraw or modify, its position with respect to this Agreement or
the Merger or approve or recommend, or propose to approve or recommend, an
Alternative Proposal.
(v) Notwithstanding anything to the contrary in this
Section 5.4(a), Company will not provide any non-public information to a third
party unless: (x) Company provides such non-public information pursuant to a
nondisclosure agreement with terms regarding the protection of confidential
information at least as restrictive as such terms in the Confidentiality
Agreement; and (y) such non-public information has been previously or is
contemporaneously delivered to Parent.
(b) Obligations of Parent. From and after the date of this
Agreement until the earlier of the Effective Time or termination of this
Agreement pursuant to its terms, Parent and its subsidiaries will not, nor will
they authorize or permit any of their respective officers, directors or
employees or any investment banker, attorney or other advisor or representative
retained by any of them to, directly or indirectly, (x) solicit, initiate or
encourage the submission of any Parent Proposal (as hereinafter defined) or (y)
participate in any discussions or negotiations regarding, or furnish to any
person any non-public information with respect to, or take any other action to
facilitate any inquiries or the making of any proposal that constitutes or would
reasonably be expected to lead to, any Parent Proposal; provided, however, that
if the Board of Directors of Parent determines in good faith, after consultation
with outside legal counsel, that it is necessary to do so in order to comply
with its fiduciary duties to Parent's stockholders under applicable law, Parent
may, in response to a Parent Proposal that was unsolicited or that did not
otherwise result from a breach of this Section 5.4(b), furnish information with
respect to Parent and participate in negotiations regarding such Parent
Proposal. Parent and its subsidiaries will immediately cease any and all
existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any Parent Proposal. In addition, nothing contained
in this Section 5.4(b) or elsewhere in this Agreement shall prohibit Parent from
(x) taking and disclosing to its stockholders a position contemplated by Rules
14d-9 and 14e-2(a) promulgated under the Exchange Act or (y) making any
disclosure to Parent's stockholders if, in the good faith judgment of the
majority of the members of the Board of Directors of Parent, after consultation
with independent legal counsel, failure to so disclose would be inconsistent
with applicable laws. Without limiting the foregoing, it is understood that any
violation of the restrictions set forth in the first two sentences of this
Section 5.4(b) by any officer, director or employee of Parent or any of its
subsidiaries or any investment banker, attorney or other advisor or
representative of Parent or any of its
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subsidiaries shall be deemed to be a breach of this Section 5.4(b) by Parent.
For purposes of this Agreement, "PARENT PROPOSAL" means any proposal made by a
third party to consummate any of the following transactions or series of related
transactions (other than the Merger): (i) a merger, consolidation, business
combination, recapitalization, liquidation, dissolution or similar transaction
involving Parent pursuant to which the stockholders of Parent immediately
preceding such transaction or series of related transactions hold less than 60%
of the equity interests in the surviving or resulting entity of such transaction
or transactions (without respect to any overlap in the companies' stockholder
bases); (ii) a sale or other disposition by Parent of assets (excluding
inventory and used equipment sold in the ordinary course of business)
representing in excess of 40% of the fair market value of Parent'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 Parent),
directly or indirectly, of beneficial ownership or a right to acquire beneficial
ownership of 40% or more of the then outstanding shares of capital stock of
Parent.
5.5 Public Disclosure. Parent and Company will consult with each other,
and to the extent practicable, agree, before issuing any press release or
otherwise making any public statement with respect to the Merger, this Agreement
or an Alternative Proposal and will not issue any such press release or make any
such public statement prior to such consultation, except as may be required by
law or any listing agreement with a national securities exchange. The parties
have agreed to the text of the joint press release announcing the signing of
this Agreement.
5.6 Reasonable Efforts; Notification.
(a) Upon the terms and subject to the conditions set forth in
this Agreement, each of the parties agrees to use reasonable efforts to take, or
cause to be taken, such actions, and to do, or cause to be done, and to assist
and cooperate with the other parties in doing, such things as are necessary,
proper or advisable to consummate and make effective, as expeditiously as
reasonably practicable, the Merger and the other transactions contemplated by
this Agreement, including using reasonable efforts to accomplish the following:
(i) the taking of such reasonable acts as are necessary to cause the conditions
precedent set forth in Article VI to be satisfied, (ii) the obtaining of all
necessary actions or nonactions, waivers, consents, approvals, orders and
authorizations from Governmental Entities and the making of all necessary
registrations, declarations and filings (including registrations, declarations
and filings with Governmental Entities, if any) and the taking of such
reasonable steps as may be necessary to avoid any suit, claim, action,
investigation or proceeding by any Governmental Entity, (iii) the obtaining of
all necessary consents, approvals or waivers from third parties, (iv) the
defending of any suits, claims, actions, investigations or proceedings, whether
judicial or administrative,
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challenging this Agreement or the consummation of the transactions contemplated
hereby, including seeking to have any stay or temporary restraining order
entered by any court or other Governmental Entity vacated or reversed and (v)
the execution or delivery of 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, Company and
its Board of Directors shall, if any state takeover statute or similar statute
or regulation is or becomes applicable to the Merger, this Agreement or any of
the transactions contemplated by this Agreement, use reasonable efforts 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, this Agreement and the transactions contemplated hereby.
Notwithstanding anything herein to the contrary, nothing in this Agreement shall
be deemed to require Parent or Company or any subsidiary or affiliate thereof to
agree to any divestiture by itself or any of its affiliates of shares of capital
stock or of any business, assets or property, or the imposition of any material
limitation on the ability of any of them to conduct their businesses or to own
or exercise control of such assets, properties and stock.
(b) Company shall give prompt notice to Parent of any
representation or warranty made by it contained in this Agreement becoming
untrue or inaccurate, or any failure of Company to comply with or satisfy in any
material respect any covenant, condition or agreement to be complied with or
satisfied by it under this Agreement, in each case, such that the conditions set
forth in Section 6.3(a) or 6.3(b) would not be satisfied, provided, however,
that no such notification shall affect the representations, warranties,
covenants or agreements of the parties or the conditions to the obligations of
the parties under this Agreement.
(c) Parent shall give prompt notice to Company of any
representation or warranty made by it or Merger Sub contained in this Agreement
becoming untrue or inaccurate, or any failure of Parent or Merger Sub to comply
with or satisfy in any material respect any covenant, condition or agreement to
be complied with or satisfied by it under this Agreement, in each case, such
that the conditions set forth in Section 6.2(a) or 6.2(b) would not be
satisfied, provided, however, that no such notification shall affect the
representations, warranties, covenants or agreements of the parties or the
conditions to the obligations of the parties under this Agreement.
5.7 Third Party Consents. As soon as reasonably practicable following
the date hereof, Parent and Company will each use its commercially reasonable
efforts to obtain any material consents, waivers and approvals under any of its
or its subsidiaries' respective agreements, contracts, licenses or leases
required to be
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obtained in connection with the consummation of the transactions contemplated
hereby.
5.8 Stock Options and Employee Benefits.
(a) At the Effective Time, each outstanding option to purchase
shares of Company Common Stock (each a "COMPANY STOCK OPTION") under the Company
Stock Option Plans, whether or not exercisable, will be assumed by Parent. Each
Company Stock Option so assumed by Parent under this Agreement will continue to
have, and be subject to, the same terms and conditions set forth in the
applicable Company Stock Option Plan immediately prior to the Effective Time
(including, without limitation, any repurchase rights or vesting provisions),
except that (i) each Company Stock Option will be exercisable (or will become
exercisable in accordance with its terms) for that number of whole shares of
Parent Common Stock equal to the product of the number of shares of Company
Common Stock that were issuable upon exercise of such Company Stock Option
immediately prior to the Effective Time multiplied by the Exchange Ratio,
rounded down to the nearest whole number of shares of Parent Common Stock and
(ii) the per share exercise price for the shares of Parent Common Stock issuable
upon exercise of such assumed Company Stock Option will be equal to the quotient
determined by dividing the exercise price per share of Company Common Stock at
which such Company Stock Option was exercisable immediately prior to the
Effective Time by the Exchange Ratio, rounded up to the nearest whole cent.
(b) It is intended that Company Stock Options assumed by
Parent shall qualify following the Effective Time as incentive stock options as
defined in Section 422 of the Code to the extent Company Stock Options qualified
as incentive stock options immediately prior to the Effective Time and the
provisions of this Section 5.8 shall be applied consistent with such intent.
(c) Rights outstanding under the ESPP shall be treated in a
manner reasonably acceptable to Parent and Company, provided that in no event
shall any such treatment interfere with Parent's ability to account for the
Merger as a pooling of interests.
(d) Parent will reserve sufficient shares of Parent Common
Stock for issuance under Section 5.8 and under Section 1.6(c) hereof.
5.9 Form S-8. Parent agrees to file a registration statement on Form
S-8 for the shares of Parent Common Stock issuable with respect to assumed
Company Stock Options within five days after the Effective Time and shall use
its commercially reasonable efforts to maintain the effectiveness of such
registration
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statement thereafter for as long as any of such options or other rights remain
outstanding.
5.10 Indemnification.
(a) From and after the Effective Time, Parent will fulfill and
honor and will cause the Surviving Corporation to fulfill and honor in all
respects the obligations of Company pursuant to any indemnification agreements
between Company and its directors and officers as of the Effective Time (the
"INDEMNIFIED PARTIES") and any indemnification provisions under Company's
Certificate of Incorporation or Bylaws as in effect on the date hereof. The
Certificate of Incorporation and By-laws of the Surviving Corporation will
contain provisions with respect to exculpation and indemnification that are at
least as favorable to the Indemnified Parties as those contained in the
Certificate of Incorporation and Bylaws of Company as in effect on the date
hereof, which provisions will not be amended, repealed or otherwise modified for
a period of six years from the Effective Time in any manner that would adversely
affect the rights thereunder of individuals who, immediately prior to the
Effective Time, were directors, officers, employees or agents of Company, unless
such modification is required by law.
(b) For a period of six years after the Effective Time, Parent
will maintain or cause the Surviving Corporation to maintain in effect, if
available, directors' and officers' liability insurance covering those persons
who are currently covered by Company's directors' and officers' liability
insurance policy on terms comparable to those applicable to the current
directors and officers of Company; provided, however, that in no event will
Parent or the Surviving Corporation be required to expend in excess of 150% of
the annual premium currently paid by Company for such coverage (or such coverage
as is available for such 150% of such annual premium).
5.11 Nasdaq Listing. Parent agrees to use its commercially reasonable
efforts to cause to be authorized for listing on Nasdaq prior to the Effective
Time the shares of Parent Common Stock issuable, and those required to be
reserved for issuance, in connection with the Merger, upon official notice of
issuance.
5.12 Affiliate Agreements.
(a) Set forth on the Company Schedules is a list of those
persons who may be deemed to be, in Company's reasonable judgment, affiliates of
Company within the meaning of Rule 145 promulgated under the Securities Act
(each a "COMPANY AFFILIATE"). Company will provide Parent with such information
and documents as Parent reasonably requests for purposes of reviewing such list.
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Company will use its commercially reasonable efforts to deliver or cause to be
delivered to Parent, as promptly as practicable on or following the date hereof,
from each Company Affiliate an executed affiliate agreement in substantially the
form attached hereto as Exhibit B-1 (the "COMPANY AFFILIATE AGREEMENT"), each of
which will be in full force and effect as of the Effective Time. Parent will be
entitled to place appropriate legends on the certificates evidencing any Parent
Common Stock to be received by a Company Affiliate pursuant to the terms of this
Agreement, and to issue appropriate stop transfer instructions to the transfer
agent for the Parent Common Stock, consistent with the terms of the Company
Affiliate Agreement.
(b) Set forth on the Parent Schedules is a list of those
persons who may be deemed to be, in Parent's reasonable judgment, affiliates of
Parent (each a "PARENT AFFILIATE"). Parent will provide Company with such
information and documents as Parent reasonably requests for purposes of
reviewing such list. Parent will use its commercially reasonable efforts to
deliver or cause to be delivered to Company, as promptly as practicable on or
following the date hereof, from each Parent Affiliate an executed affiliate
agreement in substantially the form attached hereto as Exhibit B-2 (the "PARENT
AFFILIATE AGREEMENT"), each of which will be in full force and effect as of the
Effective Time.
5.13 Regulatory Filings; Reasonable Efforts. As soon as may be
reasonably practicable, Company and Parent each shall file with the United
States Federal Trade Commission (the "FTC") and the Antitrust Division of the
United States Department of Justice ("DOJ") Notification and Report Forms
relating to the transactions contemplated herein as required by the HSR Act, as
well as comparable pre-merger notification forms required by the merger
notification or control laws and regulations of any applicable jurisdiction, as
reasonably agreed to by the parties. Company and Parent each shall promptly (a)
supply the other with any information which may be required in order to
effectuate such filings and (b) supply any additional information which
reasonably may be required by the FTC, the DOJ or the competition or merger
control authorities of any other jurisdiction and which the parties may
reasonably deem appropriate.
5.14 Board of Directors of Parent Following the Merger. The Board of
Directors of Parent will take all actions within its power to cause the Board of
Directors of Parent, effective no later than one day following the Effective
Time, to consist of five persons, one of whom shall be Xxxxxx X. Xxxxxx (who
shall retain his present position as a Class II director), one of whom will be
Xxxxx X. Xxxx (who shall be offered a position as a Class II director) and the
remaining three of whom shall have served on the Board of Directors of Parent
immediately prior to the Effective Time. If, prior to the Effective Time, any of
the foregoing designees shall decline or be unable to serve as a director,
Company (if such person is Xxxxxx Xxxxxx or Xxxxx
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Saal) or Parent (in all other cases) shall designate another person to serve in
such person's stead, which person shall be reasonably acceptable to the other
party.
ARTICLE VI
CONDITIONS TO THE MERGER
6.1 Conditions to Obligations of Each Party to Effect the Merger. The
respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction at or prior to the Closing Date of the
following conditions:
(a) Company Stockholder Approval. This Agreement shall have
been approved and adopted, and the Merger shall have been duly approved, by the
requisite vote under applicable law, by the stockholders of Company.
(b) Parent Stockholder Approval. The issuance of shares of
Parent Common Stock pursuant to the Merger shall have been duly approved by the
requisite vote under applicable law by the stockholders of Parent.
(c) Registration Statement Effective; Proxy Statement. The SEC
shall have declared the Registration Statement effective. No stop order
suspending the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose, and no similar
proceeding in respect of the Joint Proxy Statement/Prospectus, shall have been
initiated or threatened in writing by the SEC.
(d) No Order; HSR Act. No Governmental Entity shall have
enacted, issued, promulgated, enforced or entered any statute, rule, regulation,
executive order, decree, injunction or other order (whether temporary,
preliminary or permanent) which is in effect and which has the effect of making
the Merger illegal or otherwise prohibiting consummation of the Merger. All
waiting periods, if any, under the HSR Act relating to the transactions
contemplated hereby will have expired or terminated early and all material
foreign antitrust approvals required to be obtained prior to the Merger in
connection with the transactions contemplated hereby shall have been obtained.
(e) Tax Opinions. Parent and Company shall each have received
written opinions from their respective tax counsel (Xxxxxx Xxxxxxx Xxxxxxxx &
Xxxxxx, Professional Corporation, and Xxxx Xxxx Xxxx & Freidenrich, a
Professional Corporation, respectively), in form and substance reasonably
satisfactory to them, to the effect that the Merger will constitute a
reorganization within the meaning of Section 368(a) of the Code and such
opinions shall not have been withdrawn;
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provided, however, that if the counsel to either Parent or Company does not
render such opinion, this condition shall nonetheless be deemed to be satisfied
with respect to such party if counsel to the other party renders such opinion to
such party. The parties to this Agreement agree to make and use their
commercially reasonable efforts to cause their shareholders to make such
reasonable representations as requested by such counsel for the purpose of
rendering such opinions.
(f) Opinion of Accountants. Each of Parent and Company shall
have received letters from each of Coopers & Xxxxxxx L.L.P. and Xxxxxx Xxxxxxxx
LLP, respectively, dated within two (2) business days prior to the Effective
Time, regarding that firm's concurrence with Parent's management's and Company's
management's conclusions as to the appropriateness of pooling of interest
accounting for the Merger under Accounting Principles Board Opinion No. 16, if
the Merger is consummated in accordance with this Agreement.
(g) Nasdaq Listing. The shares of Parent Common Stock to be
issued to Company stockholders pursuant to the Merger shall have been approved
for listing on Nasdaq upon notice of issuance.
6.2 Additional Conditions to Obligations of Company. The obligation of
Company to consummate and effect the Merger shall be subject to the satisfaction
at or prior to the Closing Date of each of the following conditions, any of
which may be waived, in writing, exclusively by Company:
(a) Representations and Warranties. The representations and
warranties of Parent and Merger Sub contained in this Agreement (i) shall have
been true and correct in all material respects as of the date of this Agreement
and (ii) shall be true and correct in all material respects on and as of the
Closing Date except for changes contemplated by this Agreement and except for
those representations and warranties which address matters only as of a
particular date (which shall have been true and correct as of such particular
date), with the same force and effect as if made on and as of the Closing Date,
except, with regard to the foregoing clauses (i) and (ii), in such cases (other
than the representations in Sections 3.2, 3.3, 3.16 and 3.18) where the failure
to be so true and correct would not have or be reasonably likely to have a
Material Adverse Effect on Parent. Company shall have received a certificate
with respect to the foregoing signed on behalf of Parent by an authorized
officer of Parent.
(b) Agreements and Covenants. Parent and Merger Sub shall have
performed or complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by them on or prior
to
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the Closing Date, and Company shall have received a certificate to such
effect signed on behalf of Parent by an authorized officer of Parent.
(c) Material Adverse Effect. No Material Adverse Effect with
respect to Parent shall have occurred since the date of this Agreement or be
reasonably likely to occur.
(d) Affiliate Agreements. Each of the Parent Affiliates shall
have entered into the Parent Affiliate Agreement and each of such agreements
will be in full force and effect as of the Effective Time.
(e) Certain Actions. The Board of Directors of Parent shall
have complied in all material respects with the provisions of Section 5.14
hereof.
(f) Consents. Parent shall have obtained all consents, waivers
and approvals required in connection with the consummation of the transactions
contemplated hereby in connection with the agreements, contracts, licenses or
leases set forth on Section 6.2 of the Company Schedules.
6.3 Additional Conditions to the Obligations of Parent and Merger Sub.
The obligations of Parent and Merger Sub to consummate and effect the Merger
shall be subject to the satisfaction at or prior to the Closing Date of each of
the following conditions, any of which may be waived, in writing, exclusively by
Parent:
(a) Representations and Warranties. The representations and
warranties of Company contained in this Agreement (i) shall have been true and
correct in all material respects as of the date of this Agreement and (ii) shall
be true and correct in all material respects on and as of the Closing Date
except for changes contemplated by this Agreement and except for those
representations and warranties which address matters only as of a particular
date (which shall have been true and correct as of such particular date), with
the same force and effect as if made on and as of the Closing Date, except, with
regard to the foregoing clauses (i) and (ii), in such cases (other than the
representations in Sections 2.2, 2.3, 2.20 and 2.21) where the failure to be so
true and correct would not have or be reasonably likely to have a Material
Adverse Effect on Company. Parent shall have received a certificate with respect
to the foregoing signed on behalf of Company by an authorized officer of
Company.
(b) Agreements and Covenants. Company shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it at or prior to the Closing
Date, and Parent shall have received a certificate to such effect signed on
behalf of
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Company by the Chief Executive Officer and the Chief Financial Officer of
Company.
(c) Material Adverse Effect. No Material Adverse Effect with
respect to Company shall have occurred since the date of this Agreement or be
reasonably likely to occur.
(d) Affiliate Agreements. Each of the Company Affiliates shall
have entered into the Company Affiliate Agreement and each of such agreements
will be in full force and effect as of the Effective Time.
(e) Consents. Company shall have obtained all consents,
waivers and approvals required in connection with the consummation of the
transactions contemplated hereby in connection with the agreements, contracts,
licenses or leases set forth on Section 6.3(e) of the Parent Schedules.
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 the requisite approvals of the
stockholders of Company or Parent:
(a) by mutual written consent duly authorized by the Boards of
Directors of Parent and Company;
(b) by either Company or Parent if the Merger shall not have
been consummated by March 31, 1998 for any reason; provided, however, that the
right to terminate this Agreement under this Section 7.1(b) shall 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;
(c) by either Company or Parent if a Governmental Entity shall
have issued an order, decree or ruling or taken any other action, in any case
having the effect of permanently restraining, enjoining or otherwise prohibiting
the Merger, which order, decree, ruling or other action is final and
nonappealable;
(d) by either Company or Parent if the required approvals of
the stockholders of Company contemplated by this Agreement shall not have been
obtained by reason of the failure to obtain the required vote at a meeting of
Company
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stockholders duly convened therefor or at any adjournment thereof (provided that
the right to terminate this Agreement under this Section 7.1(d) shall not be
available to Company where the failure to obtain Company stockholder approval
shall have been caused by the action or failure to act of Company and such
action or failure to act constitutes a breach by Company of this Agreement);
(e) by either Company or Parent if the required approval of
the stockholders of Parent contemplated by this Agreement shall not have been
obtained by reason of the failure to obtain the required vote at a meeting of
Parent stockholders duly convened therefor or at any adjournment thereof
(provided that the right to terminate this Agreement under this Section 7.1(e)
shall not be available to Parent where the failure to obtain Parent stockholder
approval shall have been caused by the action or failure to act of Parent and
such action or failure to act constitutes a material breach by Parent of this
Agreement);
(f) by Parent if (i) the Board of Directors of Company or any
committee thereof shall have withdrawn or modified in a manner adverse to Parent
its approval or recommendation of the Merger or this Agreement, (ii) Company
shall have failed to include in the Joint/Proxy Statement/Prospectus the
recommendation of the Board of Directors of Company in favor of approval of the
Merger and this Agreement, (iii) the Board of Directors of Company shall have
failed to reconfirm such recommendation within ten business days after a written
request to do so at any time following the public announcement or disclosure of
an Alternative Proposal (iv) the Board of Directors of Company or any committee
thereof shall have recommended any Alternative Proposal or (v) the Board of
Directors of Company or any committee thereof shall have resolved to do any of
the foregoing;
(g) by Company if (i) the Board of Directors of Parent or any
committee thereof shall have withdrawn or modified in a manner adverse to
Company its recommendation of approval of the issuance of shares of Parent
Common Stock pursuant to the Merger, (ii) Parent shall have failed to include in
the Joint/Proxy Statement/Prospectus the recommendation of the Board of
Directors of Parent in favor of approval of the issuance of shares of Parent
Common Stock pursuant to the Merger, (iii) the Board of Directors of Parent
shall have failed to reconfirm such recommendation within ten business days
after a written request to do so at any time following the public announcement
or disclosure of a Parent Contingent Proposal (as defined in Section 7.3(d)) or
(iv) the Board of Directors of Parent or any committee thereof shall have
resolved to do any of the foregoing;
(h) by Company at any time prior to the approval of the Merger
by Company's stockholders and following the earlier of (i) three days following
the date the Registration Statement is declared effective pursuant to the
Securities Act
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by the SEC or (ii) sixty days following the date hereof, if the Board of
Directors of Company recommends a Superior Proposal to the stockholders of
Company;
(i) by Company, upon a breach of any representation, warranty,
covenant or agreement on the part of Parent set forth in this Agreement, or if
any representation or warranty of Parent shall have become untrue, in either
case such that the conditions set forth in Section 6.2(a) or Section 6.2(b)
would not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue, provided that Company may
not terminate this Agreement under this Section 7.1(i) if such inaccuracy in
Parent's representations and warranties or breach by Parent is curable by Parent
through the exercise of its commercially reasonable efforts prior to March 31,
1998, provided Parent continues to exercise commercially reasonable efforts to
cure such breach (it being understood that Company may not terminate this
Agreement pursuant to this paragraph (i) if it shall have materially breached
this Agreement or if such breach by Parent is cured prior to March 31, 1998); or
(j) by Parent, upon a breach of any representation, warranty,
covenant or agreement on the part of Company set forth in this Agreement, or if
any representation or warranty of Company shall have become untrue, in either
case such that the conditions set forth in Section 6.3(a) or Section 6.3(b)
would not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue, provided, that Parent may
not terminate this Agreement under this Section 7.1(j) if such inaccuracy in
Company's representations and warranties or breach by Company is curable by
Company through the exercise of its commercially reasonable efforts prior to
March 31, 1998, provided Company continues to exercise commercially reasonable
efforts to cure such breach (it being understood that Parent may not terminate
this Agreement pursuant to this paragraph (j) if it shall have materially
breached this Agreement or if such breach by Company is cured prior to March 31,
1998).
7.2 Notice of Termination; Effect of Termination. Any termination of
this Agreement under Section 7.1 above will be effective immediately upon the
delivery of written notice of the terminating party to the other parties hereto.
In the event of the termination of this Agreement as provided in Section 7.1,
this Agreement shall be of no further force or effect, except (i) as set forth
in this Section 7.2, Section 7.3 and Article 8 (miscellaneous), each of which
shall survive the termination of this Agreement, and (ii) nothing herein shall
relieve any party from liability for any willful breach of this Agreement. No
termination of this Agreement shall affect the obligations of the parties
contained in the Confidentiality Agreement, all of which obligations shall
survive termination of this Agreement in accordance with their terms.
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7.3 Fees and Expenses.
(a) General. Except as set forth in this Section 7.3, all fees
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses whether
or not the Merger is consummated; provided, however, that Parent and Company
shall share equally all fees and expenses, other than attorneys' and accountants
fees and expenses, incurred in relation to the printing and filing (with the
SEC) of the Joint Proxy Statement/Prospectus (including any preliminary
materials related thereto) and the Registration Statement (including financial
statements and exhibits) and any amendments or supplements thereto.
(b) Company Payments. In the event that this Agreement is
terminated by Parent pursuant to Section 7.1(f) or Company pursuant to Section
7.1(h), Company shall promptly, but in no event later than two days after the
date of such termination, pay Parent a fee equal to $30 million in immediately
available funds (the "COMPANY TERMINATION FEE"). If this Agreement shall be
terminated by any party hereto pursuant to Section 7.1(d) and prior to such
termination an Alternative Proposal shall have been publicly announced or
otherwise publicly disclosed, and prior to the date 12 months following the date
of the termination of this Agreement either (i) a Company Acquisition (as
hereinafter defined) shall be consummated or (ii) Company shall enter into an
Acquisition Agreement providing for a Company Acquisition, then Company shall
pay to Parent the Company Termination Fee in immediately available funds in the
case of clause (i) concurrently with the consummation of such Company
Acquisition or in the case of clause (ii) one half of the Company Termination
Fee concurrently with the execution of such Acquisition Agreement and the
remaining half of the Company Termination Fee upon the consummation of any
Company Acquisition occurring with twelve months following such execution.
Company acknowledges that the agreements contained in this Section 7.3(b) are an
integral part of the transactions contemplated by this Agreement, and that,
without these agreements, Parent would not enter into this Agreement;
accordingly, if Company fails promptly to pay the amounts due pursuant to this
Section 7.3(b) , and, in order to obtain such payment, Parent commences a suit
which results in a judgment against Company for the amounts set forth in this
Section 7.3(b) and such judgment is not set aside or reversed, Company shall pay
to Parent its reasonable costs and expenses (including attorneys' fees and
expenses) in connection with such suit, together with interest on the amounts
set forth in this Section 7.3(b) at the prime rate of The Chase Manhattan Bank
in effect on the date such payment was required to be made. "COMPANY
ACQUISITION" shall mean any of the following transactions or series of related
transactions: (i) a merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving
Company pursuant to which the stockholders of
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Company immediately preceding such transaction or series of related transactions
hold less than 60% of the equity interests in the surviving or resulting entity
of such transaction or transactions (without respect to any overlap in the
companies' stockholder bases) (other than the transactions contemplated by this
Agreement); (ii) a sale or other disposition by Company of assets (excluding
inventory and used equipment sold in the ordinary course of business)
representing in excess of 40% of the fair market value of Company'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
Company), directly or indirectly, of beneficial ownership or a right to acquire
beneficial ownership of 40% or more of the then outstanding shares of capital
stock of Company.
(c) Payment of the fees described in Section 7.3(b) above
shall not be in lieu of damages incurred in the event of material and willful
breach of this Agreement.
(d) Parent Payments. In the event that this Agreement is
terminated by Company pursuant to Section 7.1(g), Parent shall promptly, but in
no event later than two days after the date of such termination, pay Company a
fee equal to $30 million in immediately available funds (the "PARENT TERMINATION
FEE"). If this Agreement shall be terminated by any party hereto pursuant to
Section 7.1(e) and prior to the time of the occurrence of the event entitling
such party to terminate this Agreement pursuant to such provision a Parent
Contingent Proposal shall have been publicly announced or otherwise publicly
disclosed, and prior to the date 12 months following the date of the termination
of this Agreement either (i) the transaction contemplated by such Parent
Contingent Proposal shall be consummated or (ii) Parent shall enter into a
written agreement providing for the consummation of the transaction contemplated
by such Parent Contingent Proposal, then Parent shall pay to Company the Parent
Termination Fee in immediately available funds, in the case of clause (i)
concurrently with the consummation of the transaction contemplated by such
Parent Contingent Proposal and in the case of clause (ii) one half of the Parent
Termination Fee concurrently with the execution of such agreement and the
remaining half of the Parent Termination Fee upon the consummation of the
transaction contemplated by such agreement. Parent acknowledges that the
agreements contained in this Section 7.3(d) are an integral part of the
transactions contemplated by this Agreement, and that, without these agreements,
Company would not enter into this Agreement; accordingly, if Parent fails
promptly to pay the amounts due pursuant to this Section 7.3(d), and, in order
to obtain such payment, Company commences a suit which results in a judgment
against Parent for the amounts set forth in this Section 7.3(d) and such
judgment is not set aside or reversed, Parent shall pay to Company its
reasonable costs and expenses (including attorneys' fees and expenses) in
connection with such suit, together with interest on
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the amounts set forth in this Section 7.3(d) at the prime rate of The Chase
Manhattan Bank in effect on the date such payment was required to be made.
Payment of the fees described in this Section 7.3(d) shall not be in lieu of
damages incurred in the event of material and willful breach of this Agreement.
"PARENT CONTINGENT PROPOSAL" shall mean a Parent Proposal, which proposal is and
is publicly disclosed to be contingent upon the issuance of shares of Parent
Common Stock pursuant to the Merger not being approved by the stockholders of
Parent or the Merger otherwise not being consummated.
7.4 Amendment. Subject to applicable law, this Agreement may be amended
by the parties hereto at any time by execution of an instrument in writing
signed on behalf of each of Parent and Company.
7.5 Extension; Waiver. At any time prior to the Effective Time any
party hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto and (iii)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. Delay in exercising any right under this
Agreement shall not constitute a waiver of such right.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Non-Survival of Representations and Warranties. The representations
and warranties of Company, Parent and Merger Sub contained in this Agreement
shall terminate at the Effective Time, and only the covenants that by their
terms survive the Effective Time (such as those set forth in Section 5.10) shall
survive the Effective Time.
8.2 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or sent via telecopy (receipt confirmed) to the parties at the
following addresses or telecopy numbers (or at such other address or telecopy
numbers for a party as shall be specified by like notice):
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(a) if to Parent or Merger Sub, to:
McAfee Associates, Inc.
0000 Xxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Attention: President
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C.
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxx Xxxxx, Esq.
Xxxxx Xxxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
(b) if to Company, to:
Network General Corporation
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: President
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with a copy to:
Xxxx Xxxx Xxxx & Freidenrich
A Professional Corporation
000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Xxx Xxxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
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8.3 Interpretation; Knowledge.
(a) When a reference is made in this Agreement to Exhibits,
such reference shall be to an Exhibit to this Agreement unless otherwise
indicated. When a reference is made in this Agreement to Sections, such
reference shall be to a Section of this Agreement unless otherwise indicated.
The words "INCLUDE," "INCLUDES" and "INCLUDING" when used herein shall be deemed
in each case to be followed by the words "without limitation." The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. When reference is made herein to "THE BUSINESS OF" an entity, such
reference shall be deemed to include the business of all direct and indirect
subsidiaries of such entity. Reference to the subsidiaries of an entity shall be
deemed to include all direct and indirect subsidiaries of such entity.
(b) For purposes of this Agreement the term "KNOWLEDGE" means
with respect to a party hereto, with respect to any matter in question, that any
of the Chief Executive Officer, Chief Financial Officer, General Counsel,
Director of Legal Affairs or Controller of such party, has actual knowledge of
such matter.
(c) For purposes of this Agreement, the term "MATERIAL ADVERSE
EFFECT" when used in connection with an entity means any change, event or effect
that is materially adverse to the business, assets (including intangible
assets), financial condition or results of operations of such entity and its
subsidiaries taken as a whole, except for those changes, events and effects that
(i) are directly and primarily caused by conditions affecting the United States
economy as a whole or affecting the industry in which such entity competes as a
whole, which conditions do not affect such entity in a disproportionate manner,
or (ii) are directly and primarily related to or result from announcement or
pendency of the Merger.
8.4 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
8.5 Entire Agreement; Third Party Beneficiaries. This Agreement and the
documents and instruments and other agreements among the parties hereto as
contemplated by or referred to herein, including the Company Schedules and the
Parent Schedules (a) constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, it
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being understood that the Confidentiality Agreement shall continue in full force
and effect until the Closing and shall survive any termination of this
Agreement; and (b) are not intended to confer upon any other person any rights
or remedies hereunder, except as specifically provided in Section 5.10.
8.6 Severability. In the event that any provision of this Agreement or
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
8.7 Other Remedies; Specific Performance. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to seek an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity.
8.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law thereof.
Each of the parties hereto irrevocably consents to the jurisdiction of any state
or federal court within the Northern District of California or the State of
Delaware, in connection with any matter based upon or arising out of this
Agreement or the matters contemplated herein, agrees that process may be served
upon them in any manner authorized by the laws of the State of California or the
State of Delaware, as is appropriate, for such persons and waives and covenants
not to assert or plead any objection which they might otherwise have to such
jurisdiction and such process.
8.9 Rules of Construction. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
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construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
8.10 Assignment. No party may assign either this Agreement or any of
its rights, interests, or obligations hereunder without the prior written
approval of the other parties. Subject to the preceding sentence, this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
8.11 WAIVER OF JURY TRIAL. EACH OF PARENT, COMPANY AND MERGER SUB
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE ACTIONS OF PARENT, COMPANY OR MERGER SUB IN
THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.
*****
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized respective officers as of the date first
written above.
McAFEE ASSOCIATES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
------------------------------------
Title: Chairman and Chief Executive Officer
------------------------------------
MYSTERY ACQUISITION CORP.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
------------------------------------
Title: President
------------------------------------
NETWORK GENERAL CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
------------------------------------
Title: Director
------------------------------------
**** REORGANIZATION AGREEMENT ****
69
AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
McAFEE ASSOCIATES, INC.
MYSTERY ACQUISITION CORP.
AND
NETWORK GENERAL CORPORATION
DATED AS OF OCTOBER 13, 1997
70
TABLE OF CONTENTS
PAGE
----
ARTICLE I THE MERGER...........................................................2
1.1 The Merger...................................................2
1.2 Effective Time; Closing......................................2
1.3 Effect of the Merger.........................................2
1.4 Certificate of Incorporation; Bylaws.........................3
1.5 Directors and Officers.......................................3
1.6 Effect on Capital Stock......................................3
1.7 Surrender of Certificates....................................5
1.8 No Further Ownership Rights in Company Common Stock..........6
1.9 Lost, Stolen or Destroyed Certificates.......................7
1.10 Tax and Accounting Consequences..............................7
1.11 Taking of Necessary Action; Further Action...................7
ARTICLE II REPRESENTATIONS AND WARRANTIES OF COMPANY...........................7
2.1 Organization of Company......................................8
2.2 Company Capital Structure....................................8
2.3 Obligations With Respect to Capital Stock....................9
2.4 Authority....................................................9
2.5 SEC Filings; Company Financial Statements...................11
2.6 Absence of Certain Changes or Events........................12
2.7 Tax.........................................................13
2.8 Title to Properties; Absence of Liens and Encumbrances......14
2.9 Intellectual Property.......................................15
2.10 Compliance; Permits; Restrictions...........................18
2.11 Litigation..................................................19
2.12 Brokers' and Finders' Fees..................................19
2.13 Employment Matters..........................................19
2.14 Environmental Matters.......................................24
2.15 Agreements, Contracts and Commitments.......................25
2.16 Pooling of Interests........................................26
2.17 Certain Payments............................................26
2.18 Registration Statement; Joint Proxy Statement/Prospectus....26
2.19 Board Approval..............................................27
2.20 Fairness Opinion............................................27
2.21 Section 203 of the Delaware General Corporation Law Not
Applicable; Company Rights Plan.............................27
2.22 Customs.....................................................28
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TABLE OF CONTENTS
(CONTINUED)
PAGE
----
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND
MERGER SUB...........................................................28
3.1 Organization of Parent.........................................28
3.2 Parent and Merger Sub Capital Structure........................29
3.3 Obligations With Respect to Capital Stock......................29
3.4 Authority......................................................30
3.5 SEC Filings; Parent Financial Statements.......................31
3.6 Absence of Certain Changes or Events...........................32
3.7 Tax............................................................33
3.8 Title to Properties; Absence of Liens and Encumbrances ........33
3.9 Intellectual Property..........................................33
3.10 Compliance; Permits; Restrictions..............................35
3.11 Litigation.....................................................36
3.12 Brokers' and Finders' Fees.....................................36
3.13 Statements; Joint Proxy Statement/Prospectus...................36
3.14 Valid Issuance.................................................37
3.15 No Ownership of Company Common Stock...........................37
3.16 Pooling of Interests...........................................37
3.17 Board Approval.................................................37
3.18 Fairness Opinion...............................................37
ARTICLE IV CONDUCT PRIOR TO THE EFFECTIVE TIME................................37
4.1 Conduct of Business by Company..................................37
4.2 Conduct of Business by Parent...................................40
ARTICLE V ADDITIONAL AGREEMENTS...............................................41
5.1 Joint Proxy Statement/Prospectus; Registration Statement; Other
Filings; Board Recommendations..................................41
5.2 Meetings of Stockholders........................................43
5.3 Confidentiality; Access to Information..........................43
5.4 No Solicitation.................................................44
5.5 Public Disclosure...............................................47
5.6 Reasonable Efforts; Notification................................48
5.7 Third Party Consents............................................49
5.8 Stock Options and Employee Benefits.............................49
5.9 Form S-8........................................................50
5.10 Indemnification.................................................50
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TABLE OF CONTENTS
(CONTINUED)
PAGE
----
5.11 Nasdaq Listing..............................................51
5.12 Affiliate Agreements........................................51
5.13 Regulatory Filings; Reasonable Efforts......................51
5.14 Board of Directors of Parent Following the Merger...........52
ARTICLE VI CONDITIONS TO THE MERGER...........................................52
6.1 Conditions to Obligations of Each Party to Effect the Merger52
6.2 Additional Conditions to Obligations of Company.............53
6.3 Additional Conditions to the Obligations of Parent and
Merger Sub..................................................54
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER.................................55
7.1 Termination.................................................55
7.2 Notice of Termination; Effect of Termination................57
7.3 Fees and Expenses...........................................58
7.4 Amendment...................................................60
7.5 Extension; Waiver...........................................60
ARTICLE VIII GENERAL PROVISIONS...............................................60
8.1 Non-Survival of Representations and Warranties..............60
8.2 Notices.....................................................60
8.3 Interpretation; Knowledge...................................62
8.4 Counterparts................................................62
8.5 Entire Agreement; Third Party Beneficiaries.................62
8.6 Severability................................................63
8.7 Other Remedies; Specific Performance........................63
8.8 Governing Law...............................................63
8.9 Rules of Construction.......................................63
8.10 Assignment..................................................64
8.11 Waiver of Jury Trial........................................64
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INDEX OF EXHIBITS
Exhibit A-1 Form of Company Voting Agreement
Exhibit A-2 Form of Parent Voting Agreement
Exhibit B-1 Form of Company Affiliate Agreement
Exhibit B-2 Form of Parent Affiliate Agreement
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