Exhibit 10.11
EXCHANGE AGREEMENT
This Exchange Agreement (the "Agreement") dated November 17, 1997 is
entered into by and between Informix Corporation, a Delaware corporation
(together with its successors, "Informix" or the "Company"), and Xxxxxxxx
International Limited, a company organized under the laws of the Cayman Islands
(together with its successors, "Xxxxxxxx").
Unless otherwise defined herein, capitalized terms used herein and not
defined herein shall have the meanings given to them in Regulation S (as now in
effect or as hereafter amended, "Regulation S") under the Securities Act of
1933, as amended (the "Securities Act").
The parties hereto agree as follows in consideration of and upon the
basis of the representations, warranties and agreements and subject to the terms
and conditions set forth in this Agreement:
1. EXCHANGE.
a. CONVERTIBLE PREFERRED STOCK. On the Closing Date specified
in Section 2 hereof, Xxxxxxxx agrees to deliver to Informix 160,000 shares
(the "Old Preferred Shares") of Informix's Convertible Preferred Stock,
Series A, liquidation preference $250 per share (the "Old Preferred
Stock"), purchased by Xxxxxxxx pursuant to the Subscription Agreement dated
August 12, 1997 by and between Informix and Xxxxxxxx, as amended by
Amendment No. 1 (the "Amendment") to the Subscription Agreement dated as of
the date hereof (as amended, the "Subscription Agreement") having the terms
and conditions set forth in the Certificate of Designation attached thereto
as Annex A (the "Old Certificate of Designation"), in exchange for, and
Informix hereby agrees to issue to Xxxxxxxx in consideration therefore
160,000 shares (the "New Preferred Shares") of Informix's Convertible
Preferred Stock, Series A-1, liquidation preference $250 per share (the
"New Preferred Stock"), having the terms and conditions set forth in the
Certificate of Designation attached hereto as Annex A (the "New Certificate
of Designation"). The term "Converted Stock" shall apply to any shares of
Informix's common stock, par value $0.01 per share (the "Common Stock")
issued or to be issued to Xxxxxxxx upon conversion of the New Preferred
Shares pursuant to the terms of this Agreement and the New Certificate of
Designation.
2. CLOSING. A. The closing of the exchange of the Old Preferred
Shares for the New Preferred Shares (the "Closing") shall take place initially
via facsimile on November 17, 1997 upon satisfaction or, if applicable, waiver
of the conditions set forth in Sections 8 and 9 hereof, or at such other date
and time as Xxxxxxxx and Informix shall mutually agree (such date and time being
referred to herein as the "Closing Date"), provided that the original
certificates representing the New Preferred Shares shall be delivered via
Federal Express to Xxxxxxxx at the address set forth in Section 14.
At the Closing, the following deliveries shall be made:
a. NEW PREFERRED SHARES. Informix shall deliver to Xxxxxxxx
ten stock certificates, each representing an equal number of shares of New
Preferred Stock and collectively representing the New Preferred Shares,
duly registered on the books of Informix in the name of Xxxxxxxx, against
delivery by Xxxxxxxx of the certificates representing the Old Preferred
Shares, provided that upon the release by Informix of the certificates
representing the New Preferred Shares, the certificates representing the
Old Preferred Shares will be deemed to be void and upon receipt thereof,
Xxxxxxxx shall deliver the original certificates representing the Old
Preferred Shares via Federal Express to Informix at the address set forth
in Section 14.
b. CLOSING DOCUMENTS. The closing documents required by
Sections 8 and 9 shall be delivered to Xxxxxxxx and Informix, respectively.
c. DELIVERY NOTICE. An executed copy of the delivery notice in
the form attached hereto as Annex B shall be delivered to Xxxxxxxx.
The foregoing deliveries shall be deemed to occur simultaneously as
part of a single transaction, and no delivery shall be deemed to have been made
until all such deliveries have been made.
3. REPRESENTATIONS AND WARRANTIES OF INFORMIX. Except as set forth
in the Disclosure Schedule attached hereto as Annex C, Informix hereby
represents and warrants to Xxxxxxxx on the date hereof, the Closing Date, and on
the date any New Preferred Share is converted into Common Stock (each a
"Conversion Date") (unless otherwise specified as provided in the paragraphs
below) as follows:
a. Informix has been duly incorporated and is validly existing
in good standing under the laws of Delaware, or, after the Closing Date if
another entity has succeeded Informix in accordance with the terms hereof,
under the laws of one of the United States.
b. The execution, delivery and performance of this Agreement
(including the issuance of the New Preferred Shares) and of the New
Certificate of Designation by Informix have been duly authorized by all
requisite corporate action and no further consent or authorization of
Informix, its Board of Directors or its stockholders is required in
connection therewith (except to the extent anticipated in the New
Certificate of Designation relating to Excess Preferred Shares (as defined
therein)). This Agreement has been duly executed and delivered by Informix
and, when duly authorized, executed and delivered by Xxxxxxxx, will be a
valid and binding agreement of Informix, enforceable against Informix in
accordance with its terms, subject to bankruptcy, insolvency, reorgani-
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zation, moratorium and similar laws of general applicability relating to or
affecting creditors' rights generally and to general principles of equity.
c. Informix has full corporate power and authority necessary to
execute and deliver this Agreement and to perform its obligations hereunder
(including the issuance of the New Preferred Shares) and under the New
Certificate of Designation.
d. Except as may be required under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, no consent, approval,
authorization or order of any court, governmental agency or other body or
person is required for the execution and delivery by Informix of this
Agreement or the performance by Informix of any of its obligations
hereunder (including the issuance of the New Preferred Shares) and under
the New Certificate of Designation.
e. Except as may be required under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, none of the execution and
delivery by Informix of this Agreement, the performance by Informix of any
of its obligations hereunder (including issuance of the New Preferred
Shares) and under the New Certificate of Designation:
(1) violates, conflicts with, results in a breach of, or
constitutes a default (or an event which with the giving of notice or
the lapse of time or both would be reasonably likely to constitute a
default) under (A) the Certificate of Incorporation or by-laws of
Informix or any of its subsidiaries or any certificate of designation
relating to any securities of Informix or any of its subsidiaries, (B)
any decree, judgment, order, law, treaty, rule, regulation or
determination of any court, governmental agency or body, or arbitrator
having jurisdiction over Informix or any of its subsidiaries or any of
their respective properties or assets, (C) the terms of any bond,
debenture, note or any other evidence of indebtedness, or any
agreement, stock option or other similar plan, indenture, lease,
mortgage, deed of trust or other instrument to which Informix or any
of its subsidiaries is a party, by which Informix or any of its
subsidiaries is bound, or to which any of the properties or assets of
Informix or any of its subsidiaries is subject, (D) the terms of any
"lock-up" or similar provision of any underwriting or similar
agreement to which Informix or any of its subsidiaries is a party or
(E) any rules of the National Association of Securities Dealers, Inc.
applicable to Informix or the transactions contemplated hereby; or
(2) results in the creation or imposition of any lien,
charge or encumbrance (other than encumbrances that may be imposed
under federal securities laws) upon (A) any New Preferred Share or any
Converted Stock or (B) any of the properties or assets of Informix or
any of its subsidiaries.
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f. Informix has validly reserved 160,000 shares of New
Preferred Stock for issuance pursuant to the terms hereof at the Closing
and 13 million shares of Common Stock for issuance upon conversion of the
New Preferred Shares, subject only to filing the New Certificate of
Designation, which will be accomplished on or before the Closing Date.
When issued to Xxxxxxxx against exchange therefor, each New Preferred Share
and share of Converted Stock:
(1) will be duly and validly authorized, duly and validly
issued, fully paid and non-assessable;
(2) will be free and clear of any security interests, liens,
claims or other encumbrances (other than encumbrances that may be
imposed under federal securities laws); and
(3) will not have been issued or sold in violation of any
preemptive or other similar rights of the holders of any securities of
Informix.
g. When issued, each share of Converted Stock will be duly
listed and admitted for trading on the on the NASDAQ National Market
("NASDAQ") or, if applicable, listed and registered on a national
securities exchange (as defined in the United States Securities Exchange
Act of 1934, as amended (the "Exchange Act")). Informix satisfies all
quantitative maintenance criteria of the NASDAQ.
h. Informix is a reporting issuer within the meaning of
Regulation S ("Reporting Issuer"), PROVIDED, HOWEVER, that the
representation and warranty contained in this Section 3(h) shall not be
required to be given in respect of any Conversion Date if the provisions of
Section 7 are applicable and Informix is in full compliance therewith and
Xxxxxxxx is permitted to resell the Converted Stock thereunder.
i. There is no pending or, to the best knowledge of Informix,
threatened action, suit, proceeding or investigation before any court,
governmental agency or body, or arbitrator having jurisdiction over
Informix or any of its affiliates that would materially affect the
execution by Informix of, or the performance by Informix of its obligations
under, this Agreement.
j. The financial statements of Informix included in Informix's
filings after the Closing Date with the United States Securities and
Exchange Commission (the "SEC") under the Securities Act or under Section
13(a) or 15(d) of the Exchange Act (any such filing, an "SEC Filing")
(including any similar documents filed after the date of this Agreement)
comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with
respect thereto have been prepared in accordance with generally accepted
accounting principles (except, in the case of unaudited statements, as
permitted by Form 10-Q of the SEC) applied on a
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consistent basis during the periods involved (except as may be indicated in
the notes thereto) and fairly present the consolidated financial position
of Informix and its consolidated subsidiaries as of the dates thereof and
the consolidated results of their operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments).
k. [Reserved.]
l. The offer and sale of the New Preferred Shares, subject to
compliance by Xxxxxxxx with the applicable representations and warranties
contained in Section 4 hereof and with the applicable covenants and
agreements contained in Section 6 hereof, shall be made in accordance with
the provisions and requirements of Regulation S and any applicable state
law, PROVIDED, HOWEVER, that the representations and warranties contained
in this Section 3(l) shall not be required to be given in respect of any
Conversion Date if the provisions of Section 7 are applicable and Informix
is in full compliance therewith and Xxxxxxxx is permitted to resell the
Common Stock thereunder.
m. Neither Informix nor any of its affiliates nor any person
acting on its or their behalf has engaged or will engage in any directed
selling efforts within the meaning of Regulation S ("Directed Selling
Efforts") with respect to the New Preferred Shares or the Converted Stock,
and all such persons understand and have complied and will otherwise comply
with the applicable requirements of Regulation S, PROVIDED, HOWEVER, that
the representations and warranties contained in this Section 3(m) shall not
be required to be given in respect of any Conversion Date if the provisions
of Section 7 are applicable and Informix is in full compliance therewith
and Xxxxxxxx is permitted to resell the Common Stock thereunder.
n. The transactions contemplated by this Agreement are not part
of a plan or scheme on the part of Informix, any of its affiliates or any
person acting on its or their behalf to evade the registration provisions
of the Securities Act.
o. Informix has not issued, and after the date hereof, will not
issue, any stop transfer order or other order impeding the sale and
delivery of the New Preferred Shares or the Converted Stock except for a
stop order restricting the sale of any of the foregoing securities to any
person in the United States or to or for the account or benefit of any U.S.
Person during an applicable Restricted Period or otherwise not in
compliance with any applicable securities law or regulation.
p. Except for securities issued to Xxxxxxxx on August 12, 1997
pursuant to the Subscription Agreement, neither Informix nor any of its
affiliates has offered to sell or sold any Common Stock or any securities
convertible into or exchangeable or exercisable for Common Stock in
reliance upon Regulation S at any time during the 12 months prior to the
date of this Agreement; and as of the date hereof there are no outstanding
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convertible or exchangeable securities that have been offered or sold in
reliance upon Regulation S, except, in each case, the New Preferred Shares,
the Old Preferred Shares, the Option Preferred Shares (as defined in the
Subscription Agreement) and the Converted Stock. The representations and
warranties contained in this Section 3.p. shall not be required to be given
in respect of any Conversion Date.
q. As of the date of this Agreement and as of the Closing Date,
the authorized capital stock of Informix shall consist of 500,000,000
shares of Common Stock and 5,000,000 shares of preferred stock, par value
$0.01 per share, of which 440,000 shares shall be designated Series A-1
Convertible Preferred Stock.
As of November 17, 1997: (i) 152,428,406 shares of Common Stock were
issued and outstanding (together with associated rights to acquire an
additional share of Common Stock for each share outstanding under
Informix's Amended and Restated Rights Plan dated as of a date on or prior
to the Closing (together with any amendment or replacement thereof, the
"Rights Plan")); (ii) 24,960,730 shares of Common Stock were reserved for
issuance under stock option plans or upon exercise of stock options granted
outside such plans, of which 19,292,160 shares are subject to outstanding,
unexercised options and 5,668,570 shares remain available for future grant
under such plans; (iii) 4,000,000 shares of Common Stock were reserved for
issuance under employee stock purchase plans; (iv) 30,913 shares of Common
Stock were reserved for issuance upon exercise of a warrant; and (v)
500,000 shares of Common Stock reserved for issuance upon exercise of a
non-qualified stock option granted to the Chairman, President and Chief
Executive Officer of Informix.
All the outstanding shares of Common Stock are, and all shares which
may be issued pursuant to stock options, warrants or other convertible
rights will be, when issued and paid for in accordance with the respective
terms thereof, duly authorized, validly issued, fully paid and
nonassessable and free of any preemptive rights in respect thereof. As of
the date of this Agreement, except as set forth above, except for the
Series B Transaction (as defined in the Amendment), and except for shares
of Common Stock or other securities issued upon conversion, exchange,
exercise or purchase associated with the securities, options, warrants,
rights and other instruments referenced above from November 17, 1997 to the
date of this Agreement, and except for shares of Common Stock related to
option grants or purchases made after November 17, 1997 to the date of this
Agreement under stock option plans for employees, directors or consultants
and stock purchase plans for employees (not exceeding 100,000 shares in the
aggregate as of the date hereof), and except for repurchase rights in favor
of Informix with respect to common stock held by employees or former
employees of Informix, and except for the Rights Plan, (i) no shares of
capital stock or other voting securities of Informix were outstanding,
(ii) no equity equivalents, interests in the ownership or earnings of
Informix or other similar rights were outstanding and (iii) there were no
existing options, warrants, calls, subscriptions or other rights or
agreements or commitments relating to the capital stock of
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Informix or any of its subsidiaries or obligating Informix or any of its
subsidiaries to issue, transfer, sell or redeem any shares of capital
stock, or other equity interest in, Informix or any of its subsidiaries or
obligating Informix or any of its subsidiaries to grant, extend or enter
into any such option, warrant, call, subscription or other right, agreement
or commitment.
r. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereunder will not
cause Xxxxxxxx to be deemed an Acquiring Person within the meaning of, nor
create (other than to Xxxxxxxx) or trigger any rights under the Rights
Plan. Each of the shares of Common Stock issuable in connection herewith
shall be entitled to the rights accorded all other shares of Common Stock
under the Rights Plan.
s. Informix has not have suffered any material adverse change,
or any development that is reasonably likely to result in any material
adverse change in the condition, financial or otherwise, or in the business
affairs of Informix, whether or not in the ordinary course of business,
which is not disclosed in Informix's public filings under the Exchange Act
filed not less than five trading days prior to the date hereof .
t. The issuance of the New Preferred Shares hereunder is exempt
from registration under the Securities Act pursuant to Section 3(a)(9)
thereof, and no commission or other remuneration is being paid or given,
directly or indirectly for soliciting the exchange contemplated hereby.
4. REPRESENTATIONS AND WARRANTIES OF XXXXXXXX. Xxxxxxxx hereby
represents and warrants to Informix on the date hereof, the Closing Date, and
agrees with Informix (unless otherwise specified as provided in the paragraphs
below), as follows:
x. Xxxxxxxx has been duly incorporated and is validly existing
in good standing under the laws of the Cayman Islands, or, after the
Closing Date if another entity has succeeded Xxxxxxxx in accordance with
the terms hereof, under the laws of the jurisdiction of its incorporation.
b. The execution, delivery and performance of this Agreement by
Xxxxxxxx have been duly authorized by all requisite corporate action and no
further consent or authorization of Xxxxxxxx, its Board of Directors or its
stockholders is required. This Agreement has been duly executed and
delivered by Xxxxxxxx and, when duly authorized, executed and delivered by
Informix, will be a valid and binding agreement enforceable against
Xxxxxxxx in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights generally and to general
principles of equity.
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x. Xxxxxxxx understands that no United States federal or state
agency has passed on, reviewed or made any recommendation or endorsement of
the New Preferred Shares or the Converted Stock.
d. In making the decision to acquire the New Preferred Shares
in accordance with this Agreement, Xxxxxxxx has relied solely upon
independent investigations made by it and not upon any representations made
by Informix other than those made in this Agreement.
e. Subject to Section 7, Xxxxxxxx understands that the New
Preferred Shares and the Converted Stock have not been registered under the
Securities Act and may not be reoffered or resold other than pursuant to
such registration or an available exemption therefrom.
x. Xxxxxxxx is not a U.S. person within the meaning of
Regulation S ("U.S. Person") and is not acquiring the New Preferred Shares
or any Converted Stock for the account or benefit of any U.S. Person, or
following the Closing Date, subject to Section 7, the issuance of the
Converted Stock is otherwise exempt from registration under the Securities
Act.
x. Xxxxxxxx is located outside the United States.
h. Neither Xxxxxxxx nor any of its affiliates nor anyone acting
on its or their behalf has engaged or will engage in any Directed Selling
Efforts with respect to the New Preferred Shares or any Converted Stock,
and all such persons understand and have complied and will otherwise comply
with the requirements of Regulation S, unless following the Closing Date,
subject to Section 7, the issuance of the Converted Stock is otherwise
exempt from registration under the Securities Act.
i. Subject to Section 7, Xxxxxxxx is acquiring the New
Preferred Shares and the Converted Stock for its own account, for the
purpose of investment and not with a view to a distribution thereof.
j. The transactions contemplated by this Agreement are not part
of a plan or scheme on the part of Xxxxxxxx, any of its affiliates or any
person acting on its or their behalf to evade the registration requirements
of the Securities Act.
k. Assuming the accuracy of the representations and warranties
of Informix herein made as of such date, no consent, approval,
authorization or order of any court, governmental agency or other body is
required for the execution by Xxxxxxxx of this Agreement or the performance
by Xxxxxxxx of any of its obligations hereunder, other than such as have
been obtained.
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l. Neither the execution by Xxxxxxxx of this Agreement nor the
performance by Xxxxxxxx of any of its obligations hereunder will violate,
conflict with, result in a breach of, or constitute a default (or an event
which with the giving of notice or the lapse of time or both would be
reasonably likely to constitute a default) under the Memorandum or Articles
of Association of Xxxxxxxx.
x. Xxxxxxxx understands that no United States federal or state
agency has passed on, reviewed or made any recommendation or endorsement of
the New Preferred Shares or the Converted Stock.
n. [Reserved.]
5. COVENANTS OF INFORMIX. Except as set forth in the Disclosure
Schedule attached hereto, Informix covenants and agrees with Xxxxxxxx as
follows:
a. For so long as any of the New Preferred Shares are
outstanding, and in any case for a period of 40 calendar days thereafter,
Informix will continue to be a Reporting Issuer within the meaning of
Regulation S and will maintain the eligibility of the Common Stock for
quotation on NASDAQ or listing on a national securities exchange (as
defined in the Exchange Act). Notwithstanding the foregoing, Informix
shall not be required to continue to be a Reporting Issuer and Informix
shall not be obligated to make the representation set forth in Section 3(h)
hereof from the date hereof until Informix files the quarterly report for
the period ended June 29, 1997, provided that Informix uses its best
efforts to be a Reporting Issuer at all times following the Closing Date.
b. For a period beginning on the date hereof and ending on May
17, 1998, Informix will not offer or sell any Preferred Stock (other than
the Option Preferred Shares), Common Stock or other equity securities (or
any securities convertible into or exchangeable for such Preferred Stock,
Common Stock, or other equity securities) in reliance upon Regulation S and
in any event will not take any action which would extend the Restricted
Period of any securities issued or issuable hereunder, PROVIDED, HOWEVER,
that the covenants and agreements contained in this Section 5(b) shall not
be required to be made in respect of any Conversion Date if the provisions
of Section 7 are applicable and Informix is in full compliance therewith
and Xxxxxxxx is permitted to resell the Common Stock thereunder.
c. For so long as any of the New Preferred Shares are
outstanding, and in any case for a period of 40 calendar days thereafter,
neither Informix nor any of its affiliates nor any person acting on its or
their behalf will engage in any Directed Selling Efforts with respect to
the New Preferred Shares or any Converted Stock, PROVIDED, HOWEVER, that
the covenants and agreements contained in this Section 5(c) shall not be
required to be made in respect of any Conversion Date if the provisions of
Section 7 are
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applicable and Informix is in full compliance therewith and Xxxxxxxx is
permitted to resell the Common Stock thereunder.
d. For so long as any of the New Preferred Shares are
outstanding, and in any case for a period of 40 calendar days thereafter,
Informix will ensure that all applicable offering restrictions within the
meaning of Regulation S ("Offering Restrictions") with respect to the New
Preferred Shares and the Converted Stock are thoroughly complied with and
satisfied, PROVIDED, HOWEVER, that the covenants and agreements contained
in this Section 5(d) shall not be required to be made in respect of any
Conversion Date if the provisions of Section 7 are applicable and Informix
is in full compliance therewith and Xxxxxxxx is permitted to resell the
Common Stock thereunder.
e. Beginning on the date hereof and for so long as any of the
New Preferred Shares are outstanding and in any case for a period of 40
calendar days thereafter, Informix will (i) provide Xxxxxxxx with an
opportunity to review and comment on any public disclosure by Informix of
information regarding this Agreement and the transactions contemplated
hereby (including pursuant to paragraph 5.(j) below), (ii) promptly notify
Xxxxxxxx of any public disclosure by Informix of material information
regarding Informix or its financial condition, prospects or results of
operation and (iii) provide Xxxxxxxx with copies of all SEC Filings.
f. Informix will (i) comply with the terms and conditions of
the New Preferred Shares as set forth in the New Certificate of
Designation, (ii) not amend the New Certificate of Designation without
Xxxxxxxx'x express written consent and (iii) not issue any New Preferred
Stock other than as provided hereunder without Xxxxxxxx'x express written
consent.
g. For so long as any of the New Preferred Shares are
outstanding, Informix shall at all times reserve and keep available, free
from preemptive rights, out of its authorized but unissued Common Stock,
for issuance upon conversion of such New Preferred Shares, not less than
the maximum number of shares of Converted Stock then so issuable in
exchange for all New Preferred Shares that have been issued or are issuable
pursuant to this Agreement.
h. [Reserved.]
i. [Reserved.]
j. In accordance with the terms of Regulation S, Informix will
file with the SEC, within 15 calendar days after the Closing Date, a report
on Form 8-K with respect to the transactions contemplated hereby. In
addition, Informix shall file copies of
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this Agreement, including the Disclosure Schedule, and the New Certificate
of Designation as exhibits to such Form 8-K.
k. Informix shall take all actions necessary to cause the
Converted Stock to be listed and admitted for trading upon issuance on the
NASDAQ or, if applicable, a national securities exchange (as defined in the
Exchange Act) and shall maintain the listing of such shares after their
issuance; provided, however, that, so long as Informix is otherwise in
compliance with the provisions of this Agreement and the New Certificate of
Designation, Informix need not comply with the covenant contained in this
Section 5.k. following any Transaction (as defined in the New Certificate
of Designation) as a result of which the outstanding shares of Common
Stock are no longer publicly traded.
l. Prior to the Closing Date, Informix shall amend the Rights
Plan in a manner consistent with the provision contained in Annex E and
take any and all actions necessary, including further amending the Rights
Plan, to prevent the transactions contemplated hereunder from causing any
Xxxxxxxx Party (as defined in the Rights Plan) to be deemed an Acquiring
Person within the meaning of, or otherwise creating (other than to a
Xxxxxxxx Party) or triggering any rights under, the Rights Plan, and shall
not thereafter take any actions inconsistent with the rights of Xxxxxxxx
Parties as of the Closing Date.
6. COVENANTS OF XXXXXXXX. Xxxxxxxx hereby covenants and agrees with
Informix as follows:
Neither Xxxxxxxx nor any of its affiliates nor any person acting on its or their
behalf will at any time offer or sell any New Preferred Shares or any Converted
Stock other than pursuant to registration under the Securities Act or pursuant
to an available exemption therefrom.
6A. LEGEND. The parties agree that the Restricted Period (as defined
in regulation S) with respect to the Old Preferred Shares, the New Preferred
Shares and any Converted Stock has expired. Informix may place the following
legend on the certificate representing the New Preferred Shares:
The securities represented by this certificate were issued in
compliance with Section 3(a)(9) of the Securities Act in exchange
for securities issued on August 12, 1997 (the "Closing Date")
pursuant to the Exchange Agreement dated November 17, 1997
between Informix Corporation ("Informix") and Xxxxxxxx
International Limited. The securities represented by this
certificate have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), and have been sold in
reliance on the exemption from registration provided by
Regulation S under the Securities Act ("Regulation
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S"). Prior to the expiration of a 40-day restricted period beginning
on the Closing Date (the "Restricted Period"), the securities
represented by this certificate may not be offered or sold, directly
or indirectly, within the United States (as defined in Regulation S
under the Securities Act), to a U.S. Person (as defined in Regulation
S under the Securities Act) or for the account or benefit of a U.S.
Person. After the Restricted Period, such securities may be resold in
the United States or to a U.S. Person only if they are registered
under the Securities Act or an exemption from registration is
available.
Certificates for any Converted Stock issued or in respect of
transferred shares of Common Stock will not be legended unless required by
Regulation S or other applicable law.
7. REGISTRATION PROVISIONS. The shares of Converted Stock shall be
treated as "Covered Securities" for purposes of Section 7 of the Subscription
Agreement and shall be entitled to the registration rights set forth therein.
8. CONDITIONS PRECEDENT TO XXXXXXXX'X OBLIGATIONS. The obligations
of Xxxxxxxx hereunder are subject to the performance by Informix of its
obligations hereunder and to the satisfaction of the following additional
conditions precedent, unless expressly waived in writing by Xxxxxxxx:
a. On the Closing Date and on each Conversion Date (i) to the
extent provided in Section 3 hereof, the representations and warranties
made by Informix in this Agreement shall be true and correct, and (ii)
Informix shall have complied fully with all the covenants and agreements in
this Agreement; and Xxxxxxxx shall have received on each such date a
certificate of the Chief Executive Officer and the Chief Financial Officer
(or Chief Accounting Officer) of Informix dated such date and to such
effect.
b. On the Closing Date and on each Conversion Date, Informix
shall have delivered to Xxxxxxxx an opinion of counsel, reasonably
satisfactory to Xxxxxxxx, dated the date of delivery, substantially in the
form attached hereto as Annex D.
c. Prior to the Closing, Informix shall have caused the New
Certificate of Designation to be filed with the Secretary of State of the
State of Delaware in accordance with the laws thereof.
d. On the Closing Date, Informix shall have delivered to
Xxxxxxxx an opinion of counsel reasonably satisfactory to Xxxxxxxx, dated
the Closing Date, to the effect that the offer and sale of the New
Preferred Shares hereunder do not require registration under the Securities
Act.
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e. Prior to the Closing, Informix shall have amended the Rights
Plan such that the transactions contemplated hereunder will not cause
Xxxxxxxx to be deemed an Acquiring Person within the meaning of, nor create
(other than to Xxxxxxxx) or trigger any rights under, the Rights Plan.
f. The Amendment shall have been duly executed and delivered by
Informix.
As used herein the term "Business Day" means any day on which banks in
the City of New York are open for business.
9. CONDITIONS PRECEDENT TO INFORMIX'S OBLIGATIONS. The obligations
of Informix hereunder are subject to the performance by Xxxxxxxx of its
obligations hereunder and to the satisfaction of the following additional
conditions precedent, unless expressly waived in writing by Informix:
a. On the Closing Date and on each Conversion Date, (i) the
representations and warranties made by Xxxxxxxx in this Agreement shall be
true and correct, and (ii) Xxxxxxxx shall have complied fully with all the
covenants and agreements in this Agreement; and Informix shall have
received on each such date a certificate of an appropriate officer of
Xxxxxxxx dated such date and to such effect.
b. On the Closing Date, Xxxxxxxx shall have delivered to
Informix a written certification of an appropriate officer of Xxxxxxxx
dated such date stating that Xxxxxxxx is not a U.S. Person.
c. On each Conversion Date, Xxxxxxxx shall have delivered to
Informix either (i) a written certification of an appropriate officer of
Xxxxxxxx dated such date stating that Xxxxxxxx is not a U.S. Person or (ii)
an opinion of counsel to the effect that an exemption from registration
under the Securities Act is available for the issuance of the shares of
Converted Stock, or (iii) the shares of Converted Stock have been
registered under the Securities Act.
d. The Amendment shall have been duly executed and delivered by
Xxxxxxxx.
10. FEES AND EXPENSES. Each of Xxxxxxxx and Informix agrees to pay
its own expenses incident to the performance of its obligations hereunder,
including, but not limited to the fees, expenses and disbursements of such
party's counsel, except as is otherwise expressly provided in this Agreement.
13
11. NON-PERFORMANCE.
If on the Closing Date, any Conversion Date, [or the Termination Date,
Informix shall fail to deliver the New Preferred Shares or Converted Stock to
Xxxxxxxx required to be delivered pursuant to this Agreement for any reason
other than the failure of any condition precedent to Informix's obligations
hereunder, then Informix shall:
(1) hold Xxxxxxxx harmless against any loss, claim or damage
(including without limitation, incidental and consequential damages)
arising from or as a result of such failure by Informix; and
(2) reimburse Xxxxxxxx for all of its reasonable out-of-pocket
expenses, including fees and disbursements of its counsel, incurred by
Xxxxxxxx in connection with this Agreement and the transactions
contemplated hereby;
PROVIDED, HOWEVER, that Informix shall then be under no further liability to
Xxxxxxxx except as provided in this Section 11 and Section 12 hereof.
12. INDEMNIFICATION.
a. INDEMNIFICATION OF XXXXXXXX. Informix hereby agrees to
indemnify Xxxxxxxx and each of its officers, directors, employees, agents
and affiliates and each person that controls (within the meaning of Section
20 of the Exchange Act) any of the foregoing persons (each a "Xxxxxxxx
Indemnified Party") against any claim, demand, action, liability, damages,
loss, cost or expense (including, without limitation, reasonable legal
fees) (a "Proceeding"), that it may incur in connection with any of the
transactions contemplated hereby arising out of or based upon:
(1) any untrue or alleged untrue statement of a material
fact by Informix or any of its affiliates or any person acting on its
or their behalf or omission or alleged omission to state any material
fact necessary in order to make the statements, in the light of the
circumstances under which they were made, not misleading by Informix
or any of its affiliates or any person acting on its or their behalf ;
(2) any of the representations or warranties made by
Informix herein being untrue or incorrect; or
(3) any breach or non-performance by Informix of any of its
covenants, agreements or obligations under this Agreement;
14
and Informix hereby agrees to reimburse each Xxxxxxxx Indemnified Party for
any reasonable legal or other expenses incurred by such Xxxxxxxx
Indemnified Party in investigating or defending any such Proceeding;
PROVIDED, HOWEVER, that the foregoing indemnity shall not apply to any
Proceeding to the extent that it arises out of or is based upon the gross
negligence or wilful misconduct of Xxxxxxxx in connection therewith.
b. INDEMNIFICATION OF INFORMIX. Xxxxxxxx hereby agrees to
indemnify Informix and each of its officers, directors, employees, agents
and affiliates and each person that controls (within the meaning of Section
20 of the Exchange Act) any of the foregoing persons (each an "Informix
Indemnified Party") against any Proceeding, that it may incur in connection
with any of the transactions contemplated hereby arising out of or based
upon:
(1) any untrue or alleged untrue statement of a material
fact by Xxxxxxxx or any of its affiliates or any person acting on its
or their behalf or omission or alleged omission to state any material
fact necessary in order to make the statements, in the light of the
circumstances under which they were made, not misleading by Xxxxxxxx
or any of its affiliates or any person acting on its or their behalf:
(2) any of the representations or warranties made by
Xxxxxxxx herein being untrue or incorrect; or
(3) any breach or non-performance by Xxxxxxxx of any of its
covenants, agreements or obligations under this Agreement;
and Xxxxxxxx hereby agrees to reimburse each Informix Indemnified Party for
any reasonable legal or other expenses incurred by such Informix
Indemnified Party in investigating or defending any such Proceeding;
PROVIDED, HOWEVER, that the foregoing indemnity shall not apply to any
Proceeding to the extent that it arises out of or is based upon the gross
negligence or wilful misconduct of Informix in connection therewith.
c. CONDUCT OF CLAIMS.
(1) Whenever a claim for indemnification shall arise under
this Section, the party seeking indemnification (the "Indemnified
Party"), shall notify the party from whom such indemnification is
sought (the "Indemnifying Party") in writing of the Proceeding and the
facts constituting the basis for such claim in reasonable detail;
15
(2) Upon delivery of such notice, such Indemnified Party
shall have a duty to take all reasonable steps to mitigate any losses,
liabilities, costs, charges and expenses relating to any such
Proceeding;
(3) Such Indemnifying Party shall have the right to retain
the counsel of its choice in connection with such Proceeding and to
participate at its own expense in the defense of any such Proceeding;
PROVIDED, HOWEVER, that counsel to the Indemnifying Party shall not
(except with the consent of the relevant Indemnified Party) also be
counsel to such Indemnified Party. In no event shall the Indemnifying
Party be liable for fees and expenses of more than one counsel (in
addition to any local counsel) separate from its own counsel for all
Indemnified Parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances; and
(4) No Indemnifying Party shall, without the prior written
consent of the Indemnified Parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry
of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which
indemnification could be sought under this Section unless such
settlement, compromise or consent (A) includes an unconditional
release of each Indemnified Party from all liability arising out of
such litigation, investigation, proceeding or claim and (B) does not
include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any Indemnified Party.
13. SURVIVAL OF THE REPRESENTATIONS, WARRANTIES, ETC. The respective
representations, warranties, and agreements made herein by or on behalf of the
parties hereto shall remain in full force and effect, regardless of any
investigation made by or on behalf of the other party to this Agreement or any
officer, director or employee of, or person controlling or under common control
with, such party and will survive delivery of and payment for the New Preferred
Shares and any Converted Stock issuable hereunder.
14. NOTICES. all communications hereunder shall be in writing, and
a. if sent to Xxxxxxxx, shall be delivered by hand, sent by
registered mail or transmitted and confirmed by facsimile to Xxxxxxxx at:
Xxxxxxxx International Limited
c/o Midland Bank Trust Corporation (Cayman) Limited
X.X. Xxx 0000, Xxxx Xxxxxx
00
Xxxxx Xxxxxx, Xxxxxx Xxxxxxx
Xxxxxxx Xxxx Indies
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
0000 Xxx Xxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
b. if sent to Informix, shall be delivered by hand, sent by
registered mail or transmitted and confirmed by facsimile to Informix at:
Informix Corporation
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Attention: Chief Financial Officer
and
General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
15. MISCELLANEOUS
a. This Agreement may be executed in one or more counterparts
and it is not necessary that signatures of all parties appear on the same
counterpart, but such counterparts together shall constitute but one and the
same agreement.
17
b. This Agreement shall inure to the benefit of and be binding
upon the parties hereto, their respective successors and assigns and, with
respect to Section 12 hereof, their respective officers, directors, employees,
agents, affiliates and controlling persons, and no other person shall have any
right or obligation hereunder. Informix may not assign this Agreement.
c. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of New York, and each of the
parties hereto hereby submits to the non-exclusive jurisdiction of any State or
Federal court in the Borough of Manhattan in the City and State of New York and
any court hearing any appeal therefrom, over any suit, action or proceeding
against it arising out of or based upon this Agreement (a "Related Proceeding").
Each of the parties hereto hereby waives any objection to any Related Proceeding
in such courts whether on the grounds of venue, residence or domicile or on the
ground that the Related Proceeding has been brought in an inconvenient forum.
d. The provisions of this Agreement are severable, and if any
clause or provision hereof shall be held invalid, illegal or unenforceable in
whole or in part, such invalidity or unenforceability shall not in any manner
affect any other clause or provision of this Agreement.
e. The headings of the sections of this document have been
inserted for convenience of reference only and shall not be deemed to be a part
of this Agreement.
f. This Agreement (including the terms and conditions of the
New Certificate of Designation relating to the New Preferred Shares), together
with the Subscription Agreement, constitutes the entire agreement and supersedes
all prior agreements and understandings, both written and oral, between the
parties hereto with respect to the subject matter of this Agreement and is not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder or under the terms of the term sheets between such parties.
Except as expressly provided herein or in the Amendment, each provision of the
Subscription Agreement remains in full force and effect.
g. The term "affiliate" is used herein as defined in Rule
144(a)(1) under the Securities Act.
16. TIME OF ESSENCE. Time shall be of the essence in this Agreement.
18
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement, all as of the day and year first above written.
INFORMIX CORPORATION
By: /s/Xxxxxx Xxxxxxxxx, Xx.
---------------------------------------------
Name: Xxxxxx Xxxxxxxxx, Xx.
Title: Chairman, President and Chief Executive Officer
XXXXXXXX INTERNATIONAL LIMITED
By: /s/Xxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chairman
19
Annex A
[Form of New Certificate of Designation]
CERTIFICATE OF DESIGNATION
OF
SERIES A-1 CONVERTIBLE PREFERRED STOCK
OF
INFORMIX CORPORATION
The undersigned, Xxxxxx Xxxxxxxxx, Xx. and Xxxx-Xxxx Dexmier, do hereby
certify:
1. That they are the duly elected and acting Chairman of the Board,
President and Chief Executive Officer and the Chief Financial Officer ,
respectively, of Informix Corporation, a Delaware corporation (together with its
successors the "Corporation").
2. That pursuant to the authority conferred upon the Board of Directors
by the Restated Certificate of Incorporation of the Corporation, the Board of
Directors adopted the following resolution creating the powers, designations,
preferences and other rights of a newly authorized series of 440,000 shares of
Preferred Stock designated as Series A-1 Convertible Preferred Stock as required
by Section 151 of the Delaware General Corporation Law:
RESOLVED, that pursuant to the authority granted to and vested in the Board
of Directors of the Corporation (the "Board of Directors") in accordance with
the provisions of the Corporation's Restated Certificate of Incorporation (the
"Certificate of Incorporation"), the Board of Directors hereby creates a new
series of Series A-1 Convertible Preferred Stock, par value $.01 per share, of
the Corporation and hereby states the designation and number of shares, and
fixes the relative rights, preferences and limitations thereof, as follows:
Series A-1 Convertible Preferred Stock:
SECTION 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series A-1 Convertible Preferred Stock" ("Series A-1 Preferred
Stock") and the number of shares constituting Series A-1 Preferred Stock shall
be 440,000. Such number of shares may be increased or decreased by resolution
of the Board of Directors, provided that no decrease shall reduce the number of
shares of Series A-1 Preferred Stock to a number less than the number of shares
then outstanding plus the number of shares reserved for issuance upon the
exercise of outstanding options, rights or warrants or upon the conversion of
any outstanding securities issued by the Corporation convertible into Series A-1
Preferred Stock.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the provisions of paragraph (B) below, no dividends shall
accrue or be payable in respect of the Series A-1 Preferred Stock.
(B) Notwithstanding the limitation of paragraph (A) above, commencing upon
the date of occurrence (a "Default Event Date") of a Default Event (as defined
below), the holders of the Series A-1 Preferred Stock shall be entitled to
receive, to the extent permitted by applicable law, in preference to the payment
of any dividend on any class or series of stock of the Corporation ranking
junior to the Series A-1 Preferred Stock, cumulative dividends ("Dividends") on
each share of Series A-1 Preferred Stock in an amount equal to, on an annualized
basis, $250.00 times fifteen percent (15%). Dividends shall accrue, whether or
not earned or declared, on each share of Series A-1 Preferred Stock from the
Default Event Date through the earlier to occur of (i) the date on which any
Default Event shall have been resolved, and (ii) the redemption or conversion
thereof in accordance with the terms hereof. Accrued Dividends on shares of
Series A-1 Preferred Stock shall be payable on the last day of each calendar
quarter (the "Dividend Payment Date") following a Default Event Date during
which a Default Event shall have occurred, and shall be paid in cash to the
holder of such shares within five (5) business days following the applicable
Dividend Payment Date by delivering immediately available funds to such holder
in accordance with such holder's wiring instructions. If, on any date,
Dividends on any outstanding shares of Series A-1 Preferred Stock are payable
and have not been paid with respect to all Dividend Payment Dates preceding such
date, the aggregate amount of such Dividends shall be fully paid before any
distribution, whether by way of dividend or otherwise, shall be declared, paid
or set aside with respect to any shares of stock of the Corporation ranking
junior to the Series A-1 Preferred Stock.
(C) A Default Event as used in this Certificate of Designation shall mean:
(i) the failure of a Registration Statement to be declared effective by the SEC
before the 180th calendar day following and excluding the date of a Registration
Request (all such capitalized terms as defined in that certain Subscription
Agreement of the Corporation dated August 12, 1997, as amended by Amendment No.1
thereto dated as of November 17, 1997 (the "Subscription Agreement); or (ii) the
failure to obtain the Required Consent (as defined below) within 90 calendar
days of the 19.9% Limit (as defined below) becoming effective; or (iii) the
failure of the Corporation to redeem in full any shares of outstanding Series
A-1 Preferred Stock which are Objecting Shares (as defined below) on or before
the date that is twenty (20) calendar days following completion of a
Non-Qualifying Transaction (as defined below). A Default Event shall be deemed
to have been resolved at such time as, in the case of clause (i), the
Registration Statement shall be declared effective by the SEC, or, in the case
of clause (ii), the Required Consent shall have been obtained, or, in the case
of clause (iii), the date on which the Corporation (or any Surviving Entity, as
defined below) shall redeem in full all shares of Series A-1 Preferred Stock (or
Similar Stock, as defined below) which are Objecting Shares, and in all cases,
all Dividends required under Section 2(B) above have been paid in full.
SECTION 3. VOTING RIGHTS.
21
(A) Subject to the provisions of paragraph (B) below, except as required
by applicable law or Section 12, the holders of shares of Series A-1 Preferred
Stock shall not be entitled to vote on any matter submitted to a vote of
stockholders of the Corporation and their consent shall not be required for
taking any corporate action.
(B) Notwithstanding the limitation set forth in paragraph (A) above, if
the Corporation shall be required to pay Dividends in accordance with Section 2
above and fails to make timely payment in full of all Dividends so required to
be paid, then the holders of shares of Series A-1 Preferred Stock shall be
entitled, voting as a separate class, to immediately elect and appoint to the
Board of Directors of the Corporation, and the Corporation shall otherwise take
appropriate action as necessary to permit the inclusion on the Board of, a
number of persons (not to be less than a minimum of one designee) designated by
the holders of the Series A-1 Preferred Stock such that, following such
election, such designees represent a percentage of the total members of the
Board of Directors (assuming no vacancies) that most nearly approximates the
percentage of the total number of then outstanding shares of Series A-1
Preferred Stock (calculated on an as-if-converted to Common Stock (as defined
below) basis plus the total number of then outstanding shares of Common Stock
into which shares of Series A-1 Preferred Stock have been converted, to the
total outstanding shares of the voting capital stock of the Corporation (also
calculated on an as-if-converted to Common Stock basis).
SECTION 4. CONVERSION.
(A) Subject to Section 4(C) and Section 4(D), a holder of shares of
Series A-1 Preferred Stock may, at any time after the date of issuance of such
shares and on or prior to the fifth calendar day prior to such date, if any, as
may have been fixed for the redemption thereof in any permitted call for
redemption pursuant to Section 11 below, by delivering to the Corporation
written notice ("Conversion Notice"), convert one or more shares of Series A-1
Preferred Stock into the number of shares of the Corporation's common stock (the
"Common Stock") equal to (i) $250.00 divided by (ii) the Conversion Price (as
defined in Section 4(E)). The Conversion Notice shall specify the number of
shares of Series A-1 Preferred Stock to be converted, the applicable Conversion
Price, the number of shares of Common Stock issuable on conversion (which shall
not be less than 8,000 shares of Series A-1 Preferred Stock, except if all
shares of Series A-1 Preferred Stock then outstanding are being converted to
Common Stock). From and after the date on which the Corporation received a
Conversion Notice from a holder of a share of Series A-1 Preferred Stock (or if
such date is not a business day in the State of California, the next succeeding
business day) (the "Conversion Date"), such share shall cease to be outstanding
and the converting holder shall be deemed the owner of the number of shares of
Common Stock into which such share of Series A-1 Preferred Stock was converted;
provided, however, that in the event of a notice of redemption of any shares of
Series A-1 Preferred Stock pursuant to Section 11 hereof, the right of the
holder to convert the Series A-1 Preferred Stock shall terminate as to the
number of shares designated for redemption at the close of business on the fifth
calendar day preceding the redemption date, unless default is made in payment of
the redemption price, in which event such right of the holder to convert any
rights of the holder under Sections 2 and 3 hereof shall continue until such
payment. The Corporation shall deliver
22
to such holder an uncertificated security evidencing such shares of Common Stock
through book-entry transfer within three business days following the Conversion
Date or, at the written request of the holder as specified in the Conversion
Notice, a physical stock certificate evidencing such shares within ten business
days following the Conversion Date (such date of delivery referred to as the
"Issue Date"). For purposes of the preceding sentence, the first business day
following the Conversion Date shall count as the first business day for delivery
of evidence of such shares of Common Stock. The Conversion Notice may be
delivered via facsimile transmission to Informix Corporation, attention: Chief
Financial Officer, telecopy no. (000) 000-0000.
On the Issue Date, the Corporation shall issue and cause to be delivered
(against delivery of the certificate representing the Series A-1 Preferred Stock
(the "Preferred Certificate")) to the registered holder thereof at such address
as such holder shall specify in the Conversion Notice a certificate or
certificates (including uncertificated securities) for the number of full shares
of Common Stock issuable upon the conversion, registered in such holder's name,
together with cash (if any) as provided in Section 6. Such certificate or
certificates shall be deemed to have been issued and any person so designated to
be named therein shall be deemed to have become a holder of record of such
shares as of such Conversion Date. If on such Issue Date the number of shares
of Series A-1 Preferred Stock to be delivered shall be less than the total
number of shares represented by the Preferred Certificate, there shall be issued
to the holder thereof or his assignee on such Issue Date a new Preferred
Certificate evidencing the remaining Series A-1 Preferred Stock.
(B) Subject to Section 4(C) and Section 4(D), each share of Series A-1
Preferred Stock shall automatically convert into Common Stock in accordance with
the terms hereof but without the delivery of a Conversion Notice on the date
that is 547 days excluding and following the date of issuance of such share (or
if such date is not a business day in the State of California, the next
succeeding business day) (the "Automatic Conversion Date"); provided, however,
that the Automatic Conversion Date shall be extended as provided in the
following circumstances: (I) if a Default Event identified in clauses (i) or
(ii) of Section 2(C) above shall have occurred and continues at the time that
such share of Series A-1 Preferred Stock would otherwise automatically convert
into Common Stock, then no such automatic conversion shall occur and the
Automatic Conversion Date shall be delayed for a period equal to 365 calendar
days following and excluding the date on which the Default Event shall have been
resolved pursuant to Section 2(C) hereof; (II) if a Default Event identifed in
clause (iii) of Section 2(C) above shall have occurred and continues at the
time that such share of Series A-1 Preferred Stock (or Similar Stock) would
otherwise automatically convert into Common Stock, then no such automatic
conversion shall occur and the Automatic Conversion Date shall be delayed for a
period equal to the number of days required for the resolution of such Default
Event; (III) if a Registration Request is made within 360 calendar days of the
Automatic Conversion Date for such share of Series A-1 Preferred Stock , then
such date shall be extended (even if no Default Event identified in clause (i)
of Section 2(C) shall have occurred) as necessary to ensure that the Automatic
Conversion Date is not less than 180 days from the effective date of the
requested Registration Statement; and (IV) if a Required Consent has not been
obtained within 180
23
calendar days of the Automatic Conversion Date for such share of Series A-1
Preferred Stock, then such date shall be extended (even if no Default Event
identified in clause (ii) of Section 2(C) shall have occurred) as necessary to
ensure that the Automatic Conversion Date is not less than 90 days from the date
that the Required Consent is obtained. From and after the Automatic Conversion
Date, such shares of Series A-1 Preferred Stock shall cease to be outstanding
and the converting holder shall be deemed the owner of the number of shares of
Common Stock into which such shares of Series A-1 Preferred Stock were
converted. The Corporation shall deliver to such holder a stock certificate
evidencing such shares of Common Stock within ten business days following the
Automatic Conversion Date. For the purpose of determining the applicable
Conversion Price under Section 4(E), the Automatic Conversion Date shall be
deemed the Conversion Date.
(C) If, either at the time that the Corporation received a Conversion
Notice or on the Automatic Conversion Date, the aggregate number of shares of
Common Stock issuable pursuant to such Conversion Notice and all other
Conversion Notices received at that time (the "Subject Conversion Notices"),
when added to the aggregate number of shares of Common Stock (a) previously
issued pursuant to the conversion of shares of Series A-1 Preferred Stock and
(b) issuable upon conversion of all remaining outstanding shares of Series A-1
Preferred Stock (determining such number as if such Series A-1 Preferred Stock
were converted as of the Conversion Date relating to such Conversion Notice),
including Series A-1 Preferred Stock issuable (i) upon exercise by the
Corporation of its right to require Xxxxxxxx International Limited to purchase
additional shares of Series A-1 Preferred and (ii) upon exercise by Xxxxxxxx of
its right to require the Company to issue and sell to Xxxxxxxx additional shares
of Series A-1 Preferred, in each case in accordance with the terms of the
Subscription Agreement, would exceed the number of shares equal to 19.9% of the
total number of shares of Common Stock outstanding (adjusted to reflect any
split, subdivision, combination, or consolidation of the Common Stock, whether
by reclassification, distribution of a dividend with respect to the outstanding
Common Stock payable in shares of Common Stock, or otherwise, or any
recapitalization of the Common Stock) on August 12, 1997 (the "19.9% Limit") and
such circumstance would require the approval of the holders of the Common Stock
pursuant to the listing requirements or rules of the Nasdaq National Market (or
such stock exchange or other interdealer quotation system on which the Common
Stock is then listed or quoted), then the number of shares of Series A-1
Preferred Stock identified in the Subject Conversion Notices that, if converted
into shares of Common Stock, would equal or exceed the 19.9% Limit (the "Excess
Preferred Shares"), shall not be converted unless and until the stockholder
approval referred to in Section 5 (the "Required Consent") is obtained or is no
longer required. The Excess Preferred Shares will be allocated among the
holders delivering Subject Conversion Notices on a PRO RATA basis based on the
relative number of shares of Series A-1 Preferred Stock identified in each such
Subject Conversion Notice. Any Excess Preferred Shares shall not be converted
into shares of Common Stock until the later of the date on which the Required
Consent is obtained and the Corporation received a subsequent Conversion Notice
with respect thereto.
24
(D) Shares of Series A-1 Preferred Stock shall be convertible only into
the Maximum Number of shares of Common Stock. The "Maximum Number" is equal to
the sum of 13,674,500 plus the Convertible Number. The "Convertible Number" is
initially zero and thereafter may be increased upon expiration of a 65 day
period (the "Notice Period") after the holder delivers a notice (a"65 Day
Notice") to the Issuer designating an aggregate number of shares of Common Stock
in excess of 13,674,500 which will become convertible. A 65 Day Notice may be
given at any time. If the initial 65 Day Notice does not designate all of the
shares of Common Stock then issuable upon conversion to such holder under the
Series A-1 Preferred Stock, additional shares of the Series A-1 Preferred Stock
will become convertible for some or all of the remaining shares of Common Stock
upon delivery of one or more 65 Day Notices increasing the Convertible Number
after a further Notice Period. From time to time following the Notice Period,
shares of the Series A-1 Preferred Stock may be converted on any Business Day
for any quantity of shares of Common Stock, such that the aggregate number of
shares of Common Stock issued hereunder is less than or equal to the Maximum
Number.
(E) "Conversion Price" means 101% of the average of the daily
volume-weighted per share average prices as reported by Bloomberg, L.P. (or
otherwise as agreed mutually between the Corporation and the holder of record of
Series A-1 Preferred Stock delivering a Conversion Notice) of the Common Stock
on the Nasdaq National Market (or such other national securities exchange which
the Common Stock is then listed) during the 30 Trading Days (as defined below)
ending and excluding five Trading Days before and excluding the Conversion Date
(the "Pricing Period"); provided, however, that in no event shall the Conversion
Price be greater than 105% of the average of the daily volume-weighted per share
average prices as reported by Bloomberg, L.P. (or otherwise as agreed mutually
between the Corporation and the holder of record of Series A-1 Preferred Stock
delivering a Conversion Notice) of the Common Stock on the Nasdaq National
Market (or such other national securities exchange on which the Common Stock is
then listed) during the first five Trading Days of the Pricing Period; and
provided further, that in no event shall the Conversion Price be greater than
$12.00 per share (the "Conversion Ceiling Price"). The term "Trading Day" shall
mean any trading day on the Nasdaq National Market (or such other national
securities exchange on which the Common Stock is then principally listed).
SECTION 5. STOCKHOLDER APPROVAL. In the event there are Excess Preferred
Shares as described in Section 4(C), the Corporation shall promptly take all
actions reasonably necessary to obtain the required consent, including causing
its Board of Directors to call a special meeting of stockholders and recommend
such approval.
SECTION 6. FRACTIONAL SHARES. Fractional shares of Common Stock shall not
be issued upon conversion of shares of Series A-1 Preferred Stock. In lieu of
issuance of a fractional share, the Corporation shall pay to the holder of the
share of Series A-1 Preferred Stock being converted a cash amount equal to such
fraction multiplied by the Conversion Price.
SECTION 7. RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The Corporation
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock,
25
solely for the purpose of effecting the conversion of the shares of the
Series A-1 Preferred Stock, such number of its shares of Common Stock as shall
from time to time be sufficient to effect the conversion of all outstanding
shares of the Series A-1 Preferred Stock.
SECTION 8. LIQUIDATION, DISSOLUTION OR WINDING UP. In the event of any
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, before any payment or distribution of the assets of the Corporation
(whether capital or surplus) shall be made to or set apart for the holders of
Common Stock or any other series or class or classes of stock of the Corporation
ranking junior to the Series A-1 Preferred Stock upon liquidation, dissolution
or winding up, the holders of the shares of Series A-1 Preferred Stock shall be
entitled to receive $250.00 per share plus the amount of any accrued and unpaid
Dividends (the "Liquidation Preference"). If, upon any liquidation, dissolution
or winding up of the Corporation, the assets of the Corporation, or proceeds
thereof, distributable among the holders of the shares of Series A-1 Preferred
Stock shall be insufficient to pay in full the preferential amount aforesaid and
liquidating payments on any other shares of stock ranking, as to liquidation,
dissolution or winding up, on a parity with the Series A-1 Preferred Stock, if
any, then such assets, or the proceeds thereof, shall be distributed among the
holders of shares of Series A-1 Preferred Stock and any such other stock ratably
in accordance with the respective amounts which would be payable on such shares
of Series A-1 Preferred Stock and any such other stock if all amounts payable
thereon were paid in full.
SECTION 9. CONSOLIDATION, MERGER, ETC. In case the Corporation shall be a
party to any transaction providing for (i) any acquisition of the Corporation by
means of merger or other form of corporate reorganization in which outstanding
shares of the Corporation are exchanged for securities or other consideration
issued, or caused to be issued, by the acquiring corporation or its subsidiary
or (ii) a sale of all or substantially all of the assets of the Corporation or
(iii) any other transaction or series of related transactions by the Corporation
in which in excess of 50% of the Corporation's voting power is transferred to a
single entity or group acting in concert (each of the foregoing being referred
to as a "Transaction"), each share of Series A-1 Preferred Stock which is not
converted by the holder into the right to receive Common Stock of the
Corporation prior to such Transaction shall thereafter be exchangeable at the
election of the holder of the Series A-1 Preferred Stock for an equal number of
shares of preferred stock of the Surviving Entity (the "Similar Stock"), which
preferred stock shall have terms substantially identical to the terms provided
in this Certificate of Designation, including without limitation, rights
specified in Sections 2 and 3 hereof and be convertible, at the holder's option,
into shares of any class of publicly traded common stock of the Surviving
Entity. For purposes hereof, "Surviving Entity" shall mean an acquiror,
purchaser or transferee contemplated by clauses (i), (ii) and (iii),
respectively, of the immediately preceding sentence. The Corporation shall not
be a party to any Transaction unless the terms of such Transaction are
consistent with the provisions of this Section 9 and it shall not consent or
agree to the occurrence of any Transaction until the Corporation has entered
into an agreement with the successor or purchasing entity, as the case may be,
for the benefit of the holders of the Series A-1
26
Preferred Stock which will contain provisions ensuring the benefits contemplated
by this Section 9 to the holders of the Series A-1 Preferred Stock which remains
outstanding after such Transaction. The provisions of this Section 9 shall
apply similarly to successive Transactions.
SECTION 10. STOCK DIVIDENDS, STOCK SPLITS, ETC. In case the Corporation
shall after the date of first issuance of shares of Series A-1 Preferred Stock
(A) pay a dividend or make a distribution on its Common Stock in shares of its
Common Stock, (B) subdivide its outstanding Common Stock into a greater number
of shares, or (C) combine its outstanding Common Stock into a smaller number of
shares, which becomes effective on a Trading Day which is included in the
calculation of the Conversion Price, then the average of the daily
volume-weighted per share average prices of the Common Stock for the period from
the first Trading Day included in the calculation of the Conversion Price to
(but not including) the effective date of such event (the "Adjustable Average
Price") and the Conversion Ceiling Price will be proportionately adjusted to
reflect such event in calculating the Conversion Price. If the event in
question causes an increase in the total number of outstanding Common Stock,
then the Adjustable Average Price and the Conversion Ceiling Price will be
proportionately decreased. If the event in question causes a decrease in the
total number of outstanding Common Stock, then the Adjustable Average Price and
the Conversion Ceiling Price will be proportionately increased. In case the
Corporation shall after the date of the first issuance of the Series A-1
Preferred Stock issue any shares of capital stock by reclassification of its
Common Stock (excluding any transaction as to which Section 9 applies), each
share of Series A-1 Preferred Stock shall thereafter be convertible into the
kind and in the proportion of shares of stock and other securities and property
("Reclassification Consideration") receivable by a holder of one share of Common
Stock immediately prior to the record date or effective date of such
reclassification, as appropriate, and the Conversion Price in such circumstances
shall be determined based upon weighted prices of the Reclassification
Consideration. In the event the market price of any portion of the
Reclassification Consideration cannot be determined in a manner reasonably
consistent with Section 4(E), the market value of such portion of the
Reclassification Consideration shall be determined in good faith by the
Corporation's Board of Directors. In addition, the Conversion Price and the
Conversion Ceiling Price following such a reclassification shall be adjusted as
appropriate in a manner consistent with the first three sentences of this
Section 10. Adjustments made pursuant to this Section 10 shall become effective
immediately after the close of business on the record date in the case of a
dividend or distribution and shall become effective immediately after the close
of business on the record date in the case of subdivision, combination or
reclassification.
SECTION 11. REDEMPTION.
(A) Following a Transaction as a result of which the Series A-1 Preferred
Stock would be convertible into (I) a class of common stock with (x) an
aggregate market capitalization of less than $1.3 billion or (y) an average
weekly traded value as reported by Bloomberg, L.P. over the preceding six months
of less than $285 million, or (II) consideration other than shares of publicly
traded common stock of the Surviving Entity (other than cash in lieu of
fractional amounts or in connection with the exercise of statutory appraisal
rights) (either (I) or (II), a "Non-Qualifying Transaction"), and provided that
the Corporation shall have legally available
27
funds therefor, the Corporation shall have the right, at the election of its
Board of Directors upon satisfaction of the terms and conditions stated herein,
to redeem any or all Objecting Shares (as defined below).
(B) Upon the occurrence of a public announcement with respect to a
Transaction, at least forty-five (45) calendar days prior to the completion of
the Transaction, the Company shall provide written notice thereof (a
"Transaction Notice") to the holders of the Series A-1 Preferred Stock, stating
the expected completion date of the Transaction and whether such Transaction
will be a Non-Qualifying Transaction. In the event such notice provides that
the Transaction is not a Non-Qualifying Transaction, then the holders shall be
bound by the provisions of this Certificate and the Corporation shall have no
right of redemption herein. In the event the Transaction is a Non-Qualifying
Transaction and if the redemption right is exercised, then the Transaction
Notice or other notice concerning redemption shall be sent in accordance with
and include the information set forth in paragraph (C) below. Not later than
ten (10) calendar days prior to the announced completion date of the
Non-Qualifying Transaction, each holder of the Series A-1 Preferred Stock shall
respond in writing to the Corporation indicating whether the holder objects to
the Non-Qualifying Transaction. Any shares of Series A-1 Preferred Stock (and
any shares of Similar Stock into which such shares are converted in a
Non-Qualifying Transaction) as to which the holder thereof has provided a timely
objection in accordance with the preceding sentence shall be referred to as
"Objecting Shares" for purposes of this Section 11.
(C) The redemption price for each share of Series A-1 Preferred Stock
shall be equal to the Liquidation Preference, and may be paid only out of funds
legally available therefor. Redemption of less than all of the then
outstanding shares of Series A-1 Preferred Stock shall be pro rata among the
holders of the Series A-1 Preferred Stock (as to the number of shares of Series
A-1 Preferred Stock held on the date of the notice of redemption). Less than
all of the Series A-1 Preferred Stock permitted to be redeemed hereunder may not
be redeemed until all Dividends, if any, accrued and unpaid on Series A-1
Preferred outstanding shall have been paid. At least twenty (20) calendar days'
previous notice by first class mail, postage prepaid, shall be given to the
holders of record of the Series A-1 Preferred Stock for any permitted
redemption, such notice to be addressed to each holder at the address shown in
the Corporation's records and which shall specify the date of redemption, the
number of shares of the holder to be redeemed and the date at which the
conversion rights provided hereunder terminate. On or after the date of
redemption as specified in such notice, each holder shall surrender such
holder's certificate for the number of shares of Series A-1 Preferred Stock to
be redeemed as stated in the notice (except that such number of shares shall be
reduced by the number of shares of Series A-1 Preferred Stock which have been
converted pursuant to the provisions of Section 4 above between the date of the
notice and the date on which conversion rights terminate) to the Corporation at
the place specified in the notice. If less than all of the shares represented
by such certificates are redeemed, a new certificate shall forthwith be issued
for the unredeemed shares. Provided such notice is duly given, and provided
that on the redemption date specified there shall be a source of funds legally
available for such redemption and funds necessary for the redemption shall have
been paid in immediately available funds in an account specified by the Holder,
then all rights
28
with respect to such shares shall, after the specified redemption date,
terminate, whether or not said certificates have been surrendered, excepting
only in the latter instance the right of the holder to receive the redemption
price thereof, without interest, upon such surrender. At least ten (10) days
prior to the date of redemption, the Corporation shall deposit the redemption
price of all shares of Series A-1 Preferred Stock designated for redemption in
said notice and not yet redeemed with a bank or trust company having aggregate
capital and surplus in excess of $100,000,000 as a trust fund for the benefit of
the respective holders of the shares of Series A-1 Preferred Stock designated
for redemption and not yet redeemed.
SECTION 12. AMENDMENT. So long as any shares of Series A-1 Preferred
Stock are outstanding, the Corporation shall not, without first obtaining the
approval by vote or written consent, in the manner provided by law, of the
holders of at least a majority of the total number of shares of Series A-1
Preferred Stock outstanding, voting separately as a series, amend or repeal any
provision of, or add any provision to, the Corporation's Certificate of
Incorporation if such action would adversely affect the preferences, rights,
privileges or powers of, or the restrictions provided for the benefit of, the
Series A-1 Preferred Stock.
SECTION 13. REACQUIRED SHARES. Any shares of Series A-1 Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
preferred stock of the Corporation and may be reissued as part of a new series
of preferred stock subject to the conditions and restrictions on issuance set
forth herein, in the Certificate of Incorporation, or in any other Certificate
of Designation creating a series of preferred stock of the Corporation or any
similar stock or as otherwise required by applicable law.
SECTION 14. RANK.
(A) With respect to liquidation preferences and payment of dividends, the
Series A-1 Preferred Stock shall rank senior to all other existing capital stock
of the Corporation and shall rank senior to all series of any class of the
Corporation's capital stock issued after the date of the filing of this
Certificate of Designation.
(B) So long as any shares of the Series A-1 Preferred Stock are
outstanding, no Common Stock nor any other such stock of the Corporation ranking
junior to the Series A-1 Preferred Stock will be redeemed, purchased or
otherwise acquired for any consideration by the Corporation (except by
conversion into or exchange for stock of the Corporation ranking junior to the
Series A-1 Preferred Stock and except pursuant to restricted stock purchase or
similar agreements providing for the Company's repurchase of shares of Common
Stock at their original cost in connection with termination of employment)
unless, in each case the Corporation offers to redeem all outstanding shares of
the Series A-1 Preferred Stock on substantially the same terms (provided that
the redemption price per share shall not be less than the Liquidation
Preference).
29
IN WITNESS WHEREOF, this Certificate of Designation is executed on behalf
of the Corporation by the Chairman of the Board, President and Chief Executive
Officer of the Corporation and attested by its Chief Financial Officer this 17th
day of November, 1997.
------------------------------------
Xxxxxx Xxxxxxxxx, Xx.
Chairman of the Board, President and
Chief Executive Officer
Attest:
------------------------------------
Jan-Yves Dexmier
Chief Financial Officer
30
Annex B
FORM OF DELIVERY NOTICE
(To Be Executed Upon Delivery of New Preferred Shares)
Xxxxxxxx International Limited
c/o Midland Bank Trust Corporation (Cayman) Limited
X.X. Xxx 0000, Xxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxx Xxxxxxx
British West Indies
RE: EXCHANGE AGREEMENT (THE "AGREEMENT") DATED NOVEMBER 17, 1997 BY AND
BETWEEN XXXXXXXX INTERNATIONAL LIMITED ("XXXXXXXX") AND INFORMIX
CORPORATION ("INFORMIX").
Ladies and Gentlemen:
Attached are the copies of the originals of the certificates representing
the New Preferred Shares and our legal opinion relating to the transactions
contemplated by the Agreement. We have the executed originals of these
documents. We will send these documents by overnight courier to the following
address:
Xxxxxxxx International Limited
c/o Midland Bank Trust Corporation (Cayman) Limited
X.X. Xxx 0000, Xxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxx Xxxxxxx
Xxxxxxx Xxxx Indies
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Capitalized terms not otherwise defined in this letter have the meanings
set forth in the Agreement.
Very truly yours,
XXXXXX XXXXXXX XXXXXXXX & XXXXXX
Professional Corporation
31
Annex C
DISCLOSURE SCHEDULE
No exceptions.
32
Annex D
[Form of opinion of counsel to Informix]
November 17, 1997
Xxxxxxxx International Limited
c/o Midland Bank Trust Corporation (Cayman) Limited
X.X. Xxx 0000, Xxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxx Xxxxxxx
British West Indies
Ladies and Gentlemen:
Reference is made to the Exchange Agreement (the "Exchange Agreement")
dated November 17, 1997 between Informix Corporation, a Delaware corporation
(the "Company"), and Xxxxxxxx International Limited, a Cayman Islands company
("Xxxxxxxx"), and Amendment No. 1 to Subscription Agreement, dated as of
November 17, 1997 (the "Amendment"), between the Company and Xxxxxxxx. The
Exchange Agreement provides for the exchange of the Old Preferred Shares for the
New Preferred Shares (the "Exchange"), and the Amendment effects certain
amendments to the Subscription Agreement, dated August 12, 1997, complete with
all listed annexes thereto, between Informix and Xxxxxxxx pursuant to which
Xxxxxxxx purchased the Old Preferred Shares (the "Subscription Agreement"). The
Exchange Agreement and the Amendment are referred to collectively herein as the
"Agreements." Unless the context otherwise requires, all capitalized terms used
herein have the meanings ascribed to them in the Exchange Agreement or the
Subscription Agreement, as amended.
We have acted as counsel for the Company in connection with the negotiation
of the Agreements and the Exchange. As such counsel, we have made such legal
and factual examinations and inquiries as we have deemed advisable or necessary
for the purpose of rendering this opinion. In addition, we have examined
originals, certified copies or copies otherwise identified to us as being true
copies of the following:
(a) the Restated Certificate of Incorporation of the Company, as amended
to date, including the Certificate of Designation of Series A Convertible
Preferred Stock (the "Certificate of Designation") filed with the Secretary of
State of the State of Delaware on August 12, 1997 and the Certificate of
Designation of Series A-1 Convertible Preferred Stock (the "New Certificate of
Designation"), as in effect on the date hereof (the "Certificate of
Incorporation");
(b) the Bylaws of the Company, as in effect on the date hereof (the
"Bylaws");
33
(c) Resolutions of the Board of Directors relating to the transactions
contemplated by the Agreements;
(d) the Agreements and the other documents delivered by the Company in
connection with the Closing;
(e) a certificate as of a recent date of the Secretary of State of the
State of Delaware addressing the corporate good standing of the Company;
(f) such other instruments, corporate records, certificates, and other
documents as we have deemed necessary as a basis for the opinions hereinafter
expressed.
In rendering this opinion, with your permission, we have assumed (i) the
authenticity of original documents and the genuineness of all signatures; (ii)
the conformity to the originals of all documents submitted to us as copies;
(iii) the truth, accuracy, and completeness of the factual matters,
representations, and warranties contained in the records, documents,
instruments, and certificates we have reviewed as of their stated dates and as
of the date hereof; (iv) the legal capacity of natural persons; (v) except as
specifically set forth in the opinions contained herein, the due authorization,
execution, and delivery on behalf of the respective parties thereto of documents
referred to herein and the legal, valid, and binding effect thereof on such
parties (other than the Company); and (vi) the absence of any evidence extrinsic
to the provisions of the written agreements between the parties that the parties
intended a meaning contrary to that expressed by those provisions. In addition,
we have assumed that the representations and warranties as to factual matters
made by the Company in the Exchange Agreement and pursuant thereto are true,
correct, and complete.
As used in this opinion, the expression "to our knowledge," "known to us,"
or similar language with reference to matters of fact means that, after an
examination of documents, including, without limitation, the Agreements, made
available to us by the Company, and after inquiries of officers of the Company,
but without any further independent factual investigation, we find no reason to
believe that the opinions expressed herein are factually incorrect. Further,
the expression "to our knowledge," "known to us," or similar language with
reference to matters of fact refers to the current actual knowledge of attorneys
of this firm who have worked on matters for the Company in connection with the
Agreements. Except to the extent expressly set forth herein or as we otherwise
believe to be necessary to our opinion, we have not undertaken any independent
investigation to determine the existence or absence of any fact, and no
inference as to our knowledge of the existence or absence of any fact should be
drawn from our representation of the Company or our rendering of the opinions
set forth below.
For purposes of this opinion, we have assumed that Xxxxxxxx has all
requisite power and authority and has taken any and all necessary corporate or
partnership action to execute and deliver the Agreements, and we have assumed
that the representations and warranties made by Xxxxxxxx in the Agreements and
pursuant thereto are true, correct, and complete.
34
The opinions hereinafter expressed are subject to the following
exceptions, qualifications, and assumptions:
(a) We are members of the Bar of the State of California, and we express
no opinion as to any matter relating to the laws of any jurisdiction other than
the federal law of the United States of America, the laws of the State of
California, and the General Corporation Law of the State of Delaware;
(b) We express no opinion as to the effect of (i) bankruptcy, insolvency,
reorganization, arrangement, fraudulent transfer, moratorium or similar laws
relating to or affecting the rights of creditors and (ii) general principles of
equity, including, without limitation, concepts of materiality, reasonableness,
good faith and fair dealing, the exercise of judicial discretion, and the
possible unavailability of specific performance or injunctive relief, regardless
of whether considered in a proceeding in equity or at law;
(c) We express no opinion as to the choice of law provision contained in
the Agreements. Our opinions set forth herein relating to the Agreements assume
that the laws of the State of New York are identical to the laws of the State of
California;
(d) We express no opinion as to compliance with the anti-fraud provisions
of applicable securities laws;
(e) We express no opinion as to compliance with the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended;
(f) We express no opinion as to the enforceability of the indemnification
provisions of Section 11 or Section 12 of the Exchange Agreement to the extent
the provisions thereof may be subject to limitations of public policy and the
effect of applicable statutes and judicial decisions;
(g) Our opinions in paragraphs 2, 3 and 6 below are subject to the
stockholder approval requirements specified in Sections 5 and 7 of the New
Certificate of Designation; and
(h) Our opinion in paragraph 5 below is intended to express our opinion
that the execution, delivery, and performance by the Company of the Agreements
is neither prohibited by, nor does it subject the Company to, a fine, penalty or
other sanction that would be materially adverse to the Company under any law,
rule, or regulation of the State of California or United States federal law that
a lawyer in the State of California exercising customary professional diligence
would reasonably recognize to be applicable to the Company.
Based upon the foregoing and having regard to legal considerations that we
deem relevant, and subject to the qualifications, exceptions, limitations and
assumptions set forth herein, we are of the opinion that:
35
1. The Company is a corporation duly organized and validly existing
under, and by virtue of, the laws of the State of Delaware and is in good
standing under such laws.
2. All corporate action on the part of the Company, its directors and its
stockholders necessary for the authorization, execution, and delivery of the
Agreements and the authorization and delivery of the New Preferred Shares in
connection with the Exchange and the amendment of the Warrant pursuant to the
Amendment has been taken. The Agreements have been duly and validly executed
and delivered by the Company and constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms.
3. The Company has all requisite legal and corporate power to execute and
deliver the Agreements, to issue the New Preferred Shares and amend the Warrant
pursuant to the Amendment, to issue the Warrant Preferred Shares, to issue the
Common Stock issuable upon conversion of the New Preferred Shares and upon
conversion of the Warrant Preferred Shares, and to carry out and perform its
obligations under the terms of the Agreements and the New Certificate of
Designation.
4. No consent, approval, authorization of, order, or designation,
declaration, or filing with any governmental authority on the part of the
Company is required in connection with the valid execution and delivery of the
Agreements, the offer or issuance of the New Preferred Shares in connection with
the Exchange and the amendment of the Warrant pursuant to the Amendment, or the
performance of the Company's obligations under the New Certificate of
Designation, except (i) qualification (or taking such action as may be necessary
to secure an exemption from qualification, if available) under the California
Corporate Securities Law of 1968, as amended, and other applicable blue sky laws
(but excluding jurisdictions outside of the United States) of the offer and
issuance of the New Preferred Shares and the amendment of the Warrant and (ii)
the filing of a Current Report on Form 8-K within the time period prescribed by
such report. Our opinion herein is otherwise subject to the timely and proper
completion of all filings and other actions contemplated herein where such
filings and actions are to be undertaken on or after the date hereof.
5. The execution, delivery, and performance of and compliance with the
terms of the Agreements and the New Certificate of Designation do not violate,
breach or constitute a default (or an event which with the giving of notice or
the lapse of time or both would be reasonably likely to constitute a default)
under (i) the Certificate of Incorporation or the Bylaws of the Company or any
of its subsidiaries or any certificate of designation relating to any securities
of the Company or any of its subsidiaries, (ii) to our knowledge, any decree,
judgment, order, law, treaty, rule, regulation, or determination of any court,
governmental agency or body, or arbitrator having jurisdiction over the Company
or any of its subsidiaries or any of their respective properties or assets,
(iii) any rule of the National Association of Securities Dealers, Inc.
applicable to the Company or the transactions contemplated by the Agreement, or
(iv) any bond, debenture, note or any other evidence of indebtedness, or any
agreement, stock option, or other similar plan, indenture, lease, mortgage, deed
of trust or other instrument filed as an exhibit to the Company's periodic
filings with the Securities and Exchange Commission (the "Commis-
36
sion"), including any documents or agreements the Company has advised us it
intends to file on November 18, 1997.
6. The Company has validly reserved 160,000 shares of Series A-1
Preferred Stock and 13,000,000 shares of Common Stock for issuance upon
conversion of the New Preferred Shares. When issued to Xxxxxxxx against payment
therefor in accordance with the terms of the Exchange Agreement, the Amendment
and the New Certificate of Designation, each share of Series A-1 Preferred Stock
and each share of Converted Stock will be duly and validly authorized, and duly
and validly issued, fully paid, and nonassessable and will be free and clear of
any security interests, liens, claims, encumbrances, or preemptive or similar
rights contained in the Certificate of Incorporation or the Bylaws, except as
specifically provided in the Agreements or the New Certificate of Designation;
PROVIDED, HOWEVER, that the New Preferred Shares and the shares of Common Stock
issuable upon conversion of the New Preferred Shares may be subject to
restrictions on transfer under state and/or federal securities laws.
7. The Company's Common Stock is currently listed for trading on the
Nasdaq National Market.
8. To our knowledge, there are no actions, suits, proceedings, or
investigations pending against the Company or its properties before any court or
governmental agency which could reasonably be expected to materially affect the
execution by the Company of the Agreements or the performance of its obligations
thereunder.
9. The offer and issuance of the New Preferred Shares in connection with
the Exchange and the amendment of the Warrant pursuant to the Amendment in
conformity with the terms of the Agreements constitute transactions exempt from
the registration requirements of Section 5 of the Securities Act of 1933, as
amended, it being understood that we do not express any opinion as to any
subsequent resale of the New Preferred Shares, as to the issuance of the Warrant
Preferred Shares or as to the issuance of Common Stock upon the conversion of
the New Preferred Shares or the Warrant Preferred Shares.
10. To our knowledge, when issued to Xxxxxxxx against payment therefor in
accordance with the terms of the Agreements and the New Certificate of
Designation, the Warrant (as amended pursuant to the Amendment) and each share
of Series A-1 Preferred Stock and Converted Stock will not have been issued in
violation of any preemptive or other similar rights of the holders of any
securities of the Company.
This opinion is furnished to Xxxxxxxx as of the date hereof solely for its
benefit in connection with the transactions contemplated by the Agreements and
may not be relied upon by any other person or for any other purpose without our
prior written consent.
Sincerely,
WILSON, SONSINI, XXXXXXXX & XXXXXX
Professional Corporation
37
Annex E
PROVIDED FURTHER that no Xxxxxxxx Party (as defined below) shall be deemed an
"Acquiring Person" as a result of its being the Beneficial Owner of any
securities (any such securities, "Xxxxxxxx Securities") issued or issuable
pursuant to the [Subscription Agreement] (including the exhibits that are a part
thereof, and in particular including any Common Shares which have been or may be
issued upon conversion of shares of preferred stock issued thereunder) dated as
of August __, 1997 between the Company and Xxxxxxxx. A "Xxxxxxxx Party" shall
include (i) Xxxxxxxx International Limited, a company organized under the laws
of the Cayman Islands ("Xxxxxxxx"), Xxxxxxxx Asset Management, Inc., Polaris
Fund, L.P., and The Xxxxxxxx Fund, L.P., (ii) any Affiliate of Xxxxxxxx, (iii)
any creditor of Xxxxxxxx who acquires Xxxxxxxx Securities upon the exercise of
creditor rights in connection with a bona fide credit arrangement, and (iv) any
other person who acquires Xxxxxxxx Securities provided that such person has
stated or intends to state in a timely fashion in a filing pursuant to
Regulation 13D-G under the Securities Exchange Act of 1934, as amended, or any
successor provision thereto, that such person has acquired such securities in
the ordinary course of business and not with the purpose or effect of changing
or influencing control of Informix, nor in connection with or as a participant
in any transaction having such purpose or effect, including any transaction
subject to Rule 13d-3(b).
38
