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CONFORMED COPY
STOCKHOLDER AGREEMENT
AMONG
MISYS PLC
KIRSTY, INC.
MOXIE ACQUISITION CORP.
AND
THE XXX X. AND XXXXXXX X. XXXXXXXXX
CHARITABLE REMAINDER TRUST
Dated as of December 14, 1998
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CONFORMED COPY
STOCKHOLDER AGREEMENT
STOCKHOLDER AGREEMENT dated as of December 14, 1998, among MISYS
PLC, a public limited company incorporated under the laws of England ("Parent"),
KIRSTY, INC., a Delaware corporation and indirect wholly owned subsidiary of
Parent ("US Parent"), MOXIE ACQUISITION CORP., a Delaware corporation and direct
wholly owned subsidiary of US Parent ("Purchaser") and the XXX X. AND XXXXXXX X.
XXXXXXXXX CHARITABLE REMAINDER TRUST (the "Stockholder").
WHEREAS, Parent, US Parent, Purchaser and C-ATS Software Inc., a
Delaware corporation (the "Company"), propose to enter into an Agreement and
Plan of Merger dated as of the date hereof (as the same may be amended or
supplemented, the "Merger Agreement") providing for (i) the making of a cash
tender offer (as such offer may be amended from time to time as permitted under
the Merger Agreement, the "Offer") by Purchaser for all of the outstanding
shares of common stock, par value $0.001 per share, of the Company (the "Common
Stock") at a price of $7.50 per share (the "Offer Price"); and (ii) the merger
of Purchaser with and into the Company (the "Merger"), upon the terms and
subject to the conditions set forth in the Merger Agreement (the price per share
to be received in the Merger shall hereinafter be referred to as the "Merger
Consideration"); and
WHEREAS, the Stockholder owns the number of shares of Common Stock
(and the number of options to purchase shares of Common Stock) set forth
opposite its name on Schedule A attached hereto (such shares of Common Stock,
together with any other shares of capital stock of the Company acquired by the
Stockholder after the date hereof and during the term of this Agreement
(including, without limitation, through the exercise of any stock options,
warrants or similar instruments (including those stock options set forth on
Schedule A)), being collectively referred to herein as the "Subject Shares");
WHEREAS, as an essential condition and inducement to their
willingness to enter into the Merger Agreement, Parent, US Parent and Purchaser
have requested that the Stockholder enter into this Agreement, and the
Stockholder has agreed to do so; and
WHEREAS, capitalized terms used herein without definition shall have
the respective meanings specified therefor in the Merger Agreement.
NOW, THEREFORE, to induce Parent, US Parent and Purchaser to enter
into, and in consideration of their entering into, the Merger Agreement, and in
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consideration of the premises and the representations, warranties and agreements
contained herein, the parties agree as follows:
1. Representations and Warranties. (a) Of the Stockholder. The
Stockholder hereby represents and warrants to Parent, US Parent and Purchaser as
of the date hereof in respect of himself or itself as follows:
(i) Authority. The Stockholder has all requisite power and authority
to enter into this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly authorized,
executed and delivered by the Stockholder and constitutes the valid and
binding obligation of the Stockholder enforceable against the Stockholder
in accordance with its terms. Neither the execution and delivery by the
Stockholder of this Agreement nor the consummation by the Stockholder of
the transactions contemplated hereby will violate or conflict in any
material respect with, result in a breach of any material provision of or
constitute a default under, any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, deed of trust or any material
license, franchise, permit, lease, contract, agreement or other
instrument, commitment or obligation to which the Stockholder is a party
or by which the Stockholder is bound.
(ii) The Subject Shares. The Stockholder is the record and
beneficial owner of, or is trustee of a trust that is the record holder
of, and whose beneficiaries are the beneficial owners of, and has good and
marketable title to, the Subject Shares set forth opposite its name on
Schedule A attached hereto, free and clear of any claims, liens,
encumbrances and security interests whatsoever. The Stockholder does not
own, of record or beneficially, any shares of capital stock of the Company
other than the Subject Shares set forth opposite its name on Schedule A
attached hereto. The Stockholder has the sole right to vote such Subject
Shares, and none of such Subject Shares is subject to any voting trust or
other agreement, arrangement or restriction with respect to the voting of
such Subject Shares, except as contemplated by this Agreement.
(b) Of Parent, US Parent and Purchaser. Parent, US Parent and
Purchaser each hereby represents and warrants to the Stockholder that it has all
requisite power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
authorized, executed and delivered by each of Parent, US Parent and Purchaser
and constitutes the valid and binding obligation of each of Parent, US Parent
and Purchaser enforceable against each of Parent, US Parent and Purchaser in
accordance with its terms. Neither the execution and delivery by each of Parent,
US Parent and Purchaser of this Agreement nor the consummation by each of
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Parent, US Parent and Purchaser of the transactions contemplated hereby will:
(a) violate or conflict in any material respect with, result in a breach of any
material provision of, constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under, result in the
termination or in a right of termination of, accelerate the performance required
by or benefit obtainable under, result in the vesting, triggering or
acceleration of any payment or other obligations pursuant to, or result in there
being declared void, voidable, subject to withdrawal, or without further binding
effect, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust or any material license, franchise, permit, lease,
contract, agreement or other instrument, commitment or obligation to which each
of Parent, US Parent and Purchaser is a party, by which each of Parent, US
Parent and Purchaser or any of its properties is bound, or under which each of
Parent, US Parent and Purchaser or any of its properties is entitled to a
benefit; (b) other than the filings required under the HSR Act or any Exchange
Act filings, require any consent, approval or authorization of, or declaration,
filing or registration with, any Governmental Entity; or (c) violate in any
material respect any Laws applicable to each of Parent, US Parent and Purchaser.
2. Purchase and Sale of Shares. The Stockholder hereby severally
agrees to tender all Subject Shares set forth opposite the Stockholder's name on
Schedule A hereto into the Offer and not withdraw any Subject Shares so
tendered. If, for any reason, any of such Subject Shares are not tendered into
the Offer (or are tendered but are not accepted), the Stockholder whose Subject
Shares have not been tendered or accepted agrees to sell to Purchaser (or an
affiliate), and Purchaser (or an affiliate) hereby agrees to purchase, all such
Subject Shares that have not been tendered or accepted, at a price per share
equal to the Offer Price; provided that such obligation to sell and such
obligation to purchase are subject to Purchaser (or an affiliate) having
accepted shares for payment under the Offer and subject to the Minimum Condition
having been satisfied. Any Subject Shares not purchased in the Offer will be
purchased at the same time as payment is made under the Offer.
3. Covenants of the Stockholder. Until the termination of this
Agreement in accordance with Section 7, the Stockholder severally and not
jointly agrees as follows:
(a) At any meeting of stockholders of the Company called to vote
upon the Merger and the Merger Agreement or at any adjournment thereof or
in any other circumstances upon which a vote, consent or other approval
(including by written consent) with respect to the Merger and the Merger
Agreement is sought, the Stockholder shall vote (or cause to be voted) the
Subject Shares in favor of the Merger, the adoption by the Company of the
Merger Agreement and the approval of the terms thereof and each of the
other transactions contemplated by the Merger Agreement. Any vote cast in
accordance with this Section 3(a) or in accordance
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with Section 3(b) shall be cast in such manner as will insure that such
vote is duly counted for purposes of determining whether a quorum is
present and for purposes of determining the result of such vote.
(b) At any meeting of stockholders of the Company or at any
adjournment thereof or in any other circumstances upon which the
Stockholder's vote, consent or other approval is sought, the Stockholder
shall vote (or cause to be voted) the Subject Shares against (i) any
Acquisition Proposal as such term is defined in Section 6.8(a) of the
Merger Agreement or (ii) any amendment of the Company's certificate of
incorporation or by-laws or other proposal or transaction involving the
Company, which amendment or other proposal or transaction would be
reasonably likely to impede, frustrate, prevent or nullify the Merger, the
Merger Agreement or any of the other transactions contemplated by the
Merger Agreement or change in any manner the voting rights of the Common
Stock. The Stockholder further agrees not to enter into any agreement
inconsistent with the foregoing.
(c) The Stockholder shall not, prior to the earliest of (i) the
Effective Time and (ii) the termination of the Merger Agreement in
accordance with its terms, (x) sell, transfer, give, pledge, assign or
otherwise dispose of (including by gift) (collectively, "Transfer"),
consent to any Transfer of, any or all of such Subject Shares or any
interest therein or enter into any contract, option or other arrangement
(including any profit sharing arrangement) with respect to the Transfer
of, the Subject Shares to any person other than pursuant to the terms of
the Offer or the Merger or (y) enter into any voting arrangement, whether
by proxy, voting agreement or otherwise, in connection with, directly or
indirectly, any Acquisition Proposal and agrees not to commit or agree to
take any of the foregoing actions.
(d) Subject to the terms of Section 9, during the term of this
Agreement, the Stockholder shall not, nor shall it permit any investment
banker, financial advisor, attorney or accountant retained by, or other
advisor or representative of, the Stockholder to, directly or indirectly
(i) solicit, initiate or encourage (including by way of furnishing
non-public information), or take any other action to facilitate, any
inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, an Acquisition Proposal or (ii)
participate in any discussions or negotiations regarding an Acquisition
Proposal, provided, that it is understood that this Section 3(d) will not
be deemed to have been violated if in response to an unsolicited inquiry,
the Stockholder states that he and the Subject Shares are subject to the
provisions of this Agreement. Without limiting the foregoing, it is
understood that any violation of the restrictions set forth in the
preceding sentence
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by an investment banker, financial advisor, attorney or accountant
retained by, or other adviser or representative of, the Stockholder,
whether or not such person is purporting to act on behalf of the
Stockholder, shall be deemed to be a violation of this Section 3(d) by the
Stockholder.
(e) Until after the Merger is consummated or the Merger Agreement is
terminated, the Stockholder shall use reasonable efforts to take, or cause
to be taken, all actions, and to do, or cause to be done, and to assist
and cooperate with the other parties in doing, all things necessary,
proper or advisable to consummate and make effective, in the most
expeditious manner practicable, the Merger and the other transactions
contemplated by the Merger Agreement.
(f) The Stockholder, and any beneficiary of a revocable trust for
which the Stockholder serves as trustee, shall not take any action to
revoke or terminate such trust or take any other action which would
restrict, limit or frustrate in any way the transactions contemplated by
this Agreement. Each such beneficiary hereby acknowledges and agrees to be
bound by the terms of this Agreement applicable to it.
(g) (i) If the Merger Agreement shall have been terminated under
circumstances where Parent or any affiliate of Parent is entitled, or may
become entitled, to receive a Termination Fee, and within one year of such
termination (x) the Company enters into an Acquisition Agreement with
respect to an Acquisition Proposal that is subsequently consummated or (y)
an Acquisition Proposal is consummated, the Stockholder shall pay to
Parent on demand, at the time such Acquisition Proposal is consummated, an
amount equal to all Profit of the Stockholder, determined in accordance
with Section 3(g)(ii), from the consummation of any such Acquisition
Proposal.
(ii) For purposes of this Section 3(g), the "Profit" of the
Stockholder from any Acquisition Proposal shall equal (x) the aggregate
consideration that would have been received by the Stockholder pursuant to such
Acquisition Proposal if the Stockholder held the same number of Subject Shares
at the consummation of such Acquisition Proposal as he held at the time the
Merger Agreement was terminated (including any consideration that would have
been received in respect of any unexercised stock options or warrants or similar
instruments held at the time the Merger Agreement was terminated), valuing any
noncash consideration (including any residual interest in the Company) at its
fair market value on the date of such consummation less (y) the fair market
value of the aggregate consideration that would have been issuable or payable to
the Stockholder (assuming all stock options, warrants or similar instruments
held by the Stockholder were exercised) if
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he had received the Merger Consideration pursuant to the Merger Agreement as
originally executed (without giving effect to any increase in such Merger
Consideration).
(iii) For purposes of this Section 3(g), the fair market value of
any noncash consideration consisting of:
(x) securities listed on a national securities exchange or traded
on the NASDAQ/NMS shall be equal to the average closing price
per share of such security as reported on such exchange or
NASDAQ/NMS for the twenty trading days prior to the date of
determination; and
(y) consideration which is other than cash or securities of the
form specified in clause (A) of this Section 3(g)(iii) shall
be determined by a nationally recognized independent
investment banking firm mutually agreed upon by the parties
within 10 business days of the event requiring selection of
such banking firm; provided, however, that if the parties are
unable to agree within two business days after the date of
such event as to the investment banking firm, then the parties
shall each select one firm, and those firms shall select a
third investment banking firm, which third firm shall make
such determination, provided further, that the fees and
expenses of such investment banking firm shall be borne by
Parent. The determination of the investment banking firm shall
be binding upon the parties.
(iv) Any payment of profit under this Section 3(g) shall (x) if paid
in cash, be paid by wire transfer of same day funds to an account designated by
Parent and (y) if paid through a transfer of securities (with the method and
timing of such transfer to be mutually agreed), be paid as soon as practicable
through delivery of such securities, suitably endorsed for transfer, provided
that the Stockholder shall be required to pay cash under this Section 3(g) to
the extent cash is actually received by the Stockholder under circumstances
giving rise to the obligation of the Stockholder to make payment to Parent under
Section 3(g)(i).
4. Further Assurances. The Stockholder will, from time to time,
execute and deliver, or cause to be executed and delivered, such additional or
further consents, documents and other instruments as Parent may reasonably
request for the purpose of effectively carrying out the transactions
contemplated by this Agreement.
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5. Certain Events. The Stockholder agrees that this Agreement and
the obligations hereunder shall attach to the Stockholder's Subject Shares and
shall be binding upon any person or entity to which legal or beneficial
ownership of such Subject Shares shall pass, whether by operation of law or
otherwise, including without limitation the Stockholder's heirs, guardians,
administrators or successors. In the event of any stock split, stock dividend,
merger, reorganization, recapitalization or other change in the capital
structure of the Company affecting the Common Stock, or the acquisition of
additional shares of Common Stock or other voting securities of the Company by
any Stockholder, the number of Subject Shares listed in Schedule A beside the
name of the Stockholder shall be adjusted appropriately and this Agreement and
the obligations hereunder shall attach to any additional shares of Common Stock
or other voting securities of the Company issued to or acquired by the
Stockholder.
6. Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
without the prior written consent of the other parties, except that Purchaser,
US Parent or Parent (or all of them) may assign, as contemplated by Section 9.5
of the Merger Agreement, in its sole discretion, any and all of its rights,
interests and obligations hereunder to any affiliate, provided that Purchaser,
US Parent or Parent will remain liable for its obligations hereunder in the
event of any assignment pursuant to this Section 6. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns.
7. Termination. This Agreement, and all rights and obligations of
the parties hereunder, shall terminate upon the date upon which the Merger
Agreement is terminated in accordance with its terms, provided that if the
Merger Agreement has terminated under circumstances under which a Termination
Fee has become or could become payable, Sections 3(g), 4 (as it relates to the
other sections of this Agreement that survive such termination), 5, 6, 7, 8, 10
and 11 shall survive until such time as Parent could no longer be entitled to
receive a payment pursuant to Section 3(g).
8. General Provisions.
(a) Amendments. This Agreement may not be amended except by an
instrument in writing signed by each of the parties hereto.
(b) Notice. All notices and other communications hereunder shall be
in writing and shall be deemed given if hand delivered or sent by
overnight courier (providing proof of delivery) to Parent, US Parent or
Purchaser in accordance with Section 9.4 of the Merger Agreement and to
the Stockholder at its address set
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forth on Schedule A attached hereto (or at such other address for a party
as shall be specified by like notice).
(c) Interpretation. When a reference is made in this Agreement to
Sections, such reference shall be to a Section to this Agreement unless
otherwise indicated. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Wherever the words "include," "includes"
or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation."
(d) Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more of the counterparts have been
signed by each of the parties and delivered to the other party, it being
understood that each party need not sign the same counterpart.
(e) Entire Agreement; No Third-Party Beneficiaries. This Agreement
(including the documents and instruments referred to herein) (i)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to
the subject matter hereof and (ii) is not intended to confer upon any
person other than the parties hereto any rights or remedies hereunder.
(f) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware regardless
of the laws that might otherwise govern under applicable principles of
conflicts of law thereof.
(g) Voidability. If prior to the execution hereof, the Board of
Directors of the Company shall not have duly and validly authorized and
approved this Agreement, the Merger Agreement and the transactions
contemplated hereby and thereby, so that the execution and delivery hereof
by Parent, US Parent or Purchaser would trigger the provisions of Section
203 of the Delaware General Corporation Law (the "DGCL"), then this
Agreement shall be void and unenforceable until such time as such
authorization and approval shall have been duly and validly obtained.
9. Stockholder Capacity. No person executing this Agreement who is
or becomes during the term hereof a director or officer of the Company makes any
agreement or understanding herein in his capacity as such director or officer.
The
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Stockholder signs solely in his capacity as the record holder and beneficial
owner of, or the trustee of a trust whose beneficiaries are the beneficial
owners of, the Stockholder's Subject Shares and nothing herein (including,
without limitation, the provisions of Section 3(d)) shall limit or affect any
actions taken by a Stockholder in his capacity as an officer or director of the
Company.
10. Enforcement. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of Delaware or in a Delaware state court, this being in
addition to any other remedy to which they are entitled at law or in equity. In
addition, each of the parties hereto (a) consents to submit such party to the
personal jurisdiction of any Federal court located in the State of Delaware or
any Delaware state court in the event any dispute arises out of this Agreement
or any of the transactions contemplated hereby, (b) agrees that such party will
not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court, (c) agrees that such party will not bring
any action relating to this Agreement or the transactions contemplated hereby in
any court other than a Federal court sitting in the state of Delaware or a
Delaware state court and (d) waives any right to trial by jury with respect to
any claim or proceeding related to or arising out of this Agreement or any of
the transactions contemplated hereby.
11. Public Announcements. The Stockholder will consult with Parent
before issuing, and provide Parent with the opportunity to review and comment
upon, any press release or other public statements with respect to the
transactions contemplated by this Agreement and the Merger Agreement, and shall
not issue any such press release or make any such public statement prior to such
consultation, except as may be required by applicable law, court process or by
obligations pursuant to any listing agreement with any national securities
exchange (including, but not limited to, NASDAQ).
12. Legends. The Stockholder will, promptly after executing and
delivering this Agreement, deliver to the Company (or its transfer agent, if so
directed by the Company) the certificates representing the Subject Shares, which
certificates (or replacements thereof) shall be returned to the Stockholder with
the following restrictive legend placed thereon:
"THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO A STOCKHOLDER
AGREEMENT DATED AS OF DECEMBER 14, 1998,
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AND, PURSUANT TO THE TERMS THEREOF, MAY NOT BE SOLD, TRANSFERRED,
GIVEN, PLEDGED, ASSIGNED OR OTHERWISE DISPOSED OF, AND ARE SUBJECT
TO FURTHER RESTRICTIONS REGARDING, AMONG OTHER THINGS, VOTING RIGHTS
AND CERTAIN INDIRECT TRANSFERS AS SET FORTH IN THE STOCKHOLDER
AGREEMENT"
13. Grant of Irrevocable Proxy; Appointment of Proxy. (a) The
Stockholder hereby irrevocably grants to, and appoints, Parent and Strone
Macpherson and Xxxx X. Xxxxxx, in their respective capacities as officers of
Parent, and any individual who shall hereafter succeed to any such office of
Parent, and each of them individually, the Stockholder's proxy and
attorney-in-fact (with full power of substitution), for and in the name, place
and stead of the Stockholder, to vote the Stockholder's Subject Shares, or grant
a consent or approval in respect of such Subject Shares, in connection with any
and all of the matters described in Sections 3(a) and 3(b) of this Agreement, in
accordance with the terms of such Sections.
(b) The Stockholder represents that any proxies heretofore given in
respect of the Stockholder's Subject Shares are not irrevocable, and that any
such proxies are hereby revoked.
(c) The Stockholder hereby affirms that the irrevocable proxy set
forth in this Section 13 is given in connection with the execution of the Merger
Agreement, and that such irrevocable proxy is given to secure the performance of
the duties of the Stockholder under this Agreement. The Stockholder hereby
further affirms that the irrevocable proxy is coupled with an interest and may
under no circumstances be revoked. The Stockholder hereby ratifies and confirms
all that such irrevocable proxy may lawfully do or cause to be done by virtue
hereof. Such irrevocable proxy is executed and intended to be irrevocable in
accordance with the provisions of Section 212(e) of the DGCL.
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IN WITNESS WHEREOF, Parent, US Parent, the Purchaser and the
Stockholder have caused this Agreement to be duly executed and delivered as of
the date first written above.
MISYS PLC
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Title: Corporate Development Director
and Secretary
KIRSTY, INC.
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Title: Vice President
MOXIE ACQUISITION CORP.
By: /s/ Xxxx Xxxxxx
--------------------------------------
Name: Xxxx Xxxxxx
Title: Secretary
Xxx X. and Xxxxxxx X. Xxxxxxxxx
Charitable Remainder Trust
By: /s/ Xxx X. Xxxxxxxxx
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SCHEDULE A
Name and Address Number of Subject Shares Number of Subject Shares
of of Subject to
Stockholder Owned of Record Options
----------- --------------- -------
Xxx X. and Xxxxxxx X. 10 0
Xxxxxxxxx Charitable
Remainder Trust
C-ATS Software Inc.
0000 Xxxxxxxxxxx Xxxx
Xxxx Xxxx, XX 00000
