1
EXHIBIT 2.1
AGREEMENT OF MERGER
BY AND AMONG
BINDVIEW DEVELOPMENT CORPORATION,
BRAVO ACQUISITION CORPORATION,
ENTEVO CORPORATION
AND THE
REPRESENTING STOCKHOLDERS
IDENTIFIED HEREIN
DATED JANUARY 26, 2000
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TABLE OF CONTENTS
ARTICLE 1. Definitions............................................................................................1
ARTICLE 2. The Merger.............................................................................................9
2.1. The Merger................................................................................................9
2.2. Effective Time...........................................................................................10
2.3. Conversion of Shares and Options.........................................................................10
2.4. Cancellation of Treasury Stock...........................................................................13
2.5. Closing of Entevo's Transfer Books.......................................................................13
2.6. Adjustment of the Exchange Ratios........................................................................13
2.7. Stockholder Approval; Dissenting Shares..................................................................13
2.8. Exchange Procedures; Distributions with Respect to Unexchanged Shares; Stock Transfer Books..............14
2.9. Return of Exchange Fund..................................................................................16
2.10. No Further Ownership Rights in Entevo Stock.............................................................17
ARTICLE 3. Closing...............................................................................................17
ARTICLE 4. Representations and Warranties of Entevo and the Representing Stockholders............................17
4.1. Organization and Good Standing...........................................................................17
4.2. Authority; No Conflict...................................................................................18
4.3. Capitalization...........................................................................................20
4.4. Financial Statements.....................................................................................20
4.5. Books and Records........................................................................................21
4.6. Title to Properties; No Encumbrances.....................................................................21
4.7. Condition and Sufficiency of Assets......................................................................22
4.8. Accounts Receivable......................................................................................22
4.9. No Undisclosed Liabilities...............................................................................22
4.10. Taxes...................................................................................................23
4.11. No Material Adverse Change..............................................................................23
4.12. Employee Benefits.......................................................................................24
4.13. Compliance with Legal Requirements; Governmental Authorizations.........................................27
4.14. Legal Proceedings; Orders...............................................................................28
4.15. Absence of Certain Changes and Events...................................................................29
4.16. Contracts; No Defaults..................................................................................30
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4.17. Software................................................................................................31
4.18. Insurance...............................................................................................34
4.19. Employees...............................................................................................35
4.20. Labor Relations; Compliance.............................................................................36
4.21. Intellectual Property...................................................................................36
4.22. Absence of Certain Payments and Transactions............................................................39
4.23. Full Disclosure.........................................................................................39
4.24. No Brokers or Finders...................................................................................39
4.25. Year 2000 Compliance....................................................................................39
4.26. Customers and Suppliers.................................................................................40
4.27. Tax Matters.............................................................................................40
4.28. Securities Law Matters..................................................................................40
4.29. Relationships with Related Persons......................................................................40
ARTICLE 5. Representations and Warranties of BindView and BAC....................................................41
5.1. Organization and Good Standing...........................................................................41
5.2. Authority; No Conflict...................................................................................41
5.3. Certain Proceedings......................................................................................42
5.4. Brokers or Finders.......................................................................................42
5.5. BindView Capitalization..................................................................................42
5.6. BAC Capitalization.......................................................................................43
5.7. BindView SEC Reports.....................................................................................43
5.8. Litigation...............................................................................................43
5.9. No Material Adverse Change...............................................................................44
5.10. Tax Matters.............................................................................................44
5.11. Pooling.................................................................................................44
ARTICLE 6. Covenants of Entevo and the representing stockholders.................................................44
6.1. Operation of the Businesses of Entevo....................................................................44
6.2. Negative Covenants.......................................................................................45
6.3. Required Approvals.......................................................................................45
6.4. Notification.............................................................................................45
6.5. [Reserved]...............................................................................................46
6.6. No Negotiation...........................................................................................46
6.7. Best Efforts.............................................................................................46
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6.8. Transaction Expenses.....................................................................................46
ARTICLE 7. Covenants of BindView and BAC.........................................................................46
7.1. Pooling Treatment........................................................................................46
7.2. Required Approvals.......................................................................................46
7.3. Notification.............................................................................................47
7.4. Best Efforts.............................................................................................47
7.5. Stock Exchange Listing...................................................................................47
7.6. Entevo Options; Entevo Warrants..........................................................................47
7.7. Nontaxable Reorganization................................................................................48
7.8. Indemnification of Entevo Officers and Director; Insurance...............................................49
ARTICLE 8. Conditions Precedent to ENTEVO'S Obligation to Close..................................................49
8.1. Accuracy of Representations..............................................................................49
8.2. BindView's and the BAC's Performance.....................................................................49
8.3. Consents.................................................................................................49
8.4. No Proceedings...........................................................................................49
8.5. Closing Certificate......................................................................................50
8.6. Indemnity Escrow Agreement...............................................................................50
8.7. Registration Rights Agreement............................................................................50
8.8. Opinion of counsel.......................................................................................50
8.9. Tax Opinion..............................................................................................50
8.10. No Material Adverse Change..............................................................................50
ARTICLE 9. Conditions Precedent to BindView's and BAC's Obligation to Close......................................50
9.1. Accuracy of Representations..............................................................................51
9.2. Entevo's and the Representing Stockholders' Performance..................................................51
9.3. Consents.................................................................................................51
9.4. No Proceedings...........................................................................................51
9.5. No Claim Regarding Stock Ownership or Sale Proceeds......................................................51
9.6. No Material Adverse Change...............................................................................52
9.7. Closing Certificate......................................................................................52
9.8. Pooling Matters..........................................................................................52
9.9. Indemnity Escrow Agreement...............................................................................52
9.10. [Reserved]..............................................................................................52
9.11. Opinions of counsel.....................................................................................52
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9.12. Tax Opinion.............................................................................................52
9.13. Noncompete Agreements...................................................................................52
ARTICLE 10. Termination..........................................................................................53
10.1. Termination Events......................................................................................53
10.2. Effect of Termination...................................................................................53
ARTICLE 11. Indemnification; Remedies............................................................................54
11.1. Survival; Right to Indemnification Not Affected by Knowledge............................................54
11.2. Indemnification and Payment of Damages by the Stockholders..............................................54
11.3. Indemnification and Payment of Damages by BindView and BAC..............................................55
11.4. Time Limitations........................................................................................55
11.5. Limitations on Amount - the Stockholders................................................................56
11.6. Limitations on Amount - BindView and BAC................................................................56
11.7. Indemnity Escrow........................................................................................57
11.8. Procedure for Indemnification - Third Party Claims......................................................57
11.9. Procedure for Indemnification - Other Claims............................................................58
11.10. Special Procedure with Respect to Certain Claims.......................................................58
ARTICLE 12. General Provisions...................................................................................58
12.1. Expenses................................................................................................58
12.2. Public Announcements....................................................................................58
12.3. Confidentiality.........................................................................................59
12.4. Notices.................................................................................................59
12.5. Resolution of Disputes..................................................................................61
12.6. Further Assurances......................................................................................61
12.7. Waiver..................................................................................................61
12.8. Entire Agreement and Modification.......................................................................62
12.9. Schedules...............................................................................................62
12.10. Assignments, Successors and No Third-party Rights......................................................62
12.11. Severability...........................................................................................62
12.12. Section Headings, Construction.........................................................................62
12.13. Time of Essence........................................................................................63
12.14. Governing Law..........................................................................................63
12.15. Counterparts...........................................................................................63
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AGREEMENT OF MERGER
This Agreement of Merger (this "Agreement"), is made and entered into this 26th
day of January, 2000, by and among BINDVIEW DEVELOPMENT CORPORATION, a Texas
corporation ("BindView"), BRAVO ACQUISITION CORPORATION, a Delaware corporation
("BAC"), ENTEVO CORPORATION , a Delaware corporation ("Entevo"), and Xxxx Xxxxx
and Xxxxxxxxx Xxxxxxxxx (the "Representing Stockholders").
W I T N E S S E T H:
WHEREAS, BindView desires to acquire all of the capital stock, including all
securities convertible therefor, of Entevo in the manner provided in this
Agreement;
WHEREAS, BindView and Entevo believe that the Merger of BAC with and into
Entevo, in the manner provided by and subject to the terms and conditions set
forth in this Agreement and all exhibits, schedules and supplements hereto, is
desirable and in the best interests of their respective corporations and
stockholders;
WHEREAS, the Board of Directors of BindView and BAC and the shareholders of BAC
and Entevo have each approved the Contemplated Transactions, pursuant to the
terms and subject to the conditions of this Agreement, whereby BAC will be
merged with and into Entevo and the Stockholders will exchange their shares of
Entevo Stock for a certain number of shares of BindView Stock; and
WHEREAS, BindView, BAC, Entevo and the Representing Stockholders desire to make
certain representations, warranties and agreements in connection with the
Contemplated Transactions;
NOW, THEREFORE, in consideration of the mutual benefits to be derived and the
representations and warranties, conditions, covenants and promises herein
contained, and other good and valuable consideration the receipt and sufficiency
of which are hereby acknowledged, and intending to be legally bound hereby, the
parties hereto agree as follows:
ARTICLE 1. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings specified
or referred to in this Article 1:
"ACCOUNTS RECEIVABLE" has the meaning given to that term in Section 4.8.
"APPLICABLE CONTRACT" means any Contract (i) under which Entevo or its
Subsidiaries has or may acquire any rights, (ii) under which Entevo or
its Subsidiaries has or may become subject to any obligation or
liability or (iii) by which Entevo or its Subsidiaries or any of the
Assets owned or used by any of them is or may become bound.
"ASSETS" means all assets and property, whether real, personal or mixed,
tangible or intangible.
"BAC STOCK" means the common stock of BAC.
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"BALANCE SHEETS" has the meaning given to that term in Section 4.4.
"BASKET" has the meaning set forth in Section 11.5.1.
"BEST EFFORTS" means the efforts that a prudent Person desirous of achieving a
result would use in similar circumstances to ensure that such result
is achieved as expeditiously as practicable.
"BINDVIEW CLOSING DOCUMENTS" has the meaning given to that term in Section
5.2.1.
"BINDVIEW SEC REPORTS" has the meaning given to that term in Section 5.7.
"BINDVIEW STOCK" means the common stock of BindView, no par value per share.
"BREACH" means a "Breach" of a representation, warranty, covenant, obligation or
other provision of this Agreement or any instrument delivered pursuant
to this Agreement. A Breach will be deemed to have occurred if there is
or has been any inaccuracy in or breach of, or any failure to perform
or comply with, such representation, warranty, covenant, obligation or
other provision.
"CLOSING" means the closing of the Merger.
"CLOSING DATE" means the date and time as of which the Closing actually takes
place.
"COMPUTER PROGRAMS" has the meaning given to that term in Section 4.17.1.
"CONSENT" means any approval, consent, ratification, waiver or other
authorization (including any Governmental Authorization).
"CONSIDERATION" has the meaning given to that term in Section 2.3.1.
"CONTEMPLATED TRANSACTIONS" means all of the transactions contemplated by this
Agreement, including:
(i) the Merger;
(ii) the exchange by the Stockholders of their shares of
Entevo Stock for shares of BindView Stock;
(iii) the conversion of all outstanding options to purchase
Entevo Stock into options to purchase BindView Stock;
(iv) the execution and delivery of the Indemnity Escrow
Agreement and the Registration Rights Agreement; and
(v) the performance by BindView, BAC, Entevo and the
Representing Stockholders of their respective covenants and obligations
under this Agreement.
"CONTRACT" means any agreement, contract, obligation, promise or undertaking
(whether written or oral and whether express or implied) that is
legally binding.
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"COPYRIGHTS" has the meaning given to that term in Section 4.21.1.
"DAMAGES" has the same meaning as defined in Section 11.2.
"DEFINED BENEFIT PENSION PLAN" has the meaning given in ERISA Section 3(35).
"DISTRIBUTOR AGREEMENTS" has the meaning given to that term in Section 4.16.1.
"EFFECTIVE TIME" means the date and time when the Merger shall have become
effective.
"EMPLOYEE PENSION BENEFIT PLAN" has the meaning set forth in ERISA Section 3(2).
"EMPLOYEE WELFARE BENEFIT PLAN" has the meaning set forth in ERISA Section 3(1).
"ENCUMBRANCE" means any charge, claim, community property interest, condition,
equitable interest, lien, option, pledge, security interest, right of
first refusal or restriction of any kind, including any restriction on
use, voting, transfer, receipt of income or exercise of any other
attribute of ownership.
"ENTEVO CLOSING DOCUMENTS" has the meaning given to that term in Section 4.2.1.
"ENTEVO COMMON STOCK" means the common stock of Entevo.
"ENTEVO INTELLECTUAL PROPERTY ASSETS" has the meaning given to that term in
Section 4.21.1.
"ENTEVO OPTIONS" means any and all options, warrants or similar rights to
acquire Entevo Stock, including by means of conversion (other than by
conversion of the Entevo Preferred Stock).
"ENTEVO OTHER BENEFIT OBLIGATION" means an Other Benefit Obligation owed,
adopted or followed by Entevo or an ERISA Affiliate.
"ENTEVO-OWNED SOFTWARE" has the meaning given to that term in Section 4.17.1.
"ENTEVO PLANS" means all Plans (i) of which Entevo or an ERISA Affiliate is or
was a Plan Sponsor at any time within the six-year period preceding the
date of this Agreement, (ii) to which Entevo or an ERISA Affiliate
otherwise contributes or has contributed at any time within the
six-year period preceding the date of this Agreement or (iii) in which
Entevo or an ERISA Affiliate otherwise participates or has participated
at any time within the six-year period preceding the date of this
Agreement. All references to Plans are to Entevo Plans unless the
context requires otherwise.
"ENTEVO PREFERRED STOCK" means the preferred stock (all classes) of Entevo.
"ENTEVO STOCK" means the Entevo Common Stock and the Entevo Preferred Stock.
"ENTEVO VEBA" means a VEBA whose members include employees of Entevo or any
ERISA Affiliate.
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"ERISA" means the Employee Retirement Income Security Act of 1974 or any
successor law, and regulations and rules issued pursuant to such Act or
any successor law.
"ERISA AFFILIATE" means, with respect to Entevo, any other Person that, together
with Entevo, would be, or at anytime within the last six years was
treated as a single employer under IRC Section 414 or ERISA Section
4001.
"ESTIMATED TRANSACTION EXPENSES" has the meaning set forth in Section 6.8.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, or any successor law,
and regulations and rules issued pursuant to such act or any successor
law.
"FACILITIES" means any real property currently owned or leased by Entevo and any
buildings, structures or equipment, currently owned or leased by
Entevo.
"FINANCIAL STATEMENTS" has the meaning set forth in Section 4.4.
"FOUR-DIGIT DATES" has the meaning given to that term in Section 4.17.4.
"GAAP" means generally accepted accounting principles consistently applied
within the United States.
"GCLD" means the General Corporation Law of the State of Delaware, or any
successor law.
"GOVERNMENTAL AUTHORIZATION" means any approval, consent, license, permit,
waiver or other authorization issued, granted, given or otherwise made
available by or under the authority of any Governmental Body or
pursuant to any Legal Requirement.
"GOVERNMENTAL BODY" means any:
(i) nation, state, county, city, town, municipality or other
jurisdiction of any nature;
(ii) federal, state, local, municipal, foreign or other
government;
(iii) governmental authority of any nature (including any
governmental agency, branch, department, official or entity and any
court or other tribunal);
(iv) multi-national organization or body; or
(v) body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, police, regulatory or
taxing authority or power of any nature.
"INDEMNIFIED PERSONS" has the same meaning as defined in Section 11.2.
"INDEMNITY ESCROW AGENT" means ChaseMellon Shareholder Services LLC or any
successor appointed pursuant to and in accordance with the Indemnity
Escrow Agreement.
"INDEMNITY ESCROW AGREEMENT" means that certain agreement in the form of Exhibit
B dated as of the Closing Date, by and among BindView, the Representing
Stockholders and the Indemnity Escrow Agent.
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"IRC" means the Internal Revenue Code of 1986 or any successor law, and
regulations issued by the IRS pursuant to the Internal Revenue Code or
any successor law.
"IRS" means the United States Internal Revenue Service or any successor agency,
and, to the extent relevant, the United States Department of the
Treasury.
"KNOWLEDGE" means an individual will be deemed to have "Knowledge" of a
particular fact or other matter if:
(i) such individual is actually aware of such fact or other
matter; or
(ii) a prudent individual, holding the same position as the
individual deemed to have knowledge, could be expected to discover such
fact or other matter in the course of reasonable performance of the
duties of that position.
A Person (other than an individual) will be deemed to have "Knowledge"
of a particular fact or other matter if any individual who is serving,
or who has at any time served, as a director, officer, partner,
executor or trustee of such Person (or in any similar capacity) has, or
at any time had, Knowledge of such fact or other matter. For purposes
of this definition, the "officers" of BindView and BAC are Xxxxxxx
Xxxxxxx and Xxxxx X. Xxxxxxxxxx, the "officers" of Entevo are the
Representing Stockholders.
"LATEST BALANCE SHEET" has the meaning given to that term in Section 4.4.
"LEGAL REQUIREMENT" means any federal, state, local, municipal, foreign,
international, multinational or other administrative order,
constitution, law, ordinance, principle of common law, regulation,
statute or treaty.
"MARKS" has the meaning given to that term in Section 4.21.1.
"MATERIAL ADVERSE EFFECT" means any change in or effect on the referenced entity
that is or is reasonably expected to be materially adverse to any of
the financial condition, results of operations, businesses, assets or
liabilities of such entity, it being understood that none of the
following shall be deemed by itself or by themselves, either alone or
in combination with any other change or effect, to constitute a
Material Adverse Effect: (a) conditions affecting the enterprise
computer software industry as a whole, (b) conditions affecting the
United States economy or the world economy as a whole or (c) with
respect to Entevo, any action or event permitted in Article VI hereof,
or the results of any action taken or not taken after the date hereof
and on or before the Closing Date after consultation with and with the
prior approval of BindView.
"MATERIAL CONTRACTS" has the meaning given to that term in Section 4.16.
"MERGER" has the meaning as defined in Section 2.1.1.
"MULTIEMPLOYER PLAN" has the meaning set forth in ERISA Section 3(37).
"NASDAQ" means the Nasdaq National Market.
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"OFF-THE-SHELF SOFTWARE" has the meaning given to that term in Section 4.17.1.
"ORDER" means any award, decision, injunction, judgment, order, ruling, subpoena
or verdict entered, issued, made or rendered by any court,
administrative agency or other Governmental Body or by any arbitrator.
"ORDINARY COURSE OF BUSINESS" means an action taken by a Person will be deemed
to have been taken in the "Ordinary Course of Business" only if:
(i) such action is consistent with the past practices of such
Person and is taken in the ordinary course of the normal day-to-day
operations of such Person; and
(ii) such action is not required to be authorized by the board
of directors of such Person (or by any Person or group of Persons
exercising similar authority); and
(iii) such action is similar in nature and magnitude to
actions customarily taken, without any authorization by the board of
directors (or by any Person or group of Persons exercising similar
authority), in the ordinary course of the normal day-to-day operations
of other Persons that are in the same line of business as such Person.
"ORGANIZATIONAL DOCUMENTS" means (i) the articles or certificate of
incorporation and the bylaws of a corporation, (ii) the partnership
agreement and any statement of partnership of a general partnership,
(iii) the limited partnership agreement and the certificate of limited
partnership of a limited partnership, (iv) the certificate of formation
and the operating or members' agreement (or their substantial
equivalents) of a limited liability company, (v) any charter or similar
document adopted or filed in connection with the creation, formation or
organization of a Person and (vi) any amendment to any of the
foregoing.
"OTHER BENEFIT OBLIGATIONS" means all obligations, arrangements or customary
practices to provide benefits, other than salary, as compensation for
services rendered, to present or former directors, employees or agents,
other than obligations, arrangements and practices that are Plans.
Other Benefit Obligations include cafeteria plans within the meaning of
IRC Section 125, stock option plans, restricted stock plans, consulting
agreements under which the compensation paid does not depend upon the
amount of service rendered, sabbatical policies, severance payment
policies and fringe benefits within the meaning of IRC Section 132.
"PATENTS" has the meaning given to that term in Section 4.21.1.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor thereto.
"PERSON" means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability
company, joint venture, estate, trust, association, organization, labor
union or other entity or Governmental Body.
"PENSION PLAN" has the meaning given in ERISA Section 3(2)(A).
"PLAN" has the meaning given in ERISA Section 3(3).
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"PLAN SPONSOR" has the meaning given in ERISA Section 3(16)(B).
"PROCEEDING" means any action, arbitration, audit, hearing, investigation,
litigation or suit (whether civil, criminal, administrative,
investigative or informal) commenced, brought, conducted or heard by or
before, or otherwise involving, any Governmental Body or arbitrator.
"QUALIFIED PLAN" means any Plan that meets or purports to meet the requirements
of IRC Section 401(a).
"RELATED PERSON" with respect to a particular individual means:
(i) each other member of such individual's Family (as defined
below);
(ii) any Person that is directly or indirectly controlled by
such individual or one or more members of such individual's Family;
(iii) any Person in which such individual or members of such
individual's Family hold (individually or in the aggregate) a Material
Interest (as defined below); and
(iv) any Person with respect to which such individual or one
or more members of such individual's Family serves as a director,
officer, partner, executor or trustee (or in a similar capacity).
With respect to a specified Person other than an individual means:
(a) any Person that directly or indirectly controls, is
directly or indirectly controlled by, or is directly or indirectly
under common control with such specified Person;
(b) any Person that holds a Material Interest in such
specified Person;
(c) each Person that serves as a director, officer, partner,
executor or trustee of such specified Person (or in a similar
capacity);
(d) any Person in which such specified Person holds a Material
Interest;
(e) any Person which is a limited partnership with respect to
which such specified Person serves as a general partner (or in a
similar capacity); and
(f) any Related Person of any individual described in clause
(vi) or (vii).
For purposes of this definition, (A) the "FAMILY" of an individual
includes (1) the individual, (2) the individual's spouse and any former
spouses, (3) any other natural person who is related to the individual
or the individual's spouse within the second degree and (4) any other
natural person who resides with such individual, and (B) "MATERIAL
INTEREST" means direct or indirect beneficial ownership (as defined in
Rule 13d-3 under the Exchange Act) of voting securities or other voting
interests representing at least 10% of the outstanding voting power of
a Person or equity securities or other equity interests representing at
least 10% of the outstanding equity securities or equity interests in a
Person.
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"REPRESENTATIVE" with respect to a particular Person, means any director,
officer, employee, agent, consultant, advisor or other representative
of such Person, including legal counsel, accountants and financial
advisors.
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, or any successor law, and
regulations and rules issued pursuant to such act or any successor law.
"SECURITIES LAWS" mean, collectively, the Securities Act and the Exchange Act.
"SECURITYHOLDERS" means those Persons listed on Exhibit A hereto, which compose
all holders of Entevo Stock and Entevo Options.
"STOCKHOLDERS' REPRESENTATIVE" means the Person appointed as such by the
Stockholders on or prior to the date hereof and identified as such in
Section 12.4, and who is not a competitor of BindView, the Surviving
Corporation or any Related Person thereof, or an employee of any such
competitor.
"STOCKHOLDERS" means the holders of all of the Entevo Stock.
"SUBSIDIARY" with respect to any Person (the "OWNER"), means any corporation or
other Person of which securities or other interests having the power to
elect a majority of Person's board of directors or similar governing
body, or otherwise having the power to direct the business and policies
of that corporation or other Person (other than securities or other
interests having such power only upon the happening of a contingency
that has not occurred) are held by the Owner or one or more of its
Subsidiaries.
"SURVIVING CORPORATION" has the meaning as defined in Section 2.1.1.
"TAX" and "TAXES" mean any and all federal, state, local and foreign income,
profits, secondary, capital duties, franchise, sales, value added, use,
employment, payroll, transfer, occupation, real property, personal
property, severance, production, excise, gross receipts, license,
stamp, premium, customs, duties, capital stock, windfall profit,
environmental, withholding, social security (or similar), unemployment,
disability, registration, alternative or add-on minimum, estimated or
other taxes, assessments or duties of any kind whatsoever imposed by
any Governmental Body, together with any interest thereon, any
penalties, additions to tax or additional amounts with respect thereto
and any interest in respect of such penalties, additions or additional
amounts.
"TAX RETURN" means any return (including any information return), report,
statement, schedule, notice, form or other document or information
filed with or submitted to, or required to be filed with or submitted
to, any Governmental Body in connection with the determination,
assessment, collection or payment of any Tax or in connection with the
administration, implementation or enforcement of or compliance with any
Legal Requirement relating to any Tax.
"THIRD-PARTY LICENSED SOFTWARE" has the meaning given to that term in Section
4.17.1.
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"THREATENED" means a claim, Proceeding, dispute, action or other matter will be
deemed to have been "Threatened" if any demand or statement has been
made (orally or in writing) or any notice has been given (orally or in
writing).
"TITLE IV PLANS" means all Pension Plans that are subject to Title IV of ERISA,
29 U.S.C. Section 1301 et seq., other than Multiemployer Plans.
"TRADE SECRETS" has the meaning given to that term in Section 4.21.1.
"TRANSACTION EXPENSES" mean fees and expenses paid or incurred by Entevo in
connection with the negotiation, preparation, execution and performance
of this Agreement and the Contemplated Transactions to agents,
representatives, investment advisors, counsel and accountants or in
connection with any related opinion (specifically excluding normal
compensation and normal expenses of employees of Entevo in the Ordinary
Course of Business). Transaction Expenses includes any employee bonuses
not disclosed in the Schedules as of the date hereof or the salary
component of severance payments relating to the Contemplated
Transactions or resulting from a "change in control" of Entevo.
"VEBA" means a voluntary employees' beneficiary association under IRC Section
501(c)(9).
"WELFARE PLAN" has the meaning given in ERISA Section 3(1).
ARTICLE 2. THE MERGER
2.1. THE MERGER.
2.1.1. Upon the terms and subject to the conditions of this Agreement, BAC
shall be merged with and into Entevo in accordance with the GCLD (the
"Merger"). Entevo shall be the surviving corporation in the Merger (the
"Surviving Corporation"). The Surviving Corporation shall have the name
"Entevo Corporation", continue its corporate existence under and be
organized under and be governed by the GCLD and possess all the rights
and Assets of Entevo and BAC and be subject to all of the liabilities
and obligations of both of them in accordance with the provisions of
the GCLD.
2.1.2. The Certificate of Incorporation and the Bylaws of BAC, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation and Bylaws, respectively, of the Surviving Corporation
until thereafter amended.
2.1.3. The authorized and issued capital stock of the Surviving Corporation
shall consist of 1,000 shares of common stock, par value $.01 per
share.
2.1.4. The directors and officers of BAC immediately prior to the Effective
Time shall be the directors and officers of the Surviving Corporation
and will hold office from the Effective Time until their respective
successors are duly elected or appointed and qualified in the manner
provided in the Bylaws of the Surviving Corporation or as otherwise
provided by law.
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9 BVEW/ENTEVO MERGER AGREEMENT
15
2.1.5. The Merger shall have the effects set forth in the GCLD. If at any time
after the Effective Time, the Surviving Corporation shall consider or
be advised that any further assignments or assurances in law or
otherwise are necessary or desirable to vest, perfect or confirm, of
record or otherwise, in the Surviving Corporation, all rights, title
and interests in all real estate and other property and all privileges,
powers and franchises of Entevo and BAC, the Surviving Corporation and
its proper officers and directors, in the name and on behalf of Entevo
and BAC, shall be empowered and authorized to execute and deliver all
such proper deeds, assignments and assurances in law and do all things
necessary and proper to vest, perfect or confirm title to such property
or rights in the Surviving Corporation, and the proper officers and
directors of the Surviving Corporation are fully authorized in the name
of Entevo or otherwise to take any and all such action.
2.2. EFFECTIVE TIME.
The Merger shall be effective when a properly executed copy of a Certificate of
Merger shall have been duly filed with the Secretary of State of the State of
Delaware in accordance with the provisions of the GCLD, which filing shall be
made as soon as practicable on or after the Closing.
2.3. CONVERSION OF SHARES AND OPTIONS.
Subject to the provisions of Sections 2.6 and 2.3.3, each share of Entevo Stock
issued and outstanding immediately prior to the Effective Time (other than
Dissenting Shares) shall be converted into a fraction of a share of BindView
Stock, determined as follows:
(a) At the Effective Time, a number of shares equal to
the "Aggregate Share Consideration" shall be
determined by dividing $125 million by the "Base
Price", as defined below, provided that if the
Aggregate Consideration, as so determined, multiplied
by the "Closing Price", as defined below (the "Offer
Value") is:
(i) less than $85 million, the Aggregate Share
Consideration shall instead be equal to $100
million divided by 0.68 times the Base
Price;
(ii) from $85 million to (but not including) $100
million, the Aggregate Share Consideration
shall instead be equal to $100 million
divided by the Closing Price;
(iii) from $100 million to (and including) $150
million the Aggregate Share Consideration
shall not be adjusted pursuant to this
subparagraph (a);
(iv) from $150 million to (but not including)
$172.5 million, the Aggregate Share
Consideration shall instead be equal to $150
million divided by the Closing Price; and
(v) equal to or greater than $172.5 million, the
Aggregate Share Consideration shall instead
be equal to $150 million divided by 1.38
times the Base Price.
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10 BVEW/ENTEVO MERGER AGREEMENT
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For purposes of this subparagraph (a), Base Price equals $56.62 and
Closing Price equals the average closing sale price of a share of BindView Stock
on the NASDAQ National Market for the ten trading days ending two complete
trading days prior to the Effective Time.
Notwithstanding any other provision herein, BindView will not be
required to issue more shares of BindView Stock at the Effective Time than the
Aggregate Share Consideration.
(b) The Aggregate Share Consideration shall be subject to
further downward adjustment to reflect the number of
shares of Entevo Stock outstanding at the Effective
Time as follows:
(i) If any shares of Entevo Preferred Stock are
outstanding at the Effective Time:
(A) at the Effective Time, the
Aggregate Share Consideration as
determined above shall be
multiplied by a dollar value equal
to the assumed value of a share of
BindView Stock ("Assumed Value") as
determined pursuant to Article VI,
Section 2(d) of the First Amended
and Restated Certificate of
Incorporation of Entevo (the
"Entevo Certificate") (such total
amount being referred to herein as
the "Aggregate Value");
(B) the Aggregate Value shall be
allocated (solely for purposes of
calculation) among (x) the
outstanding shares of Entevo Stock
and (y) the outstanding Entevo
Options (assuming for this purpose
that all Entevo Options are treated
as outstanding Entevo Stock,
determined using the treasury stock
method) in accordance with Article
VI, Section 2 of the Entevo
Certificate; and
(C) after allocating among the
outstanding shares of Entevo Stock
and Entevo Options as provided
above, the portion of the Aggregate
Value attributable to outstanding
Entevo Stock shall be divided by
the Assumed Value, and the
resulting amount of shares of
BindView Stock shall be the
"Adjusted Aggregate Share
Consideration."
OR
(ii) If no shares of Entevo Preferred Stock are
outstanding at the Effective Time:
(A) to the total number of shares of
Entevo Stock (on a common
stock-equivalent, as converted,
basis) outstanding at the Effective
Time shall be added the number of
shares issuable under outstanding
Entevo Options (calculated using
the treasury stock method) ("Entevo
Option Equivalents") and such
adjusted total is referred to
herein as the "Adjusted Outstanding
Entevo Shares"; and
(B) the Aggregate Share Consideration
shall be proportionately reduced by
multiplying the Aggregate Share
Consideration by
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11 BVEW/ENTEVO MERGER AGREEMENT
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a fraction, the numerator of
which is the Aggregate Outstanding
Entevo Shares minus the Entevo
Option Equivalents and the
denominator of which is the
Adjusted Outstanding Entevo Shares,
and the product of such calculation
shall be the "Adjusted Aggregate
Share Consideration."
(c) The Adjusted Aggregate Share Consideration shall be
divided among the classes of outstanding Entevo Stock
at the Effective Time as follows:
(i) if any shares of Entevo Preferred Stock are
outstanding at the Effective Time, each
holder of a share of Entevo Stock shall
receive a fraction of a share of BindView
Stock determined in accordance with Article
VI, Section 2 of the Entevo Certificate,
treating the Merger as a "Liquidation" for
purposes thereof; and
(ii) if no shares of Entevo Preferred Stock are
outstanding at the Effective Time, each
holder of a share of Entevo Common Stock
shall receive a fraction of a share of
BindView Stock equal to the Adjusted
Aggregate Share Consideration divided by the
total number of shares of Entevo Common
Stock outstanding at the Effective Time;
The fraction of a share of BindView Stock that is received by each
holder of Entevo Common Stock in accordance with the above description
is referred to herein as the "Common Stock Exchange Ratio."
2.3.1. Before the Effective Time, and for the purposes of collateralizing
potential indemnification claims, the Stockholders' Representative (on
behalf of the holders of Entevo Stock), BindView and the Indemnity
Escrow Agent shall execute and deliver the Indemnity Escrow Agreement,
and BindView shall deposit into an escrow account, pursuant to and
subject to the Indemnity Escrow Agreement, the number of shares
represented in Exhibit A of the shares of BindView Stock to be
delivered to each Stockholder pursuant to the Merger.
2.3.2. No fractional shares of BindView Stock shall be issued to any
Stockholder in the Merger. To the extent the application of the
exchange calculation set forth in Exhibit A to the shares of Entevo
Stock held by a Stockholder would result in a fractional number of
shares of BindView Stock being issued to the Stockholder, the number of
shares of BindView Stock issuable to the Stockholder with respect to
all such shares in the Merger shall be rounded up to the next whole
number of shares of BindView Stock.
2.3.3. Each share of BAC Stock outstanding immediately prior to the Effective
Time shall be converted into one share of stock in the Surviving
Corporation.
2.3.4. As of and after the Effective Time, no holder of any certificate or
option grant that, immediately prior to the Effective Time, represented
shares of Entevo Stock or Entevo Options shall have any rights as a
holder of Entevo Stock or Entevo Options, other than
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12 BVEW/ENTEVO MERGER AGREEMENT
18
to receive the Consideration payable with respect to such shares or
options under Section 2.3.1.
2.4. CANCELLATION OF TREASURY STOCK.
At the Effective Time, all shares of Entevo Stock that are owned directly or
indirectly by Entevo shall be canceled without any consideration being payable
therefor.
2.5. CLOSING OF ENTEVO'S TRANSFER BOOKS.
At Closing, the share transfer books of Entevo shall be closed and no transfers
of shares of Entevo Stock shall be made thereafter.
2.6. ADJUSTMENT OF THE EXCHANGE RATIOS.
In the event that, prior to the Effective Time, any stock split, combination,
reclassification or stock dividend with respect to the BindView Stock, any
change or conversion of BindView Stock into other securities or any other
dividend or distribution with respect to the BindView Stock (other than regular
quarterly dividends) should occur or, if a record date with respect to any of
the foregoing should occur, appropriate and proportionate adjustments shall be
made to the Exchange Ratio, and thereafter all references to the Exchange Ratio
shall be deemed to be to such Exchange Ratio as so adjusted.
2.7. STOCKHOLDER APPROVAL; DISSENTING SHARES.
(a) The Stockholders holding shares of Entevo Stock constituting
the required voting power to approve the Merger and take the
other actions contemplated hereby, by execution of a written
consent in lieu of a meeting pursuant to Section 228 of the
GCLD, have on or prior to the date hereof (i) approved this
Agreement, the Merger, the Indemnity Escrow Agreement, the
Registration Rights Agreement and all other transactions
contemplated hereby and appointed A.G.W. Xxxxxx III as
Stockholder Representative, (ii) acknowledged that the
approval given thereby is irrevocable and that such
Stockholder is aware of its rights to dissent pursuant to
Section 262 of the GCLD, a copy of which was attached thereto,
and that such Stockholder has received and read a copy of
Section 262 of the GCLD, and (iii) acknowledged that by its
approval of the Merger it is not entitled to any right to
dissent from the Merger and thereby waives any rights to
receive payment of the fair value of its Entevo Stock under
the GCLD.
(b) Entevo shall, within five days following the date of this
Agreement, give prompt notice of the taking of the actions
described in Section 2.7(a) to all Stockholders not executing
the written consent described therein, together (i) with a
description of the appraisal rights of Stockholders available
under Section 262 of the GCLD, (ii) such information
concerning BindView, the Merger, this Agreement, the Indemnity
Escrow Agreement, the Registration Rights Agreement and all
other transactions contemplated hereby as BindView shall have
previously approved and (iii) a copy of a Private Placement
Memorandum in the form of Exhibit G hereto.
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13 BVEW/ENTEVO MERGER AGREEMENT
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(c) Notwithstanding any provision of this Agreement to the
contrary, shares of Entevo Stock that are outstanding
immediately prior to the Effective Time and which are held by
stockholders ("Dissenting Stockholders") who shall not have
consented to the Merger in writing and who shall have demanded
properly in writing appraisal for such shares in accordance
with Section 262 of the GCLD (collectively, the "Dissenting
Shares") shall not be converted into or represent the right to
receive the consideration set forth in Section 2.3. Such
stockholders shall be entitled to receive such consideration
as is determined to be due with respect to such Dissenting
Shares in accordance with the provisions of Section 262,
except that all Dissenting Shares held by stockholders who
shall have failed to perfect or who effectively shall have
withdrawn or lost their rights to appraisal of such shares
under Section 262 shall thereupon be deemed to have been
converted into and to have become exchangeable for, as of the
Effective Time, the right to receive the shares of BindView
Stock specified in Section 2.3, without any interest thereon,
upon surrender, in the manner provided in Section 2.8, of the
certificate or certificates that formerly evidenced by such
Dissenting Shares less the number of shares of BindView Stock
allocable to such stockholder that have been deposited in the
Escrow Fund in respect of Entevo Stock pursuant to Sections
2.8(b) and 11.5.
(d) Entevo shall give BindView (i) prompt notice of any demands
for appraisal received by Entevo, withdrawals of such demands,
and any other instruments served pursuant to the GCLD and
received by Entevo and (ii) the opportunity to direct all
negotiations and proceedings with respect to demands for
appraisal under the GCLD. Entevo shall not, except with the
prior written consent of BindView, make any payment with
respect to any demands for appraisal or offer to settle or
settle any such demands.
2.8. EXCHANGE PROCEDURES; DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES;
STOCK TRANSFER BOOKS.
(a) As of the Effective Time, BindView shall deposit with the
ChaseMellon Shareholder Services LLC, as exchange agent (the
"Exchange Agent"), for the benefit of the holders of shares of
Entevo Stock, certificates representing shares of the BindView
Stock to be issued pursuant to Section 2.5 in exchange for the
shares of Entevo Stock less the number of shares of BindView
Stock to be deposited in the Escrow Fund pursuant to Section
11.5. (Such shares of BindView Stock, together with any
dividends or distributions with respect thereto pursuant to
Sections 2.8(c) and 2.9, are referred to herein as the
"Exchange Fund").
(b) As soon as practicable after the Effective Time, BindView
shall use its reasonable efforts to cause the Exchange Agent
to send to each Person who was, at the Effective Time, a
holder of record of certificates which represented outstanding
Entevo Stock (the "Certificates") which shares were converted
into the right to receive BindView Stock pursuant to Section
2.5, a letter of transmittal which (i) shall specify that
delivery shall be effected and risk of loss and title to such
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14 BVEW/ENTEVO MERGER AGREEMENT
20
Certificates shall pass, only upon actual delivery thereof to
the Exchange Agent and (ii) shall contain instructions for use
in effecting the surrender of the Certificates. Upon surrender
to the Exchange Agent of Certificates for cancellation,
together with such letter of transmittal duly executed, such
holder shall be entitled to receive in exchange therefor (A) a
certificate representing the number of whole shares of
BindView Stock into which the Entevo Stock represented by the
surrendered Certificate shall have been converted at the
Effective Time less such holder's pro rata portion of the
number of shares of BindView Stock to be deposited in the
Escrow Fund on such holder's behalf pursuant to Section 11.5
and (B) certain dividends and distributions in accordance with
Section 2.8(c), and the Certificates so surrendered shall then
be canceled. Subject to Section 2.8(c) and Section 2.9, until
surrendered as contemplated by this Section 2.8(b), each
Certificate, from and after the Effective Time, shall be
deemed to represent only the right to receive, upon such
surrender, the number of shares of BindView Stock into which
such Entevo Stock shall have been converted. As soon as
practicable after the Effective Time, and subject to and in
accordance with the provisions of Section 11.5, BindView shall
cause to be distributed to the Escrow Agent certificates
representing 9.9% of the aggregate number of shares of
BindView Stock issued in the Merger (less any shares of
BindView Stock issued in respect of Entevo Stock that is
subject to contractual forfeiture or vesting provisions
between the Stockholder and Entevo that will survive the
Closing) which shall be registered in the name of the Escrow
Agent as nominee for the holders of Certificates canceled
pursuant to this Section 2.8. Such shares shall be
beneficially owned by such holders, shall be held in escrow
and shall be available to settle certain contingencies as
provided in Section 11.2. To the extent not used for such
purpose, such shares shall be released, as provided in the
Indemnity Escrow Agreement.
(c) No dividends or other distribution declared or made after the
Effective Time with respect to the BindView Stock with a
record date after the Effective Time shall be paid to any
holder entitled by reason of the Merger to receive
certificates representing BindView Stock until such holder
shall have surrendered its Certificates pursuant to this
Section 2.8. Subject to applicable law, following surrender of
any such Certificate, such holder shall be paid, in each case,
without interest, (i) the amount of any dividends or other
distributions theretofore paid with respect to the shares of
BindView Stock represented by the certificate received by such
holder and having a record date on or after the Effective Time
and a payment date prior to such surrender and (ii) at the
appropriate payment date or as promptly as practicable
thereafter, the amount of any dividends or other distributions
payable with respect to such shares of BindView Stock and
having a record date on or after the Effective Time but prior
to such surrender and a payment date on or after such
surrender.
(d) If any certificate representing shares of BindView Stock or
any cash is to be issued or paid to any Person other than the
registered holder of the Certificate surrendered in exchange
therefor, it shall be a condition to such exchange that such
surrendered Certificate shall be properly endorsed and
otherwise in proper
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15 BVEW/ENTEVO MERGER AGREEMENT
21
form for transfer and such Person either (i) shall pay to the
Exchange Agent any transfer or other taxes required as a
result of the issuance of such certificates of BindView Stock
and the distribution of such cash payment to such Person or
(ii) shall establish to the satisfaction of the Exchange Agent
that such tax has been paid or is not applicable. BindView or
the Exchange Agent shall be entitled to deduct and withhold
from the consideration otherwise payable pursuant to this
Agreement to any holder of shares of Entevo Stock such amounts
as BindView or the Exchange Agent is required to deduct and
withhold with respect to the making of such payment under the
IRC, or any provision of state, local or foreign tax law. To
the extent that amounts are so withheld by BindView or the
Exchange Agent, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder
of the shares of Entevo Stock in respect of which such
deduction and withholding was made by BindView or the Exchange
Agent. All amounts in respect of taxes received or withheld by
BindView shall be disposed of by BindView in accordance with
the IRC or such state, local or foreign tax law, as
applicable.
(e) If any Certificate shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the Person
claiming such Certificate to be lost, stolen or destroyed and
subject to such other conditions as the Board of Directors of
the Surviving Corporation may impose, the Surviving
Corporation shall issue in exchange for such lost, stolen or
destroyed Certificate the shares of BindView Stock as
determined under Section 2.5 and pay any cash, dividends and
distributions as determined in accordance with Section 2.8(c)
in respect of such Certificate. When authorizing such issue of
shares of BindView Stock (and payment of any such cash,
dividends and distribution) in exchange for such Certificate,
the Board of Directors of the Surviving Corporation (or any
authorized officer thereof) may, in its reasonable discretion
and as a condition precedent to the issuance thereof, require
the owner of such lost, stolen or destroyed Certificate to
give the Surviving Corporation a bond in such sum as the Board
of Directors may direct as indemnity against any claim that
may be made against the Surviving Corporation with respect to
the Certificate alleged to have been lost, stolen or
destroyed.
(f) At the close of business on the day on which the Effective
Time occurs, the stock transfer books of Entevo shall be
closed and thereafter there shall be no further registration
of transfers of shares of Entevo Stock on the records of
Entevo. From and after the Effective Time, the holders of
shares of Entevo Stock outstanding immediately prior to the
Effective Time shall cease to have any rights with respect to
such shares except as otherwise provided herein or by
applicable law.
2.9. RETURN OF EXCHANGE FUND.
Any portion of the Exchange Fund which remains undistributed to the former
holders of Entevo Stock for six months after the Effective Time shall be
delivered to BindView, upon its request, and any such former holders who have
not theretofore surrendered to the Exchange Agent their Certificates in
compliance herewith shall thereafter look only to BindView for payment of their
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claim for shares of BindView Stock, any cash in lieu of fractional shares of
BindView Stock and any dividends or distributions with respect to such shares of
BindView Stock. Neither BindView nor Entevo shall be liable to any former holder
of Entevo Stock for any such shares of BindView Stock held in the Exchange Fund
(and any cash, dividends and distributions payable in respect thereof) which is
delivered to a public official pursuant to an official request under any
applicable abandoned property, escheat or similar law.
2.10. NO FURTHER OWNERSHIP RIGHTS IN ENTEVO STOCK.
All certificates representing shares of BindView Stock delivered upon the
surrender for exchange of any Certificate in accordance with the terms hereof
(including any cash paid pursuant to Section 2.8 or Section 2.9) shall be deemed
to have been delivered (and paid) in full satisfaction of all rights pertaining
to the Entevo Stock previously represented by such Certificate.
ARTICLE 3. CLOSING
Subject to the satisfaction of the conditions set forth in Articles 8 and 9, the
Closing provided for in this Agreement will take place at the offices of
Fulbright & Xxxxxxxx L.L.P., 0000 XxXxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, at
10:00 a.m. (local time) on March 1, 2000, or on such earlier date as BindView
shall elect and notify Entevo, or at such other time and place as the parties
may agree. Subject to the provisions of Article 10, failure to consummate the
Closing on such date and time and at such place will not terminate this
Agreement and will not relieve any party of any obligation under this Agreement.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF ENTEVO AND THE
REPRESENTING STOCKHOLDERS
Entevo and the Representing Stockholders represent and warrant to each of
BindView and BAC as follows (subject to such exceptions as are expressly stated
on the Schedules hereto):
4.1. ORGANIZATION AND GOOD STANDING.
4.1.1. Entevo is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, with full corporate
power and authority to conduct its business as it is now being
conducted, to own or use the properties and Assets that it purports to
own or use and to perform all its obligations under all Applicable
Contracts. Schedule 4.1 contains a complete and accurate list of the
other jurisdictions in which Entevo is authorized to transact business.
Entevo is duly qualified to transact business as a foreign corporation
and is in good standing under the laws of each state or other
jurisdiction in which either the ownership or use of the properties
owned or used by it, or the nature of the activities conducted by it,
requires such qualification and where the failure to be so qualified
would have a Material Adverse Effect on Entevo.
4.1.2. Each of Entevo's Subsidiaries is listed on Schedule 4.1, and each is a
corporation (unless otherwise identified) validly existing and in good
standing under the laws of its jurisdiction of incorporation (as
identified in Schedule 4.1), with full corporate power and authority to
conduct its business as it is now being conducted, to own or use the
properties and Assets that it purports to own or use and to perform all
its obligations
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17 BVEW/ENTEVO MERGER AGREEMENT
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under all Contracts by which it is bound. Schedule 4.1 contains a
complete and accurate list of the other jurisdictions in which each
such Subsidiary is authorized to transact business. Each such
Subsidiary is duly qualified to transact business as a foreign
corporation and is in good standing under the laws of each state or
other jurisdiction in which either the ownership or use of the
properties owned or used by it, or the nature of the activities
conducted by it, requires such qualification and where the failure to
be so qualified would have a Material Adverse Effect on Entevo.
4.2. AUTHORITY; NO CONFLICT.
4.2.1. This Agreement constitutes the legal, valid and binding obligation of
Entevo and the Representing Stockholders, and is enforceable against
Entevo and the Representing Stockholders in accordance with its terms,
subject to applicable laws of general application relating to
bankruptcy, insolvency and the relief of debtors and rules of law
governing specific performance, injunctive relief or other equitable
remedies. Upon the execution and delivery by Entevo, the Stockholders'
Representative and the Escrow Agent of the Indemnity Escrow Agreement
and the execution and delivery by Entevo and the Stockholders'
Representative of the Registration Rights Agreement (collectively, the
"Entevo Closing Documents"), as applicable, the Entevo Closing
Documents will constitute the legal, valid and binding obligations of
Entevo, enforceable against Entevo in accordance with their respective
terms, subject to applicable laws of general application relating to
bankruptcy, insolvency and the relief of debtors and rules of law
governing specific performance, injunctive relief or other equitable
remedies. Entevo has the absolute and unrestricted right, power,
authority and capacity to execute and deliver this Agreement and the
Entevo Closing Documents and to perform its obligations under this
Agreement and the Entevo Closing Documents.
4.2.2. Except as set forth in Schedule 4.2, neither the execution and
delivery of this Agreement or any of the Entevo Closing Documents nor
the consummation or performance of any of the Contemplated Transactions
will, directly or indirectly (with or without notice or lapse of time):
(a) contravene, conflict with or result in a violation of (i) any
provision of the Organizational Documents of Entevo, (ii) any
resolution adopted by the board of directors or the
stockholders of Entevo currently in effect and not superseded
or (iii) any non-competition agreement entered into by any of
the Representing Stockholders;
(b) contravene, conflict with or result in a violation of, or give
any Governmental Body or other Person the right to challenge
any of the Contemplated Transactions or to exercise any remedy
or obtain any relief under, any Legal Requirement or any Order
to which Entevo or the Representing Stockholders, or any of
the Assets owned or used by Entevo, may be subject;
(c) contravene, conflict with or result in a violation of any of
the terms or requirements of, or give any Governmental Body
the right to revoke, withdraw, suspend, cancel, terminate or
modify, any Governmental Authorization that is
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18 BVEW/ENTEVO MERGER AGREEMENT
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held by Entevo or that otherwise relates to the business of,
or any of the Assets owned or used by, Entevo;
(d) cause Entevo to become subject to, or to become liable for the
payment of, any Tax;
(e) cause any of the Assets owned by Entevo to be reassessed or
revalued by any taxing authority or other Governmental Body;
(f) contravene, conflict with or result in a violation or breach
of any provision of, or give any Person the right to declare a
default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate or modify,
any Material Contract; or
(g) result in the imposition or creation of any Encumbrance upon
or with respect to any of the Assets owned or used by Entevo.
4.2.3. Except as set forth in Schedule 4.2, neither Entevo or its Subsidiaries
nor any of the Representing Stockholders is, or to the Knowledge of
Entevo and the Representing Stockholders will be, required give any
notice to or obtain any Consent from any Person in connection with the
execution and delivery of this Agreement or the consummation or
performance of any of the Contemplated Transactions.
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19 BVEW/ENTEVO MERGER AGREEMENT
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4.3. CAPITALIZATION.
4.3.1. As of the date of this Agreement, the authorized equity securities of
Entevo consist of (a) 40,000,000 shares of Entevo Common Stock, of
which 6,971,328 shares are issued and outstanding, (b) 5,000,000 shares
of Entevo Preferred Stock, Series A, of which 5,000,000 shares are
issued and outstanding, (c) 7,689,146 shares of Entevo Preferred Stock,
Series B, of which 7,689,146 shares are issued and outstanding, and (d)
10,030,000 shares of Entevo Preferred Stock, Series C, of which
10,000,000 shares are issued and outstanding. The Securityholders are
and will be on the Closing Date the record and beneficial owners and
holders of all shares of Entevo Stock, and each own the number of
shares (designated by class) of Entevo Stock as set forth in Exhibit A.
4.3.2. Except as set forth above in Exhibit A or on Schedule 4.3.2, there are
no preemptive or other outstanding rights, options, warrants,
conversion rights, stock appreciation rights, redemption rights,
repurchase rights, agreements, arrangements or commitments to issue or
to sell any shares of capital stock or other securities of Entevo or
any of its Subsidiaries or any securities or obligations convertible or
exchangeable into or exercisable for, or giving any Person a right to
subscribe for or acquire, any securities of Entevo or any of its
Subsidiaries, and no securities or obligation evidencing such rights
are authorized, issued or outstanding. Entevo does not have outstanding
any bonds, debentures, notes or other obligations the holders of which
have the right to vote (or convertible into or exercisable for
securities having the right to vote) with the stockholders of Entevo on
any matter.
4.3.3. All of the outstanding equity securities of Entevo have been duly
authorized and validly issued and are fully paid and nonassessable.
Except as set forth in Schedule 4.3 , there are no Contracts relating
to the issuance, sale or transfer of any equity securities or other
securities of Entevo. None of the outstanding equity securities or
other securities of Entevo was issued in violation of the Securities
Act or any other Legal Requirement. Entevo does not own or have any
Contract to acquire any equity securities or other securities of any
Person or any direct or indirect equity or ownership interest in any
other business, and is not a party to any joint venture, partnership or
similar entity or enterprise.
4.4. FINANCIAL STATEMENTS.
Entevo has delivered to BindView and BAC: (a) audited consolidated balance
sheets of Entevo as of December 31st in each of the years 1997 and 1998 (the
"Balance Sheets"), and the related audited statements of income, cash flows and
changes in stockholders' equity for each of the fiscal years then ended,
together with the notes thereto and the report thereon of PricewaterhouseCoopers
L.L.P., independent certified public accountants and (b) an unaudited interim
consolidated balance sheet of Entevo as of December 31, 1999, (the "Latest
Balance Sheet"), and the related unaudited statements of income and cash flow
for the twelve months then ended. The items listed in (a) and (b) above are
attached as Schedule 4.4 and are referred to collectively as the "Financial
Statements". The Financial Statements fairly present in all material respects
the financial condition and the results of operations, changes in stockholders'
equity and cash flow of Entevo, as applicable, at the respective dates of and
for the periods referred to in the Financial Statements in accordance with GAAP,
subject, in the case of Latest Financial
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20 BVEW/ENTEVO MERGER AGREEMENT
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Statements, to the absence of footnotes required by GAAP and to normal recurring
year-end adjustments (the effect of which will not, individually or in the
aggregate, be materially adverse to Entevo). The Financial Statements reflect
the consistent application of such accounting principles throughout the periods
involved.
4.5. BOOKS AND RECORDS.
The books of account, minute books, stock record books and other records of
Entevo, all of which have been made available to BindView and BAC, are complete
and correct. Except as set forth on Schedule 4.5, the minute books of Entevo
contain accurate and complete records of all meetings held of, and corporate
action taken by, the stockholders, the Boards of Directors and committees of the
Boards of Directors of Entevo, and no meeting of any such stockholders, Board of
Directors or committee has been held for which minutes have not been prepared
and are not contained in such minute books. At the Closing, all of those books
and records will be in the possession of Entevo.
4.6. TITLE TO PROPERTIES; NO ENCUMBRANCES.
4.6.1. Schedule 4.6 contains a complete and accurate list of all Facilities
owned or leased by Entevo. Entevo has delivered or made available to
BindView and BAC copies of the deeds, leases and other instruments (as
recorded) by which Entevo acquired or leased such Facilities, and
copies of all title insurance policies, opinions, abstracts and surveys
in the possession of Entevo and relating to such Facilities. Entevo
owns (free and clear of all Encumbrances and, with respect to real
property owned, with good and marketable title, subject only to the
matters permitted by Section 4.6.2) all the properties and Assets that
it purports to own, including all of the properties and Assets
reflected in the Balance Sheets, the Latest Balance Sheet (except for
Assets held under capitalized leases disclosed or not required to be
disclosed in Schedule 4.6 and personal property sold since the date of
the Balance Sheets and the Latest Balance Sheet, as the case may be, in
the Ordinary Course of Business) and all of the properties and Assets
purchased or otherwise acquired by Entevo since the date of the Balance
Sheets (except for personal property and other Assets acquired and sold
since the date of the Balance Sheets in the Ordinary Course of Business
and consistent with past practice).
4.6.2. Except as set forth on Schedule 4.6.2, all material properties and
Assets reflected in the Balance Sheets and the Latest Balance Sheet are
free and clear of all Encumbrances and are not, in the case of real
property, subject to any rights of way, building use restrictions,
exceptions, variances, reservations or limitations of any nature
except, with respect to all such properties and Assets, (a) mortgages
or security interests shown on the Balance Sheets or the Latest Balance
Sheet as securing specified liabilities or obligations, with respect to
which no default (or event that, with notice or lapse of time or both,
would constitute a default) exists, (b) mortgages or security interests
incurred in connection with the purchase of property or Assets after
the date of the Latest Balance Sheet (such mortgages and security
interests being limited to the property or Assets so acquired), with
respect to which no default (or event that, with notice or lapse of
time or both, would constitute a default) exists, (c) liens for current
taxes not yet due and (d) with respect to real property, (i) minor
imperfections of title, if any, none of which is substantial in
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amount, which materially detract from the value or impair the use of
the property subject thereto or impair the operations of Entevo and
(ii) zoning laws and other land use restrictions that do not impair the
present or anticipated use of the property subject thereto. All
Facilities owned by Entevo lie wholly within the boundaries of the real
property owned by Entevo and do not encroach upon the property of, or
otherwise conflict with the property rights of, any other Person.
4.7. CONDITION AND SUFFICIENCY OF ASSETS.
To the Knowledge of Entevo and the Representing Stockholders, the Facilities of
Entevo are structurally sound, are in good operating condition and repair, and
are adequate for the uses to which they are being put, and none of the
Facilities is in need of maintenance or repairs except for ordinary, routine
maintenance and repairs that are not material in nature or cost. To the
Knowledge of Entevo and the Representing Stockholders, the Assets of Entevo in
good operating condition and repair and are sufficient for the continued conduct
of Entevo's business after the Closing in substantially the same manner as
conducted prior to the Closing.
4.8. ACCOUNTS RECEIVABLE.
4.8.1. All accounts receivable of Entevo that are reflected on the Balance
Sheets or the Latest Balance Sheet or on the accounting records of
Entevo as of the Closing Date (collectively, the "Accounts Receivable")
represent or will represent valid obligations arising from valid sales
actually made or services actually performed in the Ordinary Course of
Business. Unless paid prior to the Closing Date, the Accounts
Receivable are or will be as of the Closing Date current and
collectible net of the respective reserves shown on the Balance Sheets
or the Latest Balance Sheet or on the accounting records of Entevo as
of the Closing Date (which reserves are adequate and calculated
consistent with past practice and, in the case of the reserve as of the
Closing Date, will not represent a greater percentage of the Accounts
Receivable as of the Closing Date than the reserve reflected in the
Latest Balance Sheet represented of the Accounts Receivable reflected
therein and will not represent a material adverse change in the
composition of such Accounts Receivable in terms of aging).
4.8.2. Schedule 4.8 contains a complete and accurate list of all Accounts
Receivable as of the date of the Latest Balance Sheet, which list sets
forth the aging of such Accounts Receivable. Subject to such reserves,
each of the Accounts Receivable either has been or will be collected in
full, without any set-off, within 90 days after the day on which it
first becomes due and payable. There is no contest, claim or right of
set-off, other than returns in the Ordinary Course of Business, under
any Contract with any obligor of an Accounts Receivable relating to the
amount or validity of such Accounts Receivable.
4.9. NO UNDISCLOSED LIABILITIES.
Except as set forth in Schedule 4.9, Entevo has no material liabilities or
obligations of any nature (whether known or unknown and whether absolute,
accrued, contingent or otherwise) except for liabilities or obligations
reflected or reserved against in the Balance Sheets or the Latest Balance Sheet
and current liabilities incurred in the Ordinary Course of Business since the
respective
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22 BVEW/ENTEVO MERGER AGREEMENT
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dates thereof. For purposes of this section, "material liabilities or
obligation" means any such liability or obligation, individually or in the
aggregate, in excess of $100,000.
4.10. TAXES.
4.10.1. Except as set forth in Schedule 4.10, Entevo has filed or caused to be
filed on a timely basis all Tax Returns that are or were required to be
filed by or with respect to it pursuant to applicable Legal
Requirements. Entevo has delivered or made available to BindView and
BAC copies of all such Tax Returns filed since December 31, 1997.
Entevo has paid, or made full provision for the payment of, all Taxes
that have or may have become due for all taxable periods or portions
thereof ending on or before the date hereof, except such Taxes, if any,
as are listed in Schedule 4.10 and are being contested in good faith
and as to which adequate reserves have been provided in the Balance
Sheets and the Latest Balance Sheet.
4.10.2. Schedule 4.10 contains a complete and accurate list of all audits of
all such Tax Returns filed since December 31, 1997, including a
reasonably detailed description of the nature and outcome of each such
audit. All deficiencies proposed as a result of such audits have been
paid, reserved against, settled or, as described in Schedule 4.10 , are
being contested in good faith by appropriate proceedings. Schedule 4.10
describes all adjustments to the Tax Returns filed by Entevo for all
taxable years since December 31, 1997, and the resulting deficiencies
proposed by the relevant tax authorities. Except as described in
Schedule 4.10 , Entevo has neither given nor been requested to give
waivers or extensions (or is or would be subject to a waiver or
extension given by any other Person) of any statute of limitations
relating to the payment of Taxes of Entevo or for which Entevo may be
liable.
4.10.3. The charges, accruals and reserves with respect to Taxes on the books
of Entevo are adequate and are at least equal to Entevo's aggregate
liability for Taxes. There exists no proposed tax assessment against
Entevo except as disclosed in the Balance Sheets, the Latest Balance
Sheet or in Schedule 4.10. No consent to the application of IRC Section
341(f)(2) has been filed with respect to any property or Assets held,
acquired or to be acquired by Entevo. All Taxes that Entevo is or was
required by Legal Requirements to withhold or collect have been duly
withheld or collected and, to the extent required, have been paid to
the proper Governmental Body or other Person.
4.10.4. All Tax Returns filed by (or that include on a consolidated basis)
Entevo are true, correct and complete. There is no tax sharing
agreement that will require any payment by Entevo after the date of
this Agreement.
4.11. NO MATERIAL ADVERSE CHANGE.
Since the date of the Latest Balance Sheet, there shall not have been any change
in the results of operations, properties, Assets or financial condition of
Entevo or its Subsidiaries that could reasonably be expected to result in a
Material Adverse Effect upon Entevo and its Subsidiaries, taken as a whole, and
no event has occurred or circumstance exists that could reasonably be
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23 BVEW/ENTEVO MERGER AGREEMENT
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expected to result in a Material Adverse Effect upon Entevo and its
Subsidiaries, taken as a whole.
4.12. EMPLOYEE BENEFITS.
4.12.1. Except as set forth on Schedule 4.12, Entevo maintains no Entevo Plans
or Entevo Other Benefit Obligations. Entevo maintains no Entevo VEBAs.
4.12.2. Except as set forth on Schedule 4.12, Entevo has no ERISA Affiliates.
4.12.3. Entevo has delivered or made available to BindView and BAC:
(a) all documents that set forth the terms of each Entevo Plan or
Entevo Other Benefit Obligation and of any related trust,
including (i) all plan descriptions and summary plan
descriptions of Entevo Plans for which Entevo is required to
prepare, file and distribute plan descriptions and summary
plan descriptions and (ii) all summaries and descriptions
furnished to participants and beneficiaries regarding Entevo
Plans and Entevo Other Benefit Obligations for which a plan
description or summary plan description is not required;
(b) all personnel, payroll and employment manuals and policies;
(c) all collective bargaining agreements pursuant to which
contributions have been made or obligations incurred
(including both pension and welfare benefits) by Entevo and
the ERISA Affiliates, and all collective bargaining agreements
pursuant to which contributions are being made or obligations
are owed by such entities;
(d) a written description of any Entevo Plan or Entevo Other
Benefit Obligation that is not otherwise in writing;
(e) all registration statements with respect to any Entevo Plan;
(f) all insurance policies which were purchased by or to provide
benefits under any Entevo Plan;
(g) all contracts with third party administrators, actuaries,
investment managers, consultants and other independent
contractors that relate to any Entevo Plan or Entevo Other
Benefit Obligation;
(h) samples of all notifications to employees of their rights
under ERISA Section 601 et seq. and IRC Section 4980B;
(i) the Form 5500 filed in each of the most recent three plan
years with respect to each Entevo Plan and each IRC Section
125 cafeteria plan of Entevo or any ERISA Affiliate, including
all schedules thereto and the opinions of independent
accountants;
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24 BVEW/ENTEVO MERGER AGREEMENT
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(j) all notices or reports that were given by Entevo, any ERISA
Affiliate or any Entevo Plan to the IRS or the PBGC, pursuant
to statute, within the four years preceding the date of this
Agreement, including notices that are expressly mentioned
elsewhere in this Section 4.12;
(k) all notices that were given by the IRS, the PBGC or the
Department of Labor to Entevo, any ERISA Affiliate or any
Entevo Plan within the four years preceding the date of this
Agreement; and
(l) with respect to Entevo Plans that are Qualified Plans, the
most recent determination letter for each such Plan.
4.12.4. Except as set forth in Schedule 4.12:
(a) Entevo and each ERISA Affiliate has performed all of its
material obligations under all Entevo Plans and Entevo Other
Benefit Obligations. Entevo and each ERISA Affiliate has made
appropriate entries in its financial records and statements
for all obligations and liabilities under such Plans and
Obligations that have accrued but are not due.
(b) No Entevo Plan is a Defined Benefit Pension Plan, or any other
Pension Plan to which the minimum funding provisions of ERISA
Section 302 and IRC Section 412 apply, or a Multiemployer
Plan. There is no Entevo VEBA and Entevo and each ERISA
Affiliate has not maintained or contributed to any such
Defined Benefit Plan or Pension Plan that is subject to the
provisions of ERISA Section 302 and IRC Section 412,
Multiemployer Plan or VEBA within the six year period prior to
Closing.
(c) Entevo and the ERISA Affiliates, with respect to all Entevo
Plans and Entevo Other Benefits Obligations, are, and each
Entevo Plan and Entevo Other Benefit Obligation is, in
material compliance with ERISA, the IRC and other applicable
Legal Requirements, including the provisions of such Legal
Requirements expressly mentioned in this Section 4.12, and
with any applicable collective bargaining agreement.
(d) Neither Entevo, any ERISA Affiliate nor any Securityholder has
engaged in or knowingly permitted to occur and, to Entevo's
and each of the Representing Stockholders' Knowledge, no other
party has engaged in or permitted to occur any transaction
prohibited by ERISA Section 406 or "prohibited transaction"
under IRC Section 4975(c) with respect to any Entevo Plan,
except for any transactions which are exempt under ERISA
Section 408 or IRC Section 4975.
(e) [Reserved].
(f) All filings required by ERISA and the IRC as to each Plan have
been timely filed, and all notices and disclosures to
participants required by either ERISA or the IRC have been
timely provided.
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25 BVEW/ENTEVO MERGER AGREEMENT
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(g) All contributions and payments made or accrued with respect to
all Entevo Plans and Entevo Other Benefit Obligations which
have been deducted were deductible under applicable IRC
provisions, including IRC Section 162 or Section 404. No
Entevo Plan or the Assets thereof are liable for any tax as
unrelated business taxable income.
(h) Except for any formal qualification requirement with respect
to which the remedial amendment period set forth in IRS
Section 401(b), and any regulations, rulings or other IRS
releases thereunder, has not expired, (i) each Entevo Plan
that is a Qualified Plan is qualified in form and operation
under IRC Section 401(a), and each trust for each such Plan is
exempt from federal income tax under IRC Section 501(a), and
(ii) no event has occurred or circumstance exists that gives
rise to disqualification or loss of tax-exempt status of any
such Plan or trust.
(i) No event has occurred or circumstance exists that has resulted
in or could result in the partial termination, within the
meaning of IRC Section 411(d)(3), of any Entevo Plan that is a
Qualified Plan, excluding any event with respect to which the
requirements of IRC Section 411(d)(3) have been satisfied.
(j) Each Entevo Plan can be terminated without payment of any
material termination fee or charge and, except for any
Qualified Plan, without the vesting or acceleration of any
benefits promised by such Plan. For purposes of this paragraph
(j), "material" means any fee or charge in excess of $20,000.
(k) To the Knowledge of Entevo and the Representing Stockholders,
no event has occurred or circumstance exists that could result
in a material increase in premium costs of Entevo Plans and
Entevo Other Benefit Obligations that are insured, or a
material increase in benefit costs of such Plans and
Obligations that are self-insured.
(l) Other than claims for benefits submitted by participants or
beneficiaries, no claim against, or legal proceeding
involving, any Entevo Plan or Entevo Other Benefit Obligation
is pending or, to Entevo's and each of the Representing
Stockholders' Knowledge, is Threatened.
(m) Except to the extent required under ERISA Section 601 et seq.
and IRC Section 4980B, Entevo does not provide health or
welfare benefits for any retired or former employee nor is it
obligated to provide health or welfare benefits to any active
employee following such employee's retirement or other
termination of service.
(n) Entevo has the right to modify and terminate benefits as to
retirees (other than pensions) with respect to both retired
and active employees.
(o) Entevo has complied in all material respects with the
provisions of ERISA Section 601 et seq. and IRC Section 4980B.
(p) No payment that is owed or may become due to any director,
officer, employee or agent of Entevo will be non-deductible to
Entevo or subject to tax under IRC Section 280G or Section
4999; nor will Entevo be required to "gross up" or otherwise
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26 BVEW/ENTEVO MERGER AGREEMENT
32
compensate any such person because of the imposition of any
excise tax on a payment to such person.
(q) Except as set forth in Schedule 4.12, the consummation of the
Contemplated Transactions will not result in the payment,
vesting or acceleration of any benefit, assuming that no
employee incurs a termination of employment or reduction in
hours, and no Entevo Plan or Entevo Other Benefit Obligation
is terminated by its express terms, in connection with the
Contemplated Transactions.
4.13. COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS.
4.13.1. Except as set forth in Schedule 4.13 :
(a) Each of Entevo and its Subsidiaries is, and at all times since
January 1, 1998 has been, in full compliance in all material
respects with each material Legal Requirement that is or was
applicable to it or to the conduct or operation of its
business or the ownership or use of any of its Assets;
(b) no event has occurred or circumstance exists that (with or
without notice or lapse of time) (i) may constitute or result
in a violation by Entevo or its Subsidiaries of, or a failure
on the part of Entevo or its Subsidiaries to comply with, any
material Legal Requirement or (ii) may give rise to any
obligation on the part of Entevo or its Subsidiaries to
undertake, or to bear all or any portion of the cost of, any
material remedial action of any nature (for purposes of this
clause, "material remedial action" means any such required
action that is reasonably expected to cost in excess of
$100,000); and
(c) Neither Entevo nor any of its Subsidiaries has received, at
any time since January 1, 1998, any notice or other
communication (whether oral or written) from any Governmental
Body or any other Person regarding (i) any actual, alleged,
possible or potential violation of, or failure to comply with,
any material Legal Requirement or (ii) any actual, alleged,
possible or potential obligation on the part of Entevo or its
Subsidiaries to undertake, or to bear all or any portion of
the cost of, any material remedial action of any nature (for
purposes of this clause, "material remedial action" means any
such required action that is reasonably expected to cost in
excess of $100,000).
4.13.2. Each of Entevo and its Subsidiaries has obtained all necessary
Governmental Authorizations required that relate to the business of, or
to any of the Assets owned or used by, Entevo and its Subsidiaries.
Except as set forth in Schedule 4.13 , each such Governmental
Authorization is valid and in full force and effect. Entevo and the
Representing Stockholders further represent and warrant that, except as
set forth in Schedule 4.13 :
(a) Each of Entevo and its Subsidiaries is, and at all times since
January 1, 1998 has been, in full compliance in all material
respects with all of the terms and requirements of each
material Governmental Authorization;
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27 BVEW/ENTEVO MERGER AGREEMENT
33
(b) no event has occurred or circumstance exists that may (with or
without notice or lapse of time) (i) constitute or result
directly or indirectly in a violation of or a failure to
comply with any material term or requirement of any material
Governmental Authorization or (ii) result directly or
indirectly in the revocation, withdrawal, suspension,
cancellation or termination of, or any modification to, any
material Governmental Authorization;
(c) Entevo has not received, at any time since January 1, 1998,
any notice or other communication (whether oral or written)
from any Governmental Body or any other Person regarding (i)
any actual, alleged, possible or potential violation of or
failure to comply with any material term or requirement of any
Governmental Authorization or (ii) any actual, proposed,
possible or potential revocation, withdrawal, suspension,
cancellation, termination of or modification to any material
Governmental Authorization; and
(d) all applications required to have been filed for the renewal
of the Governmental Authorizations have been duly filed on a
timely basis with the appropriate Governmental Bodies, and all
other filings required to have been made with respect to such
Governmental Authorizations have been duly made on a timely
basis with the appropriate Governmental Bodies.
4.14. LEGAL PROCEEDINGS; ORDERS.
4.14.1. There is no pending Proceeding:
(a) that has been commenced by or against Entevo or its
Subsidiaries or that otherwise relates to or may affect the
business of, or any of the Assets owned or used by, Entevo or
its Subsidiaries; or
(b) that challenges, or that may have the effect of preventing,
delaying, making illegal or otherwise interfering with any of
the Contemplated Transactions.
4.14.2. To the Knowledge of Entevo and each of the Representing Stockholders,
(i) no such Proceeding has been Threatened and (ii) no event has
occurred or circumstance exists that may give rise to or serve as a
basis for the commencement of any such Proceeding. Entevo has delivered
to BindView and BAC copies of all pleadings, correspondence and other
documents relating to each Proceeding listed in Schedule 4.14.
4.14.3. Except as set forth in Schedule 4.14
(a) There is no Order to which Entevo, or any of the Assets owned
or used by Entevo or its Subsidiaries, is subject; and
(b) no officer, or, to the knowledge of Entevo and each of the
Representing Stockholders, director, agent or employee of
Entevo or its Subsidiaries is subject to any Order that
prohibits such officer, director, agent or employee from
engaging in or continuing any conduct, activity or practice
relating to the business of Entevo and its Subsidiaries.
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28 BVEW/ENTEVO MERGER AGREEMENT
34
4.15. ABSENCE OF CERTAIN CHANGES AND EVENTS.
Except as set forth on Schedule 4.15, since the date of the Latest Balance
Sheet, Entevo and its Subsidiaries have conducted its business only in the
Ordinary Course of Business and there has not been any:
4.15.1. change in Entevo's or its Subsidiaries' authorized or issued capital
stock; grant of any stock option or right to purchase shares of capital
stock of Entevo or its Subsidiaries; issuance of any security
convertible into such capital stock; grant of any registration rights;
purchase, redemption, retirement or other acquisition by Entevo or its
Subsidiaries of any shares of any such capital stock; or declaration or
payment of any dividend or other distribution or payment with respect
to such capital stock;
4.15.2. amendment to the Organizational Documents of Entevo or its
Subsidiaries;
4.15.3. payment or increase by Entevo or its Subsidiaries of any bonuses,
salaries or other compensation to any stockholder, director, officer or
(except in the Ordinary Course of Business) employee or entry into any
employment, severance or similar Contract with any director, officer or
employee;
4.15.4. adoption of, or increase in the payments to or benefits under, any
profit sharing, bonus, deferred compensation, savings, insurance,
pension, retirement or other employee benefit plan for or with any
employees of Entevo or its Subsidiaries;
4.15.5. damage to or destruction or loss of any property or Asset of Entevo or
its Subsidiaries, whether or not covered by insurance, resulting in a
Material Adverse Effect on Entevo and its Subsidiaries, taken as a
whole;
4.15.6. entry into, termination of or receipt of notice of termination of (a)
any license (other than existing end-user license agreements entered
into in the Ordinary Course of Business using a form substantially
similar to one of the forms provided to BindView, referred to
collectively as the "Entevo End-User License Agreements"),
distributorship, dealer, sales representative, joint venture, credit or
similar agreement or (b) any Contract or transaction involving a total
remaining commitment by or to Entevo of at least $100,000;
4.15.7. sale (other than sales in the Ordinary Course of Business), lease or
other disposition of any property or Asset of Entevo or its
Subsidiaries or mortgage, pledge or imposition of any lien or other
encumbrance on any material Asset or property of Entevo or its
Subsidiaries, including the sale, lease or other disposition of any of
the Entevo Intellectual Property Assets;
4.15.8. cancellation or waiver of any claims or rights with a value to Entevo
or its Subsidiaries in excess of $50,000;
4.15.9. material change in the accounting methods used by Entevo; or
4.15.10. agreement, whether oral or written, by Entevo or its Subsidiaries to do
any of the foregoing.
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29 BVEW/ENTEVO MERGER AGREEMENT
35
4.16. CONTRACTS; NO DEFAULTS.
4.16.1. Except for those agreements identified on Schedule 4.16, there are no
Applicable Contracts of the following kinds (collectively, the
"Material Contracts"):
(a) Contracts with any current officer or director of Entevo or
any of its Subsidiaries;
(b) Contracts (other than the Entevo End-User License Agreements)
granting any other Person the right (i) to use or make copies
of the Entevo-Owned Software; (ii) to create derivative works
based on the Entevo-Owned Software; or (iii) to distribute all
or part of the Entevo-Owned Software to other Persons;
(c) Contracts pursuant to which other Persons license Entevo or
any of its Subsidiaries to incorporate Third-Party Licensed
Software (as defined in Section 4.17.1) into any Entevo-Owned
Software distributed to customers of Entevo or any of its
Subsidiaries;
(d) Contracts for the sale of any of the Assets of Entevo or any
of its Subsidiaries, other than contracts entered into in the
Ordinary Course of Business;
(e) Contracts for the grant to any person of any preferential
rights to purchase any of its Assets;
(f) Contracts which restrict Entevo or any of its Subsidiaries or,
to the Knowledge of Entevo and the Representing Stockholders,
any of the employees of any of them, from competing in any
geographical area and in any line of business conducted by
Entevo or any of its Subsidiaries;
(g) Contracts (i) that restrict Entevo or any of its Subsidiaries
or, to the Knowledge of Entevo and the Representing
Stockholders, any of the employees of any of them, from
disclosing any information concerning or obtained from any
other Person or (ii) that restrict any other Person from
disclosing any information concerning or obtained from Entevo
or any of its Subsidiaries (excluding, in each case, any such
Contracts between Entevo or any of its Subsidiaries, on the
one hand, and any of their respective employees, on the other
hand);
(h) indentures, credit agreements, security agreements, mortgages,
guarantees, promissory notes and other contracts relating to
the borrowing of money;
(i) Contracts providing for the provision of professional services
by Entevo or any of its Subsidiaries, or any of the employees
of any of them, on a fixed-fee basis;
(j) Contracts pursuant to which Entevo or any of its Subsidiaries
has granted to any other person the right to distribute,
resell or hold on consignment any products ("Distributor
Agreements"); and
(k) all other agreements, contracts or instruments entered into
outside of the Ordinary Course of Business and which are
material to Entevo.
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4.16.2. Except as specified in Schedule 4.16, the Contemplated Transactions
will not cause any of the Material Contracts, based solely on their
terms, not to continue to be legal, valid, binding and enforceable in
accordance with their terms and in full force and effect against all
the parties thereto following the Closing. The Contemplated
Transactions will not result in any material breach or default under
any Material Contract or give rise to any Encumbrance or any right of
any Person to termination, revocation, acceleration, prepayment,
suspension or modification with respect to any Material Contract.
4.16.3. Except as specified in Schedule 4.16, neither Entevo nor any of its
Subsidiaries is in breach or default in any material respect under any
Material Contract nor, to the Knowledge of Entevo or the Representing
Stockholders, is any other party to any Material Contract in breach or
default thereunder in any material respect.
4.16.4. None of the Distributor Agreements grants to any person exclusive
rights to distribute, resell or hold on consignment any products in any
geographic area.
4.16.5. True, correct and complete copies of each Material Contract have been
furnished or made available to BindView and its Representatives.
4.17. SOFTWARE.
4.17.1. (a) Schedule 4.17.1 sets forth under the caption "Entevo-Owned
Software" a true, correct and complete list of all material computer
programs (source code or object code, and including any associated
non-code files or data, all collectively "Computer Programs") that
Entevo or any Subsidiary of Entevo purport to own, including any
material Computer Programs in the development or testing phase
(collectively, the "Entevo-Owned Software"). (b) Schedule 4.17.1 sets
forth under the caption "Third-Party Licensed Software" a true, correct
and complete list of all Computer Programs licensed to Entevo or any
Subsidiary of Entevo by another person (other than any off-the-shelf
Computer Program that is so licensed under a shrink wrap license or any
Computer Program not material to Entevo's business or any Computer
Program that is used by Entevo and its Subsidiaries primarily for
financial, accounting, administrative or other non-technical
applications or is not otherwise material to Entevo and its
Subsidiaries (collectively, the "Off-the-Shelf Software"))
(collectively, the "Third-Party Licensed Software" and, together with
the Entevo-Owned Software, the "Software").
4.17.2. (a) Subject to the Entevo End-User License Agreements and the
Distribution Agreements, and except as may be specified in Schedule
4.17.2, Entevo, directly or through its Subsidiaries, has good and
marketable title to, and the valid and enforceable power and exclusive
right to sell, license, lease, transfer, use and otherwise exploit, all
existing versions and releases of the Entevo-Owned Software and all
copyrights thereof, free and clear of all liens. (b) Except as
specified in Schedule 4.17.2, Entevo, directly or through its
Subsidiaries, is in actual possession of at least one copy of the
source code and object code and any associated non-code files or data
for each computer program included in the Entevo-Owned Software. (c)
Entevo, directly or through its Subsidiaries, is in possession of all
other documentation (including all related engineering specifications,
program flow charts, installation and user manuals, if any) required
for the
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use, maintenance, and further development of the Software as currently
used in Entevo's business or as offered or represented to Entevo's
customers or potential customers. (d) Entevo, directly or through its
Subsidiaries, is in actual possession of at least one copy of the
object code and user manuals, if any, for each computer program
included in the Third-Party Licensed Software. (e) The Software,
together with the Off-the-Shelf Software, constitutes all of the
material Computer Programs reasonably necessary to conduct Entevo's
business as now conducted, and includes all of the Computer Programs
used in the development, marketing, licensing, sale or support of the
products and the services presently being offered or developed by
Entevo. (f) Except as specified in Schedule 4.17.2 and other than the
Entevo End-User License Agreements and the Distribution Agreements, no
person other than Entevo and its Subsidiaries has any right or interest
of any kind or nature in or with respect to the Entevo-Owned Software
or any portion thereof or any rights to sell, license, lease, transfer,
use or otherwise exploit the Entevo-Owned Software or any portion
thereof. (g) Each software author has made his or her contribution to
the Entevo-Owned Software (i) within the scope of employment with
Entevo or a Subsidiary thereof as a "work made for hire" or has
otherwise assigned such work in writing to Entevo or a Subsidiary
thereof, or (ii) as an independent contractor pursuant to a written
agreement in which work product and the intellectual property rights
therein, including copyrights, either (A) were designated as "works
made for hire," or (B) were the subject of a written assignment of, or
a written obligation to assign, all right, title, and interest therein
to Entevo or a Subsidiary thereof.
4.17.3. Schedule 4.17.3 sets forth a true, correct and complete list of (a) all
persons (other than Entevo and its Subsidiaries and their independent
contractors who are subject to written confidentiality agreements to
keep such source code confidential) that have been provided with the
source code, and (b) all source code escrow agreements relating to any
of the Entevo-Owned Software. Except as specified in Schedule 4.17.3,
to the Knowledge of Entevo and the Representing Stockholders, no person
(other than Entevo and its Subsidiaries and their independent
contractors and their respective employees who are subject to written
confidentiality agreements to keep such source code confidential) is in
possession of, or has or has had access to, or has asserted a right of
access to, pursuant to any contracted right therefore or otherwise, any
source code for any computer program included in the Entevo-Owned
Software.
4.17.4. Except as specified in Schedule 4.17.4:
(a) (i) The Entevo-Owned Software currently available for general
commercial license has all the features and functions
described in, and in operation performs substantially as
described in, the related user manual. (ii) The Entevo-Owned
Software and, to the Knowledge of Entevo and the Representing
Stockholders, all other Software) does not contain any "back
door", "time bomb", "Trojan horse", "worm", "drop dead
device", "virus" (as these terms are commonly used in the
computer software industry), or other software routines or
hardware components designed to permit unauthorized access, to
disable or erase software, hardware or data or to perform any
other similar type of functions. (iii) The Entevo--Owned
Software does not contain routines for surreptitiously
obtaining and/or
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transmitting personal identifiable information to any person
other than the person who is the subject of such information;
(b) To the Knowledge of Entevo and the Representing Stockholders,
there are no material defects in any Computer Program included
in the Entevo-Owned Software, which would cause such software
to fail to be "Year 2000 compliant". For purposes of this
Agreement, "Year 2000 compliant", means that all of the
Software has the following properties and capabilities: (i)
the capability to correctly recognize and accurately process
dates expressed as a four-digit number (or the binary
equivalent or other machine readable iteration thereof)
(collectively, the "Four-Digit Dates"); (ii) the capability to
accurately execute calculations using Four-Digit Dates; (iii)
the functionality (both on-line and batch), including entry,
inquiry, maintenance and update, to support processing
involving Four-Digit Dates; (iv) the capability to generate
interfaces and reports that support processing involving
Four-Digit Dates; (v) the capability to generate and
successfully transition, without human intervention, into the
year 2000 using the correct system date and to thereafter
continue processing with Four-Digit Dates; (vi) the capability
to provide correct results in forward and backward data
calculations spanning century boundaries, including the
conversion of pre-2000 dates currently stored as two-digit
dates; and (vii) the capability of correctly recognizing and
processing all leap-year aspects of any of items (i) through
(vi); provided, however, that it shall not be a breach of this
section if any failure to be Year 2000 compliant is due to (x)
a failure, by any third party product which the Entevo-Owned
Software is used, to be Year 2000 compliant or (y) any
modification of the Entevo-Owned Software made after the date
of the Closing.
(c) (i) To the Knowledge of Entevo and the Representing
Stockholders, no third party is violating or has violated any
of Entevo's or its Subsidiaries' proprietary rights in the
Entevo-Owned Software; (ii) except for the Distribution
Agreements, no third party has any right to compensation from
Entevo or its Subsidiaries by reason of the use, exploitation
or sale of the Entevo-Owned Software; (iii) except for the
Entevo End-User License Agreements and the Distribution
Agreements, there are no restrictions on the ability of Entevo
or its Subsidiaries, or any of their respective successors or
assignees, to use, sell or otherwise exploit the Entevo-Owned
Software; and (iv) neither Entevo nor any of the Representing
Stockholders has received any notice and do not have any
Knowledge of any complaint, assertion, claim, threat or
allegation inconsistent with the preceding statements in this
paragraph.
4.17.5. (a) Each Computer Program included in the Software exists in machine
readable form. (b) All warranty claims first made after the later of
(i) three years prior to the date of this Agreement and (ii) the date
that the Entevo product in question was first made available for
general commercial licensing, including any pending claims, relating to
the Software are described in Schedule 4.17.5.
4.17.6. [Reserved].
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4.17.7. Except as specified in Schedule 4.17.7, neither Entevo nor any of its
Subsidiaries markets, or has marketed, and none of them has supported
or is obligated to support, any Third-Party Licensed Software not
incorporated into the Entevo-Owned Software.
4.18. INSURANCE.
4.18.1. Entevo has delivered or made available to BindView and BAC:
(a) true and complete copies of all policies of insurance to which
Entevo is a party or under which Entevo, or any officer or
director of Entevo in his capacity as such, is or has been
covered at any time within the three years preceding the date
of this Agreement;
(b) true and complete copies of all pending applications for
policies of insurance; and
(c) any statement by any auditor of Entevo's financial statements
with regard to the adequacy of Entevo's coverage or of the
reserves for claims.
4.18.2. Schedule 4.18.2 describes:
(a) any self-insurance arrangement by or affecting Entevo,
including any reserves established thereunder;
(b) any contract or arrangement, other than a policy of insurance,
for the transfer or sharing of any risk by Entevo; and
(c) all obligations of Entevo to third parties with respect to
insurance (including such obligations under leases and service
agreements) and identifies the policy under which such
coverage is provided.
4.18.3. For the current policy year and each of the two preceding policy years:
(a) there has been no loss experience under each policy;
(b) there has been no claim under an insurance policy for an
amount in excess of $50,000; and
(c) there has been no loss experience for any claims that were
self-insured, including the number and aggregate cost of such
claims.
4.18.4. To the knowledge of Entevo and the Representing Stockholders, all
policies to which Entevo is a party or that provide coverage to Entevo
or any Securityholder, or any director or officer of Entevo in his
capacity as such:
(a) are valid, outstanding and enforceable;
(b) are issued by an insurer that is financially sound;
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34 BVEW/ENTEVO MERGER AGREEMENT
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(c) taken together, provide adequate insurance coverage for the
Assets and the operations of Entevo for all risks normally
insured against by a Person carrying on the same business or
businesses as Entevo and for all risks to which Entevo is
normally exposed;
(d) are sufficient in type and amount for compliance with all
Legal Requirements and Contracts to which Entevo is a party or
by which it is bound;
(e) will continue in full force and effect following the Closing
and the consummation of the Contemplated Transactions; and
(f) do not provide for any retrospective premium adjustment or
other experienced-based liability on the part of Entevo.
4.18.5. Entevo has not received (a) any refusal of coverage or any notice that
a defense will be afforded with reservation of rights or (b) any notice
of cancellation or any other indication that any insurance policy will
not be renewed or that the issuer of any such policy is not willing or
able to perform its obligations thereunder.
4.18.6. Entevo has paid all premiums due, and has otherwise performed all of
its respective obligations, under each material policy to which Entevo
is a party or that provides coverage to Entevo or any officer or
director thereof in his capacity as such.
4.19. EMPLOYEES.
4.19.1. Schedule 4.19 contains a complete and accurate list of the following
information for each employee or director of Entevo, including each
employee on leave of absence or layoff status: employer; name; job
title; current compensation paid or payable and any change in
compensation since September 30, 1999. The Latest Balance Sheet
includes an accurate reserve for the accrued vacation of all employees
of Entevo and its subsidiaries. Entevo and its Subsidiaries have no
pension, retirement, profit-sharing, thrift-savings, deferred
compensation, stock bonus, cash bonus, employee stock ownership
(including investment credit or payroll stock ownership), severance
pay, insurance, medical, welfare or vacation plan, other Employee
Pension Benefit Plan or Employee Welfare Benefit Plan, or any other
employee benefit plan or any compensatory or benefit plan intended
solely for directors of Entevo.
4.19.2. To Entevo's and each of the Representing Stockholders' Knowledge, no
employee or director of Entevo is a party to, or is otherwise bound by,
any agreement or arrangement, including any confidentiality,
noncompetition or proprietary rights agreement, between such employee
or director and any other Person (each, a "Proprietary Rights
Agreement") that in any way adversely affects or will affect (a) the
performance of his duties as an employee or director of the Surviving
Corporation or (b) the ability of the Surviving Corporation to conduct
its business, including any Proprietary Rights Agreement with Entevo or
any of the Representing Stockholders by any such employee or director.
To Entevo's and each of the Representing Stockholders' Knowledge, no
director, officer or other key employee of Entevo intends to terminate
his employment with Entevo.
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35 BVEW/ENTEVO MERGER AGREEMENT
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4.19.3. Entevo has no retired employees or directors receiving benefits or
scheduled to receive benefits in the future.
4.20. LABOR RELATIONS; COMPLIANCE.
Since January 1, 1997, neither Entevo nor any of its Subsidiaries has been a
party to any collective bargaining or other labor Contract. Since January 1,
1997, there has not been, there is not presently pending or existing and to
Entevo's and each of the Representing Stockholders' Knowledge there is not
Threatened, (a) any strike, slowdown, picketing, work stoppage or employee
grievance process, (b) any Proceeding against or affecting Entevo or its
Subsidiaries relating to the alleged violation of any Legal Requirement
pertaining to labor relations or employment matters, including any charge or
complaint filed by an employee or union with the National Labor Relations Board,
the Equal Employment Opportunity Commission or any comparable Governmental Body,
organizational activity or other labor or employment dispute against or
affecting Entevo or its premises or (c) any application for certification of a
collective bargaining agent. To Entevo's and each of the Representing
Stockholders' Knowledge, no event has occurred or circumstance exists that could
provide the basis for any work stoppage or other labor dispute. There is no
lockout of any employees by Entevo or its Subsidiaries, and no such action is
contemplated by Entevo or its Subsidiaries. Entevo and its Subsidiaries have
complied in all material respects with all Legal Requirements relating to
employment, equal employment opportunity, nondiscrimination, immigration, wages,
hours, benefits, collective bargaining, the payment of social security and
similar taxes, occupational safety and health, and plant closing. Neither Entevo
nor its Subsidiaries is liable for the payment of any compensation, damages,
taxes, fines, penalties or other amounts, however designated, for failure to
comply with any of the foregoing Legal Requirements.
4.21. INTELLECTUAL PROPERTY.
4.21.1. Intellectual Property Assets. The term "Entevo Intellectual Property
Assets" includes all right, title and interest, anywhere in the world,
in and to any of the following things that cover the Entevo-Owned
Software:
(a) the name "Entevo" and all fictional business names, trading
names, domain names, registered and unregistered trademarks
and service marks, and pending registration applications for
any of the foregoing (collectively, "Marks");
(b) all issued patents, pending or unfiled patent applications and
inventions and discoveries that may be patentable
(collectively, "Patents");
(c) all copyrights in both published works and unpublished works
(collectively, "Copyrights");
(d) all rights in mask works; and
(e) all know-how, trade secrets, confidential information,
customer lists, software, technical information, data, process
technology, plans, drawings and blue prints (collectively,
"Trade Secrets") owned by Entevo or its Subsidiaries or
licensed by Entevo or its Subsidiaries as licensee and
embedded in Entevo's products.
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36 BVEW/ENTEVO MERGER AGREEMENT
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4.21.2. Agreements. Schedule 4.21.2 contains a complete and accurate list of
all Contracts relating to the Entevo Intellectual Property Assets to
which Entevo is a party, or by which Entevo is bound and for which
Entevo has or is expected to derive sales revenues, except for (a) any
license implied by the sale of an Entevo or third-party product under
an Entevo standard (i.e., non-negotiated) form of license agreement
provided to BindView, (b) perpetual, paid-up licenses for commonly
available software programs with a value of less than $5,000 under
which Entevo is the licensee, (c) the Entevo End-User License
Agreements and (d) the Distribution Agreements (which are separately
scheduled). There are no outstanding and, to Entevo's and each of the
Representing Stockholders' Knowledge, no material Threatened disputes
or disagreements with respect to any such agreement.
4.21.3. Intellectual Property Necessary for the Business; Employee Agreements.
(a) Except as set forth in Schedule 4.21.3 and except where a
failure to do so would not have a Material Adverse Effect,
Entevo and its Subsidiaries either own or have adequate rights
to use, on a royalty-free basis, all of the patents,
trademarks, copyrights, trade secrets, mask works, or other
intellectual property rights that are necessary to and
currently used for their respective business as now conducted,
free and clear of all liens other than those that may be
specified herein or in Schedule 4.21.3.
(b) Except as set forth in Schedule 4.21.3, each present and
former employee of Entevo and its Subsidiaries has executed a
confidentiality, nondisclosure and intellectual property
assignment agreement substantially in the form attached to
Schedule 4.21.3.
4.21.4. Patents.
(a) Entevo does not own patents.
(b) To Entevo's Knowledge, neither the Entevo-Owned Software nor
the making or sale or other distribution of copies thereof,
nor the use thereof in accordance with the associated
documentation or advertising, nor any process or know-how used
by Entevo, infringes or has been alleged (formally or
informally) to infringe any patent or other proprietary right
of any other Person anywhere in the world or to require a
license under the same.
4.21.5. Trademarks.
(a) Schedule 4.21.5 contains a complete and accurate list of all
Marks. Except as set forth on Schedule 4.21.5, Entevo is the
owner of all right, title and interest in and to each of the
Marks, free and clear of all liens and security interests.
(b) Except as set forth in Schedule 4.21.5, all Marks that have
been registered with the United States Patent and Trademark
Office are currently in compliance with all formal legal
requirements (including the timely post-registration filing of
affidavits of use and incontestability and renewal
applications), and, to the
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37 BVEW/ENTEVO MERGER AGREEMENT
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knowledge of Entevo and the Representing Stockholders, are
valid and enforceable and are not subject to any maintenance
fees or taxes or actions falling due within 90 days after the
Closing Date.
(c) To Entevo's or any of the Representing Stockholders'
Knowledge, no Xxxx has been or is now involved in any
opposition, invalidation or cancellation and, to Entevo's or
the Representing Stockholders' Knowledge, no such action is
Threatened with the respect to any of the Marks.
(d) To Entevo's or any of the Representing Stockholders'
Knowledge, there is no trademark of any third party that is
confusingly similar to any of the Marks.
(e) To Entevo's or any of the Representing Stockholders'
Knowledge, (i) no Xxxx is infringed or has been challenged or
threatened in any way as to its validity; and (ii) none of the
Marks used by Entevo infringes or has been alleged (formally
or informally) to infringe any trade name, trademark or
service xxxx of any third party anywhere in the world.
4.21.6. Copyrights. (a) Except as provided in Schedule 4.21.6, Entevo does not
own any Copyright registration. registrations, and (b) neither the
Entevo-Owned Software nor the making or sale or other distribution of
copies thereof, nor the use thereof in accordance with the associated
documentation or advertising, nor any process or know-how used by
Entevo, infringes or has been alleged (formally or informally) to
infringe any copyright of any other Person anywhere in the world.
4.21.7. Trade Secrets.
(a) Entevo has taken all reasonable precautions to protect the
secrecy, confidentiality and value of its Trade Secrets.
(b) Entevo has good title or sufficient right to use the Trade
Secrets. To the Knowledge of Entevo and the Representing
Stockholders, the Trade Secrets (i) are not part of the public
knowledge or literature, (ii) as to Entevo-owned Trade
Secrets, have not been used, divulged or appropriated either
for the benefit of any Person (other than Entevo) or to the
detriment of Entevo, and (iii) have not been challenged or
threatened formally or informally, as to their protectability
in any way.
(c) To the Knowledge of Entevo and the Representing Stockholders,
neither the Entevo-Owned Software nor the making or sale or
other distribution of copies thereof, nor the use thereof in
accordance with the associated documentation or advertising,
nor any process or know-how used by Entevo, constitutes or has
been alleged (formally or informally) to constitute
misappropriation of any trade secret of any other Person
anywhere in the world.
4.21.8. Privacy Laws. To the Knowledge of Entevo and the Representing
Stockholders, no Person has alleged (formally or informally) to Entevo
or any of its Subsidiaries that Entevo or a Subsidiary thereof has
violated any applicable privacy law.
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4.22. ABSENCE OF CERTAIN PAYMENTS AND TRANSACTIONS.
4.22.1. Neither Entevo nor any director, officer, agent or employee of Entevo,
or any other Person associated with or acting for or on behalf of
Entevo, has directly or indirectly made any improper or unlawful
contribution, gift, bribe, rebate, payoff, influence payment, kickback
or other payment to any Person, private or public, regardless of form,
whether in money, property or services (i) to obtain favorable
treatment in securing business, (ii) to pay for favorable treatment for
business secured, (iii) to obtain special concessions or for special
concessions already obtained, for or with respect to Entevo or any
Related Person of Entevo or (iv) in violation of any Legal Requirement.
4.22.2. Entevo has made and keeps books, records, and accounts, which, in
reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the issuer. Entevo has devised and
maintains a system of internal accounting controls sufficient to
provide reasonable assurances that (i) transactions involving Entevo's
Assets are executed in accordance with management's general or specific
authorization; (ii) such transactions are recorded as necessary (A) to
permit preparation of financial statements in conformity with generally
accepted accounting principles or any other criteria applicable to such
statements, and (B) to maintain accountability for assets; (iii) access
to Entevo's Assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability
for Entevo's Assets is compared with its existing Assets at reasonable
intervals and appropriate action is taken with respect to any
differences.
4.23. FULL DISCLOSURE.
No representation or warranty of Entevo or of the Representing Stockholders in
this Agreement (including the Schedules) omits to state a material fact
necessary to make the statements herein or therein, in light of the
circumstances in which they were made, not misleading.
4.24. NO BROKERS OR FINDERS.
Except as set forth on Schedule 4.24, which Schedule identifies the full
liability therefor, Entevo and its agents have incurred no obligation or
liability, contingent or otherwise, for brokerage or finders' fees or agents'
commissions or other similar payment in connection with this Agreement.
4.25. YEAR 2000 COMPLIANCE.
To the Knowledge of Entevo or any of the Representing Stockholders, with respect
to any essential computer software, hardware, product or service utilized by
Entevo in its Ordinary Course of Business, each of such computer software,
hardware, product or service is Year 2000 compliant (as defined in Section
4.17.4(b)), except in such case where the failure to do so would not have a
Material Adverse Effect upon Entevo.
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4.26. CUSTOMERS AND SUPPLIERS.
4.26.1. Schedule 4.26 sets forth a true and correct list of (a) the ten largest
customers of Entevo in terms of sales during the fiscal year ended
December 31, 1998, and (b) the ten largest customers of Entevo in terms
of sales during the period from January 1, 1999 through the date of the
Latest Balance Sheet, showing the approximate total sales to each such
customer during each of such periods.
4.26.2. Schedule 4.26 sets forth a true and correct list of (a) the ten largest
suppliers of Entevo in terms of purchases during the fiscal year ended
December 31, 1998, and (b) the ten largest suppliers of Entevo in terms
of purchases during the period from January 1, 1999 through the date of
the Latest Balance Sheet, showing the approximate total purchases from
each such supplier during such respective periods.
4.26.3. To the knowledge of Entevo and the Representing Stockholders, except to
the extent set forth in Schedule 4.26, there has not been any material
adverse change in the business relationship of Entevo with any customer
or supplier so named in Schedule 4.26.
4.27. TAX MATTERS.
4.27.1. Other than in the Ordinary Course of Business, Entevo did not and will
not make any transfer of any of the Assets in contemplation of the
Merger or during the period ending at the Effective Time and beginning
with the commencement of negotiations (whether formal or informal) with
BindView regarding the Merger (or any other form of disposition of the
Assets or capital stock of Entevo, other than in the Ordinary Course of
Business). For the purposes of this Section 4.27.1, a transfer of
Assets includes any distribution of Assets with respect to capital
stock or in redemption of capital stock.
4.27.2. At the Effective Time, Entevo will hold at least 90% of the fair market
value of the net assets and at least 70% of the fair market value of
the gross assets held by Entevo immediately prior to the Merger.
4.28. SECURITIES LAW MATTERS.
4.28.1. The representations and warranties of each Stockholder made to BindView
in documents delivered as of the date hereof are incorporated herein as
representations of Entevo.
4.29. RELATIONSHIPS WITH RELATED PERSONS.
4.29.1. Neither the Representing Stockholders nor any Related Person of Entevo
or any of the Representing Stockholders has, or since January 1, 1998
has had, any interest in any Facilities or Assets used in or pertaining
to Entevo's business.
4.29.2. Except as set forth on Schedule 4.29.2, neither the Representing
Stockholders nor any Related Person of Entevo or any of the
Representing Stockholders is, or since January 1, 1998 has owned (of
record or as a beneficial owner) an equity interest or any other
financial or profit interest in, a Person that has (a) had business
dealings or a material financial interest in any transaction with
Entevo other than business dealings or
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40 BVEW/ENTEVO MERGER AGREEMENT
46
transactions with investment entities with which directors of Entevo
are affiliated or business dealings or transactions conducted in the
Ordinary Course of Business with Entevo at substantially prevailing
market prices and on substantially prevailing market terms or (b)
engaged in competition with Entevo with respect to any line of the
products or services of Entevo in any market presently served by
Entevo, except for ownership of less than one percent of the
outstanding capital stock of any such Person that is publicly traded on
any national securities exchange quoted on any national automated
quotation system or traded in the over-the-counter market.
4.29.3. Except as set forth in Schedule 4.29, neither the Representing
Stockholders nor any Related Person of Entevo or any of the
Representing Stockholders is a party to any material Contract with, or
has any claim or right against, Entevo.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF BINDVIEW AND BAC
BindView and BAC each represents and warrants to Entevo and the Representing
Stockholders as follows:
5.1. ORGANIZATION AND GOOD STANDING.
BindView is a corporation duly organized, validly existing and in good standing
under the laws of the State of Texas. BAC is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Each of BindView and BAC has full corporate power and authority to conduct its
business as it is now being conducted, to own or use the properties and is duly
qualified to transact business as a foreign corporation and is in good standing
under the laws of each state or other jurisdiction in which either the ownership
or use of the properties owned or used by it, or the nature of the activities
conducted by it, requires such qualification.
5.2. AUTHORITY; NO CONFLICT.
5.2.1. This Agreement constitutes the legal, valid and binding obligation of
BindView and BAC, enforceable against BindView and BAC in accordance
with its terms. Upon the execution and delivery by BindView and BAC of
the Indemnity Escrow Agreement and the Registration Rights Agreement
(collectively, the "BindView Closing Documents"), the BindView Closing
Documents will constitute the legal, valid and binding obligations of
BindView and BAC, enforceable against BindView and BAC in accordance
with their respective terms. BindView and BAC have the absolute and
unrestricted right, power and authority to execute and deliver this
Agreement and the BindView Closing Documents and to perform their
obligations under this Agreement and the BindView Closing Documents.
5.2.2. Except as set forth in Schedule 5.2, neither the execution and delivery
of this Agreement or the BindView Closing Documents by BindView or BAC
nor the consummation or performance of any of the Contemplated
Transactions by BindView or BAC will give any Person the right to
prevent, delay or otherwise interfere with any of the Contemplated
Transactions pursuant to:
(a) any provision of BindView's or BAC's Organizational Documents;
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41 BVEW/ENTEVO MERGER AGREEMENT
47
(b) any resolution adopted by the board of directors or the
stockholders of BindView or BAC;
(c) any Legal Requirement or Order to which BindView or BAC may be
subject; or
(d) any Contract to which BindView or BAC is a party or by which
BindView or BAC may be bound.
5.2.3. Except as set forth in Schedule 5.2, BindView and BAC are not and will
not be required to obtain any Consent from any Person in connection
with the execution and delivery of this Agreement or the consummation
or performance of any of the Contemplated Transactions.
5.3. CERTAIN PROCEEDINGS.
There is no pending Proceeding that has been commenced against BindView or BAC
and that challenges, or may have the effect of preventing, delaying, making
illegal or otherwise interfering with any of the Contemplated Transactions. To
BindView's and BAC's Knowledge, no such Proceeding has been Threatened.
5.4. BROKERS OR FINDERS.
Except for Xxxxxxx Xxxxx & Co., the fees and expenses of which will be paid by
BindView, BindView and BAC and each of their officers and agents have incurred
no obligation or liability, contingent or otherwise, for brokerage or finders'
fees or agents' commissions or other similar payment in connection with this
Agreement.
5.5. BINDVIEW CAPITALIZATION.
5.5.1. As of the date of this Agreement, the authorized capital stock of
BindView consists of 100,000,000 shares of BindView Stock, of which
23.35 million shares were outstanding as of the close of business on
December 31, 1999, and 20,000,000 shares of preferred stock, par value
$0.01 per share, of which no shares are outstanding. All of the
outstanding shares of BindView Stock have been duly authorized and are
validly issued, fully paid and nonassessable. BindView has no common
stock or preferred stock reserved for issuance, except that, as of
December 31, 1999, there were an aggregate of less than 10 million
shares of BindView Stock reserved for issuance pursuant to BindView's
stock option and incentive plans and a stand-alone warrant. Except as
set forth above, there are no preemptive or other outstanding rights,
options, warrants, conversion rights, stock appreciation rights,
redemption rights, repurchase rights, agreements, arrangements or
commitments to issue or to sell any shares of capital stock or other
securities of BindView or any of its Subsidiaries or any securities or
obligations convertible or exchangeable into or exercisable for, or
giving any Person a right to subscribe for or acquire, any securities
of BindView or any of its Subsidiaries, and no securities or obligation
evidencing such rights are authorized, issued or outstanding. BindView
does not have outstanding any bonds, debentures, notes or other
obligations the holders of which have the right to vote (or convertible
into or exercisable for securities having the right to vote) with the
stockholders of BindView on any matter.
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42 BVEW/ENTEVO MERGER AGREEMENT
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5.5.2. Before the Closing, BindView will have taken all necessary action to
permit it to issue the number of shares of BindView Stock to be issued
as Consideration pursuant to Section 2.3. The Consideration, when
issued, will be validly issued, fully paid and nonassessable, and no
stockholder of BindView will have any preemptive right of subscription
or purchase in respect thereof.
5.6. BAC CAPITALIZATION.
The authorized capital stock of BAC consists of 1,000 shares of BAC Stock, of
which 1,000 shares were outstanding as of the close of business on the date of
this Agreement. All of the outstanding shares of BAC Stock have been duly
authorized and are validly issued, fully paid and nonassessable. BAC has no BAC
Stock reserved for issuance. Except as set forth above, there are no preemptive
or other outstanding rights, options, warrants, conversion rights, stock
appreciation rights, redemption rights, repurchase rights, agreements,
arrangements or commitments to issue or to sell any shares of capital stock or
other securities of BAC or any of its Subsidiaries or any securities or
obligations convertible or exchangeable into or exercisable for, or giving any
Person a right to subscribe for or acquire, any securities of BAC or any of its
Subsidiaries, and no securities or obligation evidencing such rights are
authorized, issued or outstanding. BAC does not have outstanding any bonds,
debentures, notes or other obligations the holders of which have the right to
vote (or convertible into or exercisable for securities having the right to
vote) with the stockholders of BAC on any matter.
5.7. BINDVIEW SEC REPORTS.
BindView has delivered to Entevo (1) BindView's Annual Report on Form 10-K for
the year ended December 31, 1998 and (2) BindView's Quarterly Reports on Form
10-Q for the quarters ended March 31, 1999, June 30, 1999 and September 30,
1999, filed with the SEC under the Exchange Act (collectively, the "BindView SEC
Reports"). As of their respective dates, the BindView SEC Reports did not, and
any BindView SEC Reports filed with the SEC subsequent to the date hereof will
not, contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances in which they were made, not misleading.
Each of the consolidated balance sheets included in or incorporated by reference
into the BindView SEC Reports (including the related notes and schedules) fairly
presents the consolidated financial position of BindView and its Subsidiaries as
of its date and each of the consolidated statements of income and of cash flow
included in the BindView SEC Reports (including any related notes and schedules)
fairly presents the results of operations, retained earnings and changes in cash
flow, as the case may be, of BindView and its Subsidiaries for the periods set
forth therein (subject, in the case of unaudited statements, to notes and normal
year end audit adjustments that will not be material in amount or effect), in
each case in accordance with GAAP consistently applied during the periods
involved, except as may be noted therein.
5.8. LITIGATION.
There is no action, suit, proceeding, claim, arbitration or investigation
pending, or as to which BindView has received any notice of assertion against
BindView which in any manner challenges or seeks to prevent, enjoin, alter or
materially delay any of the transactions
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43 BVEW/ENTEVO MERGER AGREEMENT
49
contemplated in this Agreement or which would reasonably be expected to have a
Material Adverse Effect upon BindView.
5.9. NO MATERIAL ADVERSE CHANGE.
Since September 30, 1999, BindView has conducted its business in the ordinary
course and there has not occurred: (1) any change in the results of operations,
properties or financial condition of BindView that would result in a Material
Adverse Effect on BindView; (2) any amendment or change to the Articles of
Incorporation or Bylaws of BindView; or (3) any damage to, destruction or loss
of any assets of BindView, (whether or not covered by insurance) that would
result in a Material Adverse Effect on BindView.
5.10. TAX MATTERS
BindView has no plan or intention of entering into any transaction following the
Merger that would prevent Entevo from holding at least 90% of the fair market
value of the net assets and at least 70% of the fair market value of the gross
assets held by Entevo immediately prior to the Merger.
5.11. POOLING
To the Knowledge of BindView, BindView is eligible to use "pooling of interests"
accounting treatment for the Merger.
ARTICLE 6. COVENANTS OF ENTEVO AND THE REPRESENTING STOCKHOLDERS
6.1. OPERATION OF THE BUSINESSES OF ENTEVO.
Between the date of this Agreement and the Closing Date, Entevo will, and the
Representing Stockholders will cause Entevo to:
6.1.1. conduct the business of Entevo only in the Ordinary Course of Business,
consistent with past practices;
6.1.2. use its Best Efforts to preserve intact the current business
organization of Entevo, keep available the services of the current
officers, employees and agents of Entevo and maintain the relations and
good will with suppliers, customers, landlords, creditors, employees,
agents and others having business relationships with Entevo;
6.1.3. confer with BindView concerning operational matters of a material
nature; and
6.1.4. otherwise report periodically to BindView regarding the status of the
business, operations and finances of Entevo.
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44 BVEW/ENTEVO MERGER AGREEMENT
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6.2. NEGATIVE COVENANTS.
Except as otherwise expressly permitted by this Agreement, between the date of
this Agreement and the Closing Date, Entevo will not without the prior consent
of BindView,
6.2.1. take any action that would jeopardize treatment of the Contemplated
Transactions as a "pooling of interests" for accounting purposes;
6.2.2. take any affirmative action, or fail to take any reasonable action
within its or their control, as a result of which any of the changes or
events listed in Section 4.15 is likely to occur;
6.2.3. pay, make or declare any distribution or dividend, including any
special or regular bonuses (other than those regular bonuses paid in
the Ordinary Course of Business and described on Schedule 6.2.3, which
may be paid only with BindView's prior consent, which consent may not
be withheld unless BindView receives written advice from its
independent accountants that such payment would violate Section 6.2.1)
that would otherwise be payable to the Securityholders during such time
period, to the Securityholders;
6.2.4. issue any additional equity interests in Entevo (including any Entevo
Stock or Entevo Options), other than the issuance of Entevo Stock
pursuant to validly exercised Entevo Options outstanding on the date
hereof and reflected in the Schedules hereto;
6.2.5. prepay or amend the provisions of any term indebtedness for borrowed
money of Entevo existing as of the date hereof; or
6.2.6. take any action that is not in the Ordinary Course of Business.
6.3. REQUIRED APPROVALS.
As promptly as practicable after the date of this Agreement, Entevo will make
all filings required by Legal Requirements to be made by them in order to
consummate the Contemplated Transactions, including filings under the Xxxx-Xxxxx
Xxxxxx Antitrust Improvements Act of 1976. Between the date of this Agreement
and the Closing Date, Entevo will, and the Representing Stockholders will cause
Entevo to, (1) cooperate with BindView with respect to all filings that BindView
elects to make or is required by Legal Requirements to make in connection with
the Contemplated Transactions and (2) cooperate with BindView in obtaining all
consents identified in Schedule 4.2.
6.4. NOTIFICATION.
Between the date of this Agreement and the Closing Date, Entevo and each
Representing Stockholder will promptly notify BindView in writing if Entevo or
such Representing Stockholder becomes aware of any fact or condition that causes
or constitutes a Breach of any of Entevo's or the Representing Stockholders'
representations and warranties as of the date of this Agreement, or if Entevo or
such Representing Stockholder becomes aware of the occurrence after the date of
this Agreement of any fact or condition that would (except as expressly
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45 BVEW/ENTEVO MERGER AGREEMENT
51
contemplated by this Agreement) cause or constitute a Breach of any such
representation or warranty, had such representation or warranty been made as of
the time of occurrence or discovery of such fact or condition. During the same
period, Entevo and each Representing Stockholder will promptly notify BindView
of the occurrence of any Breach of any covenant of Entevo or the Representing
Stockholders in this Article 6 or of the occurrence of any event that may make
the satisfaction of the conditions in Article 9 impossible or unlikely.
6.5. [RESERVED]
6.6. NO NEGOTIATION.
It being understood that holders of Entevo Stock representing sufficient voting
power to approve the Merger in accordance with the GCLD have irrevocably adopted
this Agreement and approved the Merger, until such time, if any, as this
Agreement is terminated pursuant to Article 10, Entevo will not, and will cause
each of its Representatives not to, and the Representing Stockholders will not,
directly or indirectly solicit, initiate or encourage any inquiries or proposals
from, discuss or negotiate with or provide any non-public information to, any
Person (other than BindView and BAC) relating to any transaction involving the
sale of Entevo Stock or the business or Assets (other than the sale of Assets
and inventory in the Ordinary Course of Business and the sale or issuance of
Entevo Stock pursuant to the exercise of options, warrants or any other rights
to acquire Entevo Stock outstanding on the date hereof and reflected in the
Schedules hereto) of Entevo, or any merger, consolidation, business combination
or similar transaction involving Entevo.
6.7. BEST EFFORTS.
Between the date of this Agreement and the Closing Date, Entevo and the
Representing Stockholders will use their Best Efforts to cause the conditions in
Articles 8 and 9 to be satisfied.
6.8. TRANSACTION EXPENSES.
Entevo shall not incur Transaction Expenses in excess of the amount indicated on
Schedule 6.8 (such amount being the "Estimated Transaction Expenses").
ARTICLE 7. COVENANTS OF BINDVIEW AND BAC
7.1. POOLING TREATMENT.
Neither BindView nor BAC will take any action that would jeopardize treatment of
the Contemplated Transactions as a "pooling of interests" for accounting
purposes
7.2. REQUIRED APPROVALS.
As promptly as practicable after the date of this Agreement, BindView and BAC
will, and will cause each of its Related Persons to, make all filings required
by Legal Requirements to be made by them to consummate the Contemplated
Transactions, including, if applicable, filings under the Xxxx-Xxxxx Xxxxxx
Antitrust Improvements Act of 1976. Between the date of this Agreement and the
Closing Date, BindView and BAC will, and will cause each Related Person to, (1)
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46 BVEW/ENTEVO MERGER AGREEMENT
52
cooperate with Entevo and the Stockholders with respect to all filings that
Entevo and the Stockholders are required by Legal Requirements to make in
connection with the Contemplated Transactions and (2) cooperate with Entevo and
the Stockholders in obtaining all consents identified in Schedule 4.2.
7.3. NOTIFICATION.
Between the date of this Agreement and the Closing Date, BindView and BAC will
promptly notify Entevo in writing if BindView and BAC become aware of any fact
or condition that causes or constitutes a Breach of any of BindView's and BAC's
representations and warranties as of the date of this Agreement, or if BindView
and BAC become aware of the occurrence after the date of this Agreement of any
fact or condition that would (except as expressly contemplated by this
Agreement) cause or constitute a Breach of any such representation or warranty,
had such representation or warranty been made as of the time of occurrence or
discovery of such fact or condition. During the same period, BindView and BAC
will promptly notify Entevo of the occurrence of any Breach of any covenant of
BindView and BAC become in this Article 7 or of the occurrence of any event that
may make the satisfaction of the conditions in Article 8 impossible or unlikely.
7.4. BEST EFFORTS.
Between the date of this Agreement and the Closing Date, BindView and BAC will
use their Best Efforts to cause the conditions in Articles 8 and 9 to be
satisfied.
7.5. STOCK EXCHANGE LISTING.
BindView shall use its Best Efforts to list on the Nasdaq Stock Market the
shares of BindView Stock to be issued in connection with the Merger and upon
exercise of Substitute Options.
7.6. ENTEVO OPTIONS; ENTEVO WARRANTS.
(a) Concurrent with the Effective Time, Entevo each Entevo Option
outstanding on the date hereof and identified in the Schedules
hereto that has been issued pursuant to Entevo's 1997 Stock
Plan and Entevo's 1998 Indian Stock Option Plan in effect on
the date hereof (the "Stock Plans") shall be assumed by
BindView and become and represent an option (a "Substitute
Option") issued under an appropriate BindView stock option
plan, to purchase the number of shares of BindView Stock
(decreased to the nearest full share) determined by
multiplying (i) the number of shares of Entevo Stock subject
to such Entevo Option immediately prior to the Effective Time
by (ii) the Common Stock Exchange Ratio, which Entevo Options
shall have an exercise price per share of BindView Stock
(rounded up to the nearest tenth of a cent) equal to the
exercise price per share of Entevo Stock immediately prior to
the Effective Time divided by the Common Stock Exchange Ratio.
After the Effective Time, except as provided herein, each
Substitute Option shall be exercisable upon the same terms and
conditions as were applicable under the related Entevo Option
immediately prior to the Effective Time. Entevo agrees that it
will not grant any stock appreciation rights or limited stock
appreciation rights and will not permit cash
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47 BVEW/ENTEVO MERGER AGREEMENT
53
payments to holders of Entevo Options in lieu of the
substitution therefor of Substitute Options.
(b) The adjustments provided herein with respect to any Entevo
Options that are "Incentive Stock Options" as defined in
Section 422 of the Code shall be and are intended to be
effected in a manner which is consistent with Section 424(a)
of the Code.
(c) As soon as practicable after the Effective Time, BindView
shall deliver to the holders of Entevo Options appropriate
notices setting forth such holders' rights pursuant to the
Stock Plans and the agreements evidencing the grants of such
Entevo Options and that such Entevo Options and agreements
shall be assumed by BindView and shall continue in effect on
the same terms and conditions (subject to the adjustment set
forth in this Section 7.6).
(d) As soon as practicable after the Effective Time, BindView
shall prepare and file with the SEC a registration statement
on Form S-8 (or another appropriate form) registering a number
of shares subject to the Substitute Options. Such registration
statement shall be kept effective (and the current status of
the prospectus required thereby shall be maintained in
accordance with the relevant requirements of the Securities
Act and the Exchange Act) at least for so long as any
Substitute Options remain outstanding.
(e) Concurrent with the Effective Time, each Entevo Option
outstanding on the date hereof and identified in the Schedules
hereto that was not issued pursuant to a Stock Plan (each, an
"Entevo Warrant"), without any action on the part of the
holder, shall be deemed to constitute a warrant to acquire, on
the same terms and conditions as were applicable under such
Entevo Warrant, a number of shares of BindView Stock
equivalent to (1) the number of shares that could have been
purchased immediately prior to the Effective Time under such
Entevo Warrant multiplied by (2) the Common Stock Exchange
Ratio (rounded down to the nearest whole number), at a price
per share of BindView Stock (rounded up to the nearest tenth
of a cent) equal to the exercise price per share pursuant to
such Entevo Warrant immediately prior to the Effective Time
divided by the Common Stock Exchange Ratio. At or prior to the
Effective Time, Entevo shall make all necessary arrangements
with respect to the Entevo Warrants to permit the assumption
of the unexercised Entevo Warrants by BindView pursuant to
this Section 7.6(e).
7.7. NONTAXABLE REORGANIZATION.
BindView intends for the Merger to qualify as a reorganization under Section
368(a) of the IRC; BindView and its affiliates shall use commercially reasonable
efforts to cause the Merger to so qualify; BindView and its affiliates will take
the position for all purposes that the Merger so qualifies; and BindView and its
affiliates shall not take any action other than the consummation of the
transactions contemplated herein that would cause the Merger (i) not to so
qualify or (ii) to become taxable to any of the Stockholders immediately prior
to the Closing Date.
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48 BVEW/ENTEVO MERGER AGREEMENT
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7.8. INDEMNIFICATION OF ENTEVO OFFICERS AND DIRECTOR; INSURANCE
BindView agrees for a period of six years following the Closing Date, to fulfill
and honor in all respects any obligations of Entevo to indemnify each person who
is or was a director or officer of Entevo pursuant to any indemnification
provisions of Entevo's Certificate of Incorporation or By-Laws as each is in
effect on December 31, 1999; provided that nothing in this section shall prevent
BindView from effecting any merger, reorganization or consolidation of Entevo.
This Section 7.10 is intended to be for the benefit of, and shall be enforceable
by, the indemnified parties referred to herein, their heirs and personal
representatives and shall be binding on BindView and its successors and assigns.
ARTICLE 8. CONDITIONS PRECEDENT TO ENTEVO'S OBLIGATION TO CLOSE
Entevo's obligation to consummate the Contemplated Transactions is subject to
the satisfaction, at or before Closing, of each of the following conditions, any
of which may be waived by Entevo, in whole or in part; provided, however, that
Entevo's election to proceed with the Closing shall not be deemed a waiver of
any breach of any representation, warranty or covenant contained herein, whether
or not known to Entevo or existing on the Closing Date.
8.1. ACCURACY OF REPRESENTATIONS.
All of BindView's and BAC's representations and warranties in this Agreement
(considered collectively) shall have been accurate in all material respects as
of the date of this Agreement, and will be accurate in all material respects as
of the Closing Date as if made on the Closing Date, without regard to
materiality qualifications contained in any such representation or warranty. For
purposes of determining whether a breach of a representation or warranty has
occurred, and determining the amount of damage suffered by a Stockholder as a
result thereof for purposes of Section 11.3 hereof, the materiality limitation
set forth in the certificates delivered by BindView and the BAC at the Closing
shall be disregarded and BindView and BAC shall be deemed to have made the
representations and warranties set forth in Article 5 on the Closing Date as if
they were made on such date.
8.2. BINDVIEW'S AND THE BAC'S PERFORMANCE.
All of the covenants and obligations that BindView and BAC are required to
perform or to comply with pursuant to this Agreement at or prior to the Closing
(considered collectively), and each of these covenants and obligations
(considered individually), have been duly performed and complied with in all
material respects.
8.3. CONSENTS.
Each of the Consents identified in Schedule 5.2 shall have been obtained and
shall be in full force and effect.
8.4. NO PROCEEDINGS.
Since the date of this Agreement, there has not been commenced or Threatened
against Entevo or any Stockholder, or against any Person affiliated with Entevo
or any Stockholder, any
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49 BVEW/ENTEVO MERGER AGREEMENT
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Proceeding (1) involving any challenge to, or seeking damages or other relief in
connection with, any of the Contemplated Transactions or (2) that may have the
effect of preventing, delaying, making illegal or otherwise interfering with any
of the Contemplated Transactions.
8.5. CLOSING CERTIFICATE.
BindView and BAC shall have executed and delivered to Entevo and the
Stockholders' Representative a certificate, dated the Closing Date, as to the
satisfaction of the conditions set forth in Sections 8.1 and 8.2 and, to the
Knowledge of each Person signing the certificate, the satisfaction of the
conditions set forth in Section 8.3.
8.6. INDEMNITY ESCROW AGREEMENT.
Entevo and the Stockholders' Representative shall have received a copy of the
Indemnity Escrow Agreement, duly executed by the Indemnity Escrow Agent and
BindView.
8.7. REGISTRATION RIGHTS AGREEMENT.
Entevo and the Stockholders' Representative shall have received a copy of the
Registration Rights Agreement in substantially the form attached as Exhibit D,
duly executed by BindView.
8.8. OPINION OF COUNSEL.
Entevo and the Stockholders' Representative shall have received an opinion of
Fulbright & Xxxxxxxx L.L.P., counsel to BindView and BAC, dated the Closing
Date, as to the matters set forth on Exhibit E.
8.9. TAX OPINION.
Entevo shall have received the opinion of Xxxxx & Xxxxxxx L.L.P., counsel to
Entevo, dated the Closing Date, to the effect that the Merger is a
"reorganization" under Section 368(a) of the IRC. In rendering such opinion,
Xxxxx & Xxxxxxx shall require delivery of and rely upon the representations
letter delivered by BindView and Entevo in customary form.
8.10. NO MATERIAL ADVERSE CHANGE.
Since the date of this Agreement, there shall not have been any change in the
business, operations, properties, prospects, Assets or condition of BindView and
BAC that could reasonably be expected to result in a Material Adverse Effect to
BindView and BAC, and no event has occurred or circumstances exists that could
reasonably be expected to result in a Material Adverse Effect to BindView and
BAC.
ARTICLE 9. CONDITIONS PRECEDENT TO BINDVIEW'S AND BAC'S OBLIGATION TO CLOSE
BindView's and BAC's obligation to consummate the Contemplated Transactions is
subject to the satisfaction, at or before Closing, of each of the following
conditions, any of which may be waived by BindView and BAC, in whole or in part;
provided, however, that BindView's and
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50 BVEW/ENTEVO MERGER AGREEMENT
56
BAC's election to proceed with the Closing shall not be deemed a waiver of any
breach of any representation, warranty or covenant contained herein, whether or
not known to BindView or BAC or existing on the Closing Date.
9.1. ACCURACY OF REPRESENTATIONS.
All of Entevo's and the Representing Stockholders' representations and
warranties in this Agreement (considered collectively) shall have been accurate
in all material respects as of the date of this Agreement, and will be accurate
in all material respects as of the Closing Date as if made on the Closing Date,
without regard to materiality qualifications contained in any such
representation or warranty. For purposes of determining whether a breach of a
representation or warranty has occurred, and determining the amount of damage
suffered by an Indemnified Person as a result thereof for purposes of Section
11.2 hereof, the materiality limitation set forth in the certificates delivered
by Entevo and the Representing Stockholders at the Closing shall be disregarded
and Entevo and the Representing Stockholders shall be deemed to have made the
representations and warranties set forth in Article 4 on the Closing Date as if
they were made on such date.
9.2. ENTEVO'S AND THE REPRESENTING STOCKHOLDERS' PERFORMANCE.
All of the covenants and obligations that Entevo and the Representing
Stockholders are required to perform or to comply with pursuant to this
Agreement at or prior to the Closing (considered collectively), and each of
these covenants and obligations (considered individually), have been duly
performed and complied with in all material respects.
9.3. CONSENTS.
Each of the Consents identified in Schedule 4.2 shall have been obtained and
shall be in full force and effect.
9.4. NO PROCEEDINGS.
Since the date of this Agreement, there has not been commenced or Threatened
against BindView or BAC, or against any Person affiliated with BindView or BAC,
any Proceeding (i) involving any challenge to, or seeking damages or other
relief in connection with, any of the Contemplated Transactions or (ii) that may
have the effect of preventing, delaying, making illegal or otherwise interfering
with any of the Contemplated Transactions.
9.5. NO CLAIM REGARDING STOCK OWNERSHIP OR SALE PROCEEDS.
There has not been made or Threatened by any Person not a Securityholder any
claim asserting that such Person (i) is the holder or the beneficial owner of,
or has the right to acquire or to obtain beneficial ownership of, any stock of,
or any other voting, equity or ownership interest in, Entevo or (ii) is entitled
to all or any portion of the Consideration payable for Entevo Stock.
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9.6. NO MATERIAL ADVERSE CHANGE.
Since the date of the Latest Balance Sheet, except as expressly stated in the
Schedules, there shall not have been any change in the business, operations,
properties, prospects, Assets or condition of Entevo and its Subsidiaries that
could reasonably be expected to result in a Material Adverse Effect to Entevo
and its Subsidiaries, taken as a whole, and no event shall have occurred or
circumstance exist that could reasonably be expected to result in a Material
Adverse Effect to Entevo and its Subsidiaries, taken as a whole.
9.7. CLOSING CERTIFICATE.
Entevo shall have executed and delivered to BindView and BAC a certificate,
dated the Closing Date, as to the satisfaction of the conditions set forth in
Sections 9.1 and 9.2 and, to the Knowledge of the Person signing the
certificate, the satisfaction of the conditions set forth in Sections 9.5, 9.6
and 9.7.
9.8. POOLING MATTERS.
BindView shall have received a written opinion of PricewaterhouseCoopers L.L.P.
that, in accordance with generally accepted accounting principles and applicable
rules and regulations of the SEC, each of BindView and Entevo is a poolable
entity and the Merger pursuant to this Agreement will be treated as a "pooling
of interests" for accounting purposes.
9.9. INDEMNITY ESCROW AGREEMENT.
BindView and BAC shall have received a copy of the Indemnity Escrow Agreement,
duly executed by the Indemnity Escrow Agent, Entevo and the Stockholders'
Representative.
9.10. [RESERVED].
9.11. OPINIONS OF COUNSEL.
BindView and BAC shall have received an opinion of Xxxxx & Xxxxxxx L.L.P.,
counsel to Entevo, dated the Closing Date, as to the matters set forth on
Exhibit F.
9.12. TAX OPINION.
BindView shall have received the opinion of Fulbright & Xxxxxxxx L.L.P., counsel
to BindView, dated the Closing Date, to the effect that the Merger is a
"reorganization" under Section 368(a) of the IRC. In rendering such opinion,
Fulbright & Xxxxxxxx shall require delivery of and rely upon the representations
letter delivered by BindView and Entevo in customary form.
9.13. NONCOMPETE AGREEMENTS.
BindView shall have received duly executed noncompete agreements in the form
attached as Exhibit H from each of the Representing Stockholders.
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ARTICLE 10. TERMINATION
10.1. TERMINATION EVENTS.
This Agreement may, by notice given prior to or at the Closing, be terminated:
10.1.1. by either BindView or Entevo if a material Breach of any provision of
this Agreement has been committed by the other party and such Breach
has not been waived and is not reasonably capable of being cured prior
to Closing;
10.1.2. (a) by BindView or BAC if any of the conditions in Article 9 has not
been satisfied as of the Closing Date or if satisfaction of such a
condition is or becomes impossible (other than through the failure of
BindView or BAC to comply with any of its obligations under this
Agreement) and BindView or BAC has not waived such condition on or
before the Closing Date; or (b) by Entevo if any of the conditions in
Article 8 has not been satisfied as of the Closing Date or if
satisfaction of such a condition is or becomes impossible (other than
through the failure of Entevo to comply with any of its obligations
under this Agreement) and Entevo has not waived such condition on or
before the Closing Date;
10.1.3. by mutual consent of BindView and Entevo; or
10.1.4. by BindView or Entevo if (a) the Closing has not occurred (other than
through the failure of any party seeking to terminate this Agreement to
comply fully with its obligations under this Agreement) on or before
May 15, 2000, or such later date as the parties may agree upon in
writing or (b) any court of competent jurisdiction in the United States
or other United States governmental authority shall have issued an
order, decree, ruling or taken any other action restraining, enjoining
or otherwise prohibiting the Merger and such order, decree, ruling or
other action shall have become final and nonappealable.
10.2. EFFECT OF TERMINATION.
10.2.1. Subject to Section 10.2.2, each party's right of termination under
Section 10.1 is in addition to any other rights it may have under this
Agreement or otherwise, and the exercise of a right of termination will
not be an election of remedies. If this Agreement is terminated
pursuant to Section 10.1, all further obligations of the parties under
this Agreement will terminate, except that the obligations in Sections
12.1 and 12.3 will survive; provided, however, that if this Agreement
is terminated by a party because of the Breach of this Agreement by the
other party or because one or more of the conditions to the terminating
party's obligations under this Agreement is not satisfied as a result
of the other party's failure to comply with its obligations under this
Agreement, the terminating party's right to pursue all legal remedies
will survive such termination unimpaired. In addition, upon such a
termination as provided for in this Section 10, each of Entevo,
BindView and BAC shall return any and all information, documents and
data obtained in connection with this transaction to the owner of such
information, documents and data within the five business days following
such confirmed termination.
10.2.2. If BindView or BAC terminates this Agreement pursuant to Section
10.1.2(a) following a Breach by Entevo of Section 6.2.1, and if, within
six months of such termination, Entevo
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or any of the Stockholders enter into an agreement or letter of intent
contemplating an Acquisition Transaction, Entevo will pay BindView,
upon consummation of such transaction, an amount equal to 9.9% of the
total consideration to be received by Entevo or the Stockholders, as
applicable, from the Acquisition Transaction. For purposes of this
clause, the term "Acquisition Transaction" means, whether effected in
one transaction or a series of transactions, (x) any merger,
consolidation, reorganization or other business combination pursuant to
which the business of Entevo and its Subsidiaries is combined with that
of any other Person, (y) the acquisition, directly or indirectly, by
any other Person by way of a tender or exchange offer, negotiated
purchase or other means of 50% or more of the then-outstanding Entevo
Stock or (z) the acquisition, directly or indirectly, by any other
Person of 50% or more of the assets of, or of any right to 50% or more
of the revenues or income of, Entevo and its Subsidiaries by way of a
negotiated purchase, lease, license, exchange, joint venture or other
means.
ARTICLE 11. INDEMNIFICATION; REMEDIES
11.1. SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY KNOWLEDGE.
All representations, warranties, covenants and obligations in this Agreement,
the Schedules, the supplements, the closing certificates delivered pursuant to
Sections 8.5 and 9.8 and any other certificates or document delivered pursuant
to this Agreement will survive the Closing for the periods set for in Section
11.4. The right of any party to indemnification, payment of Damages or any other
remedy based on such representations, warranties, covenants and obligations will
not be affected by any investigation conducted with respect to, or any Knowledge
acquired (or capable of being acquired) at any time by that party, whether
before or after the execution and delivery of this Agreement or the Closing
Date, with respect to the accuracy or inaccuracy of or compliance with, any such
representation, warranty, covenant or obligation.
11.2. INDEMNIFICATION AND PAYMENT OF DAMAGES BY THE STOCKHOLDERS.
Subject to the limitations set forth in this Article 11, the Stockholders (other
than any Dissenting Shareholders), jointly and severally, will indemnify and
hold harmless BindView and BAC, and their respective Representatives,
stockholders, controlling persons and affiliates (collectively, the "Indemnified
Persons") for, and will pay to the Indemnified Persons the amount of, any loss,
liability, claim, damage (including incidental and consequential damages),
expense (including costs of investigation and defense and reasonable attorneys'
fees) or diminution of value, whether or not involving a third-party claim
(collectively, "Damages"), arising, directly or indirectly, from or in
connection with:
11.2.1. any Breach of any representation or warranty made by Entevo or the
Stockholders (other than any Dissenting Shareholders) in this
Agreement, the Letters of Transmittal or any other certificate or
document delivered by Entevo or by the Stockholders, either
individually or by the Stockholders' Representative, pursuant to this
Agreement;
11.2.2. any Breach of any representation or warranty made by Entevo or the
Stockholders in this Agreement or the Letters of Transmittal as if such
representation or warranty were made on and as of the Closing Date;
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11.2.3. any Breach by Entevo or the Representing Stockholders of any covenant
or obligation of Entevo or the Representing Stockholders in this
Agreement.
11.3. INDEMNIFICATION AND PAYMENT OF DAMAGES BY BINDVIEW AND BAC.
BindView and BAC will indemnify and hold harmless the Stockholders, and will pay
to the Stockholders the amount of any Damages arising, directly or indirectly,
from or in connection with:
11.3.1. any Breach of any representation or warranty made by BindView or BAC in
this Agreement or in any certificate delivered by BindView or BAC
pursuant to this Agreement, or
11.3.2. any Breach by BindView or BAC of any covenant or obligation of BindView
or BAC in this Agreement.
11.4. TIME LIMITATIONS.
11.4.1. Except as provided below, if the Closing occurs, the Stockholders will
have no liability (for indemnification or otherwise) to BindView
hereunder, unless on or before the first anniversary of the Closing
Date BindView or BAC notifies the Stockholders' Representative of a
claim specifying the factual basis of that claim in reasonable detail
to the extent then known by BindView or BAC.
11.4.2. If the Closing occurs, BindView and BAC will have no liability (for
indemnification or otherwise) with respect to any representation or
warranty, or covenant or obligation to be performed and complied with
prior to the Closing Date, unless on or before the first anniversary of
the Closing Date the Stockholders' Representative notifies BindView of
a claim specifying the factual basis of that claim in reasonable detail
to the extent then known by the Stockholders' Representative.
11.4.3. The limitations of Sections 11.4.1 and 11.4.2 will not apply to
(a) any intentional Breach of any covenant or obligation, or
(b) Damages relating to actual fraud, or
(c) any Damages for undisclosed and unpaid Taxes of Entevo for any
period ending on or before the Effective Time incurred other
than in the Ordinary Course of Business or Damages or arising
from any Breach of Section 4.10, 4.12, or 4.27, in each case
where BindView makes a Claim therefor on or before the
expiration of the statute of limitations with respect to such
matter, or
(d) any Damages arising from a Breach of Section 4.3, 6.2.1 or
6.8; or
(e) any Damages arising from a Breach of Section 4.21.3, 4.21.6,
or 4.21.7.
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55 BVEW/ENTEVO MERGER AGREEMENT
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11.4.4. The Stockholders will have no liability (for indemnification or
otherwise) to BindView hereunder for any Damages arising from a Breach
of Section 4.21.3, 4.21.6, or 4.21.7 unless on or before the third
anniversary of the Closing Date BindView or BAC notifies the
Stockholders' Representative of a claim specifying the factual basis of
that claim in reasonable detail to the extent then known by BindView or
BAC.
11.5. LIMITATIONS ON AMOUNT - THE STOCKHOLDERS.
11.5.1. Except as provided below, the Stockholders will have no liability (for
indemnification or otherwise) to BindView hereunder, unless and until
the total of all Damages with respect to such matters exceeds $250,000
(the "Basket"), and then such liability shall include those Damages
comprising the Basket amount.
11.5.2. Except as provided below, the maximum amount of Damages that may be
recovered from the Stockholders and the source of recovery shall be
limited to the Indemnity Escrow Account pursuant to the Indemnity
Escrow Agreement.
11.5.3. The limitations of this Section 11.5 will not apply to damages relating
to any intentional Breach of any covenant or obligation or actual
fraud.
11.5.4. The limitations of Section 11.5.1 and, with respect to the Representing
Stockholders (who shall not be liable in excess of the amount of
Consideration they receive in the Merger), Section 11.5.2 shall not
apply to
(a) any Damages for undisclosed and unpaid Taxes of Entevo for any
period ending on or before the Effective Time incurred other
than in the Ordinary Course of Business or Damages or arising
from any Breach of Section 4.10, 4.12, or 4.27, in each case
where BindView makes a Claim therefor on or before the
expiration of the statute of limitations with respect to such
matter and in each case in excess of specific accruals
therefor on the Latest Balance Sheet, or
(b) any Damages arising from a Breach of Section 4.3, 4.21.3,
4.21.6, 4.21.7, 6.2.1 or 6.8;
provided, in the case of this Section 11.5.4, that the Indemnity Escrow
Account has first been exhausted.
11.6. LIMITATIONS ON AMOUNT - BINDVIEW AND BAC.
11.6.1. BindView and BAC will have no liability (for indemnification or
otherwise) with respect to the matters described in Section 11.3 until
the total of all Damages with respect to such matters exceeds an amount
equal to the Basket, and then such liability shall include those
Damages comprising the Basket amount.
11.6.2. The maximum amount of Damages for all matters that may be recovered
from BindView and BAC under this Agreement shall be an amount equal to
the market value at the Effective Time of the assets in the Escrow
Account at the Effective Time.
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56 BVEW/ENTEVO MERGER AGREEMENT
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11.6.3. The limitations of this Section 11.6 will not apply to any intentional
Breach by BindView or BAC of any covenant or obligation or to Damages
relating to actual fraud.
11.7. INDEMNITY ESCROW.
Upon notice to the Stockholders' Representative specifying in reasonable detail
the basis for a Claim, BindView or BAC may give notice of a Claim under the
Indemnity Escrow Agreement.
11.8. PROCEDURE FOR INDEMNIFICATION - THIRD PARTY CLAIMS.
11.8.1. Promptly after receipt by an indemnified party under Section 11.2 or
11.3 of notice of the commencement of any Proceeding against it, such
indemnified party will, if a claim is to be made against an
indemnifying party under such Section, give notice to the indemnifying
party of the commencement of such claim, but the failure to notify the
indemnifying party will not relieve the indemnifying party of any
liability that it may have to any indemnified party, except to the
extent that the indemnifying party demonstrates that the defense of
such action is prejudiced by the indemnifying party's failure to give
such notice.
11.8.2. If any Proceeding referred to in Section 11.8.1 is brought against an
indemnified party, the indemnifying party will be entitled to
participate in such Proceeding and, to the extent that it wishes
(unless (a) the indemnifying party is also a party to such Proceeding
and the indemnified party determines in good faith that joint
representation would be inappropriate or (b) the indemnifying party
fails to provide reasonable assurance to the indemnified party of its
financial capacity to defend such Proceeding and provide
indemnification with respect to such Proceeding), to assume the defense
of such Proceeding with counsel satisfactory to the indemnified party
and, after notice from the indemnifying party to the indemnified party
of its election to assume the defense of such Proceeding, the
indemnifying party will not, as long as it diligently conducts such
defense, be liable to the indemnified party under this Article 11 for
any fees of other counsel or any other expenses with respect to the
defense of such Proceeding, in each case subsequently incurred by the
indemnified party in connection with the defense of such Proceeding,
other than reasonable costs of investigation. If the indemnifying party
assumes the defense of a Proceeding, (x) it will be conclusively
established for purposes of this Agreement that the claims made in that
Proceeding are within the scope of and subject to indemnification, (y)
no compromise or settlement of such claims may be effected by the
indemnifying party without the indemnified party's consent unless (1)
there is no finding or admission of any violation of Legal Requirements
or any violation of the rights of any Person and no effect on any other
claims that may be made against the indemnified party and (2) the sole
relief provided is monetary damages that are paid in full by the
indemnifying party and (z) the indemnified party will have no liability
with respect to any compromise or settlement of such claims effected
without its consent. If notice is given to an indemnifying party of the
commencement of any Proceeding and the indemnifying party does not,
within ten days after the indemnified party's notice is given, give
notice to the indemnified party of its election to assume the defense
of such Proceeding, the indemnifying party will be bound by any
determination made in such Proceeding or any compromise or settlement
effected by the indemnified party.
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11.8.3. Notwithstanding the foregoing, if an indemnified party determines in
good faith that there is a reasonable probability that a Proceeding may
adversely affect it or its affiliates other than as a result of
monetary damages for which it would be entitled to indemnification
under this Agreement, the indemnified party may, by notice to the
indemnifying party, assume the exclusive right to defend, compromise or
settle such Proceeding, but the indemnifying party will not be bound by
any determination of a Proceeding so defended or any compromise or
settlement effected without its consent (which may not be unreasonably
withheld).
11.9. PROCEDURE FOR INDEMNIFICATION - OTHER CLAIMS.
A claim for indemnification for any matter not involving a third-party claim may
be asserted by notice to the party from whom indemnification is sought.
11.10. SPECIAL PROCEDURE WITH RESPECT TO CERTAIN CLAIMS.
BindView agrees that, with respect to any Claim for a Breach of Section 4.8.2,
BindView may assert such Claim and, if the Stockholders' Representative executes
Joint Written Instructions (as defined in the Indemnity Escrow Agreement) to
such effect, BindView will not collect Escrow Shares from the Indemnity Escrow
Account with respect to such Claim before eleven months after the Effective
Time, and at such time any such Claim shall be reduced by any amount collected
by Entevo with resect to the account underlying such Claim.
ARTICLE 12. GENERAL PROVISIONS
12.1. EXPENSES.
Except as otherwise expressly provided in this Agreement, each party to this
Agreement will bear its respective expenses incurred in connection with the
preparation, execution and performance of this Agreement and the Contemplated
Transactions, including all fees and expenses of agents, representatives,
counsel and accountants. It is understood that if the Transaction Expenses
exceed the Estimated Transaction Expenses, BindView will be entitled to
indemnification for the excess, which indemnification shall come from the
Indemnity Escrow Account without regard to any basket.
12.2. PUBLIC ANNOUNCEMENTS.
Unless required by a Legal Requirement, until the Closing Entevo and the
Representing Stockholders will not, and will not permit their respective Related
Persons to, make any disclosure regarding this Agreement to any Person other
than their Representatives without BindView's prior written consent. If any such
person is required by Legal Requirements to make any such disclosure, such
person must first provide to BindView a copy of such proposed disclosure, a
description of the Legal Requirement requiring such disclosure and the time and
place at which such disclosure will be made. Entevo and the Representing
Stockholders will consult with BindView concerning the means by which Entevo's
employees, customers and suppliers and others having dealings with Entevo will
be informed of the Contemplated Transactions, and BindView and BAC will have the
right to be present for any such communication.
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12.3. CONFIDENTIALITY.
12.3.1. Between the date of this Agreement and the Closing Date (or, if
applicable, the date of termination of this Agreement pursuant to
Article 10), BindView, BAC, Entevo and the Representing Stockholders
will maintain in confidence, and will cause the directors, officers,
employees, agents, advisors and Representatives of BindView, BAC and
Entevo to maintain in confidence, and not use to the detriment of
another party hereto any written, oral or other information obtained in
confidence from such other party in connection with this Agreement or
the Contemplated Transactions, unless (a) such information is already
known to such party or to others not bound by a duty of confidentiality
or such information becomes publicly available through no fault of such
party, (b) the use of such information is necessary or appropriate in
making any filing or obtaining any consent or approval required for the
consummation of the Contemplated Transactions or (c) the furnishing or
use of such information is required by or necessary or appropriate in
connection with any Legal Requirement or legal proceeding.
12.3.2. If the Contemplated Transactions are not consummated, each party will
return or destroy as much of such written information as the other
party may reasonably request.
12.3.3. The provisions of this Section 12.3 are in addition to and cumulative
of the terms and conditions contained in (a) that certain Nondisclosure
Agreement dated November 29, 1999, by and between Entevo and BindView.
In the event of any conflict between the terms of this Section 12.3 and
that letter, the terms of that letter will supersede the conflicting
terms of this Section 12.3.
12.4. NOTICES.
All notices, consents, waivers and other communications under this Agreement
must be in writing and will be deemed to have been duly given when (a) delivered
by hand (with written confirmation of receipt), (b) sent by telecopier or
electronic mail, in either case, with written confirmation of receipt or (c)
when received by the addressee, if sent by a nationally recognized overnight
delivery service (receipt requested), in each case to the appropriate addresses
and telecopier numbers set forth below (or to such other addresses and
telecopier numbers as a party may designate by notice to the other parties):
BindView:
BindView Development Corporation
0000 Xxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: X.X. Xxxxx, Vice President and General Counsel
Facsimile No.: (000) 000-0000
E-mail: xxxxxx@xxxxxxxx.xxx
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with a copy to:
Fulbright & Xxxxxxxx L.L.P.
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxx, Xx.
Facsimile No.: (000) 000-0000
E-mail: xxxxx@xxxxxxxxx.xxx
Stockholders' Representative:
A.G.W. Xxxxxx III
0000 Xxxxx'x Xxxx, Xxxxx 0000
XxXxxx, XX 00000
Facsimile No.: (000) 000 0000
with a copy to:
Xxxxx & Xxxxxxx L.L.P.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Silver
Facsimile No.: (000) 000-0000
E-mail: xxxxxxxx@xxxxx.xxx
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12.5. RESOLUTION OF DISPUTES.
12.5.1. Any dispute arising under or relating to this Agreement or an alleged
breach thereof that BindView and the Shareholder Representative cannot
resolve between themselves shall first be referred to non-binding
mediation in accordance with the Commercial Mediation Rules of the
American Arbitration Association.
12.5.2. If such dispute is not resolved by mediation, it shall be referred to
binding arbitration before a three-arbitrator panel in accordance with
the Commercial Arbitration Rules of the American Arbitration
Association. At least one arbitrator shall be an attorney with at least
fifteen years of experience in the practice of law, and at least one
arbitrator shall be a certified public accountant with at least fifteen
years of experience as a CPA, and both the lawyer arbitrator and the
CPA arbitrator shall have at least five years of experience in working
with software companies. The seat of any such arbitration shall be in,
and any arbitral proceedings shall be conducted in, New York, New York,
unless the parties agree otherwise. The arbitrators are authorized and
directed to take all reasonable measures to streamline, expedite, and
reduce the cost of the arbitration proceedings, including without
limitation any pre-hearing proceedings. The arbitration award shall be
based strictly on this Agreement and on the application of the
applicable law to the facts.
12.5.3. The arbitration award shall be enforceable in any court having
jurisdiction; the parties agree that the state and federal courts in
New York, New York, Houston, Texas, or Arlington, Virginia shall have
jurisdiction to enforce such award.
12.6. FURTHER ASSURANCES.
The parties agree (1) to furnish upon request to each other such further
information, (2) to execute and deliver to each other such other documents and
(3) to do such other acts and things, all as the other party may reasonably
request for the purpose of carrying out the intent of this Agreement and the
documents referred to in this Agreement.
12.7. WAIVER.
The rights and remedies of the parties to this Agreement are cumulative and not
alternative. Neither the failure nor any delay by any party in exercising any
right, power or privilege under this Agreement or the documents referred to in
this Agreement will operate as a waiver of such right, power or privilege, and
no single or partial exercise of any such right, power or privilege will
preclude any other or further exercise of such right, power or privilege or the
exercise of any other right, power or privilege except as otherwise provided by
this Agreement. To the maximum extent permitted by applicable law, (1) no claim
or right arising out of this Agreement or the documents referred to in this
Agreement can be discharged by one party, in whole or in part, by a waiver or
renunciation of the claim or right unless in writing signed by the other party,
(2) no waiver that may be given by a party will be applicable except in the
specific instance for which it is given and (3) no notice to or demand on one
party will be deemed to be a waiver of any obligation of such party or of the
right of the party giving such notice or demand to take further action without
notice or demand as provided in this Agreement or the documents referred to in
this Agreement.
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12.8. ENTIRE AGREEMENT AND MODIFICATION.
Except for that certain Nondisclosure Agreement dated November 29, 1999, and
except as otherwise provided herein, this Agreement supersedes all prior
agreements between the parties with respect to its subject matter and
constitutes (along with the documents referred to in this Agreement) a complete
and exclusive statement of the terms of the agreement between the parties with
respect to its subject matter. This Agreement may not be amended except by
BindView and Entevo.
12.9. SCHEDULES.
In the event of any inconsistency between the statements in the body of this
Agreement and those in the Schedules (other than an exception expressly set
forth as such in the Schedules with respect to a specifically identified
representation or warranty), the statements in the body of this Agreement will
control.
12.10. ASSIGNMENTS, SUCCESSORS AND NO THIRD-PARTY RIGHTS.
No party may assign any of its rights under this Agreement without the prior
consent of the other parties, which will not be unreasonably withheld, except
that BindView or BAC may assign any of its rights under this Agreement to any
Subsidiary of BindView or BAC. Subject to the preceding sentence, this Agreement
will apply to, be binding in all respects upon, and inure to the benefit of the
successors and permitted assigns of the parties. Except for Sections 7.6 and
7.8, nothing expressed or referred to in this Agreement will be construed to
give any Person other than the parties to this Agreement any legal or equitable
right, remedy, or claim under or with respect to this Agreement or any provision
of this Agreement. Except for Sections 7.6 and 7.8, this Agreement and all of
its provisions and conditions are for the sole and exclusive benefit of the
parties to this Agreement and their successors and assigns.
12.11. SEVERABILITY.
If any provision of this Agreement is held invalid or unenforceable by any court
of competent jurisdiction, the other provisions of this Agreement will remain in
full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable. The provisions of this Agreement were
negotiated by the parties hereto and this Agreement shall be deemed to have been
drafted by all the parties hereto.
12.12. SECTION HEADINGS, CONSTRUCTION.
The headings of Sections in this Agreement are provided for convenience only and
will not affect its construction or interpretation. All references to
"Articles", "Exhibits", "Schedules" or "Sections" refer to the corresponding
annexes, articles, exhibits, schedules or sections of this Agreement. All words
used in this Agreement will be construed to be of such gender or number as the
circumstances require. Unless otherwise expressly provided, the word "including"
will be construed to be illustrative and will not be construed to be limiting or
exclusive.
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12.13. TIME OF ESSENCE.
With regard to all dates and time periods set forth or referred to in this
Agreement, time is of the essence.
12.14. GOVERNING LAW.
This Agreement will be governed by the laws of the State of Delaware applicable
to contracts made and performed wholly within Delaware by residents of that
state.
12.15. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of which will
be deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement.
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63 BVEW/ENTEVO MERGER AGREEMENT
69
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
effective as of the date first written above.
BINDVIEW DEVELOPMENT CORPORATION
By /s/ XXXXXXX X. XXXXXXX
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Name Xxxxxxx X. Xxxxxxx
----------------------------------------
Title President and Chief Executive Officer
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BRAVO ACQUISITION CORPORATION
By /s/ XXXXXXX X. XXXXXXX
------------------------------------------
Name Xxxxxxx X. Xxxxxxx
----------------------------------------
Title President
---------------------------------------
ENTEVO CORPORATION
By /s/ XXXX XXXXX
------------------------------------------
Name Xxxx Xxxxx
----------------------------------------
Title CEO
---------------------------------------
REPRESENTING STOCKHOLDERS
/s/ XXXX XXXXX
------------------------------------------
/s/ XXXXXXXXX XXXXXXXXX
------------------------------------------
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64 BVEW/ENTEVO MERGER AGREEMENT
