AGREEMENT AND PLAN OF MERGER
BY AND AMONG
ANALOGY, INC.,
ANALOGY ACQUISITION CORPORATION
AND
SYMMETRY DESIGN SYSTEMS, INC.
DATED
October 23, 1996
TABLE OF CONTENTS
Page
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ARTICLE I THE MERGER; CLOSING; EFFECTIVE TIME.......................... 1
1.1 THE MERGER.................................................... 1
1.2 THE CLOSING................................................... 1
1.3 ARTICLES OF MERGER............................................ 2
1.4 FURTHER ASSURANCES............................................ 2
ARTICLE II PURPOSES; CAPITALIZATION; ARTICLES OF
INCORPORATION; BUSINESS OF THE SURVIVING CORPORATION.................... 2
2.1 PURPOSES OF THE SURVIVING CORPORATION. ....................... 2
2.2 CAPITALIZATION OF THE SURVIVING CORPORATION. ................. 2
2.3 ARTICLES OF INCORPORATION..................................... 2
2.4 BYLAWS. ...................................................... 2
2.5 TAX CONSEQUENCES.............................................. 3
2.6 OFFICERS AND DIRECTORS........................................ 3
ARTICLE III CONSIDERATION FOR THE MERGER............................... 3
3.1 CONVERSION.................................................... 3
3.2 TREASURY SHARES............................................... 4
3.3 SHAREHOLDER RIGHTS............................................ 4
3.4 DISSENTERS' RIGHTS............................................ 4
3.5 FRACTIONAL SHARES............................................. 5
3.6 LOST CERTIFICATES............................................. 5
3.7 SUBSIDIARY SHARES............................................. 5
3.8 ESCROW DEPOSIT................................................ 5
ARTICLE IV REPRESENTATIONS AND WARRANTIES.............................. 6
4.1 REPRESENTATIONS AND WARRANTIES OF SYMMETRY.................... 6
(a) ORGANIZATION, GOOD STANDING, POWER, ETC.................. 6
(b) AUTHORIZED CAPITALIZATION................................ 6
(c) SUBSIDIARIES............................................. 6
(d) OPTIONS, WARRANTS, RIGHTS, ETC........................... 7
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(e) EFFECT OF AGREEMENT. .................................... 7
(f) POWER, DUE AUTHORIZATION................................. 7
(g) SECURITIES MATTERS....................................... 8
(h) FINANCIAL STATEMENTS..................................... 8
(i) CUSTOMERS................................................ 8
(j) DISTRIBUTORS, RESELLERS.................................. 9
(k) ABSENCE OF CERTAIN CHANGES OR EVENTS..................... 9
(l) TAXES.................................................... 10
(m) LITIGATION............................................... 11
(n) LABOR MATTERS............................................ 12
(o) INTANGIBLE PROPERTY...................................... 12
(p) BOOKS AND RECORDS........................................ 13
(q) LICENSES, PERMITS, AUTHORIZATIONS, ETC................... 14
(r) APPLICABLE LAWS.......................................... 14
(s) EMPLOYEE BENEFIT PLANS. ................................. 14
(t) ENVIRONMENTAL LAWS AND REGULATIONS....................... 18
(u) INSURANCE................................................ 20
(v) TITLE TO REAL AND PERSONAL PROPERTIES, ABSENCE OF LIENS
AND ENCUMBRANCES; CONDITION OF PROPERTIES. .............. 20
(w) INVENTORY................................................ 21
(x) MATERIAL CONTRACTS....................................... 21
(y) LOANS, NOTES, ACCOUNTS RECEIVABLE AND ACCOUNTS PAYABLE... 23
(z) TRANSACTIONS WITH RELATED PARTIES........................ 24
(aa) FULL DISCLOSURE.......................................... 24
(ab) BANKING RELATIONSHIPS.................................... 25
(ac) ABSENCE OF CERTAIN COMMERCIAL PRACTICES.................. 25
(ad) BROKERS.................................................. 25
(ae) TAX-FREE REORGANIZATION.................................. 25
4.2 REPRESENTATIONS AND WARRANTIES OF ANALOGY AND SUBSIDIARY...... 25
(a) ORGANIZATION, GOOD STANDING, POWER, ETC.................. 25
(b) MERGER STOCK............................................. 26
(c) POWER, DUE AUTHORIZATION................................. 26
(d) NO CONFLICT.............................................. 26
(e) BROKERS.................................................. 26
(f) ADDITIONAL INFORMATION................................... 26
(g) NO MATERIAL CHANGE....................................... 27
(h) SEC REPORTS.............................................. 27
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ARTICLE V SYMMETRY'S COVENANTS......................................... 27
5.1 SHAREHOLDER'S MEETING......................................... 27
5.2 CONDUCT OF SYMMETRY PRIOR TO THE CLOSING DATE................. 28
(a) OPERATION OF BUSINESS.................................... 28
(b) MAINTAIN PROPERTIES...................................... 28
(c) BOOKS AND RECORDS........................................ 28
(d) ENCUMBRANCES............................................. 28
(e) COMPLIANCE............................................... 28
(f) NO SOLICITATION.......................................... 28
(g) ACTIONS WITH RESPECT TO CHARTER DOCUMENTS, CAPITAL
STOCK.................................................... 29
(h) ACCESS................................................... 29
(i) NOTIFICATION OF CERTAIN MATTERS.......................... 29
5.3 PUBLICITY..................................................... 30
ARTICLE VI MUTUAL COVENANTS........................................... 30
6.1 BEST EFFORTS.................................................. 30
6.2 FILINGS; OTHER ACTION......................................... 30
6.3 TAX-FREE REORGANIZATION....................................... 30
6.4 FURTHER ACTION................................................ 30
ARTICLE VII CONDITIONS................................................. 31
7.1 CONDITIONS TO OBLIGATIONS OF ANALOGY AND SUBSIDIARY........... 31
(a) SYMMETRY SHAREHOLDER APPROVAL............................ 31
(b) REPRESENTATIONS AND WARRANTIES........................... 31
(c) PERFORMANCE OF OBLIGATIONS BY SYMMETRY................... 31
(d) NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY................. 31
(e) PROCEEDINGS AND LITIGATION............................... 31
(f) EMPLOYEE RETENTION....................................... 32
(g) RESIGNATIONS............................................. 32
(h) OPINION LETTER OF COUNSEL FOR SYMMETRY................... 32
(i) DISSENTING SHAREHOLDERS.................................. 32
(j) INVESTMENT REPRESENTATIONS............................... 32
(k) NO MATERIAL ADVERSE CHANGE............................... 32
(l) FILINGS AND CONSENTS..................................... 32
(m) PROCEEDINGS SATISFACTORY TO COUNSEL...................... 33
(n) NON-COMPETITION, NONDISCLOSURE AGREEMENTS................ 33
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(o) EMPLOYMENT AGREEMENTS.................................... 33
(p) PRIVATE PLACEMENT EXEMPTION.............................. 33
(q) NO ENCUMBRANCES.......................................... 33
(r) ESCROW AGREEMENT......................................... 33
(s) PAYMENT OF NOTES......................................... 34
7.2 CONDITIONS TO OBLIGATIONS OF SYMMETRY......................... 34
(a) SYMMETRY SHAREHOLDER APPROVAL............................ 34
(b) REPRESENTATIONS AND WARRANTIES........................... 34
(c) PERFORMANCE OF OBLIGATIONS OF ANALOGY AND SUBSIDIARY..... 34
(d) NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY................. 34
(e) OPINION LETTER OF COUNSEL FOR ANALOGY AND SUBSIDIARY..... 34
(f) REGISTRATION RIGHTS AGREEMENT............................ 34
(g) ESCROW AGREEMENT......................................... 34
(h) PROCEEDINGS AND LITIGATION............................... 35
(i) FILINGS AND CONSENTS..................................... 35
(j) PROCEEDINGS SATISFACTORY TO COUNSEL...................... 35
(k) EMPLOYMENT AGREEMENTS.................................... 35
ARTICLE VIII TERMINATION............................................... 35
8.1 TERMINATION BY MUTUAL CONSENT................................. 35
8.2 TERMINATION BY EITHER SYMMETRY OR ANALOGY..................... 35
8.3 TERMINATION BY ANALOGY........................................ 36
8.4 TERMINATION BY SYMMETRY....................................... 36
8.5 NOTICE OF TERMINATION......................................... 36
8.6 EFFECT OF TERMINATION AND ABANDONMENT......................... 36
ARTICLE IX CERTAIN RIGHTS AND LIMITATIONS
REGARDING THE MERGER STOCK.................................... 36
9.1 RESTRICTIONS ON SALE OR TRANSFER OF SHARES; LEGEND............ 36
9.2 REGISTRATION OF THE MERGER STOCK.............................. 37
ARTICLE X RIGHTS TO ESCROW FUND........................................ 37
10.1 AGREEMENT FOR INDEMNIFICATION................................. 37
10.2 LIMITATIONS OF CLAIMS AGAINST ESCROW FUND..................... 40
10.3 NOTICE OF CLAIM............................................... 40
10.4 DEFENSE AND SETTLEMENT OF CLAIMS.............................. 41
10.5 JURISDICTION.................................................. 41
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ARTICLE XI MISCELLANEOUS............................................... 41
11.1 COOPERATION................................................... 41
11.2 PAYMENT OF EXPENSES........................................... 42
11.3 SURVIVAL...................................................... 42
11.4 MODIFICATION OR AMENDMENT..................................... 42
11.5 WAIVER OF CONDITIONS.......................................... 42
11.6 CERTIFICATION OF SHAREHOLDER VOTE AND DISSENTERS.............. 42
11.7 COUNTERPARTS.................................................. 43
11.8 GOVERNING LAW................................................. 43
11.9 NOTICES....................................................... 43
11.10 ENTIRE AGREEMENT........................................... 44
11.11 CAPTIONS................................................... 44
11.12 SEVERABILITY............................................... 44
11.13 CONFIDENTIALITY............................................ 44
DISCLOSURE SCHEDULES
Symmetry Disclosure Schedule
Analogy Disclosure Schedule
EXHIBITS
Directors of Surviving Corporation
and Officers of Surviving Corporation (2.6)
List of Continuing Employees (7.1(f))
Opinion of Xxxxxx Godward LLP (7.1(h))
Form of Letter of Transmittal (7.1(j))
Noncompetition, Assignment of Invention
and Nondisclosure Agreement (7.1(n))
Employment Agreement (7.1(o))
Opinion of Ater Xxxxx Xxxxxx Xxxxxx & Xxxxxxxx, LLP (7.2(e))
Registration Rights Agreement (7.2(f))
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (hereinafter, this "Agreement"), made as
of this 23rd day of October, 1996, by and among ANALOGY, INC., an Oregon
corporation ("Analogy"), ANALOGY ACQUISITION CORPORATION, an Oregon corporation
and a wholly owned subsidiary of Analogy ("Subsidiary"), and SYMMETRY DESIGN
SYSTEMS, INC., a California corporation ("Symmetry"). Analogy, Subsidiary and
Symmetry are sometimes hereinafter collectively referred to as the "Constituent
Corporations."
WITNESSETH:
WHEREAS, Analogy, Symmetry and Subsidiary desire to merge Subsidiary with
and into Symmetry, with Symmetry being the surviving corporation in the merger,
all upon the terms and subject to the conditions of this Agreement;
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
THE MERGER; CLOSING; EFFECTIVE TIME
1.1 THE MERGER. Subject to the terms and conditions of this Agreement and
in accordance with the laws of the state of California, at the Effective Time
(as defined in Section 1.3 hereof) Subsidiary shall be merged with and into
Symmetry and the separate corporate existence of Subsidiary shall thereupon
cease (the "Merger"). Symmetry shall be the surviving corporation in the Merger
(sometimes hereinafter referred to as the "Surviving Corporation"). The Merger
shall have the effects specified in Section 1107 of the California Corporations
Code (the "Corporations Code") and Section 60.497 of the Oregon Business
Corporation Act.
1.2 THE CLOSING. The closing of the Merger (the "Closing") shall take
place at the at the offices of Ater Xxxxx Xxxxxx Xxxxxx & Xxxxxxxx, LLP at 10:00
am., Pacific Standard Time, on November __, 1996 (or at such other place, time
or date as may be mutually agreed upon by Analogy and Symmetry) (the "Closing
Date"). At the Closing, each of the parties shall take all action and deliver
all such documents, instruments, certificates, agreements, securities and other
items as may be requisite and are within its power to perform in order to
fulfill and observe all covenants, conditions and agreements on its part to be
performed, fulfilled and observed at or prior to the Merger (and not theretofore
accomplished), and/or to cause all conditions precedent to the other party's
obligations hereunder to be satisfied in full.
1- AGREEMENT AND PLAN OF MERGER
1.3 ARTICLES OF MERGER. On the Closing Date, if all of the conditions to
the Merger set forth in Article VII shall have been fulfilled or waived in
accordance herewith and this Agreement shall not have been terminated in
accordance with Article VIII, the parties hereto shall cause Articles of Merger
meeting the requirements of Section 1103 of the Corporations Code to be properly
executed and filed in accordance with such Section. The Merger shall become
effective at the time (the "Effective Time") of the filing of Articles of Merger
in accordance with the Corporations Code or at such later time which the parties
hereto have agreed and designated in such Articles of Merger as the effective
time of the Merger.
1.4 FURTHER ASSURANCES. If, at any time after the Effective Time, the
Surviving Corporation shall determine or be advised that any deeds, bills of
sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any rights, properties
or assets as a result of, or in connection with, the Merger or otherwise to
carry out this Agreement, the officers and directors of the Surviving
Corporation shall be authorized to execute and deliver all such deeds, bills of
sale, assignments and assurances and to take and do all such other actions and
things as may be necessary or desirable to vest, perfect or confirm any and all
right, title and interest in, to and under such rights, properties or assets in
the Surviving Corporation or otherwise to carry out the intent of this
Agreement.
ARTICLE II
PURPOSES; CAPITALIZATION; ARTICLES OF
INCORPORATION; BUSINESS OF THE SURVIVING
CORPORATION
2.1 PURPOSES OF THE SURVIVING CORPORATION. The purposes of the Surviving
Corporation shall be the purposes set forth in the Articles of Incorporation of
Symmetry in effect immediately prior to the Effective Time.
2.2 CAPITALIZATION OF THE SURVIVING CORPORATION. The capitalization of
the Surviving Corporation shall be as set forth in the Articles of Incorporation
of Symmetry in effect immediately prior to the Effective Time.
2.3 ARTICLES OF INCORPORATION. The Articles of Incorporation of the
Surviving Corporation shall be the Articles of Incorporation of Symmetry in
effect immediately prior to the Effective Time.
2.4 BYLAWS. The Bylaws of the Surviving Corporation shall be the Bylaws
of Symmetry in effect immediately prior to the Effective Time.
2- AGREEMENT AND PLAN OF MERGER
2.5 TAX CONSEQUENCES. It is intended that the Merger shall constitute a
tax-free reorganization within the meaning of Section 368 (a)(2)(E) of the
Internal Revenue Code of 1986, as amended (the "Code"), and that this Agreement
shall constitute a "plan of reorganization" for the purposes of Section 368 of
the Code.
2.6 OFFICERS AND DIRECTORS. The directors and the officers of the
Surviving Corporation, effective immediately, after the Effective Time will be
as listed on Exhibit 2.6, all of whom shall serve until their resignation or
removal or until their successors are elected and qualified.
ARTICLE III
CONSIDERATION FOR THE MERGER
3.1 CONVERSION. At the Effective Time, each share of common stock of
Symmetry, no par value per share, (other than Dissenting Shares (as hereinafter
defined)), issued and outstanding immediately prior to the Effective Time (the
"Symmetry Shares") shall, by virtue of the Merger and without any action on the
part of the holder thereof, be cancelled and converted into the right to receive
that shareholder's "Pro Rata Share" (as hereinafter defined) of the "Fixed
Merger Consideration" (as hereinafter defined), together with the contingent
contract right to receive that shareholder's Pro Rata Share of the "Contingent
Merger Consideration" (as hereinafter defined), on release for the purpose of
such distribution of the aggregate remaining Contingent Merger Consideration
from the escrow established herein. The following definitions shall apply:
(a) TOTAL MERGER CONSIDERATION means 650,000 shares of Analogy common
stock, no par value per share.
(b) FIXED MERGER CONSIDERATION means 90% of the Total Merger
Consideration (585,000 shares of Analogy common stock).
(c) CONTINGENT MERGER CONSIDERATION means 10% of the Total Merger
Consideration (65,000 shares of Analogy common stock).
(d) PRO RATA SHARE means that portion obtained by multiplying the
number of each Shareholder's (as hereinafter defined) Symmetry Shares by the
Fixed Merger Consideration, Contingent Merger Consideration, Escrow Fund, or
Representatives' Fund (as the case may be), and dividing the product thus
obtained by the total number of Symmetry Shares.
3- AGREEMENT AND PLAN OF MERGER
3.2 TREASURY SHARES. Each Symmetry Share issued and held in Symmetry's
treasury immediately prior to the Effective Time shall, by virtue of the Merger
and without any action on the part of the holder thereof, cease to be
outstanding, shall be cancelled and retired without payment of any consideration
therefor, and shall cease to exist.
3.3 SHAREHOLDER RIGHTS. From and after the Effective Time, the holders of
certificates representing Symmetry Shares outstanding immediately prior to the
Effective Time (each, a "Shareholder," and collectively, the "Shareholders")
shall cease to have any rights with respect to such Symmetry Shares (except such
rights, if any, as they may have as dissenting shareholders under the
Corporations Code) and their sole rights (except as aforesaid) shall be those
contract rights which they will have pursuant to this Agreement with respect to
the Contingent Merger Consideration and those which they will have as holders of
their Pro Rata Share of the Fixed Merger Consideration.
After the Effective Time, each holder of a certificate or certificates
representing Symmetry Shares outstanding immediately prior to the Effective Time
(other than dissenting shareholders) shall be entitled, upon surrender of the
same (duly endorsed if required), together with a properly completed letter of
transmittal covering all such shares (with customary representations and
warranties regarding the absence of liens, claims and encumbrances on such
shares) and the other instruments and agreements referred to in Article VII
hereof, to receive in exchange therefor (i) a certificate or certificates (as
the holder requests) representing that Shareholder's Pro Rata Share of the Fixed
Merger Consideration, plus (ii) a contingent contract right as defined in this
Agreement to receive that Shareholder's Pro Rata Share of the Contingent Merger
Consideration. Until so surrendered for exchange, each such certificate
representing Symmetry Shares outstanding as aforesaid (other than those of
dissenting shareholders) shall be deemed for all corporate purposes, other than
the payment of dividends, to evidence the ownership of the number of shares of
Analogy common stock to be delivered and distributed in exchange therefor
pursuant to this Article III. Unless and until any such certificate
representing Symmetry Shares outstanding as aforesaid shall be so surrendered,
no dividend payable to holders of record of Analogy common stock at or after the
Effective Time shall be paid to the holder of such certificate but upon
surrender thereof there shall be paid to the holder of record immediately prior
to the Effective Time of such surrendered certificate the dividends (without
interest) that have theretofore become payable with respect to the Analogy
common stock, deliverable and distributable in exchange therefor pursuant to
this Article III; provided, however, that if by reason of the escheat or other
laws of any state having jurisdiction in the premises, Analogy is required to
pay such state all or any part of such dividends which have become payable, the
amount of dividends which would otherwise be payable upon surrender of any such
certificate representing Symmetry Shares outstanding as aforesaid shall be
reduced by the amount so paid pursuant to such escheat or other laws.
3.4 DISSENTERS' RIGHTS. Symmetry Shares held by shareholders who have
properly exercised dissenters' rights with respect thereto in accordance with
Sections 1300 through 1312
4- AGREEMENT AND PLAN OF MERGER
of the Corporations Code (collectively, the "Dissenting Shares") shall not be
converted into the right to receive Analogy common stock, but such shareholders
shall be entitled to receive payment of the appraised value of the Dissenting
Shares in accordance with the provisions of the Corporations Code, except that
any Dissenting Shares held by a shareholder who shall thereafter withdraw such
demand for appraisal of his Symmetry Shares or otherwise lose the right to such
payment as provided in the Corporations Code, shall thereupon be deemed to have
been converted into, as of the Effective Time, the right to receive Analogy
common stock, without any interest thereon. If any holder of Symmetry Shares
shall be entitled to be paid the "fair value" of his shares, as provided in
Section 1300 of the Corporations Code, Symmetry shall give Analogy notice
thereof and Analogy shall have the right to participate in all negotiations and
proceedings with respect to any such demands. Symmetry shall not, except with
the prior written consent of Analogy, voluntarily make any payment with respect
to, or settle or offer to settle, any such demand for payment.
3.5 FRACTIONAL SHARES. No fractional shares of Analogy common stock shall
be issued in the Merger. In lieu of the issuance of any such fractional shares,
Analogy shall pay to each former shareholder of Symmetry who otherwise would be
entitled to receive a fractional share of Analogy's common stock (after taking
into account all Analogy common stock into which such shareholder's Symmetry
Shares were converted pursuant to this Article III) an amount in cash (rounded
to the nearest whole cent) determined by multiplying (i) the fair market value
(as hereinafter defined) of a share of Analogy's common stock by (ii) the
fraction of a share of Analogy's common stock which such holder would otherwise
be entitled to receive pursuant to this Article III. The fair market value of a
share of Analogy's common stock shall be the average of the closing prices over
the ten (10) day trading period immediately preceding the two (2) day period
prior to the Closing Date.
3.6 LOST CERTIFICATES. In the event any certificate representing Symmetry
Shares (a "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 indemnity against any claim that may be made
against Analogy with respect to such Certificate, and, if required by Analogy,
the posting by such person of a bond in such amount as Analogy may determine is
reasonably necessary in connection with such indemnity, Analogy will issue in
exchange for such lost, stolen or destroyed Certificate the Analogy common
stock, and cash in lieu of any fractional shares, deliverable in respect thereof
pursuant to this Agreement.
3.7 SUBSIDIARY SHARES. Each Share of common stock of Subsidiary that is
issued and outstanding immediately prior to the Effective Time shall be
converted without any action on the part of the holder thereof into one share of
common stock of the Surviving Corporation.
3.8 ESCROW DEPOSIT. Promptly following the Closing, Analogy shall deposit
in escrow pursuant to Article X hereof, the number of shares of Analogy common
stock constituting the Contingent Merger Consideration. Such shares shall be
issued in the name of
5- AGREEMENT AND PLAN OF MERGER
the Escrow Agent, "as Escrow Agent under that Escrow Agreement dated" the
Closing Date or otherwise with equivalent effect. Such shares shall be held for
the purposes described in Article X and the Escrow Agreement (as hereinafter
defined), and released to Analogy and/or the Shareholders in accordance with the
provisions of Article X and the Escrow Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS AND WARRANTIES OF SYMMETRY. In order to induce
Analogy and Subsidiary to enter into this Agreement, Symmetry represents and
warrants to Analogy and Subsidiary, subject to the matters set forth in the
Symmetry Disclosure Schedule (the "Symmetry Disclosure Schedule") delivered
herewith, as follows:
(a) ORGANIZATION, GOOD STANDING, POWER, ETC. Symmetry is a
corporation duly organized, validly existing and in good standing under the laws
of the State of California. Symmetry has all requisite corporate power and
authority to own, operate and lease its properties and to carry on its business
as now being conducted or as proposed to be conducted. Symmetry is duly
qualified and in good standing as a foreign corporation in each jurisdiction in
which the property owned, leased or occupied by it or the nature of the business
conducted by it makes such qualification necessary, except where the failure to
be so qualified would not have a material adverse effect on the business,
operations or financial condition of Symmetry, and all such jurisdictions are
set forth in Section 4.1(a) of the Symmetry Disclosure Schedule. Symmetry has
delivered, or will prior to or on the Closing Date deliver, to Analogy complete
and correct copies of its Articles of Incorporation (certified by the Secretary
of the State of California) and Bylaws (certified by the Secretary of Symmetry),
as amended to the Closing Date.
(b) AUTHORIZED CAPITALIZATION. The authorized capital stock of
Symmetry consists of 10,000,000 shares of common stock, no par value per share.
At the date hereof, there are 2,809,270 shares of Symmetry common stock issued
and outstanding and no shares are held in Symmetry's treasury. All such
outstanding shares have been duly authorized and are validly issued, fully paid
and non-assessable, and Symmetry has no liability under the provisions of
federal and state securities laws by reason of the issuance thereof. To the
best of Symmetry's knowledge, all shares of Symmetry common stock held by the
Shareholders are free and clear of all liens, claims and encumbrances and all
right, title or interest of others.
(c) SUBSIDIARIES. Symmetry does not own, and has not during the last
five years owned, any shares of capital stock or other securities of, or any
other interest in, nor does it control or has it controlled during the last five
years, directly or indirectly, any other corporation, association, joint
venture, partnership or other business organization.
6- AGREEMENT AND PLAN OF MERGER
(d) OPTIONS, WARRANTS, RIGHTS, ETC. Except as set forth in Section
4.1(d) of the Symmetry Disclosure Schedule, there are no outstanding or
authorized subscriptions, options, warrants, calls, rights, commitments or any
other agreements of any character which obligate or may obligate Symmetry to
issue any additional shares of its capital stock or any securities convertible
into or evidencing the right to subscribe for any shares of such capital stock.
Section 4.1(d) of the Symmetry Disclosure Schedule also contains a description
of the security, option, warrant or other instrument, the exercise price, number
of shares into which it is convertible or for which it is exercisable, vesting
schedule, current conversion or exchange ratio, if applicable, and other
applicable details of such agreements. Except as set forth in Section 4.1(d) of
the Symmetry Disclosure Schedule, there are no voting trusts or any other
agreements or understandings with respect to the voting of the capital stock of
Symmetry. Symmetry is not obligated, directly, indirectly, or contingently to
purchase or redeem any of its shares of capital stock and has not so redeemed
any shares of its capital stock during the past five years.
(e) EFFECT OF AGREEMENT. The execution, delivery and performance of
this Agreement by Symmetry and consummation by Symmetry of the transactions
contemplated hereby will not require the consent, approval or authorization of
any person or persons or public authority, other than the approval of the
shareholders of Symmetry. Symmetry is not in default under or in violation of
any provision of its Articles of Incorporation or Bylaws, or in default or
violation of any restriction, lien, encumbrance, indenture, contract, agreement,
lease, sublease, loan agreement, note or other obligation or liability to which
it is a party or by which it is bound or to which its assets are subject, which
default or violation would have a material adverse effect on the business,
operations or financial condition of Symmetry. Neither the execution and
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will (i) result in the acceleration of, or the creation in
any party of the right to accelerate, terminate, modify or cancel, any
indenture, contract, agreement, lease, sublease, loan agreement, note or other
obligation or liability to which Symmetry is a party or by which it is bound or
to which any of its assets are subject, or (ii) conflict with or result in a
breach of or constitute a default under any provision of the Articles of
Incorporation or Bylaws of Symmetry, or a default or violation of any
restriction, lien, encumbrance, indenture, contract, agreement, lease, sublease,
loan agreement, note or other obligation or liability to which it is a party or
by which it is bound or to which its assets are subject, or result in the
creation of any lien or encumbrance upon said assets.
(f) POWER, DUE AUTHORIZATION. Subject only to the approval of this
Agreement and the transactions contemplated hereby by Symmetry's shareholders
(i) Symmetry has the power and authority to execute and deliver this Agreement
and to perform all of its obligations hereunder in accordance with the terms
hereof, and (ii) all necessary corporate action to authorize the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated by this Agreement on the part of Symmetry has been
duly and effectively taken, including, without limiting the generality of the
foregoing, the approval thereof by the Board of Directors of Symmetry. This
Agreement is a valid and binding obligation of
7- AGREEMENT AND PLAN OF MERGER
Symmetry, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and other laws applicable to
creditors' rights and remedies and general principles of equity. At the
Closing, Symmetry will deliver to Analogy a certified copy of the resolutions
adopted by Symmetry's Board of Directors to authorize the execution, delivery
and performance of this Agreement and the transactions contemplated hereby.
(g) SECURITIES MATTERS. Symmetry does not have and has not had any
outstanding securities registered (or required to be registered) under the
Securities Act of 1933 or the Securities Exchange Act of 1934 or any reporting
obligation thereunder. Symmetry has delivered (or will deliver) to Analogy
copies of the proxy statement and all other written materials sent or made
available or to be sent or made available to the holders of its capital stock in
connection with this Agreement and the Merger. The proxy statement notice and
such other material complied with or will comply with the applicable
requirements of the Corporations Code and applicable federal and state
securities laws and did not (or will not) contain any untrue statement of a
material fact or omit to state any material fact necessary, in light of the
circumstances, in order to make the statements therein not misleading.
(h) FINANCIAL STATEMENTS. Symmetry has delivered to Analogy the
balance sheets of Symmetry as at December 31, 1995 and 1994 together with the
statements of profit and loss and cash flows for the two fiscal years then
ended, and the balance sheets of Symmetry as of March 31, 1996, June 30, 1996
and September 30, 1996, and the statements of profit and loss and cash flows for
the three quarters then ended, all certified by the Chief Financial Officer of
Symmetry as being true, accurate and complete to his knowledge. Such financial
statements are hereinafter collectively referred to as the "Financial
Statements." Such Financial Statements are correct and complete and present
fairly the financial condition of Symmetry at the dates of said statements and
the results of its operations for the periods covered thereby (except that the
Financial Statements are subject to normal year-end adjustments and lack
footnotes and other presentation items). Symmetry's said balance sheets, make
full and adequate provision for all debts, liabilities and obligations (fixed
and contingent, including unpaid federal, state or local taxes) of Symmetry as
of the date thereof, which are normally shown on a balance sheet in accordance
with generally accepted accounting principles. Except to the extent reflected
or reserved against in such Financial Statements, there are no material
liabilities or obligations of Symmetry or related to its business or operations,
of any nature, whether accrued, absolute, contingent or otherwise, and whether
due or to become due, of such nature as would typically be reflected in
financial statements prepared in accordance with generally accepted accounting
principles, other than liabilities which have been incurred in the ordinary
course of business and which are not material in relation to Symmetry's business
taken as a whole.
(i) CUSTOMERS. Symmetry has no knowledge or reason to know of any
termination, cancellation, limitation, modification or change in the business
relationship of Symmetry with any customer or group of customers which
individually or in the aggregate
8- AGREEMENT AND PLAN OF MERGER
constituted more than ten percent (10%) of Symmetry's sales for Symmetry's
fiscal year ended December 31, 1995.
(j) DISTRIBUTORS, RESELLERS. Symmetry has no knowledge or reason to
know of any termination, cancellation, limitation, modification or change in the
business relationship of Symmetry with any distributor or reseller or group of
distributors or resellers which individually or in the aggregate constituted
more than ten percent (10%) of Symmetry's sales for Symmetry's fiscal year ended
December 31, 1995.
(k) ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31, 1995,
Symmetry has not, except with respect to agreements and transactions with
Analogy in contemplation of this Agreement,:
(i) incurred any obligation or liability (contingent or
otherwise) except normal trade or business obligations incurred in the
ordinary course of business;
(ii) discharged or satisfied any lien or encumbrance or paid any
obligation or liability (contingent or otherwise), except current
liabilities of Symmetry outstanding on December 31, 1995, and current
liabilities incurred since December 31, 1995, in the ordinary course of
business;
(iii) mortgaged, pledged or subjected to lien, charge,
security interest or to any other encumbrance any of its assets or
properties;
(iv) sold, transferred, leased or otherwise disposed of any of
its assets or properties, except for a fair consideration in the ordinary
course of business;
(v) cancelled or compromised any debt or claim, except for
adjustments made in the ordinary course of business which, in the
aggregate, are not material;
(vi) waived or released any rights of any material value;
(vii) sold, assigned, transferred or granted any concessions,
leases, licenses, agreements, patents, inventions, trademarks,
servicemarks, trade names, copyrights or other intangible assets other than
in the ordinary course of business under or pursuant to contracts with
customers, joint ventures, prime contractors or subcontractors;
(viii) (a) disposed of or permitted to lapse any patent, or
any registered trademark, service xxxx, trade name or copyright held by
Symmetry, (b) disposed of or permitted to lapse any of the foregoing items
which Symmetry had a right to use
9- AGREEMENT AND PLAN OF MERGER
pursuant to the terms of a negotiated agreement, (c) disclosed to any
person not an employee any process or know-how not theretofore a matter of
public knowledge, or (d) disclosed to any person not an employee, except in
the ordinary course of business, any trade secret not theretofore a matter
of public knowledge;
(ix) entered into any arrangement, agreement or undertaking not
terminable on thirty (30) days' or less notice without cost or liability
(including, without limitation, any payment of or promise to pay any bonus
or special compensation) with employees except in accordance with
established Symmetry policies and practices;
(x) suffered the occurrence of any event or events which,
individually or in the aggregate, has or have resulted in a material
adverse change in its operations, prospects, earnings, assets, properties
or business, or in its condition, financial or otherwise;
(xi) declared any dividend or made any payment or distribution to
its shareholders;
(xii) made any loan to or entered into any other transaction
with any officer, director or shareholder of Symmetry;
(xiii) granted any increase in the compensation of or bonuses
payable or paid to any of Symmetry's employees or directors;
(xiv) redeemed, issued or sold or agreed to redeem, issue or
sell any shares of its capital stock or options, warrants, pre-emptive or
other rights to purchase or acquire securities or capital stock of
Symmetry;
(xv) entered into any other material transaction, contract or
commitment other than in the ordinary course of business; or
(xvi) entered into any binding agreement, arrangement or
commitment to do or take any of the foregoing actions.
(l) TAXES.
(i) Symmetry has timely filed all returns, declarations,
reports, estimates, information returns and statements (each, a "Return,"
and, collectively the "Returns") required to be filed with respect to any
Taxes (as hereinafter defined) and has timely and properly paid all Taxes
that are shown to be due and payable on such Returns, has established on
its books and records reserves that are adequate in all material respects
for the payment of all Taxes accrued but not yet due and payable, and has
complied in
10- AGREEMENT AND PLAN OF MERGER
all material respects with all applicable laws, rules and regulations
relating to the payment and withholding of Taxes and timely and properly
withheld from employee wages and paid over to the proper governmental
authorities all amounts required to be so withheld and paid over under all
applicable laws.
(ii) There are no liens for Taxes on the assets of Symmetry
except liens for Taxes not yet due. Symmetry has not requested any
extension of time within which to file any Return, which Return has not
since been filed. No deficiency for any Taxes has been proposed, asserted
or assessed against Symmetry which has not been resolved and paid in full.
There are no outstanding waivers or consents given by Symmetry regarding
the application of the statute of limitations with respect to any Taxes or
Returns, and no federal, state, local or foreign audits or other
administrative proceedings or court proceedings are presently pending with
regard to any Taxes or Returns.
(iii) Symmetry has not filed a consent pursuant to
Section 341(f) of the Code or agreed to have Section 341(f)(2) of the Code
applied to any disposition of a subsection (f) asset (as such term is
defined in Section 341(f)(4) of the Code) owned by Symmetry. Symmetry is
not required to include in income any adjustment pursuant to Section 481(a)
of the Code by reason of a voluntary change in accounting method initiated
by Symmetry, nor does Symmetry have any knowledge that the Internal Revenue
Service (the "IRS") has proposed any such adjustment or change in
accounting method.
(iv) Symmetry has established and will maintain on its books and
records reserves adequate in all material respects to pay all Taxes accrued
but not yet due and payable, and such reserves are reflected on Symmetry's
financial statements to the extent required. Symmetry is not a party to any
agreement, contract or arrangement that would result, separately or in the
aggregate, in the payment of "excess parachute payments" within the meaning
of Section 280G of the Code.
(v) For purposes of this Agreement, "Taxes" means all taxes,
charges, fees, levies or other assessments, including without limitation
all net income, gross income, gross receipts, sales, use, ad valorem,
transfer, franchise, profits, license, withholding, payroll, employment,
excise, severance, stamp, occupation, property or other taxes, customs,
duties, fees, assessments or charges of any kind whatsoever, together with
any interest and penalties, additions to tax or additional amounts imposed
by any taxing authority (domestic or foreign).
(m) LITIGATION. There are no actions, claims, suits, proceedings or
investigations pending or threatened against Symmetry, at law or in equity, or
before or by any federal, state, municipal or other governmental or
nongovernmental department, commission, board, bureau, agency or
instrumentality, or any other person, and there are no outstanding or
11- AGREEMENT AND PLAN OF MERGER
unsatisfied judgments, orders, decrees or stipulations against Symmetry or to
which it may become a party, or against any director, officer or employee of
Symmetry in their capacity or arising out of their duties as a director, officer
or employee of Symmetry. Symmetry has no reason to believe that any such
action, claim, suit, proceeding or investigation may be brought or threatened
against Symmetry, or any of its directors, officers or employees.
(n) LABOR MATTERS. There are no controversies pending or threatened
between Symmetry and any employees of Symmetry. Symmetry has complied with all
laws relating to the employment of labor, including any provisions thereof
relating to wages, hours, collective bargaining and the payment of withholding
and social security and similar taxes the failure to comply with which might
materially adversely affect the operations, prospects, earnings, assets,
properties or business of Symmetry and Symmetry is not liable for any arrears of
wages or any taxes or penalties for failure to comply with any of the foregoing.
None of Symmetry's employees is represented by any labor union, and Symmetry has
no knowledge of any organizational efforts presently being made or threatened by
or on behalf of any labor unions with respect to employees of Symmetry. Symmetry
has not been advised by any officer or employee that he is contemplating leaving
Symmetry as a result of the Merger or otherwise. A true and complete list of
all of Symmetry's officers and employees and their respective salaries, wages,
other compensation and positions is set forth in the Symmetry Disclosure
Schedule. All personnel policies and manuals of Symmetry are listed on the
Symmetry Disclosure Schedule and true and complete copies of such documents have
been delivered to Analogy. No employee or consultant of Symmetry shall have the
right to receive from the Surviving Corporation or Analogy a severance payment
or other payment in the nature thereof in the event his or her employment is
terminated by the Surviving Corporation following the Merger (except any such
right granted by Analogy or pursuant to any agreement or policy instituted or
adopted by Analogy, including the agreements referred to in Section 7.1(o)
hereof and any agreements related thereto).
(o) INTANGIBLE PROPERTY. Symmetry's intangible property consists
of all of the software, trade secrets, know-how, any other confidential or
proprietary information of Symmetry, United States and foreign patents, trade
names, trademarks and servicemarks and registrations thereof, copyrights and
copyright registrations, and applications for any of the foregoing, currently or
formerly used in the conduct of the business of Symmetry or created as the
property of Symmetry to be licensed to others, including without limitation the
items set forth in Section 4.1(o) of the Symmetry Disclosure Schedule
(collectively, the "Intangible Property"). To the extent aspects of Intangible
Property are amenable to itemization, Section 4.1(o) of the Symmetry Disclosure
Schedule sets forth a true and correct list, of all such items of Intangible
Property. Section 4.1(o) of the Symmetry Disclosure Schedule also sets forth
all licenses or similar agreements or arrangements to which Symmetry is a party,
either as licensee or licensor, with respect to the Intangible Property. Except
as otherwise disclosed in Section 4.1(o) of the Symmetry Disclosure Schedule:
12- AGREEMENT AND PLAN OF MERGER
(i) with respect to that subset of the Intangible Property that
is the core technology of Symmetry, namely its proprietary modeling
process, all of the model library known as SymLib and identified on the
Symmetry Disclosure Schedule, the source code for the TFT models included
within the SymSpice source code and the source code for the modeling
software known as MODPEX (collectively, the "Symmetry Technology") Symmetry
is the sole and exclusive owner of all right, title and interest in and to
the Symmetry Technology, free and clear of all liens, security interests,
charges, encumbrances, or other adverse claims;
(ii) Symmetry has the right and authority to use the Intangible
Property in connection with the conduct of its business in the manner
presently conducted;
(iii) Symmetry has not received notice of, and knows of no
basis for, a pending or threatened claim, interference action or other
judicial or adversarial proceeding against Symmetry that any of the
operations, activities, products, services or publications of Symmetry
infringes or will infringe any patent, trademark, servicemark, trade name,
copyright, trade secret or other property right of a third party, or that
it is illegally or otherwise misusing the trade secrets, formulae or
property rights of others;
(iv) to the best of Symmetry's knowledge, there are no
outstanding, nor are there any threatened, disputes or other disagreements
with respect to any licenses or similar agreements or arrangements or with
respect to infringement by a third party of any of the Symmetry Technology
or any portion of the Intangible Property that Symmetry has acquired the
rights to pursuant to the terms of a negotiated agreement;
(v) the Intangible Property owned or licensed by Symmetry is
sufficient to conduct and continue conducting Symmetry's business as
presently conducted;
(vi) to the best of Symmetry's knowledge, Symmetry has taken all
steps reasonably necessary to protect its continuing right, title and
interest in and to the Intangible Property and its continued use of the
Intangible Property; and
(vii) Symmetry knows of no third party infringing upon or
otherwise violating, or threatening to infringe upon or otherwise violate,
any of the Intangible Property in which Symmetry has ownership rights.
(p) BOOKS AND RECORDS. The books and records of Symmetry, including
without limitation, the minute books, stock record books and books of account,
have been and are complete and correct, and accurately reflect the basis for the
financial condition and results of operations of Symmetry as set forth in the
Financial Statements.
13- AGREEMENT AND PLAN OF MERGER
(q) LICENSES, PERMITS, AUTHORIZATIONS, ETC. Symmetry has all
approvals, authorizations, consents, licenses, orders, governmental security
clearances and registrations and permits of all governmental agencies, whether
federal, state or local, United States or foreign, required to permit the
operation of its business as presently conducted where the failure to obtain
such approvals, authorizations, consents, licenses, orders, governmental
security clearances, registrations and permits might materially adversely affect
Symmetry's business, financial condition or results of operations. All such
approvals, authorizations, consents, licenses, permits, orders, clearances and
registrations are in full force and effect and no suspension or cancellation
thereof has been threatened, nor is Symmetry in violation of any of the
foregoing.
(r) APPLICABLE LAWS. Symmetry has complied and is in compliance with
all United States and foreign laws, rules, regulations, ordinances, decrees and
orders applicable to the operation of its business as presently conducted and/or
its owned or leased properties the failure to comply with which might materially
adversely affect the operations, prospects, earnings, assets, properties or
business of Symmetry.
(s) EMPLOYEE BENEFIT PLANS.
(i) EMPLOYEE PLANS. Section 4.1(s) of the Symmetry Disclosure
Schedule contains a true, correct and complete list of all pension, profit
sharing, benefit, retirement, deferred compensation, welfare, insurance,
disability, bonus, vacation pay, severance pay and other similar plans,
programs and agreements, whether reduced to writing or not, other than any
"multi-employer plan" as such term is defined in Section 4001(a)(3) of the
Employee Retirement Income Security Act of 1974 ("ERISA"), relating to
Symmetry's employees, or maintained at any time since its inception by
Symmetry or by any other member (hereinafter, an "Affiliate") of any
controlled group of corporations, group of trades or businesses under
common control, or affiliated service groups (as defined for purposes of
Section 414(b), (c) and (m), respectively, of the Code) (the "Employee
Plans") and, except as set forth on the Symmetry Disclosure Schedule,
Symmetry has no obligations, contingent or otherwise, past or present,
under the terms of any Employee Plan or law applicable thereto.
(ii) PROHIBITED TRANSACTIONS. Neither Symmetry nor any of its
Affiliates, directors, officers, employees or agents, or any "party in
interest" or "disqualified person," as such terms are defined in Section 3
of ERISA and Section 4975 of the Code, respectively, has, with respect to
any Employee Plan, engaged in or been a party to any nonexempt "prohibited
transaction," within the meaning of Section 4975 of the Code or Section 406
of ERISA, in connection with which, directly or indirectly, Symmetry or any
of its Affiliates, directors or employees or any Employee Plan or any
related funding medium could be subject to either a penalty assessed
pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975 of the
Code.
14- AGREEMENT AND PLAN OF MERGER
(iii) COMPLIANCE. With respect to each Employee Plan,
Symmetry and its Affiliates are in material compliance with the
requirements prescribed by any and all statutes, orders or governmental
rules or regulations currently in effect, including, but not limited to,
ERISA and the Code, applicable to such Employee Plans. To the best of its
knowledge, Symmetry and its Affiliates have performed in all material
respects all obligations required to be performed by them under, and are
not in violation of, and there has been no default or violation by any
other party with respect to, any of the Employee Plans. Except as set forth
on the Symmetry Disclosure Schedule: (A) none of the Employee Plans which
is subject to Title IV of ERISA has been or will be terminated in whole or
in part within the meaning of ERISA or the Code; (B) no liability has been
or will be incurred through, no event or circumstance has occurred and no
event or circumstance will occur prior to, the Closing Date, which could
result in such a liability being asserted by the Pension Benefit Guaranty
Corporation ("PBGC") with respect to any Employee Plan (other than the
payment of annual premiums under Section 4007 of ERISA or benefits payable
in accordance with the terms of such Employee Plan); (C) no Employee Plan
that is subject to Part 3 of Subtitle B of Title I of ERISA or Section 412
of the Code, or both, has incurred any "accumulated funding deficiency" (as
defined in ERISA), whether or not waived; (D) neither Symmetry nor any
Affiliate has failed to pay any amounts due and owing as required by the
terms of any Employee Plan; (E) there has been no "reportable event" within
the meaning of Section 4043 of ERISA, or any event described in
Section 4063(a) of ERISA, with respect to any Employee Plan, other than as
disclosed in Section 4.1(s) of the Symmetry Disclosure Schedule; (F)
neither Symmetry nor any Affiliate has failed to make any payment to an
Employee Plan required under Section 302 of ERISA nor has any lien ever
been imposed under Section 302(f) of ERISA; (G) neither Symmetry nor any
Affiliate has adopted an amendment to any Employee Plan which requires the
provision of security under Section 307 of ERISA; and (H) the PBGC has not
instituted any proceedings to terminate an Employee Plan pursuant to
Section 4042 of ERISA.
(iv) MULTI-EMPLOYER PLANS. Section 4.1(s) of the Symmetry
Disclosure Schedule lists each and every multi-employer plan as that term
is defined in Section 4001(a)(3) of ERISA ("Multi-employer Plan") to which
Symmetry or its Affiliates contribute or are required to contribute or have
ever been required to contribute. No Multi-employer Plan listed in Section
4.1(s) of the Symmetry Disclosure Schedule is in "reorganization" (as
defined in Section 4241 of ERISA) or is "insolvent" (as defined in
Section 4245 of ERISA). Neither Symmetry nor any Affiliate has withdrawn
or is reasonably expected to withdraw from a Multi-employer Plan in a
complete or partial withdrawal which has resulted or will result in
"withdrawal liability," as defined for purposes of Part I of Subtitle I of
Part IV of ERISA, with respect to any such plan which has not been
satisfied in full. Symmetry and its Affiliates have made all contributions
to any such plan as are required through the Closing Date under the terms
of any such applicable law; and no event has occurred, or will occur prior
to the
15- AGREEMENT AND PLAN OF MERGER
Closing Date, which could give rise to any other liability (other than a
continuing obligation to contribute to such plan(s) under the terms of any
applicable collective bargaining agreements) on the part of Symmetry or
Analogy, or their Affiliates, officers, employees or directors with respect
to such plan(s).
(v) RETIREE BENEFITS. Except as set forth in Section 4.1(s) of
the Symmetry Disclosure Schedule, no Employee Plan provides health or life
insurance benefits for retirees. No such plan contains any provisions, and
no commitments or agreements exist, which in any way would limit or
prohibit Analogy from amending any such plan to reduce or eliminate such
retiree benefits.
(vi) COPIES OF EMPLOYEE PLANS AND RELATED DOCUMENTS. Symmetry
has previously delivered to Analogy true and complete copies of all
Employee Plans which have been reduced to writing and written descriptions
of all Employee Plans which have not been reduced to writing, all
agreements, including trust agreements and insurance contracts, related to
such Employee Plans, and the Summary Plan Description and all modifications
thereto for each Employee Plan communicated to employees. With respect to
each Employee Plan that is a "defined benefit plan," as such term is
defined in Section 3(35) of ERISA ("Defined Benefit Plan"), true and
complete copies of (A) the annual actuarial valuation reports for the last
five years, (B) the Form 5500 and Schedule A and B thereto, filed for the
last five years and (C) any filing made with the PBGC, Internal Revenue
Service or Department of Labor, or any correspondence with or from such
agencies, regarding the termination of any such defined Benefit Plan, have
been delivered to Analogy.
(vii) QUALIFICATIONS. Each Employee Plan intended to qualify
under Section 401(a) of the Code has been determined by the Internal
Revenue Service to so qualify and continues to so qualify, and the trusts
created thereunder have been determined to be exempt from tax under the
provisions of Section 501(a), and continue to be so exempt. Each Employee
Plan which is a funded welfare benefit plan intended to be exempt from tax
under the provisions of Section 501(c)(9) of the Code has been determined
by the Internal Revenue Service to be so exempt and continues to be so
exempt. Copies of all determination letters with respect to each such
Employee Plan have been previously delivered by Symmetry to Analogy, and
nothing has occurred, or will occur prior to the Closing Date, which might
cause the loss of such qualification or exemption, no such Employee Plan
has been operated in a manner which would cause it to be disqualified in
operation, and all such Employee Plans have been administered in compliance
with and consistent with all applicable requirements of the Code and ERISA,
including, without limitation, all reporting, notice, and disclosure
requirements.
16- AGREEMENT AND PLAN OF MERGER
(viii) FUNDING STATUS, ETC.
(A) Except as set forth in the Symmetry Disclosure
Schedule, neither Symmetry nor any corporation or trade or business (whether or
not incorporated) which would be treated as a member of the controlled group of
Symmetry under Section 4001(a)(14) of ERISA would be liable for (1) any amount
pursuant to Section 4062, 4063, 4064, 4068 or 4069 of ERISA if any of the
Employee Plans which are subject to Title IV of ERISA were to terminate or
(2) any amount pursuant to Section 4201 of ERISA if a complete or partial
withdrawal from any Multi-employer Plan listed in the Symmetry Disclosure
Schedule occurred before the Closing Date. Except as set forth in the Symmetry
Disclosure Schedule, all Employee Plans which are subject to Title IV of ERISA
have no amount of unfunded benefit liabilities, as defined in
Section 4001(a)(18) of ERISA. There is no unpaid contribution due with respect
to the plan year of any Defined Benefit Plan ended prior to the Closing Date, as
required under the minimum funding requirements of Section 412 of ERISA.
(B) With respect to each Employee Plan which is a qualified
defined contribution pension, profit-sharing or stock bonus plan, as defined in
ERISA, all employer contributions accrued for plan years ending prior to the
Closing Date under the plan terms and applicable law have been made by Symmetry.
(C) All premiums or other payments required by the terms of
any group or individual insurance policies and programs maintained by Symmetry
and covering any present or former employees of Symmetry with respect to all
periods up to and including the Closing Date have been fully paid for the length
of the obligation.
(ix) CLAIMS AND LITIGATION. Except as set forth in Section
4.1(s) of the Symmetry Disclosure Schedule, there are no pending, and to
the best of Symmetry's knowledge, threatened claims, suits or other
proceedings by present or former employees of Symmetry or its Affiliates,
plan participants, beneficiaries or spouses of any of the above, the
Internal Revenue Service, the PBGC, the Department of Labor, or any other
person or entity (including claims against the assets of any trust)
involving any Employee Plan, or any rights or benefits thereunder, other
than ordinary and usual claims for benefits by participants or
beneficiaries, including claims pursuant to domestic relations orders.
(x) NO IMPLIED RIGHTS. Nothing expressed or implied herein
shall confer upon any past or present employee of Symmetry or its
Affiliates, his or her representatives, beneficiaries, successors and
assigns, or upon any collective bargaining agent, any rights or remedies of
any nature, including, without limitation, any rights to employment or
continued employment with Symmetry, Analogy, or any successor or affiliate.
17- AGREEMENT AND PLAN OF MERGER
(t) ENVIRONMENTAL LAWS AND REGULATIONS.
(i) CERTAIN DEFINITIONS. For purposes of this Agreement:
(A) "Hazardous Substance" means any chemical, pollutant,
contaminant, waste (including, without limitation, toxic, hazardous, infectious,
sanitary, solid, radioactive and petroleum waste, collectively, "Waste"), toxic
substance, hazardous substance, extremely hazardous substance, hazardous
material, radioactive material, oil and petroleum product, as such terms, or any
similar terms, are or shall be used under any applicable federal, state, local
and foreign laws, regulations, rules, ordinances, permits (including, without
limitation, authorizations, approvals, registrations and licenses, collectively,
"Permits"), administrative orders, judicial decisions or the like (collectively,
"Laws") relating to pollution or protection of the environment, natural
resources or human health.
(B) "Environmental Laws" means any and all Laws relating to
(1) pollution or protection of the environment, natural resources or human
safety and health from any Hazardous Substance or (2) nuisance, trespass or
"toxic tort," so called, including, without limitation, laws relating to
emissions, discharges, releases or threatened releases of any Hazardous
Substance or otherwise relating to the manufacture, processing, importation,
distribution, use, generation, treatment, storage, disposal, transportation or
handling of any Hazardous Substance. Environmental Laws include, but are not
limited to, the Clean Air Act, the Federal Water Pollution Control Act as
amended by the Clean Water Act of 1977, the Safe Drinking Water Act, the
Occupational Safety and Health Act of 1970 ("OSHA Act"), the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), the
Superfund Amendments and Reauthorization Act of 1986 ("XXXX"), the Solid Waste
Disposal Act as amended by the Resource Conservation and Recovery Act of 1976
("RCRA"), the Hazardous and Solid Waste Amendments of 1984, the Medical Waste
Tracking Act, the Hazardous Materials Transportation Act, and the Toxic
Substances Control Act of 1976 ("TSCA"), and any rules and regulations
promulgated thereunder.
(C) "Environmental Claim" means any civil, criminal or
investigative action, suit, litigation, hearing, communication (written or
oral), demand, claim, citation, notice or notice of violation, warning, consent
decree, judgment or order by any person or entity alleging, claiming, concerning
or finding liability or potential liability (including, without limitation,
liability or potential liability for investigatory costs, cleanup costs,
governmental response or oversight costs, natural resources damages, property
damages, penalties, personal injuries, death or any other damages or costs,
including, without limitation, litigation and settlement costs and consultants'
and attorneys' fees) arising out of, based on or resulting from, in whole or in
part, the actual or alleged presence, threatened release, release, emission,
disposal, storage, treatment, transportation, generation, manufacture or use of
any Hazardous Substance at or from any location.
18- AGREEMENT AND PLAN OF MERGER
(ii) PERMITS. Symmetry possesses and is in compliance with all
Permits required under applicable Environmental Laws in connection with
Symmetry's business and operations or its assets and properties where the
failure to possess or comply might materially adversely affect Symmetry,
its business or operations, and each of such Permits is listed in Section
4.1(t) of the Symmetry Disclosure Schedule.
(iii) COMPLIANCE WITH ENVIRONMENTAL LAWS. (A) Symmetry is,
and its business, operations, assets and properties are, in compliance with
all Environmental Laws; (B) to Symmetry's knowledge, neither the real
property owned, leased, operated or controlled, directly or indirectly, by
Symmetry, nor, any other real property contiguous thereto, is or has been
designated by any state, local or federal agency or body as a hazardous
waste disposal site or a site or location requiring investigation
concerning, or management, cleanup or removal of, any Hazardous Substance;
(C) to Symmetry's knowledge, there has never been any release or threatened
release, emission, disposal, storage, transportation, generation,
manufacture or use of any Hazardous Substance from or on any real property
owned, leased, operated or controlled, directly or indirectly, by Symmetry,
nor any other real property contiguous thereto, in violation of any
Environmental Laws; and (D) to Symmetry's knowledge, there are no actions,
activities, circumstances, conditions, events, incidents, practices, plans
or proposed Environmental Laws that may interfere with or prevent
Symmetry's future conduct of Symmetry's business and operations or use of
Symmetry's assets and properties at their maximum potential production or
operational capacity in full compliance with all applicable Environmental
Laws.
(iv) ENVIRONMENTAL CLAIMS. There are no Environmental Claims
pending or, to Symmetry's knowledge, threatened against Symmetry or against
any person or entity whose liability for any Environmental Claim Symmetry
has retained or assumed either contractually or by operation of law.
(v) POTENTIAL ENVIRONMENTAL CLAIMS. There are no past or
present actions, activities, circumstances, conditions, events, incidents
or practices, including, without limitation, the release, threatened
release, emission, discharge, disposal, storage, treatment, transportation,
generation, manufacture or use of any Hazardous Substance that could form
the basis of any Environmental Claim against Symmetry or, to Symmetry's
knowledge, against any person or entity whose liability for any
Environmental Claim Symmetry has retained or assumed either contractually
or by operation of law.
(vi) WASTE. All Waste or Waste generated in connection with
Symmetry's business, operations, assets and properties related thereto has
been (A) treated, stored or disposed of by or at facilities duly licensed
19- AGREEMENT AND PLAN OF MERGER
pursuant to applicable Environmental Laws and (B) transported to such
facilities by transporters duly licensed pursuant to applicable
Environmental Laws. Symmetry has maintained true and complete records
relating to the generation, transportation, treatment, storage and disposal
of Waste generated in connection with Symmetry's business, operations,
assets and properties.
(vii) SYMMETRY'S HAZARDOUS SUBSTANCES. Each Hazardous
Substance used, manufactured, imported, processed, stored, treated,
transported, released or disposed of in connection with Symmetry's
business, operations, assets or properties is listed in the Symmetry
Disclosure Schedule.
(viii) ASBESTOS, PCBS AND STORAGE TANKS. Except as listed in
Section 4.1(t) of the Symmetry Disclosure Schedule, without in any way
limiting the generality of the foregoing, there is no asbestos contained in
or forming part of any building, building component, structure, improvement
or office space owned, operated, leased or controlled, directly or
indirectly, by Symmetry; no polychlorinated biphenyls (PCBs) are used or
stored at any property owned, operated, leased or controlled, directly or
indirectly, by Symmetry; and no storage tanks (above or below ground) exist
at any property owned, operated, leased or controlled, directly or
indirectly, by Symmetry.
(ix) ENVIRONMENTAL REPORTS. Symmetry has delivered to Analogy
all environmental inspection reports ("Environmental Reports") prepared by
any person or entity concerning compliance with applicable Environmental
Laws of Symmetry's business, operations, assets or properties and the use,
manufacture, importation, processing, storage, treatment, transportation,
release or disposal therefrom, therein or thereon of any Hazardous
Substance. All such Environmental Reports are listed in the Symmetry
Disclosure Schedule.
(u) INSURANCE. Symmetry has and shall maintain in full force and
effect policies of insurance of the types and in the amounts customarily carried
by comparable businesses in Symmetry's circumstances. Symmetry is the sole
owner of each of such policies, and all premiums due thereon have been paid.
Copies of such insurance policies have previously been delivered by Symmetry to
Analogy, and nothing has occurred, or will occur prior to the Closing Date,
which might cause any insurer to cancel or otherwise terminate any such policy.
(v) TITLE TO REAL AND PERSONAL PROPERTIES, ABSENCE OF LIENS AND
ENCUMBRANCES; CONDITION OF PROPERTIES.
(i) Except as described in the following sentence, Symmetry has
good and marketable title to, and owns outright, all of its real and
personal properties and assets (including, but not limited to, the assets
reflected in Symmetry's balance sheet as of September 30, 1996), except for
those disposed of in the ordinary course of business, and none of such
assets is encumbered by any mortgage, lien, claim or encumbrance
20- AGREEMENT AND PLAN OF MERGER
except liens, claims or encumbrances reflected in said balance sheet or
(where required) in the notes thereto, and liens for taxes which are not
yet due and payable. All leases pursuant to which Symmetry leases any real
or personal property are valid and binding in accordance with their
respective terms, and there is not under any such lease any existing
default by Symmetry, event of default or event which, with notice and/or
lapse of time, would constitute a default.
(ii) All buildings and material fixtures and equipment owned or
used by Symmetry have been properly maintained and are in good operating
order and repair, ordinary wear and tear excepted, and to the best of
Symmetry's knowledge, are in compliance in all material respects with all
zoning, building and fire codes and all other laws, rules, regulations and
requirements of governmental authorities and the fire insurance rating
association having jurisdiction. All leases of real or personal property to
which Symmetry is a party are fully effective and afford Symmetry peaceful
and undisturbed possession of the subject matter of the lease. To the best
knowledge of Symmetry, the buildings, plant, structures and equipment of
Symmetry are structurally sound with no known defects and are in good
operating condition and repair and are adequate for the uses to which they
are being put, and none of such buildings, plant, structures or equipment
is in need of maintenance or repairs except for ordinary, routine
maintenance and repairs that are not material in nature or cost.
(iii) To the best knowledge of Symmetry, neither the whole
nor any portion of the real or personal property used or owned by Symmetry
is subject to any decree or order of a governmental body to be sold or is
being condemned, expropriated or otherwise taken by any governmental body
or other person with or without payment of compensation thereof, nor has
any such condemnation, expropriation or taking been proposed.
(w) INVENTORY. All inventory of Symmetry, whether or not
reflected in the Financial Statements, consists of a quality and quantity usable
and salable in the ordinary course of business, except for obsolete items and
items of below standard quality, all of which have been written off or written
down or reserved to be written off or written down to net realizable value in
the Financial Statements. All inventories not written off or written down have
been priced at the lower of average cost or market. The quantities of each type
of inventory are, in the reasonable judgment of Symmetry's management, not
excessive, but are reasonable and warranted in the present circumstances of
Symmetry. All work in process and finished goods inventory is free of any known
defect or other deficiency.
(x) MATERIAL CONTRACTS. Section 4.1(x) of the Symmetry Disclosure
Schedule lists all material contracts, instruments, agreements or commitments
(whether oral or written) relating to the conduct of the business of Symmetry.
Symmetry has made available to Analogy true and correct copies of each document
and a written description, accurate in all material
21- AGREEMENT AND PLAN OF MERGER
respects, of each oral arrangement so listed. Without limiting the generality
of the foregoing, the aforesaid list includes all contracts, agreements,
instruments of the following types to which Symmetry is a party:
(i) any contract which involves or may involve future
expenditures or obligations on the part of Symmetry of more than $10,000 or
any such contract continuing over a period of more than six months from its
date, or any contract for the sale of products or rendering of services not
in the ordinary course of business;
(ii) any contract for the employment of any individual and any
consulting agreement with an individual or an entity;
(iii) any bonus, incentive, deferred compensation, severance
pay, pension, profit sharing, retirement, death benefit, employee stock
purchase, stock option, employee benefit, employee incentive, fringe
benefit, medical or dental insurance or plan, life insurance, vacation pay,
or similar or like plan, agreement or arrangement, together with a list of
all employees or former employees currently receiving benefits thereunder;
(iv) any collective bargaining agreement or other agreement with
any labor union or other organization (Symmetry hereby represents that no
other such agreement has been requested by, or is under discussion by
management with, any group of employees or others);
(v) any lease of any real or personal property or deeds or other
instruments representing ownership of any real property;
(vi) any mortgage, security agreement, chattel mortgage or
conditional sales agreement or any similar instrument or agreement;
(vii) any agreement, indenture or other instrument relating
to the borrowing of money, or the guaranty of any obligation including,
without limitation, for the borrowing of money and a list of all bank
accounts identifying authorized signatories;
(viii) any joint venture, partnering, strategic alliance or
other similar agreement;
(ix) any sales representative or distributorship agreement;
(x) any dealer, reseller, OEM, value added reseller, agency or
franchise agreement;
22- AGREEMENT AND PLAN OF MERGER
(xi) any agreement not made in the ordinary and normal course of
business;
(xii) any agreement of any nature with officers, directors,
shareholders or other affiliates of Symmetry whether any such person's
interest is direct or indirect;
(xiii) any agreement which requires prior approval in
connection with a change in control of Symmetry or which will be in default
or which gives rise to termination rights following a change in control of
Symmetry;
(xiv) any agreement which provides, initially or
contingently, for the escrow or release to a third party of any source code
of Symmetry;
(xv) any agreement which commissions the creation of intangible
property or which otherwise relates to the purchase of intangible property;
(xvi) any agreement which involves the licensing by or to
Symmetry of any software or other technology, know-how, trade secret,
confidential or proprietary information, which is necessary to the conduct
of, or material to, the business of Symmetry;
(xvii) any non-competition agreement, confidentiality/
non-disclosure or assignment of inventions agreement (both for the benefit of
and/or restricting Symmetry);
(xviii) any property, casualty, director and officer liability
and other forms of insurance; and
(xix) any agreements which in any material way limit the
freedom of Symmetry from competing in any geographic area, business or
product line or with any person or entity.
All documents, rights, obligations, contracts, agreements and commitments
referred to in the Symmetry Disclosure Schedule are valid and enforceable in
accordance with their respective terms for the periods stated therein and except
as disclosed in Section 4.1(x) of the Symmetry Disclosure Schedule, there are
not under any of them existing defaults, events of default or events which with
notice and/or lapse of time would constitute defaults.
(y) LOANS, NOTES, ACCOUNTS RECEIVABLE AND ACCOUNTS PAYABLE. The
loans, notes and accounts receivable of Symmetry reflected in the balance sheet
of Symmetry as at September 30, 1996, and all loans, notes and accounts
receivable arising after September 30, 1996, and prior to the Closing Date
arose, and will arise, from bona fide transactions in the ordinary course of
business of Symmetry and have been collected or are reasonably expected to
23- AGREEMENT AND PLAN OF MERGER
be collected within payment periods that are both usual and expected in
Symmetry's industry and no longer than Symmetry's past experience, and at the
aggregate recorded amount thereof . The accounts payable of Symmetry reflected
on such balance sheet and all accounts payable arising after September 30, 1996,
and prior to the Closing Date arose, and will arise, from bona fide transactions
in the ordinary course of business of Symmetry. The method of computing all
reserves as at the Closing Date will not change from the method of computing
said reserves on September 30, 1996. On the Closing Date, Symmetry shall have
no accounts or loans receivable from any person, firm or corporation with which
it is affiliated, or from any of its directors, officers or employees except for
customary advances to personnel incurred in the ordinary course of business and
except as disclosed in Section 4.1(y) of the Symmetry Disclosure Schedule.
(z) TRANSACTIONS WITH RELATED PARTIES. Except as set forth in
Section 4.1(z) of the Symmetry Disclosure Schedule, no officer, director, or
person known to Symmetry to own more than one percent (1%) of Symmetry's common
stock (each, a "Related Party," and, collectively, the "Related Parties") was,
during the year ended December 31, 1995, or thereafter, or is presently, a
party, directly or indirectly to any transaction or presently proposed
transaction with Symmetry. Except as set forth in Section 4.1(z) of the
Symmetry Disclosure Schedule; (i) since December 31, 1995 there have been no
transactions between Symmetry and any Related Party or any payment (however
characterized) by Symmetry to any Related Party or by any Related Party to
Symmetry (other than payments in the ordinary course and consistent with past
practice in respect of salary, wages or reimbursable expenses); (ii) there is no
lease, agreement or commitment between Symmetry and any Related Party; (iii) no
Related Party has any interest in any property, real or personal, tangible or
intangible, used in or pertaining to the business of Symmetry; (iv) no Related
Party is indebted to Symmetry; and (v) Symmetry is not indebted to any Related
Party.
(aa) FULL DISCLOSURE. All information furnished by Symmetry to
Analogy pursuant to or in connection with this Agreement and all instruments and
agreements executed in connection herewith, taken together as a whole, is, and
will be on the Closing Date, accurate and complete and does and will on the
Closing Date include all material facts required to be stated therein or
necessary to make the statements therein not misleading. All documents
furnished by Symmetry to Analogy pursuant to or in connection with this
Agreement are true and correct copies, except to the extent that Symmetry has
informed Analogy otherwise in writing and provided or identified true and
correct copies thereof, and there are no amendments or modifications thereto
except as otherwise set forth in such documents or information. As of the date
of this Agreement, Symmetry has disclosed to Analogy all events, conditions and
facts known to it materially affecting the business and prospects of Symmetry.
Symmetry has not withheld knowledge of any such events, conditions or facts
which it knows, or which it has reasonable grounds to know, may reasonably
affect the business and prospects of Symmetry.
24- AGREEMENT AND PLAN OF MERGER
(ab) BANKING RELATIONSHIPS. Section 4.1(ab) of the Symmetry
Disclosure Schedule sets forth the names and locations of all banks, trust
companies, savings and loan associations and other financial institutions at
which Symmetry maintains safe deposit boxes or accounts of any nature and the
names of all persons authorized to have access thereto, draw thereon or make
withdrawals therefrom. At the Closing, Symmetry will deliver to Analogy copies
of all records, including all signatures or authorization cards, pertaining to
such safe deposit boxes and bank accounts.
(ac) ABSENCE OF CERTAIN COMMERCIAL PRACTICES. Symmetry and its
directors and officers, and, to the best knowledge of Symmetry, its other
employees, agents or other persons acting on its behalf have not (i) given or
agreed to give any gift or similar benefit of more than nominal value to any
customer, supplier, or governmental employee or official or any other person
which is or may be in a position to help or hinder Symmetry or assist Symmetry
in connection with any proposed transaction, which gift or similar benefit, if
not given in the past, could have materially adversely affected the assets,
business, prospects, condition (financial or otherwise) or results of operations
of Symmetry, or which, if not continued in the future, could materially
adversely affect the assets, business, prospects, condition (financial or
otherwise) or results of operations of Symmetry, or (ii) used any corporate or
other funds for unlawful contributions, payments, gifts or entertainment, or
made any unlawful expenditures relating to political activity to government
officials or otherwise or established or maintained any unlawful or unrecorded
funds which would be in violation of Section 30A of the Securities Exchange Act
of 1934, as amended, were that provision applicable. Symmetry and its directors
and officers or, to the best knowledge of Symmetry, its employees, other agents
or other persons acting on its behalf have not accepted or received any unlawful
contributions, payments, gifts or expenditures.
(ad) BROKERS. No Broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the Merger
or the transactions contemplated by this Agreement based upon arrangements made
by or on behalf of Symmetry.
(ae) TAX-FREE REORGANIZATION. Symmetry has no reason to believe that
the Merger will not qualify as a tax-free reorganization within the meaning of
Section 368(a)(2)(E) of the Code.
4.2 REPRESENTATIONS AND WARRANTIES OF ANALOGY AND SUBSIDIARY. In order to
induce Symmetry to enter into this Agreement, Analogy and Subsidiary jointly and
severally represent and warrant to Symmetry, subject to the matters set forth in
the Analogy Disclosure Schedule delivered herewith, as follows:
(a) ORGANIZATION, GOOD STANDING, POWER, ETC. Each of Analogy and
Subsidiary is a corporation duly organized and validly existing under the laws
of the State of Oregon, has all requisite corporate power and authority to own,
operate and lease its properties
25- AGREEMENT AND PLAN OF MERGER
and to carry on its business as now being conducted, and is duly qualified and
in good standing in each jurisdiction in which the property owned, leased or
occupied by it or the nature of the business conducted by it makes such
qualification necessary.
(b) MERGER STOCK. The shares of common stock of Analogy to be issued
to the shareholders of Symmetry in connection with the Merger have been duly
authorized by all necessary corporate action by Analogy and, when issued and
delivered by Analogy pursuant to this Agreement, will be validly issued, fully
paid and non-assessable.
(c) POWER, DUE AUTHORIZATION. Each of Analogy and Subsidiary has the
power and authority to execute and deliver this Agreement and to perform all of
its obligations hereunder in accordance with the terms hereof, and all necessary
corporate action to authorize the consummation of the transactions contemplated
by this Agreement on the part of each of Analogy and Subsidiary has been duly
and effectively taken, including, without limiting the generality of the
foregoing, the approval thereof by the Boards of Directors of Analogy and
Subsidiary and by Analogy as the sole shareholder of Subsidiary.
(d) NO CONFLICT. Neither the execution and delivery of this
Agreement nor the performance of Analogy's or Subsidiary's obligations hereunder
will (i) violate any provision of the Articles of Incorporation or Bylaws of
Analogy or Subsidiary, (ii) violate any material provision of any applicable
statute or law or any judgment, decree, order, regulation or rule of any court
or governmental body applicable to Analogy or Subsidiary, or (iii) constitute a
material breach or default (or an event which, with notice or lapse of time or
both, would constitute a material default) under any material contract,
commitment, agreement, lease or other obligation to which Analogy or Subsidiary
is party.
(e) BROKERS. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the Merger
or the transactions contemplated by this Agreement based upon arrangements made
by or on behalf of Analogy.
(f) ADDITIONAL INFORMATION. Analogy represents and warrants that the
information contained in the following documents, which Analogy has furnished to
Symmetry or will furnish if requested by Symmetry prior to the Closing, is or
will be true and correct in all material respects as of the respective filing
dates:
(i) Analogy's Annual Report on Form 10-K for the fiscal year
ended March 31, 1996 (without exhibits unless specifically requested);
(ii) Analogy's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1996 (without exhibits unless specifically requested);
26- AGREEMENT AND PLAN OF MERGER
(iii) Analogy's Current Reports on Form 8-K filed with the
Securities and Exchange Commission (the "SEC") since March 31, 1996, if
any; and
(iv) Notice of Annual Meeting and Proxy Statement for Analogy's
1996 Annual Meeting of Shareholders.
(g) NO MATERIAL CHANGE. As of the date hereof, there has been no
material adverse change in Analogy's financial condition, results of operations,
business or prospects since June 30, 1996.
(h) SEC REPORTS.
(i) Analogy has filed with the SEC all reports (the "SEC
Reports") required to be filed by it under the Securities Exchange Act of
1934, as amended (the "Exchange Act"). All of the SEC Reports filed by
Analogy complied in all material respects with the requirements of the
Exchange Act. None of the SEC Reports contained as of the respective dates
thereof, any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under which
they were made. All financial statements contained in the SEC Reports have
been prepared in accordance with generally accepted accounting principles
consistently applied throughout the applicable periods ("GAAP"). Each
consolidated balance sheet included in the SEC Reports presents fairly in
accordance with GAAP the consolidated financial position of Analogy as of
the date of such balance sheet, and each consolidated statement of
operations, shareholders' equity and cash flows presents fairly in
accordance with GAAP the consolidated results of operations, shareholders'
equity and cash flow of Analogy for the periods then ended.
(ii) No event has occurred since June 30, 1996 which requires the
filing of an SEC Report that has not heretofore been filed and furnished to
Symmetry, excepting only the end of the second quarter of Analogy's fiscal
year 1997 on September 30, 1996.
ARTICLE V
SYMMETRY'S COVENANTS
5.1 SHAREHOLDER'S MEETING. Symmetry shall, as promptly as practicable,
but in no event later than November 14, 1996, take any and all action necessary
in accordance with applicable law and its Articles of Incorporation and Bylaws
(i) to convene a meeting of its shareholders to consider and vote upon the
approval of this Agreement, or (ii) to obtain the
27- AGREEMENT AND PLAN OF MERGER
written consent of its shareholders thereto. Immediately upon setting a record
date, if applicable, for the shareholders entitled to vote at such meeting and
immediately upon any subsequent change thereof, Symmetry shall send written
notice thereof to Analogy. The Board of Directors of Symmetry shall, subject to
its fiduciary duty to Symmetry's shareholders, recommend such approval and shall
take all lawful action to solicit such approval.
5.2 CONDUCT OF SYMMETRY PRIOR TO THE CLOSING DATE. During the period from
the date hereof through the later of (i) the Closing Date, and (ii) the
Effective Time, Symmetry will conduct its business and affairs as follows:
(a) OPERATION OF BUSINESS. Symmetry will operate its business only
in the usual, regular and ordinary manner so as to maintain the goodwill it
presently enjoys, will make no material changes in its operations, and, to the
extent consistent with such operation, will use its best efforts to (i) preserve
intact its present business organization, (ii) preserve its present relationship
with its customers, suppliers, distributors, value added resellers, consultants,
joint venturers, strategic partners and others with which it has business
dealings, and (iii) keep in its employ substantially all of its key personnel.
(b) MAINTAIN PROPERTIES. Symmetry will maintain all of its
properties in good repair, order and condition, reasonable wear and use
excepted, and will maintain insurance upon all of its properties and with
respect to the conduct of its business in such amounts and of such kinds as are
in effect on the date of this Agreement or as the same may be added to by mutual
agreement of Symmetry and Analogy.
(c) BOOKS AND RECORDS. Symmetry will maintain its books, accounts
and records in the usual, regular and ordinary manner, on a basis consistent
with prior years.
(d) ENCUMBRANCES. Symmetry will not encumber or mortgage any of its
property or assets except in the usual and ordinary course of business or enter
into any contract or commitment which by reason of its size or otherwise is not
in the usual and ordinary course of business, and Symmetry will not, other than
in the usual and ordinary course of its business, dispose of, sell, or convey or
acquire any assets or property. Symmetry shall not enter into any transaction
which if effected before the date of this Agreement would constitute a breach of
the representations, warranties or agreements contained herein.
(e) COMPLIANCE. Symmetry will comply with the provisions of all
laws, regulations, ordinances, and judicial decrees applicable to it or the
conduct of its business the failure to comply with which might materially
adversely affect its operations, prospects, earnings, assets, properties or
business.
(f) NO SOLICITATION. Symmetry will not, nor will it permit any of
its officers, directors, employees, agents, or representatives (including,
without limitation,
28- AGREEMENT AND PLAN OF MERGER
investment bankers, attorneys and accountants), directly or indirectly to,
(i) initiate, contract with, solicit or encourage any inquiries or proposals by,
or (ii) enter into any discussions or negotiations with, or disclose directly or
indirectly any information concerning its business and properties to, or afford
any access to its properties, books, and records to, any corporation,
partnership, person, or other entity or group in connection with any possible
proposal (an "Subsidiary Proposal") regarding a sale of Symmetry's capital stock
or a merger, consolidation, or sale of all or a substantial portion of its
assets, or any similar transaction. Symmetry will provide written notice to
Analogy immediately if any discussions or negotiations are sought to be
initiated, any inquiry or proposal is made, or any such information is requested
with respect to an Subsidiary Proposal or potential Subsidiary Proposal or if
any Subsidiary Proposal is received or indicated to be forthcoming.
(g) ACTIONS WITH RESPECT TO CHARTER DOCUMENTS, CAPITAL STOCK.
Symmetry will not, without the prior written approval of Analogy: (i) amend or
otherwise change its Articles of Incorporation or Bylaws, as each such document
is in effect on the date hereof; (ii) issue or sell, or authorize for issuance
or sale, additional shares of any class of its capital stock or options,
warrants or other securities exercisable for or convertible into such capital
stock; (iii) declare, set aside, make or pay any dividend or other distribution
with respect to its capital stock or options, warrants or other securities
exercisable for or convertible into such capital stock; (iv) redeem, purchase or
otherwise acquire, directly or indirectly, any of its capital stock; (v) take
any action to change the number of directors of its Board of Directors or to
change the members of its Board of Directors; or (vi) take any action to
accelerate the vesting of any option to purchase its capital stock.
(h) ACCESS. Symmetry will afford Analogy and its officers,
employees, counsel, accountants and other authorized representatives access,
during normal business hours, to all of the properties, books, contracts,
commitments and records of Symmetry and will furnish promptly to Analogy all
other information concerning its business, properties and personnel as Analogy
may reasonably request, provided that no investigation pursuant to this
Section 5.2(h) shall affect or be deemed to modify any representation or
warranty made by Symmetry, or the conditions to the obligations of Symmetry to
consummate the Merger.
(i) NOTIFICATION OF CERTAIN MATTERS. Symmetry shall give prompt
notice to Analogy of: (i) the occurrence of, or any communication relating to, a
default or event which, with notice or lapse of time or both would become a
default under any agreement, indenture or instrument material to the financial
condition, properties, business or results of operations of Symmetry, to which
Symmetry is a party or is subject; (ii) any notice or other communication from
any third party alleging that the consent of such third party is or may be
required in connection with the transactions contemplated by this Agreement; and
(iii) any material adverse change in the financial condition, properties,
business, results of operations or prospects of Symmetry, or the occurrence of
any event which, so far as reasonably can be foreseen at the time of its
occurrence, would result in any such change.
29- AGREEMENT AND PLAN OF MERGER
5.3 PUBLICITY. Symmetry shall not issue any press release or otherwise
make any public statement with respect to the transactions contemplated hereby
without the prior written approval of Analogy.
ARTICLE VI
MUTUAL COVENANTS
6.1 BEST EFFORTS. Subject to the terms and conditions hereof each party
to this Agreement agrees to fully cooperate with the others and the others'
counsel, accountants and representatives in connection with any steps required
to be taken as part of its obligations under this Agreement. Each party to this
Agreement agrees that it will use its reasonable best efforts (without incurring
material expense) to cause all conditions to its obligations under this
Agreement to be satisfied as promptly as possible, and will not knowingly
undertake a course of action inconsistent with this Agreement or which would
make any of its representations, warranties, agreements or covenants in this
Agreement untrue in any material respect or any conditions precedent to its
obligations under this Agreement unable to be satisfied at or prior to the
Closing.
6.2 FILINGS; OTHER ACTION. Subject to the terms and conditions hereof,
Analogy and Symmetry shall (a) cooperate with one another in (i) determining
which filings are required to be made prior to the Effective Time with, and
which consents, approvals, permits or authorizations are required to be obtained
prior to the Effective Time from, governmental or regulatory authorities of the
United States, the several states, foreign jurisdictions and third parties in
connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and (ii) timely make all
such filings and timely seek all such consents, approvals, permits or
authorizations; and (b) use all reasonable efforts to take, or cause to be
taken, all other actions and do, or cause to be done, all other things
necessary, proper or appropriate to consummate and make effective the
transactions contemplated by this Agreement. In case at any time after the
Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement, the proper officers and/or directors of Symmetry and
Analogy shall take all such necessary action.
6.3 TAX-FREE REORGANIZATION. From and after the Effective Time, neither
Analogy nor the Surviving Corporation shall take or suffer to be taken any
action which will cause the Merger not to constitute a tax-free reorganization
within the meaning of Section 368(a)(2)(E) of the Code.
6.4 FURTHER ACTION. Subject to the fulfillment or waiver, at or before
the Effective Time, of each of the conditions of performance set forth herein,
each party hereto shall perform
30- AGREEMENT AND PLAN OF MERGER
such further acts and execute such documents as may be reasonably required to
effectuate the Merger.
ARTICLE VII
CONDITIONS
7.1 CONDITIONS TO OBLIGATIONS OF ANALOGY AND SUBSIDIARY. The obligations
of Analogy and Subsidiary to effect the Merger are also subject to the
satisfaction or waiver by Analogy and Subsidiary at or prior to the Effective
Time of the following conditions:
(a) SYMMETRY SHAREHOLDER APPROVAL. This Agreement, the Merger and
the other transactions contemplated hereby shall have been approved and adopted
by the requisite vote of the shareholders of Symmetry in accordance with the
Corporations Code and Symmetry's Articles of Incorporation and Bylaws. Analogy
shall have received a certificate signed on behalf of Symmetry by the Secretary
of Symmetry to such effect.
(b) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Symmetry set forth in this Agreement shall be true and correct as
of the Closing Date as though made on and as of the Closing Date (except to the
extent such representations and warranties speak as of an earlier date).
Analogy shall have received a certificate signed on behalf of Symmetry by the
Chief Executive Officer and the Chief Financial Officer of Symmetry to the
foregoing effect.
(c) PERFORMANCE OF OBLIGATIONS BY SYMMETRY. Symmetry shall have
performed all obligations required to be performed by it under this Agreement at
or prior to the Closing Date, and Analogy shall have received a certificate
signed on behalf of Symmetry by the Chief Executive Officer and the Chief
Financial Officer of Symmetry to such effect.
(d) NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No order, injunction
or decree issued by any court or agency of competent jurisdiction or other legal
restraint or prohibition preventing the consummation of the Merger or any of the
other transactions contemplated by this Agreement (an "Order") shall be in
effect. No statute, rule, regulation, order, injunction or decree shall have
been enacted, entered, promulgated or enforced by any governmental entity which
prohibits, restricts or makes illegal consummation of the Merger.
(e) PROCEEDINGS AND LITIGATION. On the Closing Date, no action or
proceeding shall be threatened, instituted or pending by or before any court or
any governmental or other regulatory or administrative body requesting or
looking toward an order, judgment or decree which (i) questions the validity of
or seeks to restrain or prohibit the consummation of the transactions
contemplated hereby; (ii) seeks to compel Analogy to hold separate all or a
31- AGREEMENT AND PLAN OF MERGER
material portion of Symmetry's business or assets as a result of the
transactions contemplated hereby; or (iii) in the reasonable judgment of
Analogy, would have a material adverse effect on the business or financial
condition of Symmetry or the Surviving Corporation.
(f) EMPLOYEE RETENTION. At the Effective Time, the employees
identified in Exhibit 7.1(f) attached hereto shall continue to be employed by
Symmetry and shall not have indicated either to Analogy or Symmetry an intention
to terminate their employment with the Surviving Corporation following
consummation of the Merger.
(g) RESIGNATIONS. All directors and officers of Symmetry whose
resignation shall have been requested by Analogy not less than two days before
the Closing Date shall have submitted their resignations effective as of the
Closing Date, and copies of such resignations shall have been provided to
Analogy prior to Closing.
(h) OPINION LETTER OF COUNSEL FOR SYMMETRY. Analogy shall have
received an opinion letter of Xxxxxx Godward LLP, counsel for Symmetry, dated
the Closing Date, in form and substance satisfactory to Analogy and its counsel,
to the effect set forth in Exhibit 7.1(h) attached hereto.
(i) DISSENTING SHAREHOLDERS. Holders of no more than five percent
(5%) of the issued and outstanding shares of Symmetry capital stock shall have
filed written objection to the Merger with Symmetry prior to the taking of the
vote of the Symmetry shareholders with respect thereto.
(j) INVESTMENT REPRESENTATIONS. All shareholders of Symmetry who
have voted in favor of the Merger and this Agreement shall have entered into
agreements in the form of Exhibit 7.1(j) attached hereto with respect to the
Analogy Shares to be issued to them hereunder, which agreements shall become
effective on the Closing Date.
(k) NO MATERIAL ADVERSE CHANGE. Since June 30, 1996, there shall
have been no material adverse change in the operations, prospects, earnings,
assets, properties, business, or condition (financial or otherwise) of Symmetry,
except for the tax accrual reflected on Symmetry's September 30, 1996 financial
statements; nor shall there exist any condition that, to Symmetry's knowledge,
could reasonably be expected to result in such a material adverse change, and
Analogy shall have received a certificate signed on behalf of Symmetry by the
Chief Executive Officer and the Chief Financial Officer of Symmetry to such
effect.
(l) FILINGS AND CONSENTS. On the Closing Date, other than the filing
of Articles of Merger, all filings required to be made prior to the Effective
Time by Symmetry with, and all consents, approvals and authorizations required
to be obtained prior to the Effective Time by Symmetry from, governmental
authorities and other persons in connection with the
32- AGREEMENT AND PLAN OF MERGER
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby shall have been made or obtained, as the case
may be.
(m) PROCEEDINGS SATISFACTORY TO COUNSEL. All proceedings taken by
Symmetry and all instruments executed and delivered by Symmetry in connection
with the Merger at or prior to the Closing Date shall be reasonably satisfactory
in form and substance to counsel for Analogy.
(n) NON-COMPETITION, NONDISCLOSURE AGREEMENTS. There shall have been
delivered to Analogy Non-competition, Assignment of Invention and Non-disclosure
Agreements, substantially in the form attached hereto as Exhibit 7.1(n),
executed by the following persons: Wenge Wu, E-Xxx Xx, Xxxxx Xxx, Xxxx Xxxxx and
Xxxxxx Gold.
(o) EMPLOYMENT AGREEMENTS. There shall have been delivered to
Analogy Employment Agreements, substantially in the form attached hereto as
Exhibit 7.1(o), executed by the following persons: Xxxx Xxxxxxx, Chenmin Hu and
Xxxxxx Xxxxxx.
(p) PRIVATE PLACEMENT EXEMPTION. Analogy shall have received
evidence reasonably satisfactory to it that the issuance and exchange of shares
of Analogy common stock for the Symmetry Shares pursuant to the terms of this
Agreement are exempt from the registration requirements of the Securities Act
(as hereinafter defined) pursuant to Section 4(2) under the Securities Act.
(q) NO ENCUMBRANCES. Analogy shall have received evidence
satisfactory to it, such evidence to consist of the representations and
warranties contained in the agreement attached hereto as Exhibit 7.1(j),
together with evidence of the release of the liens granted to Symmetry pursuant
to the stock pledge agreements executed by the Shareholders in favor of
Symmetry, that the Symmetry Shares to be surrendered at the Closing to Analogy
for exchange in connection with the Merger are free and clear of all liens,
claims and encumbrances and all right, title and interest of others.
(r) ESCROW AGREEMENT. Analogy, the escrow agent and the Shareholder
Representatives (as hereinafter defined) shall have entered into an Escrow
Agreement (as hereinafter defined) in form and substance satisfactory to
Analogy, which Escrow Agreement shall become effective upon the Effective Time.
(s) PAYMENT OF NOTES. Analogy shall have received evidence
satisfactory to it that the promissory notes delivered by Chenmin Hu, E-Xxx Xx,
Wenge Wu, Zheng Shi, Xxxx Xxxxx and Xxxxxx Xxxxxx in connection with their
purchase of shares of Symmetry's common stock, have been paid in full and
cancelled.
33- AGREEMENT AND PLAN OF MERGER
7.2 CONDITIONS TO OBLIGATIONS OF SYMMETRY. The obligation of Symmetry to
effect the Merger is also subject to the satisfaction or waiver by Symmetry at
or prior to the Effective Time of the following conditions:
(a) SYMMETRY SHAREHOLDER APPROVAL. This Agreement, the Merger and
the other transactions contemplated hereby shall have been approved and adopted
by the requisite vote of the shareholders of Symmetry in accordance with the
Corporations Code and Symmetry's Articles of Incorporation and Bylaws.
(b) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Analogy and Subsidiary set forth in this Agreement shall be true
and correct in all material respects as of the Closing Date as though made on
and as of the Closing Date (except to the extent such representations and
warranties speak as of an earlier date). Symmetry shall have received a
certificate signed on behalf of Analogy by the Chief Executive Officer and the
Chief Financial Officer of Analogy to the such effect.
(c) PERFORMANCE OF OBLIGATIONS OF ANALOGY AND SUBSIDIARY. Analogy
and Subsidiary shall have performed in all material respects all obligations
required to be performed by them under this Agreement at or prior to the Closing
Date, and Symmetry shall have received a certificate signed on behalf of Analogy
by the Chief Executive Officer and the Chief Financial Officer of Analogy to
such effect.
(d) NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No Order shall be in
effect. No statute, rule, regulation, order, injunction or decree shall have
been enacted, entered, promulgated or enforced by any governmental entity which
prohibits, restricts or makes illegal consummation of the Merger.
(e) OPINION LETTER OF COUNSEL FOR ANALOGY AND SUBSIDIARY. Symmetry
shall have received an opinion letter of Ater Xxxxx Xxxxxx Xxxxxx & Xxxxxxxx,
LLP, counsel for Analogy and Subsidiary, dated the Closing Date, in form and
substance satisfactory to Symmetry and its counsel to the effect set forth in
Exhibit 7.2(e) attached hereto.
(f) REGISTRATION RIGHTS AGREEMENT. Analogy shall have entered into a
Registration Rights Agreement in the form of Exhibit 7.2(f) attached hereto in
favor of the Shareholders with respect to the Analogy common stock to be issued
to them hereunder, which agreement shall become effective as of the Effective
Time.
(g) ESCROW AGREEMENT. Analogy, the escrow agent, and the Shareholder
Representatives shall have entered into a Escrow Agreement in form and substance
satisfactory to the Shareholder Representatives and Symmetry, which Escrow
Agreement shall become effective upon the Effective Time.
34- AGREEMENT AND PLAN OF MERGER
(h) PROCEEDINGS AND LITIGATION. On the Closing Date, no action or
proceeding shall be threatened, instituted or pending by or before any court or
any governmental or other regulatory or administrative body requesting or
looking toward an order, judgment or decree which (i) questions the validity of
or seeks to restrain or prohibit the consummation of the transactions
contemplated hereby; or (ii) in the reasonable judgment of Symmetry, would have
a material adverse effect on Analogy.
(i) FILINGS AND CONSENTS. On the Closing Date, other than the filing
of Articles of Merger, all filings required to be made prior to the Effective
Time by Analogy and Subsidiary with, and all consents, approvals and
authorizations required to be obtained prior to the Effective Time by Analogy
and Subsidiary from, governmental authorities and other persons in connection
with the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby shall have been made or obtained, as the case
may be.
(j) PROCEEDINGS SATISFACTORY TO COUNSEL. All proceedings taken by
Analogy and Subsidiary and all instruments executed and delivered by Analogy and
Subsidiary in connection with the Merger at or prior to the Closing Date shall
be reasonably satisfactory in form and substance to counsel for Symmetry.
(k) EMPLOYMENT AGREEMENTS. There shall have been delivered to Xxxx
Xxxxxxx, Chenmin Hu and Xxxxxx Xxxxxx Employment Agreements, substantially in
the form attached hereto as Exhibit 7.1(o), together with all agreements related
thereto (including the warrants related thereto), executed by an authorized
officer of Analogy or Subsidiary, as applicable.
ARTICLE VIII
TERMINATION
8.1 TERMINATION BY MUTUAL CONSENT. This Agreement may be terminated and
the Merger abandoned at any time prior to the Effective Time, before or after
the approval of this Agreement by the shareholders of Symmetry by the mutual
consent of Symmetry and Analogy.
8.2 TERMINATION BY EITHER SYMMETRY OR ANALOGY. This Agreement may be
terminated and the Merger abandoned by either Symmetry or Analogy at any time
prior to the Effective Time, before or after the approval of this Agreement by
the shareholders of Symmetry if: (a) the Merger shall not have become effective
by December 31, 1996, or such later date as shall have been approved by the
Boards of Directors of Symmetry and Analogy; (b) a final and nonappealable Order
shall be in effect; or (c) any statute, rule or regulation shall have been
enacted or promulgated by any government or governmental agency which makes
consummation of the Merger illegal.
35- AGREEMENT AND PLAN OF MERGER
8.3 TERMINATION BY ANALOGY. This Agreement may be terminated by Analogy,
and the Merger abandoned at any time prior to the Effective Time, before or
after the approval of this Agreement by the shareholders and/or directors of the
Constituent Corporations, if: (a) any of the representations or warranties made
by Symmetry in this Agreement shall not be correct or accurate at and as of the
time the Closing is scheduled to take place hereunder with the same effect as if
made at such time; or (b) Symmetry shall have failed to comply with or perform
any of the covenants, conditions or agreements contained in this Agreement to be
complied with or performed by Symmetry at or prior to the Closing.
8.4 TERMINATION BY SYMMETRY. This Agreement may be terminated by
Symmetry, and the Merger abandoned at any time prior to the Effective Time,
before or after the approval of this Agreement by the shareholders of the
Constituent Corporations, if (a) any of the representations and warranties made
by Analogy and Subsidiary in this Agreement shall not be correct or accurate in
all material respects at and as of the time the Closing is scheduled to take
place hereunder with the same effect as if made at such time; or (b) Analogy or
Subsidiary shall have failed to comply with or perform any of the covenants,
conditions or agreements contained in this Agreement to be complied with or
performed by Analogy or Subsidiary at or prior to the Closing in any material
respect.
8.5 NOTICE OF TERMINATION. In the event of any termination pursuant to
this Article VIII (other than pursuant to Section 8.1 hereof), written notice
setting forth the reasons therefor shall forthwith be given by the terminating
party to the other party hereto.
8.6 EFFECT OF TERMINATION AND ABANDONMENT. In the event of termination of
this Agreement and abandonment of the Merger pursuant to this Article VIII,
except as provided herein, no party hereto (or any of its directors or officers)
shall have any liability or further obligation to any other party to this
Agreement, except that nothing herein will relieve any party from liability for
any breach of this Agreement. Notwithstanding the foregoing, in the event of
the termination of this Agreement due to the failure of any party to consummate
the Merger for any reason other than the failure of any condition to closing
specified in Article VII, the defaulting party shall reimburse the
non-defaulting party for all its expenses incident to preparing for and entering
into this Agreement, including, without limitation, legal and accounting fees
and expenses.
ARTICLE IX
CERTAIN RIGHTS AND LIMITATIONS
REGARDING THE MERGER STOCK
9.1 RESTRICTIONS ON SALE OR TRANSFER OF SHARES; LEGEND. The Analogy
common stock to be issued hereunder will not have been registered under the
Securities Act of 1933, as
36- AGREEMENT AND PLAN OF MERGER
amended (the "Securities Act") or the blue sky laws of any state by reason of
their contemplated issuance in a transaction exempt from the registration and
prospectus delivery requirements of the Securities Act and of such state laws.
Such shares may not be sold, transferred, or otherwise disposed of without
registration under the Securities Act and such state laws or an exemption
therefrom and an opinion of counsel to such effect and satisfactory to Analogy
shall have been delivered to Analogy. The certificates representing the Analogy
common stock shall contain the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
UNDER ANY STATE SECURITIES LAWS. NEITHER SUCH SHARES NOR
ANY PORTION THEREOF OR INTEREST THEREIN MAY BE SOLD,
ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF
UNLESS THE SAME IS REGISTERED UNDER SAID ACT AND APPLICABLE
STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE AND THE CORPORATION SHALL HAVE
RECEIVED EVIDENCE OF SUCH EXEMPTION SATISFACTORY TO THE
CORPORATION (WHICH MAY INCLUDE, AMONG OTHER THINGS, AN
OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION)."
9.2 REGISTRATION OF THE MERGER STOCK. At the Closing, Analogy shall enter
into the Registration Rights Agreement in the form attached hereto as
Exhibit 7.2(f) with any or all of the Shareholders who acquired Analogy common
stock or rights thereto in the Merger, which Analogy common stock is not covered
by an effective registration statement under the Securities Act, at any time or
from time to time from the Closing Date to such date as is five (5) days prior
to the filing by Analogy of the registration statement referred to therein with
the Securities and Exchange Commission.
ARTICLE X
RIGHTS TO ESCROW FUND
10.1 AGREEMENT FOR INDEMNIFICATION.
(a) As used in this Article X:
37- AGREEMENT AND PLAN OF MERGER
(i) "Damages" means claims, damages, losses, liabilities,
judgments, settlements, costs and expenses, including, without limitation, all
reasonable fees and disbursements of counsel incident to the investigation or
defense of any claim or proceeding or threatened claim or proceeding;
(ii) "Shareholder Representative" means Xxxx Xxxxxxx in his role
as representative of the Shareholders in administering the Escrow Fund
established under this Agreement and to be administered under this
Agreement and under the Escrow Agreement to be executed at or before the
Closing (the "Escrow Agreement"), or in the event of Xxxx Xxxxxxx'x
resignation, death or incapacity, Chenmin Hu, or in the event of Chenmin
Hu's resignation, death or incapacity, such replacement for the Shareholder
Representative as may be designated by a majority of the Shareholders,
provided such substitute Shareholder Representative shall be bound to the
same duties and commitments as the original Shareholder Representative; and
(iii) "Indemnified Party" means each of Analogy and Subsidiary.
(b) From, out of, and to the extent of the resources represented by
the Escrow Fund as hereinafter set forth, the Indemnified Parties shall be held
harmless from, against and in respect of, any and all Damages incurred by any
Indemnified Party arising from or in connection with: (i) any breach of any
representation or warranty made by Symmetry in Article IV of this Agreement and
not disclosed on the Symmetry Disclosure Schedule, which breach does not arise
from or in connection with clause (ii) hereof; and (ii) any tax liability of
Symmetry (including without limitation, any interest or penalties assessed)
accrued, incurred or otherwise relating to Symmetry's conduct of its business
and operations prior to January 1, 1996. Each of the clauses of this Section
10.1(b) collectively referred to herein as "Claims".
(c) The representations and warranties set forth in Article IV shall,
for purposes of this Article X, be deemed to have survived the Effective Time
notwithstanding any contrary terms of this Agreement, and whenever such
representations and warranties are referred to in this Article X, the text of
the same as set forth in Article IV shall be deemed to be set forth in their
entirety herein, and the same are hereby incorporated herein by such references.
Each such representation and warranty shall be deemed to have been relied upon
by the party or parties to which made, notwithstanding any investigation or
inspection made by or on behalf of such party or parties, and shall not be
affected in any respect by any such investigation or inspection.
(d) The Shareholder Representative agrees that any information
supplied by Symmetry or its professional advisers before the Effective Time to
the Shareholder Representative or to the Shareholders in connection with this
Agreement or otherwise in relation to the business and affairs of Symmetry shall
not be deemed a representation, warranty or
38- AGREEMENT AND PLAN OF MERGER
guarantee of its accuracy by Symmetry and shall not constitute a defense to any
claim by an Indemnified Party hereunder, and the Shareholder Representative
hereby waives any claim against Symmetry or any Indemnified Party in respect
thereof.
(e) Analogy shall deposit the Contingent Merger Consideration in
escrow under the Escrow Agreement, in three certificates: one for 49% of the
Contingent Merger Consideration (the "Clause (i) Escrow Fund"), one for 49% of
the Contingent Merger Consideration (the "Clause (ii) Escrow Fund"), and one for
2% of the Contingent Merger Consideration (the "Representative's Fund"). The
Clause (i) Escrow Fund and the Clause (ii) Escrow, collectively, hereinafter the
"Escrow Fund." Upon the expiration of the indemnity obligations in accordance
with the provisions of Section 10.2(a), and subject to the terms of the Escrow
Agreement, all of the Analogy common stock in the Escrow Fund and the
Representative's Fund shall be transferred to the Shareholders according to
their Pro Rata Share of such Analogy common stock, except for any Analogy common
stock which may be necessary under the remainder of this Section 10.1(e).
Subject to the remainder of this Section 10.1(e), Analogy shall execute and
deliver any instructions to the Escrow Agent (as defined in the Escrow
Agreement) required by the Escrow Agent to effect such transfer. If, on the
applicable Expiration Date (as hereinafter defined), there exists any Claim
which was timely asserted by an Indemnified Party but which is not then finally
resolved and discharged, there shall remain in the Escrow out of the Escrow Fund
an aggregate number of Shares of Analogy common stock with an aggregate market
value (determined as of the applicable Expiration Date) equal to the reasonable
estimate (delivered under Section 10.3) of the amount of Damages asserted to be
caused by such Claim. Upon the final resolution and discharge of any such
Claim, Analogy shall execute and deliver any instructions to the Escrow Agent
required by the Escrow Agent to effect the transfer of any shares of Analogy
common stock remaining in the Escrow Fund and the Representative's Fund (subject
to the following sentence) to the Shareholders according to their Pro Rata Share
thereof. There shall also remain in the Escrow out of the Representative's Fund
an aggregate number of Shares of Analogy common stock with an aggregate market
value (determined as of the applicable Expiration Date) equal to the amount
reasonably specified by the Shareholder Representative as the reserve he wishes
to retain against expenses associated with the administration and/or defense of
any pending Claims and against any other unpaid administrative expenses
associated with the fund.
(f) Xxxx Xxxxxxx shall act as the representative of the Shareholders
with respect to all decisions concerning the disposition of the Escrow Fund and
the defense, compromise or settlement of any Claims made by an Indemnified Party
against the Escrow Fund. The Shareholder Representative shall serve without
compensation, provided, however, that the Escrow Agreement shall provide that
the Shareholder Representative shall have full power and authority to draw upon
the Representative's Fund to meet expenses, on an as-needed basis, to pay the
reasonable fees and expenses of attorneys, accountants, investigators or other
professionals necessary to assist the Shareholder Representative in carrying out
his duties
39- AGREEMENT AND PLAN OF MERGER
hereunder. Any amounts so released and not expended shall be returned to the
Representative's Fund.
(g) The Shareholder Representative shall have sole discretion and
decision making authority with respect to any decision entrusted to him by this
Agreement, and shall not be liable or answerable therefor to any Shareholder or
to Analogy, excepting only with respect to willful misconduct or fraud, or
willful breach of fiduciary duty.
10.2 LIMITATIONS OF CLAIMS AGAINST ESCROW FUND. The indemnity obligations
under this Agreement shall be subject to the following limitations:
(a) The indemnity obligations under clause (i) of Section 10.1(b)
shall expire on the first anniversary of the Effective Time (the "Clause (i)
Expiration Date"), and the indemnity obligations under clause (ii) of Section
10.1(b) shall expire on the earlier of (X) the date of receipt by Symmetry from
the United States Internal Revenue Service of a final determination/assessment
of taxes due (including without limitation, interest and penalties) with respect
to Symmetry's conduct of its business and operations prior to January 1, 1996
(the "Final Determination Date"), and (Y) the second anniversary of the
Effective Time (the "Clause (ii) Expiration Date") (the Clause (i) Expiration
Date and the Clause (ii) Expiration Date, collectively, hereinafter the
"Expiration Date"); provided, however, that the indemnity obligations for Claims
timely asserted by an Indemnified Party in the manner provided in this Agreement
shall continue until such Claims are finally resolved and discharged.
(b) The Indemnified Parties shall be entitled to indemnification with
respect to Claims arising pursuant to clause (i) of Section 10.1(b) only if the
aggregate and collective Damages incurred or suffered by them with respect to
such Claims exceeds $25,000, in which event they shall be entitled to
indemnification of the full amount of such Damages (subject to the limitations
set forth in this Section 10.2.). In addition, the Indemnified Parties shall be
entitled to indemnification with respect to Claims arising pursuant to clause
(ii) of Section 10.1(b) only if the aggregate and collective Damages incurred or
suffered by them with respect to such Claims exceeds $40,000, in which event
they shall be entitled to indemnification of the full amount of such Damages
(subject to the limitations set forth in this Section 10.2).
10.3 NOTICE OF CLAIM. An Indemnified Party shall promptly notify the
Shareholder Representative in writing of any Claim asserted against or imposed
upon or incurred by it that might give rise to any indemnity obligation
hereunder (a "Notice of Claim"), specifying the basis and, if possible, a
reasonable estimate of the amount (as determined in good faith by the Board of
Directors of the Indemnified Party), of Damages sought by such Indemnified Party
on account thereof and in reasonable detail such information as any of the
Indemnified Parties may have with respect to the matter that is the subject of
the Notice of Claim (including copies of any summons, complaint or other
pleading that may have been served on any of them and any written claim, demand,
invoice, billing or other document evidencing or asserting the same).
40- AGREEMENT AND PLAN OF MERGER
An Indemnified Party shall not be entitled to give a Notice of Claim on or
after the applicable Expiration Date. The date of a Notice of Claim shall mean
(a) the date of the postmark on the registered or certified mail containing the
Notice of Claim, or (b) if the Notice of Claim is transmitted by courier, the
date of its delivery to the courier by the Indemnified Party or (c) if the
Notice of Claim is personally delivered, the date of such personal delivery.
10.4 DEFENSE AND SETTLEMENT OF CLAIMS. The Shareholder Representative
shall have the right (without prejudice to the right of any Indemnified Party to
participate at its own expense through counsel of its own choosing) to defend
against any Claim that is the subject of a Notice of Claim and to pay the
expenses thereof (including the expenses of counsel of their own choosing) out
of proceeds from the sale of the shares of Analogy common stock in the
Representative's Fund, and to control such defense if he provides written notice
of his intention to do so within 15 business days of receipt of the Notice of
Claim. The Indemnified Parties shall cooperate fully in the defense of such
Claim and shall make available to the Shareholder Representative or his counsel
all pertinent information under their control relating thereto. The Indemnified
Parties shall have the right to elect to settle any such Claim; provided,
however, there shall be no indemnification obligation with respect to any
monetary payment to any third party required by such settlement unless the
Shareholder Representative shall have consented thereto. The Shareholder
Representative shall have the right to elect to settle any such Claim subject to
the consent of Analogy; provided, however, that if Analogy fails to give such
consent within 15 business days of being requested to do so, Analogy shall, at
its expense, assume the defense of such Claim and regardless of the outcome of
such matter, the Indemnified Parties' recovery hereunder shall be limited to the
amount of any such proposed settlement.
10.5 JURISDICTION. Symmetry and the Shareholder Representative hereby
irrevocably submit to the personal jurisdiction of the state courts of the State
of Oregon and to the personal jurisdiction of the United States District Court
for the District of Oregon, and all courts from which an appeal may be taken,
solely for the purpose of any suit, action, or other proceeding arising out of
or based upon this Agreement, and hereby waive to the extent not prohibited by
law, and agree not to assert, by way of motion, as a defense, or otherwise, in
any such proceeding, any claim that it or they are not subject personally to the
jurisdiction of the above-named courts for such proceedings.
ARTICLE XI
MISCELLANEOUS
11.1 COOPERATION. The parties agree that each of them will fully cooperate
with the other and with the other's counsel and accountants in connection with
any steps required to be taken as part of its obligations under this Agreement.
Each party agrees that it will use its best efforts to cause all conditions to
this Agreement to be satisfied as promptly as possible, and each
41- AGREEMENT AND PLAN OF MERGER
party agrees that it will not undertake any course of action inconsistent with
this Agreement or which would make any representations, warranties or agreements
made by it in this Agreement untrue or any conditions precedent to this
Agreement unable to be satisfied at or prior to the Closing Date.
11.2 PAYMENT OF EXPENSES. Whether or not the Merger shall be consummated,
except as otherwise provided under Section 8.6 hereof, each party hereto shall
pay its own expenses incident to preparing for, entering into and carrying out
this Agreement and the consummation of the Merger.
11.3 SURVIVAL. The representations, warranties and agreements of the
parties contained in Article III (but only to the extent that such provision
expressly relate to actions to be taken after the Effective Time), Article IV,
Article X and Sections 1.4, 11.2 and 11.3 shall survive the consummation of the
Merger. The agreements of the parties contained in Sections 8.6 and 11.2 shall
survive the termination of this Agreement. All other representations,
warranties, agreements and covenants in this Agreement shall be deemed to be
conditions of the Merger, as provided herein, and shall not survive the
consummation of the Merger.
11.4 MODIFICATION OR AMENDMENT. At any time (before or after approval
hereof by the shareholders of the Constituent Corporations) prior to the
Effective Time, the parties hereto may, by written agreement, make any
modification or amendment of this Agreement approved by their respective Boards
of Directors, provided such modification or amendment does not reduce the total
consideration to be paid in the Merger. This Agreement shall not be modified or
amended except pursuant to an instrument in writing executed and delivered on
behalf of each of the parties hereto.
11.5 WAIVER OF CONDITIONS. The conditions to each of the parties'
obligations to consummate the Merger are for the sole benefit of such party and
may be waived by such party in whole or in part to the extent permitted by
applicable law. No waiver of one such condition shall constitute a waiver of
any other such condition.
11.6 CERTIFICATION OF SHAREHOLDER VOTE AND DISSENTERS. Promptly following
the shareholder meeting or obtainment of the written consent of the Shareholders
referred to in Section 5.1, but in any event no later than five (5) days prior
to the Merger Date, Symmetry shall deliver to Analogy a certificate of its
Secretary setting forth (i) the number of shares of its capital stock
outstanding and entitled to vote, the number of shares of its stock voted in
favor of or consenting to and the number of shares voted against adoption and
approval of this Agreement, (ii) the names of all of its shareholders not voting
in favor of this Agreement who filed with Symmetry written objection to the
Merger before the taking of the vote on the Agreement and (iii) a definitive
list of common shareholders and the number of shares of such shareholders to be
tendered to Analogy in the Merger.
42- AGREEMENT AND PLAN OF MERGER
11.7 COUNTERPARTS. For the convenience of the parties hereto, this
Agreement may be executed in any number of counterparts, each such counterpart
being deemed to be an original instrument, and all such counterparts shall
together constitute the same agreement.
11.8 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Oregon, without giving effect to its
conflicts of laws principles.
11.9 NOTICES. Any notice, request, instruction or other document to be
given hereunder by any party to the others shall be in writing and delivered
personally or sent by registered or certified mail, postage prepaid as follows:
If to Analogy and/or Subsidiary:
Analogy, Inc.
0000 XX Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxx 00000
Attention: Nic Xxxxxxxx
With a copy to:
Ater Xxxxx Xxxxxx Xxxxxx & Xxxxxxxx, LLP
Suite 1800
222 S.W. Columbia
Xxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxxxx, Esquire
If to Symmetry:
Symmetry Design Systems, Inc.
000 X. Xxx Xxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxx
With a copy to:
Xxxxxx Godward LLP
Five Palo Alto Square
0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxx, Esquire
If to the Shareholder Representative:
Xxxx Xxxxxxx
Symmetry Design Systems, Inc.
000 X. Xxx Xxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
43- AGREEMENT AND PLAN OF MERGER
11.10 ENTIRE AGREEMENT. This Agreement (a) constitutes the entire
agreement and supersedes all other prior agreements and understandings, both
written and oral, among the parties, with respect to the subject matter hereof,
(b) is not intended to confer upon any person other than the parties hereto any
rights or remedies hereunder, and (c) shall not be assignable by operation of
law or otherwise.
11.11 CAPTIONS. The Article, Section and paragraph captions herein are
for convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.
11.12 SEVERABILITY. Should a court or other body of competent
jurisdiction determine that any provision of this Agreement is excessive in
scope or otherwise invalid or unenforceable, such provision shall be adjusted
rather than voided, if possible, so that it is enforceable to the maximum extent
possible, and all other provisions of this Agreement shall be deemed valid and
enforceable to the extent possible.
11.13 CONFIDENTIALITY. On and at all times after the execution of this
Agreement and until the consummation of the transactions contemplated hereby,
the Parties agree to continue to be bound by the confidentiality and
nondisclosure provisions of the Mutual Nondisclosure Agreement dated May 15,
1996, among Symmetry, Analogy and Subsidiary (with Subsidiary to have the same
rights and obligations thereunder as Analogy) (the "MNDA") with respect to
information obtained by or provided to either Party in connection with the
transactions contemplated by this Agreement. However, each Party may disclose
information to its employees and financial and legal advisors on a strict
need-to-know-basis and under obligations of confidentiality similar to those
contained in the MNDA.
44- AGREEMENT AND PLAN OF MERGER
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
intending it to be effective as of the date first hereinabove written.
ANALOGY, INC.
By: /s/ XXXX XXXXXX
-----------------------------------------
Xxxx Xxxxxx, President and Chief
Executive Officer
ANALOGY ACQUISITION CORPORATION
By: /s/ XXXX XXXXXX
-----------------------------------------
Xxxx Xxxxxx, President
SYMMETRY DESIGN SYSTEMS, INC.
By: /s/ XXXX XXXXXXX
-----------------------------------------
Xxxx Xxxxxxx, President and
Chief Executive Officer
FOR THE PURPOSE OF ACCEPTING HIS APPOINTMENT
AND ASSUMING HIS OBLIGATIONS AS SHAREHOLDER
REPRESENTATIVE PURSUANT TO ARTICLE X ONLY:
/s/ XXXX XXXXXXX
--------------------------------------------
Xxxx Xxxxxxx
45 - AGREEMENT AND PLAN OF MERGER
