Exhibit 99(c)(1)
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "AGREEMENT"), dated September 3,
1999, by and between DLZ Corp., a California corporation ("PURCHASER"), and
Digital Link Corporation, a California corporation (the "COMPANY").
WHEREAS, pursuant to this Agreement, Purchaser will commence a tender
offer to purchase all outstanding shares (the "SHARES") of common stock, no par
value, of the Company (the "COMPANY COMMON STOCK"), at a price of $10.30 per
Share, net to the seller in cash, without interest thereon, upon the terms and
subject to the conditions set forth in the Offer to Purchase (the "OFFER TO
PURCHASE") of Purchaser and the related Letter of Transmittal (collectively, the
"OFFER"), which will be filed as exhibits to each of (a) the Tender Offer
Statement on Schedule 14D-1 filed by Purchaser (together with all supplements or
amendments thereto, the "SCHEDULE 14D-1") and (b) the Transaction Statement on
Schedule 13E-3 filed by Purchaser (together with all supplements or amendments
thereto, the "SCHEDULE 13E-3") in respect of the Offer to be filed by Purchaser
with the Securities and Exchange Commission (the "SEC");
WHEREAS, each of the Board of Directors of the Company (the "COMPANY
BOARD") and a special committee of the Company Board consisting of the
disinterested directors of the Company Board, none of whom is affiliated with
Purchaser (the "SPECIAL COMMITTEE"), has (i) determined that the consideration
to be paid for each Share in the Offer and in the Merger (as defined) is fair
and in the best interests of the shareholders of the Company, (ii) approved this
Agreement and the transactions contemplated hereby and (iii) resolved to
recommend acceptance of the Offer and the Merger and approval of this Agreement
by such shareholders;
WHEREAS, the sole director of Purchaser and the sole shareholder of
Purchaser have each approved the Offer and the subsequent merger of Purchaser
with the Company in accordance with the terms of this Agreement and the
California General Corporation Law (the "CGCL").
NOW, THEREFORE, in consideration of the representations, warranties and
agreements herein contained, and subject to the terms and conditions herein
contained, the parties hereto hereby agree as follows:
ARTICLE I.
DEFINITIONS
1.1 DEFINITIONS. For purposes of this Agreement and in addition to any
and all definitions and interpretations otherwise provided throughout this
Agreement, the following terms shall have the meanings set forth below. Any of
such terms, unless the context otherwise requires, may be used in the singular
or plural, depending on reference.
"Articles of Incorporation" shall mean the Articles of Incorporation of
the Company.
"California Agreement of Merger" shall have the meaning set forth in
Section 3.2.
"Certificate" or "Certificates" shall mean the certificates that,
immediately prior to the Effective Time, represent issued and outstanding
Shares.
"Closing" shall have the meaning set forth in Section 9.1.
"Closing Date" shall mean the date on which the Closing occurs.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Constituent Corporations" shall mean Purchaser and the Company.
"Director" shall mean a member of the Company Board as of the date
hereof.
"Dissenting Shares" shall mean Shares that are not voted in favor of
the approval and adoption of the Merger and with respect to which appraisal
rights are demanded and perfected in accordance with Section 1300 of the CGCL
and not withdrawn.
"Dissenting Shareholders" shall mean the shareholders of the Company
who hold Dissenting Shares.
"Effective Time" shall have the meaning set forth in Section 3.2.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Expiration Date" shall mean the scheduled expiration date and the time
the Offer is, from time to time, set to expire.
"Funds" shall have the meaning set forth in Section 4.2.1.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx" Antitrust Improvements Act of
1976.
"Indemnified Parties" shall mean each present and former director of
the Company.
"Material Adverse Effect" shall mean a material adverse effect on the
business, assets, financial condition or results of operation of the Company or
on the ability of the Company or Purchaser to consummate the transactions
contemplated by this Agreement, or any event or events which, individually or in
the aggregate, constitute or, with the passage of time, would constitute a
Material Adverse Effect; provided, however, that there shall not be deemed a
material adverse effect on the ability of Purchaser to consummate the
transactions contemplated by this Agreement if such material adverse effect is
caused by the action or inaction of Purchaser or Purchaser's affiliates and
there shall not be deemed to be a material adverse effect on the business,
assets, financial condition results of operations of the Company or on the
ability of the Company to consummate the transactions contemplated by Agreement
if such effect is proximately caused by breach of Section 7.8.
"Merger" shall have the meaning set forth in Section 3.1.
"Merger Consideration" shall have the meaning set forth in Section
4.1.1.
"Offer Conditions" shall have the meaning set forth in Section 2.1.1.
"Offer Documents" shall mean the documents pursuant to which the Offer
will be made, including all materials required to be transmitted to shareholders
pursuant to Regulation 14D-1 and Regulation 13E-3 of the Exchange Act, together
with any supplements or amendments thereto.
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"Other Filings" shall have the meaning set forth in Section 3.9.
"Paying Agent" shall have the meaning set forth in Section 4.2.1.
"Proxy Statement" shall mean any proxy statement distributed to the
Company's shareholders in connection with the Merger, including any amendments
or supplements thereto.
"Securities Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"Staff" shall mean the employees, representatives and other staff of
the SEC.
"Shareholders' Meeting" shall mean any special meeting of the
shareholders of the Company held for the purpose of approving and adopting this
Agreement, the Merger and the transactions contemplated hereby and thereby.
"Special Committee" shall mean a committee of the Board of Directors
composed of all directors of the Company who are not affiliated with Purchaser.
"Surviving Corporation" shall mean the Company after the Merger.
"Transfer Agent" shall mean the transfer agent selected by the Company.
ARTICLE II.
THE TENDER OFFER
2.1 THE OFFER.
2.1.1 TERMS OF OFFER. As promptly as practicable following the
execution hereof, Purchaser will file the Schedule 14D-1 and the Offer to
Purchase as an exhibit thereto setting forth the terms of the Offer and
providing (i) for a purchase price per Share of $10.30 (the "PER SHARE PRICE")
(ii) that the initial expiration of the Offer shall be no earlier than 12:00
midnight on October 15, 1999 and (iii) for the consummation of the Offer to be
subject only to the conditions (the "OFFER CONDITIONS") set forth on ANNEX A
attached hereto. Without the prior written consent of the Company, Purchaser
shall not (i) reduce the number of Shares subject to the Offer, (ii) reduce the
Per Share Price, (iii) extend the Offer if all of the Offer Conditions have been
satisfied or waived, (iv) change the form of consideration payable in the Offer,
(v) amend, modify or add to the Offer Conditions, (vi) amend any other term of
the Offer in a manner adverse to the holders of the Shares, or (vii) waive the
Minimum Condition. Notwithstanding the foregoing, Purchaser may, without the
consent of the Company, (A) extend the Offer, if at the scheduled expiration
date of the Offer any of the Offer Conditions shall not have been satisfied or
waived, until such time as such conditions are satisfied or waived, (B) extend
the Offer for any period required by any statute, rule, regulation,
interpretation or position of the SEC or any other governmental authority or
agency (domestic, foreign or supranational) applicable to the Offer, and (C)
extend the Offer on one or more occasions for an aggregate of not more than 20
business days beyond the latest expiration date that would otherwise be
permitted under clauses (A) and (B) of this sentence in order to obtain Shares
which, together with Shares previously held by Purchaser, constitute at least
ninety percent (90%) of the outstanding Shares; provided, however, that (i)
Purchaser shall extend the Offer up to twenty business days following its
initial expiration upon the prior reasonable request by the Special Committee
and (ii) Purchaser shall not extend the offer beyond twenty business days
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following its initial expiration without the prior consent of the Special
Committee. It is agreed that the conditions set forth in ANNEX A are for the
sole benefit of Purchaser and may be asserted by Purchaser regardless of the
circumstances giving rise to any such condition (including any action or
inaction by Purchaser) or may be waived by Purchaser, in whole or in part at any
time and from time to time, in Purchaser's discretion. The failure by Purchaser
at any time to exercise any of the foregoing rights shall not be deemed a waiver
of any such right and each such right shall be deemed an ongoing right which may
be asserted at any time and from time to time. Any reasonable determination by
Purchaser with respect to any of the foregoing conditions (including, without
limitation, the satisfaction of such conditions) shall be final and binding on
the parties. Purchaser will promptly pay for all Shares tendered and not
withdrawn pursuant to the Offer as soon as practicable after the expiration of
the Offer.
2.1.2 SCHEDULE 14D-1 AND SCHEDULE 13E-3. As promptly as reasonably
practicable following execution of this Agreement, Purchaser shall file with the
SEC a Schedule 14D-1 and a Schedule 13E-3, which shall reflect the terms of the
Offer. The Offer Documents shall comply as to form in all material respects with
the requirements of the Exchange Act, and the rules and regulations promulgated
thereunder and, on the date filed with the SEC and on the date first published,
sent or given to the holders of Shares, shall not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading, except that no
representation will be made by Purchaser with respect to information supplied by
the Company in writing specifically for inclusion in the Offer Documents, and
the Offer Documents may contain a disclaimer to such effect. Each of Purchaser
and the Company agrees promptly to correct any information supplied by it
specifically for inclusion in the Offer Documents if and to the extent that such
information shall have become false or misleading in any material respect, and
Purchaser further agrees to take all steps necessary to cause the Offer
Documents as so corrected to be filed with the SEC and to be disseminated to
holders of Shares, in each case as and to the extent required by applicable
federal securities laws. The Company and its counsel shall be given the
opportunity to the extent practicable to review and comment upon the Offer
Documents and all amendments and supplements to the Offer Documents prior to
their filing with the SEC or dissemination to the shareholders of the Company.
2.2 COMPANY ACTION.
2.2.1 APPROVAL OF OFFER. The Company hereby approves of and
consents to the Offer and the Merger and represents and warrants that each of
the Special Committee and the Company Board, at a meeting duly called and held,
has unanimously adopted resolutions (i) determining that this Agreement and the
transactions contemplated hereby, including the Offer and the Merger, are fair
to, and in the best interests of, the shareholders of the Company, (ii)
approving this Agreement and the transactions contemplated hereby, including the
Offer and the Merger, in all respects and taking all other action necessary to
render any state takeover statutes inapplicable to the Offer, the Merger and the
transactions contemplated thereby and (iii) recommending without qualification
that the shareholders of the Company accept the Offer, tender their Shares
thereunder to Purchaser and approve and adopt this Agreement and the Merger.
2.2.2 [intentionally blank]
2.2.3 FAIRNESS OPINIONS. The Company represents that the Special
Committee has received the opinion of Xxxx Xxxxxxxx Xxxxxxx (the "Company's
Financial Adviser") that the consideration to be received by holders of Shares
pursuant to the Offer and the Merger is fair to such holders from a financial
point of view, and the Company will provide a copy of such opinion to
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Purchaser prior to the filing of the Schedule 14D-1 and the Schedule 13E-3 and
any Schedule 14D-9 contemplated thereby. The Company has been authorized by the
Company's Financial Adviser to permit, subject to prior review and consent by
the Company's Financial Adviser (such consent not to be unreasonably withheld),
the inclusion of the fairness opinion (or a reference thereto) in the Offer
Documents, the Schedule 14D-9 and the Proxy Statement. In addition, the Company
acknowledges receipt from Xxxxxx Securities Incorporated, which has been
retained by Purchaser, of an opinion that the Offer and the Merger is fair to
the holders of the Shares (other than Purchaser) from a financial point of view
pursuant to Section 1203 of the CGCL.
2.2.4 SCHEDULE 14D-9. The Special Committee shall file with the
SEC, on the date the Offer Documents are filed with the SEC, a Schedule 14D-9
which contains the recommendations described in Sections 2.2.1, and shall mail
the Schedule 14D-9 to the shareholders of the Company. The Schedule 14D-9 shall
comply in all material respects with the requirements of the Exchange Act and
the rules and regulations promulgated thereunder on the date filed with the SEC
and on the date first published, sent or given to the Company's shareholders,
and shall not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading, except that no representation is made by the Company with
respect to information supplied in writing by Purchaser specifically for
inclusion or incorporation by reference in the Schedule 14D-9, and may contain a
disclaimer to such effect. Each of the Company and Purchaser agrees promptly to
correct any information provided by it for use in the Schedule 14D-9 if and to
the extent that such information shall have become false or misleading in any
material respect, and the Company further agrees to take all steps necessary to
amend or supplement the Schedule 14D-9 and to cause the Schedule 14D-9 as so
amended or supplemented to be filed with the SEC and disseminated to the
Company's shareholders, in each case as and to the extent required by applicable
federal securities laws. Purchaser and its counsel shall be given the
opportunity to the extent practicable to review and comment upon the Schedule
14D-9 and all amendments and supplements thereto prior to their filing with the
SEC or dissemination to shareholders of the Company.
2.2.5 MAILING LABELS. In connection with the Offer, the Company
shall cause its Transfer Agent to furnish Purchaser promptly with mailing labels
containing the names and addresses of the record holders of Shares as of a
recent date and of those persons becoming record holders subsequent to such
date, together with copies of all lists of shareholders, security position
listings and computer files and all other information in the Company's
possession or control regarding the beneficial owners of Company Common Stock,
and shall furnish to Purchaser such information and assistance (including
updated lists of shareholders, security position listings and computer files) as
Purchaser may reasonably request in communicating the Offer to the Company's
shareholders. Subject to the requirements of applicable law, and except for such
steps as are necessary to disseminate the Offer Documents and any other
documents necessary to consummate the Merger, Purchaser and its agents shall
hold in confidence the information contained in any such labels, listings and
files, will use such information only in connection with the Offer and the
Merger and, if this Agreement shall be terminated, will, upon request, deliver,
and will use their best efforts to cause their agents to deliver, to the Company
all copies of and any extracts or summaries from such information then in their
possessions or control.
ARTICLE III.
THE MERGER
3.1 THE MERGER. Subject to the terms and conditions of this
Agreement, at the Effective Time, Purchaser shall merge (the "MERGER") with
and into the Company and the separate
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corporate existence of Purchaser shall thereupon cease. The Company shall be the
surviving corporation in the Merger and shall be governed by the laws of the
State of California, and the separate corporate existence of the Company, with
all its rights, privileges, immunities, powers and franchises, of a public as
well as of a private nature, shall continue unaffected by the Merger. Purchaser
may, upon notice to the Company, modify the structure of the Merger if Purchaser
determines it is advisable to do so because of tax or other considerations so
long as such modification causes no adverse effect on the transaction from the
perspective of the shareholders of the Company other than Purchaser, and the
Company shall promptly enter into any amendment to this Agreement necessary or
desirable to accomplish such modification. From and after the Effective Time,
the Merger shall have the effects specified in the CGCL.
3.2 EFFECTIVE TIME. At the Closing contemplated in Section 9.1, the
Company and Purchaser will cause an Agreement of Merger or Certificate of
Ownership pursuant to Section 1110 of the CGCL implementing the terms of this
Agreement (in either case, the "CALIFORNIA AGREEMENT OF MERGER") to be filed
with the Secretary of State of the State of California as provided in the CGCL.
The Merger shall become effective as of the date and at the time the California
Agreement of Merger is duly filed by the Secretary of State of the State of
California (or such later time as may be specified therein), and such time is
hereinafter referred to as the "EFFECTIVE TIME."
3.3 ARTICLES OF INCORPORATION. The Articles of Incorporation of the
Company as in effect immediately prior to the Effective Time shall be the
Articles of Incorporation of the Surviving Company, until duly amended in
accordance with the terms thereof and the CGCL.
3.4 BY-LAWS. The By-Laws of Purchaser as in effect immediately prior to
the Effective Time shall be the By-Laws of Surviving Corporation, until duly
amended in accordance with the terms thereof and the CGCL.
3.5 DIRECTORS AND OFFICERS. At the Effective Time, the directors of
Purchaser immediately prior to the Effective Time shall be the directors of the
Surviving Corporation, each of such directors to hold office, subject to the
applicable provisions of the Articles of Incorporation and By-Laws of the
Surviving Corporation, until their respective successors shall be duly elected
or appointed and qualified. The officers of the Company immediately prior to the
Effective Time shall be the initial officers of Surviving Corporation, in each
case until their resignation or removal or until their respective successors are
duly elected or appointed and qualified.
3.6 FURTHER ASSURANCES. If at any time after the Effective Time,
Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments or assurances or any other acts or things are necessary,
desirable or proper: (a) to vest, perfect or confirm, of record or otherwise, in
Surviving Corporation, its right, title or interest in, to or under any of the
rights, privileges, powers, franchises, properties or assets of either of the
Constituent Corporations, or (b) otherwise to carry out the purposes of this
Agreement, the proper officers and directors of Surviving Corporation are hereby
authorized on behalf of the respective Constituent Corporations to execute and
deliver, in the name and on behalf of the respective Constituent Corporations,
all such deeds, bills of sale, assignments and assurances and do, in the name
and on behalf of the Constituent Corporations, all such other acts and things
necessary, desirable or proper to vest, perfect or confirm its right, title or
interest in, to or under any of the rights, privileges, powers, franchises,
properties or assets of the Constituent Corporations and otherwise to carry out
the purposes of this Agreement.
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3.7 PROXY STATEMENT. As soon as practicable after the execution of this
Agreement, the Company and Purchaser shall promptly prepare and file a
preliminary Proxy Statement with the SEC with respect to the Merger, which Proxy
Statement shall include the recommendation of the Special Committee that
shareholders of the Company vote in favor of the approval and adoption of this
Agreement and the Merger and the other transactions contemplated hereby and
thereby and the determination of the Special Committee that this Agreement and
the transactions contemplated hereby, including the Offer and the Merger, are
fair to, and in the best interests of, the shareholders of the Company. Each of
the parties hereto shall notify the other parties hereto promptly of the receipt
by it of any comments from the SEC or its Staff and of any request of the SEC
for amendments or supplements to the Proxy Statement or for additional
information and will supply the other parties hereto with copies of all
correspondence between it and its representatives, on the one hand, and the SEC
or the members of its Staff or any other governmental officials, on the other
hand, and will provide the other parties and their counsel with the opportunity
to participate, including by way of discussions with the SEC or its Staff, in
the response of such party to such comments, with respect to the Proxy
Statement. Subject to the foregoing sentence, the Company shall, after
consultation with Purchaser, respond promptly to any comments made by the SEC
with respect to the Proxy Statement and any preliminary version thereof. The
Company and Purchaser each shall use its reasonable efforts to obtain and
furnish the information required to be included in the Proxy Statement. If at
any time prior to the time of approval and adoption of this Agreement by the
Company's shareholders there shall occur any event that should be set forth in
an amendment or supplement to the Proxy Statement, the Company shall promptly
prepare and mail to its shareholders such amendment or supplement. The Company
shall not mail the Proxy Statement or, except as required by the Exchange Act or
the rules and regulations promulgated thereunder, any amendment or supplement
thereto, to the Company's shareholders unless the Company has first obtained the
consent of Purchaser to such mailing.
3.8 APPROVAL OF MERGER BY SHAREHOLDERS.
3.8.1 SHORT-FORM MERGER. In the event that, pursuant to the Offer,
Purchaser purchases Shares that, together with Shares previously held by
Purchaser, constitute at least ninety percent (90%) of the outstanding Shares,
the parties hereto shall take all necessary and appropriate action to cause the
Merger to become effective, in accordance with Section 1110 of the CGCL, as soon
as reasonably practicable after such purchase of Shares pursuant to the Offer
and satisfaction or waiver of the conditions of Article VIII (other than the
conditions in Sections 8.1.4 and 8.1.5), without a meeting of the shareholders
of the Company.
3.8.2 SHAREHOLDERS' MEETING. In the event that, pursuant to the
Offer, Purchaser does not purchase Shares, the Company shall (i) if requested by
Purchaser, duly call, give notice of, convene and hold the Shareholders' Meeting
as soon as practicable; and (ii) cause the Proxy Statement to be mailed to its
shareholders at the earliest practicable time after responding to all such
comments to the satisfaction of the Staff of the SEC and to obtain the necessary
approvals by its shareholders of this Agreement.
3.8.3 VOTE OF SHARES BY PURCHASER. At the Shareholders' Meeting or
in any written consent in lieu of a meeting, Purchaser and its affiliates will
vote all Shares owned by them and will exercise all voting rights or proxies
held by them in favor of approval and adoption of this Agreement, the Merger,
and the transactions contemplated hereby and thereby.
3.8.4 ACQUISITION TRANSACTIONS. Without limiting the generality of
the foregoing, other than as specifically set forth in Section 3.7, the Company
agrees that its obligations
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pursuant to this Section 3.8 shall not be affected by either the commencement,
public proposal, public disclosure or other communication to the Company by any
third party of any offer to acquire some or all of the Shares or all or any
substantial portion of the assets of the Company or any change in the
recommendation of the Company Board.
3.9 OTHER FILINGS. The Company and Purchaser, as the case may be, shall
promptly prepare and file any other filings required under the Exchange Act or
any other Federal or state securities or corporate laws relating to the Merger
and the transactions contemplated herein (the "OTHER FILINGS"). Each of the
parties hereto shall notify the other parties hereto promptly of the receipt by
it of any comments from the SEC or its Staff and of any request of the SEC or
any other governmental officials with respect to any Other Filings or for
additional information and will supply the other parties hereto with copies of
all correspondence between it and its representatives, on the one hand, and the
SEC or the members of its Staff or any other governmental officials, on the
other hand, and will provide the other parties and their counsel with the
opportunity to participate, including by way of discussions with the SEC or its
Staff, in the response of such party to such comments, with respect to any Other
Filings or the Merger. The Company and Purchaser each shall use its reasonable
efforts to obtain and furnish the information required to be included in any
Other Filings or the Merger.
ARTICLE IV.
CONVERSION OR CANCELLATION OF SHARES; STOCK RIGHTS
4.1 CONVERSION OR CANCELLATION OF SHARES. At the Effective Time, by
virtue of the Merger and without any action on the part of the holders thereof:
4.1.1 CONVERSION OF SHARES INTO CASH. Each Share issued and
outstanding immediately prior to the Effective Time (other than Shares owned by
Purchaser and Shares held by the Dissenting Shareholders) shall be converted
into and represent the right to receive, without interest, an amount in cash
equal to the greater of $10.30 net or the amount per share which may be paid
pursuant to the Offer as it may be amended (the "MERGER Consideration"), payable
to the holder thereof, upon surrender of the Certificates. As of the Effective
Time, all such Shares shall no longer be outstanding, shall be automatically
canceled and shall cease to exist, and each holder of a Certificate which
formerly represented any such Shares shall thereafter cease to have any rights
with respect to such Shares, except the right to receive the Merger
Consideration for such Shares upon the surrender of such Certificate or
Certificates in accordance with Section 4.2.
4.1.2 CANCELLATION OF SHARES. Each Share issued and outstanding
immediately prior to the Effective Time and owned by Purchaser shall no longer
be outstanding, shall be canceled without payment of any consideration therefor
and shall cease to exist, and each holder of a Certificate representing any such
Shares shall thereafter cease to have any rights with respect to such Shares.
4.1.3 SHARES OF PURCHASER. Each Share of Purchaser issued and
outstanding immediately prior to the Effective Time shall be converted into and
become one fully-paid and non-assessable share of common stock, no par value, of
the Surviving Corporation.
4.2 EXCHANGE OF CERTIFICATES; PAYING AGENT
4.2.1 PAYING AGENT AND FUNDS. Prior to the Closing, Purchaser shall
select a bank or trust company to act as paying agent (the "PAYING AGENT") for
the payment of the Merger Consideration specified in Section 4.1 pursuant to
irrevocable instructions from Purchaser upon
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surrender of Certificates converted into the right to receive cash pursuant to
the Merger. Prior to the Effective Time, Purchaser shall make available to the
Paying Agent immediately available funds in the amount of the Merger
Consideration multiplied by the number of outstanding Shares converted into the
right to receive the Merger Consideration (the "FUNDS"), it being understood
that any and all interest earned on the Funds shall be paid over to Purchaser by
the Paying Agent as Purchaser shall direct. The Funds shall be held as a
separate fund and not used for any purpose except as provided herein.
4.2.2 LETTER OF TRANSMITTAL; STOCK CERTIFICATES. Promptly after the
Effective Time, the Paying Agent shall mail to each person who was, at the
Effective Time, a holder of record of a Certificate or Certificates, other than
the Company or any of the Purchaser Entities, a letter of transmittal and
instructions for use in effecting the surrender, in exchange for payment in cash
therefor, of the Certificates. The letter of transmittal shall specify that
delivery shall be effected, and risk of loss and title shall pass, only upon
proper delivery to and receipt of such Certificates by the Paying Agent and
shall be in such form and have such provisions as Purchaser shall reasonably
specify. Upon surrender to the Paying Agent of such Certificates, together with
the letter of transmittal, duly executed and completed in accordance with the
instructions thereto and such other documents as may be reasonably required by
the Paying Agent, the Paying Agent shall promptly pay to the persons entitled
thereto, out of the Funds, a check in the amount to which such persons are
entitled pursuant to Section 4.1.1, after giving effect to any required tax
withholdings, and such Certificate shall forthwith be canceled. No interest will
be paid or will accrue on the amount payable upon the surrender of any such
Certificates. If payment is to be made to a person other than the registered
holder of the Certificates surrendered, it shall be a condition of such payment
that the Certificates so surrendered shall be properly endorsed or otherwise in
proper form for transfer and that the person requesting such payment shall pay
any transfer or other taxes required by reason of the payment to a person other
than the registered holder of the Certificates surrendered or establish to the
satisfaction of the Surviving Corporation or the Paying Agent that such tax has
been paid or is not applicable. Until surrendered as contemplated by this
Section 4.2, each Certificate (other than Certificates representing Shares held
by Purchaser or by the Dissenting Shareholders) shall be deemed at any time
after the Effective Time to represent only the right to receive upon such
surrender the amount of cash, without interest, into which the Shares
theretofore represented by such Certificate shall have been converted pursuant
to Section 4.1.
4.2.3 TRANSFER OF FUNDS TO PURCHASER. Six months following the
Effective Time, the Surviving Corporation shall be entitled to cause the Paying
Agent to deliver to it any Funds (including any interest, dividends, earnings or
distributions received with respect thereto which shall be paid as directed by
Purchaser) made available to the Paying Agent by Purchaser which have not been
disbursed, and thereafter holders of Certificates who have not theretofore
complied with the instructions for exchanging their Certificates shall be
entitled to look only to the Surviving Corporation for payment as general
creditors thereof with respect to the cash payable upon due surrender of their
Certificates.
4.2.4 FEES OF PAYING AGENT. Except as otherwise provided herein,
Purchaser shall pay all charges and expenses, including those of the Paying
Agent, in connection with the exchange of the Merger Consideration for
Certificates.
4.2.5 ESCHEAT. Notwithstanding anything to the contrary in this
Section 4.2, none of the Paying Agent, the Company, the Surviving Corporation or
Purchaser shall be liable to a holder of a Certificate formerly representing
Shares for any amount properly delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law. If Certificates are not
surrendered prior to two years after the Effective Time (or immediately prior to
such earlier date on which any payment pursuant to this Article IV would
otherwise escheat or become the property of any
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Federal, state or local government agency or authority, court or commission),
unclaimed funds payable with respect to such Certificates shall, to the extent
permitted by applicable law, become the property of the Surviving Corporation,
free and clear of all claims or interest of any person previously entitled
thereto.
4.3 DISSENTERS' RIGHTS. Notwithstanding the provisions of Section 4.1
or any other provision of this Agreement to the contrary, Dissenting Shares
shall not be converted into the right to receive the Merger Consideration at or
after the Effective Time, but such Shares shall become the right to receive such
consideration as may be determined to be due to holders of Dissenting Shares
pursuant to the laws of the State of California, unless and until the holder of
such Dissenting Shares withdraws his or her demand for such appraisal in
accordance with the CGCL or becomes ineligible for such appraisal. If a holder
of Dissenting Shares shall withdraw his or her demand for such appraisal or
shall become ineligible for such appraisal (through failure to perfect or
otherwise), then, as of the Effective Time or the occurrence of such event,
whichever last occurs, such holder's Dissenting Shares shall automatically be
converted into and represent the right to receive the Merger Consideration,
without interest, as provided in Section 4.1.1 and in accordance with the CGCL.
The Company shall give Purchaser (i) prompt notice of any demands for appraisal
of Shares received by the Company and (ii) the opportunity to participate in and
direct all negotiations and proceedings with respect to any such demands. The
Company shall not, without the prior written consent of Purchaser, make any
payment with respect to, or settle, offer to settle or otherwise negotiate, any
such demands.
4.4 TRANSFER OF SHARES AFTER THE EFFECTIVE TIME. No transfers of Shares
shall be made in the stock transfer books of the Surviving Corporation at or
after the Effective Time. If, after the Effective Time, Certificates formerly
representing Shares are presented to the Surviving Corporation, they shall be
canceled and exchanged for the Merger Consideration in accordance with the
provisions set forth in Article IV.
4.5 STOCK OPTIONS UNDER 1992 EQUITY PLAN. To the extent permitted under
the Company's 1992 Equity Plan, each option granted under such plan shall at the
Effective Time become the right to receive, upon surrender of such option, an
amount in cash per share subject to such option equal to the amount by which the
Merger Consideration exceeds the per share exercise price of such option, such
amount to be payable, less an amount equal to all taxes required to be withheld
from such payment, if and to the extent that such option "vests" as provided in
the option agreement pursuant to which such option was granted.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents, warrants, covenants to Purchaser that:
5.1 AUTHORITY. The Company has full corporate power and authority to
execute, deliver and perform this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly approved by the
Company Board, and the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby have been duly and
validly authorized by the Company Board and, except for the approval of the
Merger by the holders of the Shares in accordance as required by the CGCL, no
other corporate actions on the part of the Company are necessary to authorize
this Agreement or to consummate the transactions contemplated hereby, including
the acquisition of Shares pursuant to the Offer and the Merger. This Agreement
has been duly and validly executed and delivered by the Company and, assuming
due
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authorization, execution and delivery by Purchaser, constitutes a valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms, except to the extent that its enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting the enforcement of creditors' rights generally or by general equitable
principles, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
5.2 PROXY STATEMENT; OFFER DOCUMENTS. Any Proxy Statement or similar
materials distributed to the Company's shareholders in connection with the
Merger, including any amendments or supplements thereto, will comply in all
material respects with applicable federal securities laws and will not contain
any untrue statements of a material fact required to be stated therein or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading, except that no representation is made by the Company
with respect to information supplied by Purchaser in writing for inclusion in
the Proxy Statement. None of the information supplied by the Company in writing
for inclusion in the Offer Documents or provided by the Company in the Schedule
14D-9 will, at the respective times that the Offer Documents and the Schedule
14D-9 or any amendments or supplements thereto are filed with the SEC and are
first published or sent or given to holders of Shares, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
5.3 BROKERS AND FINDERS. Neither the Company nor any of its respective
officers, directors or employees has employed any broker, finder or investment
banker or incurred any liability for any brokerage fees, commissions, finders'
fees or investment banking fees in connection with the transactions contemplated
herein, other than the Company's Financial Adviser pursuant to that certain
Letter Agreement between the Company and the Company's Financial Adviser, a copy
of which has been delivered to Purchaser.
5.4 STATE TAKEOVER STATUTES. To the Company's knowledge, no state
takeover statute or similar statute or regulation other than Chapters 11, 12 and
13 of the CGCL applies or purports to apply to the Offer, the Merger, this
Agreement or any of the transactions contemplated by this Agreement.
5.5 OPINION OF FINANCIAL ADVISOR. The Company has received the opinion
of the Company's Financial Adviser to the effect that, as of the date of this
Agreement, the consideration to be received in the Offer and the Merger by the
Company's shareholders is fair to the Company's shareholders from a financial
point of view.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES OF
PURCHASER
Purchaser hereby represents and warrants to the Company that:
6.1 ORGANIZATION. Purchaser is a corporation duly organized and validly
existing and in good standing under the laws of the State of California.
Purchaser has all requisite corporate power and authority to own its assets and
carry on its business as now being conducted or proposed to be conducted.
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6.2 AUTHORIZED CAPITAL. The authorized capital stock of Purchaser will
at the Effective Time consist of forty million (40,000,000) shares of common
stock, no par value, of which all shares outstanding as of the Effective Time
will be owned, beneficially or of record, by Xxxxxx Xxxxx or affiliates of
Xxxxxx Xxxxx. The issued and outstanding share of capital stock of Purchaser is
validly issued, fully paid, nonassessable and free of preemptive rights and all
liens.
6.3 AUTHORITY. Purchaser has the necessary corporate power and
authority to enter into this Agreement and to carry out its obligations
hereunder. The execution and delivery of this Agreement by Purchaser, the
performance by Purchaser of its obligations hereunder and the consummation by
Purchaser of the transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of its Board of Directors and
approved by Xxxxxx Xxxxx as sole shareholder of Purchaser, and no other
corporate proceeding on the part of Purchaser is necessary for the execution and
delivery of this Agreement by Purchaser and the performance by Purchaser of its
obligations hereunder and the consummation by Purchaser of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Purchaser and, assuming the due authorization, execution and delivery hereof by
the Company, is a legal, valid and binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms, except to the extent that its
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of creditors'
rights generally or by general equitable principles, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
6.4 NO PRIOR ACTIVITIES. Purchaser has not incurred nor will it incur,
directly or indirectly, any liabilities or obligations, except those incurred in
connection with its incorporation or with the negotiation of this Agreement, the
Offer Documents and the consummation of the transactions contemplated hereby and
thereby. Purchaser has not engaged, directly or indirectly, in any business or
activity of any type or kind, or entered into any agreement or arrangement with
any person or entity, and is not subject to or bound by any obligation or
undertaking, that is not contemplated by or in connection with this Agreement,
the Offer Documents and the transactions contemplated hereby and thereby.
6.5 BROKERS AND FINDERS. Neither Purchaser nor any of its officers,
directors or employees has employed any broker, finder or investment banker or
incurred any liability for any brokerage fees, commissions, finders fees or
investment banking fees in connection with the transactions contemplated herein,
except that Purchaser has employed and will pay the fees and expenses of Xxxxxx
Securities Incorporated.
6.6 CONSENTS AND APPROVALS; NO VIOLATIONS. Except for any required
approval of the Merger by Xxxxxx Xxxxx as the sole shareholder of Purchaser, the
filing of the California Agreement of Merger in accordance with the CGCL and any
required filing pursuant to, and the expiration or termination of any applicable
waiting periods under, the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended, neither the execution, delivery and performance of this Agreement by
Purchaser nor the consummation by either of them of the transactions
contemplated hereby will (i) conflict with or result in any breach of any
provision of their respective articles of incorporation or bylaws; (ii) require
any consent, approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority, except in connection
with the Exchange Act; (iii) result in a violation or breach of, or constitute a
default under, or give rise to any right of termination, amendment, cancellation
or acceleration under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, contract, agreement or other instrument or
obligation of any kind to which Purchaser is a party or by which Purchaser or
any of its assets may be bound; or (iv) assuming Purchaser's compliance with the
12
CGCL as provided in this Agreement, violate any order, writ, injunction,
judgment, decree, law, statute, rule, regulation or governmental permit or
license applicable to Purchaser or any of its assets.
6.7 OFFER DOCUMENTS; PROXY STATEMENT; OTHER INFORMATION. None of the
information included in the Offer Documents (including any amendments or
supplements thereto) or any schedules required to be filed with the SEC in
connection therewith and described therein as being supplied by Purchaser will,
at the respective times that the Offer Documents or any amendments or
supplements thereto or any such schedules are filed with the SEC, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. None of
the information supplied in writing by Purchaser specifically for inclusion in
the Proxy Statement, Schedule 14D-9 or any statement required pursuant to
Section 14(f) of the Exchange Act or any other schedules or statements required
to be filed with the SEC in connection therewith will contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein in light of
the circumstances under which they were made, not misleading.
6.8 POST-CLOSING MATTERS. The Merger and the transactions contemplated
by this Agreement will not cause the Company to be unable to pay its existing
debts as they mature.
ARTICLE VII.
COVENANTS OF THE PARTIES
7.1 CONDUCT OF BUSINESS OF THE COMPANY. The Company and its
subsidiaries shall use their best efforts to preserve intact their business
organizations, to keep available the services of their operating personnel and
to preserve the goodwill of those having business relationships with them,
including, without limitation, suppliers. Except as contemplated by this
Agreement, during the period from the date of this Agreement to the Effective
Time, the Company Board will not permit the Company or any of its subsidiaries
to conduct its business and operations otherwise than in the ordinary and usual
course of business consistent with past practice.
7.2 NOTIFICATION OF CERTAIN MATTERS. The Company shall give prompt
notice to Purchaser of: (i) 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; (ii) any notice
or other communication from any regulatory authority in connection with the
transactions contemplated by this Agreement; and (iii) the occurrence of any
event having, or which insofar as can be reasonably foreseen would have, a
Material Adverse Effect.
7.3 FURTHER INFORMATION. Each of the Company and Purchaser shall give
prompt written notice to the other of (i) any representation or warranty made by
it contained in this Agreement becoming untrue or inaccurate in any material
respect or (ii) the failure by it to comply with or satisfy in any material
respect any covenant, condition or agreement to be complied with or satisfied by
it under this Agreement; provided, however, that no such notification shall cure
such breach or non-compliance or shall affect the representations, warranties,
covenants or agreements of the parties or the conditions to the obligations of
the parties under this Agreement or limit or otherwise affect the remedies
available hereunder.
7.4 REASONABLE EFFORTS. Subject to the terms and conditions of this
Agreement, each of the parties hereto will use all reasonable efforts to take,
or cause to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
13
consummate and make effective the transactions contemplated by this Agreement
and shall use all reasonable efforts to satisfy the conditions to the
transactions contemplated hereby and to obtain all waivers, permits, consents
and approvals and to effect all registrations, filings and notices with or to
third parties or governmental or public bodies or authorities which are
necessary or desirable in connection with the transactions contemplated by this
Agreement, including, but not limited to, filings to the extent required under
the Exchange Act. Without limiting the generality of the foregoing, the Company
and Purchaser will vigorously defend against any lawsuit or proceeding, whether
judicial or administrative, challenging this Agreement or the consummation of
any of the transactions contemplated hereby. Subject to the terms and conditions
of this Agreement, from time to time after the date hereof, without further
consideration, the Company will, at its own expense, execute and deliver such
documents to Purchaser as Purchaser may reasonably request in order to
consummate the transactions contemplated by this Agreement. Subject to the terms
and conditions of this Agreement, Purchaser will, from time to time after the
date hereof, without further consideration, at its own expense, execute and
deliver such documents to the Company as the Company may reasonably request in
order to consummate the transactions contemplated by this Agreement.
7.5 PUBLIC ANNOUNCEMENTS. Purchaser and the Company shall consult with
each other before issuing any press release or otherwise making any public
statements with respect to the transactions contemplated hereby and shall not
issue any such press release or make any such public statement prior to such
consultation, except as may be required by law or any listing agreement with a
national securities exchange or the Nasdaq Stock Market. No director shall make
any press release or public announcement concerning the transactions
contemplated hereby and shall make no other statement inconsistent with the
Schedule 14D-9 and the Schedule 14D-1.
7.6 INDEMNITY.
7.6.1 Purchaser shall cause (i) all rights to indemnification by
the Company now existing in favor of the Indemnified Parties as provided in the
Company's Articles of Incorporation and By-Laws, or rights of indemnification
equivalent thereto, and (ii) limitations of liability in the Company's Articles
of Incorporation, or limitations equivalent thereto, to survive the Merger and
to continue in full force and effect as rights to indemnification and
limitations on liability, respectively, by the Surviving Corporation for a
period of six years following the Effective Time, and shall cause to remain in
full force and effect and cause the Surviving Corporation to fully perform all
indemnity agreements with Indemnified Parties in effect on the date hereof (the
"INDEMNITY AGREEMENTS").
7.6.2 Subject to the terms set forth herein, the Surviving
Corporation shall indemnify and hold harmless, to the fullest extent permitted
under applicable law (and shall also advance expenses as incurred by an
Indemnified Party to the extent permitted under applicable law, provided the
person to whom expenses are advanced provides an undertaking to repay such
advances if it is ultimately determined that such person is not entitled to
indemnification), each Indemnified Party against any costs or expenses
(including attorneys' fees), judgments, fines, losses, claims, damages,
liabilities and amounts paid in settlement in connection with any claim, action,
suit, proceeding or investigation, whether civil, criminal, administrative or
investigative, arising out of or pertaining to any action, alleged action,
omission or alleged omission occurring on or prior to the Effective Time in
their capacity as director, officer or employee (including, without limitation,
any claims, actions, suits, proceedings and investigations which arise out of or
relate to the transactions contemplated by this Agreement) for a period of six
years after the Effective Time, provided that, in the event any claim or claims
are asserted or made within such six year period, all rights to indemnification
in respect of any such claim or claims shall continue until final disposition of
any and all such claims.
14
7.6.3 Any Indemnified Party wishing to claim indemnification under
this Section 7.6, upon learning of any such claim, action, suit, proceeding or
investigation, shall promptly notify the Surviving Corporation thereof, but the
failure to so notify shall not relieve the Surviving Corporation of any
obligation to indemnify such Indemnified Party or of any other obligation
imposed by this Section 7.6 unless and to the extent that such failure
materially prejudices the Surviving Corporation; it being understood that it
shall be deemed to materially prejudice the Surviving Corporation, as the case
may be, if, as a result of such failure to notify, the Surviving Corporation is
not given an opportunity to assume the defense of such claim, action, suit,
proceeding or investigation within a reasonably prompt time after such claim,
action, suit, proceeding or investigation is asserted or initiated. In the event
of any such claim, action, suit, proceeding or investigation, (i) the Surviving
Corporation shall have the right to assume the defense thereof and shall not be
liable to such Indemnified Party for any legal expenses of other counsel or any
other expenses subsequently incurred by such Indemnified Party in connection
with the defense hereof, except that if the Surviving Corporation elects not to
assume such defense or counsel for the Indemnified Party advises that there are
issues which raise conflicts of interest between the Surviving Corporation and
the Indemnified Party, the Indemnified Party may retain counsel satisfactory to
it, and the Surviving Corporation shall pay all reasonable fees and expenses of
such counsel for the Indemnified Party promptly as statements therefore are
received; provided, however, that in no event shall the Surviving Corporation be
required to pay fees and expenses, including disbursements and other charges,
for more than one firm of attorneys in any one legal action or group of related
legal actions unless (A) counsel for the Indemnified Party advises that there is
a conflict of interest that requires more than one firm of attorneys, or (B)
local counsel of record is needed in any jurisdiction in which any such action
is pending, (ii) the Surviving Corporation and the Indemnified Party shall
cooperate in the defense of any such matter, and (iii) the Surviving Corporation
shall not be liable for any settlement effected without its prior written
consent (which consent shall not be unreasonably withheld); and provided,
further, that the Surviving Corporation shall not have any obligation hereunder
to any Indemnified Party if and to the extent a court of competent jurisdiction
ultimately determines, and such determination shall have become final, that the
indemnification of such Indemnified Party in the manner contemplated hereby is
prohibited by applicable law.
7.6.4 For six years after the Effective Time, the Surviving
Corporation shall maintain the officers' and directors' liability insurance
covering the Indemnified Parties who are presently covered by the Company's
officers' and directors' liability insurance, with respect to acts or omissions
occurring at or prior to the Effective Time, on terms no less favorable than
those in effect on the date hereof or at the Effective Time.
7.6.5 In the event that any of the provisions of Section 7.6.1,
7.6.2. 7.6.3 or 7.6.4 above would conflict with any of the provisions of the
Company's By-Laws, Articles of Incorporation or Indemnity Agreements in a manner
that, if held applicable, would limit or restrict, or impose conditions or
obligations on the exercise by any of the Indemnified Parties of, any of the
indemnification rights or limitations of liability granted to them under the
Company's By-Laws, Articles of Incorporation or Indemnity Agreements, then, in
any such event or circumstance the applicable provisions of the Company's
By-Laws, Articles of Incorporation or Indemnity Agreements shall control, as it
is the intention of the parties that the Indemnified Parties shall have
indemnification rights or limitations of liability no less favorable than those
which they have under the Company's By-Laws, Articles of Incorporation or
Indemnity Agreements, as in effect on the date hereof.
7.6.6 The covenants contained in this Section 7.6 shall survive the
Effective Time until fully discharged, are intended to benefit each of the
Indemnified Parties and shall be binding on all successors and assignees of the
Surviving Corporation.
15
7.7 OTHER TRANSACTIONS.
7.7.1 CEASE PENDING DISCUSSIONS. The Company on behalf of itself
and its affiliates and their respective officers, directors, employees,
investment bankers, attorneys and other representatives and agents, shall
immediately cease any existing discussions or negotiations, if any, with any
parties (other than Purchaser) conducted heretofore with respect to any
Acquisition Transaction (as defined below).
7.7.2 NEW PROPOSALS. Unless and until this Agreement has been
terminated pursuant to Article X hereof, the Company and any of the Company's
officers and directors shall not, and the Company shall direct and use its best
efforts to cause its employees, agents and representatives (including, without
limitation any investment banker, attorney or accountant retained by the
Company) not to take or cause, directly or indirectly, any of the following
actions with any party other than Purchaser or Purchaser's designees: (i)
solicit, encourage, initiate, participate in or otherwise facilitate any
negotiations, inquiries or discussions with respect to any offer, indication or
proposal to acquire all or more than 15% of the Company's business, assets or
capital shares whether by merger, consolidation, or other business combination,
purchase of assets, reorganization, tender or exchange offer (each of the
foregoing, an "Acquisition Proposal") or (ii) disclose, in connection with an
Acquisition Proposal, any information or provide access to its properties, books
or records, except as required by law or pursuant to a governmental request for
information. The Company will take the necessary steps to promptly inform the
individuals or entities referred to in the first sentence of this Section 7.7.2
of the obligations undertaken in this Section 7.7.2.
7.7.3 SUPERIOR PROPOSALS. Notwithstanding anything to the contrary
contained in Sections 7.7.1 and 7.7.2 or elsewhere in this Agreement, prior to
the Effective Time, the Company may participate in discussions or negotiations
with, and furnish non-public information, and afford access to the properties,
books, records, officers, employees and representatives of the Company to any
Person, entity or group if such Person, entity or group has delivered to the
Company, prior to the date of the Company's meeting of shareholders or action
pursuant to Section 1110 of the CGCL, as applicable, and in writing, an
Acquisition Proposal which the Special Committee in its reasonable judgment
determines if consummated would be more favorable, from a financial point of
view, to the Company's shareholders than the transactions contemplated by this
Agreement, which determination shall be made only after the Special Committee
(i) receives a written opinion of its legal counsel that the Special Committee
would breach its fiduciary duties if it did not accept the Acquisition Proposal
and (ii) a written opinion of the Company's Financial Adviser to the effect that
the Acquisition Proposal is superior, from a financial point of view, to the
Company's shareholders than the transactions contemplated by this Agreement (an
Acquisition Proposal satisfying such conditions constituting a "Superior
Proposal"). In the event the company receives a Superior Proposal, nothing
contained in this Agreement (but subject to this Section 7.7.3) will prevent the
Special Committee from, on behalf of the Board of Directors, executing or
entering into an agreement relating to such Superior Proposal and recommending
such Superior Proposal to the shareholders of the Company, if the Special
Committee determines in accordance with the preceding sentence that its
fiduciary duties require it to do so; in such case, the Special Committee may
withdraw, modify, or refrain from makings its recommendation of the transactions
contemplated by this Agreement; provided, however, that the Special Committee
shall (i) promptly notify Purchaser, and in any event within 24 hours, if any
Acquisition Proposal is received by, any such information is requested from, or
any such negotiations or discussions are sought to be initiated or continued
with, the Company, indicating, in connection with such notice, the name of such
person and the material terms of such Acquisition Proposal, (ii) provide
Purchaser at least 48 hours prior written notice of the Special Committee's
intention, on behalf of the Board of Directors of the Company, to
16
execute or enter into an agreement relating to such Superior Proposal and
(iii) terminate this Agreement by written notice to Purchaser provided no sooner
than 48 hours after Purchaser's receipt of a copy of such Superior Proposal.
7.8 PURCHASER AFFILIATES. Purchaser shall cause Purchaser's affiliates
to take actions in such affiliates' capacities as officers, directors or
employees of the Company to comply with the Company's covenants under this
Article VII (provided, however, that Purchaser's affiliates may, by reason of
conflict of interest, decline to participate in activities under Section 7.7.3)
and shall cause Purchaser's affiliates not to take any willful action or
inaction that causes the representations and warranties contained in Article V
to be untrue.
ARTICLE VIII.
CONDITIONS OF THE MERGER
8.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligations of each party to this Agreement to consummate the Merger
shall be subject to the following conditions, which have not been waived at or
prior to the Closing:
8.1.1 SHAREHOLDER APPROVAL OF MERGER. This Agreement and the Merger
shall have been approved and adopted by the requisite vote or consent of the
shareholders of the Company required by the Company's Articles of Incorporation
and By-Laws and the CGCL; provided, however, that this condition shall not apply
in the event that Shares are purchased pursuant to the Offer;
8.1.2 LEGAL ACTIONS. No preliminary or permanent injunction or
other order shall have been issued by any court or by any governmental or
regulatory agency, body or authority which prohibits the consummation of the
Offer or the Merger and the transactions contemplated by this Agreement and
which is in effect at the Effective Time; provided, however, that, in the case
of a decree, injunction or other order, each of the parties shall have used
reasonable efforts to prevent the entry of any such injunction or other order
and to appeal as promptly as possible any decree, injunction or other order that
may be entered; and
8.1.3 LAW MAKING ILLEGAL. No statute, rule or regulation shall have
been enacted, entered, promulgated or enforced by any governmental authority
that prohibits the consummation of the Offer or the Merger or has the effect of
making the purchase of the Shares illegal.
8.2 CONDITIONS TO THE OBLIGATIONS OF PURCHASER TO EFFECT THE MERGER.
The obligation of Purchaser to effect the Merger shall be further subject to
satisfaction of the following conditions, which have not been waived at or prior
to the Closing:
8.2.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Each of the
Company's representations and warranties contained in Article V shall be true
and correct as of the Closing Date unless the aggregate failure of such
representations and warranties to be true and correct does not have a Material
Adverse Effect;
8.2.2 COMPANY PERFORMANCE. The Company shall have performed and
complied with the agreements and obligations contained in this Agreement
required to be performed and complied with by it at or prior to the Effective
Time unless the failure of such performance or compliance does not have a
Material Adverse Effect;
17
8.2.3 NO CHANGE IN RECOMMENDATION. There shall have been no change
in the Special Committee's recommendation that the stockholders of the Company
accept the Offer and approve the Merger, all as provided in Section 2.2; and
8.2.4 DISSENTERS' RIGHTS. The holders of not more than 15% of the
outstanding Shares shall have exercised, nor shall they have any continued right
to exercise, appraisal, dissenters' or similar rights under applicable law with
respect to their Shares by virtue of the Merger.
8.3 CONDITION TO THE OBLIGATIONS OF THE COMPANY TO EFFECT THE MERGER.
The obligation of the Company to effect the Merger shall be further subject to
satisfaction of the following conditions, which have not been waived at or prior
to the Closing:
8.3.1 Representations and Warranties of Purchaser. Each of
Purchaser's representations and warranties contained in Article VI shall be true
and correct in all material respects as of the Closing Date; and
8.3.2 PURCHASER PERFORMANCE. Purchaser shall have performed and
complied in all material respects with the agreements and obligations contained
in this Agreement required to be performed and complied with by it at or prior
to the Effective Time.
ARTICLE IX.
CLOSING
9.1 TIME AND PLACE. The closing of the Merger (the "CLOSING") shall
take place at the offices of Xxxxxx & Xxxxxxx, 000 Xxxxxxxxxxxx Xxxxx, Xxxxx
Xxxx, Xxxxxxxxxx at 9:00 a.m. local time on a date to be specified by the
parties which shall be no later than the third business day after the date on
which the last of the closing conditions set forth in Article VIII is satisfied
or waived unless another time, date or place is agreed upon in writing by the
parties hereto.
9.2 FILINGS AT THE CLOSING. At the Closing, Purchaser shall cause the
California Agreement of Merger to be filed and recorded with the Secretary of
State of the State of California in accordance with the provisions of Section
1103 of the CGCL, and shall take any and all other lawful actions and do any and
all other lawful things necessary to cause the Merger to become effective.
ARTICLE X.
TERMINATION; AMENDMENT; WAIVER
10.1 TERMINATION. This Agreement may be terminated and the Offer (if
Purchaser has not accepted Shares for payment) and the Merger may be abandoned
at any time prior to the Effective Time:
10.1.1 MUTUAL CONSENT. By mutual written consent of Purchaser and
the Company;
10.1.2 COURT OR GOVERNMENTAL RESTRAINT. By Purchaser or the
Company if any court of competent jurisdiction in the United States or other
United States governmental body shall have issued an order, decree or ruling or
taken any other final action restraining, enjoining or otherwise prohibiting the
Merger or the acceptance for payment and payment for the Shares in the Offer and
such order, decree, ruling or other action is or shall have become
nonappealable;
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10.1.3 BY EITHER PARTY AFTER OUTSIDE DATE. By either the Company
or Purchaser if the Merger shall not have been consummated by the date which is
180 days from the date of this Agreement (the "Outside Date"); provided that the
right to terminate this Agreement under this Section 10.1.3 shall not be
available to any party whose failure to fulfill any obligation or condition
under this Agreement has been the cause of, or resulted in, the failure of the
Merger to occur on or before the Outside Date and shall not be available to
Purchaser if Purchaser has purchased Shares pursuant to the Offer.
10.1.4 BY PURCHASER FOR COMPANY BREACH. By Purchaser if, prior to
the earlier of (a) acceptance for payment of Shares pursuant to the Offer or (b)
the Closing, (i) there shall have been a breach of any representation or
warranty on the part of the Company having a Material Adverse Effect, (ii) there
shall have been a breach of any covenant or agreement on the part of the Company
resulting in a Material Adverse Effect.
10.1.5 BY COMPANY FOR PURCHASER BREACH. By the Company if (i)
there shall have been a breach of any representation or warranty on the part of
Purchaser which has a material adverse effect on the consummation of the Offer
or the Merger or (ii) there shall have been a material breach of any covenant or
agreement on the part of Purchaser which has a material adverse effect on the
consummation of the Offer or the Merger.
10.1.6 BY PURCHASER FOR CERTAIN ACTIONS OF THE COMPANY. By
Purchaser, prior to the purchase of Shares pursuant to the Offer, if (i) the
Special Committee shall have withdrawn or adversely modified its recommendation
of the Offer, the Merger or this Agreement or the Special Committee , upon
request of Purchaser, shall fail to reaffirm such approval or recommendation
within five business dates after such request if an Acquisition Proposal is
pending, or shall have resolved to do any of the foregoing; (ii) the Special
Committee shall have recommended to the shareholders of the Company that they
approve an Acquisition Proposal other than the transactions contemplated by this
Agreement; (iii) a tender offer or exchange offer that, if successful, would
result in any Person or "group" becoming a "beneficial owner" (such terms having
the meaning in this Agreement as is ascribed under Regulation 13D under the
Exchange Act) of 15% or more of the outstanding Shares is commenced (other than
by Purchaser or an affiliate of Purchaser) and the Special Committee recommends
that the shareholders of the Company tender their shares in such tender or
exchange offer; (iv) for any reason the Company fails to call and hold the
meeting of shareholders contemplated by Section 3.8.2 (provided, however, that
this clause (iv) shall be ineffective if Purchaser purchases Shares pursuant to
the Offer) or (vi) if the Company or any of the Persons described in Section
7.7.1 or 7.7.2 who are not affiliates of Purchaser, shall willfully and
materially breach Section 7.7.1 or 7.7.2;
10.1.7 BY THE COMPANY UPON ACCEPTING A SUPERIOR OFFER. By the
Company, prior to the purchase of Shares pursuant to the Offer, if the Special
Committee determines, on behalf of the Board of Directors, to accept a Superior
Proposal.
10.2 EFFECT OF TERMINATION. In the event of the termination of this
Agreement and the abandonment of the Offer and the Merger pursuant to Section
10.1, this Agreement shall forthwith become void and have no effect, without any
liability on the part of any party hereto or its affiliates, directors, officers
or shareholders, other than the provisions of this Section 10.2 and 10.3 hereof.
Notwithstanding the foregoing, nothing contained in this Section 10.2 shall
relieve any party from liability for any breach of this Agreement.
19
10.3 FEES AND EXPENSES UPON TERMINATION. Upon the termination of this
Agreement for any reason prior to the earlier of (a) the purchase of Shares by
Purchaser pursuant to the Offer or (b) the Effective Time (other than
termination by Purchaser and/or the Company pursuant to Sections 10.1.1,
10.1.2., 10.1.3., 10.1.4. or 10.1.5. hereof) the Company shall reimburse
Purchaser and its affiliates for all actual documented out-of-pocket fees and
expenses actually and reasonably incurred by Purchaser or on Purchaser's behalf
in connection with the Offer and the Merger and the consummation of all
transactions contemplated by this Agreement (including, without limitation, fees
payable to financing sources, investment bankers, counsel to any of the
foregoing, and accountants). Upon the termination of this Agreement pursuant to
Section 10.1.6 or 10.1.7, the Company shall pay to Purchaser the sum of
$2,400,000. All amounts payable pursuant to this Section 10.3 shall be due
within three business days after termination of this Agreement and shall be
payable by wire transfer of immediately available funds.
ARTICLE XI.
MISCELLANEOUS
11.1 NONSURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. None of
the representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time or, in the
case of the Company, shall survive the earlier of (i) acceptance for payment of,
and payment for, the Shares by Purchaser pursuant to the Offer and (ii) the
Effective Time. This Section 11.1 shall not limit any covenant or agreement of
the parties which by its terms contemplates performance after the Effective Time
of the Merger.
11.2 AMENDMENT AND MODIFICATION. Subject to applicable law, this
Agreement may be amended, modified or supplemented only by written agreement of
Purchaser and the Company at any time prior to the Effective Time with respect
to any of the terms contained herein executed by duly authorized officers of the
respective parties, except that (i) prior to the Effective Time, consent by the
Company shall require the approval of the Special Committee and (ii) after the
Effective Time, the price per Share to be paid pursuant to this Agreement to the
holders of Shares shall in no event be decreased and the form of consideration
to be received by the holders of the Shares in the Merger shall in no event be
altered, and no other amendment which would adversely affect the holders of
Shares shall be made, without the approval of the applicable holders.
11.3 WAIVER OF COMPLIANCE; CONSENTS. At any time prior to the Effective
Time, the parties hereto may extend the time for performance of any of the
obligations or other acts or waive any inaccuracies in the representations and
warranties contained herein or in the documents delivered pursuant hereto. Any
failure of Purchaser, on the one hand, or the Company, on the other hand, to
comply with any obligation, covenant, agreement or condition herein may be
waived in writing by Purchaser or the Company, respectively, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of or estoppel with respect
to any subsequent or other failure. Whenever this Agreement requires or permits
consent by or on behalf of any party hereto or any extensions, such consent or
extension shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 11.3.
11.4 COUNTERPARTS. This Agreement may be executed in any number of
counterparts each of which shall be deemed an original but all of which together
shall constitute one and the same instrument.
11.5 GOVERNING LAW; SUBMISSION TO JURISDICTION. This Agreement shall be
governed by and construed in accordance with the laws of the State of California
without regard to its conflicts of
20
laws rules. Each party hereto hereby (i) irrevocably and unconditionally submits
in any legal action or proceeding relating to this Agreement, or for recognition
and enforcement of any judgment in respect thereof, to the exclusive general
jurisdiction of the state and federal courts in the state of California, and
appellate courts from any thereof and (ii) consents that any action or
proceeding may be brought in such courts and waives any objection that it may
now or hereafter have to the venue of any such action or proceeding in any such
court or that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same.
11.6 NOTICES.
(a) All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given when received if personally delivered;
when transmitted if transmitted by telecopy; the day after it is sent, if sent
for next day delivery to a domestic address by recognized overnight delivery
service (E.G., Federal Express); and upon receipt, if sent by certified or
registered mail, return receipt requested, as follows:
(b) If to the Company, to:
Prior to the Effective Time,
Digital Link Corporation
000 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Special Committee of Board of Directors
Telecopier: (000) 000-0000
with a copy to:
Fenwick & West LLP
Xxx Xxxx Xxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Telecopier: (000) 000-0000
After the Effective Time,
Digital Link Corporation
000 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxxx
Telecopier: (000) 000-0000
(c) if to Purchaser, to:
DLZ Corp.
000 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxxx
21
Telecopier: (000) 000-0000
with copies to:
Xxxxxx & Xxxxxxx
000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxxxx
Telecopier: (000) 000-0000
11.7 ENTIRE AGREEMENT, ASSIGNMENT ETC. This Agreement, including the
exhibits hereto, embodies the entire agreement and understanding of the parties
hereto in respect of the subject matter hereof and is not intended to confer
upon any other person any rights or remedies hereunder. This Agreement
supersedes all prior agreements and understanding of the parties with respect to
the subject matter hereof. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, and (except for Indemnified
Parties) no other person shall have any right, benefit or obligation under this
Agreement as a third party beneficiary or otherwise. Neither this Agreement nor
any of the rights, interest or obligations hereunder shall be assigned by any
party hereto without the prior written consent of the other parties hereto,
except that Purchaser shall have the right to assign its rights to any (directly
or indirectly) wholly owned subsidiary of Purchaser without the prior written
consent of the Company, provided that Purchaser shall remain fully responsible
for and shall cause such subsidiary to duly and timely perform, all of
Purchaser's obligations hereunder.
11.8 VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
11.9 HEADINGS; CERTAIN DEFINITIONS. The Articles and Section headings
contained in this Agreement are solely for the purpose of reference, are not
part of the agreement of the parties and shall not affect in any way the meaning
or interpretation of this Agreement. Every reference herein to the word "days,"
if not preceded by the word "business," shall mean calendar days, and every
reference herein to the words "business days" shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday that is not a day on which banking institutions
in the city of New York are authorized or obligated by law to close.
11.10 SPECIFIC PERFORMANCE. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any state or federal court in
the state of California, this being in addition to any other remedy to which
they are entitled at law or in equity.
22
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of the parties hereto as of the date first above
written.
DLZ CORP.
By: /s/ Xxxxxx Xxxxx
------------------------------------------
Name: Xxxxxx Xxxxx
Title: President and Chief Executive Officer
DIGITAL LINK CORPORATION
By: /s/ Xxxxxx Xxxxx
------------------------------------------
Name: Xxxxxx Xxxxx
Title: President and Chief Executive Officer
23
ANNEX A
The capitalized terms used herein and not otherwise defined herein have
the meanings set forth in the Agreement and Plan of Merger to which this Annex A
is attached.
Notwithstanding any other provision of the Agreement and Plan of Merger
to which this ANNEX A is attached (the "AGREEMENT") or the Offer, Purchaser
shall not be required to accept for payment, purchase or pay for any Shares of
the Company tendered, and may terminate or, subject to the terms of the
Agreement, amend the Offer and may postpone the acceptance for payment of and
payment for any Shares if there shall not have been validly tendered and not
withdrawn prior to the expiration of the Offer that number of shares of Company
Common Stock which, together with the Shares owned by Purchaser, would represent
ninety percent (90%) of the outstanding shares of the Company on the date of
purchase (the "MINIMUM CONDITION"). Furthermore, notwithstanding any other term
of the Offer or this Agreement, Purchaser shall not be required to accept for
payment or, subject as aforesaid, to pay for any Shares not theretofore accepted
for payment or paid for, and may terminate the Offer if, at any time on or after
the date of this Agreement and before the acceptance of such Shares for payment
or the payment therefor, any of the following conditions exists:
(a) LEGAL PROCEEDINGS. There shall have been threatened, instituted or
be pending any action or proceeding before any court or governmental,
administrative or regulatory authority or agency, domestic or foreign (each, a
"GOVERNMENTAL ENTITY"), or by any other person, domestic or foreign, before any
court or Governmental Entity, (i) challenging or seeking to, or which is
reasonably likely to, make illegal, materially delay or otherwise directly or
indirectly restrain or prohibit or seeking to, or which is reasonably likely to,
impose voting, procedural, price or other requirements, including any such
requirements under California law, in addition to those required by federal
securities laws, in connection with the making of the Offer, the acceptance for
payment of, or payment for, any Shares by Purchaser or the consummation by
Purchaser of the Merger or other business combination with the Company, or
seeking to obtain material damages in connection therewith; (ii) seeking to
prohibit or limit materially the ownership or operation by the Company,
Purchaser or any of their respective subsidiaries of all or any material portion
of the business or assets of the Company, Purchaser or any of their respective
subsidiaries, or to compel the Company, Purchaser or any of their respective
subsidiaries to dispose of or hold separate all or any material portion of the
business or assets of the Company, Purchaser or any of their respective
subsidiaries; (iii) seeking to impose or confirm limitations on the ability of
Purchaser to exercise effectively full rights of ownership of any Shares,
including, without limitation, the right to vote any Shares acquired by
Purchaser pursuant to the Offer or otherwise on all matters properly presented
to the Company's shareholders; (iv) seeking to require divestiture by Purchaser
of any Shares; (v) seeking any material diminution in the benefits expected to
be derived by Purchaser as a result of the transactions contemplated by the
Offer or the Merger or any other similar business combination with the Company;
(vi) otherwise directly or indirectly relating to the Offer or which otherwise,
in the reasonable judgment of Purchaser, might materially adversely affect the
Company or Purchaser or the value of the Shares; or (vii) which otherwise, in
the reasonable judgment of Purchaser, is likely to materially adversely affect
the business, operations (including, without limitation, results of operations),
properties (including, without limitation, intangible properties), condition
(financial or otherwise), assets or liabilities (including, without limitation,
contingent liabilities) or prospects of either the Company or any of its
subsidiaries or Purchaser;
(b) OTHER LEGAL ACTIONS. There shall have been any action taken, or any
statute, rule, regulation, legislation, interpretation, judgment, order or
injunction enacted, entered, enforced, promulgated, amended, issued or deemed
applicable to (i) Purchaser, the Company or any subsidiary or
A-1
affiliate of Purchaser or the Company or (ii) the Offer or the Merger, by any
legislative body, court, government or governmental, administrative or
regulatory authority or agency, domestic or foreign, other than the routine
application of the waiting period provisions of the HSR Act to the Offer or the
Merger, which, in the reasonable judgment of Purchaser, is likely to result,
directly or indirectly, in any of the consequences referred to in clauses (i)
through (vii) of paragraph (a) above;
(c) MATERIAL ADVERSE CHANGE. There shall have occurred any change,
condition, event or development that constitutes a Material Adverse Effect;
(d) STOCK MARKET AND RELATED MATTERS. There shall have occurred (i) any
general suspension of, or limitation on prices for, trading in securities on the
Nasdaq National Market, (ii) any material adverse change in United States
currency exchange rates or a suspension of, or limitation on, currency exchange
markets, (iii) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, (iv) any limitation (whether
or not mandatory) by any government or governmental, administrative or
regulatory authority or agency, domestic or foreign, on, or other event that, in
the reasonable judgment of Purchaser, might affect the extension of credit by
banks or other lending institutions, or (v) a commencement of a war or armed
hostilities or other national or international calamity directly or indirectly
involving the United States;
(e) CORPORATE CHANGES. The Company or any of its subsidiaries, joint
ventures or partners or other affiliates shall have, directly or indirectly, (i)
split, combined or otherwise changed, or authorized or proposed a split,
combination or other change of, the Shares or its capitalization, (ii) acquired
or otherwise caused a reduction in the number of, or authorized or proposed the
acquisition or other reduction in the number of, outstanding Shares or other
securities (other than as aforesaid), (iii) issued or sold, or authorized or
proposed the issuance, distribution or sale of, additional Shares (other than
the issuance of Shares under option prior to the date of this Agreement, in
accordance with the terms of such options as such terms have been publicly
disclosed prior to the date of this Agreement), shares of any other class of
capital stock, other voting securities or any securities convertible into, or
rights, warrants or options, conditional or otherwise, to acquire, any of the
foregoing, (iv) declared or paid, or proposed to declare or pay, any dividend or
other distribution, whether payable in cash, securities or other property, on or
with respect to any shares of capital stock of the Company, (v) altered or
proposed to alter any material term of any outstanding security, (vi) incurred
any debt other than in the ordinary course of business or any debt containing
burdensome covenants, (vii) authorized, recommended, proposed or entered into an
agreement, agreement in principle or arrangement or understanding with respect
to any merger, consolidation, liquidation, dissolution, business combination,
acquisition of assets, disposition of assets, release or relinquishment of any
material contractual or other right of the Company or any of its subsidiaries or
any comparable event not in the ordinary course of business, (viii) entered into
or amended any employment, change in control, severance, executive compensation
or similar agreement, arrangement or plan with or for the benefit of any of its
employees, consultants or directors, or made grants or awards thereunder, other
than in the ordinary course of business or entered into or amended any
agreements, arrangements or plans so as to provide for increased or accelerated
benefits to any such persons, (ix) except as may be required by law, taken any
action to terminate or amend any employee benefit plan (as defined in Section
3(2) of the Employee Retirement Income Security Act of 1974, as amended) of the
Company or any of its subsidiaries, or (x) amended or authorized or proposed any
amendment to the Company's Articles of Incorporation or Bylaws;
(f) [intentionally omitted];
A-2
(g) REQUIRED APPROVALS. Any required approval, permit, authorization or
consent of any governmental authority or agency shall not have been obtained on
terms reasonably satisfactory to Purchaser;
(h) COMPANY'S REPRESENTATIONS AND WARRANTIES. Any of the
representations and warranties of the Company set forth in this Agreement that
are qualified shall not be true and correct unless the effect of all such
failures to be true or correct does not constitute a Material Adverse Effect;
(i) COMPANY'S COVENANTS. The Company shall have failed to perform any
obligation or to comply with any agreement or covenant of the Company to be
performed or complied with by it under this Agreement unless the effect of all
such failures does not constitute a Material Adverse Effect;
(j) MODIFICATION OF RECOMMENDATION. The Company Board or any committee
thereof shall have withdrawn or modified in a manner adverse to Purchaser its
approval or recommendation of the Offer, the Merger or this Agreement, or (ii)
the Company Board or any committee thereof shall have resolved to take the
foregoing action; or
(l) TERMINATION OF AGREEMENT. This Agreement shall have been terminated
in accordance with its terms;
The foregoing conditions are for the sole benefit of Purchaser and may
be asserted by Purchaser regardless of the circumstances giving rise to any such
condition or may be waived by Purchaser in whole or in part at any time and from
time to time in Purchaser's discretion. The failure by Purchaser at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right; the waiver of any such right with respect to particular facts and other
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances; and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time.
A-3
AGREEMENT AND PLAN OF MERGER
by and among
DLZ CORP.,
and
DIGITAL LINK CORPORATION
Dated as of September 3, 1999
TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS.............................................................................1
1.1 DEFINITIONS......................................................................1
ARTICLE II. THE TENDER OFFER.......................................................................3
2.1 THE OFFER........................................................................3
2.2 COMPANY ACTION...................................................................4
ARTICLE III. THE MERGER............................................................................6
3.1 THE MERGER.......................................................................6
3.2 EFFECTIVE TIME...................................................................6
3.3 ARTICLES OF INCORPORATION........................................................6
3.4 BY-LAWS..........................................................................6
3.5 DIRECTORS AND OFFICERS...........................................................7
3.6 FURTHER ASSURANCES...............................................................7
3.7 PROXY STATEMENT..................................................................7
3.8 APPROVAL OF MERGER BY SHAREHOLDERS...............................................8
3.9 OTHER FILINGS....................................................................8
ARTICLE IV. CONVERSION OR CANCELLATION OF SHARES; STOCK RIGHTS.....................................9
4.1 CONVERSION OR CANCELLATION OF SHARES.............................................9
4.2 EXCHANGE OF CERTIFICATES; PAYING AGENT...........................................9
4.3 DISSENTERS'RIGHTS...............................................................11
4.4 TRANSFER OF SHARES AFTER THE EFFECTIVE TIME.....................................11
4.5 STOCK OPTIONS UNDER 1992 EQUITY PLAN............................................11
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF THE COMPANY..........................................11
5.1 AUTHORITY.......................................................................11
5.2 PROXY STATEMENT; OFFER DOCUMENTS................................................12
5.3 BROKERS AND FINDERS.............................................................12
5.4 STATE TAKEOVER STATUTES.........................................................12
5.5 OPINION OF FINANCIAL ADVISOR....................................................12
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF PURCHASER...........................................13
6.1 ORGANIZATION....................................................................13
6.2 AUTHORIZED CAPITAL..............................................................13
6.3 AUTHORITY.......................................................................13
6.4 NO PRIOR ACTIVITIES.............................................................13
6.5 BROKERS AND FINDERS.............................................................13
6.6 CONSENTS AND APPROVALS; NO VIOLATIONS...........................................14
6.7 OFFER DOCUMENTS; PROXY STATEMENT; OTHER INFORMATION.............................14
ARTICLE VII. COVENANTS OF THE PARTIES.............................................................14
7.1 CONDUCT OF BUSINESS OF THE COMPANY..............................................14
7.2 NOTIFICATION OF CERTAIN MATTERS.................................................15
7.3 FURTHER INFORMATION.............................................................15
7.4 REASONABLE EFFORTS..............................................................15
7.5 PUBLIC ANNOUNCEMENTS............................................................15
7.6 INDEMNITY.......................................................................16
i
7.7 OTHER TRANSACTIONS..............................................................17
7.8 PURCHASER AFFILIATES............................................................18
ARTICLE VIII. CONDITIONS OF THE MERGER............................................................19
8.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER......................19
8.2 CONDITIONS TO THE OBLIGATIONS OF PURCHASER TO EFFECT THE MERGER.................19
8.3 CONDITION TO THE OBLIGATIONS OF THE COMPANY TO EFFECT THE MERGER................20
ARTICLE IX. CLOSING...............................................................................20
9.1 TIME AND PLACE..................................................................20
9.2 FILINGS AT THE CLOSING..........................................................20
ARTICLE X. TERMINATION; AMENDMENT; WAIVER.........................................................21
10.1 TERMINATION.....................................................................21
10.2 EFFECT OF TERMINATION...........................................................22
10.3 FEES AND EXPENSES UPON TERMINATION..............................................22
ARTICLE XI. MISCELLANEOUS.........................................................................22
11.1 NONSURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.......................22
11.2 AMENDMENT AND MODIFICATION......................................................23
11.3 WAIVER OF COMPLIANCE; CONSENTS..................................................23
11.4 COUNTERPARTS....................................................................23
11.5 GOVERNING LAW; SUBMISSION TO JURISDICTION.......................................23
11.6 NOTICES.........................................................................23
11.7 ENTIRE AGREEMENT, ASSIGNMENT ETC................................................24
11.8 VALIDITY........................................................................25
11.9 HEADINGS; CERTAIN DEFINITIONS...................................................25
11.10 SPECIFIC PERFORMANCE............................................................25
ANNEX A..........................................................................................A-1
ii
