AMENDMENT NO. 1
This Amendment No. 1 to Agreement and Plan of Merger and Reorganization
is dated as of April 28, 2000 among SOPHEON PLC, a United Kingdom public
company, limited by shares ("PARENT"), TELTECH RESOURCE NETWORK CORPORATION, a
Minnesota corporation ("COMPANY") and SOPHEON CORPORATION, a Minnesota
corporation and a wholly-owned subsidiary of Parent ("MERGER SUB").
RECITALS:
A. Parent, Merger Sub and Company are parties to an Agreement and
Plan of Merger and Reorganization dated as of January 21, 2000 (the "Merger
Agreement") whereby Company will be merged with and into Merger Sub. Capitalized
terms used but not defined herein shall have the same meaning as in the Merger
Agreement.
B. The Merger Agreement currently provides for the distribution
of cash and Parent Common Stock only to holders of outstanding shares of Company
Common and Preferred Stock through a description of calculations which shall be
made at closing.
C. The purpose of this Amendment is to revise the Merger
Agreement to permit individuals who hold options to purchase shares of Company
Common Stock to participate in the consideration payable to shareholders of
Company in the Merger without having to exercise their options by receiving
options to purchase Parent Common Stock. These option holders should receive
options to purchase Parent Common Stock in an equivalent value as if each had
exercised his or her options to purchase shares of Company Common Stock. Holders
of Company Common and Preferred Stock should also receive the same amount in
value as if the option holders had exercised their options.
D. The parties desire to set forth a description of the process
to be followed upon the effectiveness of the Merger to determine the allocation
of the Total Merger Consideration, with examples of how the calculations shall
be made, and the principles the parties agree to follow in performing the
calculations.
NOW THEREFORE RESOLVED, the parties hereto agree as follows:
1. The following definitions contained in the Merger Agreement
shall be revised as follows:
"COMMON EXCHANGE RATIO" shall be deleted.
"COMPANY COMMON STOCK" shall mean each share of Common Stock, $0.01 par
value per share, of Company issued and outstanding immediately before the
Effective Time.
"COMPANY SERIES A STOCK" shall mean each share of Series A Convertible
Preferred Stock, $0.01 par value per share, of Company issued and outstanding
immediately before the Effective Time.
"COMPANY SERIES B STOCK" shall mean each share of Series B Convertible
Preferred Stock, $0.01 par value per share, of Company issued and outstanding
immediately before the Effective Time.
"COMPANY SERIES C STOCK" shall mean each share of Series C Convertible
Preferred Stock, $0.01 par value per share, of Company issued and outstanding
immediately before the Effective Time.
"COMPANY SERIES D STOCK" shall mean each share of Series D Convertible
Preferred Stock, $0.01 par value per share, of Company issued and outstanding
immediately before the Effective Time.
"COMPANY SERIES E STOCK" shall mean each share of Series E Convertible
Preferred Stock, $0.01 par value per share, of Company issued and outstanding
immediately before the Effective Time.
"PRO RATA EXCHANGE RATIO" shall be deleted.
"SERIES A EXCHANGE RATIO" shall be deleted.
"SERIES B EXCHANGE RATIO" shall be deleted.
"SERIES C EXCHANGE RATIO" shall be deleted.
"SERIES D EXCHANGE RATIO" shall be deleted.
"SERIES E EXCHANGE RATIO" shall be deleted.
"PARTICIPATING OPTIONS" shall have the meaning set forth in Section
3.1(b) of this Agreement, as amended.
"TOTAL MERGER CONSIDERATION" shall mean the Total Merger Shares plus
$14,000,000 (U.S. Dollars) PLUS the aggregate capital paid into the Company upon
the exercise of Company Stock Options and Warrants to purchase shares of Company
Capital Stock from and after January 21, 2000 until the Closing, PLUS the number
of shares of Parent Common Stock equal to the aggregate exercise price of the
Participating Options divided by the Average Closing Price.
2. Section 3.1 of the Merger Agreement is amended in its entirety
to read as follows:
"SECTION 3.1 CONVERSION OF SHARES. At the Effective Time, by virtue of
the Merger, and without any action on the part of Parent, Merger Sub, Company or
anyone else, shares of Company Common Stock and of Company Preferred Stock and
Company Stock Options shall be converted into the right to receive the
consideration described below:
(a) The Total Merger Consideration shall first be allocated to the
holders of Company Preferred Stock in accordance with the preferences stated in
the Company's Restated Articles of Incorporation. The Total Merger Consideration
shall next be paid to holders of Company Common Stock to return, on an average
basis, the aggregate capital paid in by all holders of Company Common Stock as
reflected in the financial statements of the Company immediately before the
Effective Time. The cash portion of the Total Merger Consideration shall be
allocated between the holders of Company Preferred Stock and holders of Company
Common Stock pro rata based upon the relative amounts payable in the aggregate
to each such group pursuant to the
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Company's Restated Articles of Incorporation. The remaining amount due pursuant
to the Company's Restated Articles of Incorporation shall be payable in shares
of Parent Common Stock based upon the Average Closing Price. For examples of
these calculations, see Exhibit 3.1(a) to this Amendment attached hereto.
(b) Options to purchase shares of Parent Common Stock shall be
allocated to holders of Company Stock Options out of the Total Merger Shares in
an amount equal in value to the aggregate dollar value which would be payable to
holders of Company Stock Options if they had exercised their options less the
aggregate exercise price payable upon exercise of the Company Stock Options. For
examples of these calculations, see Exhibit 3.1(b) to this Amendment, attached
hereto. The calculation of the exercise prices of the options to purchase Parent
Common Stock are described in Section 3(e) below. Only those options to purchase
Company Common Stock for which their portion of the Total Merger Consideration
would be greater than the exercise price under the Company Stock Options shall
receive options to purchase Parent Common Stock. These Company Stock Options
shall be referred to as the "Participating Options." For examples of these
calculations, see Exhibit 3.1(b) to this Amendment, attached hereto. Each option
to purchase a share of Company Common Stock shall be converted into options to
purchase a number of shares of Parent Common Stock which is equal to the net
value of such option, based upon its particular exercise price. For examples of
these calculations, see Exhibit 3.1(b) to this Amendment, attached hereto.
(c) The Total Merger Shares shall be reduced by the shares of
Parent Common Stock payable in Section 3.1(a) and issuable pursuant to options
in Section 3.1(b) above. The remainder of the Total Merger Shares shall be
allocated pro rata amongst all holders of Company Common Stock and Company
Preferred Stock, on an as-converted basis, with the exception that the number of
shares of Parent Common Stock payable to holders of Company Common Stock as a
group shall be reduced by, and the number of shares of Parent Common Stock
payable to holders of Company Preferred Stock as a group shall be increased by,
the difference between (i) the aggregate value the holders of Company Common
Stock received pursuant to Section 3.1(a) above and (ii) the aggregate value
that the holders of Company Common Stock would have received if all
Participating Options had been exercised. For examples of these calculations,
see Exhibit 3.1(c) to this Amendment, attached hereto.
(d) Because holders of Participating Options received
consideration which was limited to the net value of their options as described
in Section 3.1(b) above, Parent shall issue additional options to holders of
Participating Options to compensate such holders in an amount equivalent to the
value of the exercise price that will be payable upon exercise of options to
purchase Parent Common Stock. These options shall be in addition to those
granted in Section 3.1(b) above and in addition to the Total Merger Shares. The
aggregate exercise price of the Participating Options shall be divided by the
Average Closing Price to determine the total additional shares of Parent Common
Stock to be granted as options. This number of shares of Parent Common Stock
shall be allocated amongst holders of Participating Options based upon the
exercise price of their respective options. For examples of these calculations,
see Exhibit 3.1(d) to this Amendment, attached hereto.
(e) The exercise price of the options to purchase shares of Parent
Common Stock granted in subparts (b) and (d) of Section 3.1 herein shall be
equal, in the aggregate, to the aggregate exercise price of the Participating
Options and shall, on an option-by-option basis,
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preserve the terms of the Company Stock Options. For examples of these
calculations, see Exhibit 3.1(e) to this Amendment, attached hereto.
3. Section 3.2(a) shall be amended in its entirety to read as
follows:
"(a) EXCHANGE AGENT. As of the Effective Time, Parent shall enter into
an agreement with a U.S. bank or trust company reasonably acceptable to the
Company to act as exchange agent for the Merger (the "Exchange Agent") as may be
designated by Parent. The Exchange Agent shall have the right to subcontract
certain functions to third party specialists, such as investment brokers,
advisors and bankers for the purpose of effecting the transactions contemplated
by this Agreement and for assisting in the efficient trading of securities. The
subcontracted third party or parties shall be, for purposes of this Agreement,
Exchange Agent(s); PROVIDED, HOWEVER, such third party need not be a U.S. bank
or a trust company, and may be a foreign entity."
4. Section 3.2(b) of the Merger Agreement is amended in its
entirety to read as follows:
"(b) PARENT TO PROVIDE COMMON STOCK AND CASH. Promptly after the
Effective Time, Parent shall make available to the Exchange Agent for the
benefit of the holders of Company Capital Stock (i) certificates of Parent
Common Stock ("PARENT CERTIFICATES") representing the number of whole shares of
Parent Common Stock issuable pursuant to Section 3.1 in exchange for shares of
Company Capital Stock outstanding immediately prior to the Effective Time; and
(ii) sufficient funds to permit payment in lieu of fractional shares pursuant to
Section 3.6 and the cash to be paid in respect of shares of Company Capital
Stock pursuant to Section 3.1."
5. The last two sentences of Section 3.3(a) of the Merger
Agreement, (which read "All rights under any and all Company Stock Options which
remain unexercised immediately prior to the Effective Time of the Merger shall
be automatically terminated and cancelled. The Board of Directors of the Company
shall take whatever action is necessary prior to the Effective Time to terminate
the unexercised Company Stock Options as of such time.") shall be deleted.
6. The following is added to Section 3.3 of the Merger Agreement:
"(c) EXCHANGE PROCEDURES. The Exchange Agent shall mail to each
holder of record of Participating Options, whose options were converted into the
right to receive shares of Parent Common Stock, a statement indicating each
Participating Option has been amended into the right to purchase the number of
shares of Parent Common Stock as set forth in such amendment. No fractional
shares shall be issued; any fraction shall be rounded up or down to the nearest
whole number.
(d) TERMINATION OF OPTIONS. All Company Stock Options which are
not Participating Options due to the fact that their exercise price is greater
than the value which is payable to holders of Company Common Stock as described
in subparts (a) and (c) of Section 3.1 above shall (i) be terminated by the
Board of Directors of the Company upon the effectiveness of the Merger; and (ii)
receive no consideration in the Merger."
7. Each of the parties agrees to act in good faith in performing
the calculations required in Section 3.1 of the Merger Agreement, as amended.
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8. Each party may, at its option, have its accountants review the
computations and final determinations as described in Section 3.1 of the Merger
Agreement, as amended.
9. The Total Merger Consideration as finally calculated shall not
exceed $14,000,000 in cash plus the aggregate cash paid in upon exercise of
Company Stock Options and Warrants from January 21, 2000, to the Effective Date
plus the Total Merger Shares plus the number of shares of Parent Common Stock
equal to the aggregate exercise price of the Participating Options divided by
the Average Closing Price.
10. Section 6.1(g) of the Merger Agreement is amended in its
entirety to read as follows:
"(g) amend the terms of, repurchase, redeem or other acquire, any
of its securities other than pursuant to the terms of Section 3.3 above."
11. A new section is added to Article VII of the Merger Agreement
to read as follows:
"SECTION 7.9 LISTING OF PARENT STOCK OPTIONS ON AIM. Parent shall
submit to the London Stock Exchange an application to admit to trading on the
Alternative Investment Market ("AIM") all shares of Parent Common Stock issuable
upon exercise of options granted in the Merger in accordance with this Agreement
by a date sufficient to cause such shares to be so admitted as soon as
reasonably practicable after such issuances."
12. Section 8.1(f) of the Merger Agreement is amended in its
entirety to read as follows:
"(f) Parent shall have submitted an application to the London Stock
Exchange to admit to trading on the AIM all of the shares of Parent Common Stock
issuable to the Company's stockholders in the Merger by a date sufficient to
cause such shares of Parent Common Stock to be so admitted within three business
days of issuance of such shares."
13. All other terms and conditions of the Merger Agreement shall
remain in full force and effect, unamended. Except as set forth herein, all
capitalized terms that are undefined shall have the meanings ascribed to them as
set forth in the Merger Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date first written above by the respective officers thereunto
duly authorized.
SOPHEON PLC
By /s/ Xxxxx X. Xxxxx
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Its Chairman and Chief Executive Officer
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SOPHEON CORPORATION
By /s/ Xxxxx X. Xxxxx
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Its President
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TELTECH RESOURCE NETWORK
CORPORATION
By /s/ Xxxxxx X. Xxxxxxx
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Its CEO and President
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