[CONFORMED COPY]
AGREEMENT AND PLAN OF MERGER
by and among
SBC COMMUNICATIONS, INC.,
SBC SILVER, INC.
and
STERLING COMMERCE, INC.
Dated as of February 18, 2000
TABLE OF CONTENTS
Page
ARTICLE I
THE OFFER AND THE MERGER
Section 1.01 The Offer . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02 Company Actions . . . . . . . . . . . . . . . . . . . . 5
Section 1.03 Directors . . . . . . . . . . . . . . . . . . . . . . . 6
Section 1.04 The Merger . . . . . . . . . . . . . . . . . . . . . . . 8
Section 1.05 Closing . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 1.06 Effective Time . . . . . . . . . . . . . . . . . . . . . 8
Section 1.07 Directors and Officers . . . . . . . . . . . . . . . . . 9
Section 1.08 Stockholders' Meeting . . . . . . . . . . . . . . . . . 9
Section 1.09 Merger Without Meeting of Stockholders . . . . . . . . . 10
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
Section 2.01 Effect on Capital Stock . . . . . . . . . . . . . . . . 10
Section 2.02 Exchange of Certificates . . . . . . . . . . . . . . . . 11
Section 2.03 Dissenting Shares . . . . . . . . . . . . . . . . . . . 13
Section 2.04 Company Stock Option Plans . . . . . . . . . . . . . . . 14
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 Representations and Warranties of the Company . . . . . 17
Section 3.02 Representations and Warranties of Parent . . . . . . . . 33
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 4.01 Conduct of Business of the Company . . . . . . . . . . . 36
Section 4.02 No Solicitation by the Company . . . . . . . . . . . . . 40
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.01 Access to Information; Confidentiality . . . . . . . . . 43
Section 5.02 Reasonable Best Efforts; Cooperation . . . . . . . . . . 44
Section 5.03 Indemnification, Exculpation and Insurance . . . . . . . 44
Section 5.04 Fees and Expenses . . . . . . . . . . . . . . . . . . . 45
Section 5.05 Public Announcements . . . . . . . . . . . . . . . . . . 46
Section 5.06 Employee Benefit Plans . . . . . . . . . . . . . . . . . 46
Section 5.07 Purchaser Compliance . . . . . . . . . . . . . . . . . . 48
Section 5.08 NYSE Listing . . . . . . . . . . . . . . . . . . . . . . 48
Section 5.09 MSD Agreement . . . . . . . . . . . . . . . . . . . . . 48
Section 5.10 Telecommunications Act of 1996 . . . . . . . . . . . . . 48
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01 Conditions to Each Party's Obligation to Effect
the Merger . . . . . . . . . . . . . . . . . . . . . . . 49
Section 6.02 Frustration of Closing Conditions . . . . . . . . . . . 50
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
Section 7.01 Termination . . . . . . . . . . . . . . . . . . . . . . 50
Section 7.02 Effect of Termination . . . . . . . . . . . . . . . . . 52
Section 7.03 Amendment . . . . . . . . . . . . . . . . . . . . . . . 53
Section 7.04 Extension; Waiver . . . . . . . . . . . . . . . . . . . 53
ARTICLE VIII
GENERAL PROVISIONS
Section 8.01 Nonsurvival of Representations and Warranties . . . . . 53
Section 8.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 8.03 Definitions . . . . . . . . . . . . . . . . . . . . . . 54
Section 8.04 Interpretation . . . . . . . . . . . . . . . . . . . . . 56
Section 8.05 Counterparts . . . . . . . . . . . . . . . . . . . . . . 56
Section 8.06 Entire Agreement; No Third-Party Beneficiaries . . . . . 56
Section 8.07 Governing Law . . . . . . . . . . . . . . . . . . . . . 57
Section 8.08 Assignment . . . . . . . . . . . . . . . . . . . . . . . 57
Section 8.09 Consent to Jurisdiction . . . . . . . . . . . . . . . . 57
Section 8.10 Headings . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 8.11 Severability . . . . . . . . . . . . . . . . . . . . . . 57
INDEX OF TERMS
Page
affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Certificate of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Change in Control Individuals . . . . . . . . . . . . . . . . . . . . . 24
Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Communications Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Company Acquisition Agreement . . . . . . . . . . . . . . . . . . . . . 39
Company Authorized Preferred Stock . . . . . . . . . . . . . . . . . . 15
Company Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . 21
Company Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Company Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Company Disclosure Schedule . . . . . . . . . . . . . . . . . . . . . . 14
Company Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Company Filed SEC Documents . . . . . . . . . . . . . . . . . . . . . . 20
Company Junior Preferred Stock . . . . . . . . . . . . . . . . . . . . . 2
Company Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Company Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Company Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . 15
Company Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Company Rights Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Company SEC Documents . . . . . . . . . . . . . . . . . . . . . . . . . 18
Company Stock Option . . . . . . . . . . . . . . . . . . . . . . . . . 14
Company Stock Option Plans . . . . . . . . . . . . . . . . . . . . . . 16
Company Stockholder Approval . . . . . . . . . . . . . . . . . . . . . 26
Company Stockholders Meeting . . . . . . . . . . . . . . . . . . . . . . 9
Company Superior Proposal . . . . . . . . . . . . . . . . . . . . . . . 40
Company Takeover Proposal . . . . . . . . . . . . . . . . . . . . . . . 38
Company Treasury Stock . . . . . . . . . . . . . . . . . . . . . . . . 16
Confidentiality Agreement . . . . . . . . . . . . . . . . . . . . . . . 41
control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Control Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
DGCL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Dissenting Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Employed Intellectual Property . . . . . . . . . . . . . . . . . . . . 27
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ERISA Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Exchange Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Governmental Entity . . . . . . . . . . . . . . . . . . . . . . . . . . 18
HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . 27
knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
material adverse change . . . . . . . . . . . . . . . . . . . . . . . . 52
material adverse effect . . . . . . . . . . . . . . . . . . . . . . . . 52
Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Merger Consideration . . . . . . . . . . . . . . . . . . . . . . . . . 11
Minimum Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
MSD Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Offer Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Offer Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Offer to Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Original Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Other Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Parent Disclosure Schedule . . . . . . . . . . . . . . . . . . . . . . 31
person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Purchase Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Purchaser Common Stock . . . . . . . . . . . . . . . . . . . . . . . . 11
Real Property Leases . . . . . . . . . . . . . . . . . . . . . . . . . 30
Restraints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Schedule 14D-9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Schedule TO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Surviving Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Year 2000 Compliant . . . . . . . . . . . . . . . . . . . . . . . . . . 31
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
February 18, 2000, by and among SBC Communications, Inc., a Delaware
corporation ("Parent"), SBC Silver, Inc., a Delaware corporation and a
wholly owned subsidiary of Parent ("Purchaser"), and Sterling Commerce,
Inc., a Delaware corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent, Purchaser
and the Company have approved, and each deems it advisable and in the best
interests of its stockholders to consummate, the acquisition of the Company
by Parent upon the terms and subject to the conditions set forth herein;
WHEREAS, the parties desire to make certain representations,
warranties, covenants and agreements in connection with the Transactions
(as defined in Section 1.02(a)) and also to prescribe various conditions to
the Transactions; and
WHEREAS, as a condition and inducement to Parent's and
Purchaser's entering into this Agreement and incurring the obligations set
forth herein, concurrently with the execution and delivery of this
Agreement, Parent and Purchaser are entering into one or more stockholder
agreements with each of the individuals listed on Schedule I hereto (the
"Stockholders"), pursuant to which, among other things, each Stockholder
has agreed to vote the Shares (as such term is hereinafter defined) then
owned by such Stockholder in favor of the Merger, to grant Parent an
irrevocable proxy to vote such Shares and to tender all Shares then owned
by such Stockholder to Parent or Purchaser, as applicable, in accordance
with the Offer.
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Agreement, the
parties hereto agree as follows:
ARTICLE I
THE OFFER AND THE MERGER
Section 1.01 The Offer.
(a) As promptly as practicable (but in no event later than five
business days after the public announcement of the execution hereof),
Purchaser shall commence (within the meaning of Rule 14d-2 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) a tender
offer (the "Offer") for all of the outstanding shares of Common Stock, par
value $.01 per share (the "Shares"), of the Company ("Company Common
Stock") (including the related rights (the "Company Rights") to purchase
the Company's Series A Junior Participating Preferred Stock, par value $.01
per share ("Company Junior Preferred Stock"), pursuant to the Rights
Agreement, dated as of December 18, 1996 (as amended, the "Company Rights
Plan"), between the Company and the First National Bank of Boston, as
rights agent), at a price of $44.25 per Share, net to the seller in cash
(such price, or such higher price per Share as may be paid in the Offer,
being referred to herein as the "Offer Price"), subject to the conditions
set forth in Annex A hereto. The obligations of Purchaser to commence the
Offer and to accept for payment and to pay for any Shares validly tendered
on or prior to the expiration of the Offer and not withdrawn shall be
subject only to there being validly tendered and not withdrawn immediately
prior to the expiration of the Offer that number of Shares which represents
at least a majority of the shares of Company Common Stock on a fully-
diluted basis (provided that for the purposes of the foregoing calculation,
Company Stock Options (as hereinafter defined) that are outstanding
immediately prior to consummation of the Offer and are not exercisable at
such time shall not be taken into account) (the "Minimum Condition") and to
the other conditions set forth in Annex A hereto. The Offer shall be made
by means of an offer to purchase (the "Offer to Purchase") containing the
terms set forth in this Agreement and the conditions set forth in Annex A
hereto. Without the consent of the Company, Purchaser shall not (i) reduce
the number of Shares subject to the Offer, (ii) reduce the Offer Price,
(iii) modify or add to the conditions set forth in Annex A hereto or
otherwise amend the Offer in any manner adverse to the holders of the
Shares, (iv) except as provided in the next three sentences, extend the
Offer, (v) change the form of consideration payable in the Offer or (vi)
waive the Minimum Condition. Notwithstanding the foregoing, Purchaser may,
without the consent of the Company, (i) extend the Offer from time to time
if at the initial expiration date of the Offer (which initial expiration
date shall be 20 business days following commencement of the Offer) or any
extension thereof (I) any of the conditions to Purchaser's obligation to
purchase Shares set forth in clauses (i) or (iii) of the first paragraph of
Annex A or paragraph (a) of Annex A shall not be satisfied or waived, until
such time as such conditions are satisfied or waived but not beyond 60 days
after the date of the commencement of the Offer or (II) the Company or any
person that (directly or indirectly) is more than 10% owned by, or
controlled by or is under common control with, the Company does not operate
in a manner consistent with the provisions of the Communications Act of
1934, as amended (the "Communications Act"), applicable to a "Xxxx
Operating Company" or its "affiliates" that does not have authority to
provide non-incidental interLATA telecommunications services originating in
any state in which the Company or any such person does business as of such
date (provided, however, that this extension right may not be exercised by
Parent or Purchaser if the failure of the Company or any such person to be
so operating results from any failure by Parent or Purchaser to perform any
of its obligations under this Agreement), until 15 days after the
previously-scheduled expiration date; provided, however, that Purchaser
may, without the consent of the Company, extend the Offer for not more than
an additional 60 days beyond such initial 60-day extension period if (a)
the Offer shall not have been consummated as a direct result of the failure
of the conditions set forth in clauses (i) or (iii) of the first paragraph
of Annex A to have been satisfied, (b) with respect to the condition set
forth in such clause (i), Purchaser is endeavoring in good faith to satisfy
such conditions and (c) the reason that such conditions have not been
satisfied is not due to a breach by Purchaser of its obligations under this
Agreement, and (ii) extend the Offer for any period required by any rule,
regulation, interpretation or positions of the Securities and Exchange
Commission (the "SEC") or the staff thereof applicable to the Offer but not
beyond 60 days after the date of the commencement of the Offer. The terms
"affiliate," "own" and "Xxxx Operating Company," have the meanings set
forth in Sections 3(1) and 3(4), respectively, of the Communications Act.
In addition, Purchaser shall at the request of the Company extend the Offer
from time to time if at any scheduled expiration date of the Offer any of
the conditions to Purchaser's obligation to purchase Shares shall not be
satisfied; provided, however, that Purchaser shall not be required to
extend the Offer beyond 60 days after the date of the commencement of the
Offer; provided further, however, that Purchaser shall, at the Company's
request, extend the Offer for not more than an additional 60 days beyond
such initial 60-day extension period if (a) the Offer shall not have been
consummated as a direct result of the failure of the condition set forth in
clause (i) of the first paragraph of Annex A to have been satisfied, (b)
the Company is cooperating in good faith to enable Purchaser to satisfy
such condition and (c) the reason that such condition has not been
satisfied is not due to a breach by the Company of its obligations under
this Agreement. On the terms and subject to the conditions of the Offer
and this Agreement, Purchaser shall, and Parent shall cause Purchaser to,
pay for all Shares validly tendered and not withdrawn pursuant to the Offer
that Purchaser becomes obligated to purchase pursuant to the Offer as soon
as practicable after the expiration of the Offer; provided, however, that
if, immediately prior to the expiration date of the Offer (as it may be
extended), the Shares tendered and not withdrawn pursuant to the Offer
equal less than 90% of the outstanding Shares, Purchaser may (x) extend the
Offer for a period not to exceed five business days, notwithstanding that
all conditions to the Offer are satisfied as of such expiration date of the
Offer, provided that upon such extension Parent and Purchaser shall be
deemed to have waived all of the conditions set forth in Annex A other than
the Minimum Condition and (y) amend the Offer to include a "subsequent
offering period" not to exceed ten business days to the extent permitted
under Rule 14d-11 under the Exchange Act, if available. The date on which
Purchaser shall purchase and pay for Shares tendered pursuant to the Offer
shall hereinafter be referred to as the "Purchase Date."
(b) As soon as practicable on the date the Offer is commenced,
Parent and Purchaser shall file with the SEC a Tender Offer Statement on
Schedule TO with respect to the Offer (together with all amendments and
supplements thereto and including the exhibits thereto, the "Schedule TO").
The Schedule TO will include, as exhibits, the Offer to Purchase and a form
of letter of transmittal and summary advertisement (collectively, together
with any amendments and supplements thereto, the "Offer Documents").
Parent and Purchaser jointly and severally represent and warrant to the
Company that the Offer Documents will comply in all material respects with
the provisions of applicable federal securities laws and, on the date filed
with the SEC and on the date first published, sent or given to the
Company's stockholders, 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 Parent or Purchaser with respect to
information furnished by the Company for inclusion in the Offer Documents.
The Company represents and warrants to Parent and Purchaser that the
information supplied in writing by the Company for inclusion in the Offer
Documents will 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. Each of Parent and Purchaser agrees
to take all steps necessary to cause the Offer Documents to be filed with
the SEC and to be disseminated to holders of the Shares, in each case as
and to the extent required by applicable federal securities laws. Each of
Parent and Purchaser, on the one hand, and the Company, on the other hand,
agrees to promptly correct any information provided by it for use in the
Offer Documents if and to the extent that it shall have become false and
misleading in any material respect and Parent and Purchaser further agree
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 the Shares, in
each case as and to the extent required by applicable federal securities
laws. The Company and its outside counsel shall be given the opportunity
to review the Schedule TO before it is filed with the SEC. In addition,
Parent and Purchaser will provide the Company and its outside counsel with
any comments, whether written or oral, Parent, Purchaser or their outside
counsel may receive from time to time from the SEC or its staff with
respect to the Offer Documents promptly after the receipt of such comments.
Section 1.02 Company Actions.
(a) The Company hereby approves of and consents to the Offer and
represents that the Board of Directors of the Company (the "Company
Board"), at a meeting duly called and held, has (i) unanimously determined
that each of the Agreement, the Offer and the Merger (as defined in Section
1.04) are advisable and are fair to and in the best interests of the
stockholders of the Company, (ii) unanimously approved this Agreement and
the transactions contemplated hereby, including the Offer, the acquisition
of Shares pursuant to the Offer and the Merger (collectively, the
"Transactions"), and (iii) resolved to recommend that the stockholders of
the Company accept the Offer, approve the Merger and approve and adopt this
Agreement; provided, that such recommendation may be withdrawn, modified or
amended only in accordance with the provisions of Section 4.02. The
Company has been advised by each of its directors and by each executive
officer of the Company who as of the date hereof is actually aware (to the
knowledge of the Company) of the Transactions that each such person either
intends to tender pursuant to the Offer all Shares owned by such person or
vote all Shares owned by such person in favor of the Merger.
(b) Concurrently with the commencement of the Offer, the Company
shall file with the SEC a Solicitation/Recommendation Statement on Schedule
14D-9 (together with all amendments and supplements thereto and including
the exhibits thereto, the "Schedule 14D-9") which shall, subject to the
provisions of Section 4.02, contain the recommendation referred to in
clause (iii) of Section 1.02(a) hereof. The Company represents and
warrants to Parent and Purchaser that the Schedule 14D-9 will comply in all
material respects with the provisions of applicable federal securities laws
and, on the date filed with the SEC and on the date first published, sent
or given to the Company's stockholders, 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 furnished by Parent or Purchaser for inclusion in the Schedule
14D-9. Parent and Purchaser jointly and severally represent and warrant to
the Company that the information supplied in writing by Parent and
Purchaser for inclusion in the Schedule 14D-9 will not contain any untrue
statement of 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 such statement was made, not
misleading. The Company further agrees to take all steps necessary to
cause the Schedule 14D-9 to be filed with the SEC and to be disseminated to
holders of the Shares, in each case as and to the extent required by
applicable federal securities laws. Each of the Company, on the one hand,
and Parent and Purchaser, on the other hand, agrees promptly to correct any
information provided by it for use in the Schedule 14D-9 if and to the
extent that it shall have become false and misleading in any material
respect and the Company further agrees to take all steps necessary to cause
the Schedule 14D-9 as so corrected to be filed with the SEC and to be
disseminated to holders of the Shares, in each case as and to the extent
required by applicable federal securities laws. Parent and its outside
counsel shall be given the opportunity to review the Schedule 14D-9 before
it is filed with the SEC. In addition, the Company will provide Parent,
Purchaser and their outside counsel with any comments, whether written or
oral, that the Company or its outside counsel may receive from time to time
from the SEC or its staff with respect to the Schedule 14D-9 promptly after
the receipt of such comments.
(c) In connection with the Offer, the Company will promptly
furnish or cause to be furnished to Purchaser mailing labels, security
position listings and any available listing or computer file containing the
names and addresses of all record holders of the Shares as of a recent
date, and shall furnish Purchaser with such additional information
(including, but not limited to, updated lists of holders of the Shares and
their addresses, mailing labels and lists of security positions) and
assistance as Purchaser or its agents may reasonably request in connection
with the Offer, including for communicating the Offer to the record and
beneficial holders of the Shares. Except for such steps as are necessary
to consummate the Offer, Parent and Purchaser shall hold in confidence the
information contained in any of such labels and lists and the additional
information referred to in the preceding sentence, will use such
information only in connection with the Offer, and, if this Agreement is
terminated, will upon request of the Company deliver or cause to be
delivered to the Company all copies of such information then in its
possession or the possession of its agents or representatives.
Section 1.03 Directors.
(a) Promptly upon the purchase of and payment for any Shares by
Parent or Purchaser pursuant to the Offer, Parent shall be entitled to
designate such number of directors, rounded up to the nearest whole number,
on the Company Board as is equal to the product of the total number of
directors on the Company Board (giving effect to the directors designated
by Parent pursuant to this sentence) multiplied by the percentage that the
number of Shares so accepted for payment bears to the total number of
Shares then outstanding. In furtherance thereof, the Company shall, upon
request of Purchaser, promptly either increase the size of the Company
Board or secure the resignations of such number of its incumbent directors,
or both, as is necessary to enable Parent's designees to be so elected to
the Company Board, and shall cause Parent's designees to be so elected. At
such time, the Company shall also cause persons designated by Parent to
have proportionate (but not less than majority) representation on (i) each
committee of the Company Board, (ii) each board of directors (or similar
body) of each subsidiary (as hereinafter defined) of the Company and (iii)
each committee (or similar body) of each such board. The provisions of
this Section 1.03(a) are in addition to and shall not limit any rights
which Purchaser may have as a holder or beneficial owner of Shares as a
matter of applicable law with respect to the election of directors or
otherwise.
(b) The Company shall promptly take all actions required
pursuant to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder in order to fulfill its obligations under this Section 1.03,
including mailing to stockholders (as part of the Schedule 14D-9 or
otherwise) the information required by such Section 14(f) and Rule 14f-1 as
is necessary to enable Parent's designees to be elected to the Company
Board (provided that Purchaser shall have provided to the Company on a
timely basis all information required to be included with respect to
Purchaser's designees). In the event that Parent's designees are elected
to the Company Board, until the Effective Time (as hereinafter defined),
the Company Board shall have at least two directors who are directors on
the date hereof (the "Original Directors"); provided that, in such event,
if the number of Original Directors shall be reduced below two for any
reason whatsoever, any remaining Original Directors (or Original Director,
if there be only one remaining) shall be entitled to designate persons to
fill such vacancies who shall be deemed to be Original Directors for
purposes of this Agreement or, if no Original Director then remains, the
other directors shall designate two persons to fill such vacancies who
shall not be stockholders, affiliates or associates of Parent or Purchaser,
and such persons shall be deemed to be Original Directors for purposes of
this Agreement. Notwithstanding anything in this Agreement to the
contrary, in the event that Parent's designees are elected to the Company
Board prior to the Effective Time, the affirmative vote of a majority of
the Original Directors shall be required for the Company to (i) amend or
terminate this Agreement or agree or consent to any amendment or
termination of this Agreement, (ii) exercise or waive any of the Company's
rights, benefits or remedies hereunder, (iii) extend the time for
performance of Parent's and Purchaser's respective obligations hereunder or
(iv) take any other action by the Company Board under or in connection with
this Agreement other than the actions provided for in Section 1.08 hereof
which shall not require the approval of the Original Directors.
Section 1.04 The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and, in accordance with the
Delaware General Corporation Law (the "DGCL"), the Company and Purchaser
shall consummate a merger (the "Merger") pursuant to which (a) Purchaser
shall be merged with and into the Company and the separate corporate
existence of Purchaser shall thereupon cease, (b) the Company shall be the
successor or surviving corporation in the Merger (sometimes hereinafter
referred to as the "Surviving Corporation") and shall continue to be
governed by the laws of the State of Delaware, and (c) the separate
corporate existence of the Company with all its rights, privileges,
immunities, powers and franchises shall continue unaffected by the Merger,
except as set forth in this Section 1.04. Pursuant to the Merger, (x) the
Certificate of Incorporation of the Company as in effect immediately prior
to the Effective Time (as hereinafter defined) shall be amended to read in
its entirety like the certificate of incorporation of Purchaser, provided
that Article First of the certificate of incorporation of Purchaser shall
be amended to read in its entirety as follows: "FIRST: The name of the
Corporation is "Sterling Commerce, Inc.," and, as so amended, shall be the
certificate of incorporation of the Surviving Corporation until thereafter
amended as provided by law and such certificate of incorporation, and (y)
the by-laws of Purchaser, as in effect immediately prior to the Effective
Time, shall be the by-laws of the Surviving Corporation until thereafter
amended as provided by law, by such certificate of incorporation or by such
by-laws. The Merger shall have the effects set forth in Section 259 of the
DGCL.
Section 1.05 Closing. The closing of the Merger (the
"Closing") shall take place at 10:00 a.m. on a date to be specified by the
parties (the "Closing Date"), which shall be no later than the second
business day after satisfaction or waiver of all of the conditions set
forth in Article VI, unless another time or date is agreed to by the
parties hereto. The Closing will be held at the offices of Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP, Four Times Square, New York, New York, 10036 or
at such other location as is agreed to by the parties.
Section 1.06 Effective Time. Subject to the provisions of this
Agreement, as soon as practicable on the Closing Date, the parties shall
file a certificate of merger (the "Certificate of Merger") executed in
accordance with the relevant provisions of the DGCL and shall make all
other filings or recordings required under the DGCL to effectuate the
Merger. The Merger shall become effective at such time as the Certificate
of Merger is duly filed with the Secretary of State of the State of
Delaware or at such other subsequent date or time as is agreed upon by the
parties and specified in the Certificate of Merger, such time being
referred to herein as the "Effective Time."
Section 1.07 Directors and Officers. The directors of
Purchaser and the officers of the Company at the Effective Time shall, from
and after the Effective Time, be the directors and officers, respectively,
of the Surviving Corporation until their successors shall have been duly
elected or appointed or qualified or until their earlier death, resignation
or removal in accordance with the certificate of incorporation and by-laws
of the Surviving Corporation.
Section 1.08 Stockholders' Meeting.
(a) If required by applicable law in order to consummate the
Merger, the Company, acting through its Board of Directors, shall, in
accordance with applicable law:
(i) duly call, give notice of, convene and hold a special
meeting of its stockholders (the "Company Stockholders Meeting") as
promptly as practicable following the acceptance for payment and
purchase of Shares by Purchaser pursuant to the Offer for the purpose
of considering and taking action upon the approval of the Merger and
the approval and adoption of this Agreement;
(ii) prepare and file with the SEC a preliminary proxy or
information statement relating to the Merger and this Agreement and
obtain and furnish the information required to be included by the SEC
in the Proxy Statement (as hereinafter defined) and, after
consultation with Parent, respond promptly to any comments made by the
SEC with respect to the preliminary proxy or information statement and
cause a definitive proxy or information statement, including any
amendment or supplement thereto (the "Proxy Statement"), to be mailed
to its stockholders at the earliest practicable date, provided that no
amendment or supplement to the Proxy Statement will be made by the
Company without consultation with Parent and its outside counsel;
(iii) include in the Proxy Statement the recommendation
of the Company Board that stockholders of the Company vote in favor of
the approval of the Merger and the approval and adoption of this
Agreement; and
(iv) use its reasonable best efforts to solicit from holders
of Shares proxies in favor of the Merger and shall take all other
action reasonably necessary or advisable to secure any vote or consent
of stockholders required by Delaware law to effect the Merger.
(b) Parent will provide the Company with the information
concerning Parent and Purchaser required to be included in the Proxy
Statement. Parent shall vote, or cause to be voted, all of the Shares then
owned by it, Purchaser or any of its other subsidiaries or affiliates
controlled by Parent in favor of the approval of the Merger and the
approval and adoption of this Agreement.
Section 1.09 Merger Without Meeting of Stockholders.
Notwithstanding Section 1.08, in the event that Parent, Purchaser and any
other subsidiaries of Parent shall acquire in the aggregate a number of the
outstanding shares of each class of capital stock of the Company, pursuant
to the Offer or otherwise, sufficient to enable Purchaser or the Company to
cause the Merger to become effective without a meeting of stockholders of
the Company, the parties hereto shall, subject to Article IV, take all
necessary and appropriate action to cause the Merger to become effective as
soon as practicable after such acquisition, without a meeting of
stockholders of the Company, in accordance with Section 253 of the DGCL.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
Section 2.01 Effect on Capital Stock. As of the Effective
Time, by virtue of the Merger and without any further action on the part of
the holders of any Shares or holders of common stock, par value $1.00 per
share, of Purchaser (the "Purchaser Common Stock"):
(a) Capital Stock of Purchaser. Each issued and outstanding
share of Purchaser Common Stock shall be converted into and become one
fully paid and nonassessable share of common stock of the Surviving
Corporation.
(b) Cancellation of Treasury Stock. Each Share of Company
Common Stock held in the Company's treasury or by any of the Company's
subsidiaries, Parent or any of Parent's subsidiaries shall automatically be
cancelled and retired and shall cease to exist, and no consideration shall
be delivered in exchange therefor.
(c) Conversion of Company Common Stock. Each issued and
outstanding Share (other than Shares to be cancelled in accordance with
Section 2.01(b) and other than any Dissenting Shares (as hereinafter
defined)) shall be converted into the right to receive the Offer Price,
payable to the holder thereof, without interest (the "Merger
Consideration"), upon surrender of the certificate formerly representing
such Share in the manner provided in Section 2.02. As of the Effective
Time, all such Shares shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to exist, and each
holder of a certificate representing any such Shares shall cease to have
any rights with respect thereto, except the right to receive the Merger
Consideration therefor, without interest, upon the surrender of such
certificate in accordance with Section 2.02.
Section 2.02 Exchange of Certificates.
(a) Exchange Agent. Parent shall designate a bank or trust
company reasonably satisfactory to the Company to act as agent for the
holders of the Shares in connection with the Merger (the "Exchange Agent")
to receive in trust the funds to which holders of the Shares shall become
entitled pursuant to Section 2.01(c). At the Effective Time, Parent or
Purchaser shall deposit, or cause to be deposited, with the Exchange Agent
for the benefit of holders of Shares the aggregate consideration to which
such holders shall be entitled at the Effective Time pursuant to Section
2.01(c). Such funds shall be invested as directed by Parent or the
Surviving Corporation pending payment thereof by the Exchange Agent to
holders of the Shares.
(b) Exchange Procedures. As soon as reasonably practicable
after the Effective Time, Parent shall cause the Exchange Agent to mail to
each holder of record of a certificate or certificates, which immediately
prior to the Effective Time represented outstanding Shares (the
"Certificates"), whose Shares were converted pursuant to Section 2.01 into
the right to receive the Merger Consideration, (i) a letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and
title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall be in such form and have such
other provisions not inconsistent with this Agreement as Parent and the
Company may reasonably specify) and (ii) instructions for use in
surrendering the Certificates in exchange for payment of the Merger
Consideration. Upon surrender of a Certificate for cancellation to the
Exchange Agent and such other documents as may reasonably be required by
the Exchange Agent, together with such letter of transmittal, duly
executed, the holder of such Certificate shall be entitled to receive in
exchange therefor the Merger Consideration, without interest, for each
Share formerly represented by such Certificate, and the Certificate so
surrendered shall forthwith be cancelled. If payment of the Merger
Consideration is to be made to a person other than the person in whose name
the surrendered Certificate is registered, it shall be a condition of
payment that the Certificate so surrendered shall be properly endorsed or
shall be otherwise in proper form for transfer and that the person
requesting such payment shall have paid any transfer and other taxes
required by reason of the payment of the Merger Consideration to a person
other than the registered holder of the Certificate surrendered or shall
have established to the satisfaction of the Surviving Corporation that such
tax either has been paid or is not applicable. Until surrendered as
contemplated by this Section 2.02, each Certificate shall be deemed at any
time after the Effective Time to represent only the right to receive the
Merger Consideration in cash as contemplated by this Section 2.02.
(c) Transfer Books; No Further Ownership Rights in the Shares.
At the Effective Time, the stock transfer books of the Company shall be
closed, and thereafter there shall be no further registration of transfers
of the Shares on the records of the Company. From and after the Effective
Time, the holders of Certificates evidencing ownership of the Shares
outstanding immediately prior to the Effective Time shall cease to have any
rights with respect to such Shares, except as otherwise provided for herein
or by applicable law. If, after the Effective Time, Certificates are
presented to the Surviving Corporation for any reason, they shall be
cancelled and exchanged as provided in this Article II.
(d) Termination of Fund; No Liability. At any time following
six months after the Effective Time, the Surviving Corporation shall be
entitled to require the Exchange Agent to deliver to it any funds
(including any earnings received with respect thereto) which had been made
available to the Exchange Agent and which have not been disbursed to
holders of Certificates, and thereafter such holders shall be entitled to
look only to the Surviving Corporation (subject to abandoned property,
escheat or other similar laws) and only as general creditors thereof with
respect to the Merger Consideration payable upon due surrender of their
Certificates, without any interest thereon. Notwithstanding the foregoing,
neither the Surviving Corporation nor the Exchange Agent shall be liable to
any holder of a Certificate for Merger Consideration delivered to a public
official pursuant to any applicable abandoned property, escheat or similar
law.
(e) Withholding of Tax. Purchaser shall be entitled to deduct
and withhold from the Merger Consideration otherwise payable pursuant to
this Agreement to any former holder of Shares such amount as Purchaser (or
any affiliate thereof) or the Exchange Agent is required to deduct and
withhold pursuant to applicable rules under the Internal Revenue Code of
1986, as amended (the "Code"), or any provision of state, local or foreign
law. To the extent that amounts are so withheld by Purchaser, such
withheld amounts shall be treated for all purposes of this Agreement as
having been paid to the former holder of Shares in respect of which such
withholding was made.
Section 2.03 Dissenting Shares.
(a) Notwithstanding any provision of this Agreement to the
contrary, any Shares as to which the holder thereof has demanded appraisal
with respect to the Merger in accordance with Section 262 of the DGCL and
as of the Effective Time has neither effectively withdrawn nor lost his
right to such appraisal (the "Dissenting Shares") shall not be converted
into or represent a right to receive cash pursuant to Section 2.01, but the
holder thereof shall be entitled to only such rights as are granted by the
DGCL.
(b) Notwithstanding the provisions of Section 2.03(a), if any
holder of Shares who demands appraisal of his Shares under the DGCL
effectively withdraws or loses (through failure to perfect or otherwise)
such holder's right to appraisal, then as of the Effective Time or the
occurrence of such event, whichever later occurs, such holder's Shares
shall automatically be converted into and represent only the right to
receive the Merger Consideration as provided in Section 2.01(c), without
interest, upon surrender of the Certificate or Certificates representing
such Shares pursuant to Section 2.02.
(c) The Company shall give Parent (i) prompt notice of any
written demands for appraisal or payment of the fair value of any Shares,
attempted withdrawals of such demands, and any other instruments served on
the Company pursuant to the DGCL received by the Company and (ii) the
opportunity to direct all negotiations and proceedings with respect to
demands for appraisal under the DGCL. Except with the prior written
consent of Parent, the Company shall not voluntarily make any payment with
respect to any demands for appraisal, settle or offer to settle any such
demands.
Section 2.04 Company Stock Option Plans.
(a) Parent and the Company shall take all actions necessary to
provide that each outstanding option to purchase shares of Company Common
Stock (a "Company Stock Option") granted under any Company Stock Option
Plan (as defined herein) which is outstanding immediately prior to the
consummation of the Offer, whether or not such Company Stock Option is
vested and exercisable immediately prior to the consummation of the Offer,
shall be canceled, as of the day immediately following the consummation of
the Offer and the holder thereof shall be entitled to receive an amount in
cash payable at the time of cancellation equal to the excess of (i) the
product of (A) the excess, if any, of (x) the Offer Price over (y) the per
share exercise price of such Company Stock Option multiplied by (B) the
number of shares of Company Common Stock subject to such Company Stock
Option over (ii) any income tax or employment tax withholding required
under the Code.
(b) The Company and Parent agree that each of the Company Stock
Option Plans shall be amended, to the extent necessary, to reflect the
transactions contemplated by this Agreement. As soon as practicable after
the consummation of the Offer, Parent shall deliver to the holders of
Company Stock Options appropriate notices setting forth such holders'
rights set forth herein.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 Representations and Warranties of the Company.
Except as set forth on the Disclosure Schedule delivered by the Company to
Parent prior to the execution of this Agreement (the "Company Disclosure
Schedule") (each section of which qualifies the correspondingly numbered
representation and warranty or covenant), the Company represents and
warrants to Parent as follows:
(a) Organization, Standing and Corporate Power. Each of the
Company and its subsidiaries is a corporation or other legal entity duly
organized, validly existing and in good standing (with respect to
jurisdictions which recognize such concept) under the laws of the
jurisdiction in which it is organized and has the requisite corporate or
other power, as the case may be, and authority to carry on its business as
now being conducted, except, as to subsidiaries, for those jurisdictions
where the failure to be so organized, existing or in good standing
individually or in the aggregate would not have, or reasonably be expected
to have, a material adverse effect (as defined in Section 8.03) on the
Company. Each of the Company and its subsidiaries is duly qualified or
licensed to do business and is in good standing (with respect to
jurisdictions which recognize such concept) in each jurisdiction in which
the nature of its business or the ownership, leasing or operation of its
properties makes such qualification or licensing necessary, except for
those jurisdictions where the failure to be so qualified or licensed or to
be in good standing individually or in the aggregate would not have, or
reasonably be expected to have, a material adverse effect on the Company.
The Company has made available to Parent prior to the execution of this
Agreement complete and correct copies of its certificate of incorporation
and by-laws, each as amended to date.
(b) Subsidiaries. Exhibit 21.1 to the Company's Annual Report
on Form 10-K for the fiscal year ended September 30, 1999 includes all the
subsidiaries of the Company. All the outstanding shares of capital stock
of, or other equity interests in, each subsidiary (i) have been duly
authorized, validly issued and are fully paid and nonassessable, (ii)
except for director qualifying shares, are owned directly or indirectly by
the Company, free and clear of all pledges, claims, liens, charges,
encumbrances and security interests of any kind or nature whatsoever
(collectively, "Liens") and (iii) are free of any other restriction
(including any restriction on the right to vote, sell or otherwise dispose
of such capital stock or other ownership interests).
(c) Capital Structure. The authorized capital stock of the
Company consists of (i) 300,000,000 shares of Company Common Stock, par
value $.01 per share, and (ii) 50,000,000 shares of preferred stock, par
value $.01 per share ("Company Authorized Preferred Stock"), of which
3,000,000 shares have been designated as Company Junior Preferred Stock and
reserved for issuance pursuant to the Company Rights Plan. "Company
Preferred Stock" means Company Authorized Preferred Stock that is issued
and outstanding from time to time. At the close of business on January 31,
2000: (i) 80,040,334 shares of Company Common Stock were issued and
outstanding; (ii) 16,135,944 shares of Company Common Stock were held by
the Company in its treasury or by its subsidiaries (such shares, "Company
Treasury Stock"); (iii) no shares of Company Preferred Stock were issued or
outstanding; and (iv) no shares of Company Preferred Stock were held by the
Company in its treasury or by its subsidiaries. At the close of business
on January 31, 2000: (i) 20,903,047 shares of Company Common Stock were
reserved for issuance pursuant to the Sterling Commerce, Inc. Amended and
Restated 1996 Stock Option Plan, the Sterling Commerce, Inc. 1999 Stock
Option Plan, the XcelleNet, Inc. 1987 Stock Option Plan, as amended, the
XcelleNet, Inc. 1996 Long Term Incentive Plan, and the XcelleNet, Inc.
Stock Option Plan for Outside Directors (collectively, the "Company Stock
Option Plans"), of which 17,714,490 shares were subject to outstanding
Company Stock Options; and (ii) 4,000,000 shares of Company Common Stock
were reserved for issuance pursuant to the Sterling Commerce, Inc. Employee
Stock Purchase Plan, of which 280,661 have been purchased and issued as of
January 31, 2000. Section 3.01(c) of the Company Disclosure Schedule sets
forth information regarding the current exercise price, date of grant,
number granted and vesting schedule of Company Stock Options for each
holder thereof. All outstanding shares of capital stock of the Company
are, and all shares which may be issued will be, when issued, duly
authorized, validly issued, fully paid and nonassessable and not subject to
preemptive rights. Except as set forth in this Section 3.01(c), except for
changes since January 31, 2000 resulting from the issuance of shares of
Company Common Stock or Company Stock Options pursuant to the Company Stock
Option Plans and except as permitted by Section 4.01(b), (x) there are not
issued, reserved for issuance or outstanding (A) any shares of capital
stock or other voting securities of the Company, (B) any securities of the
Company convertible into or exchangeable or exercisable for shares of
capital stock or voting securities of the Company and (C) except for the
issuance of Company capital stock pursuant to the Company Rights Plan, any
warrants, calls, options, subscriptions or other rights, agreements or
commitments to acquire from the Company or any of its subsidiaries, or
obligation of the Company or any of its subsidiaries to issue, any capital
stock, voting securities or securities convertible into or exchangeable or
exercisable for capital stock or voting securities of the Company, and
(y) there are no outstanding obligations of the Company or any of its
subsidiaries to repurchase, redeem or otherwise acquire any such securities
or to issue, deliver or sell, or cause to be issued, delivered or sold, any
such securities. Neither the Company nor any of its subsidiaries is a
party to any voting agreement with respect to the voting of any such
securities. There are no outstanding (A) securities of the Company or any
of its subsidiaries convertible into or exchangeable or exercisable for
shares of capital stock or other voting securities or ownership interests
in any of its subsidiaries, (B) warrants, calls, options, subscriptions or
other rights, agreements or commitments to acquire from the Company or any
of its subsidiaries, or obligation of the Company or any of its
subsidiaries to issue, any capital stock, voting securities or other
ownership interests in, or any securities convertible into or exchangeable
or exercisable for any capital stock, voting securities or ownership
interests in, any of its subsidiaries or (C) obligations of the Company or
any of its subsidiaries to repurchase, redeem or otherwise acquire any such
outstanding securities of the Company subsidiaries or to issue, deliver or
sell, or cause to be issued, delivered or sold, any such securities. Other
than the Company subsidiaries, the Company does not directly or indirectly
beneficially own any securities or other beneficial ownership interests in
any other entity. To the knowledge of the Company, other than as set forth
in the Company SEC Documents (defined herein) as of the date hereof, no
person or "group" "beneficially owns" 5% or more of the Company's
outstanding voting securities, with the terms "beneficially owns" and
"group" having the meanings ascribed to them under Rule 13d-3 and Rule
13d-5 under the Exchange Act.
(d) Authority; Noncontravention. The Company has all requisite
corporate power and authority to execute, deliver and perform its
obligations under this Agreement and, subject, in the case of the Merger,
to the Company Stockholder Approval (as defined in Section 3.01(l)), to
consummate the Transactions. The execution, delivery and performance of
this Agreement by the Company and the consummation by the Company of the
Transactions have been duly authorized by all necessary corporate action on
the part of the Company, subject, in the case of the Merger, to the Company
Stockholder Approval. This Agreement has been duly executed and delivered
by the Company and, assuming the due authorization, execution and delivery
by Parent and Purchaser, constitutes a legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its
terms. The execution and delivery of this Agreement does not, and the
consummation of the Transactions and compliance with the provisions of this
Agreement will not, conflict with, or result in any violation of, or
default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any
obligation or loss of a benefit under, or result in the creation of any
Lien upon any of the properties or assets of the Company or any of its
subsidiaries under, (i) the certificate of incorporation or by-laws of the
Company or the comparable organizational documents of any of its
subsidiaries, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession,
franchise, license or similar authorization applicable to the Company or
any of its subsidiaries or their respective properties or assets or (iii)
subject to the governmental filings and other matters referred to in the
following sentence, any judgment, order, decree, statute, law, ordinance,
rule or regulation applicable to the Company or any of its subsidiaries or
their respective properties or assets, other than, in the case of clauses
(ii) and (iii), any such conflicts, violations, defaults, rights, losses or
Liens that individually or in the aggregate would not (x) have, or
reasonably be expected to have, a material adverse effect on the Company or
(y) reasonably be expected to materially impair or delay the ability of the
Company to perform its obligations under this Agreement. No consent,
approval, order or authorization of, action by, or in respect of, or
registration, declaration or filing with, any federal, state, local or
foreign government, any court, administrative, regulatory or other
governmental agency, commission or authority or any non-governmental U.S.
or foreign regulatory agency, commission or authority or any arbitral
tribunal (each, a "Governmental Entity") or any other person is required by
the Company or any of its subsidiaries in connection with the execution and
delivery of this Agreement by the Company or the consummation by the
Company of the Transactions, except for: (1) the filing with the SEC of
(A) the Schedule 14D-9 and, if applicable, the Proxy Statement, and (B)
such reports under Section 13(a), 13(d), 15(d) or 16(a) of the Exchange
Act, as may be required in connection with this Agreement and the
Transactions; (2) the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware and appropriate documents with
the relevant authorities of other states in which the Company is qualified
to do business and such filings with Governmental Entities to satisfy the
applicable requirements of state securities or "blue sky" laws; (3) the
filing of a pre-merger notification and report form under the Xxxx-Xxxxx-
Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and
the expiration or termination of the waiting period thereunder and the
filing of comparable pre-merger notifications in non-U.S. jurisdictions, if
applicable, and the expiration of any waiting periods thereunder; and (4)
such consents, approvals, orders or authorizations the failure of which to
be made or obtained individually or in the aggregate would not (x) have, or
reasonably be expected to have, a material adverse effect on the Company or
(y) reasonably be expected to materially impair or delay the ability of the
Company to perform its obligations under this Agreement.
(e) Reports; Financial Statements. The Company has filed all
required reports, schedules, forms, statements and other documents
(including exhibits and all other information incorporated therein) with
the SEC since September 30, 1996 (the "Company SEC Documents"). As of
their respective dates, the Company SEC Documents complied in all material
respects with the requirements of the Securities Act of 1933, as amended
(the "Securities Act"), or the Exchange Act, as the case may be, and the
rules and regulations of the SEC promulgated thereunder applicable to such
Company SEC Documents, and none of the Company SEC Documents when filed (as
supplemented by subsequently filed Company SEC Documents) contained any
untrue statement of a material fact or omitted to state a 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. The financial statements of the Company included in the
Company SEC Documents comply as to form, as of their respective dates of
filing with the SEC, in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with generally accepted
accounting principles (except, in the case of unaudited statements, as
permitted by Form 10-Q of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto) and
fairly present in all material respects the consolidated financial position
of the Company and its consolidated subsidiaries as of the dates thereof
and the consolidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
recurring year-end audit adjustments that are not material). Except (A) as
reflected in such financial statements or in the notes thereto, (B) for
liabilities incurred in connection with this Agreement or the Transactions
or (C) for liabilities incurred in the ordinary course of business since
the date of the most recent financial statements included in the Company
SEC Documents, neither the Company nor any of its subsidiaries has any
liabilities of any kind whatsoever, whether accrued, contingent, absolute,
due, to become due, determined, determinable or otherwise which would have,
or would reasonably be expected to have, individually or in the aggregate,
a material adverse effect on the Company.
(f) Information Supplied. In addition to the representations
and warranties of the Company contained in Sections 1.01(b) and 1.02(b),
the Proxy Statement, if any, will, at the date it is filed with the SEC, at
any time that it is amended or supplemented, at the time it is first mailed
to the Company's stockholders and at the time of the Company Stockholders
Meeting, 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 or warranty is
made by the Company with respect to information that Parent or Purchaser
supplied to them for inclusion therein or for incorporation by reference
therein. The Proxy Statement will comply as to form in all material
respects with the requirements of the Exchange Act and the rules and
regulations thereunder.
(g) Absence of Certain Changes or Events. Except for
liabilities incurred in connection with this Agreement or the Transactions,
since September 30, 1999, the Company and its subsidiaries have conducted
their business only in the ordinary course, and there has not been (1) any
material adverse change in the Company, (2) any declaration, setting aside
or payment of any dividend or other distribution (whether in cash, stock or
property) with respect to any of the Company's or its non wholly-owned
subsidiaries' capital stock, (3) any split, combination or reclassification
of any of the Company's or its subsidiaries' capital stock or any
redemption or other acquisition by the Company or any of its subsidiaries
of any shares of its capital stock or any issuance or the authorization of
any issuance of any other securities in respect of, in lieu of or in
substitution for shares of the Company's or its subsidiaries' capital
stock, except for issuances of Company Common Stock under the Company Stock
Option Plans, (4) (A) any granting by the Company or any of its
subsidiaries to any director, officer or employee of the Company of any
increase in compensation, bonus or other benefits, except for normal
increases in the ordinary course of business or in connection with the
hiring or promotion of any such person or increases required under any
employment agreements in effect as of the date of the most recent audited
financial statements included in the Company SEC Documents filed and
publicly available prior to the date of this Agreement (as amended to the
date of this Agreement, the "Company Filed SEC Documents"), (B) any
granting by the Company or any of its subsidiaries to any such director,
officer or employee of any increase in severance or termination pay, except
in the ordinary course of business or in connection with the hiring or
promotion of any such person, or (C) any entry by the Company or any of its
subsidiaries into, or any amendment of, any employment, deferred
compensation, consulting, severance, termination or indemnification
agreement with any such director, officer or employee, other than in the
ordinary course of business or in connection with the hiring or promotion
of any such person, (5) except insofar as may be required by a change in
generally accepted accounting principles, any change in accounting methods,
principles or practices by the Company, (6) any Tax (as hereinafter
defined) election that individually or in the aggregate would reasonably be
expected to have a material effect on the Company or any of its Tax
attributes or any settlement or compromise of any material Tax liability,
(7) any amendment to any term of any outstanding security of the Company or
any of its subsidiaries that would materially increase the obligations of
the Company or such subsidiaries under such security, (8) any entry into
any agreement, commitment or transaction by the Company or any of its
subsidiaries which is material to the Company and its subsidiaries taken as
a whole, except for agreements, commitments or transactions entered into in
the ordinary course of business or (9) any agreement to do any of the
foregoing.
(h) Compliance with Applicable Laws; Litigation. The Company
and its subsidiaries hold all permits, licenses, variances, exemptions,
orders, registrations and approvals of all Governmental Entities which are
required for the operation of the businesses of the Company and its
subsidiaries as currently conducted (collectively, the "Company Permits"),
except where the failure to have any such Company Permits individually or
in the aggregate would not have, or reasonably be expected to have, a
material adverse effect on the Company. The Company and its subsidiaries
are in compliance with the terms of the Company Permits and all applicable
statutes, laws, ordinances, rules and regulations, except where the failure
so to comply individually or in the aggregate would not have, or reasonably
be expected to have, a material adverse effect on the Company. No action,
demand, injunction, decree, requirement or investigation by any
Governmental Entity and no suit, action or proceeding by any person, in
each case with respect to the Company or any of its subsidiaries or any of
their respective properties is pending or, to the knowledge (as defined in
Section 8.03) of the Company, threatened, other than, in each case, those
the outcome of which individually or in the aggregate would not (i) have,
or reasonably be expected to have, a material adverse effect on the Company
or (ii) reasonably be expected to materially impair or delay the ability of
the Company to perform its obligations under this Agreement. As of the
date of this Agreement, there is no suit, action or proceeding by any
person pending or, to the knowledge of the Company, threatened against or
affecting the Company or any of its subsidiaries which questions the
validity of this Agreement, the Offer or the Merger or any action to be
taken by the Company or any of its stockholders in connection with the
consummation of the Transactions.
(i) Benefit Plans. Section 3.01(i) of the Company Disclosure
Schedule contains a true and complete list of (v) each collective
bargaining agreement, (w) with respect to any current or former United
States based employee, officer or director of the Company or any of its
subsidiaries, each change of control, retention or retirement agreement,
plan or arrangement in effect and each salary continuation or severance
agreement, plan or arrangement which would entitle any such person to
receive severance amounts in excess of the amounts which, individually or
in the aggregate, any such person would be provided in accordance with
Section 5.06(c) of the Company Disclosure Schedule, (x) each stock option
or phantom stock plan, (y) each material bonus, pension, profit sharing,
deferred compensation, incentive compensation, stock ownership, stock
purchase, retirement, vacation, severance, salary continuation, sick leave,
disability, death benefit, hospitalization, medical, employee loan,
educational assistance, or other plan, program or arrangement, and (z) each
material employment, retention, consulting, individual compensation,
termination or severance agreement relating to any current or former
employee, officer or director of the Company or any of its subsidiaries
(collectively, the "Company Benefit Plans"). None of the Company Benefit
Plans is subject to Title IV of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA").
With respect to each Company Benefit Plan, a complete and correct
copy of each of the following documents (if applicable) has been made
available to Parent: (i) the most recent document constituting the Company
Benefit Plan and all amendments thereto, and any related trust documents;
(ii) the most recent summary plan description, and all related summaries of
material modifications; (iii) the most recent IRS determination letter;
(iv) the most recent Form 5500 (including schedules and attachments); (v)
the most recent financial statements and actuarial reports (including for
purposes of Financial Accounting Standards Board report nos. 87, 106 and
112); and (vi) a description of any nonwritten Company Benefit Plan.
(j) ERISA Compliance.
(i) With respect to the Company Benefit Plans and the
Other Benefit Plans (as defined herein) no event has occurred and, to
the knowledge of the Company, there exists no condition or set of
circumstances, in connection with which the Company or any of its
subsidiaries could be subject to any material liability under ERISA,
the Code, or any other applicable law.
(ii) Each Company Benefit Plan and Other Benefit Plan has
been operated and administered in all material respects in accordance
with its terms. The Company Benefit Plans and the Other Benefits
Plans are in compliance in all material respects with the applicable
provisions of ERISA, the Code and all other applicable laws. In
particular, to the knowledge of the Company, no individual who has
performed services for the Company or any of its subsidiaries has been
improperly excluded from participation in any Company Benefit Plan or
Other Benefit Plan. Each Company Benefit Plan and Other Benefit Plan
that is intended to be qualified under Section 401(a) or 501(c)(9) of
the Code so qualifies and has received a favorable determination
letter from the IRS to such effect. To the knowledge of the Company,
no fact or event has occurred since the date of any determination
letter from the IRS which is reasonably likely to adversely affect
such favorable determination. There are no audits or proceedings
initiated pursuant to the Employee Plans Compliance Resolution System
or similar proceedings pending with the Internal Revenue Service or
Department of Labor with respect to any Company Benefit Plan or Other
Benefit Plan.
(iii) Neither the Company nor any trade or business,
whether or not incorporated (an "ERISA Affiliate"), which together
with the Company would be deemed to be a "single employer" within the
meaning of Section 4001(b) of ERISA, has incurred any liability under
Title IV of ERISA and no condition exists that presents a risk to the
Company or any ERISA Affiliate of the Company of incurring any such
liability (other than liability for benefits or premiums to the
Pension Benefit Guaranty Corporation arising in the ordinary course),
(y) no Company Benefit Plan has incurred an "accumulated funding
deficiency" (within the meaning of Section 302 of ERISA or Section 412
of the Code) whether or not waived and (z) to the knowledge of the
Company, there are not any facts or circumstances that would change
the funded status of any Company Benefit Plan that is a "defined
benefit" plan (as defined in Section 3(35) of ERISA) since the date of
the most recent actuarial report for such plan. No Company Benefit
Plan is a "multiemployer plan" within the meaning of Section 3(37) of
ERISA.
(iv) Neither the Company nor any of its subsidiaries is a
party to any collective bargaining or other labor union contract
applicable to persons employed by the Company or any of its
subsidiaries and no collective bargaining agreement is being
negotiated by the Company or any of its subsidiaries. As of the date
of this Agreement, there is no labor dispute, strike or work stoppage
against the Company or any of its subsidiaries pending or, to the
knowledge of the Company, threatened which may interfere with the
respective business activities of the Company or any of its
subsidiaries. As of the date of this Agreement, none of the Company,
any of its subsidiaries or any of their respective representatives or
employees has committed any unfair labor practice in connection with
the operation of the respective businesses of the Company or any of
its subsidiaries, and there is no charge or complaint against the
Company or any of its subsidiaries by the National Labor Relations
Board or any comparable governmental agency pending or threatened in
writing.
(v) No Company Benefit Plan or Other Benefit Plan provides
medical or life insurance benefits (whether or not insured) with
respect to current or former employees after retirement or other
termination of service.
(vi) Neither the execution and delivery of this Agreement
nor the consummation of the transactions hereby will (either alone or
in combination with another event) (w) result in any payment becoming
due, or increase the amount of any compensation due, (x) increase any
benefits otherwise payable under any Company Benefit Plan or Other
Benefit Plan, (y) result in the acceleration of the time of payment or
vesting of any such compensation or benefits, or (z) result in the
failure of any amount payable under any Company Benefit Plan or Other
Benefit Plan to be deductible for federal income tax purposes by
virtue of Section 280G or Section 162(m) of the Code (the arrangements
providing for any of the foregoing hereinafter referred to as the
"Change in Control Agreements" and the individuals directly or
indirectly receiving payments or otherwise benefitting under such
Change in Control Agreements hereinafter referred to as the "Change in
Control Individuals").
(vii) There are no pending or, to the knowledge of the
Company, threatened actions, claims, or proceedings against or
relating to any Company Benefit Plan or Other Benefit Plan (other than
routine benefit claims by persons entitled to benefits thereunder),
and, to the knowledge of the Company, there are no facts or
circumstances which could form a reasonable basis for any of the
foregoing.
(viii) All material liabilities have been adequately
reserved on the consolidated financial statements of the Company
included in the Company SEC Documents for each Company Benefit Plan
and Other Benefit Plan covering employees outside of the United
States. The benefits and compensation under the Company Benefit Plans
and Other Benefit Plans covering employees outside of the United
States are no more than customary and reasonable for the country in
which such employees work and the industry in which the Company and
its subsidiaries conduct their business.
(ix) Section 3.01(j) of the Company Disclosure Schedule sets
forth (I) in accordance with the terms thereof, the maximum aggregate
liability under all Change in Control Agreements (assuming where
necessary that any Change in Control Individual is severed), and (II)
as of the dates indicated thereon, the liability under the Sterling
Commerce, Inc. Supplemental Executive Retirement Plan upon a "Change
in Control" (as defined therein) (the "SERP"), the assets in the SERP
trust and liabilities under the SERP without a Change in Control, the
liability under the retention bonus program identified in Section
4.9(c) of the Seller Disclosure Schedule to the MSD Agreement (as
defined herein), and the assets of the trust and liabilities under the
Sterling Commerce, Inc. Deferred Compensation Plan.
(k) Taxes.
(i) Each of the Company and its subsidiaries has timely
filed (after giving effect to any extensions of time to file which
were obtained and have not expired) all material Tax returns and Tax
reports required to be filed by it and all such returns and reports
are complete and correct in all material respects. The Company and
each of its subsidiaries has paid (or the Company has paid on its
behalf) all material Taxes due for all taxable periods through the
date hereof, and the most recent financial statements contained in the
Company Filed SEC Documents reflect an adequate reserve for all Taxes
payable by the Company and its subsidiaries for all taxable periods
and portions thereof accrued through the date of such financial
statements.
(ii) No audits or other administrative proceedings or court
proceedings are pending or, to the knowledge of the Company,
threatened with respect to any Taxes or Tax Returns of the Company or
its subsidiaries. No material deficiencies for any Taxes have been
proposed, asserted or assessed against the Company or any of its
subsidiaries that have not been fully paid or are not adequately
reserved for in the most recent financial statements contained in the
Company Filed SEC Documents.
(iii) None of the Company, any of its subsidiaries, nor
any affiliated, consolidated, combined or unitary group of which the
Company or any of its subsidiaries is now or, to the knowledge of the
Company, ever was a member, has waived any statute of limitations or
agreed to any extension of time within which to file any Tax return,
or to pay any material Taxes which such statute of limitations has not
expired or Tax return or Taxes have not since been timely filed or
paid.
(iv) No Liens for Taxes exist with respect to any assets or
properties of the Company or any of its subsidiaries, except for
statutory Liens for Taxes not yet due.
(v) Neither the Company nor any of its subsidiaries is a
party to or is bound by any Tax sharing, Tax indemnity or similar
agreement with respect to Taxes pursuant to which it will have any
obligation to make any payment after the Closing Date. Neither the
Company nor any of its subsidiaries has entered into a closing
agreement pursuant to Section 7121 of the Code or any predecessor
provision or any similar provision of state, local or foreign Tax law.
(vi) The Company and its subsidiaries have withheld and paid
over all material Taxes required to be withheld in connection with any
amounts paid over or owing to any employee, creditor, independent
contractor or other third party.
(vii) No claim has been made by a taxing authority in a
jurisdiction where the Company or any of its subsidiaries does not
file Tax Returns to the effect that the Company or any of its
subsidiaries is or may be subject to Taxation by that jurisdiction.
(viii) Neither the Company nor any of its subsidiaries
has constituted either a "distributing corporation" or a "controlled
corporation" (within the meaning of Section 355(a)(1)(A) of the Code)
in a distribution of stock qualifying for tax-free treatment under
Section 355 of the Code (i) in the two years prior to the date of this
Agreement or (ii) in a distribution which could otherwise constitute
part of a "plan" or "series of related transactions" (within the
meaning of Section 355(e) of the Code) in conjunction with the Merger.
(ix) As used in this Agreement, "Taxes" shall include all
federal, state, local or foreign income, property, sales, excise, use,
occupation, service, transfer, payroll, franchise, withholding and
other taxes or similar governmental charges, fees, levies or other
assessments including any interest, penalties or additions with
respect thereto.
(l) Voting Requirements. The affirmative vote of the holders of
a majority of the outstanding shares of Company Common Stock at the Company
Stockholders Meeting called to adopt this Agreement (the "Company
Stockholder Approval") is the only vote of the holders of any class or
series of the Company's capital stock necessary to approve and adopt this
Agreement and the transactions contemplated hereby.
(m) State Takeover Statutes. The Board of Directors of the
Company has approved this Agreement and the consummation of the
Transactions and, assuming the accuracy of Parent's representation and
warranty contained in Section 3.02(d), such approval constitutes approval
of the Merger and the other Transactions by the Board of Directors of the
Company under the provisions of Section 203 of the DGCL such that Section
203 of the DGCL does not apply to the Merger and the other Transactions.
No other "fair price," "moratorium," "control share," "business
combination," "affiliate transaction" or other anti-takeover statute is
applicable to the Company, the Shares, the Merger or the other
Transactions.
(n) Brokers. Except for Xxxxxxx, Xxxxx & Co., no broker,
investment banker, financial advisor or other person is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission
in connection with the Transactions based upon arrangements made by or on
behalf of the Company. The Company has heretofore made available to Parent
a complete and correct copy of all agreements between the Company and
Xxxxxxx, Sachs & Co. pursuant to which such firm would be entitled to any
payment relating to the Transactions.
(o) Intellectual Property.
(i) The Company and its subsidiaries own free and clear of
any Lien or have the valid and enforceable right to use all material
U.S. and foreign patents, trademarks (registered or unregistered),
service marks, trade names including, without limitation, "Sterling
Commerce," trade dress, corporate names, domain names, copyrights
(registered or unregistered), trade secrets, know-how and other
confidential or proprietary technical and business information,
inventions (patentable or unpatentable), processes, formulae and
software of any kind (including any and all documentation,
information, materials, licenses, other agreements or rights, or
registrations or applications for registration, relating to any of the
foregoing), as well as all goodwill symbolized by any of the foregoing
(collectively, "Intellectual Property"), necessary to carry on or
currently used in the business of the Company and its subsidiaries
substantially as currently conducted (collectively, the "Employed
Intellectual Property").
(ii) The activities, products and services of the Company
and its subsidiaries do not infringe in any material respect upon, or
constitute the unauthorized use in any material respect of the
Intellectual Property of any other person or entity. There are no
claims or suits pending or for which notice has been provided or, to
the knowledge of the Company, threatened (A) alleging that the
Company's or any of its subsidiaries, activities, products or services
infringe in any material respect upon or constitute the unauthorized
use in any material respect of any other person or entity's
Intellectual Property or (B) challenging the Company's or any of its
subsidiaries' ownership of, right to use, or the validity or
enforceability of any license or other agreement relating to, any
Employed Intellectual Property. To the knowledge of the Company,
there are not material infringements or unauthorized uses by third
parties of any Employed Intellectual Property owned by the Company and
it subsidiaries.
(iii) The consummation of the Merger and the other
Transactions will not result in the loss by the Company or its
subsidiaries of any rights to Employed Intellectual Property.
(iv) The Company has heretofore delivered to Parent a
complete and accurate list of the following Employed Intellectual
Property owned by the Company or its subsidiaries: (A) all material
patents issued in the U.S. or any other country, by title, number and
issue date; (B) all material patent applications now pending in the
U.S. or any other country, or any transnational patent office, by
title, serial or application number and filing date; (C) all material
trademark and service xxxx registrations issued in the U.S. or any
other country, or by any transnational trademark office, by xxxx,
registration number and issue date; (D) all material applications for
trademark and service xxxx registrations now pending in the U.S. or
any other country, or any transnational trademark office, by xxxx,
serial or application number and filing date; (E) all material
registered copyrights, by title, registration number and registration
date; (F) all material applications for copyright registrations, by
title, application number and filing date; and (G) all material
Internet domain name registrations. All Employed Intellectual
Property owned by Company or its subsidiaries is valid, subsisting,
enforceable, and, where applicable, has been properly maintained
except as would not have, or reasonably be expected to have,
individually or in the aggregate, a material adverse effect on the
Company.
(p) Material Contracts.
(i) Section 3.01(p) of the Company Disclosure Schedule sets
forth a list of all Material Contracts (as hereinafter defined), other
than any entered into after the date hereof in accordance with Section
4.01 hereof. The Company has heretofore made available to Parent
true, correct and complete copies of all written, and summaries of all
oral, contracts and agreements (and all amendments, modifications and
supplements thereto and all side letters to which the Company or any
of its subsidiaries is a party affecting the obligations of any party
thereunder) to which the Company or any of its subsidiaries is a party
or by which any of its or their properties or assets are bound that
are material to the business, properties or assets of the Company and
its subsidiaries taken as a whole, including, without limitation: (A)
material employment, severance, product design or development,
personal services, consulting, non-competition or indemnification
contracts (including, without limitation, any material contract to
which the Company or any of its subsidiaries is a party involving
employees of the Company); (B) material licensing, merchandising or
distribution agreements; (C) contracts granting a right of first
refusal or first negotiation; (D) material partnership or joint
venture agreements or other partnership or joint venture agreements
containing material financial obligations of the Company or any of its
subsidiaries; (E) agreements for the acquisition, sale or lease of
material properties or assets of the Company (by merger, purchase or
sale of assets or stock or otherwise) entered into since January 1,
1997; (F) contracts or agreements with any Governmental Entity entered
into outside the ordinary course of business; (G) loan or credit
agreements, mortgages, indentures or other agreements or instruments
evidencing indebtedness for borrowed money by the Company or any of
its subsidiaries or any such agreement pursuant to which indebtedness
for borrowed money may be incurred, other than any of the foregoing
which represent obligations of the Company and its subsidiaries in an
aggregate amount of less than $1 million; (H) agreements that purport
to limit, curtail or restrict the ability of the Company or any of its
subsidiaries to compete in any geographic area or line of business;
(I) contracts or agreements that would be required to be filed as an
exhibit to a Form 10-K filed by the Company with the SEC on the date
hereof that have not been filed or incorporated by reference as an
exhibit to a Company Filed SEC Document; and (J) commitments and
agreements to enter into any of the foregoing (collectively, together
with any such contracts entered into in accordance with Section 4.01
hereof, the "Material Contracts").
(ii) Each of the Material Contracts constitutes the valid
and legally binding obligation of the Company or its subsidiaries,
enforceable in accordance with its terms, and is in full force and
effect. There is no default under any Material Contract so listed
either by the Company or, to the Company's knowledge, by any other
party thereto, and no event has occurred that with the lapse of time
or the giving of notice or both would constitute a default thereunder
by the Company or, to the Company's knowledge, any other party. No
party to any such Material Contract has given notice to the Company of
or made a claim against the Company with respect to any breach or
default thereunder.
(q) Real Property
(i) There is no real property owned in fee by the Company
and its subsidiaries.
(ii) Section 3.01(q) of the Company Disclosure Schedule sets
forth all leases, subleases and other agreements (the "Real Property
Leases") under which the Company or any of its subsidiaries uses or
occupies or has the right to use or occupy, now or in the future, any
real property. The Company has heretofore made available to Parent
true, correct and complete copies of all the Real Property Leases (and
all modifications, amendments and supplements thereto and all side
letters to which the Company or any of its subsidiaries is a party
affecting the obligations of any party thereunder). Each Real
Property Lease constitutes the valid and legally binding obligation of
the Company or its subsidiaries, enforceable in accordance with its
terms, and is in full force and effect. All rent and other sums and
charges payable by the Company and its subsidiaries as tenants under
each Real Property Lease are current and no termination event or
condition or uncured default of a material nature on the part of the
Company or any such subsidiary or, to the Company's knowledge, the
landlord, exists under any Real Property Lease. Each of the Company
and its subsidiaries has a good and valid leasehold interest in each
parcel of real property leased by it free and clear of all Liens,
except (A) Taxes and general and special assessments not in default
and payable without penalty and interest, and (B) other Liens which do
not materially interfere with the Company's or any of its
subsidiaries' use and enjoyment of such real property or materially
detract from or diminish the value thereof.
(iii) No party to any such Real Property Leases has
given notice to the Company or any of its subsidiaries of or made a
written claim against the Company or any of its subsidiaries with
respect to any material breach or material default thereunder.
(r) Opinion of Financial Advisor. The Company has received the
opinion of Xxxxxxx Xxxxx & Co., dated the date hereof, to the effect that,
as of such date, the Offer Price and the Merger Consideration are fair from
a financial point of view to the stockholders of the Company.
(s) Company Rights Plan. The Company Rights Plan has been
amended to (i) render the Company Rights Plan inapplicable to the Offer and
the Merger and the other Transactions and (ii) ensure that (y) neither
Parent nor any of its subsidiaries is an Acquiring Person (as defined in
the Company Rights Plan) pursuant to the Company Rights Plan and (z) a
Share Acquisition Date, Distribution Date or Triggering Event (in each case
as defined in the Company Rights Plan) does not occur by reason of the
approval, execution or delivery of this Agreement, the consummation of the
Offer and the Merger or the consummation of the other Transactions.
(t) Year 2000. The current release of each of the Company's and
its subsidiaries' current product offerings and their critical information
technology systems and, to the knowledge of the Company, all third-party
components, services or products embedded or used in or required by the
Company's current product offerings are Year 2000 Compliant, except as
would not, individually or in the aggregate, have, or reasonably be
expected to have, a material adverse effect on the Company. A product or
information technology system is "Year 2000 Compliant" if it is capable of
recording, storing, processing and presenting calendar dates falling on or
after January 1, 2000 in the same manner and with substantially the same
functionality as such software or system records, stores, processes and
presents calendar dates falling on or before December 31, 1999, and treats
the Year 2000 as a leap year, provided that such software or system is
presented with properly formatted and accurate dates and date-related data
in accordance with such software's or system's requirements, and provided
further that the hardware, operating system, software and other system
components with or on which such products or systems operate are Year 2000
Compliant and performing properly.
Section 3.02 Representations and Warranties of Parent. Except
as set forth on the Disclosure Schedule delivered by Parent to the Company
prior to the execution of this Agreement (the "Parent Disclosure Schedule")
(each section of which qualifies the correspondingly numbered
representation and warranty or covenant), Parent represents and warrants to
the Company as follows:
(a) Organization, Standing and Corporate Power. Each of Parent
and Purchaser is a corporation duly organized, validly existing and in good
standing (with respect to jurisdictions which recognize such concept) under
the laws of the jurisdiction in which it is organized and has the requisite
corporate or other power, as the case may be, and authority to carry on its
business as now being conducted, except, as to Purchaser, for those
jurisdictions where the failure to be so organized, existing or in good
standing individually or in the aggregate would not have, or reasonably be
expected to have, a material adverse effect on Parent. Each of Parent and
Purchaser is duly qualified or licensed to do business and is in good
standing (with respect to jurisdictions which recognize such concept) in
each jurisdiction in which the nature of its business or the ownership,
leasing or operation of its properties makes such qualification or
licensing necessary, except for those jurisdictions where the failure to be
so qualified or licensed or to be in good standing individually or in the
aggregate would not have, or reasonably be expected to have, a material
adverse effect on Parent. Parent has made available to the Company prior
to the execution of this Agreement complete and correct copies of its
certificate of incorporation and by-laws, each as amended to date.
(b) Authority; Noncontravention. Each of Parent and Purchaser
has all requisite corporate power and authority to execute, deliver and
perform its obligations under this Agreement and to consummate the
Transactions. The execution, delivery and performance of this Agreement by
Parent and Purchaser and the consummation by Parent and Purchaser of the
Transactions have been duly authorized by all necessary corporate action on
the part of Parent and Purchaser. This Agreement has been duly executed
and delivered by Parent and Purchaser and, assuming the due authorization,
execution and delivery by the Company, constitutes a legal, valid and
binding obligation of Parent and Purchaser, enforceable against Parent and
Purchaser in accordance with its terms. The execution and delivery of this
Agreement does not, and the consummation of the Transactions and compliance
with the provisions of this Agreement will not, conflict with, or result in
any violation of, or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of a benefit under, or result in the
creation of any Lien upon any of the properties or assets of Parent or any
of its subsidiaries under, (i) the certificate of incorporation or by-laws
of Parent or Purchaser, (ii) any loan or credit agreement, note, bond,
mortgage, indenture, lease or other agreement, instrument, permit,
concession, franchise, license or similar authorization applicable to
Parent or any of its subsidiaries or their respective properties or assets
or (iii) subject to the governmental filings and other matters referred to
in the following sentence, any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Parent or any of its
subsidiaries or their respective properties or assets, other than, in the
case of clauses (ii) and (iii), any such conflicts, violations, defaults,
rights, losses or Liens that individually or in the aggregate would not (x)
have a material adverse effect on Parent or (y) reasonably be expected to
materially impair or delay the ability of Parent to perform its obligations
under this Agreement. No consent, approval, order or authorization of,
action by, or in respect of, or registration, declaration or filing with,
any Governmental Entity or any other person is required by Parent or any of
its subsidiaries in connection with the execution and delivery of this
Agreement by Parent or Purchaser or the consummation by Parent or Purchaser
of the transactions contemplated hereby, except for: (1) the filing with
the SEC of (A) the Offer Documents, and (B) such reports under Section
13(a), 13(d), 15(d) or 16(a) of the Exchange Act as may be required in
connection with this Agreement and the transactions contemplated hereby;
(2) the filing of the Certificate of Merger with the Secretary of State of
the State of Delaware and appropriate documents with the relevant
authorities of other states in which Parent is qualified to do business and
such filings with Governmental Entities to satisfy the applicable
requirements of state securities or "blue sky" laws; (3) the filing of a
pre-merger notification and report form by Parent under the HSR Act and the
expiration or termination of the waiting period thereunder and the filing
of comparable pre-merger notifications in non-U.S. jurisdictions, if
applicable, and the expiration of any waiting periods thereunder; and (4)
such consents, approvals, orders or authorizations the failure of which to
be made or obtained individually or in the aggregate would not (x) have a
material adverse effect on Parent or (y) reasonably be expected to
materially impair or delay the ability of Parent or Purchaser to perform
its obligations under this Agreement.
(c) Information Supplied. In addition to Parent's and
Purchaser's representations and warranties contained in Sections 1.01(b)
and 1.02(b), none of the information supplied or to be supplied by Parent
or Purchaser specifically for inclusion or incorporation by reference in
the Proxy Statement will, at the date it is filed with the SEC, at any time
that it is amended or supplemented at the time it is first mailed to the
Company's stockholders and at the time of the Company Stockholders Meeting,
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.
(d) Ownership of Company Common Stock. Neither Parent nor any
of its subsidiaries beneficially owns (as defined in Rule 13d-3 under the
Exchange Act) any Shares.
(e) Sufficient Funds. Parent has, and will make available to
Purchaser, sufficient funds to purchase all of the Shares outstanding on a
fully diluted basis at the Offer Price.
(f) Communications Act of 1934. To the knowledge of Parent,
Section 5.10(a) of the Parent Disclosure Schedule sets forth a complete and
accurate list of all steps necessary such that the Company and any person
that (directly or indirectly) is owned or controlled by or is under common
ownership or control with the Company will operate in compliance with the
provisions of the Communications Act, as if the Company and any such
persons were "affiliates" of a "Xxxx Operating Company" as of the Closing.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 4.01 Conduct of Business of the Company. Except as set
forth in Section 4.01 of the Company Disclosure Schedule, except as
otherwise expressly permitted by this Agreement or except as consented to
by Parent (in its sole discretion), during the period from the date of this
Agreement to the earlier of the Effective Time and the appointment or
election of Parent's designees to the Company Board pursuant to Section
1.03 (such earlier time, the "Control Time"), the Company shall, and shall
cause its subsidiaries to, carry on their respective businesses in the
ordinary course consistent with past practice and in compliance in all
material respects with all applicable laws and regulations and, to the
extent consistent therewith, use reasonable best efforts to preserve intact
their current business organizations (other than internal organizational
realignments), to keep available the services of their current officers and
other key employees and to preserve their relationships with those persons
having business dealings with them to the end that their goodwill and
ongoing businesses shall be unimpaired at the Effective Time. Without
limiting the generality of the foregoing (but subject to the above
exceptions), during the period from the date of this Agreement to the
Control Time, the Company shall not, and shall not permit any of its
subsidiaries to:
(a) other than dividends and distributions by a direct or
indirect wholly owned subsidiary of the Company to its parent, (I) declare,
set aside or pay any dividends on, or make any other distributions in
respect of, any of its capital stock, (II) split, combine or reclassify any
of its capital stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock, except for issuances of Company Common Stock upon the
exercise of Company Stock Options under the Company Stock Option Plans or
in connection with other awards under the Company Stock Option Plans
outstanding as of the date hereof in accordance with their present terms or
issued pursuant to Section 4.01(b) or the issuance of capital stock of the
Company pursuant to the Company Rights Plan, (III) except pursuant to
agreements entered into with respect to the Company Stock Option Plans,
purchase, redeem or otherwise acquire any shares of capital stock of the
Company or any of its subsidiaries or any other securities thereof or any
rights, warrants or options to acquire any such shares or other securities
or (IV) make any other actual, constructive or deemed distribution in
respect of any shares of its capital stock or otherwise make any payments
to stockholders in their capacity as such;
(b) issue, deliver, sell, pledge or otherwise encumber or
subject to any Lien any shares of its capital stock, any other voting
securities or any securities convertible into, or any rights, warrants or
options to acquire, any such shares, voting securities or convertible
securities (other than Company Stock Options granted under clause (II)
below or the issuance of Company Common Stock upon the exercise of Company
Stock Options or in connection with other awards under the Company Stock
Option Plans (I) outstanding as of January 31, 2000 in accordance with
their present terms, or (II) granted after January 31, 2000 in the ordinary
course of business consistent with past practice (so long as such
additional amount of Company Common Stock subject to Company Stock Options
(A) does not exceed 250,000 shares of Company Common Stock in the
aggregate, (B) does not vest, either in full or part, solely as a result of
the transactions contemplated by this Agreement, (C) is not granted to any
Change in Control Individual and (D) is not granted at an exercise price of
less than the fair market value of the Company Common Stock at the date of
grant);
(c) amend its certificate of incorporation, by-laws or other
comparable organizational documents;
(d) acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial portion of the stock or assets of, or
by any other manner, any business or any person;
(e) sell, lease, license, mortgage or otherwise encumber or
subject to any Lien or otherwise dispose of any of its properties or assets
(including securitizations), other than the Company's Managed Systems
Division pursuant to the MSD Agreement (as hereinafter defined), a true and
complete copy, including all exhibits and schedules, of which has been
previously provided by the Company to Parent, or in the ordinary course of
business consistent with past practice;
(f) except for borrowings under credit facilities or lines of
credit existing on the date hereof, incur any indebtedness for borrowed
money or issue any debt securities or assume, guarantee or endorse, or
otherwise become responsible for the obligations of any person, or make any
loans, advances or capital contributions to, or investments in, any person
other than its wholly owned subsidiaries, except in the ordinary course of
business consistent with past practice and in amounts not material to the
maker of such loan, advance, capital contribution or investment;
(g) take, or agree to commit to take, any action that would or
is reasonably likely to result in any of the conditions to the Offer set
forth in Annex A or any of the conditions to the Merger set forth in
Article VI not being satisfied, or that would materially impair the ability
of the Company, Parent, Purchaser or the holders of Shares to consummate
the Offer or the Merger in accordance with the terms hereof or materially
delay such consummation;
(h) make any capital expenditure or expenditures which exceed
$25,000,000 in the aggregate;
(i) make or revoke any Tax election, settle or compromise any
Tax liability material to the Company or any of its subsidiaries, or change
(or make a request to any taxing authority to change) its Tax or accounting
methods, policies, practice or procedures, except in each case as required
by applicable law or generally accepted accounting principles;
(j) except as required under existing Company Benefit Plans, (i)
grant any employee, officer or director any increase in wages, bonus,
severance, profit sharing, retirement, insurance or other compensation or
benefits (other than an increase in wages in the ordinary course of
business consistent with past practice for any individual other than a
Change in Control Individual), (ii) amend or terminate any Company Benefit
Plan, (iii) establish any new compensation or benefit plan or arrangement,
(iv) enter into any employment, consulting, retention, termination or
severance agreement (other than in the ordinary course of business
consistent with past practice for any individual other than a Change in
Control Individual) or (v) enter into any change in control agreement;
(k) revalue in any material respect any of its assets,
including, without limitation, writing down the value of inventory or
writing-off notes or accounts receivable other than in the ordinary and
usual course of business consistent with past practice or as required by
generally accepted accounting principles;
(l) (i) enter into any contract or agreement, other than in the
ordinary course of business consistent with past practice, or amend in any
material respect any of the Material Contracts or the agreements referred
to in Section 3.01(q) other than in the ordinary course of business; or
(ii) enter into any contract, agreement, commitment or arrangement
providing for, or amend any contract, agreement, commitment or arrangement
to provide for, the taking of any action that would be prohibited
hereunder;
(m) pay, discharge or satisfy any material claims, liabilities
or obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the
ordinary course of business consistent with past practice of liabilities
reflected or reserved against in the consolidated financial statements of
the Company and its subsidiaries or incurred in the ordinary and usual
course of business consistent with past practice;
(n) settle or compromise any pending or threatened suit, action
or claim relating to the transactions contemplated hereby;
(o) enter into any agreement or arrangement that would limit or
restrict the Surviving Corporation and its affiliates (including Parent) or
any successor thereto, from engaging or competing in any line of business
or in any geographic area; or
(p) authorize, or commit or agree to take, any of the foregoing
actions;
provided that the limitations set forth in this Section 4.01 (other than
clause (a)) shall not apply to any transaction between the Company and any
wholly owned subsidiary or between any wholly owned subsidiaries of the
Company.
Section 4.02 No Solicitation by the Company.
(a) The Company and its subsidiaries and each of their
respective affiliates, directors, officers, employees, agents and
representatives (including without limitation any investment banker,
financial advisor, attorney, accountant or other representative retained by
it or any of its subsidiaries) shall immediately cease any discussions or
negotiations with any other parties that may be ongoing with respect to any
Company Takeover Proposal (as defined below). The Company shall not, nor
shall it authorize or permit any of its subsidiaries to, nor shall it
authorize or permit any of its or its subsidiaries' affiliates, directors,
officers, employees, agents or representatives (including, without
limitation, any investment banker, financial advisor, attorney, accountant
or other representative retained by it or any of its subsidiaries) to,
directly or indirectly, (i) solicit, initiate or encourage (including by
way of furnishing information or assistance), or take any other action
designed to facilitate, any inquiries, any expression of interest or the
making of any proposal which constitutes any Company Takeover Proposal or
(ii) participate in any discussions or negotiations regarding any Company
Takeover Proposal; provided, however, that if, during the Initial Period
(as defined herein), the Board of Directors of the Company (i) determines
in good faith that such Company Takeover Proposal is a Company Superior
Proposal (as defined in Section 4.02(b)) and (ii) determines in good faith,
after receiving advice of outside counsel, that such action is necessary
for the Board of Directors of the Company to comply with its fiduciary
duties to stockholders under the DGCL, and, prior to furnishing any
non-public information to such person, the Company receives from such
person an executed confidentiality agreement with provisions no less
favorable to the Company (i.e., no less restrictive with respect to the
conduct of such person) than the Confidentiality Agreement (as defined
herein), the Company may, in response to a Company Takeover Proposal not
solicited in violation of this Section 4.02(a) and subject to providing
prior written notice of its decision to take such action to Parent (the
"Company Notice") and compliance with Section 4.02(c), following delivery
of the Company Notice (x) furnish information with respect to the Company
and its subsidiaries to any person making such a Company Takeover Proposal
(provided that such information has been previously delivered to Parent)
and (y) participate in discussions or negotiations regarding such a Company
Takeover Proposal. For purposes of this Agreement, "Company Takeover
Proposal" means any inquiry, proposal or offer from any person relating to
any (r) direct or indirect acquisition or purchase (including by way of
lease, exchange, sale, mortgage, pledge or otherwise, in a single
transaction or series of related transactions) of substantial assets of the
Company or any of its subsidiaries, taken as a whole, (s) direct or
indirect acquisition or purchase (including by way of lease, exchange,
sale, mortgage, pledge or otherwise, in a single transaction or series of
related transactions) of 20% or more of any class of equity securities of
the Company or any of its subsidiaries whose business constitutes 20% or
more of the net revenues, net income or assets of the Company and its
subsidiaries, taken as a whole, (t) tender offer or exchange offer that if
consummated would result in any person beneficially owning 20% or more of
any class of equity securities of the Company, (u) merger, consolidation,
share exchange, business combination, recapitalization, liquidation,
dissolution or similar transaction involving the Company or any of its
subsidiaries whose business constitutes 20% or more of the net revenues,
net income or assets of the Company and its subsidiaries, taken as a whole,
(v) acquisition by any person, after the date hereof, of beneficial
ownership or the right to acquire beneficial ownership of, or the formation
of any "group" (as such term is defined under Section 13(d) of the Exchange
Act), that beneficially owns or has the right to acquire beneficial
ownership of 20% or more of any class of equity securities of the Company,
(x) adoption by the Company of a plan of liquidation, the declaration or
payment by the Company of an extraordinary dividend on any of its shares of
capital stock or the effectuation by the Company of a recapitalization or
other type of transaction that would involve either a change in the
Company's outstanding capital stock or a distribution of assets of any kind
to the holders of such capital stock, (y) repurchase by the Company or any
of its subsidiaries of shares of Company Common Stock, or (z) agreement to,
or public announcement by the Company or any other person, entity or group
of a proposal, plan or intention to do any of the foregoing, other than (i)
the transactions contemplated by this Agreement or (ii) the sale of the
Company's Managed Systems Division pursuant to the MSD Agreement. For
purposes of this Agreement, the term "Initial Period" means the period from
the date hereof and continuing until 20 business days following the
commencement of the Offer; provided, however, that if the Offer is extended
beyond such 20 business day period by the Purchaser pursuant to Section
1.01(a), and as of the date of such extension, the condition set forth in
clause (iii) of the first paragraph of Annex A has been met and the Minimum
Condition has not been met, the Initial Period shall be extended until the
earlier of (a) the time the Minimum Condition has been met and (b) 60 days
from the commencement of the Offer.
(b) Except as expressly permitted by this Section 4.02, neither
the Board of Directors of the Company nor any committee thereof shall (i)
withdraw or modify, or propose publicly to withdraw or modify, in a manner
adverse to Parent, the approval or recommendation by such Board of
Directors or such committee of the Merger or this Agreement, (ii) approve
or recommend, or propose publicly to approve or recommend, any Company
Takeover Proposal or (iii) cause the Company to enter into any letter of
intent, agreement in principle, acquisition agreement or other similar
agreement (each, a "Company Acquisition Agreement") related to any Company
Takeover Proposal. Notwithstanding the foregoing, in the event that,
during the Initial Period, the Board of Directors of the Company determines
in good faith, after receiving advice from the Company's outside counsel
that (i) the withdrawal, modification or change of its recommendation is
necessary for the Board of Directors of the Company to comply with its
fiduciary duties to the Company's stockholders under the DGCL and (ii) the
Company Takeover Proposal is a Company Superior Proposal, the Board of
Directors of the Company may (subject to this and the following sentences)
(x) withdraw or adversely modify its approval or recommendation of the
Transactions or the matters to be considered at the Company Stockholders
Meeting, (y) approve or recommend such Company Superior Proposal and/or (z)
simultaneously with the payment of the Termination Fee required pursuant to
Section 5.04(b)(i), terminate this Agreement and, if it so chooses, enter
into a Company Acquisition Agreement with respect to such Company Superior
Proposal, but only after the third business day following Parent's receipt
of written notice advising Parent that the Board of Directors of the
Company is prepared to terminate this Agreement and only if, during such
three-day period, the Company and its advisors shall have negotiated in
good faith with Parent to make such adjustments in the terms and conditions
of this Agreement as would enable Parent to proceed with the Transactions
on such adjusted terms. For purposes of this Agreement, a "Company
Superior Proposal" means any bona fide written proposal made by a third
party to acquire, directly or indirectly, including pursuant to a tender
offer, exchange offer, merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction, more
than 50% of the combined voting power of the shares of Company Common Stock
then outstanding or all or substantially all the assets of the Company
(excluding the Company's Managed Systems Division) and which the Board of
Directors of the Company determines in its good faith judgment (after
receiving and consistent with a written opinion from a financial advisor of
nationally recognized reputation) to be more financially favorable to the
Company's stockholders than the Offer and the Merger and for which
financing, to the extent required, is then committed and which is not
subject to any financing commitment.
(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) of this Section 4.02, the Company shall promptly and
in any event within 24 hours advise Parent orally and in writing of any
Company Takeover Proposal or request for information relating to the
Company or any of its subsidiaries, or for access to the properties, books
or records of the Company or any of its subsidiaries by any person that is
considering making, or has made, a Company Takeover Proposal and shall keep
Parent reasonably informed, on a current basis and in reasonable detail, of
the status and details thereof and, if in writing, promptly deliver or
cause to be delivered to Parent a copy of such proposal or request.
(d) Nothing contained in this Section 4.02 shall prohibit the
Company from taking and disclosing to its stockholders a position
contemplated by Rule 14e-2(a) promulgated under the Exchange Act or from
making any disclosure to the Company's stockholders which, in the good
faith judgment of the Board of Directors of the Company, after receiving
advice of outside counsel is necessary under applicable law, provided that
the Company does not withdraw or modify, or propose to withdraw or modify,
its position with respect to the Offer, the Merger or this Agreement or
approve or recommend, or propose to approve or recommend, a Company
Takeover Proposal unless the Company and its Board of Directors have
complied with all the provisions of this Section 4.02.
(e) The Company covenants and agrees that it will not waive,
modify or amend in any manner, and will take all actions necessary to
enforce, any standstill and confidentiality provisions contained in
agreements to which the Company is a party or to which the Company is
subject.
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.01 Access to Information; Confidentiality. To the
extent permitted by applicable law and subject to the Agreement dated
November 19, 1999, between Parent and the Company (the "Confidentiality
Agreement"), the Company shall, and shall cause each of its subsidiaries
to, afford to Parent and to the officers, employees, accountants, counsel,
financial advisors and other representatives of Parent, reasonable access
during normal business hours during the period prior to the Effective Time
to the Company's properties, books, contracts, commitments, personnel and
records and, during such period, the Company shall, and shall cause each of
its subsidiaries to, furnish promptly to Parent all other information
concerning its business, properties and personnel as Parent may reasonably
request, provided that no investigation pursuant to this Section 5.01 shall
affect or modify any representation or warranty given by the Company.
Parent will hold, and will cause its respective officers, employees,
accountants, counsel, financial advisors and other representatives and
affiliates to hold, any nonpublic information in accordance with the terms
of the Confidentiality Agreement.
Section 5.02 Reasonable Best Efforts; Cooperation. Upon the
terms and subject to the conditions set forth in this Agreement, each of
the parties agrees to use reasonable best efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, and to assist and
cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Offer, the Merger and the other Transactions, including,
but not limited to, (i) the obtaining of all necessary actions or
nonactions, waivers, consents and approvals from Governmental Entities and
the making of all necessary registrations and filings and the taking of all
steps as may be necessary to obtain an approval or waiver from, or to avoid
an action or proceeding by, any Governmental Entity, (ii) the obtaining of
all necessary consents, approvals or waivers from third parties, (iii) the
defending of any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement or the consummation of the
Transactions, including seeking to have any stay or temporary restraining
order entered by any court or other Governmental Entity vacated or
reversed, (iv) the execution and delivery of any additional instruments
necessary to consummate the Transactions and to fully carry out the
purposes of this Agreement, and (v) the actions contemplated by Section
5.10 of the Parent Disclosure Schedule. Nothing set forth in this Section
5.02(a) will limit or affect actions permitted to be taken pursuant to
Section 4.02.
Section 5.03 Indemnification, Exculpation and Insurance.
(a) Parent agrees to indemnify and hold harmless from
liabilities for acts or omissions occurring at or prior to the Effective
Time those classes of persons currently entitled to indemnification from
the Company and its subsidiaries as provided in their respective
certificates of incorporation or by-laws (or comparable organizational
documents). Parent also agrees to advance expenses to any such person
promptly upon receipt of an undertaking from such person that such expenses
shall be repaid should it be ultimately determined that such person is not
entitled to indemnification. In addition, from and after the Effective
Time, directors and officers of the Company who become directors or
officers of Parent or any of its subsidiaries will be entitled to
indemnification under Parent's or any of its subsidiaries' certificate of
incorporation and by-laws, as the same may be amended from time to time in
accordance with their terms and applicable law, and to all other indemnity
rights and protections as are afforded to other directors and officers of
Parent or any of its subsidiaries.
(b) In the event that the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges into any other person
and is not the continuing or surviving corporation or entity of such
consolidation or merger or (ii) except for any disposition of assets by the
Surviving Corporation required by applicable law in connection with the
Merger, transfers or conveys all or substantially all of its properties and
assets to any person, then, and in each such case, proper provision will be
made so that the successors and assigns of the Surviving Corporation assume
the obligations set forth in this Section 5.03.
(c) For six years after the Effective Time, Parent shall
maintain in effect the Company's current directors' and officers' liability
insurance covering acts or omissions occurring prior to the Effective Time
with respect to those persons who are currently covered by the Company's
directors' and officers' liability insurance policy on terms with respect
to such coverage and amount no less favorable than those of such policy in
effect on the date hereof; provided that Parent may substitute therefor
policies of Parent or its subsidiaries containing terms with respect to
coverage and amount no less favorable to such directors or officers;
provided, further, that in no event shall Parent be required to pay
aggregate premiums for insurance under this Section 5.03(c) in excess of
200% of the aggregate premiums paid by the Company in fiscal 1999 for such
purpose.
(d) The provisions of this Section 5.03 (i) are intended to be
for the benefit of, and will be enforceable by, each indemnified party, his
or her heirs and his or her representatives and (ii) are in addition to,
and not in substitution for, any other rights to indemnification or
contribution that any such person may have by contract or otherwise.
Section 5.04 Fees and Expenses. (a) Except as provided in
this Section 5.04, all fees and expenses incurred in connection with the
Merger, this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such fees or expenses, whether or not the
Merger is consummated.
(b) In the event that (i) this Agreement is terminated by the
Company pursuant to Section 7.01(c)(ii), (ii) this Agreement is terminated
by Parent pursuant to Section 7.01(d)(iii), (iii) this Agreement is
terminated by Parent or the Company pursuant to Section 7.01(b)(i) solely
as a result of the failure of the Minimum Condition to be satisfied and at
or prior to such termination the Company has received one or more Company
Takeover Proposals which at the time of such termination has not been
absolutely and unconditionally withdrawn or abandoned or (iv) this
Agreement is terminated by Parent pursuant to Section 7.01(d)(i) and such
breach or failure to perform on the part of the Company is willful and
prior to such termination the Company has received a Company Takeover
Proposal, then promptly after such termination (and in any event within one
business day, except that any payment of the Termination Fee pursuant to
subparagraph (i) above shall be paid simultaneously with, and be a
necessary condition to, such termination), the Company shall pay Parent a
fee of $125 million by wire transfer of same day funds.
Section 5.05 Public Announcements. Parent and the Company will
consult with each other before issuing, and provide each other the
opportunity to review, comment upon and concur with, any press release or
other public statements with respect to the Transactions, and shall not
issue any such press release or make any such public statement prior to
such consultation, except as either party may determine is required by
applicable law, court process or by obligations pursuant to any listing
agreement with any national securities exchange. The parties agree that
the initial press release to be issued with respect to the transactions
contemplated by this Agreement shall be in the form heretofore agreed to by
the parties.
Section 5.06 Employee Benefit Plans.
(a) Parent hereby agrees that individuals who are employed by
the Company and its subsidiaries as of the Closing shall remain employees
of the Surviving Corporation and its subsidiaries immediately following the
Closing. Parent hereby agrees to honor, and agrees to cause the Surviving
Corporation to honor, and to make required payments when due under all
Company Benefit Plans and all similar types of contracts, agreements,
arrangements, policies, plans and commitments not required to be scheduled
pursuant to Section 3.01(i) hereof (the "Other Benefit Plans"), provided,
that the Company shall have the right at any time to amend or terminate any
such Company Benefit Plan or Other Benefit Plan in accordance with its
terms. Neither this Section 5.06 nor any other provision of this Agreement
shall limit the ability or right of the Company and its subsidiaries to
terminate the employment of any of their respective employees after the
Closing (subject to any rights of any such employee pursuant to any Company
Benefit Plan or any Other Benefit Plan).
(b) For purposes of all employee benefit plans, programs and
arrangements maintained by or contributed to by Parent and its subsidiaries
(including, after the Closing, the Company), for which the Company's
employees are eligible for participation, Parent shall, or shall cause its
subsidiaries to, cause each such plan, program or arrangement to treat the
prior service with the Company and its affiliates of each person who is an
employee or former employee of the Company or its subsidiaries immediately
prior to the Closing (a "Company Employee") as service rendered to Parent
or its subsidiaries, as the case may be, for purposes of eligibility to
participate in and vesting thereunder (but not benefit accrual) to the same
extent such service is recognized under corresponding plans, programs or
arrangements of the Company or its affiliates prior to the Closing;
provided, however, that such crediting of service shall not operate to
duplicate any benefit or the funding of such benefit. Company Employees
shall also be given credit for any deductible or co-payment amounts paid in
respect of the plan year in which the Closing occurs, to the extent that,
following the Closing, they participate in any other plan for which
deductibles or co-payments are required. Parent shall also cause each
Parent Benefit Plan to waive any preexisting condition which was waived
under the terms of any Company Benefit Plan immediately prior to the
Closing or waiting period limitation which would otherwise be applicable to
a Company Employee on or after the Closing. Parent shall recognize any
accrued but unused vacation and sabbatical time of the Company Employees as
of the Closing Date, and Parent shall cause the Company and its
subsidiaries to provide or pay such paid vacation and sabbatical time but
only to the extent properly accrued or reserved for on the relevant balance
sheet.
(c) Parent shall provide severance pay to any Company Employee
who is terminated by Parent or the Surviving Corporation, or any of their
respective subsidiaries, during the period beginning on the Closing Date
and ending one year following the Closing Date. The amount of severance
payable to any such terminated Company Employee shall be the amount of
severance pay determined pursuant to Section 5.06(c) of the Company
Disclosure Schedule with respect to such employee.
(d) Parent acknowledges that for purposes of all the Company
Benefit Plans, the consummation of the transactions contemplated by this
Agreement will constitute a "Change in Control" of the Company (as that
term is defined in such Company Benefit Plans). Parent agrees (i) to cause
the Company after consummation of the transactions contemplated by this
Agreement to pay all amounts provided under such Company Benefit Plans, as
a result of a Change in Control of the Company in accordance with their
terms, and (ii) to cause the Company to honor, all rights, privileges and
modifications to or with respect to any such Company Benefit Plans which
became effective as a result of such Change in Control.
Section 5.07 Purchaser Compliance. Parent shall cause
Purchaser to comply with all of its obligations under or related to this
Agreement.
Section 5.08 [Intentionally Omitted.]
Section 5.09 MSD Agreement. From and after the Effective Time,
Parent and Purchaser agree to cause the Surviving Corporation and its
subsidiaries to comply with the Company's and its subsidiaries' obligations
under the Asset Purchase Agreement, dated as of January 26, 2000 by and
among the Company, Sterling Commerce (Southern), Inc., Sterling Commerce
(U.K.) Ltd., Sterling Commerce B.V., Sterling Commerce International, Inc.,
Brave Acquisition Corp. and Brave Cayman, Ltd. (the "MSD Agreement").
Section 5.10 Other Actions. The Company makes the
representations and warranties, and prior to the consummation of the Offer
agrees to take the steps, set forth in Section 5.10(a) of the Parent
Disclosure Schedule. Prior to the consummation of the Offer, Parent agrees
to assist the Company in taking the foregoing steps. In addition Parent
and the Company agree to comply with, and take the actions provided for in,
Section 5.10(b) of the Parent Disclosure Schedule.
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01 Conditions to Each Party's Obligation to Effect
the Merger. The respective obligation of each party to effect the Merger
is subject to the satisfaction or waiver on or prior to the Closing Date of
the following conditions:
(a) Stockholder Approval. If required by applicable law, the
Company Stockholder Approval shall have been obtained.
(b) No Injunctions or Restraints. No judgment, order, decree,
preliminary or permanent injunction, statute, law, ordinance, rule or
regulation, entered, enacted, promulgated, enforced or issued by any court
or other Governmental Entity of competent jurisdiction or other legal
restraint or prohibition (collectively, "Restraints") shall be in effect
preventing, enjoining or prohibiting the consummation of the Merger;
provided, however, that each of the parties shall have used its reasonable
best efforts to prevent the entry of any such Restraints and to appeal as
promptly as possible any such Restraints that may be entered.
(c) Purchase of Shares in the Offer. Parent, Purchaser or their
affiliates shall have accepted for payment and paid for all of the Shares
tendered and not withdrawn pursuant to the Offer, except that this
condition shall not apply if Parent, Purchaser or their affiliates shall
have failed to purchase Shares pursuant to the Offer in breach of their
obligations under this Agreement.
Section 6.02 Frustration of Closing Conditions. None of
Parent, Purchaser or the Company may rely on the failure of any condition
set forth in Section 6.01 to be satisfied if such failure was caused by
such party's failure to use reasonable best efforts to consummate the
Offer, the Merger and the other Transactions, as required by and subject to
Section 5.02.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
Section 7.01 Termination. This Agreement may be terminated at
any time prior to the Effective Time, whether before or after the Company
Stockholder Approval:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company:
(i) if the Offer shall have expired in accordance with the
terms of this Agreement without any Shares being purchased therein;
provided, however, that the right to terminate this Agreement under
this Section 7.01(b)(i) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has been the
cause of, or resulted in, the failure of Parent or Purchaser, as the
case may be, to purchase the Shares pursuant to the Offer on or prior
to such date;
(ii) [intentionally omitted]; or
(iii) if any Restraint having any of the effects set
forth in Section 6.01(b) shall be in effect and shall have become
final and nonappealable; provided, that the party seeking to terminate
this Agreement pursuant to this Section 7.01(b)(iii) shall have used
reasonable best efforts to prevent the entry of and to remove such
Restraint;
(c) by the Company:
(i) if prior to the purchase of Shares pursuant to the
Offer, Parent or Purchaser shall have breached or failed to perform in
any material respect any of their respective representations,
warranties, covenants or other agreements contained in this Agreement
or if any representation or warranty of Parent or Purchaser shall have
become untrue, which breach or failure to perform cannot be or has not
been cured within 30 days after the giving of written notice to Parent
or Purchaser, as applicable, except, in any case, for such breaches,
untruths or failures to perform which are not, in the Company's
opinion, reasonably likely to adversely affect Parent's or Purchaser's
ability to complete the Offer or the Merger;
(ii) if the Board of Directors of the Company shall have
exercised its termination rights set forth in Section 4.02(b);
provided that, in order for the termination of this Agreement pursuant
to this paragraph (ii) to be deemed effective, the Company shall have
complied with all provisions of Section 4.02, including (A) the notice
provisions therein and (B) the obligation to simultaneously pay to
Parent the Termination Fee required pursuant to Section 5.04(b)(i); or
(iii) if Parent, Purchaser or any of their affiliates
shall have failed to commence the Offer on or prior to five business
days following the date of the initial public announcement of the
Offer; provided, that the Company may not terminate this Agreement
pursuant to this Section 7.01(c)(iii) if the cause of such failure was
the Company's material breach of its obligations under this Agreement;
(d) by Parent or Purchaser:
(i) if prior to the purchase of Shares pursuant to the
Offer, the Company shall have breached or failed to perform any of its
representations, warranties, covenants or other agreements contained
in this Agreement or if any representation or warranty of the Company
shall have become untrue (except where the breach or untruth of such
representations or warranties results from changes specifically
permitted by the Agreement or from any transaction expressly consented
to in writing by Parent) which (A) would give rise to the failure of a
condition set forth in paragraph (c) or (d) of Annex A hereto and (B)
cannot be or has not been cured within 30 days after the giving of
written notice to the Company;
(ii) if, due to an occurrence not involving a breach by
Parent or Purchaser of their respective obligations hereunder, which
makes it impossible to satisfy any of the conditions set forth in
Annex A hereto, Parent, Purchaser, or any of their affiliates shall
have failed to commence the Offer on or prior to five business days
following the date of the initial public announcement of the Offer;
(iii) if (v) the Board of Directors of the Company (or
any committee thereof) withdraws or modifies its approval or
recommendation of the Offer, the Merger or this Agreement in a manner
adverse to Parent, (w) the Board of Directors of the Company (or any
committee thereof) shall have recommended to the stockholders of the
Company any Company Takeover Proposal, (x) the Company fails to call
or hold the Company Stockholder Meeting following the receipt by the
Company of a Company Takeover Proposal, (y) the Board of Directors of
the Company (or any committee thereof) shall have resolved to do any
of the foregoing, or (z) either Parent or Purchaser is entitled to
terminate the Offer as a result of the occurrence of an event set
forth in paragraph (b) of Annex A hereto; or
(iv) any person or "group" (as defined in Section 13(d)(3)
of the Exchange Act), other than Parent, Purchaser or their affiliates
or any group of which any of them is a member, shall have acquired
beneficial ownership (as determined pursuant to Rule 13d-3 promulgated
under the Exchange Act) of 20% or more of the Shares.
Section 7.02 Effect of Termination. In the event of
termination of this Agreement by either the Company, Parent or Purchaser as
provided in Section 7.01, this Agreement shall forthwith become void and
have no effect, without any liability or obligation on the part of Parent,
Purchaser or the Company, other than the provisions of the last sentence of
Section 5.01, Section 5.04, this Section 7.02 and Article VIII, which
provisions survive such termination, provided, however, that nothing herein
shall relieve any party from any liability for any willful and material
breach by such party of any of its representations, warranties, covenants
or agreements set forth in this Agreement.
Section 7.03 Amendment. This Agreement may be amended by the
parties at any time before or after the Company Stockholder Approval;
provided, however, that after any such approval, there shall not be made
any amendment that by law requires further approval by the stockholders of
the Company or Parent without the further approval of such stockholders.
This Agreement may not be amended except by an instrument in writing signed
on behalf of each of the parties and approved by the Original Directors if
required by Section 1.03.
Section 7.04 Extension; Waiver. At any time prior to the
Effective Time, a party may (a) extend the time for the performance of any
of the obligations or other acts of the other party, (b) waive any
inaccuracies in the representations and warranties of the other party
contained in this Agreement or in any document delivered pursuant to this
Agreement or (c) subject to the proviso of Section 7.03, waive compliance
by the other party with any of the agreements or conditions contained in
this Agreement. Any agreement on the part of a party to any such extension
or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party and approved by the Original Directors if
required by Section 1.03. The failure of any party to this Agreement to
assert any of its rights under this Agreement or otherwise shall not
constitute a waiver of such rights.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.01 Nonsurvival of Representations and Warranties.
None of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time. This Section 8.01 shall not limit any covenant or agreement of the
parties which by its terms contemplates performance after the Effective
Time.
Section 8.02 Notices. All notices, requests, claims, demands
and other communications under this Agreement shall be in writing and shall
be deemed given if delivered personally, telecopied (which is confirmed) or
sent by overnight courier (providing proof of delivery) to the parties at
the following addresses (or at such other address for a party as shall be
specified by like notice):
(a) if to Parent or Purchaser, to:
SBC Communications, Inc.
000 X. Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Senior Vice President -
Corporate Development
with copies to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx Xxxxxxxxxx
Xxxxxx Xxxxx
and
SBC Communications, Inc.
000 X. Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Senior Vice President -
Corporate Development
(b) if to the Company, to
Sterling Commerce, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: General Counsel
with copies to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Xxxx
Xxxx X. Xxxxxxxx
Section 8.03 Definitions. For purposes of this Agreement:
(a) an "affiliate" of any person means another person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such first person, where
"control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management policies of a person,
whether through the ownership of voting securities, by contract, as trustee
or executor, or otherwise;
(b) "material adverse change" or "material adverse effect"
means, when used in connection with the Company or Parent, any change,
effect, event, occurrence or state of facts that is materially adverse to
the business, financial condition or results of operations of such party
and its subsidiaries taken as a whole other than any change, effect, event
or occurrence relating to (i) the economy or securities markets of the
United States or any other region in general, (ii) this Agreement or the
transactions contemplated hereby or the announcement thereof or (iii) the
industry in which the Company or Parent, as the case may be, operates in
general, and not specifically relating to the Company or Parent or their
respective subsidiaries;
(c) "person" means an individual, corporation, partnership,
limited liability company, joint venture, association, trust,
unincorporated organization or other entity;
(d) a "subsidiary" of any person means another person, an amount
of the voting securities or other voting ownership or partnership interests
of which is sufficient to elect at least a majority of its Board of
Directors or other governing body (or, if there are no such voting
securities or interests, 50% or more of the equity interests of which) is
owned directly or indirectly by such first person.
(e) "knowledge" of any person which is not an individual means
the knowledge of such person's executive officers after due inquiry.
Section 8.04 Interpretation. When a reference is made in this
Agreement to an Article, Section or Exhibit, such reference shall be to an
Article or Section of, or an Exhibit to, this Agreement unless otherwise
indicated. The table of contents, index of terms and headings contained in
this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. Whenever the words
"include", "includes" or "including" are used in this Agreement, they shall
be deemed to be followed by the words "without limitation". The words
"hereof", "herein" and "hereunder" and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. All terms defined in this
Agreement shall have the defined meanings when used in any certificate or
other document made or delivered pursuant hereto unless otherwise defined
therein. The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such term. Any agreement,
instrument or statute defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement, instrument or
statute as from time to time amended, modified or supplemented, including
(in the case of agreements or instruments) by waiver or consent and (in the
case of statutes) by succession of comparable successor statutes and
references to all attachments thereto and instruments incorporated therein.
References to a person are also to its permitted successors and assigns.
Section 8.05 Counterparts. This Agreement may be executed in
two or more counterparts, all of which shall be considered one and the same
Agreement and shall become effective when one or more counterparts have
been signed by each of the parties and delivered to the other parties.
Section 8.06 Entire Agreement; No Third-Party Beneficiaries.
This Agreement (including the documents and instruments referred to
herein), and the Confidentiality Agreement (a) constitute the entire
agreement, and supersede all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter of
this Agreement and (b) except for the provisions of Article II and Section
5.03, are not intended to confer upon any person other than the parties any
rights or remedies.
Section 8.07 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE,
REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE
PRINCIPLES OF CONFLICT OF LAWS THEREOF.
Section 8.08 Assignment. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise by either of the parties
hereto without the prior written consent of the other party except that
Purchaser may assign, in its sole discretion, any or all of its rights,
interests and obligations hereunder to Parent or to any direct or indirect
wholly owned subsidiary of Parent; provided, that Parent shall be obligated
to cause such subsidiary to comply with its obligations under or related to
this Agreement. Any assignment in violation of the preceding sentence
shall be void. Subject to the preceding two sentences, this Agreement will
be binding upon, inure to the benefit of, and be enforceable by, the
parties and their respective successors and assigns.
Section 8.09 Consent to Jurisdiction. Each of the parties
hereto (a) consents to submit itself to the personal jurisdiction of any
federal court located in the State of Delaware or any Delaware state court
in the event any dispute arises out of this Agreement or any of the
transactions contemplated by this Agreement, (b) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court, and (c) agrees that it will not
bring any action relating to this Agreement or any of the transactions
contemplated by this Agreement in any court other than a federal court
sitting in the State of Delaware or a Delaware state court.
Section 8.10 Headings. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
Section 8.11 Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any
rule of law or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect. Upon such
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible to the fullest extent permitted by
applicable law in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the extent possible.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
and Plan of Merger to be signed by their respective officers hereunto duly
authorized, all as of the date first written above.
SBC COMMUNICATIONS, INC.
By: /s/ Xxxxxxx X. XxXxx
---------------------------------
Name: Xxxxxxx X. XxXxx
Title: Managing Director - Corporate
Development
SBC SILVER, INC.
By: /s/ Xxxxxxx X. XxXxx
---------------------------------
Name: Xxxxxxx X. XxXxx
Title: Vice President
STERLING COMMERCE, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
ANNEX A
Certain Conditions of the Offer. Notwithstanding any other
provisions of the Offer, Purchaser shall not be required to accept for
payment or, subject to any applicable rules and regulations of the SEC,
including Rule 14e-1(c) under the Exchange Act (relating to Purchaser's
obligation to pay for or return tendered Shares promptly after termination
or withdrawal of the Offer), pay for, and may delay the acceptance for
payment of or, subject to the restriction referred to above, the payment
for, any tendered Shares, and may terminate or amend the Offer as to any
Shares not then paid for, if (i) any applicable waiting period under the
HSR Act, the Swedish Competition Act and the German Gesetz gegen
Wettebewerbsbeschraenkungen has not expired or terminated, (ii) the Minimum
Condition has not been satisfied, (iii) the Company has failed to take one
or more of the actions required of it in Section 5.10(a) of the Parent
Disclosure Schedule, or (iv) at any time on or after the date of this
Agreement and (except in the case of clause (b)) continuing in effect
immediately prior to the expiration of the Offer, any of the following
events shall occur (other than as a result of any action or inaction of
Parent or any of its subsidiaries which constitutes a breach of this
Agreement):
(a) there shall be any statute, rule, regulation, judgment,
order or injunction issued, enacted, entered, enforced, promulgated or
deemed applicable to the Offer or the Merger or any other action shall
be taken by any Governmental Entity (other than actions taken by any
Governmental Entity pursuant to any state or federal antitrust law,
including without limitation the HSR Act, or the Communications Act)
(i) prohibiting or imposing any material limitations on Parent's or
Purchaser's ability to exercise ownership or operation (or that of any
of their respective subsidiaries or affiliates) of all or a material
portion of their or the Company's businesses or assets, (ii)
challenging the acquisition by Parent or Purchaser of any Shares under
the Offer, or restraining or prohibiting the making or consummation of
the Offer, the Merger or the performance of any of the other
Transactions, (iii) imposing material limitations on the ability of
Purchaser, or rendering Purchaser unable, to accept for payment, pay
for or purchase some or all of the Shares pursuant to the Offer, and
the Merger, or (iv) imposing material limitations on the ability of
Purchaser or Parent effectively to exercise full rights of ownership
of the Shares, including, without limitation, the right to vote the
Shares purchased by it on all matters properly presented to the
Company's stockholders, including without limitation the approval and
adoption of this Agreement and the Transactions;
(b) the Company shall have entered into any Company
Acquisition Agreement with respect to any Company Superior Proposal in
accordance with Section 4.02(b) of this Agreement;
(c) (i) any of the representations and warranties of the
Company set forth in this Agreement (without giving effect to any
materiality or material adverse change or material adverse effect
qualification set forth therein) shall not be true and correct as of
the expiration of the Offer, except where the failure of such
representations and warranties to be so true and correct results from
changes specifically permitted by this Agreement or from any
transaction expressly consented to in writing by Parent or, in the
aggregate, does not have a material adverse effect on the Company; or
(ii) the representations and warranties of the Company set forth in
Section 3.01(c) or Section 3.01(g)(2) shall be untrue or incorrect in
any material respect, except where the failure of such representations
and warranties to be true and correct results from changes
specifically permitted by this Agreement or from any transaction
expressly consented to in writing by Parent;
(d) the Company shall have failed to perform in any
material respect any material obligation or to comply in any material
respect with any material agreement or covenant of the Company to be
performed or complied with by it under this Agreement at or
immediately prior to consummation of the Offer; or
(e) this Agreement shall have been terminated in accordance
with its terms;
(f) there shall have occurred any material adverse effect
on the Company or there shall have occurred any change, condition,
event or development that would reasonably be expected to have a
material adverse effect on the Company;
(g) Parent and the Company shall have agreed (in their
respective sole discretion) that Purchaser shall terminate the Offer
or postpone the acceptance for payment of or payment for Shares
thereunder; or
(h) there shall have occurred a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States which, in either case, prohibits Parent's or Purchaser's bank
lenders from furnishing to them the funds necessary to pay for the Shares
upon consummation of the Offer;
which in the reasonable judgment of Parent or Purchaser, in any such case,
and regardless of the circumstances (including any action or inaction by
Parent or Purchaser other than any action or inaction by Parent or
Purchaser which constitutes a breach of this Agreement) giving rise to such
condition makes it inadvisable to proceed with the Offer and/or with such
acceptance for payment of or payment for Shares.
The foregoing conditions are for the sole benefit of Parent and
Purchaser and may be asserted by Parent or Purchaser regardless of the
circumstances giving rise to any such condition (other than as a result of
any action or inaction of Parent or any of its subsidiaries which
constitutes a breach of this Agreement) or may be waived by Parent or
Purchaser, in whole or in part, at any time and from time to time in the
sole discretion of Parent or Purchaser. The failure by Parent or 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 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 which may be asserted at any time and from time to
time.
