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EXHIBIT (d)(1)
[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
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TABLE OF CONTENTS
Page
ARTICLE I
THE OFFER AND THE MERGER
Section 1.01 The Offer......................................................................... 2
Section 1.02 Company Actions................................................................... 5
Section 1.03 Directors......................................................................... 7
Section 1.04 The Merger........................................................................ 8
Section 1.05 Closing........................................................................... 8
Section 1.06 Effective Time.................................................................... 9
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..................................... 14
Section 3.02 Representations and Warranties of Parent.......................................... 31
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 4.01 Conduct of Business of the Company................................................ 34
Section 4.02 No Solicitation by the Company.................................................... 37
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Page
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.01 Access to Information; Confidentiality............................................ 41
Section 5.02 Reasonable Best Efforts; Cooperation.............................................. 41
Section 5.03 Indemnification, Exculpation and Insurance........................................ 42
Section 5.04 Fees and Expenses................................................................. 43
Section 5.05 Public Announcements.............................................................. 43
Section 5.06 Employee Benefit Plans............................................................ 44
Section 5.07 Purchaser Compliance.............................................................. 45
Section 5.08 NYSE Listing...................................................................... 45
Section 5.09 MSD Agreement..................................................................... 45
Section 5.10 Telecommunications Act of 1996.................................................... 46
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01 Conditions to Each Party's Obligation to Effect the Merger........................ 46
Section 6.02 Frustration of Closing Conditions................................................. 46
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
Section 7.01 Termination....................................................................... 47
Section 7.02 Effect of Termination............................................................. 49
Section 7.03 Amendment......................................................................... 49
Section 7.04 Extension; Waiver................................................................. 49
ARTICLE VIII
GENERAL PROVISIONS
Section 8.01 Nonsurvival of Representations and Warranties..................................... 50
Section 8.02 Notices........................................................................... 50
Section 8.03 Definitions....................................................................... 52
Section 8.04 Interpretation.................................................................... 52
Section 8.05 Counterparts...................................................................... 53
Section 8.06 Entire Agreement; No Third-Party Beneficiaries.................................... 53
Section 8.07 Governing Law..................................................................... 53
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Page
Section 8.08 Assignment........................................................................ 53
Section 8.09 Consent to Jurisdiction........................................................... 54
Section 8.10 Headings.......................................................................... 54
Section 8.11 Severability...................................................................... 54
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INDEX OF TERMS
Page
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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
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Page
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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
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Page
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SEC................................................................................................. 3
Securities Act...................................................................................... 18
Shares.............................................................................................. 2
Stockholders........................................................................................ 1
subsidiary.......................................................................................... 52
Surviving Corporation............................................................................... 8
Taxes............................................................................................... 26
Transactions........................................................................................ 5
Year 2000 Compliant................................................................................. 31
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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:
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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
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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 Pur-
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chaser 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
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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
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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.
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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
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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,
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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
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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
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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
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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
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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.
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(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
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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
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31, 2000: (i) 80,040,334 shares of Company Common Stock were issued and out
standing; (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 exchange
able 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,
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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,
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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 arbitraltribunal (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
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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,
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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,
registra-
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tions 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").
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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.
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(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
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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.
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(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
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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
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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
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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
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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
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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.
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(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
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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,
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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
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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)
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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
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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
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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
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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 stock holders 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
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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
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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 reason able 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
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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
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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
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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 Mini mum 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
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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
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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").
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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 reason able 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.
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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
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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;
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(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
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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
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58
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
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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
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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 discre-
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tion, 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agree-
ment 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
63
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;
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64
(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;
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65
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.
A-3
