Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
XXXXX.XXX, INC.,
SILVER MERGER SUB INC.
AND
XXXXXXXX.XXX, INC.
DATED AS OF AUGUST 8, 2000
TABLE OF CONTENTS
Page
AGREEMENT AND PLAN OF MERGER....................................................................... 4
ARTICLE 1. THE MERGER.............................................................................. 5
SECTION 1.1 The Merger........................................................................... 5
SECTION 1.2 Closing.............................................................................. 5
SECTION 1.3 Effective Time....................................................................... 5
SECTION 1.4 Effects of the Merger................................................................ 6
SECTION 1.5 Certificates of Incorporation and By-laws of the Surviving Corporation............... 6
SECTION 1.6 Directors and Officers............................................................... 6
ARTICLE 2. EFFECTS OF THE MERGER ON THE CAPITAL STOCK OF XXXXXXXX.XXX; EXCHANGE OF CERTIFICATES.... 6
SECTION 2.1 Effect on Xxxxxxxx.xxx Capital Stock................................................. 6
SECTION 2.2 Exchange of Shares and Certificates.................................................. 9
SECTION 2.3 Certain Adjustments.................................................................. 11
ARTICLE 3. REPRESENTATIONS AND WARRANTIES.......................................................... 11
SECTION 3.1 Representations and Warranties of Phone and Merger Sub............................... 11
SECTION 3.2 Representations and Warranties of Xxxxxxxx.xxx....................................... 24
ARTICLE 4. COVENANTS RELATING TO CONDUCT OF BUSINESS SECTION....................................... 37
SECTION 4.1 Conduct of Business.................................................................. 37
SECTION 4.2 No Solicitation by Phone............................................................. 42
SECTION 4.3 No Solicitation by Xxxxxxxx.xxx...................................................... 44
ARTICLE 5. ADDITIONAL AGREEMENTS................................................................... 45
SECTION 5.1 Preparation of the Form S-4 and the Joint Proxy Statement; Stockholders' Meetings... 45
SECTION 5.2 Pooling Letters...................................................................... 46
SECTION 5.3 Access to Information; Confidentiality............................................... 47
SECTION 5.4 Commercially Reasonable Efforts...................................................... 47
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Page
SECTION 5.5 Indemnification, Exculpation and Insurance........................................... 48
SECTION 5.6 Fees and Expenses.................................................................... 49
SECTION 5.7 Public Announcements................................................................. 49
SECTION 5.8 Affiliates........................................................................... 50
SECTION 5.9 Nasdaq Listing....................................................................... 50
SECTION 5.10 Tax and Accounting Treatment........................................................ 50
SECTION 5.11 Post-Merger Operations.............................................................. 51
SECTION 5.12 Conveyance Taxes.................................................................... 51
SECTION 5.13 Employee Benefits................................................................... 51
SECTION 5.14 Consents of Accountants............................................................. 51
SECTION 5.15 Phone Board and Officers............................................................ 51
SECTION 5.16 Rights Plans........................................................................ 52
SECTION 5.17 Action by Board of Directors........................................................ 52
ARTICLE 6. CONDITIONS PRECEDENT.................................................................... 52
SECTION 6.1 Conditions to Each Party's Obligation to Effect The Merger........................... 52
SECTION 6.2 Conditions to Obligations of Xxxxxxxx.xxx............................................ 53
SECTION 6.3 Conditions to Obligations of Phone and Merger Sub.................................... 54
ARTICLE 7. TERMINATION, AMENDMENT AND WAIVER....................................................... 55
SECTION 7.1 Termination.......................................................................... 55
SECTION 7.2 Effect of Termination................................................................ 56
SECTION 7.3 Amendment............................................................................ 59
SECTION 7.4 Extension; Waiver.................................................................... 59
ARTICLE 8. GENERAL PROVISIONS...................................................................... 59
SECTION 8.1 Nonsurvival of Representations and Warranties........................................ 59
SECTION 8.2 Notices.............................................................................. 59
SECTION 8.3 Definitions.......................................................................... 60
SECTION 8.4 Interpretation....................................................................... 61
SECTION 8.5 Counterparts......................................................................... 62
SECTION 8.6 Entire Agreement; No Third-Party Beneficiaries....................................... 62
SECTION 8.7 Governing Law........................................................................ 62
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Page
SECTION 8.8 Assignment........................................................................... 62
SECTION 8.9 Consent to Jurisdiction.............................................................. 62
SECTION 8.10 Headings, etc....................................................................... 62
SECTION 8.11 Severability........................................................................ 62
EXHIBITS
EXHIBIT A-- Form of Phone Stock Option Agreement
EXHIBIT B-- Form of Xxxxxxxx.xxx Stock Option Agreement
EXHIBIT C-- Form of Xxxxxxxx.xxx Voting Agreement
EXHIBIT D-- Form of Phone Voting Agreement
EXHIBIT E-- Form of Xxxxxxxx.xxx Affiliate Letter
EXHIBIT F-- Form of Phone Affiliate Letter
EXHIBIT G-- Form of Strategic Alliance MOU
EXHIBIT H-- Form of Xxxxxxxx.xxx Special Affiliate Letter
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of August 8, 2000, by and among
XXXXX.XXX, INC., a Delaware corporation ("Phone"), SILVER MERGER SUB INC., a
Delaware corporation and a wholly owned subsidiary of Phone ("Merger Sub") and
XXXXXXXX.XXX, INC., a Delaware corporation ("Xxxxxxxx.xxx").
W I T N E S S E T H:
WHEREAS, the Boards of Directors of Phone and Xxxxxxxx.xxx deem it
advisable and in the best interests of each corporation and its respective
stockholders that Phone and Xxxxxxxx.xxx engage in a business combination in a
merger of equals in order to advance the long-term strategic business interests
of Phone and Xxxxxxxx.xxx; and
WHEREAS, in furtherance thereof, the Boards of Directors of each of
Phone, Merger Sub and Xxxxxxxx.xxx have approved this Agreement and the merger
of Merger Sub with and into Xxxxxxxx.xxx with Xxxxxxxx.xxx continuing as the
surviving corporation (the "Merger") and have deemed the Merger advisable, upon
the terms and subject to the conditions set forth in this Agreement; and
WHEREAS, the Boards of Directors of each of Phone, Merger Sub and
Xxxxxxxx.xxx, having determined that the Merger and the other transactions
contemplated hereby are advisable and in the best interests of its stockholders,
have approved the transactions contemplated by this Agreement, the Option
Agreements, the Voting Agreements and the Strategic Alliance MOU (as such terms
are hereinafter defined) in accordance with the provisions of the Delaware
General Corporation Law (the "DGCL"); and
WHEREAS, the Board of Directors of Xxxxxxxx.xxx has resolved to
recommend to Xxxxxxxx.xxx's stockholders the approval and adoption of this
Agreement, and the consummation of the transactions contemplated hereby upon the
terms and subject to the conditions set forth herein; and
WHEREAS, the Board of Directors of Phone has resolved to recommend to
Phone's stockholders the approval of the issuance of shares of Phone Common
Stock (as hereinafter defined) pursuant to the Merger and the amendment to
Phone's Certificate of Incorporation to change the name of Phone as of the
Effective Time to a name to be mutually agreed upon in good faith by Phone and
Xxxxxxxx.xxx following the date hereof (the "Phone Charter Amendment"); and
WHEREAS, as a condition and inducement to the execution of this
Agreement, contemporaneously herewith Xxxxxxxx.xxx and Phone will enter into a
stock option agreement (the "Phone Option Agreement") attached hereto as Exhibit
A and a stock option agreement (the "Xxxxxxxx.xxx Option Agreement" and,
together with the Phone Option Agreement, the "Option Agreements") attached
hereto as Exhibit B; and
WHEREAS, as a condition and inducement to the execution of this
Agreement, contemporaneously herewith certain stockholders of Phone will enter
into a voting agreement (the "Phone Voting Agreement") attached hereto as
Exhibit C and certain stockholders of Xxxxxxxx.xxx will enter into a voting
agreement (the "Xxxxxxxx.xxx Voting Agreement"
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and together with the Phone Voting Agreement, the "Voting Agreements") attached
hereto as Exhibit D; and
WHEREAS, as a condition and inducement to the execution of this
Agreement, contemporaneously herewith Xxxxxxxx.xxx and Phone will enter into the
Reciprocal Reseller License and Services Memorandum of Understanding (the
"Strategic Alliance MOU") attached hereto as Exhibit G; and
WHEREAS, for United States federal income tax purposes, it is intended
that the Merger shall qualify as a reorganization within the meaning of section
368(a) of the Internal Revenue Code of 1986, as amended, (the "Code"), and the
rules and regulations promulgated thereunder and this Agreement is intended to
be and is adopted as a plan of reorganization within the meaning of section
368(a) of the Code.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements set forth herein, in the Option Agreements, the Voting
Agreements and the Strategic Alliance MOU the parties agree as follows:
ARTICLE 1.
THE MERGER
SECTION 1.1 The Merger.
Upon the terms and subject to the conditions set forth in this
Agreement, and in accordance with the DGCL, Merger Sub shall be merged with and
into Xxxxxxxx.xxx at the Effective Time (as defined in Section 1.3 hereof).
Following the Effective Time, the separate corporate existence of Merger Sub
shall cease and Xxxxxxxx.xxx shall continue as the surviving corporation (the
"Surviving Corporation") in the Merger and shall succeed to and assume all the
rights, privileges, immunities, properties, powers and franchises of Merger Sub
in accordance with the DGCL.
SECTION 1.2 Closing.
The closing of the Merger (the "Closing") shall take place at 10:00
a.m., California time, on a date to be specified by the parties, which shall be
no later than the second business day after satisfaction or waiver of all of the
conditions set forth in Article 6 (the "Closing Date"), at the offices of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxx
Xxxx, Xxxxxxxxxx 00000, unless another time, date or place is agreed to in
writing by the parties hereto.
SECTION 1.3 Effective Time.
Subject to the provisions of this Agreement, as soon as practicable on
the Closing Date, the parties shall cause the Merger to be consummated by filing
with the Secretary of State of the State of Delaware (the "Secretary of State")
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. The Merger shall become effective at such
time as the Certificate of Merger is duly filed with the Secretary of State, or
at such subsequent
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date or time as Phone and Xxxxxxxx.xxx shall agree and specify in the
Certificate of Merger (the time Merger becomes effective being hereinafter
referred to as the "Effective Time").
SECTION 1.4 Effects of the Merger.
The Merger shall have the effects set forth in Section 259 of the
DGCL.
SECTION 1.5 Certificates of Incorporation and By-laws of the Surviving
Corporation.
At the Effective Time, subject to the requirements of Section 5.5, the
Certificate of Incorporation and the by-laws of Merger Sub, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation and by-laws of the Surviving Corporation, in each case until
thereafter amended in accordance with applicable law.
SECTION 1.6 Directors and Officers.
The directors and officers of Merger Sub 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 Surviving Corporation's Certificate of Incorporation and
by-laws.
ARTICLE 2.
EFFECTS OF THE MERGER ON THE CAPITAL STOCK OF
XXXXXXXX.XXX; EXCHANGE OF CERTIFICATES
SECTION 2.1 Effect on Xxxxxxxx.xxx Capital Stock.
As of the Effective Time of the Merger, by virtue of the Merger and
without any action on the part of the holders of any shares of common stock, par
value $0.001 per share, of Xxxxxxxx.xxx ("Xxxxxxxx.xxx Common Stock") or any
shares of common stock of Merger Sub:
(a) Conversion of Xxxxxxxx.xxx Common Stock.
Each issued and outstanding share of Xxxxxxxx.xxx Common Stock (other
than any shares of Xxxxxxxx.xxx Common Stock to be canceled pursuant to Section
2.1(c) hereof) shall be converted into the right to receive 1.6105 (the
"Exchange Ratio") fully paid and nonassessable shares of common stock, par value
$0.001 per share, of Phone ("Phone Common Stock"). As of the Effective Time,
all such shares of Xxxxxxxx.xxx Common Stock shall no longer be outstanding and
shall automatically be canceled and retired and shall cease to exist. As of the
Effective Time, each certificate theretofore representing shares of Xxxxxxxx.xxx
Common Stock, without any action on the part of Phone, Xxxxxxxx.xxx or the
holder thereof, shall be deemed to represent that number of shares of Phone
Common Stock determined by multiplying the shares of Xxxxxxxx.xxx Common Stock
represented thereby by the Exchange Ratio. Each holder of a certificate
representing any shares of Xxxxxxxx.xxx Common Stock shall cease to have any
rights with respect thereto, except the right to receive, upon the surrender of
any such certificates, certificates representing the shares of Phone Common
Stock to be issued or paid in
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consideration therefor upon surrender of such certificate in accordance with
Section 2.2 hereof without interest.
(b) Capital Stock of Merger Sub.
Each issued and outstanding share of common stock, par value $0.01 per
share, of Merger Sub shall be converted into one fully paid and nonassessable
share of common stock, par value $0.01 per share, of the Surviving Corporation.
(c) Cancellation of Treasury Shares. Each share of Xxxxxxxx.xxx
Common Stock held in the treasury of Xxxxxxxx.xxx, or owned by Phone or any
direct or indirect subsidiary of Xxxxxxxx.xxx or Phone immediately prior to the
Effective Time shall automatically be canceled and retired and shall cease to
exist, and no consideration shall be delivered in exchange thereof.
(d) Assumption and Conversion of Xxxxxxxx.xxx Options.
(i) As of the Effective Time, each outstanding option or warrant
to purchase Xxxxxxxx.xxx Common Stock (a "Xxxxxxxx.xxx Option") issued under
each Xxxxxxxx.xxx Stock Plan (as defined in Section 3.2(c)) shall thereafter
entitle the holder thereof to receive, upon the exercise thereof, that number of
shares of Phone Common Stock equal to the product of (w) the number of shares of
Xxxxxxxx.xxx Common Stock subject to such Xxxxxxxx.xxx Option immediately prior
to the Effective Time and (x) the Exchange Ratio, at an exercise price for each
full share of Phone Common Stock subject to such Xxxxxxxx.xxx Option equal to
(y) the exercise price per share of Xxxxxxxx.xxx Common Stock subject to such
Xxxxxxxx.xxx Option divided by (z) the Exchange Ratio, which exercise price per
share shall be rounded up to the nearest two-place decimal. The number of shares
of Phone Common Stock that may be purchased by a holder upon the exercise of any
Xxxxxxxx.xxx Option shall not include any fractional share of Phone Common Stock
but shall be rounded, in the case of any Xxxxxxxx.xxx Option other than an
"incentive stock option" (within the meaning of section 422 of the Code), up
and, in the case of any incentive stock option, down to the nearest whole share,
if necessary.
(ii) As of the Effective Time, Phone shall assume in full each
Xxxxxxxx.xxx Option and all of the other rights and obligations of Xxxxxxxx.xxx
under the Xxxxxxxx.xxx Stock Plans (as defined in Section 3.2(c)) as provided
herein. Section 2.1(d)(ii) of the Xxxxxxxx.xxx Disclosure Schedule sets forth a
list summarizing all Xxxxxxxx.xxx Options under all of the Xxxxxxxx.xxx Stock
Plans, including the term and the exercise price of each Xxxxxxxx.xxx Option.
The assumption of a Xxxxxxxx.xxx Option by Phone shall not terminate or modify
(except as required hereunder) any right of first refusal, right of repurchase,
vesting schedule or other restriction on transferability relating to a
Xxxxxxxx.xxx Option or the stock issuable upon the exercise thereof. Continuous
employment with Xxxxxxxx.xxx shall be credited to an optionee for purposes of
determining the number of shares subject to exercise, vesting or repurchase
after the Effective Time, and the provisions in the Xxxxxxxx.xxx Stock Plans
and/or in any stock option agreement evidencing the terms and conditions of any
Xxxxxxxx.xxx Option relating to the exercisability of any Xxxxxxxx.xxx Option
upon termination of an optionee's employment or service as a director shall not
be deemed triggered until such time as such optionee shall be neither an
employee or officer nor serving as a director of Phone or any subsidiary. After
such assumption, Phone shall issue, upon any partial or total exercise of any
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Xxxxxxxx.xxx Option, in lieu of shares of Xxxxxxxx.xxx Common Stock, the number
of shares of Phone Common Stock to which the holder of the Xxxxxxxx.xxx Option
is entitled pursuant to this Agreement. The assumption by Phone of Xxxxxxxx.xxx
Options shall not give holders of such Xxxxxxxx.xxx Options any additional
benefits which they did not have immediately prior to the Effective Time. Phone
shall file with the Securities and Exchange Commission (the "SEC") as soon as
practicable, and in any event within two (2) business days, following the
Effective Time a registration statement on Form S-8 under the Securities Act of
1933, as amended (the "Securities Act"), covering, to the extent applicable, the
shares of Phone Common Stock to be issued upon the exercise of Xxxxxxxx.xxx
Options assumed by Phone. Phone shall use commercially reasonable efforts to
qualify as soon as practicable, and in any event within two (2) business days,
after the Effective Time under the applicable state securities laws the issuance
of the shares of Phone Common Stock to be issued upon exercise of such
Xxxxxxxx.xxx Options. Prior to the Effective Time, Xxxxxxxx.xxx shall make such
amendments, if any, to the Xxxxxxxx.xxx Stock Plans as shall be necessary to
permit such assumption in accordance with this Section 2.1(d).
(iii) It is the intention of the parties that, to the extent
that any Xxxxxxxx.xxx Option constitutes an incentive stock option immediately
prior to the Effective Time of the Merger, such Xxxxxxxx.xxx Option shall
continue to qualify as an incentive stock option to the maximum extent permitted
by section 422 of the Code, and that the assumption of Xxxxxxxx.xxx Options
provided by this Section 2.1(d) shall satisfy the conditions of section 424(a)
of the Code.
(e) At the Effective Time, Phone shall assume the outstanding
offering periods under the Xxxxxxxx.xxx Employee Stock Purchase Plan (the
"Xxxxxxxx.xxx ESPP"), and all outstanding rights to purchase shares of
Xxxxxxxx.xxx Common Stock under the Xxxxxxxx.xxx ESPP ("Purchase Rights") shall
be converted (in accordance with the Exchange Ratio) into rights to purchase
shares of Phone Common Stock (with the number of shares rounded down to the
nearest whole share and the purchase price as of the offering date for each
offering period in effect as of the Effective Time rounded up to the nearest
whole cent). All such converted Purchase Rights shall be assumed by Phone, and
each offering period in effect under the Xxxxxxxx.xxx ESPP immediately prior to
the Effective Time shall be continued in accordance with the terms of the
Xxxxxxxx.xxx ESPP until the end of such offering period. The Xxxxxxxx.xxx ESPP
shall terminate or be merged into the stock purchase plan sponsored by Phone
(the "Phone ESPP") immediately following the exercise of the last assumed
Purchase Right, and no additional Purchase Rights shall be granted under the
Xxxxxxxx.xxx ESPP following the Effective Time, provided that references to
Xxxxxxxx.xxx in the Xxxxxxxx.xxx ESPP and related documents shall mean Phone
(except that the purchase price as of the offering date for a relevant period
shall be determined with respect to the fair market value of Xxxxxxxx.xxx Common
Stock on such date, as adjusted hereby). Phone shall take all corporate action
necessary to reserve for issuance a sufficient number of shares of Phone Common
Stock for issuance upon exercise of Purchase Rights under the Xxxxxxxx.xxx ESPP
assumed in accordance with this Section 2.1(e). Phone agrees that, from and
after the Effective Time, Xxxxxxxx.xxx employees may participate in the Phone
ESPP, subject to the terms and conditions of the Phone ESPP; provided, however,
that Phone shall amend the Phone ESPP to provide for a special offering period
that permits Xxxxxxxx.xxx employees the ability to immediately participate in
the Phone ESPP after the Effective Time, and that service with Xxxxxxxx.xxx
shall
5
be treated as service with Phone for determining eligibility of Xxxxxxxx.xxx's
employees under the Phone ESPP.
SECTION 2.2 Exchange of Shares and Certificates.
(a) Exchange Agent. As of the Effective Time of the Merger, Phone
shall deposit with U.S. Stock Transfer Corporation or such other bank, trust
company or nationally recognized shareholder services provider as may be
designated by Phone (the "Exchange Agent"), for the benefit of the holders of
shares of Xxxxxxxx.xxx Common Stock, for exchange in accordance with this
Article 2, through the Exchange Agent, certificates representing the shares of
Phone Common Stock (such shares of Phone Common Stock, together with any
dividends or distributions with respect thereto with a record date after the
Effective Time, and any cash payable in lieu of any fractional shares of Phone
Common Stock, being hereinafter referred to as the "Exchange Fund") issuable
pursuant to Section 2.1 hereof in exchange for outstanding shares of
Xxxxxxxx.xxx Common Stock.
(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, the Exchange Agent shall mail to each holder of record of a
certificate or certificates which immediately prior to the Effective Time
represented outstanding shares of Xxxxxxxx.xxx Common Stock (the "Certificates")
whose shares were converted into shares of Phone Common Stock pursuant to
Section 2.1 hereof, (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 as Phone may reasonably specify),
and (ii) instructions for use in effecting the surrender of the Certificates in
exchange for certificates representing shares of Phone Common Stock. Upon
surrender of a Certificate for cancellation to the Exchange Agent or to such
other agent or agents as may be appointed by Phone, together with such letter of
transmittal, duly executed, and such other documents as may reasonably be
required by the Exchange Agent, the holder of such Certificate shall be entitled
to receive in exchange therefor a certificate representing that number of whole
shares of Phone Common Stock which such holder has the right to receive pursuant
to the provisions of this Article 2, and the Certificate so surrendered shall
forthwith be canceled. In the event of a transfer of ownership of Xxxxxxxx.xxx
Common Stock which is not registered in the transfer records of Xxxxxxxx.xxx, a
certificate representing the proper number of shares of Phone Common Stock may
be issued to a person other than the person in whose name the Certificate so
surrendered is registered, if such Certificate shall be properly endorsed or
otherwise be in proper form for transfer and the person requesting such issuance
shall pay any transfer or other taxes required by reason of the issuance of
shares of Phone Common Stock to a person other than the registered holder of
such Certificate or establish to the satisfaction of Phone that such tax has
been paid or is not applicable. No interest shall be paid or shall accrue on any
cash payable in lieu of any fractional shares of Phone Common Stock.
(c) Distributions with Respect to Unexchanged Shares. No dividends or
other distributions with respect to Phone Common Stock with a record date after
the Effective Time shall be paid to the holder of any unsurrendered Certificate
with respect to the shares of Phone Common Stock represented thereby, and no
cash payment in lieu of fractional shares shall be paid to any such holder
pursuant to Section 2.2(e) hereof, until the surrender of such Certificate in
accordance with this Article 2. Subject to the effect of applicable laws,
following surrender of
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any such Certificate, there shall be paid to the holder of the certificate
representing whole shares of Phone Common Stock issued in exchange therefor,
without interest, (i) at the time of such surrender, the amount of any cash
payable in lieu of a fractional share of Phone Common Stock to which such holder
is entitled pursuant to Section 2.2(e) and the amount of dividends or other
distributions with a record date after the Effective Time theretofore paid with
respect to such whole shares of Phone Common Stock, and (ii) at the appropriate
payment date, the amount of dividends or other distributions with a record date
after the Effective Time but prior to such surrender and a payment date
subsequent to such surrender payable with respect to such whole shares of Phone
Common Stock.
(d) No Further Ownership Rights in Xxxxxxxx.xxx Common Stock. All
shares of Phone Common Stock issued upon the surrender for exchange of
Certificates in accordance with the terms of this Article 2 (including any cash
paid pursuant to Section 2.2(c) or 2.2(e) hereof) shall be deemed to have been
issued (and paid) in full satisfaction of all rights pertaining to the shares of
Xxxxxxxx.xxx Common Stock theretofore represented by such Certificates, subject,
however, to the obligation of the Surviving Corporation, as applicable, to pay
any dividends or make any other distributions with a record date prior to the
Effective Time which may have been declared or made by Xxxxxxxx.xxx on such
shares of Xxxxxxxx.xxx Common Stock in accordance with the terms of this
Agreement and which remain unpaid at the Effective Time, and there shall be no
further registration of transfers on the stock transfer books of the Surviving
Corporation of the shares of Xxxxxxxx.xxx Common Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation or the Exchange Agent
for any reason, they shall be canceled and exchanged as provided in this Article
2, except as otherwise provided by law.
(e) Fractional Shares.
(i) No certificates representing fractional shares of Phone
Common Stock shall be issued upon the surrender for exchange of Certificates,
and such fractional share interests shall not entitle the owner thereof to vote
or to any other rights of a stockholder of Phone.
(ii) Notwithstanding any other provision of this Agreement, each
holder of shares of Xxxxxxxx.xxx Common Stock converted pursuant to the Merger
who would otherwise have been entitled to receive a fraction of a share of Phone
Common Stock (after taking into account all Certificates delivered by such
holder) shall receive, in lieu thereof, cash (without interest) in an amount
equal to (i) such fraction multiplied by (ii) the average of the closing price
of a share of Xxxxxxxx.xxx Common Stock for the ten (10) most recent trading
days that Xxxxxxxx.xxx Common Stock has traded ending on the trading day
immediately prior to the Effective Time, as reported on the Nasdaq National
Market.
(f) Termination of Exchange Fund. Any portion of the Exchange Fund
which remains undistributed to the holders of the Certificates for six (6)
months after the Effective Time shall be delivered to Phone, upon demand, and
any holders of the Certificates who have not theretofore complied with this
Article 2 shall thereafter look only to Phone for payment of their claim for
Phone Common Stock, any cash in lieu of fractional shares of Phone Common Stock
and any dividends or distributions with respect to Phone Common Stock.
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(g) No Liability. None of Phone, Merger Sub, Xxxxxxxx.xxx or the
Exchange Agent shall be liable to any person in respect of any shares of Phone
Common Stock (or dividends or distributions with respect thereto) or cash from
the Exchange Fund delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law. If any Certificates shall not have
been surrendered prior to seven (7) years after the Effective Time, or
immediately prior to such earlier date on which any shares of Phone Common
Stock, any cash in lieu of fractional shares of Phone Common Stock or any
dividends or distributions with respect to Phone Common Stock in respect of such
Certificate would otherwise escheat to or become the property of any
Governmental Entity, any such shares, cash, dividends or distributions in
respect of such Certificate shall, to the extent permitted by applicable law,
become the property of the Surviving Corporation, free and clear of all claims
or interest of any person previously entitled thereto.
(h) Investment of Exchange Fund. The Exchange Agent shall invest any
cash included in the Exchange Fund, as directed by Phone, on a daily basis. Any
interest and other income resulting from such investments shall be paid to
Phone.
SECTION 2.3 Certain Adjustments.
If between the date hereof and the Effective Time, the outstanding
shares of Xxxxxxxx.xxx Common Stock or Phone Common Stock shall be changed into
a different number of shares by reason of any reclassification,
recapitalization, split-up, combination or exchange of shares, or any dividend
payable in stock or other securities shall be declared thereon with a record
date within such period, the Exchange Ratio shall be adjusted accordingly to
provide to the holders of Xxxxxxxx.xxx Common Stock the same economic effect as
contemplated by this Agreement prior to such reclassification, recapitalization,
split-up, combination, exchange or dividend.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 Representations and Warranties of Phone and Merger Sub.
Phone and Merger Sub represent and warrant to Xxxxxxxx.xxx, subject to
such exceptions as are disclosed in writing in the disclosure letter supplied by
Phone to Xxxxxxxx.xxx dated as of the date hereof (the "Phone Disclosure
Schedule"), which disclosure shall provide an exception to or otherwise qualify
the representations, warranties or covenants of Phone and Merger Sub contained
in the section of this Agreement corresponding by number to such disclosure or
covenant and the other representations, warranties and covenants herein to the
extent such disclosure shall reasonably appear to be applicable to such other
representations, warranties or covenants as follows:
(a) Organization, Standing and Corporate Power.
(i) Each of Phone and its subsidiaries (as defined in Section
8.3) 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
8
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 a material adverse
effect (as defined in Section 8.3) on Phone. Each of Phone 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 a material adverse
effect on Phone.
(ii) Phone and Merger Sub have delivered to or made available to
Xxxxxxxx.xxx prior to the execution of this Agreement complete and correct
copies of any amendments to the certificate of incorporation of Phone (the
"Phone Certificate"), the certificate of incorporation of Merger Sub and the by-
laws of Phone and Merger Sub not filed as of the date hereof with the Phone
Filed SEC Documents (as defined in Section 3.1(g)).
(b) Subsidiaries. Exhibit 21 to Phone's Annual Report on Form 10-K
for the fiscal year ended June 30, 1999, includes all the subsidiaries of Phone
which as of the date of this Agreement are Significant Subsidiaries (as defined
in Rule 1-02 of Regulation S-X of the SEC). All the outstanding shares of
capital stock of, or other equity interests in, each such Significant Subsidiary
have been validly issued and are fully paid and nonassessable and are owned
directly or indirectly by Phone, free and clear of all pledges, claims, liens,
charges, encumbrances and security interests of any kind or nature whatsoever
(collectively, "Liens") and 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 Phone consists of 250,000,000 shares
of Phone Common Stock and 5,000,000 shares of preferred stock, par value $0.001
per share ("Phone Preferred Stock"). At the close of business on July 31, 2000,
(i) 82,997,462 shares of Phone Common Stock were issued and outstanding; (ii)
908,334 shares were issued and held by Phone in its treasury; (iii) no shares of
Phone Preferred Stock were issued and outstanding; (iv) 27,700,417 shares of
Phone Common Stock were reserved for issuance pursuant to all stock option,
restricted stock or other stock-based compensation, benefits or savings plans,
agreements or arrangements in which current or former employees or directors of
Phone or its subsidiaries participate as of the date hereof, complete and
correct copies of which, in each case as amended as of the date hereof, have
been filed as exhibits to the Phone Filed SEC Documents (as defined below) or
delivered to Xxxxxxxx.xxx (such plans, collectively, the "Phone Stock Plans");
(v) 18,105 shares of Phone Common Stock were reserved for issuance upon the
exercise of outstanding warrants; and (vi) 250,000 shares of Phone Preferred
Stock will be designated as Series A Junior Participating Preferred Stock, all
of which will be reserved for issuance upon exercise of preferred stock purchase
rights (the "Phone Rights") issuable pursuant to the Rights Agreement approved
by the board of directors of Phone in connection with its approval of this
Agreement and to be entered into no later than ten (10) days following the date
hereof substantially in the form previously provided to Xxxxxxxx.xxx (the "Phone
Rights Agreement"). The authorized capital stock of Merger Sub consists of 100
shares of common stock, par value $0.01 per share of which 100 shares are issued
and outstanding. Phone is the sole stockholder of
9
Merger Sub and is the legal and beneficial owner of all 100 issued and
outstanding shares. Merger Sub was formed by Phone on July 31, 2000, solely for
the purpose of effecting the Merger and the other transactions contemplated by
this Agreement. Except as contemplated by this Agreement, Merger Sub does not
hold nor has it held any material assets or incurred any material liabilities
nor has Merger Sub carried on any business activities other than in connection
with the Merger and the other transactions contemplated by this Agreement. All
outstanding shares of capital stock of Phone and Merger Sub are, and all shares
of capital stock of Phone which may be issued pursuant to the Phone Stock Plans
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 3.1(c) and except for changes since June 30, 2000, resulting from the
issuance of shares of Phone Common Stock pursuant to the Phone Options or as
expressly permitted by this Agreement, (x) there are not issued, reserved for
issuance or outstanding (A) any shares of capital stock or other voting
securities of Phone, (B) any securities of Phone or any Phone subsidiary
convertible into or exchangeable or exercisable for shares of capital stock or
voting securities of Phone, (C) any warrants, calls, options or other rights to
acquire from Phone or any Phone subsidiary (including any subsidiary trust), or
obligations of Phone or any Phone subsidiary to issue, any capital stock, voting
securities or securities convertible into or exchangeable or exercisable for
capital stock or voting securities of Phone, and (y) there are no outstanding
obligations of Phone or any Phone subsidiary 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 Phone nor any Phone subsidiary
is a party to any agreement restricting the purchase or transfer of, relating to
the voting of, requiring registration of, or granting any preemptive or, except
as provided by the terms of the Phone Options, antidilutive rights with respect
to, any securities of the type referred to in the two preceding sentences. Other
than the Phone subsidiaries, Phone does not directly or indirectly beneficially
own any securities or other beneficial ownership interests in any other entity
except for non-controlling investments made in the ordinary course of business
in entities which are not individually or in the aggregate material to Phone and
its subsidiaries as a whole.
(d) Authority; Non-contravention.
Each of Phone and Merger Sub has all requisite corporate power and
authority to enter into this Agreement, and Phone has all requisite corporate
power and authority to enter into the Option Agreements and, subject to the
Phone Stockholder Approval (as defined in Section 3.1(l)), to consummate the
transactions contemplated hereby and thereby. The execution and delivery of
this Agreement by Phone and Merger Sub, the execution and delivery of the Option
Agreements by Phone and the consummation by Phone and Merger Sub of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action on the part of Phone and Merger Sub, subject, in the
case of the Merger to the Phone Stockholder Approval. This Agreement and the
Option Agreements have been duly executed and delivered by Phone and Merger Sub
and, assuming the due authorization, execution and delivery of each agreement to
which they are parties by Xxxxxxxx.xxx constitutes (or will constitute, as the
case may be) the legal, valid and binding obligation of Phone and Merger Sub,
enforceable against Phone and Merger Sub in accordance with their terms. The
execution and delivery of this Agreement does not, and the execution and
delivery of the Option Agreements and the consummation of the transactions
contemplated hereby and thereby and compliance with the provisions of this
Agreement and the Option Agreements 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
10
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 Phone or any of its subsidiaries or in any restriction
on the conduct of Phone's business or operations under, (i) the Phone
Certificate or the by-laws of Phone or the comparable organizational documents
of any of its subsidiaries, (ii) any loan or credit agreement, note, bond,
mortgage, indenture, trust document, lease or other agreement, instrument,
permit, concession, franchise, license or similar authorization applicable to
Phone 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 Phone 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, restrictions or Liens that
individually or in the aggregate would not (x) have a material adverse effect on
Phone or Xxxxxxxx.xxx or (y) reasonably be expected to impair the ability of
each of Phone and Merger Sub to perform its obligations under this Agreement or
the Option Agreements. 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 self-
regulatory agency, commission or authority (a "Governmental Entity") is required
by or with respect to Phone or any of its subsidiaries in connection with the
execution and delivery of this Agreement by Phone and Merger Sub, or the
execution and delivery by Phone of the Option Agreements or the consummation by
Phone and Merger Sub of the transactions contemplated hereby and thereby, except
for (1) the filing of a pre-merger notification and report form by Phone and
Merger Sub under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR Act") or filings or notifications under the antitrust,
competition or similar laws of any foreign jurisdiction; (2) the filing with the
SEC of (A) a proxy statement relating to the Phone Stockholders' Meeting (as
defined in Section 5.1(b)) (such proxy statement, together with the proxy
statement relating to the Xxxxxxxx.xxx Stockholders' Meeting (as defined in
Section 5.1(c)), in each case as amended or supplemented from time to time, the
"Joint Proxy Statement"), (B) the registration statement on Form S-4 to be filed
with the SEC by Phone in connection with the issuance of Phone Common Stock in
the Merger (the "Form S-4"), and (C) such reports under Section 13(a), 13(d),
15(d) or 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as may be required in connection with this Agreement, the Option
Agreements and the transactions contemplated hereby and thereby; (3) 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 Phone and Merger Sub are qualified to do business and such filings with
Governmental Entities to satisfy the applicable requirements of state securities
or "blue sky" laws; 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 Phone and Merger Sub or (y)
reasonably be expected to impair the ability of each of Phone and Merger Sub to
perform its obligations under this Agreement.
(e) SEC Documents; Undisclosed Liabilities.
Phone has filed all required registration statements, prospectuses,
reports, schedules, forms, statements and other documents (including exhibits
and all other information incorporated therein) with the SEC since June 11, 1999
(the "Phone SEC Documents"). As of their respective dates, the Phone SEC
Documents complied in all material respects with the
11
requirements of 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
Phone SEC Documents, and none of the Phone SEC Documents when filed 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 Phone included in the Phone 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 ("GAAP")
(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 the consolidated financial
position of Phone 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 year-end audit
adjustments which are not material). Except (i) as reflected in such financial
statements or in the notes thereto or (ii) for liabilities incurred in
connection with this Agreement, the Option Agreements or the transactions
contemplated hereby or thereby, or (iii) for liabilities incurred in the
ordinary course of business consistent with past practices and which would not
reasonably be expected to have a material adverse effect, neither Phone nor any
of its subsidiaries has any liabilities or obligations of any nature which,
individually or in the aggregate, would have a material adverse effect on Phone.
(f) Information Supplied.
None of the information supplied or to be supplied by Phone and Merger
Sub specifically for inclusion or incorporation by reference in (i) the Form S-4
will, at the time the Form S-4 becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading or (ii) the Joint Proxy Statement will, at the date it is first
mailed to Phone's stockholders or at the time of the Phone 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. The Form S-4 and the Joint Proxy Statement will comply as to form
in all material respects with the requirements of the Exchange Act and the rules
and regulations thereunder, except that no representation or warranty is made by
Phone with respect to statements made or incorporated by reference therein based
on information supplied by Xxxxxxxx.xxx specifically for inclusion or
incorporation by reference in the Form S-4 or the Joint Proxy Statement.
(g) Absence of Certain Changes or Events.
Except for liabilities incurred in connection with this Agreement, the
Option Agreements or the transactions contemplated hereby and thereby, and
except as permitted by Section 4.1(a), since March 31, 2000, Phone and its
subsidiaries have conducted their business only in the ordinary course
consistent with past practice or as disclosed in any Phone SEC Document filed
since such date and prior to the date hereof, and there has not been (i) any
material adverse change in Phone, (ii) any declaration, setting aside or payment
of any dividend or other distribution (whether in cash, stock or property) with
respect to any of Phone's capital
12
stock, (iii) any split, combination or reclassification of any of Phone's
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 Phone's
capital stock, except for issuances of Phone Common Stock upon exercise or
conversion of Phone Options, in each case awarded prior to the date hereof in
accordance with their present terms or issued pursuant to Section 4.1(a), (iv)
(A) any granting by Phone or any of its subsidiaries to any current or former
director, officer or other key employee of Phone or its subsidiaries of any
increase in compensation, bonus or other benefits, except for normal increases
as a result of promotions, normal increases of base pay or target bonuses in the
ordinary course of business or as was required under any employment agreements
in effect as of Xxxxx 00, 0000, (X) any granting by Phone or any of its
subsidiaries to any such current or former director, officer or key employee of
any increase in severance or termination pay, or (C) any entry by Phone or any
of its subsidiaries into, or any amendment of, any employment, deferred
compensation, consulting, severance, termination or indemnification agreement
with any such current or former director or officer, or any material amendment
of any of the foregoing with any key employee, (v) except insofar as may have
been disclosed in Phone SEC Documents filed and publicly available prior to the
date of this Agreement (as amended to the date hereof, the "Phone Filed SEC
Documents") or required by a change in GAAP, any change in accounting methods,
principles or practices by Phone materially affecting its assets, liabilities or
business, (vi) except insofar as may have been disclosed in the Phone Filed SEC
Documents, any tax election that individually or in the aggregate would have a
material adverse effect on Phone or any of its tax attributes or any settlement
or compromise of any material income tax liability, or (vii) any action taken by
Phone or any of the Phone subsidiaries during the period from April 1, 2000,
through the date of this Agreement that, if taken during the period from the
date of this Agreement through the Effective Time, would constitute a breach of
Section 4.1(a).
(h) Compliance with Applicable Laws; Litigation.
(i) Phone, its subsidiaries and employees hold all permits,
licenses, variances, exemptions, orders, registrations and approvals of all
Governmental Entities which are required for the operation of the businesses of
Phone and its subsidiaries (the "Phone Permits"), except where the failure to
have any such Phone Permits individually or in the aggregate would not have a
material adverse effect on Phone. Except as specifically disclosed in the Phone
SEC Documents filed with the SEC prior to the date hereof, Phone and its
subsidiaries are in compliance with the terms of the Phone Permits and all
applicable laws, statutes, orders, rules, regulations, policies or guidelines
promulgated, or judgments, decisions or orders entered by any Governmental
Entity (all such laws, statutes, orders, rules, regulations, policies,
guidelines, judgments, decisions and orders, collectively, "Applicable Laws"),
relating to Phone or its business or properties, except where the failure to be
in compliance with such Applicable Laws individually or in the aggregate would
not have a material adverse effect on Phone. As of the date of this Agreement,
except as disclosed in the Phone Filed SEC Documents, no action, demand,
requirement or investigation by any Governmental Entity and no suit, action or
proceeding by any person, in each case with respect to Phone or any of its
subsidiaries or any of their respective properties, is pending or, to the
knowledge (as defined in Section 8.3(e)) of Phone, threatened, other than, in
each case, those the outcome of which individually or in the aggregate would not
(A) have a material adverse effect on Phone and Merger Sub or (B) reasonably be
expected to impair the ability of each of Phone and Merger Sub to perform its
obligations under this Agreement or the Option Agreements or prevent or
materially delay the consummation of any of the transactions contemplated hereby
or thereby.
13
(ii) Neither Phone nor any Phone subsidiary is subject to any
outstanding order, injunction or decree which has had or, insofar as can be
reasonably foreseen, individually or in the aggregate would have, a material
adverse effect on Phone.
(i) Absence of Changes in Benefit Plans.
Phone has delivered to Xxxxxxxx.xxx or made available to Xxxxxxxx.xxx
for review true and complete copies of (i) all severance and employment
agreements of Phone with directors, executive officers or key employees, (ii)
all written and material unwritten severance programs and policies of each of
Phone and each Phone subsidiary, and (iii) all plans or arrangements of Phone
and each Phone subsidiary relating to its employees which contain change in
control provisions, in each case which has not been filed as an exhibit to a
Phone Filed SEC Document. Documents made available are identified in Section
3.1(i) of the Phone Disclosure Schedule. Since March 31, 2000, there has not
been any adoption or amendment in any material respect by Phone or any of its
subsidiaries of (A) any collective bargaining agreement with respect to any
employees of, (B) any material bonus, pension, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock purchase, stock
option, phantom stock, retirement, vacation, severance, disability, death
benefit, hospitalization, medical or other plan, arrangement or understanding
providing benefits to any current or former officers, directors or employees of,
(C) any employment agreement, consulting agreement or severance agreement with
any current or former officer or director of, or (D) any material employment
agreement, consulting agreement or severance agreement with any employee of
Phone or any of its wholly owned subsidiaries (collectively, the "Phone Benefit
Plans"), or any material change in any actuarial or other assumption used to
calculate funding obligations with respect to any Phone pension plans, or any
material change in the manner in which contributions to any Phone pension plans
are made or the basis on which such contributions are determined. Since March
31, 2000, neither Phone nor any Phone subsidiary has amended any Phone Options
or any Phone Stock Plans to accelerate the vesting of, or release restrictions
on, awards thereunder, or to provide for such acceleration in the event of a
change in control.
(j) Benefit Plans.
(i) With respect to the Phone Benefit Plans, no event has
occurred and there exists no condition or set of circumstances, in connection
with which Phone or any of its subsidiaries would be subject to any liability
that individually or in the aggregate would have a material adverse effect on
Phone under the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), the Code or any other applicable law.
(ii) Each Phone Benefit Plan has been administered in accordance
with its terms, except for any failures so to administer any Phone Benefit Plan
that individually or in the aggregate would not have a material adverse effect
on Phone. The Phone Benefit Plans have been operated, and are, in compliance
with the applicable provisions of ERISA, the Code and all other applicable laws
and the terms of all applicable collective bargaining agreements, except for any
failures to be in such compliance that individually or in the aggregate would
not have a material adverse effect on Phone. Each Phone Benefit Plan intended to
qualify under section 401(a) of the Code and each trust intended to qualify
under section 501(a) of the Code has either received a favorable determination,
opinion or advisory letter from the Internal Revenue Service (the "IRS") with
respect to each such Phone Benefit Plan as to its qualified status under the
14
Code, or has remaining a period of time under applicable Treasury regulations or
IRS pronouncements in which to apply for such a letter and make any amendments
necessary to obtain a favorable determination, opinion or advisory as to the
qualified status of each Phone Benefit Plan. To the knowledge of Phone, no fact
or event has occurred since the date of any determination opinion or advisory
letter from the IRS which is reasonably likely to affect adversely the qualified
status of any such Phone Benefit Plan or the exempt status of any such trust.
(iii) No Phone Benefit Plan is subject to Title IV of ERISA or
is a "multi-employer plan" within the meaning of Section 3(37) of ERISA.
(iv) No Phone Benefit Plan provides medical benefits (whether or
not insured), with respect to current or former employees after retirement or
other termination of service (other than coverage mandated by applicable law or
benefits, the full cost of which is borne by the current or former employee)
other than individual arrangements the amounts of which are not material.
(v) Phone has previously provided to Xxxxxxxx.xxx a copy of each
collective bargaining or other labor union contract applicable to persons
employed by Phone or any of its subsidiaries to which Phone or any of its
subsidiaries is a party. No collective bargaining agreement is being negotiated
or renegotiated by Phone or any of its subsidiaries. As of the date of this
Agreement, there is no labor dispute, strike or work stoppage against Phone or
any of its subsidiaries pending or, to the knowledge of Phone, threatened which
may interfere with the respective business activities of Phone or any of its
subsidiaries, except where such dispute, strike or work stoppage individually or
in the aggregate would not have a material adverse effect on Phone. As of the
date of this Agreement, to the knowledge of Phone, none of Phone, any of its
subsidiaries or any of their respective representatives or employees has
committed any material unfair labor practice in connection with the operation of
the respective businesses of Phone or any of its subsidiaries, and there is no
material charge or complaint against Phone or any of its subsidiaries by the
National Labor Relations Board or any comparable governmental agency pending or
threatened in writing.
(vi) No employee of Phone or any Phone subsidiary will be
entitled to any material payment, additional benefits or any acceleration of the
time of payment or vesting of any benefits under any Phone Benefit Plan as a
result of the transactions contemplated by this Agreement (either alone or in
conjunction with any other event such as a termination of employment).
(vii) To the knowledge of Phone, no material oral or written
representation or commitment with respect to any aspect of any Phone Benefit
Plan has been made to employees of Phone or any Phone subsidiaries by an
authorized Phone employee prior to the Closing Date that is not materially in
accordance with the written or otherwise preexisting terms and provisions of
such Phone Benefit Plans in effect immediately prior to the Closing Date.
(viii) Except such as would not have a material adverse effect,
there are no material unresolved claims or disputes under the terms of, or in
connection with, any Phone Benefit Plan (other than routine undisputed claims
for benefits), and no action, legal or otherwise, has been commenced with
respect to any material claim.
15
(ix) To the knowledge of Phone, no non-exempt "prohibited
transaction" (within the meaning of section 4975(c) of the Code) involving any
Phone Benefit Plan has occurred that could subject Phone to any material tax
penalty or other cost or liability (by indemnification or otherwise).
(x) Neither Phone nor any Phone subsidiary is obligated to make
any parachute payments as such term is defined in section 280G of the Code, and
neither is a party to any agreement that under certain circumstances is
reasonably likely to obligate it, or any successor in interest, to make any
parachute payments that will not be deductible under section 280G of the Code.
Neither Phone nor any Phone subsidiary is obligated to make reimbursement or
gross-up payments to any person in respect to excess parachute payments.
(k) Taxes.
(i) Each of Phone and its subsidiaries has filed all material
Tax Returns required to be filed by it (taking into account all applicable
extensions) with the appropriate Tax Authority and all such returns are true,
complete, and correct in all material respects, or requests for extensions to
file such returns have been timely filed, granted, and have not expired, except
to the extent that such failures to file, to be complete, true, or correct, or
to have extensions granted that remain in effect individually or in the
aggregate would not have a material adverse effect on Phone. Phone and each of
its subsidiaries has paid (or Phone has paid or caused to be paid on its behalf)
all Taxes shown as due on such returns, and the most recent financial statements
contained in the Phone Filed SEC Documents reflect an adequate reserve in
accordance with GAAP for all Taxes payable by Phone and its subsidiaries for all
taxable periods and portions thereof accrued through the date of such financial
statements.
(ii) No deficiencies for any Taxes have been proposed, asserted
or assessed against Phone or any of its subsidiaries that are not adequately
reserved for, except for deficiencies that individually or in the aggregate
would not have a material adverse effect on Phone. Phone and its subsidiaries
have disclosed all material deficiencies or adjustments for Taxes that have been
proposed or assessed by any Tax Authority against Phone or any of its
subsidiaries. All of the Federal income Tax Returns of the "affiliated group"
(as defined in section 1504(a) of the Code) of which Phone is the common parent
are no longer subject to any Audit by virtue of the expiration of the applicable
statutory period of limitations for the assessment of Tax.
(iii) Neither Phone nor any of its subsidiaries has taken any
action or knows of any fact, agreement, plan or other circumstance that is
reasonably likely to prevent the Merger from qualifying as a "reorganization"
within the meaning of section 368(a) of the Code.
(iv) No Audits are presently pending with regard to any Taxes or
Tax Returns of Phone or its subsidiaries.
(v) Neither Phone nor any of its subsidiaries is a party to any
agreement providing for the allocation, indemnification, or sharing of Taxes.
(vi) Other than the "affiliated group" (as defined in section
1504(a) of the Code) of which Phone is the common parent, neither Phone nor any
of its subsidiaries has been a member of any "affiliated group."
16
(vii) There are no liens for Taxes on any of the assets of Phone
or its subsidiaries except for liens for Taxes that are not yet due and payable
and for which adequate reserves have been provided in accordance with GAAP in
the most recent financial statements contained in the Phone Filed SEC Documents.
(viii) As used in this Agreement, "Audit" means any audit,
assessment, or other examination relating to Taxes by any Tax Authority or any
administrative or judicial proceedings or appeals of such proceedings relating
to Taxes. "Tax" or "Taxes" means all Federal, state, local, and foreign taxes,
and other assessments of a similar nature (whether imposed directly or through
withholding), including any interest, additions to tax, or penalties applicable
thereto, imposed by any Tax Authority. "Tax Authority" means the Internal
Revenue Service and any other domestic or foreign governmental authority
responsible for the administration of any Taxes. "Tax Returns" mean all Federal,
state, local and foreign tax returns, declarations, statements, reports,
schedules, forms, and information returns and any amendments thereto.
(l) Voting Requirements.
The affirmative vote at the Phone Stockholders' Meeting (the "Phone
Stockholder Approval") of (i) the holders of a majority of all outstanding
shares of Phone Common Stock present in person or by proxy and entitled to vote
at a duly convened and held meeting of Phone stockholders to approve the
issuance of shares of Phone Common Stock pursuant to the Merger and (ii) the
holders of a majority of all outstanding shares of Phone Common Stock to approve
the Phone Charter Amendment are the only votes of the holders of any class or
series of Phone's capital stock necessary to adopt this Agreement and approve
the transactions contemplated hereby.
(m) State Takeover Statutes; Certificate of Incorporation.
The Board of Directors of Phone has adopted a resolution or
resolutions approving this Agreement, the Option Agreements and the Xxxxxxxx.xxx
Voting Agreement and the transactions contemplated hereby and thereby and,
assuming the accuracy of Xxxxxxxx.xxx's representation and warranty contained in
Section 3.2(p), such approval constitutes approval of the Merger and the other
transactions contemplated hereby and by the Option Agreements and the
Xxxxxxxx.xxx Voting Agreement by the Phone Board of Directors under the
provisions of Section 203 of the DGCL such that Section 203 of the DGCL does not
apply to this Agreement, the Option Agreements, the Xxxxxxxx.xxx Voting
Agreement and the transactions contemplated hereby and thereby. To the knowledge
of Phone, no state takeover statute other than Section 203 of the DGCL (which
has been rendered inapplicable) is applicable to the Merger or the other
transactions contemplated hereby.
(n) Brokers.
Except for fees payable to Credit Suisse First Boston Corporation
("CSFB") pursuant to an engagement letter, dated June 16, 2000, a true and
complete copy of which has been provided to Xxxxxxxx.xxx, 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 contemplated by this Agreement based upon arrangements made by or
on behalf of Phone or Merger Sub.
17
(o) Opinion of Financial Advisors.
Phone has received the opinion of CSFB, dated the date of this
Agreement, to the effect that, as of such date, the Exchange Ratio is fair from
a financial point of view to Phone, a signed copy of which opinion will be
delivered to Xxxxxxxx.xxx promptly after execution of this Agreement.
(p) Ownership of Xxxxxxxx.xxx Common Stock.
To the knowledge of Phone and Merger Sub, as of the date hereof or at
any time within twelve (12) months prior to the date of this Agreement (and
before giving effect to the Xxxxxxxx.xxx Option Agreement and the Xxxxxxxx.xxx
Voting Agreement, which will be entered into immediately after the execution of
this Agreement), neither Phone nor, to its knowledge without independent
investigation, any of its affiliates, (i) beneficially owns (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, or (ii) is party to any
agreement, arrangement or understanding for the purpose of acquiring, holding,
voting or disposing of, in each case, shares of capital stock of Xxxxxxxx.xxx.
(q) Intellectual Property.
(i) To the knowledge of Phone, Phone or its subsidiaries own or
have a valid right to use all trademarks, service marks, trade names, Internet
domain names, designs, slogans, and general intangibles of like nature, together
with all applications, registrations and goodwill related to the foregoing
(collectively, "Phone Trademarks"); patents (including any registration,
continuations, continuations-in-part, renewals and applications for any of the
foregoing); copyrights (including any registrations, renewals and applications
for any of the foregoing); Phone Software (as defined below); technology, trade
secrets and other confidential information, know-how, proprietary processes,
formulae, algorithms, models, and methodologies (collectively, "Phone Trade
Secrets") used in or necessary for the conduct of Phone's and each of its
subsidiary's business as currently conducted (all such intellectual property
being referred to herein as the "Phone Intellectual Property"), except where the
failure to possess such right would not have a material adverse effect. For
purposes of this Section 3.1(q), "Phone Software" means any and all (a) computer
programs, including any and all software implementations of algorithms, models
and methodologies, whether in source code or object code, (b) databases and
compilations, including any and all data and collections of data, whether
machine readable or otherwise, (c) descriptions, flowcharts and other work
product used to design, plan, organize and develop any of the foregoing, (d) the
technology supporting any Internet site(s) operated by or on behalf of Phone or
any of its subsidiaries and (e) all documentation, including user manuals and
training materials, relating to any of the foregoing.
(ii) The Phone Intellectual Property owned by Phone or any of
its subsidiaries is free and clear of all Liens.
(iii) All material Intellectual Property owned by Phone or any
of its subsidiaries is valid and subsisting, in full force and effect, and has
not been canceled, has not expired, nor has it been abandoned. There is no
pending or, to Phone's knowledge, threatened opposition, interference or
cancellation proceeding before any court or registration authority in any
jurisdiction against any registrations in respect of the Phone Intellectual
Property (other than Phone Trademarks) owned by Phone or any of its
subsidiaries.
18
(iv) To the actual knowledge of Phone or any of its
subsidiaries, the conduct of the business of Phone and its subsidiaries as
currently conducted does not infringe upon (either directly or indirectly such
as through contributory infringement or inducement to infringe) any intellectual
property rights owned or controlled by any third party. There are no claims or
suits pending and as to which Phone has received actual notice or, to the
knowledge of Phone, threatened, and neither Phone nor any of its subsidiaries
has received any notice of a third-party claim or suit, (a) alleging that its
activities or the conduct of its business infringes upon, violates, or
constitutes the unauthorized use of the intellectual property rights of any
third party or (b) challenging the ownership, use, validity or enforceability of
any Phone Intellectual Property, which in any case would have a material adverse
effect.
(v) There are no written settlements, forbearances to xxx,
consents, judgments, or orders or similar obligations which in any material
respect (a) restrict the right of Phone or its subsidiaries to use any Phone
Intellectual Property owned by Phone, or (b) restrict the business of Phone or
its subsidiaries in order to accommodate a third party's intellectual property
rights or (c) except for licenses with customers for Phone Software, there are
no agreements that permit third parties to use any Phone Intellectual Property
owned or controlled by Phone or any of its subsidiaries.
(vi) Phone and each of its subsidiaries takes reasonable
measures to protect the confidentiality of Phone Trade Secrets, including (i)
requiring its employees and independent contractors having access thereto to
execute written nondisclosure agreements and (ii) requiring all licensees to
maintain the confidentiality of Phone Trade Secrets. To the actual knowledge of
Phone or its subsidiaries, no Phone Trade Secret has been knowingly disclosed or
authorized to be disclosed to any third party other than pursuant to a
nondisclosure agreement or other appropriate instrument that adequately protects
Phone and the applicable subsidiary's proprietary interests in and to such trade
secrets. To the knowledge of Phone, no party to any nondisclosure agreement or
nondisclosure obligation relating to its trade secrets is in breach or default
thereof.
(vii) To the knowledge of Phone, no third party is
misappropriating, infringing, diluting, or violating any Phone Intellectual
Property owned by Phone or any of its subsidiaries other than immaterial
disputes concerning use by a third party of Phone Trademarks of Phone or a
subsidiary.
(viii) The consummation of the Merger and the other transactions
contemplated by this Agreement shall not result in the loss or impairment of
Phone's or of any subsidiary's right to own or use any of the Phone Intellectual
Property, and will not require the consent of any governmental authority, except
where such loss or impairment or the failure to obtain consent would not result
in a material adverse effect.
(r) Certain Contracts.
Except as set forth in the Phone Filed SEC Documents, neither Phone
nor any of its subsidiaries is a party to or bound by (i) any "material
contract" (as such term is defined in Item 601(b)(10) of Regulation S-K of the
SEC), (ii) any non-competition agreement or any other agreement or obligation
which purports to limit in any material respect the manner in which, or the
localities in which, all or any material portion of the business of Phone and
its subsidiaries (including, for purposes of this Section 3.1(r), Xxxxxxxx.xxx
and its subsidiaries, assuming the
19
Merger have taken place), taken as a whole, is or would be conducted, (iii) any
exclusive supply or purchase contracts or any exclusive requirements contracts
or (iv) any contract or other agreement which would prohibit or materially delay
the consummation of the Merger or any of the transactions contemplated by this
Agreement (all contracts of the type described in clauses (i) and (ii) being
referred to herein as "Phone Material Contracts"). Phone has delivered to
Xxxxxxxx.xxx or provided to Xxxxxxxx.xxx for review, prior to the execution of
this Agreement, complete and correct copies of all Phone Material Contracts not
filed as exhibits to the Phone Filed SEC Documents. Each Phone Material Contract
is valid and binding on Phone (or, to the extent a Phone subsidiary is a party,
such subsidiary) and is in full force and effect, and Phone and each Phone
subsidiary have in all material respects performed all obligations required to
be performed by them to date under each Phone Material Contract, except where
such noncompliance, individually or in the aggregate, would not have a material
adverse effect on Phone. Neither Phone nor any Phone subsidiary knows of, or has
received notice of, any violation or default under (nor, to the knowledge of
Phone, does there exist any condition which with the passage of time or the
giving of notice or both would result in such a violation or default under) any
Phone Material Contract.
(s) Phone Rights Agreement.
Phone has delivered to Xxxxxxxx.xxx a true, correct and complete copy
of the Phone Rights Agreement. Phone has taken all action so that the entering
into of this Agreement, the Phone Option Agreement, the Phone Voting Agreement,
the Merger, the acquisition of shares pursuant to the Phone Option Agreement and
the other transactions contemplated hereby and thereby will not result in the
grant of any rights to any person under the Phone Rights Agreement or enable or
require the Phone Rights to be exercised, distributed or triggered.
(t) Environmental Liability.
Except as set forth in the Phone Filed SEC Documents, there are no
legal, administrative, arbitral or other proceedings, claims, actions, causes of
action, private environmental investigations or remediation activities or
governmental investigations of any nature pending or threatened against Phone or
any of its subsidiaries seeking to impose, or that could reasonably be expected
to result in the imposition of, on Phone or any of its subsidiaries, any
liability or obligation arising under common law or under any local, state or
federal environmental statute, regulation or ordinance, including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended ("CERCLA"), which liability or obligation could
reasonably be expected to have a material adverse effect on Phone. To the
knowledge of Phone, there is no reasonable basis for any such proceeding, claim,
action or governmental investigation that would impose any liability or
obligation that could reasonably be expected to have a material adverse effect
on Phone.
(u) Insurance.
Phone and each of its subsidiaries have policies of insurance and
bonds of the type and in amounts customarily carried by persons conducting
businesses or owning assets similar to those of Phone and its subsidiaries.
There is no claim pending under any of such policies or bonds as to which
coverage has been questioned, denied or disputed by the underwriters of such
policies or bonds, except questioned, denied or disputed claims the failure to
provide coverage for which would not, individually or in the aggregate, have a
material
20
adverse effect on Phone. All premiums due and payable under all such policies
and bonds have been paid and Phone and its subsidiaries are otherwise in
compliance in all material respects with the terms of such policies and bonds.
Phone has no knowledge of any threatened termination of, or material premium
increase with respect to, any of such policies.
(v) Accounting Matters.
As of the date hereof, to the knowledge of Phone, none of Phone, any
of its subsidiaries or any of their respective directors, officers or
stockholders, has taken any action which would prevent the accounting for the
Merger as a pooling of interests in accordance with Accounting Principles Board
Opinion No. 16 ("APB 16") and the interpretative releases pursuant thereto and
the pronouncements of the SEC.
(w) Transactions with Affiliates.
Except as disclosed in the Phone SEC Documents filed prior to the date
of this Agreement or as disclosed in the Phone Disclosure Schedule, since June
30, 1999, there have been no transactions, agreements, arrangements or
understandings between Phone and its affiliates that would be required to be
disclosed under the Item 404 of Regulation S-K under the Securities Act.
(x) Full Disclosure.
None of the representations or warranties made by Phone or Merger Sub
herein or in any schedule hereto, including the Phone Disclosure Schedule, or
any certificate furnished by Phone or Merger Sub pursuant to this Agreement,
contains or will contain at the Effective Time any untrue statement of a
material fact, or omits or will omit at the Effective Time, to state any
material fact necessary in order to make the statements contained herein or
therein, in the light of the circumstances under which made, not misleading.
SECTION 3.2 Representations and Warranties of Xxxxxxxx.xxx.
Xxxxxxxx.xxx represents and warrants to Phone and Merger Sub, subject
to such exceptions as are disclosed in writing in the disclosure letter supplied
by Xxxxxxxx.xxx to Phone dated as of the date hereof (the "Xxxxxxxx.xxx
Disclosure Schedule"), which disclosure shall provide an exception to or
otherwise qualify the representations, warranties or covenants of Xxxxxxxx.xxx
contained in the section of this Agreement corresponding by number to such
disclosure or covenant and the other representations, warranties and covenants
herein to the extent such disclosure shall reasonably appear to be applicable to
such other representations, warranties or covenants as follows:
(a) Organization, Standing and Corporate Power.
(i) Each of Xxxxxxxx.xxx and its subsidiaries (as defined in
Section 8.3) 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
21
the aggregate would not have a material adverse effect (as defined in Section
8.3(b)) on Xxxxxxxx.xxx. Each of Xxxxxxxx.xxx 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 a material adverse effect on
Xxxxxxxx.xxx.
(ii) Xxxxxxxx.xxx has delivered to Phone prior to the execution
of this Agreement complete and correct copies of any amendments to its
Certificate of Incorporation (the "Xxxxxxxx.xxx Certificate") and by-laws not
filed as of the date hereof with the Xxxxxxxx.xxx SEC Documents (as defined in
Section 3.2(e)).
(b) Subsidiaries.
Exhibit 21 to Xxxxxxxx.xxx's Annual Report on Form 10-K for the fiscal
year ended December 31, 1999, includes all the subsidiaries of Xxxxxxxx.xxx
which as of the date of this Agreement are Significant Subsidiaries (as defined
in Rule 102 of Regulation S-X of the SEC). All the outstanding shares of
capital stock of, or other equity interests in, each such Significant Subsidiary
have been validly issued and are fully paid and nonassessable and are owned
directly or indirectly by Xxxxxxxx.xxx, free and clear of all Liens and 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 Xxxxxxxx.xxx consists of 150,000,000
shares of Xxxxxxxx.xxx Common Stock, and 5,000,000 shares of preferred stock,
without par value ("Xxxxxxxx.xxx Preferred Stock"). At the close of business on
July 31, 2000: (i) 48,866,633 shares of Xxxxxxxx.xxx Common Stock were issued
and outstanding; (ii) 52,698 shares of Xxxxxxxx.xxx Common Stock were held by
Xxxxxxxx.xxx in its treasury; (iii) no shares of Xxxxxxxx.xxx Preferred Stock
were issued and outstanding; (iv) 8,817,838 shares of Xxxxxxxx.xxx Common Stock
were reserved for issuance pursuant to all stock option, restricted stock or
other stock-based compensation, benefits or savings plans, agreements or
arrangements in which current or former employees or directors of Xxxxxxxx.xxx
or its subsidiaries participate as of the date hereof, complete and correct
copies of which, in each case as amended as of the date hereof, have been filed
as exhibits to the Xxxxxxxx.xxx Filed SEC Documents or delivered to Phone (such
plans, collectively, the "Xxxxxxxx.xxx Stock Plans"), (v) 850,000 shares of
Xxxxxxxx.xxx Common Stock were reserved for issuance pursuant to options outside
the Xxxxxxxx.xxx Stock Plans; and (vi) 146,721 shares of Xxxxxxxx.xxx Common
Stock were reserved for issuance upon the exercise of outstanding warrants and
(vii) 155,000 shares of Xxxxxxxx.xxx Preferred Stock will be designated as
Series A Participating Preferred Stock all of which will be reserved for
issuance upon the exercise of preferred stock purchase rights (the "Xxxxxxxx.xxx
Rights") issued pursuant to the Rights Agreement approved by the board of
directors of Xxxxxxxx.xxx in connection with its approval of this Agreement and
to be entered into no later than ten (10) days following the date hereof
substantially in the form previously provided to Phone (the "Xxxxxxxx.xxx Rights
Agreement"). All outstanding shares of capital stock of Xxxxxxxx.xxx are, and
all shares which may be issued as permitted by this Agreement or
22
otherwise 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 3.2(c), and except for changes since March 31, 2000, resulting from the
issuance of shares of Xxxxxxxx.xxx Common Stock pursuant to the Xxxxxxxx.xxx
Options or as expressly permitted by this Agreement, (x) there are not issued,
reserved for issuance or outstanding (A) any shares of capital stock or other
voting securities of Xxxxxxxx.xxx, (B) any securities of Xxxxxxxx.xxx or any
Xxxxxxxx.xxx subsidiary convertible into or exchangeable or exercisable for
shares of capital stock or voting securities of Xxxxxxxx.xxx, (C) any warrants,
calls, options or other rights to acquire from Xxxxxxxx.xxx or any Xxxxxxxx.xxx
subsidiary, and any obligation of Xxxxxxxx.xxx or any Xxxxxxxx.xxx subsidiary to
issue, any capital stock, voting securities or securities convertible into or
exchangeable or exercisable for capital stock or voting securities of
Xxxxxxxx.xxx, and (y) there are no outstanding obligations of Xxxxxxxx.xxx or
any Xxxxxxxx.xxx subsidiary 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 Xxxxxxxx.xxx nor any Xxxxxxxx.xxx subsidiary
is a party to any agreement restricting the purchase or transfer of, relating to
the voting of, requiring registration of, or granting any preemptive or, except
as provided by the terms of the Xxxxxxxx.xxx Options, antidilutive rights with
respect to, any securities of the type referred to in the two preceding
sentences. Other than the Xxxxxxxx.xxx subsidiaries, Xxxxxxxx.xxx does not
directly or indirectly beneficially own any securities or other beneficial
ownership interests in any other entity except for non-controlling investments
made in the ordinary course of business in entities which are not individually
or in the aggregate material to Xxxxxxxx.xxx and its subsidiaries as a whole.
(d) Authority; Non-contravention.
Xxxxxxxx.xxx has all requisite corporate power and authority to enter
into this Agreement and the Option Agreements. Subject to the Xxxxxxxx.xxx
Stockholder Approval (as defined in Section 3.2(l)), Xxxxxxxx.xxx has all
requisite corporate power and authority to consummate the transactions
contemplated by this Agreement and the Option Agreements. The execution and
delivery of this Agreement and the Option Agreements by Xxxxxxxx.xxx and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of Xxxxxxxx.xxx,
subject in the case of the Merger, to the Xxxxxxxx.xxx Stockholder Approval.
This Agreement and the Option Agreements have been duly executed and delivered
by Xxxxxxxx.xxx and, assuming the due authorization, execution and delivery
thereof by Phone and Merger Sub, constitute (or will constitute, as the case may
be) the legal, valid and binding obligation of Xxxxxxxx.xxx enforceable against
Xxxxxxxx.xxx in accordance with their terms. The execution and delivery of this
Agreement does not, and the execution and delivery of the Option Agreements and
the consummation of the transactions contemplated hereby and thereby and
compliance with the provisions of this Agreement and the Option Agreements 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
Xxxxxxxx.xxx or any of its subsidiaries or any restriction on the conduct of
Xxxxxxxx.xxx's business or operations under, (i) the Xxxxxxxx.xxx Certificate or
the by-laws of Xxxxxxxx.xxx or the comparable organizational documents of any of
its subsidiaries, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, trust document, lease or other agreement, instrument, permit,
concession, franchise, license or similar authorization applicable to
Xxxxxxxx.xxx or any of its subsidiaries or their
23
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 Xxxxxxxx.xxx
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, restrictions or Liens that individually or in the aggregate
would not (x) have a material adverse effect on Xxxxxxxx.xxx or (y) reasonably
be expected to impair the ability of Xxxxxxxx.xxx to perform its obligations
under this Agreement or the Option Agreements. No consent, approval, order or
authorization of, action by, or in respect of, or registration, declaration or
filing with, any Governmental Entity is required by or with respect to
Xxxxxxxx.xxx or any of its subsidiaries in connection with the execution and
delivery of this Agreement or the Option Agreements by Xxxxxxxx.xxx or the
consummation by Xxxxxxxx.xxx of the transactions contemplated hereby or thereby,
except for (1) the filing of a pre-merger notification and report form by
Xxxxxxxx.xxx under the HSR Act or filings or notifications under the antitrust,
competition or similar laws of any foreign jurisdiction; (2) the filing with the
SEC of (A) the Joint Proxy Statement relating to the Xxxxxxxx.xxx Stockholders'
Meeting 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 Option
Agreements and the transactions contemplated hereby and thereby; (3) 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 Xxxxxxxx.xxx is qualified to do business; 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
Xxxxxxxx.xxx or (y) reasonably be expected to impair the ability of Xxxxxxxx.xxx
to perform its obligations under this Agreement.
(e) SEC Documents; Undisclosed Liabilities.
Xxxxxxxx.xxx has filed all required registration statements,
prospectuses, reports, schedules, forms, statements and other documents
(including exhibits and all other information incorporated therein) with the SEC
since June 29, 1999 (the "Xxxxxxxx.xxx SEC Documents"). As of their respective
dates, the Xxxxxxxx.xxx SEC Documents complied in all material respects with the
requirements of 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
Xxxxxxxx.xxx SEC Documents, and none of the Xxxxxxxx.xxx SEC Documents when
filed 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 Xxxxxxxx.xxx included in the
Xxxxxxxx.xxx 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 GAAP (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 the consolidated financial position of
Xxxxxxxx.xxx 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 year-end audit
adjustments which are not material). Except (i) as reflected in such financial
statements or in the notes thereto or (ii) for liabilities incurred in
connection with this Agreement, the Option Agreements or the transactions
contemplated hereby or thereby, or (iii) for liabilities incurred in the
ordinary course of business consistent with past practices and which would not
reasonably be
24
expected to have a material adverse effect, neither Xxxxxxxx.xxx nor any of its
subsidiaries has any liabilities or obligations of any nature which,
individually or in the aggregate, would have a material adverse effect on
Xxxxxxxx.xxx.
(f) Information Supplied.
None of the information supplied or to be supplied by Xxxxxxxx.xxx
specifically for inclusion or incorporation by reference in (i) the Form S-4
will, at the time the Form S-4 becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading or (ii) the Joint Proxy Statement will, at the date it is first
mailed to Xxxxxxxx.xxx's stockholders or at the time of the Xxxxxxxx.xxx
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. The Joint Proxy Statement and the Form S-4 will
comply as to form in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations thereunder,
except that no representation or warranty is made by Xxxxxxxx.xxx with respect
to statements made or incorporated by reference therein based on information
supplied by Phone specifically for inclusion or incorporation by reference in
the Joint Proxy Statement or the Form S-4.
(g) Absence of Certain Changes or Events.
Except for liabilities incurred in connection with this Agreement, the
Option Agreements or the transactions contemplated hereby or thereby, and except
as permitted by Section 4.1(b), since March 31, 2000, Xxxxxxxx.xxx and its
subsidiaries have conducted their business only in the ordinary course
consistent with past practice or as disclosed in any Xxxxxxxx.xxx SEC Document
filed since such date and prior to the date hereof, and there has not been (i)
any material adverse change (as defined in Section 8.3(b)) in Xxxxxxxx.xxx, (ii)
any declaration, setting aside or payment of any dividend or other distribution
(whether in cash, stock or property) with respect to any of the capital stock of
Xxxxxxxx.xxx or any of its subsidiaries, (iii) any split, combination or
reclassification of any of the capital stock of Xxxxxxxx.xxx or any of its
subsidiaries 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
capital stock of Xxxxxxxx.xxx or any of its subsidiaries, except for issuances
of Xxxxxxxx.xxx Common Stock upon exercise or conversion of Xxxxxxxx.xxx
Options, in each case awarded prior to the date hereof in accordance with their
present terms or issued pursuant to Section 4.1(b), (iv) (A) any granting by
Xxxxxxxx.xxx or any of its subsidiaries to any current or former director,
officer or other key employee of Xxxxxxxx.xxx or its subsidiaries of any
increase in compensation, bonus or other benefits, except for normal increases
as a result of promotions, normal increases of base pay or target bonuses in the
ordinary course of business or as was required under any employment agreements
in effect as of Xxxxx 00, 0000, (X) any granting by Xxxxxxxx.xxx or any of its
subsidiaries to any such current or former director, officer or key employee of
any increase in severance or termination pay, or (C) any entry by Xxxxxxxx.xxx
or any of its subsidiaries into, or any amendment of, any employment, deferred
compensation, consulting, severance, termination or indemnification agreement
with any such current or former director, officer, or any material amendment of
any of the foregoing with any key employee, (v) except insofar as may have been
disclosed in Xxxxxxxx.xxx SEC Documents filed and publicly available prior to
the date of this
25
Agreement (as amended to the date hereof, the "Xxxxxxxx.xxx Filed SEC
Documents") or required by a change in GAAP, any change in accounting methods,
principles or practices by Xxxxxxxx.xxx materially affecting its assets,
liabilities or business, (vi) except insofar as may have been disclosed in the
Xxxxxxxx.xxx Filed SEC Documents, any tax election that individually or in the
aggregate would have a material adverse effect on Xxxxxxxx.xxx or any of its tax
attributes or any settlement or compromise of any material income tax liability
or (vii) any action taken by Xxxxxxxx.xxx or any of the Xxxxxxxx.xxx
subsidiaries during the period from April 1, 2000, through the date of this
Agreement that, if taken during the period from the date of this Agreement
through the Effective Time, would constitute a breach of Section 4.1(b).
(h) Compliance with Applicable Laws; Litigation.
(i) Xxxxxxxx.xxx, its subsidiaries and employees hold all
permits, licenses, variances, exemptions, orders, registrations and approvals of
all Governmental Entities which are required for the operation of the businesses
of Xxxxxxxx.xxx and its subsidiaries (the "Xxxxxxxx.xxx Permits") except where
the failure to have any such Xxxxxxxx.xxx Permits individually or in the
aggregate would not have a material adverse effect on Xxxxxxxx.xxx. Except as
specifically disclosed in the Xxxxxxxx.xxx SEC Documents filed with the SEC
prior to the date hereof, Xxxxxxxx.xxx and its subsidiaries are in compliance
with the terms of the Xxxxxxxx.xxx Permits and all Applicable Laws relating to
Xxxxxxxx.xxx and its subsidiaries or their respective business or properties,
except where the failure to be in compliance with such Applicable Laws
individually or in the aggregate would not have a material adverse effect on
Xxxxxxxx.xxx. As of the date of this Agreement, except as disclosed in the
Xxxxxxxx.xxx Filed SEC Documents, no action, demand, requirement or
investigation by any Governmental Entity and no suit, action or proceeding by
any person, in each case with respect to Xxxxxxxx.xxx or any of its subsidiaries
or any of their respective properties, is pending or, to the knowledge of
Xxxxxxxx.xxx, threatened, other than, in each case, those the outcome of which
individually or in the aggregate would not (A) have a material adverse effect on
Xxxxxxxx.xxx or (B) reasonably be expected to impair the ability of Xxxxxxxx.xxx
to perform its obligations under this Agreement or the Option Agreements or
prevent or materially delay the consummation of any of the transactions
contemplated hereby or thereby.
(ii) Neither Xxxxxxxx.xxx nor any Xxxxxxxx.xxx subsidiary is
subject to any outstanding order, injunction or decree which has had or, insofar
as can be reasonably foreseen, individually or in the aggregate would have, a
material adverse effect on Xxxxxxxx.xxx.
(i) Absence of Changes in Benefit Plans.
Xxxxxxxx.xxx has delivered to Phone or made available to Phone for
review true and complete copies of (i) all severance and employment agreements
of Xxxxxxxx.xxx with directors, executive officers or key employees, (ii) all
written and material unwritten severance programs and policies of each of
Xxxxxxxx.xxx and each Xxxxxxxx.xxx subsidiary, and (iii) all plans or
arrangements of Xxxxxxxx.xxx and each Xxxxxxxx.xxx subsidiary relating to its
employees which contain change in control provisions, in each case which has not
been filed as an exhibit to a Xxxxxxxx.xxx Filed SEC Document. Documents made
available are identified in Section 3.2(i) of the Xxxxxxxx.xxx Disclosure
Schedule. Since March 31, 2000, there has not been any adoption or amendment in
any material respect by Xxxxxxxx.xxx or any of its subsidiaries of any (A)
collective bargaining agreement with respect to any employees of, (B)
26
any material bonus, pension, profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock option, phantom stock,
retirement, vacation, severance, disability, death benefit, hospitalization,
medical or other plan, arrangement or understanding providing benefits to any
current or former officers, directors or employees of, (C) any employment
agreement, consulting agreement or severance agreement with any current or
former officer or director of, or (D) any material employment agreement,
consulting agreement or severance agreement with any employee of Xxxxxxxx.xxx or
any of its wholly owned subsidiaries (collectively, the "Xxxxxxxx.xxx Benefit
Plans"), or any material change in any actuarial or other assumption used to
calculate funding obligations with respect to any Xxxxxxxx.xxx pension plans, or
any material change in the manner in which contributions to any Xxxxxxxx.xxx
pension plans are made or the basis on which such contributions are determined.
Since March 31, 2000, neither Xxxxxxxx.xxx nor any Xxxxxxxx.xxx subsidiary has
amended any Xxxxxxxx.xxx Options or any Xxxxxxxx.xxx Stock Plans to accelerate
the vesting of, or release restrictions on, awards thereunder, or to provide for
such acceleration in the event of a change in control.
(j) Benefit Plans.
(i) With respect to the Xxxxxxxx.xxx Benefit Plans, no event has
occurred and there exists no condition or set of circumstances, in connection
with which Xxxxxxxx.xxx or any of its subsidiaries would be subject to any
liability that individually or in the aggregate could have a material adverse
effect on Xxxxxxxx.xxx under ERISA, the Code or any other applicable law.
(ii) Each Xxxxxxxx.xxx Benefit Plan has been administered in
accordance with its terms, except for any failures so to administer any
Xxxxxxxx.xxx Benefit Plan that individually or in the aggregate would not have a
material adverse effect on Xxxxxxxx.xxx. The Xxxxxxxx.xxx Benefit Plans have
been operated, and are, in compliance with the applicable provisions of ERISA,
the Code and all other applicable laws and the terms of all applicable
collective bargaining agreements, except for any failures to be in such
compliance that individually or in the aggregate would not have a material
adverse effect on Xxxxxxxx.xxx. Each Xxxxxxxx.xxx Benefit Plan intended to
qualify under section 401(a) of the Code and each trust intended to qualify
under section 501(a) of the Code has received either a favorable determination,
opinion or advisory letter from the IRS with respect to each such Xxxxxxxx.xxx
Benefit Plan as to its qualified status under the Code, or has remaining a
period of time under applicable Treasury regulations or IRS pronouncements in
which to apply for such a letter and make any amendments necessary to obtain a
favorable determination, opinion or advisory as to the qualified status of each
Xxxxxxxx.xxx Benefit Plan. To the knowledge of Xxxxxxxx.xxx, no fact or event
has occurred since the date of any determination letter from the IRS which is
reasonably likely to affect adversely the qualified status of any such
Xxxxxxxx.xxx Benefit Plan or the exempt status of any such trust.
(iii) No Xxxxxxxx.xxx Benefit Plan is subject to Title IV of
ERISA or is a "multi-employer plan" within the meaning of Section 3(37) of
ERISA.
(iv) No Xxxxxxxx.xxx Benefit Plan provides medical benefits
(whether or not insured), with respect to current or former employees after
retirement or other termination of service (other than coverage mandated by
applicable law or benefits, the full cost of which is
27
borne by the current or former employee) other than individual arrangements the
amounts of which are not material.
(v) Xxxxxxxx.xxx has previously provided to Phone a copy of each
collective bargaining or other labor union contract applicable to persons
employed by Xxxxxxxx.xxx or any of its subsidiaries to which Xxxxxxxx.xxx or any
of its subsidiaries is a party. No collective bargaining agreement is being
negotiated or renegotiated by Xxxxxxxx.xxx or any of its subsidiaries. As of the
date of this Agreement, there is no labor dispute, strike or work stoppage
against Xxxxxxxx.xxx or any of its subsidiaries pending or, to the knowledge of
Xxxxxxxx.xxx, threatened which may interfere with the respective business
activities of Xxxxxxxx.xxx or any of its subsidiaries, except where such
dispute, strike or work stoppage individually or in the aggregate would not have
a material adverse effect on Xxxxxxxx.xxx. As of the date of this Agreement, to
the knowledge of Xxxxxxxx.xxx, none of Xxxxxxxx.xxx, any of its subsidiaries or
any of their respective representatives or employees has committed any material
unfair labor practice in connection with the operation of the respective
businesses of Xxxxxxxx.xxx or any of its subsidiaries, and there is no material
charge or complaint against Xxxxxxxx.xxx or any of its subsidiaries by the
National Labor Relations Board or any comparable governmental agency pending or
threatened in writing.
(vi) No employee of Xxxxxxxx.xxx or any Xxxxxxxx.xxx subsidiary
will be entitled to any material payment, additional benefits or any
acceleration of the time of payment or vesting of any benefits under any
Xxxxxxxx.xxx Benefit Plan as a result of the transactions contemplated by this
Agreement (either alone or in conjunction with any other event such as a
termination of employment).
(vii) To the knowledge of Xxxxxxxx.xxx, no material oral or
written representation or commitment with respect to any aspect of any
Xxxxxxxx.xxx Benefit Plan has been made to employees of Xxxxxxxx.xxx or any
Xxxxxxxx.xxx subsidiaries by an authorized Xxxxxxxx.xxx employee prior to the
Closing Date that is not materially in accordance with the written or otherwise
preexisting terms and provisions of such Xxxxxxxx.xxx Benefit Plans in effect
immediately prior to the Closing Date.
(viii) Except as would not have a material adverse effect, there
are no material unresolved claims or disputes under the terms of, or in
connection with, any Xxxxxxxx.xxx Benefit Plan (other than routine undisputed
claims for benefits), and no action, legal or otherwise, has been commenced with
respect to any material claim.
(ix) To the knowledge of Xxxxxxxx.xxx, no non-exempt "prohibited
transaction" (within the meaning of section 4975(c) of the Code) involving any
Xxxxxxxx.xxx Benefit Plan has occurred that could subject Xxxxxxxx.xxx to any
material tax penalty or other cost or liability (by indemnification or
otherwise).
(x) Neither Xxxxxxxx.xxx nor any Xxxxxxxx.xxx subsidiary is
obligated to make any parachute payments as such term is defined in section 280G
of the Code, and neither is a party to any agreement that under certain
circumstances is reasonably likely to obligate it, or any successor in interest,
to make any parachute payments that will not be deductible under section 280G of
the Code. Neither Xxxxxxxx.xxx nor any Xxxxxxxx.xxx subsidiary is obligated to
make reimbursement or gross-up payments to any person in respect to excess
parachute payments.
28
(k) Taxes.
(i) Each of Xxxxxxxx.xxx and its subsidiaries has filed all
material Tax Returns required to be filed by it (taking into account all
applicable extensions) with the appropriate Tax Authority and all such returns
are complete, true, and correct in all material respects, or requests for
extensions to file such returns have been timely filed, granted, and have not
expired, except to the extent that such failures to file, to be complete, true,
or correct, or to have extensions granted that remain in effect individually or
in the aggregate would not have a material adverse effect on Xxxxxxxx.xxx.
Xxxxxxxx.xxx and each of its subsidiaries has paid (or Xxxxxxxx.xxx has paid or
caused to be paid on its behalf) all Taxes shown as due on such returns, and the
most recent financial statements contained in the Xxxxxxxx.xxx Filed SEC
Documents reflect an adequate reserve in accordance with GAAP for all Taxes
payable by Xxxxxxxx.xxx and its subsidiaries for all taxable periods and
portions thereof accrued through the date of such financial statements.
(ii) No deficiencies for any Taxes have been proposed, asserted
or assessed against Xxxxxxxx.xxx or any of its subsidiaries that are not
adequately reserved for, except for deficiencies that individually or in the
aggregate would not have a material adverse effect on Xxxxxxxx.xxx. Xxxxxxxx.xxx
and its subsidiaries have disclosed all material deficiencies or adjustments for
Taxes that have been proposed or assessed by any Tax Authority against
Xxxxxxxx.xxx or any of its subsidiaries. All of the Federal income Tax Returns
of the "affiliated group" (as defined in section 1504(a) of the Code) of which
Xxxxxxxx.xxx is the common parent are no longer subject to any Audit by virtue
of the expiration of the applicable statutory period of limitations for the
assessment of Tax.
(iii) Neither Xxxxxxxx.xxx nor any of its subsidiaries has taken
any action or knows of any fact, agreement, plan or other circumstance that is
reasonably likely to prevent the Merger from qualifying as a "reorganization"
within the meaning of section 368(a) of the Code.
(iv) No Audits are presently pending with regard to any Taxes or
Tax Returns of Xxxxxxxx.xxx or its subsidiaries.
(v) Neither Xxxxxxxx.xxx nor any of its subsidiaries is a party
to any agreement providing for the allocation, indemnification, or sharing of
Taxes.
(vi) Other than the "affiliated group" (as defined in section
1504(a) of the Code) of which Xxxxxxxx.xxx is the common parent, neither
Xxxxxxxx.xxx nor any of its subsidiaries has been a member of any "affiliated
group."
(vii) There are no liens for Taxes on any of the assets of
Xxxxxxxx.xxx or its subsidiaries except for liens for Taxes that are not yet due
and payable and for which adequate reserves have been provided in accordance
with GAAP in the most recent financial statements contained in the Xxxxxxxx.xxx
Filed SEC Documents.
(l) Voting Requirements.
The affirmative vote at the Xxxxxxxx.xxx Stockholders' Meeting (the
"Xxxxxxxx.xxx Stockholder Approval") of the holders of a majority of all
outstanding shares of
29
Xxxxxxxx.xxx Common Stock entitled to vote at a duly convened and held meeting
of Xxxxxxxx.xxx stockholders is the only vote of the holders of any class or
series of Xxxxxxxx.xxx's capital stock necessary to adopt this Agreement and
approve the transactions contemplated hereby.
(m) State Takeover Statutes; Certificate of Incorporation.
The Board of Directors of Xxxxxxxx.xxx has adopted a resolution or
resolutions approving this Agreement, the Option Agreements, the Phone Voting
Agreement and the transactions contemplated hereby and thereby, and, assuming
the accuracy of Phone's representation and warranty contained in Section 3.1(p),
such approval constitutes approval of the Merger and the other transactions
contemplated hereby and by the Option Agreements and the Phone Voting Agreement
by the Xxxxxxxx.xxx Board of Directors under the provisions of Section 203 of
the DGCL such that Section 203 of the DGCL does not apply to this Agreement, the
Option Agreements, the Phone Voting Agreement or the transactions contemplated
hereby and thereby. To the knowledge of Xxxxxxxx.xxx, no state takeover statute
other than Section 203 of the DGCL (which has been rendered inapplicable) is
applicable to the Merger or the other transactions contemplated hereby.
(n) Brokers.
Except for fees payable to Xxxxxx Xxxxxxx & Co. Incorporated pursuant
to an engagement letter dated July 28, 2000, a true and correct copy of which
has been provided to Phone, 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 contemplated
by this Agreement based upon arrangements made by or on behalf of Xxxxxxxx.xxx.
(o) Opinion of Financial Advisors.
Xxxxxxxx.xxx has received the opinion of Xxxxxx Xxxxxxx & Co.
Incorporated, dated the date of this Agreement, to the effect that, as of such
date, Exchange Ratio is fair from a financial point of view to holders of
Xxxxxxxx.xxx Common Stock (other than Phone and its affiliates), a signed copy
of which opinion will be delivered to Phone promptly after execution of this
Agreement.
(p) Ownership of Phone Common Stock.
To the knowledge of Xxxxxxxx.xxx, as of the date hereof or at any time
within twelve (12) months prior to the date of this Agreement (and before giving
effect to the Phone Option Agreement and the Phone Voting Agreement, which will
be entered into immediately after the execution of this Agreement) neither
Xxxxxxxx.xxx nor, to its knowledge without independent investigation, any of its
affiliates, (i) beneficially owns (as defined in either Rule 13d-3 under the
Exchange Act) or owned, directly or indirectly, or (ii) is or was party to any
agreement, arrangement or understanding for the purpose of acquiring, holding,
voting or disposing of, in each case, shares of capital stock of Phone.
(q) Intellectual Property.
30
(i) To the knowledge of Xxxxxxxx.xxx, Xxxxxxxx.xxx or its
subsidiaries own or have a valid right to use all trademarks, service marks,
trade names, Internet domain names, designs, slogans, and general intangibles of
like nature, together with all applications, registrations, renewals and
goodwill related to the foregoing (collectively, "Xxxxxxxx.xxx Trademarks");
patents (including any registration, continuations, continuations-in-part,
renewals and applications for any of the foregoing); copyrights (including any
registrations and applications for any of the foregoing); Xxxxxxxx.xxx Software
(as defined below); technology, trade secrets and other confidential
information, know-how, proprietary processes, formulae, algorithms, models, and
methodologies (collectively, "Xxxxxxxx.xxx Trade Secrets") used in or necessary
for the conduct of Xxxxxxxx.xxx's and each of its subsidiary's business as
currently conducted (all such intellectual property being referred to herein as
the "Xxxxxxxx.xxx Intellectual Property"), except where the failure to possess
such right would not have a material adverse effect. For purposes of this
Section 3.2(q), "Xxxxxxxx.xxx Software" means any and all (a) computer programs,
including any and all software implementations of algorithms, models and
methodologies, whether in source code or object code, (b) databases and
compilations, including any and all data and collections of data, whether
machine readable or otherwise, (c) descriptions, flowcharts and other work
product used to design, plan, organize and develop any of the foregoing, (d) the
technology supporting any Internet site(s) operated by or on behalf of
Xxxxxxxx.xxx or any of its subsidiaries and (e) all documentation, including
user manuals and training materials, relating to any of the foregoing.
(ii) The Xxxxxxxx.xxx Intellectual Property owned by
Xxxxxxxx.xxx or any of its subsidiaries is free and clear of all Liens.
(iii) All material Xxxxxxxx.xxx Intellectual Property owned by
Xxxxxxxx.xxx or any of its subsidiaries is valid and subsisting, in full force
and effect, and has not been canceled, has not expired, nor has it been
abandoned. There is no pending or, to Xxxxxxxx.xxx's knowledge, threatened
opposition, interference or cancellation proceeding before any court or
registration authority in any jurisdiction against any registrations in respect
of the Xxxxxxxx.xxx Intellectual Property owned by Xxxxxxxx.xxx or any of its
subsidiaries.
(iv) To the actual knowledge of Xxxxxxxx.xxx or any of its
subsidiaries, the conduct of the business of Xxxxxxxx.xxx and its subsidiaries
as currently conducted does not infringe upon (either directly or indirectly
such as through contributory infringement or inducement to infringe) any
intellectual property rights owned or controlled by any third party. There are
no claims or suits pending and as to which Xxxxxxxx.xxx has received actual
notice or, to the knowledge of Xxxxxxxx.xxx, threatened, and neither
Xxxxxxxx.xxx nor any of its subsidiaries has received any notice of a third-
party claim or suit, (a) alleging that its activities or the conduct of its
business infringes upon, violates, or constitutes the unauthorized use of the
intellectual property rights of any third party or (b) challenging the
ownership, use, validity or enforceability of any Xxxxxxxx.xxx Intellectual
Property (other than Xxxxxxxx.xxx Trademarks), which in any case would have a
material adverse effect.
(v) There are no written settlements, forbearances to xxx,
consents, judgments, or orders or similar obligations which in any material
respect (a) restrict the right of Xxxxxxxx.xxx or its subsidiaries to use any
Xxxxxxxx.xxx Intellectual Property owned by Xxxxxxxx.xxx, or (b) restrict the
business of Xxxxxxxx.xxx or its subsidiaries in order to accommodate a third
party's intellectual property rights or (c) except for licenses with customers
31
for the Xxxxxxxx.xxx Software, there are no agreements that permit third parties
to use any Xxxxxxxx.xxx Intellectual Property owned or controlled by
Xxxxxxxx.xxx or any of its subsidiaries.
(vi) Xxxxxxxx.xxx and each of its subsidiaries takes reasonable
measures to protect the confidentiality of Xxxxxxxx.xxx Trade Secrets, including
(i) requiring its employees and independent contractors having access thereto to
execute written nondisclosure agreements and (ii) requiring all licensees to
maintain the confidentiality of Xxxxxxxx.xxx Trade Secrets. To the actual
knowledge of Xxxxxxxx.xxx or its subsidiaries, no Xxxxxxxx.xxx Trade Secret has
been knowingly disclosed or authorized to be disclosed to any third party other
than pursuant to a nondisclosure agreement or other appropriate instrument that
adequately protects Xxxxxxxx.xxx and the applicable subsidiary's proprietary
interests in and to such trade secrets. To the knowledge of Xxxxxxxx.xxx, no
party to any nondisclosure agreement or nondisclosure obligation relating to its
trade secrets is in breach or default thereof.
(vii) To the knowledge of Xxxxxxxx.xxx, no third party is
misappropriating, infringing, diluting, or violating any Xxxxxxxx.xxx
Intellectual Property owned by Xxxxxxxx.xxx or any of its subsidiaries other
than immaterial disputes concerning use by a third party of Xxxxxxxx.xxx
Trademarks of Xxxxxxxx.xxx or any of its subsidiaries.
(viii) The consummation of the Merger and the other transactions
contemplated by this Agreement shall not result in the loss or impairment of
Xxxxxxxx.xxx's or of any subsidiary's right to own or use any of the
Xxxxxxxx.xxx Intellectual Property, and will not require the consent of any
governmental authority, except where such loss or impairment or the failure to
obtain consent would not result in a material adverse effect.
(r) Certain Contracts.
Except as set forth in the Xxxxxxxx.xxx Filed SEC Documents, neither
Xxxxxxxx.xxx nor any of its subsidiaries is a party to or bound by (i) any
"material contract" (as such term is defined in Item 601(b)(10) of Regulation S-
K of the SEC), (ii) any non- competition agreement or any other agreement or
obligation which purports to limit in any material respect the manner in which,
or the localities in which, all or any material portion of the business of
Xxxxxxxx.xxx and its subsidiaries (including, for purposes of this Section
3.2(r), Phone and its subsidiaries, assuming the Merger has taken place), taken
as a whole, is or would be conducted, (iii) any exclusive supply or purchase
contracts or any exclusive requirements contracts or (iv) any contract or other
agreement which would prohibit or materially delay the consummation of the
Merger or any of the transactions contemplated by this Agreement (all contracts
of the type described in clauses (i) and (ii) being referred to herein as
"Xxxxxxxx.xxx Material Contracts"). Xxxxxxxx.xxx has delivered to Phone or made
available to Phone for review, prior to the execution of this Agreement,
complete and correct copies of all Xxxxxxxx.xxx Material Contracts not filed as
exhibits to the Xxxxxxxx.xxx Filed SEC Documents. Each Xxxxxxxx.xxx Material
Contract is valid and binding on Xxxxxxxx.xxx (or, to the extent a Xxxxxxxx.xxx
subsidiary is a party, such subsidiary) and is in full force and effect, and
Xxxxxxxx.xxx and each Xxxxxxxx.xxx subsidiary have in all material respects
performed all obligations required to be performed by them to date under each
Xxxxxxxx.xxx Material Contract, except where such noncompliance, individually or
in the aggregate, would not have a material adverse effect on Xxxxxxxx.xxx.
Neither Xxxxxxxx.xxx nor any Xxxxxxxx.xxx subsidiary knows of, or has received
notice of, any
32
violation or default under (nor, to the knowledge of Xxxxxxxx.xxx, does there
exist any condition which with the passage of time or the giving of notice or
both would result in such a violation or default under) any Xxxxxxxx.xxx
Material Contract.
(s) Xxxxxxxx.xxx Rights Agreement.
Xxxxxxxx.xxx has delivered to Phone a true, correct and complete copy
of the Xxxxxxxx.xxx Rights Agreement. Xxxxxxxx.xxx has taken all action so that
the entering into of this Agreement, the Xxxxxxxx.xxx Option Agreement, the
Xxxxxxxx.xxx Voting Agreement and the Merger, the acquisition of shares pursuant
to the Xxxxxxxx.xxx Option Agreement and the other transactions contemplated
hereby and thereby will not result in the grant of any rights to any person
under the Xxxxxxxx.xxx Rights Agreement or enable or require the Xxxxxxxx.xxx
Rights to be exercised, distributed or triggered.
(t) Environmental Liability.
Except as set forth in the Xxxxxxxx.xxx Filed SEC Documents, there are
no legal, administrative, arbitral or other proceedings, claims, actions, causes
of action, private environmental investigations or remediation activities or
governmental investigations of any nature pending or threatened against
Xxxxxxxx.xxx or any of its subsidiaries seeking to impose, or that could
reasonably be expected to result in the imposition, on Xxxxxxxx.xxx or any of
its subsidiaries, of any liability or obligation arising under common law or
under any local, state or federal environmental statute, regulation or
ordinance, including, without limitation, CERCLA, which liability or obligation
could reasonably be expected to have a material adverse effect on Xxxxxxxx.xxx.
To the knowledge of Xxxxxxxx.xxx, there is no reasonable basis for any such
proceeding, claim, action or governmental investigation that would impose any
liability or obligation that could reasonably be expected to have a material
adverse effect on Xxxxxxxx.xxx.
(u) Insurance.
Xxxxxxxx.xxx and each of its subsidiaries have policies of insurance
and bonds of the type and in amounts customarily carried by persons conducting
businesses or owning assets similar to those of Xxxxxxxx.xxx and its
subsidiaries. There is no material claim pending under any of such policies or
bonds as to which coverage has been questioned, denied or disputed by the
underwriters of such policies or bonds, except questioned, denied or disputed
claims the failure to provide coverage for which would not, individually or in
the aggregate, have a material adverse effect on Xxxxxxxx.xxx. All premiums due
and payable under all such policies and bonds have been paid and Xxxxxxxx.xxx
and its subsidiaries are otherwise in compliance in all material respects with
the terms of such policies and bonds. Xxxxxxxx.xxx has no knowledge of any
threatened termination of, or material premium increase with respect to, any of
such policies.
(v) Accounting Matters.
As of the date hereof, to the knowledge of Xxxxxxxx.xxx, none of
Xxxxxxxx.xxx, any of its subsidiaries or any of their respective directors,
officers or stockholders, has taken any action which would prevent the
accounting for the Merger as a pooling of interests in accordance with APB 16,
the interpretative releases pursuant thereto and the pronouncements of the SEC.
33
(w) Transactions with Affiliates.
Except as disclosed in the Xxxxxxxx.xxx SEC Documents filed prior to
the date of this Agreement or as disclosed in the Xxxxxxxx.xxx Disclosure
Schedule, since December 31, 1999, there have been no transactions, agreements,
arrangements or understandings between Xxxxxxxx.xxx and its affiliates that
would be required to be disclosed under the Item 404 of Regulation S-K under the
Securities Act.
(x) Full Disclosure.
None of the representations or warranties made by Xxxxxxxx.xxx herein
or in any schedule hereto, including the Xxxxxxxx.xxx Disclosure Schedule, or
any certificate furnished by Xxxxxxxx.xxx pursuant to this Agreement, contains
or will contain at the Effective Time any untrue statement of a material fact,
or omits or will omit at the Effective Time, to state any material fact
necessary in order to make the statements contained herein or therein, in the
light of the circumstances under which made, not misleading.
ARTICLE 4.
COVENANTS RELATING TO CONDUCT OF BUSINESS SECTION
SECTION 4.1 Conduct of Business.
(a) Conduct of Business by Phone.
Except as set forth in Section 4.1(a) of the Phone Disclosure
Schedule, as otherwise expressly contemplated by this Agreement or as consented
to by Xxxxxxxx.xxx in writing, such consent not to be unreasonably withheld or
delayed, during the period from the date of this Agreement to the Effective
Time, Phone 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 efforts to preserve
intact their current business organizations, use reasonable efforts to keep
available the services of their current officers and other key employees and
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 Effective Time, Phone shall not, and shall not permit any of
its subsidiaries to:
(i) other than dividends and distributions by a direct or
indirect wholly owned subsidiary of Phone to its parent, or by a subsidiary that
is partially owned by Phone or any of its subsidiaries, provided that Phone or
any such subsidiary receives or is to receive its proportionate share thereof,
(x) declare, set aside or pay any dividends on, make any other distributions in
respect of, or enter into any agreement with respect to the voting of, any of
its capital stock, (y) 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
Phone Common Stock upon the exercise of Phone Options, in each case, outstanding
as of the date hereof in accordance with their present terms (including cashless
exercise) or issued pursuant to Section 4.1(a)(ii) or (z) purchase, redeem or
otherwise acquire
34
any shares of capital stock of Phone or any of its subsidiaries or any other
securities thereof or any rights, warrants or options to acquire any such shares
or other securities (except, in the case of clause (z), for the deemed
acceptance of shares upon cashless exercise of Phone Options outstanding on the
date hereof, or in connection with withholding obligations relating thereto);
(ii) except in connection with acquisitions permitted or
contemplated by clause (iv) of this Section 4.1(a), 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 the issuance of Phone Common Stock upon the
exercise or conversion of Phone Options outstanding as of the date hereof in
accordance with their present terms or the issuance of Phone Options (and shares
of Phone Common Stock upon the exercise thereof) granted after the date hereof
in the ordinary course of business consistent with past practice for employees
(so long as such additional amount of Phone Common Stock subject to Phone
Options issued to such employees does not exceed four and one-half million
(4,500,000) shares of Phone Common Stock in the aggregate));
(iii) except as contemplated hereby, amend its certificate of
incorporation, by-laws or other comparable organizational documents;
(iv) acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial portion of the assets or equity or other
securities of, or by any other manner, any business or any person, or, except
for transactions pursuant to contracts or agreements in force at the date of
this Agreement or acquisitions or investments permitted or contemplated by
Section 4.1(a) of the Phone Disclosure Schedule, make any material investment
either by purchase of stock or securities, contributions to capital, property
transfers, or purchase of any property or assets of any other individual,
corporation or other entity other than a subsidiary of Phone;
(v) 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 in the ordinary course of business
consistent with past practice, including, without limitation, in connection with
consolidation of acquired businesses or as would not have a material adverse
effect on Phone;
(vi) take any action that would cause the representations and
warranties set forth in Section 3.1(g) and qualified as to materiality to be no
longer true and correct or, if not so qualified, to be no longer true and
correct in all material respects;
(vii) incur any indebtedness for borrowed money or issue any
debt securities or assume, guarantee or endorse, or otherwise as an
accommodation become responsible for the obligations of any person for borrowed
money, other than pursuant to a revolving credit facility or receivables
facility or commercial paper facility in effect as of the date hereof (including
any replacement facilities), in the ordinary course of business consistent with
past practice;
(viii) settle any material claim (including any Tax claim),
action or proceeding involving money damages, except in the ordinary course of
business consistent with past practice;
35
(ix) make any material Tax election except in the ordinary
course of business and consistent with past practice;
(x) other than in the ordinary course of business or in
connection with acquisitions permitted by Section 4.1(a) of the Phone Disclosure
Schedule, enter into or terminate any material contract or agreement, or make
any change in any of its material leases or contracts, other than amendments or
renewals of contracts and leases without material adverse changes of terms;
(xi) except for increases in accordance with normal past
practice, increase in any manner the compensation or fringe benefits of any of
its officers or directors, or materially increase the foregoing in respect of
employees; enter into any commitment to pay any pension, retirement or severance
benefit to any such officers or directors, or make any material commitment to
pay the foregoing to any employees; commit itself to, or enter into, any
employment agreement involving compensation of more than Two Hundred Thousand
Dollars ($200,000.00) per year or a term other than "at will;" adopt or commit
itself to any new benefit, base salary or stock option plan or arrangement; or
amend, supplement, or accelerate the timing of payments or vesting under, or
otherwise materially amend or supplement any existing benefit, stock option or
compensation plan or arrangement (other than as may be required by applicable
law);
(xii) change any of the accounting methods used by Phone or any
of its subsidiaries unless required by generally accepted accounting principles
or take or knowingly allow to be taken any action which would jeopardize the
treatment of the Merger as a pooling of interests for accounting purposes; or
(xiii) authorize, or commit or agree to take, any of the
foregoing actions; provided that the limitations set forth in this Section
4.1(a) (other than clause (iii)) shall not apply to any transaction between
Phone and any wholly owned subsidiary or between any wholly owned subsidiaries
of Phone.
(b) Conduct of Business by Xxxxxxxx.xxx.
Except as set forth in Section 4.1(b) of the Xxxxxxxx.xxx Disclosure
Schedule, as otherwise expressly contemplated by this Agreement or as consented
to by Phone in writing, such consent not to be unreasonably withheld or delayed,
during the period from the date of this Agreement to the Effective Time,
Xxxxxxxx.xxx 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 all reasonable efforts to preserve
intact their current business organizations, use reasonable efforts to keep
available the services of their current officers and other key employees and
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 Effective Time, Xxxxxxxx.xxx shall not, and shall not permit
any of other Xxxxxxxx.xxx subsidiaries to:
(i) other than dividends and distributions by a direct or
indirect wholly owned subsidiary of Xxxxxxxx.xxx to its parent, or by a
subsidiary that is partially owned by
36
Xxxxxxxx.xxx or any of its subsidiaries, provided that Xxxxxxxx.xxx or any such
subsidiary receives or is to receive its proportionate share thereof, (x)
declare, set aside or pay any dividends on, make any other distributions in
respect of, or enter into any agreement with respect to the voting of, any of
its capital stock or the capital stock of any of its subsidiaries, (y) 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 or the capital stock of any of its subsidiaries,
except for issuances of Xxxxxxxx.xxx Common Stock upon the exercise of
Xxxxxxxx.xxx Options outstanding as of the date hereof in accordance with their
present terms (including cashless exercise) or issued pursuant to Section
4.1(b)(ii) or (z) purchase, redeem or otherwise acquire any shares of capital
stock of Xxxxxxxx.xxx or any of its subsidiaries or any other securities thereof
or any rights, warrants or options to acquire any such shares or other
securities (except, in the case of clause (z), for the deemed acceptance of
shares upon cashless exercise of Xxxxxxxx.xxx Options, or in connection with
withholding obligations relating thereto);
(ii) except in connection with acquisitions permitted or
contemplated by clause (iv) of this Section 4.2(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 the issuance of Xxxxxxxx.xxx Common Stock
upon the exercise of Xxxxxxxx.xxx Options outstanding as of the date hereof in
accordance with their present terms or the issuance of Xxxxxxxx.xxx Options (and
shares of Xxxxxxxx.xxx Common Stock upon the exercise thereof) granted after the
date hereof in the ordinary course of business consistent with past practice for
employees (so long as such additional amount of Xxxxxxxx.xxx Common Stock
subject to Xxxxxxxx.xxx Employee Stock Options issued to employees does not
exceed four and one-half million (4,500,000) shares of Xxxxxxxx.xxx Common Stock
in the aggregate));
(iii) except as contemplated hereby, amend its certificate of
incorporation, by-laws or other comparable organizational documents;
(iv) acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial portion of the assets or equity or other
securities of, or by any other manner, any business or any person, or, except
for transactions pursuant to contracts or agreements in force at the date of
this Agreement or acquisitions or investments permitted or contemplated by
Section 4.1(b) of the Xxxxxxxx.xxx Disclosure Schedule, make any material
investment either by purchase of stock or securities, contributions to capital,
property transfers, or purchase of any property or assets of any other
individual, corporation or other entity other than a subsidiary of Xxxxxxxx.xxx;
(v) 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 in the ordinary course of business
consistent with past practice, including, without limitation, in connection with
consolidation of acquired businesses or as would not have a material adverse
effect on Xxxxxxxx.xxx;
37
(vi) take any action that would cause the representations and
warranties set forth in Section 3.2(g) and qualified as to materiality to be no
longer be true and correct or, if not so qualified, to be no longer true and
correct in all material respects;
(vii) incur any indebtedness for borrowed money or issue any
debt securities or assume, guarantee or endorse, or otherwise as an
accommodation become responsible for the obligations of any person for borrowed
money, other than pursuant to a revolving credit facility or receivables
facility or commercial paper facility in effect as of the date hereof (including
any replacement facilities), in the ordinary course of business consistent with
past practice;
(viii) settle any claim (including any Tax claim), action or
proceeding involving money damages, except in the ordinary course of business
consistent with past practice;
(ix) make any material Tax election except in the ordinary
course of business and consistent with past practice;
(x) other than in the ordinary course of business or in
connection with acquisitions permitted by Section 4.1(b) of the Xxxxxxxx.xxx
Disclosure Schedule, enter into or terminate any material contract or agreement,
or make any change in any of its material leases or contracts, other than
amendments or renewals of contracts and leases without material adverse changes
of terms;
(xi) except for increases in accordance with normal past
practice, increase in any manner the compensation or fringe benefits of any of
its officers or directors, or materially increase the foregoing in respect of
employees; enter into any commitment to pay any pension, retirement or severance
benefit to any such officers or directors, or make any material commitment to
pay any of the foregoing to any employees; commit itself to, or enter into, any
employment agreement involving base salary of more than Two Hundred Thousand
Dollars ($200,000.00) per year or a term other than "at will;" adopt or commit
itself to any new benefit, compensation or stock option plan or arrangement; or
amend, supplement, or accelerate the timing of payments or vesting under, or
otherwise materially amend or supplement any existing benefit, stock option or
compensation plan or arrangement (other than as may be required by applicable
law);
(xii) change any of the accounting methods used by Xxxxxxxx.xxx
or any of its subsidiaries unless required by generally accepted accounting
principles or take or knowingly allow to be taken any action which would
jeopardize the treatment of the Merger as a pooling of interests for accounting
purposes; or
(xiii) authorize, or commit or agree to take, any of the
foregoing actions; provided that the limitations set forth in this Section
4.1(b) (other than clause (iii)) shall not apply to any transaction between
Xxxxxxxx.xxx and any wholly owned subsidiary or between any wholly owned
subsidiaries of Xxxxxxxx.xxx.
(c) Other Actions.
38
Except as required by law, Phone, Xxxxxxxx.xxx and Merger Sub shall
not, and shall not permit any of their respective subsidiaries to, voluntarily
take any action that would, or that could reasonably be expected to, result in
any of the conditions to the Merger set forth in Article 6 not being satisfied.
(d) Advice of Changes.
Each of Phone, Xxxxxxxx.xxx and Merger Sub shall promptly advise the
other parties orally and in writing to the extent it has knowledge of any change
or event which would cause a failure of any of the conditions set forth in
Article 6 to be satisfied; provided, however, that no such notification shall
affect the representations, warranties, covenants or agreements of the parties
(or remedies with respect thereto) or the conditions to the obligations of the
parties under this Agreement.
SECTION 4.2 No Solicitation by Phone.
(a) Phone shall not, nor shall it permit any of its subsidiaries to,
nor shall it authorize or permit any of its officers, directors or employees or
any investment banker, financial advisor, attorney, accountant or other
representative retained by it or any of its subsidiaries to, directly or
indirectly through another person, (i) solicit, initiate or encourage (including
by way of furnishing information), or take any other action designed to
facilitate, any inquiries or the making of any proposal the consummation of
which would constitute an Alternative Transaction (as hereinafter defined) or
(ii) participate in any discussions or negotiations regarding any Alternative
Transaction; provided, however, that if, at any time prior to the adoption of
this Agreement by the holders of Phone Common Stock, the Board of Directors of
Phone determines in good faith, after consultation with outside counsel, that
the failure to provide such information or participate in such negotiations or
discussions would result in a reasonable possibility that the Board of Directors
of Phone would breach its fiduciary duties to Phone's stockholders under
applicable law, Phone may, in response to any such proposal that was not
solicited by it or that did not otherwise result from a breach of this Section
4.2(a), and subject to compliance with Section 4.2(c), (x) furnish information
with respect to Phone and its subsidiaries to any person pursuant to a customary
confidentiality agreement containing terms as to confidentiality no less
restrictive than the terms of the confidentiality agreement, dated June 9, 2000,
entered into between Xxxxxxxx.xxx and Phone (the "Confidentiality Agreement")
and (y) participate in negotiations regarding such proposal. For purposes of
this Agreement "Alternative Transaction" means any of (i) a transaction or
series of transactions pursuant to which any person (or group of persons) other
than Xxxxxxxx.xxx and its subsidiaries and other than Phone and its subsidiaries
(a "Third Party") acquires or would acquire, directly or indirectly, beneficial
ownership (as defined in Rule 13d-3 under the Exchange Act) of more than twenty
percent (20%) of the outstanding shares of Xxxxxxxx.xxx or Phone, as the case
may be, whether from Xxxxxxxx.xxx or Phone or pursuant to a tender offer or
exchange offer or otherwise, (ii) any acquisition or proposed acquisition of
Xxxxxxxx.xxx or any of its significant subsidiaries or Phone or any of its
significant subsidiaries, as the case may be, by a merger or other business
combination (including any so-called "merger of equals" and whether or not
Xxxxxxxx.xxx or any of its significant subsidiaries or Phone or any of its
significant subsidiaries, as the case may be, is the entity surviving any such
merger or business combination) or (iii) any other transaction pursuant to which
any Third Party acquires or would acquire, directly or indirectly, control of
assets (including for this purpose the outstanding equity securities of
subsidiaries of Xxxxxxxx.xxx or
39
Phone, as the case may be, and any entity surviving any merger or combination
including any of them) of Xxxxxxxx.xxx or any of its subsidiaries or Phone or
any of its subsidiaries, as the case may be, for consideration equal to twenty
percent (20%) or more of the fair market value of all of the outstanding shares
of Xxxxxxxx.xxx Common Stock or all of the outstanding shares of Phone Common
Stock, as the case may be, on the date prior to the date hereof.
(b) Neither the Board of Directors of Phone nor any committee thereof
shall (i) except as expressly permitted by this Section 4.2(b), withdraw,
qualify or modify, or propose publicly to withdraw, qualify or modify, in a
manner adverse to Xxxxxxxx.xxx, the approval or recommendation by such Board of
Directors or such committee of the Merger, this Agreement, the issuance of Phone
Common Stock in connection with the Merger or the Charter Amendment, (ii)
approve or recommend, or propose publicly to approve or recommend, any
Alternative Transaction, or (iii) cause Phone to enter into any letter of
intent, agreement in principle, acquisition agreement or other similar agreement
related to any Alternative Transaction. Notwithstanding the foregoing, in the
event that prior to the adoption of this Agreement by the holders of Phone
Common Stock the Board of Directors of Phone determines in good faith, after it
has received a Phone Superior Proposal (as defined below) and after consultation
with outside counsel, that the failure to do so would result in a reasonable
possibility that the Board of Directors of Phone would breach its fiduciary
duties to Phone's stockholders under applicable law, the Board of Directors of
Phone may (subject to this and the following sentences) inform Phone
stockholders that it no longer believes that the Merger or this Agreement is
advisable and no longer recommends approval of the issuance of shares of Phone
Common Stock pursuant to this Agreement (a "Phone Subsequent Determination"),
but only at a time that is after the third business day following Xxxxxxxx.xxx's
receipt of written notice advising Xxxxxxxx.xxx that the Board of Directors of
Phone has received a Phone Superior Proposal specifying the material terms and
conditions of such Phone Superior Proposal, identifying the person making such
Phone Superior Proposal and stating that it intends to make a Phone Subsequent
Determination. For purposes of this Agreement, a "Phone Superior Proposal" means
any proposal (on its most recently amended or modified terms, if amended or
modified) made by a Third Party to enter into an Alternative Transaction which
the Board of Directors of Phone determines in its good faith judgment (after
consultation with a financial advisor of nationally recognized reputation) to be
more favorable to Phone's stockholders than the Merger taking into account all
relevant factors (including whether, in the good faith judgment of the Board of
Directors of Phone, after consultation with a financial advisor of nationally
recognized reputation, the third party is reasonably able to finance the
transaction. Notwithstanding any other provision of this Agreement, Phone shall
submit this Agreement to its stockholders whether or not the Board of Directors
of Phone makes a Phone Subsequent Determination.
(c) In addition to the obligations of Phone set forth in paragraphs
(a) and (b) of this Section 4.2, and in any event within one (1) business day,
Phone shall promptly advise Xxxxxxxx.xxx orally and in writing of any request
for information or of any proposal in connection with an Alternative
Transaction, the material terms and conditions of such request or proposal and
the identity of the person making such request or proposal. Phone will keep
Xxxxxxxx.xxx reasonably informed of the status and details (including amendments
or proposed amendments) of any such request or proposal on a current basis.
(d) Nothing contained in this Section 4.2 shall prohibit Phone (i)
from taking and disclosing to its stockholders a position contemplated by Rule
14d-9 or Rule 14e-2(a)
40
promulgated under the Exchange Act or (ii) from making any disclosure to its
stockholders if, in the good faith judgment of the Board of Directors of Phone,
after consultation with outside counsel, failure so to disclose would be
inconsistent with its fiduciary duties to Phone's stockholders under applicable
law.
SECTION 4.3 No Solicitation by Xxxxxxxx.xxx.
(a) Xxxxxxxx.xxx shall not, nor shall it permit any of its
subsidiaries to, nor shall it authorize or permit any of its officers, directors
or employees or any investment banker, financial advisor, attorney, accountant
or other representative retained by it or any of its subsidiaries to, directly
or indirectly through another person, (i) solicit, initiate or encourage
(including by way of furnishing information), or take any other action designed
to facilitate, any inquiries or the making of any proposal the consummation of
which would constitute an Alternative Transaction or (ii) participate in any
discussions or negotiations regarding any Alternative Transaction; provided,
however, that if, at any time prior to the adoption of this Agreement by the
holders of Xxxxxxxx.xxx Common Stock, the Board of Directors of Xxxxxxxx.xxx
determines in good faith, after consultation with outside counsel, that the
failure to provide such information or participate in such negotiations or
discussions would result in a reasonable possibility that the Board of Directors
of Xxxxxxxx.xxx breach its fiduciary duties to Xxxxxxxx.xxx's stockholders under
applicable law, Xxxxxxxx.xxx may, in response to any such proposal that was not
solicited by it or which did not otherwise result from a breach of this Section
4.3(a), and subject to compliance with Section 4.3(c), (x) furnish information
with respect to Xxxxxxxx.xxx and its subsidiaries to any person pursuant to a
customary confidentiality agreement containing terms as to confidentiality no
less restrictive than the Confidentiality Agreement, as amended pursuant to
Section 8.6 hereof, and (y) participate in negotiations regarding such proposal.
(b) Neither the Board of Directors of Xxxxxxxx.xxx nor any committee
thereof shall (i) except as expressly permitted by this Section 4.3(b),
withdraw, qualify or modify, or propose publicly to withdraw, qualify or modify,
in a manner adverse to Phone, 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 Alternative
Transaction, or (iii) cause Xxxxxxxx.xxx to enter into any letter of intent,
agreement in principle, acquisition agreement or other similar agreement related
to any Alternative Transaction. Notwithstanding the foregoing, in the event that
prior to the adoption of this Agreement by the holders of Xxxxxxxx.xxx Common
Stock the Board of Directors of Xxxxxxxx.xxx determines in good faith, after it
has received a Xxxxxxxx.xxx Superior Proposal (as defined below) and after
consultation with outside counsel, that the failure to do so would result in a
reasonable possibility that the Board of Directors of Xxxxxxxx.xxx would breach
its fiduciary duties to Xxxxxxxx.xxx's stockholders under applicable law, the
Board of Directors of Xxxxxxxx.xxx may (subject to this and the following
sentences) inform Xxxxxxxx.xxx stockholders that it no longer believes that the
Merger or this Agreement is advisable and no longer recommends approval (a
"Xxxxxxxx.xxx Subsequent Determination"), but only at a time that is after the
third business day following Phone's receipt of written notice advising Phone
that the Board of Directors of Xxxxxxxx.xxx has received a Xxxxxxxx.xxx Superior
Proposal, specifying the material terms and conditions of such Xxxxxxxx.xxx
Superior Proposal, identifying the person making such Xxxxxxxx.xxx Superior
Proposal and stating that it intends to make a Xxxxxxxx.xxx Subsequent
Determination. For purposes of this Agreement, a
41
"Xxxxxxxx.xxx Superior Proposal" means any proposal (on its most recently
amended or modified terms, if amended or modified) made by a Third Party enter
into an Alternative Transaction on terms which the Board of Directors of
Xxxxxxxx.xxx determines in its good faith judgment (after consultation with a
financial advisor of nationally recognized reputation) to be more favorable to
Xxxxxxxx.xxx's stockholders than the Merger taking into account all relevant
factors (including whether, in the good faith judgment of the Board of Directors
of Xxxxxxxx.xxx, after consultation with a financial advisor of nationally
recognized reputation, the third party is reasonably able to finance the
transaction. Notwithstanding any other provision of this Agreement, Xxxxxxxx.xxx
shall submit this Agreement to its stockholders whether or not the Board of
Directors of Xxxxxxxx.xxx make a Xxxxxxxx.xxx Subsequent Determination.
(c) In addition to the obligations of Xxxxxxxx.xxx set forth in
paragraphs (a) and (b) of this Section 4.3, and in any event within one (1)
business day, Xxxxxxxx.xxx shall promptly advise Phone orally and in writing of
any request for information or of any proposal in connection with an Alternative
Transaction, the material terms and conditions of such request or proposal and
the identity of the person making such request or proposal. Xxxxxxxx.xxx will
keep Phone reasonably informed of the status and details (including amendments
or proposed amendments) of any such request or proposal on a current basis.
(d) Nothing contained in this Section 4.3 shall prohibit Xxxxxxxx.xxx
from (i) taking and disclosing to its stockholders a position contemplated by
Rule 14d-9 or Rule 14e-2(a) promulgated under the Exchange Act or (ii) from
making any disclosure to its stockholders if, in the good faith judgment of the
Board of Directors of Xxxxxxxx.xxx, after consultation with outside counsel,
failure so to disclose would be inconsistent with its fiduciary duties to
Xxxxxxxx.xxx's stockholders under applicable law.
ARTICLE 5.
ADDITIONAL AGREEMENTS
SECTION 5.1 Preparation of the Form S-4 and the Joint Proxy Statement;
Stockholders' Meetings.
(a) As soon as practicable following the date of this Agreement,
Phone and Xxxxxxxx.xxx shall prepare and file with the SEC the Joint Proxy
Statement, and Phone shall prepare and file with the SEC the Form S-4, in which
the Joint Proxy Statement will be included as a prospectus. Each of Phone and
Xxxxxxxx.xxx shall use commercially reasonable efforts to have the Form S-4
declared effective under the Securities Act as promptly as practicable after
such filing. Phone will use commercially reasonable efforts to cause the Joint
Proxy Statement to be mailed to Phone's stockholders, and Xxxxxxxx.xxx will use
commercially reasonable efforts to cause the Joint Proxy Statement to be mailed
to Xxxxxxxx.xxx's stockholders, in each case as promptly as practicable after
the Form S-4 is declared effective under the Securities Act. Phone shall also
take any action required to be taken under any applicable state securities laws
in connection with the issuance of shares of Phone Common Stock in the Merger
and the conversion of Xxxxxxxx.xxx Options into options to acquire Phone Common
Stock, and Xxxxxxxx.xxx shall furnish all information concerning Xxxxxxxx.xxx
and the holders of Xxxxxxxx.xxx Common Stock as may be reasonably requested in
connection with any such action. No filing of, or amendment or supplement to,
the Form S-4 or the Joint Proxy Statement
42
will be made by Phone without Xxxxxxxx.xxx's prior consent and without providing
Xxxxxxxx.xxx the opportunity to review and comment thereon. Phone will advise
Xxxxxxxx.xxx promptly after it receives notice thereof, of the time when the
Form S-4 has become effective or any supplement or amendment has been filed, the
issuance of any stop order, the suspension of the qualification of the Phone
Common Stock issuable in connection with the Merger for offering or sale in any
jurisdiction, or any request by the SEC for amendment of the Joint Proxy
Statement or the Form S-4 or comments thereon and responses thereto or requests
by the SEC for additional information. If at any time prior to the Effective
Time any information relating to Phone or Xxxxxxxx.xxx, or any of their
respective affiliates, officers or directors, should be discovered by Phone or
Xxxxxxxx.xxx which should be set forth in an amendment or supplement to any of
the Form S-4 or the Joint Proxy Statement, so that any of such documents would
not include any misstatement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, the party which discovers such
information shall promptly notify the other parties hereto and an appropriate
amendment or supplement describing such information shall be promptly filed with
the SEC and, to the extent required by law, disseminated to the stockholders of
Phone and Xxxxxxxx.xxx.
(b) Phone shall, as promptly as practicable after the Form S-4 is
declared effective under the Securities Act, duly give notice of, convene and
hold a meeting of its stockholders (the "Phone Stockholders' Meeting") in
accordance with the DGCL for the purpose of obtaining the Phone Stockholder
Approval and shall, subject to the provisions of Section 4.2(b) hereof, through
its Board of Directors, recommend to its stockholders the approval of the
issuance of the shares of Phone Common Stock in the Merger and the Phone Charter
Amendment.
(c) Xxxxxxxx.xxx shall, as promptly as practicable after the Form S-4
is declared effective under the Securities Act, duly give notice of, convene and
hold a meeting of its stockholders (the "Xxxxxxxx.xxx Stockholders' Meeting") in
accordance with the DGCL for the purpose of obtaining the Xxxxxxxx.xxx
Stockholder Approval and shall, subject to the provisions of Section 4.3(b)
hereof, through its Board of Directors, recommend to its stockholders the
approval and adoption of this Agreement, the Merger and the other transactions
contemplated hereby.
(d) Xxxxxxxx.xxx and Phone will use commercially reasonable efforts
to hold the Phone Stockholders' Meeting and the Xxxxxxxx.xxx Stockholders'
Meeting on the same date and as soon as reasonably practicable after the date
hereof.
SECTION 5.2 Pooling Letters.
Xxxxxxxx.xxx shall use commercially reasonable efforts to obtain from
Xxxxxxxx.xxx's accounting firm, Ernst & Young, a signed report in form and
substance reasonably satisfactory to Phone and dated not earlier than five (5)
days prior to the Closing Date, to the effect that, subject to customary
qualifications, such firm concurs with the conclusion of Xxxxxxxx.xxx's
management that Xxxxxxxx.xxx qualifies as a "combining company" in accordance
with the criteria set forth in paragraph 46 of APB 16 and has not violated the
criteria set forth in paragraphs 47c, 47d and 48c of APB 16 during the period
extending from two (2) years preceding the date of initiation to the date of
such report and Phone
43
shall use commercially reasonable efforts to obtain from Phone's accounting
firm, KPMG LLP a signed report in form and substance reasonably satisfactory to
Phone and dated not earlier than five (5) days prior to the Closing Date, to the
effect that such firm concurs with the conclusion of Phone's management that
pooling of interests accounting for the Merger under APB 16 is appropriate.
SECTION 5.3 Access to Information; Confidentiality.
Subject to the Confidentiality Agreement and subject to applicable
law, each of Phone and Xxxxxxxx.xxx shall, and shall cause each of its
respective subsidiaries to, afford to the other party and to the officers,
employees, accountants, counsel, financial advisors and other representatives of
such other party, reasonable access during normal business hours during the
period prior to the Effective Time to all their respective properties, books,
contracts, commitments, personnel and records (provided that such access shall
not interfere with the business or operations of such party) and, during such
period, each of Phone and Xxxxxxxx.xxx shall, and shall cause each of its
respective subsidiaries to, furnish promptly to the other party (a) a copy of
each report, schedule, registration statement and other document filed by it
during such period pursuant to the requirements of federal or state securities
laws and (b) all other information concerning its business, properties and
personnel as such other party may reasonably request. No review pursuant to this
Section 5.3 shall affect any representation or warranty given by the other party
hereto. Each of Phone and Xxxxxxxx.xxx 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 Agreements. Phone shall also cooperate
with Xxxxxxxx.xxx and use its best efforts to obtain an estimate of withdrawal
liability from each multi-employer plan with respect to which Phone contributes
as of the date hereof.
SECTION 5.4 Commercially Reasonable Efforts.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties agrees to use commercially reasonable 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 Merger and the other transactions contemplated by this
Agreement, including (i) the obtaining of all necessary actions or nonactions,
waivers, consents and approvals from Governmental Entities and the making of all
necessary registrations and filings and the taking of all steps as may be
necessary to obtain an approval or waiver from, or to avoid an action or
proceeding by, any Governmental Entity, (ii) the obtaining of all necessary
consents, approvals or waivers, and any necessary or appropriate financing
arrangements, 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 contemplated by this
Agreement, including seeking to have any stay or temporary restraining order
entered by any court or other Governmental Entity vacated or reversed, and (iv)
the execution and delivery of any additional instruments necessary to consummate
the transactions contemplated by, and to fully carry out the purposes of, this
Agreement. Notwithstanding anything to the contrary in this Agreement, neither
Xxxxxxxx.xxx nor Phone shall be required to hold separate (including by trust or
otherwise) or divest any of their respective businesses or
44
assets, or enter into any consent decree or other agreement that would restrict
either Xxxxxxxx.xxx or Phone in the conduct of its business as heretofore
conducted.
(b) In connection with and without limiting the foregoing, Phone and
Xxxxxxxx.xxx shall (i) take all action necessary to ensure that no state
takeover statute or similar statute or regulation is or becomes applicable to
this Agreement, the Option Agreements, or any of the transactions contemplated
hereby and thereby and (ii) if any state takeover statute or similar statute or
regulation becomes applicable to such agreements or transactions, take all
action necessary to ensure that such transactions may be consummated as promptly
as practicable on the terms contemplated by this Agreement and otherwise to
minimize the effect of such statute or regulation on the Merger and the other
transactions contemplated by this Agreement.
SECTION 5.5 Indemnification, Exculpation and Insurance.
Phone agrees that at all times after the Effective Time, it shall
indemnify, and shall cause the Surviving Corporation to indemnify, each person
who is now, or has been at any time prior to the date hereof, a director or
officer of Xxxxxxxx.xxx, any of its subsidiaries or affiliates, or of any of
its successors and assigns (individually an "Indemnified Party" and collectively
the "Indemnified Parties"), to the same extent and in the same manner as is now
provided in the certificate of incorporation or by-laws of Xxxxxxxx.xxx or
otherwise in effect at the Effective Time (pursuant to an indemnification
agreement or otherwise), with respect to any claim, liability, loss, damage,
cost or expense (whenever asserted or claimed) based in whole or in part on, or
arising in whole or in part out of, any matter existing or occurring at or prior
to the Effective Time. Phone shall, or shall cause the Surviving Corporation
to, maintain in effect for not less than six (6) years after the Effective Time
the current policies of directors' and officers' liability insurance maintained
by Xxxxxxxx.xxx on the date hereof (provided that Phone or the Surviving
Corporation may substitute therefor policies having at least the same coverage
and containing terms and conditions which are no less advantageous to the
persons currently covered by such policies as insured) with respect to matters
existing or occurring at or prior to the Effective Time. Without limiting the
foregoing, in the event any Indemnified Party becomes involved in any capacity
in any action, proceeding or investigation based in whole or in part on, or
arising in whole or in part out of, any matter, including the transactions
contemplated hereby, existing or occurring at or prior to the Effective Time,
then, following the Effective Time, to the extent permitted by law Phone shall,
or shall cause the Surviving Corporation to, periodically advance to such
Indemnified Party its legal and other expenses (including the cost of any
investigation and preparation incurred in connection therewith), subject to the
provision by such Indemnified Party of an undertaking to reimburse the amounts
so advanced in the event of a final determination by a court of competent
jurisdiction that such Indemnified Party is not entitled thereto. Promptly
after receipt by an Indemnified Party of notice of the assertion (an
"Assertion") of any claim or the commencement of any action against him or her
in respect to which indemnity or reimbursement may be sought against Phone, the
Surviving Corporation or a subsidiary of Phone ("Indemnitors") hereunder, such
Indemnified Party shall notify any Indemnitor in writing of the Assertion, but
the failure to so notify any Indemnitor shall not relieve any Indemnitor of any
liability it may have to such Indemnified Party hereunder except to the extent
such failure shall have materially prejudiced Indemnitor in defending against
such Assertion. Indemnitors shall be entitled to participate in and, to the
extent Indemnitors (A) elect by written notice to such Indemnified Party within
thirty (30) days after receipt by any
45
Indemnitor of notice of such Assertion and (B) acknowledge in writing their
obligation to indemnify the Indemnified Parties in connection with such
Assertion, to assume the defense of such Assertion, at their own expense, with
counsel chosen by Indemnitors and reasonably satisfactory to such Indemnified
Party. Notwithstanding that Indemnitors shall have elected by such written
notice to assume the defense of any Assertion, such Indemnified Party shall have
the right to participate in the investigation and defense thereof, with separate
counsel chosen by such Indemnified Party, but in such event the fees and
expenses of such counsel shall be paid by such Indemnified Party, unless, in the
opinion of such separate counsel, (i) such Indemnified Party has available to
him one or more defenses to such Assertion that may not be available to the
Indemnitors, (ii) there is otherwise a conflict of interest between the
Indemnified Party, on the one hand, and the Indemnitors, on the other hand, or
(iii) the Indemnitors fail to vigorously pursue the defense of the asserted
claim. No Indemnified Party shall settle any Assertion without the prior written
consent of Phone, nor shall any Indemnitor settle any Assertion without either
(i) the written consent of all Indemnified Parties against whom such Assertion
was made, or (ii) obtaining a general release from the party making the
Assertion for all Indemnified Parties as a condition of such settlement. The
provisions of this Section 5.5 are intended for the benefit of, and shall be
enforceable by, the respective Indemnified Parties. The provisions of this
Section 5.5 are not intended to constitute insurance. To the extent that any
policy of insurance shall provide all or any part of the indemnity owed to the
Indemnified Parties, or any of them, hereunder, the Indemnitors shall be
relieved of their obligation with regard thereto. No acceptance by an
Indemnified Party of any defense from any third party with respect to an
Assertion shall be deemed to constitute a waiver by such Indemnified Party of
its rights under this Section 5.5 or to receive the full measure of the
indemnity provided for hereby.
SECTION 5.6 Fees and Expenses.
Except as set forth in this Section 5.6 and in Section 7.2, all fees
and expenses incurred in connection with the Merger, this Agreement, the Option
Agreements and the transactions contemplated by this Agreement and the Option
Agreements shall be paid by the party incurring such fees or expenses, whether
or not the Merger are consummated, except that each of Xxxxxxxx.xxx and Phone
shall bear and pay one-half of the costs and expenses (other than the fees and
expenses of each party's attorneys and accountants which shall be paid by the
party incurring such expenses) incurred by Phone, Merger Sub, or Xxxxxxxx.xxx in
connection with (i) the filing, printing and mailing of the Form S-4 and the
Joint Proxy Statement (including SEC filing fees) and (ii) the filings of the
premerger notification and report forms under the HSR Act (including filing
fees). In addition, all transfer taxes incurred by Phone, Merger Sub or
Xxxxxxxx.xxx in connection with the Merger arising on or after the Effective
Time shall be borne by Phone.
SECTION 5.7 Public Announcements.
Xxxxxxxx.xxx and Phone will consult with each other and agree before
issuing, and provide each other the opportunity to review, comment upon and
concur with, and use reasonable efforts to agree on, any press release with
respect to the transactions contemplated by this Agreement, the Option
Agreements, including the Merger, and shall not issue any such press release
prior to such consultation and agreement, 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 or stock market. The
parties agree that the initial press
46
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 5.8 Affiliates.
(a) On or before the date hereof, Phone shall prepare and deliver a
copy to Xxxxxxxx.xxx of a letter identifying all persons who may be deemed to
be, at the time this Agreement is submitted for approval and adoption by the
stockholders of Phone, "affiliates" of Phone for purposes of applicable SEC
accounting releases with respect to pooling of interests accounting treatment
and such list shall be updated as necessary to reflect changes from the date
hereof. Phone shall use commercially reasonable efforts to cause each person
identified on such list to deliver to Phone on or before the date hereof,
written agreements substantially in the form attached as Exhibit F hereto, and
in the event any other person becomes an affiliate of Phone thereafter to cause
such person to deliver such an agreement to Phone as soon as practicable but in
any event at Closing.
(b) On or before the date hereof, Xxxxxxxx.xxx shall deliver to Phone
a letter identifying all persons who may be deemed to be, at the time this
Agreement is submitted for approval and adoption by the stockholders of
Xxxxxxxx.xxx, "affiliates" of Xxxxxxxx.xxx for purposes of Rule 145 under the
Securities Act and for purposes of applicable SEC accounting releases with
respect to pooling of interests accounting treatment and such list shall be
updated as necessary to reflect changes from the date hereof. Xxxxxxxx.xxx shall
use commercially reasonable efforts to cause each person identified on such list
to deliver to Phone on or before the date hereof, written agreements
substantially in the form attached as Exhibit E or Exhibit H hereto, as
applicable, and in the event any other person becomes an affiliate of
Xxxxxxxx.xxx thereafter to cause such person to deliver such an agreement to
Phone as soon as practicable but in any event at Closing.
SECTION 5.9 Nasdaq Listing.
Phone shall use commercially reasonable efforts to cause the Phone
Common Stock issuable under Article 2 to be approved for listing on the Nasdaq
National Market, subject to official notice of issuance, as promptly as
practicable after the date hereof, and in any event prior to the Closing Date.
SECTION 5.10 Tax and Accounting Treatment.
Each of Phone, Xxxxxxxx.xxx and their respective subsidiaries shall
use all reasonable efforts to cause the Merger to qualify (i) for treatment as a
pooling of interests for accounting purposes and (ii) as a reorganization within
the meaning of section 368(a) of the Code, and to obtain the opinions of counsel
referred to in sections 6.2 and 6.3. Neither Phone, nor Xxxxxxxx.xxx, nor their
respective subsidiaries, shall take any action to cause the Merger to fail to
qualify (i) for treatment as a pooling of interests for accounting purposes or
(ii) as a reorganization within the meaning of section 368(a) of the Code.
47
SECTION 5.11 Post-Merger Operations.
Following the Effective Time, the headquarters of Phone and its
subsidiaries shall be located in Redwood City, California, until such time as
the Board of Directors of Phone otherwise determines.
SECTION 5.12 Conveyance Taxes.
Xxxxxxxx.xxx and Phone shall cooperate in the preparation, execution
and filing of all returns, questionnaires, applications or other documents
regarding any real property transfer or gains, sales, use, transfer, value
added, stock transfer and stamp taxes, any transfer, recording, registration and
other fees or any similar taxes which become payable in connection with the
transactions contemplated by this Agreement that are required or permitted to be
filed on or before the Effective Time.
SECTION 5.13 Employee Benefits.
For a period of one (1) year after the Closing, Phone covenants that
it shall provide all active employees of Xxxxxxxx.xxx and their dependants and
all qualified beneficiaries with coverage under one or more Phone welfare
benefit plans (each, a "Phone Welfare Benefit Plan"), including without
limitation health coverage (collectively, "Coverage"), which meet the following
requirements as of the Effective Time: (A) the Coverage is comparable in the
aggregate to that provided under the Xxxxxxxx.xxx welfare benefit plans listed
in Section 5.13 of the Xxxxxxxx.xxx Disclosure Schedule (each, a "Xxxxxxxx.xxx
Scheduled Welfare Plan"), (B) service with Xxxxxxxx.xxx prior to the Effective
Time shall be credited against all service and waiting period requirements under
the Phone Welfare Benefit Plans, (C) such Phone Welfare Benefit Plans shall not
provide for any pre-existing condition exclusions other than any such exclusions
existing under the Xxxxxxxx.xxx Scheduled Welfare Plans, and (D) the deductibles
and/or copayments in effect under the Phone Welfare Benefit Plans shall be
credited with any applicable deductibles and/or copayments paid by such
individuals under the Xxxxxxxx.xxx Scheduled Welfare Plans for the plan year in
which the Effective Time occurs.
SECTION 5.14 Consents of Accountants.
Phone and Xxxxxxxx.xxx will each use all reasonable efforts to cause
to be delivered to each other consents from their respective independent
auditors, dated the date on which the Form S-4 shall become effective, in form
reasonably satisfactory to the recipient and customary in scope and substance
for consents delivered by independent public accountants in connection with
registration statements on Form S-4 under the Securities Act.
SECTION 5.15 Phone Board and Officers.
(a) The Board of Directors of Phone shall take all action necessary
so that effective as of the Effective Time, the Board of Directors of Phone
consists of six members, three (3) of whom are members of the current Phone
Board of Directors designated by Phone (the "Phone Designees") and three (3) of
whom are members of the current Xxxxxxxx.xxx Board of Directors designated by
Xxxxxxxx.xxx (the "Xxxxxxxx.xxx Designees") and that each of the three (3)
classes of Phone Directors includes one Phone Designee and one Xxxxxxxx.xxx
Designee.
48
(b) The Board of Directors of Phone will take all necessary action to
appoint, effective as of the Effective Time, (i) Xxxxxx X. Xxxxxxx to the
position of President and Chief Executive Officer of Phone, (ii) Xxxxx Xxxxxxxx
to the position of Executive Vice President and Chairman of the Board of Phone,
(iii) Xxxx X. XxxXxxxxxx to the position of Executive Vice President of Phone
and (iv) Xxxx X. Black to the position of Chief Financial Officer of Phone.
Phone shall take all action necessary to elect such additional members of
management and executive officers of Phone as the Board of Directors of Phone
may determine.
SECTION 5.16 Rights Plans.
(a) Phone shall not redeem the Phone Rights, or amend, modify (other
than to delay any "distribution date" therein) or terminate the Phone Rights
Plan prior to the Effective Time unless required to do so by order of a court of
competent jurisdiction.
(b) Xxxxxxxx.xxx shall not redeem the Xxxxxxxx.xxx Rights or amend,
modify (other than to delay any "distribution date" therein) or terminate the
Xxxxxxxx.xxx Rights Plan prior to the Effective Time unless required to do so by
order of a court of competent jurisdiction.
SECTION 5.17 Action by Board of Directors.
Prior to the Effective Time, the board of directors of each of Phone
and Xxxxxxxx.xxx shall comply as applicable with the provisions of the SEC's no-
action letter dated January 12, 1999, addressed to Skadden, Arps, Slate, Xxxxxxx
and Xxxx LLP relating to Rule 16b of the Exchange Act.
ARTICLE 6.
CONDITIONS PRECEDENT
SECTION 6.1 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 Approvals.
Each of the Phone Stockholder Approval and the Xxxxxxxx.xxx
Stockholder Approval shall have been obtained.
(b) HSR Act.
The waiting period (and any extension thereof) applicable to the
Merger under the HSR Act shall have been terminated or shall have expired.
(c) Governmental and Regulatory Approvals.
Other than the filing of the Certificates of Merger provided for under
Section 1.3 and filings pursuant to the HSR Act (which are addressed in Section
6.1(b)), all consents, approvals and actions of, filings with and notices to any
Governmental Entity required of Phone, Xxxxxxxx.xxx or any of their subsidiaries
to consummate the Merger and the other transactions
49
contemplated hereby (together with the matters contemplated by Section 6.1(b),
the "Requisite Regulatory Approvals") shall have been obtained.
(d) No Injunctions or Restraints.
No judgment, order, decree, 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 (i) preventing the
consummation of the Merger, or (ii) which otherwise is reasonably likely to have
a material adverse effect on Phone following the Effective Time or the effective
operation of the combined company following consummation of the Merger.
(e) Form S-4.
The Form S-4 shall have become effective under the Securities Act
prior to the mailing of the Joint Proxy Statement by each of Phone and
Xxxxxxxx.xxx to their respective stockholders and no stop order or proceedings
seeking a stop order shall be threatened by the SEC or shall have been initiated
by the SEC.
(f) Nasdaq Listings.
The shares of Phone Common Stock issuable to the stockholders of
Xxxxxxxx.xxx as contemplated by Article 2 shall have been approved for listing
on the Nasdaq National Market, subject to official notice of issuance.
SECTION 6.2 Conditions to Obligations of Xxxxxxxx.xxx.
The obligation of Xxxxxxxx.xxx to effect the Merger is further subject
to satisfaction or waiver of the following conditions:
(a) Representations and Warranties.
The representations and warranties of Phone and Merger Sub set forth
herein shall be true and correct both when made and at and as of the Closing
Date, as if made at and as of such time (except to the extent expressly made as
of an earlier date, in which case as of such date), except where the failure of
such representations and warranties (other than those set forth in Section
3.1(c)) which shall be true and correct in all material respects to be so true
and correct (without giving effect to any limitation as to "materiality" or
"material adverse effect" set forth therein) does not have, and is not likely to
have, individually or in the aggregate, a "material adverse effect" on Phone.
(b) Performance of Obligations of Phone and Merger Sub.
Each of Phone and Merger Sub shall have performed in all material
respects all obligations required to be performed by it under this Agreement at
or prior to the Closing Date.
50
(c) No Material Adverse Change.
At any time after the date of this Agreement there shall not have
occurred any material adverse change relating to Phone.
(d) Officer's Certificate.
Xxxxxxxx.xxx shall have received an officer's certificate duly
executed by each of the Chief Executive Officer and Chief Financial Officer of
Phone to the effect that the conditions set forth in Sections 6.2(a), (b) and
(c) have been satisfied.
(e) Tax Opinion.
Xxxxxxxx.xxx shall have received an opinion of Wilson, Sonsini,
Xxxxxxxx & Xxxxxx, Professional Corporation, in form and substance reasonably
satisfactory to Xxxxxxxx.xxx, dated as of the Effective Time, substantially to
the effect that, on the basis of facts, representations and assumptions set
forth in such opinion, for United States federal income tax purposes, the Merger
will constitute a "reorganization" within the meaning of section 368(a) of the
Code.
In rendering such opinion, Wilson, Sonsini, Xxxxxxxx & Xxxxxx,
Professional Corporation may receive and rely upon representations contained in
certificates of Xxxxxxxx.xxx, Phone, Merger Sub and others, and the parties
agree to provide Wilson, Sonsini, Xxxxxxxx & Xxxxxx, Professional Corporation
with such certificates as Wilson, Sonsini, Xxxxxxxx & Xxxxxx, Professional
Corporation may reasonably request in connection with rendering its opinion.
SECTION 6.3 Conditions to Obligations of Phone and Merger Sub.
The obligations of Phone and Merger Sub to effect the Merger are
further subject to satisfaction or waiver of the following conditions:
(a) Representations and Warranties.
The representations and warranties of Xxxxxxxx.xxx set forth herein
shall be true and correct both when made and at and as of the Closing Date, as
if made at and as of such time (except to the extent expressly made as of an
earlier date, in which case as of such date), except where the failure of such
representations and warranties (other than those set forth in Section 3.2(c))
which shall be true and correct in all material respects to be so true and
correct (without giving effect to any limitation as to "materiality," or
"material adverse effect" set forth therein) does not have, and is not likely to
have, individually or in the aggregate, a material adverse effect on
Xxxxxxxx.xxx.
(b) Performance of Obligations of Xxxxxxxx.xxx.
Xxxxxxxx.xxx shall have performed in all material respects all
obligations required to be performed by it under this Agreement at or prior to
the Closing Date.
(c) No Material Adverse Change.
51
At any time after the date of this Agreement there shall not have
occurred any material adverse change relating to Xxxxxxxx.xxx.
(d) Officer's Certificate.
Phone shall have received an officer's certificate duly executed by
each of the Chief Executive Officer and Chief Financial Officer of Xxxxxxxx.xxx
to the effect that the conditions set forth in Sections 6.3(a), (b) and (c) have
been satisfied.
(e) Tax Opinion.
Phone shall have received an opinion of Skadden, Arps, Slate, Xxxxxxx
& Xxxx LLP, in form and substance reasonably satisfactory to Phone, dated as of
the Effective Time, substantially to the effect that, on the basis of facts,
representations and assumptions set forth in such opinion, for United States
federal income tax purposes, the Merger will constitute a "reorganization"
within the meaning of section 368(a) of the Code.
In rendering such opinion, Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
may receive and rely upon representations contained in certificates of Phone,
Merger Sub, Xxxxxxxx.xxx and others, and the parties agree to provide Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP with such certificates as Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP may reasonably request in connection with rendering its
opinion.
ARTICLE 7.
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1 Termination.
This Agreement may be terminated at any time prior to the Effective
Time, and (except in the case of 7.1(e) or 7.1(f)) whether before or after the
Phone Stockholder Approval or the Xxxxxxxx.xxx Stockholder Approval:
(a) by mutual written consent of Xxxxxxxx.xxx and Phone, if the Board
of Directors of each so determines by a vote of a majority of its entire board;
(b) by either the Board of Directors of Xxxxxxxx.xxx or the Board of
Directors of Phone:
(i) if the Merger shall not have been consummated by March 31,
2001 (the "Outside Date") unless such termination right has been expressly
restricted in writing by the Board of Directors of Xxxxxxxx.xxx or Phone, as the
case may be; provided, however, that the right to terminate this Agreement
pursuant to this Section 7.1(b)(i) shall not be available to any party whose
failure to perform any of its obligations under this Agreement results in the
failure of the Merger to be consummated by such time; provided, however, that
-------- -------
in the event either Phone or Xxxxxxxx.xxx has received a request, demand or
legal order from a Governmental Entity with responsibility for administering
antitrust, competition or other similar foreign rules, regulations or laws for
additional documentation or other information, the Outside Date shall be
extended to June 30, 2001;
52
(ii) if the Phone Stockholder Approval shall not have been
obtained at a Phone Stockholders' Meeting duly convened therefor or at any
adjournment or postponement thereof;
(iii) if the Xxxxxxxx.xxx Stockholder Approval shall not have
been obtained at a Xxxxxxxx.xxx Stockholders' Meeting duly convened therefor or
at any adjournment or postponement thereof;
(iv) if any Restraint having any of the effects set forth in
Section 6.1(d) shall be in effect and shall have become final and nonappealable,
or if any Governmental Entity that must grant a Requisite Regulatory Approval
has denied approval of the Merger and such denial has become final and
nonappealable;
(c) by the Board of Directors of Xxxxxxxx.xxx if either of Phone or
Merger Sub shall have breached or failed to perform any of its representations,
warranties, covenants or other agreements contained in this Agreement, which
breach or failure to perform (A) would give rise to the failure of a condition
set forth in Section 6.2(a) or (b), and (B) is incapable of being cured by Phone
or is not cured within fifteen (15) business days of written notice thereof;
(d) by the Board of Directors of Phone, if Xxxxxxxx.xxx shall have
breached or failed to perform in any material respect any of its
representations, warranties, covenants or other agreements contained in this
Agreement, which breach or failure to perform (A) would give rise to the failure
of a condition set forth in Section 6.3(a) or (b), and (B) is incapable of being
cured by Xxxxxxxx.xxx or is not cured within fifteen (15) business days of
written notice thereof;
(e) by the Board of Directors of Xxxxxxxx.xxx, at any time prior to
the Phone Stockholders' Meeting, if (i) the Phone Board of Directors shall have
(A) failed to include in the Joint Proxy Statement to the stockholders of Phone,
its recommendation without modification or qualification that such stockholders
approve the issuance of Phone Common Stock in the Merger and the Charter
Amendment, (B) subsequently withdrawn such recommendation, (C) modified or
qualified such recommendation in a manner adverse to the interests of
Xxxxxxxx.xxx or (D) failed to reconfirm such recommendation within ten (10)
business days of receipt of a written request from Xxxxxxxx.xxx to do so or (ii)
Phone shall have materially breached the provisions of Section 4.2 of this
Agreement;
(f) by the Board of Directors of Phone, at any time prior to the
Xxxxxxxx.xxx Stockholders' Meeting, if (i) the Xxxxxxxx.xxx Board of Directors
shall have (A) failed to include in the Joint Proxy Statement to the
stockholders of Xxxxxxxx.xxx, its recommendation without modification or
qualification that such stockholders approve this Agreement and the transaction
contemplated hereby, or (B) subsequently withdrawn such recommendation, or (C)
modified or qualified such recommendation in a manner adverse to the interests
of Phone, or (D) failed to reconfirm such recommendation within ten (10)
business days of receipt of a written request from Phone to do so or (ii)
Xxxxxxxx.xxx shall have materially breached the provisions of Section 4.3 of
this Agreement.
SECTION 7.2 Effect of Termination.
53
(a) In the event of termination of this Agreement as provided in
Section 7.1 hereof, and subject to the provisions of Section 8.1 hereof, this
Agreement shall forthwith become void and there shall be no liability on the
part of any of the parties, except (i) as set forth in this Section 7.2 and in
Sections 5.3, 5.6, 3.1(n) and 3.2(n) hereof, and (ii) nothing herein shall
relieve any party from liability for any willful breach hereof.
(b) (1) If this Agreement is terminated by Xxxxxxxx.xxx or Phone
pursuant to Section 7.1(b)(ii) hereof because of the failure to obtain the
required approval from the Phone stockholders and at the time of such
termination or prior to the meeting of Phone's stockholders there shall have
been a publicly-announced and not irrevocably and unconditionally withdrawn
offer or proposal for, or any agreement with respect to, a transaction that
would constitute an Alternative Transaction (as defined in Section 4.2(a)
hereof, except that for purposes of this Section 7.2(b), the applicable
percentage of clause (i) of such definition shall be fifty percent (50%))
involving Phone or any of the Phone subsidiaries (whether or not such offer,
proposal, announcement or agreement shall have been rejected prior to the time
of such termination or of the meeting), Phone shall pay to Xxxxxxxx.xxx an
amount equal to Xxxxxxxx.xxx's actual out-of-pocket fees, costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby (the "Xxxxxxxx.xxx Expenses").
(2) If, within twelve (12) months following a termination
contemplated by (1) above, (x) Phone consummates an Alternative Transaction or
(y) Phone enters into an agreement or binding letter of intent providing for an
Alternative Transaction, then Phone shall pay to Xxxxxxxx.xxx a termination fee
equal to One Hundred Ninety-Five Million Dollars ($195,000,000.00) (the
"Termination Fee") minus the Xxxxxxxx.xxx Expenses already paid pursuant to (1)
above.
(3) If this Agreement is terminated (i) by Xxxxxxxx.xxx as a
result of Phone's material breach of Section 5.1(b) hereof, which is not cured
within thirty (30) days after notice thereof to Phone, or (ii) by Xxxxxxxx.xxx
pursuant to Section 7.1(e) hereof, Phone shall pay to Xxxxxxxx.xxx an amount
equal to the Termination Fee.
(c) (1) If this Agreement is terminated by Xxxxxxxx.xxx or Phone
pursuant to Section 7.1(b)(iii) hereof because of the failure to obtain the
required approval from the Xxxxxxxx.xxx stockholders and at the time of such
termination or prior to the meeting of Xxxxxxxx.xxx's stockholders there shall
have been a publicly-announced and not irrevocably and unconditionally withdrawn
offer or proposal for, or any agreement with respect to, a transaction that
would constitute an Alternative Transaction (as defined in Section 4.2(a)
hereof, except that for purposes of this Section 7.2(c), the applicable
percentage of clause (i) of such definition shall be fifty percent (50%))
involving Xxxxxxxx.xxx or any of the Xxxxxxxx.xxx subsidiaries (whether or not
such offer, proposal, announcement or agreement shall have been rejected prior
to the time of such termination or of the meeting), Xxxxxxxx.xxx shall pay to
Phone an amount equal to Phone's actual out-of-pocket fees, costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby (the "Phone Expenses").
(2) If, within twelve (12) months following a termination
contemplated by (1) above, (x) Xxxxxxxx.xxx consummates an Alternative
Transaction or (y) Xxxxxxxx.xxx enters into an agreement or binding letter of
intent providing for an Alternative Transaction, then
54
Xxxxxxxx.xxx shall pay to Phone a termination fee equal to the Termination Fee
minus the Phone Expenses already paid pursuant to (1) above.
(3) If this Agreement is terminated (i) by Phone as a result of
Xxxxxxxx.xxx's material breach of Section 5.1(c) hereof which is not cured
within thirty (30) days after notice thereof to Xxxxxxxx.xxx, or (ii) by Phone
pursuant to Section 7.1(f) hereof, Xxxxxxxx.xxx shall pay to Phone an amount
equal to the Termination Fee.
(d) Each payment of Xxxxxxxx.xxx Expenses, Phone Expenses or the
Termination Fee payable under Sections 7.2(b)(1) , 7.2(b)(2), 7.2 (c)(1) or
7.2(c)(2) above shall be payable in cash, payable no later than one (1) business
day following the delivery of notice of termination to the other party.
(e) Each Termination Fee payable under Section 7.2(b)(3) shall be
payable in cash and shares of Phone Common Stock, in such combination as Phone
may elect (provided that the cash component must be at least Forty Million
Dollars ($40,000,000.00)) with an aggregate value (for all purposes of this
Section 7.2(e), such shares of Phone Common Stock shall be valued at a price per
share equal to the average closing price per share of Phone Common Stock for the
five (5) most recent trading days that Phone Common Stock has traded ending on
the trading day immediately prior to the termination date, as reported on the
Nasdaq National Market) equal to the Termination Fee, payable no later than
three (3) business days following the delivery of notice of termination to the
other party. If Phone satisfies its obligation to pay the Termination Fee in
part by issuing shares of Phone Common Stock (the "Phone Termination Fee
Shares"), then Xxxxxxxx.xxx shall be entitled to registration rights with
respect to such shares as described in the Phone Stock Option Agreement
(treating Phone Termination Fee Shares for all purposes of Section 7 of the
Phone Stock Option Agreement as if they were Option Shares (as defined in the
Phone Stock Option Agreement)).
(f) Each Termination Fee payable under Section 7.2(c)(3) shall be
paid in cash and shares of Xxxxxxxx.xxx Common Stock, in such combination as
Xxxxxxxx.xxx may elect (provided that the cash component must be at least Forty
Million Dollars ($40,000,000.00)) with an aggregate value (for all purposes of
this Section 7.2(e), such shares of Xxxxxxxx.xxx Common Stock to be valued at a
price per share equal to the average closing price per share of Xxxxxxxx.xxx
Common Stock for the five (5) most recent trading days that Xxxxxxxx.xxx Common
Stock has traded ending on the trading day immediately prior to the termination
date, as reported on the Nasdaq National Market) equal to the Termination Fee,
payable no later than three (3) business days following the delivery of notice
of termination to the other party. If Xxxxxxxx.xxx satisfies its obligation to
pay the Termination Fee in part by issuing shares of Xxxxxxxx.xxx Common Stock
(the "Xxxxxxxx.xxx Termination Fee Shares"), then Phone shall be entitled to
registration rights with respect to such shares as described in the Xxxxxxxx.xxx
Stock Option Agreement (treating Xxxxxxxx.xxx Termination Fee Shares for all
purposes of Section 7 of the Xxxxxxxx.xxx Stock Option Agreement as if they were
Option Shares (as defined in the Xxxxxxxx.xxx Stock Option Agreement)).
(g) Xxxxxxxx.xxx and Phone agree that the agreements contained in
Sections 7.2(b) and (c) above are an integral part of the transaction
contemplated by this Agreement and constitute liquidated damages and not a
penalty. If one party fails to promptly pay to the other any fee due under such
Sections 7.2(b) and (c), the defaulting party shall pay the costs and
55
expenses (including legal fees and expenses) in connection with any action,
including the filing of any lawsuit or other legal action, taken to collect
payment.
SECTION 7.3 Amendment.
Subject to compliance with applicable law, this Agreement may be
amended by the parties at any time before or after the Phone Stockholder
Approval or the Xxxxxxxx.xxx Stockholder Approval; provided, however, that after
any such approval, there may not be, without further approval of such the
stockholders of Phone (in the case of the Phone Stockholder Approval) and the
stockholders of Xxxxxxxx.xxx (in the case of the Xxxxxxxx.xxx Stockholder
Approval), any amendment of this Agreement that changes the amount or the form
of the consideration to be delivered to the holders of Xxxxxxxx.xxx Common Stock
hereunder, or which by law otherwise expressly requires 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 hereto and duly approved by the
parties' respective Boards of Directors or a duly designated committee thereof.
SECTION 7.4 Extension; Waiver.
At any time prior to the Effective Time, a party may, subject to the
proviso of Section 7.3 (and for this purpose treating any waiver referred to
below as an amendment), (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties of the other parties contained in this
Agreement or in any document delivered pursuant to this Agreement or (c) 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. Any extension or waiver given in compliance with this
Section 7.4 or failure to insist on strict compliance with an obligation,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure.
ARTICLE 8.
GENERAL PROVISIONS
SECTION 8.1 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 8.1 shall not limit any covenant or agreement of the parties
which by its terms contemplates performance after the Effective Time.
SECTION 8.2 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 or faxed (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):
56
(a) if to Xxxxxxxx.xxx to:
Xxxxxxxx.xxx, Inc.
000 Xxxxxxx Xxxxxx
Xxxxx Xxxxxxx, XX 00000
Attention: General Counsel
Facsimile: (000) 000-0000
with copies to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Attention: Xxxxxxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
and to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation
Spear Street Tower, Suite 0000
Xxx Xxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
(b) if to Phone or Merger Sub, to it at:
Xxxxx.xxx, Inc.
000 Xxxxxxxxxx Xxxxx
Xxxxxxx Xxxx, XX 00000
Attention: General Counsel
Facsimile: (000) 000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
SECTION 8.3 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
57
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 Phone or Xxxxxxxx.xxx, any change, effect, event,
occurrence or state of facts that is or could reasonably be expected to be
materially adverse to the business, financial condition or results of operations
of such party and its subsidiaries taken as a whole, it being understood that
none of the following shall be deemed by itself or by themselves, either alone
or in combination, to constitute a material adverse effect: (i) a change in the
market price or trading volume of Xxxxxxxx.xxx Common Stock or Phone Common
Stock, as the case may be or (ii) conditions affecting the U.S. economy as a
whole;
(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, other voting ownership or voting 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 interests, fifty percent
(50%) or more of the equity interests of which) is owned directly or indirectly
by such first person; and
(e) "knowledge" of any person which is not an individual means the
knowledge of such person's executive officers or senior management of such
person's operating divisions and segments.
SECTION 8.4 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. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation." The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein. The definitions contained in this Agreement
are applicable to the singular as well as the plural forms of such terms and to
the masculine as well as to the feminine and neuter genders of such term. Any
agreement, instrument or statute defined or referred to herein or in any
agreement or instrument that is referred to herein means such agreement,
instrument or statute as from time to time amended, modified or supplemented,
including (in the case of agreements or instruments) by waiver or consent and
(in the case of statutes) by succession of comparable successor statutes and
references to all attachments thereto and instruments incorporated therein.
References to a person are also to its permitted successors and assigns.
58
SECTION 8.5 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 8.6 Entire Agreement; No Third-Party Beneficiaries.
This Agreement (including the documents and instruments referred to
herein), the Option Agreements, the Voting Agreements 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 Section 5.5, are not intended to confer upon any person other than
the parties any rights or remedies.
SECTION 8.7 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 8.8 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. 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 8.9 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, etc.
The headings and table of contents 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
59
Agreement shall nevertheless remain in full force and effect, insofar as the
foregoing can be accomplished without materially affecting the economic benefits
anticipated by the parties to this Agreement. 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.
60
IN WITNESS WHEREOF, Xxxxxxxx.xxx, Xxxxx.xxx and Merger Sub have caused
this Agreement to be signed by their respective officers thereunto duly
authorized, all as of the date first written above.
XXXXXXXX.XXX, INC.
By: /s/ Xxxx XxxXxxxxxx
-------------------
Name: Xxxx XxxXxxxxxx
Title: Chief Executive Officer
XXXXX.XXX, INC.
By: /s/ Xxxxx Xxxxxxxx
------------------
Name: Xxxxx Xxxxxxxx
Title: Chief Executive Officer
SILVER MERGER SUB INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------
Name: Xxxxxx X. Xxxxx
Title:
61
Exhibit A
STOCK OPTION AGREEMENT
(XXXXX.XXX, INC. SHARES)
STOCK OPTION AGREEMENT
(XXXXX.XXX, INC. SHARES)
THIS STOCK OPTION AGREEMENT (this "AGREEMENT"), dated August 8, 2000,
between Xxxxx.xxx, Inc., a Delaware corporation ("Issuer"), and Xxxxxxxx.xxx,
Inc., a Delaware corporation ("Grantee").
WITNESSETH:
WHEREAS, Grantee and Issuer have entered into an Agreement and Plan of
Merger, dated as of August 8, 2000 (the "Merger Agreement"), which provides,
among other things, for the merger of Merger Sub with and into Grantee with
Grantee continuing as the surviving corporation upon the terms and subject to
the conditions set forth in the Merger Agreement (capitalized terms used herein
without definition shall have the respective meanings specified in the Merger
Agreement); and
WHEREAS, as a condition to Grantee's entering into the Merger
Agreement and in consideration therefor, Issuer has agreed to grant Grantee the
Option (as hereinafter defined).
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein and in the Merger Agreement, and
intending to be legally bound hereby, the parties hereto agree as follows:
1. GRANT OF OPTION. Issuer hereby grants to Grantee an
---------------
unconditional, irrevocable option (the "Option") to purchase, subject to the
terms hereof, sixteen million five hundred sixteen thousand four hundred ninety-
five (16,516,497) shares of fully paid and nonassessable common stock of the
Issuer, par value $.001 per share ("Common Stock"), equal to and in no event
exceeding nineteen and nine-tenths percent (19.9%) of the shares of Common Stock
outstanding as of July 31, 2000 the date hereof, at a purchase price of $78.0625
per share of Common Stock as adjusted in accordance with the provisions of
Section 6 of this Agreement (such price, as adjusted if applicable, the "Option
Price").
2. EXERCISE OF OPTION.
(a) Grantee may exercise the Option, in whole or part, and from time
to time, if, but only if, a Triggering Event (as hereinafter defined) shall have
occurred prior to the occurrence of an Option Termination Event (as hereinafter
defined), provided that Grantee shall have sent the written notice of such
exercise (as provided in subsection (e) of this Section 2) on or prior to the
last date of the six (6)-month period following such Triggering Event (the
"Option Expiration Date").
(b) The term "Option Termination Event" shall mean the first day
after the earliest to occur of the following dates: (i) the date on which the
Effective Time of the Merger occurs; (ii) the last date of the twelve (12) month
period beginning on the date of termination of the Merger Agreement pursuant to
Section 7.1(b)(ii); provided, that such termination has given
--------
rise to the right of Grantee to receive payment of Xxxxxxxx.xxx Expenses
pursuant to Section 7.2(b)(1) of the Merger Agreement; provided, that subsequent
--------
to such termination, if an event occurs that gives rise to the obligation of
Issuer to pay the Termination Fee pursuant to Section 7.2(b)(2) of the Merger
Agreement, then the last date of the six (6) month period beginning on the date
of actual payment of the Termination Fee by Issuer to Grantee pursuant to
Section 7.2(b)(2) of the Merger Agreement; (iii) the date of termination of the
Merger Agreement by either party pursuant to the provisions of any section of
the Merger Agreement other than Sections 7.1(b)(ii) (other than as provided in
clause (ii) above); provided, that such termination occurs prior to the
--------
occurrence of a Triggering Event; and (iv) the last date of the six (6) month
period beginning on the date of the first occurrence of a Triggering Event;
provided, however, that if the Option cannot be exercised as of any such date by
-------- -------
reason of any applicable judgment, decree, law, regulation or order (each, an
"Impediment"), or by reason of the waiting period under the HSR Act, then the
Option Termination Event shall be delayed until the date which is thirty (30)
days after such Impediment has been removed or such waiting period has expired.
(c) TRIGGERING EVENT. The term "Triggering Event" shall mean any
----------------
termination of the Merger Agreement which entitles Grantee to receive payment of
the Termination Fee from Issuer pursuant to Section 7.2 of the Merger Agreement.
(d) NOTICE OF TRIGGERING EVENT. Issuer shall notify Grantee
--------------------------
promptly in writing of the occurrence of any Triggering Event, and in any event
within twenty-four (24) hours, it being understood that the giving of such
notice by Issuer shall not be a condition to the right of Grantee to exercise
the Option or for a Triggering Event to have occurred.
(e) NOTICE OF EXERCISE; CLOSING. In the event Grantee is entitled
---------------------------
to and wishes to exercise the Option, it shall send to Issuer a written notice
(the date of which being herein referred to as the "Notice Date") specifying (i)
the total number of shares it will purchase pursuant to such exercise and (ii) a
place and date which shall be a business day not earlier than three (3) business
days nor later than sixty (60) business days from the Notice Date for the
closing of such purchase (the "Closing Date"); provided, that if the closing of
the purchase and sale pursuant to the Option (the "Closing") cannot be
consummated, in the reasonable opinion of Grantee, by reason of any applicable
judgment, decree, order, law or regulation, the period of time that otherwise
would run pursuant to this sentence shall run instead from the date on which
such restriction on consummation has expired or been terminated; and provided
further, without limiting the foregoing, that if, in the reasonable opinion of
Grantee, prior notification to or approval of any regulatory agency is required
in connection with such purchase, Grantee shall promptly file the required
notice or application for approval and shall expeditiously process the same and
the period of time that otherwise would run pursuant to this sentence shall run
instead from the date on which any required notification periods have expired or
been terminated or such approvals have been obtained and any requisite waiting
period or periods shall have passed. Any exercise of the Option shall be deemed
to occur on the Closing Date relating thereto.
(f) PURCHASE PRICE. At the Closing referred to in subsection (e) of
--------------
this Section 2, Grantee shall pay to Issuer the aggregate purchase price for the
shares of Common Stock purchased pursuant to the exercise of the Option in
immediately available funds by wire transfer to a bank account designated by
Issuer, provided that failure or refusal of Issuer to designate such a bank
account shall not preclude Grantee from exercising the Option.
(g) ISSUANCE OF COMMON STOCK. At such Closing, simultaneously with
------------------------
the delivery of immediately available funds as provided in subsection (f) of
this Section 2, Issuer shall deliver to Grantee a certificate or certificates
representing the number of shares of Common Stock purchased by the Grantee and,
if the Option should be exercised in part only, a new Option evidencing the
rights of Grantee thereof to purchase the balance of the shares purchasable
hereunder, and the Grantee shall deliver to Issuer this Agreement and a letter
agreeing that Grantee will not offer to sell or otherwise dispose of such shares
in violation of applicable law or the provisions of this Agreement.
(h) LEGEND. Certificates for Common Stock delivered at a Closing
------
hereunder may be endorsed with a restrictive legend that shall read
substantially as follows:
"THE TRANSFER AND VOTING OF THE SHARES REPRESENTED BY THIS CERTIFICATE
IS SUBJECT TO CERTAIN PROVISIONS OF AN AGREEMENT BETWEEN THE
REGISTERED HOLDER HEREOF AND ISSUER AND TO RESALE RESTRICTIONS ARISING
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. A COPY OF SUCH AGREEMENT
IS ON FILE AT THE PRINCIPAL OFFICE OF ISSUER AND WILL BE PROVIDED TO
THE HOLDER HEREOF WITHOUT CHARGE UPON RECEIPT BY ISSUER OF A WRITTEN
REQUEST THEREFOR."
It is understood and agreed that: (i) the reference to the resale
restrictions of the Securities Act of 1933, as amended (the "Securities Act"),
in the above legend shall be removed by delivery of substitute certificate(s)
without such reference if Grantee shall have delivered to Issuer a copy of a
letter from the staff of the SEC, or an opinion of counsel, in form and
substance reasonably satisfactory to Issuer, to the effect that such legend is
not required for purposes of the Securities Act; (ii) the reference to the
provisions of this Agreement in the above legend shall be removed by delivery of
substitute certificate(s) without such reference if the shares have been sold or
transferred in compliance with the provisions of this Agreement and under
circumstances that do not require the retention of such reference; and (iii) the
legend shall be removed in its entirety if the conditions in the preceding
clauses (i) and (ii) and both satisfied. In addition, such certificates shall
bear any other legend as may be required by law.
(i) RECORD HOLDER; EXPENSES. Upon the Closing, Grantee shall be
-----------------------
deemed to be the holder of record of the shares of Common Stock issuable upon
such exercise, notwithstanding that the stock transfer books of Issuer shall
then be closed or that certificates representing such shares of Common Stock
shall not then be actually delivered to Grantee or the Issuer shall have failed
or refused to designate the bank account described in subsection (f) of this
Section 2. Issuer shall pay all expenses, and any and all United States federal,
state and local taxes and other charges that may be payable in connection with
the preparation, issuance and delivery of stock certificates under this Section
2 in the name of Grantee or its assignee, transferee or designee.
3. CONDITIONS TO DELIVERY OF OPTION SHARES. The obligation of
Issuer to deliver Option Shares upon any exercise of the Option is subject to
the satisfaction of the following conditions:
(a) All waiting periods, if any, under the HSR Act applicable to the
issuance of Option Shares hereunder shall have expired or been terminated; and
(b) There shall be no preliminary or permanent injunction or other
order issued by any court of competent jurisdiction preventing or prohibiting
such exercise of the Option or the delivery of the Option Shares in respect of
such exercise.
4. RESERVATION OF SHARES. Issuer agrees: (i) that it shall at all
---------------------
times maintain, free from preemptive rights, sufficient authorized but unissued
or treasury shares of Common Stock (and other securities issuable pursuant to
Section 6) so that the Option may be exercised without additional authorization
of Common Stock (or such other securities) after giving effect to all other
options, warrants, convertible securities and other rights to purchase Common
Stock (or such other securities); (ii) that it will not, by charter amendment or
through reorganization, consolidation, merger, dissolution or sale of assets, or
by any other voluntary act avoid or seek to avoid the observance or performance
of any of the covenants, stipulations or conditions to be observed or performed
hereunder by Issuer; (iii) promptly to take all action as may from time to time
be required (including without limitation complying with all premerger
notification, reporting and waiting periods in the HSR Act and the rules and
regulations thereunder) in order to permit Grantee to exercise the Option and
the Issuer duly and effectively to issue shares of Common Stock pursuant hereto;
and (iv) promptly to take all action provided herein to protect the rights of
Grantee against dilution.
5. LOST OPTIONS. Upon receipt by Issuer of evidence reasonably
------------
satisfactory to it of the loss, theft, destruction or mutilation of this
Agreement, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Agreement, if mutilated, Issuer will execute and deliver a new Agreement of like
tenor and date.
6. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. The number of shares
of Common Stock purchasable upon the exercise of the Option shall be subject to
adjustment from time to time as provided in this Section 6.
(a) In the event that any additional shares of Common Stock are issued
or otherwise become outstanding after the date hereof (other than by reason of
subsection (b) of this Section 6), the number of shares of Common Stock subject
to the Option shall be increased so that, after such issuance of additional
shares, such number of shares then remaining subject to the Option, together
with shares theretofore issued pursuant to the Option, equals nineteen and nine-
tenths percent (19.9%) of the number of such shares of Common Stock then issued
and outstanding.
(b) In the event of any change in Common Stock by reason of stock
dividends, other dividends on the Common Stock payable in securities or other
property (other than regular cash dividends), stock splits, merger,
recapitalization, combinations, subdivisions, conversions, exchanges of shares
or other similar transactions, then the type and number of shares of Common
Stock purchasable upon exercise hereof shall be appropriately adjusted, and
proper provision will be made in the agreements governing such transaction so
that Grantee shall receive upon exercise of the Option and payment of the
aggregate Option Price hereunder the
number and class of shares or other securities or property that Grantee would
have received in respect of Common Stock if the Option had been exercised in
full immediately prior to such event, or the record date therefor, as
applicable.
(c) Whenever the number of shares of outstanding Common Stock changes
after the date hereof as a result of the events described in clause (b) hereof
(but not the events described in clause (a) hereof), the Option Price shall be
adjusted by multiplying the Option Price by a fraction the numerator of which
shall be equal to the aggregate number of shares of Common Stock purchasable
prior to the adjustment and the denominator of which shall be equal to the
aggregate number of shares of Common Stock purchasable immediately after the
adjustment.
(d) No adjustment made in accordance with this Section 6 shall
constitute or be deemed a waiver of any breach of any of Issuer's
representations, warranties, covenants, agreements or obligations contained in
the Merger Agreement.
(e) If the Issuer satisfies a portion of its obligation to pay Grantee
a termination fee as permitted by Section 7.2 of the Merger Agreement by issuing
to Grantee shares of Common Stock (the "Termination Fee Shares"), then the
number of shares of Common Stock subject to the Option (including those Option
Shares which may have already been exercised) will be adjusted so that the sum
of the number of shares of Common Stock subject to the Option and the number of
Termination Fee Shares equals nineteen and nine-tenths percent (19.9%) of the
number of shares of Common Stock then issued and outstanding, without giving
effect to any Option Shares or Termination Fee Shares.
7. REGISTRATION RIGHTS.
-------------------
(a) As used in this Agreement, "Registrable Securities" means each of
the Option Shares issued to Grantee hereunder and any other securities issued in
exchange for, or issued as dividends or otherwise on or in respect of, any of
such Option Shares.
(b) At any time or from time to time within three (3) years of the
first Closing, Grantee may make a written request to Issuer for registration
under and in accordance with the provisions of the Securities Act with respect
to all or any part of the Registrable Securities (a "Demand Registration"). A
Demand Registration may be, at the option of Grantee, a shelf registration or a
registration involving an underwritten offering. As soon as reasonably
practicable after Grantee's request for a Demand Registration, Issuer shall file
one or more registration statements on any appropriate form with respect to all
of the Registrable Securities requested to be so registered; provided that
Issuer will not be required to file any such registration statement during any
period of time (not to exceed sixty (60) days after such request in the case of
clause (i) below or ninety (90) days in the case of clauses (ii) or (iii) below)
when (i) Issuer is in possession of material non-public information which it
reasonably believes would be detrimental to be disclosed at such time, (ii)
Issuer is required under the Securities Act to include audited financial
statements for any period in such registration statement that are not yet
available for inclusion therein, or (iii) Issuer determines, in its reasonable
judgment, that such registration would interfere with any financing, acquisition
or other material transaction involving Issuer or any of its affiliates. Issuer
shall use its best efforts to have the Demand
Registration declared effective as soon as reasonably practicable after such
filing and to keep the Demand Registration continuously effective for a period
of at least sixty (60) days following the date on which the Demand Registration
is declared effective, in the case of an underwritten offering, or at least one
hundred twenty (120) days following the date on which the Demand Registration is
declared effective, in the case of a shelf registration; provided that, if for
any reason the effectiveness of any Demand Registration is suspended, the
required period of effectiveness shall be extended by the aggregate number of
days of each such suspension; and provided, further, that the effectiveness of
any Demand Registration may be terminated if and when all of the Registrable
Securities covered thereby shall have been sold. Grantee shall be entitled to
two (2) Demand Registrations: provided, that only requests relating to a
registration statement that has become effective under the Securities Act shall
be counted for purposes of determining the number of Demand Registrations made.
If any Demand Registration involves an underwritten offering, (i) Issuer shall
have the right to select the managing underwriter, which shall be reasonably
acceptable to Grantee and (ii) Issuer shall enter into an underwriting agreement
in customary form.
(c) If at any time within two (2) years of the first Closing, Issuer
proposes to file a registration statement under the Securities Act with respect
to any shares of any class of its equity securities to be sold for the account
of Issuer (other than a registration statement on Form S-4 or Form S-8 or any
successor form), and the registration form to be used may be used for the
registration of Registrable Securities, then Issuer shall in each case give
written notice of such proposed filing to Grantee at least twenty (20) days
before the anticipated filing date, and Grantee shall have the right to include
in such registration such number of Registrable Securities as Grantee may
request (such request to be made by written notice to Issuer within fifteen (15)
days following Grantee's receipt from Issuer of such notice of proposed filing)
(an "Incidental Registration"). Issuer shall use its commercially reasonable
efforts to cause the managing underwriter of any proposed underwritten offering
to permit Grantee to include in such offering all Registrable Securities
requested by Grantee to be included in the registration for such offering on the
same terms and conditions as any similar securities of Issuer included therein.
Notwithstanding the foregoing, if the managing underwriter of such offering
advises Grantee that, in the reasonable opinion of such underwriter, the amount
of Registrable Securities which Grantee requests to be included in such offering
would materially and adversely affect the success of such offering, then the
amount of Registrable Securities to be offered shall be reduced to the extent
necessary to reduce the total amount of securities to be included in such
offering to the amount recommended by such underwriter; provided that if the
amount of Registrable Securities shall be so reduced, Issuer shall include in
such offering (i) first all shares proposed to be included therein by the Issuer
and (ii) second the shares requested to be included therein by Grantee pro rata
with the shares intended to be included therein by any other stockholder of the
Issuer. Participation by Grantee in any Incidental registration shall not
affect the obligation of the Company to effect Demand Registrations under this
Section 4.1. The issuer may withdraw any registration under the Securities Act
that gives rise to an Incidental Registration without consent of Grantee.
(d) In the event that Registrable Securities are included in a
"piggyback" registration statement pursuant to Section 7(c) hereof, Grantee
agrees not to effect any public sale or distribution of the issue being
registered or a similar security of Issuer, or any securities convertible into
or exchangeable or exercisable for such securities, including a sale pursuant to
Rule 144 under the Securities Act, during the ten (10) business days prior to,
and during the ninety (90)-day period beginning on, the effective date of such
registration statement (except as part of such registration), if and to the
extent timely notified in writing by Issuer, in the case of a non-underwritten
public offering, or by the managing underwriter, in the case of an underwritten
public offering. In the event that Grantee requests a Demand Registration or if
Registrable Securities are included in a "piggyback" registration pursuant to
Section 7(c) hereof, Issuer agrees not to effect any public sale or distribution
of the issue being registered or a similar security of Issuer, or any securities
convertible into or exchangeable or exercisable for such securities, during the
period from such request until ninety (90) days after the effective date of such
registration statement (except as part of such registration or pursuant to a
registration of securities on Form S-4 or Form S-8 or any successor form).
(e) Notwithstanding anything to the contrary contained herein, in the
event that Grantee requests a Demand Registration or a "piggyback" registration
of Registrable Securities pursuant to Section 7(b) or 7(c) hereof, respectively,
Issuer shall have the right to purchase all, but not less than all, of the
Registrable Securities requested to be so registered, upon the terms and subject
to the conditions set forth in this Section 7(e). If Issuer wishes to exercise
such purchase right, then within two (2) business days following receipt of a
request for a Demand Registration or a "piggyback" registration, Issuer shall
send a written notice (a "Repurchase Notice") to Grantee specifying that Issuer
wishes to exercise such purchase right, a date for the closing of such purchase,
which shall not be more than five (5) business days after delivery of such
Repurchase Notice, and a place for the closing of such purchase (a "Repurchase
Closing"). Upon delivery of a Repurchase Notice subject to applicable Delaware
law, a binding agreement shall be deemed to exist between Grantee and Issuer
providing for the purchase by Issuer of the Registrable Securities requested to
be registered by Grantee, upon the terms and subject to the conditions set forth
in this Section 7(e). The purchase price per share or other unit of Registrable
Securities (the "Repurchase Price") shall equal the average per share or per
unit closing price as quoted on the Nasdaq (or if not then quoted thereon, on
such other exchange or quotation system on which the Registrable Securities are
quoted) for the period of five (5) trading days ending on the trading day
immediately prior to the day on which Grantee requests a Demand Registration or
a "piggyback" registration of the Registrable Securities which Issuer
subsequently elects to purchase. Grantee's obligation to deliver any
Registrable Securities at a Repurchase Closing shall be subject to the condition
that, at such Repurchase Closing, Issuer shall have delivered to Grantee a
certificate signed on behalf of Issuer by Issuer's chief executive officer and
chief financial officer, which certificate shall be satisfactory in form and
substance to Grantee, to the effect that the purchase by Issuer of such
Registrable Securities (i) is permitted under applicable Delaware corporate law
and under the fraudulent conveyance provisions of the federal bankruptcy code
and (ii) does not violate any material agreement to which Issuer or any of its
subsidiaries is a party or by which any of their properties or assets is bound.
At any Repurchase Closing, Issuer shall pay to Grantee the aggregate Repurchase
Price for the Registrable Securities being purchased by wire transfer of
immediately available funds or by delivering to Grantee a certified or bank
check payable to or on the order of Grantee in an amount equal to such aggregate
Repurchase Price, and Grantee will surrender to Issuer a certificate or
certificates evidencing such Registrable Securities. A purchase of Registrable
Securities by Issuer pursuant to this Section 7(e) shall be considered a Demand
Registration for purposes of Section 7(b) hereof.
(f) The registrations effected under this Section 7 shall be effected
at Issuer's expense except for underwriting commissions allocable to the
Registrable Securities. Issuer shall indemnify and hold harmless Grantee, its
affiliates and controlling persons and their respective officers, directors,
agents and representatives from and against any and all losses, claims, damages,
liabilities and expenses (including, without limitation, all out-of-pocket
expenses, investigation expenses, expenses incurred with respect to any judgment
and fees and disbursements of counsel and accountants) arising out of or based
upon any statements contained in, or omissions or alleged omissions from, each
registration statement (and related prospectus) filed pursuant to this Section
7; provided, however, that Issuer shall not be liable in any such case to
-------- -------
Grantee or any affiliate or controlling person of Grantee or any of their
respective officers, directors, agents or representatives to the extent that any
such loss, claim, damage, liability (or action or proceeding in respect thereof)
or expense arises out of or is based upon an untrue statement or omission or
alleged omission made in such registration statement or prospectus in reliance
upon, and in conformity with, written information furnished to Issuer
specifically for use in the preparation thereof by Grantee such affiliate,
controlling person, officer, director, agent or representative, as the case may
be.
8. REPURCHASE OF OPTION AND OPTION SHARES.
--------------------------------------
(a) At the request of and upon notice by Grantee (the "Put Notice") at
any time during the period during which the Option is exercisable pursuant to
Section 2 (the "Purchase Period"), the Issuer (or any successor entity thereof)
will purchase from Grantee all or any portion of the Option, to the extent not
previously exercised, at the price set forth in subparagraph (i) below, and all
or any portion of the Option Shares, if any, acquired by Grantee pursuant
thereto, at the price set forth in subparagraph (ii) below:
(i) the difference between the "Market/Tender Offer Price" for
the Common Stock as of the date Grantee gives notice of its intent to exercise
its rights under this Section 7(a) (defined as the higher of (A) the highest
price per share offered as of such date pursuant to any Acquisition Proposal
which was made prior to such date and (B) the average closing sale price of
Common Stock then on the Nasdaq National Market during the five (5) trading days
ending on the trading day immediately preceding such date) and the Exercise
Price, multiplied by the number of Common Stock purchasable pursuant to the
Option, but only if the Market/Tender Offer Price is greater than the Exercise
Price. For purposes of determining the highest price offered pursuant to any
Acquisition Proposal which involves consideration other than cash, the value of
such consideration will be equal to the higher of (x) if securities of the same
class of the proponent as such considerations are traded on any national
securities exchange or by any registered securities association, a value based
on the closing sale price or asked price for such securities on their principal
trading market on such date and (y) the value ascribed to such consideration by
the proponent of such Acquisition Proposal, or if no such value is ascribed, a
value determined in good faith by the Board of Directors of the Issuer.
(ii) The Market/Tender Offer Price multiplied by the number of
shares of Common Stock so purchased.
9. REPRESENTATIONS AND WARRANTIES OF THE ISSUER. Issuer hereby
--------------------------------------------
represents and warrants to Grantee as follows:
(a) Issuer has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of Issuer and no other corporate proceedings on the part of
Issuer are necessary to authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has been duly and validly executed
and delivered by Issuer. This Agreement is the valid and legally binding
obligation of Issuer, enforceable against Issuer in accordance with its terms.
(b) Issuer has taken all necessary corporate action to authorize and
reserve and to permit it to issue, and at all times from the date hereof through
the termination of this Agreement in accordance with its terms will have
reserved for issuance upon the exercise of the Option, that number of shares of
Common Stock equal to the maximum number of shares of Common Stock at any time
and from time to time issuable hereunder, and all such shares, upon issuance
pursuant hereto, will be duly authorized, validly issued, fully paid,
nonassessable, and will be delivered free and clear of all claims, liens,
encumbrance and security interests and not subject to any preemptive rights.
(c) The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby will not (i) conflict with,
or result in any violation or breach of any provision of the Certificate of
Incorporation, as amended to date, or Bylaws, as amended to date, of Issuer,
(ii) result in any violation or breach of, or constitute (with or without notice
or lapse of time, or both) a default (or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of any benefit) under any
of the terms, conditions or provisions of any note, bond, mortgage, indenture,
lease, contract or other agreement, instrument or obligation to which the Issuer
or any of its Subsidiaries is a party or by which any of them or any of their
properties or assets may be bound, or (iii) conflict or violate any permit,
concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Issuer or any of its Subsidiaries or
any of its or their properties or assets, except in the case of (ii) and (iii)
for any such violations, breaches, defaults, terminations, cancellations,
accelerations or conflicts which could not, individually or in the aggregate,
have a material adverse effect (as defined in the Merger Agreement) on Issuer
and its Subsidiaries, taken as a whole, or impair the ability of Issuer to
consummate the transactions contemplated by this Agreement.
(d) The Issuer has taken, and will in the future take, all steps
necessary to irrevocably exempt the transactions contemplated by this Agreement
from any applicable state takeover law and from any applicable charter or
contractual provision containing change of control or anti-takeover provisions.
10. REPRESENTATIONS AND WARRANTIES OF THE GRANTEE. Grantee hereby
---------------------------------------------
represents and warrants to Issuer as follows:
(a) Grantee has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of Grantee and no other corporate
proceedings on the part of Grantee are necessary to authorize this Agreement or
to consummate the transactions so contemplated. This Agreement has been duly and
validly executed and delivered by Grantee. This Agreement is the valid and
legally binding obligation of Grantee, enforceable against Grantee in accordance
with its terms.
(b) The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby will not (i) conflict with,
or result in any violation or breach of any provision of the Certificate of
Incorporation, as amended to date, or Bylaws, as amended to date, of Grantee,
(ii) result in any violation or breach of, or constitute (with or without notice
or lapse of time, or both) a default (or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of any benefit) under any
of the terms, conditions or provisions of any note, bond, mortgage, indenture,
lease, contract or other agreement, instrument or obligation to which the
Grantee or any of its Subsidiaries is a party or by which any of them or any of
their properties or assets may be bound, or (iii) conflict or violate any
permit, concession, franchise, license, judgment, order, degree, statute, law,
ordinance, rule or regulation applicable to Grantee or any of its Subsidiaries
or any of its or their properties or assets, except in the case of (ii) and
(iii) for any such violations, breaches, defaults, terminations, cancellations,
accelerations or conflicts which could not, individually or in the aggregate,
have a material adverse effect (as defined in the Merger Agreement) on Grantee
and its Subsidiaries, taken as a whole, or impair the ability of Grantee to
consummate the transactions contemplated by this Agreement.
(c) The Grantee has taken, and will in the future take, all steps
necessary to irrevocably exempt the transactions contemplated by this Agreement
from any applicable state takeover law and from any applicable charter or
contractual provision containing change of control or anti-takeover provisions.
11. GRANTEE COMPLIANCE. Grantee shall acquire the Option Shares for
------------------
investment purposes only and not with a view to any distribution thereof in
violation of the Securities Act, and shall not sell any Option Shares purchased
pursuant to this Agreement except in compliance with the Securities Act.
12. ASSIGNMENT OF OPTION BY GRANTEE. Neither of the parties hereto
-------------------------------
may assign any of its rights or obligations under this Option Agreement or the
Option created hereunder to any other person, without the express written
consent of the other party.
13. LIMITATION OF GRANTEE PROFIT.
----------------------------
(a) Notwithstanding any other provision of this Agreement, in no event
shall the Grantee's Total Profit (as hereinafter defined) exceed Two Hundred
Thirty Million Four Hundred Fifty-Four Thousand Five Hundred Forty-Five dollars
($230,454,545.00) (the "Profit Cap") and, if it otherwise would exceed such
amount, the Grantee, at its sole election, shall either (i) reduce the number of
shares of Common Stock subject to this Option, (ii) deliver to the Issuer for
cancellation Option Shares previously purchased by, or Termination Fee Shares
(or other securities into which such Termination Fee Shares are converted or
exchanged) to Grantee (valued, for the purposes of this Section 12(a) at the
average closing sales price per share of Common Stock (or if there is no sale on
such date then the average between the closing bid and
ask prices on any such day) as reported by the Nasdaq National Market for the
five (5) consecutive trading days preceding the day on which the Grantee's Total
Profit exceeds the Profit Cap, (iii) pay cash to the Issuer, (iv) reduce the
number of Termination Fee Shares to be paid by the Grantee or (v) any
combination thereof, so that Grantee's actually realized Total Profit shall not
exceed the Profit Cap after taking into account the foregoing actions.
(b) As used herein, the term "Total Profit" shall mean the amount
(before taxes) of the following: (a) the aggregate amount of (i) (x) the net
cash amounts received by Grantee pursuant to the sale of Option Shares or
Termination Fee Shares (or any other securities into which such Option Shares or
Termination Fee Shares are converted or exchanged) to any unaffiliated party or
to Issuer pursuant to this Agreement, less (y) the Grantee's purchase price of
such Option Shares or other securities, (ii) any amounts received by Grantee on
the transfer of the Option (or any portion thereof), if permitted hereunder, and
(iii) the amount received by Grantee pursuant to Section 7.2 of the Merger
Agreement; minus (b) the amount of cash theretofore paid to the Issuer pursuant
to this Section 12 plus the value of the Option Shares or Termination Fee Shares
or other securities theretofore delivered to the Issuer for cancellation
pursuant to this Section 12.
Notwithstanding any other provision of this Agreement, nothing in this Agreement
shall affect the ability of Grantee to receive nor relieve Issuer's obligation
to pay a fee pursuant to Section 7.2 of the Merger Agreement; provided that if
Total Profit received by Grantee would exceed the Profit Cap following the
receipt of such fee, Grantee shall be obligated to comply with the terms of
Section 12(a) within five (5) days of the later of (i) the date of receipt of
such fee and (ii) the date of receipt of the net cash by Grantee pursuant to the
sale of Option Shares or Termination Fee Shares (or, any other securities into
which such Option Shares or Termination Fee Shares are converted or exchanged)
pursuant to this Agreement.
(c) Notwithstanding any other provision of this Agreement, the Option
may not be exercised for a number of Option Shares that would, as of the Notice
Date, result in a Notional Total Profit (as defined below) of more than the
Profit Cap; provided; however, that Grantee may indicate in its notice of
exercise that Grantee is taking any of the actions described in subsection (a)
hereof so as to reduce the Notional Total Profit to not more than the Profit Cap
and preserve its rights to exercise the Option for the resulting number of
Option Shares. "Notional Total Profit" shall mean, with respect to any number
of Option Shares as to which the Grantee may propose to exercise the Option, the
Total Profit determined as of the Notice Date assuming that the Option was
exercised on such date for such number of Option Shares and assuming such Option
Shares, together with all other Option Shares held by the Grantee and its
affiliates as of such date, were sold for cash at the closing sales price for
Common Stock as of the close of business on the preceding trading day.
(d) For purposes of Section 11(a) and clause (iii) of Section 11(b),
the value of any Option Shares delivered by Grantee to the Issuer shall be the
average closing sales price per share of Common Stock (or if there is no sale on
such date then the average between the closing bid and ask prices on any such
day) as reported by the Nasdaq National Market for the five (5) consecutive
trading days preceding the day the Grantee's Total Profit exceeds the Profit
Cap.
14. APPLICATION FOR REGULATORY APPROVAL. Each of Grantee and Issuer
-----------------------------------
will use its commercially reasonable efforts to make all filings with, and to
obtain consents of, all third parties and governmental authorities necessary to
the consummation of the transactions contemplated by this Agreement, including
without limitation making application to list the shares of Common Stock
issuable hereunder on the Nasdaq National Market upon official notice of
issuance.
15. SPECIFIC PERFORMANCE. The parties hereto acknowledge that
--------------------
damages would be an inadequate remedy for a breach of this Agreement by either
party hereto and that the obligations of the parties hereto shall be enforceable
by either party hereto through injunctive or other equitable relief.
16. SEPARABILITY OF PROVISIONS. If any term, provision, covenant or
--------------------------
restriction contained in this Agreement is held by a court or a federal or state
regulatory agency of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions and covenants and
restrictions contained in this Agreement shall remain in full force and effect,
and shall in no way be affected, impaired or invalidated.
17. NOTICES. All notices, claims, demands and other communications
-------
hereunder shall be deemed to have been duly given or made when delivered in
person, by overnight courier or by facsimile at the respective addresses of the
parties set forth in the Merger Agreement.
18. 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 conflicts of
laws thereof.
19. COUNTERPARTS. This Agreement may be executed in two or more
------------
counterparts, each of which will be deemed to be an original, but all of which
shall constitute one and the same agreement.
20. EXPENSES. Except as otherwise expressly provided herein or in
--------
the Merger Agreement, each of the parties hereto shall bear and pay all costs
and expenses incurred by it or on its behalf in connection with the transactions
contemplated hereunder, including fees and expenses of its own financial
consultants, investment bankers, accountants and counsel.
21. ENTIRE AGREEMENT. Except as otherwise expressly provided herein
----------------
or in the Merger Agreement, this Agreement contains the entire agreement between
the parties with respect to the transactions contemplated hereunder and
supersedes all prior arrangements or understandings with respect thereof,
written or oral. The terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Nothing in this Agreement, expressed or
implied, is intended to confer upon any party, other than the parties hereto,
and their respective successors except as assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement, except as
expressly provided herein. Any provision of this Agreement may be waived only in
writing at any time by the party that is entitled to the benefits of such
provision. This Agreement may not
be modified, amended, altered or supplemented except upon the execution and
delivery of a written agreement executed by the parties hereto.
22. FURTHER ASSURANCES. In the event of any exercise of the Option
------------------
by Grantee, Issuer and Grantee shall execute and deliver all other documents and
instruments and take all other action that may be reasonably necessary in order
to consummate the transactions provided for by such exercise. Nothing contained
in this Agreement shall be deemed to authorize Issuer or Grantee to breach any
provision of the Merger Agreement.
23. 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.
IN WITNESS WHEREOF, Issuer and Grantee have caused this Agreement to
be signed by their respective officers thereunto duly authorized, all as of the
date first written above.
XXXXXXXX.XXX, INC.
By: _____________________________________
Name:
Title:
XXXXX.XXX, INC.
By: _____________________________________
Name:
Title:
Exhibit B
STOCK OPTION AGREEMENT
(XXXXXXXX.XXX, INC. SHARES)
STOCK OPTION AGREEMENT
(XXXXXXXX.XXX, INC. SHARES)
THIS STOCK OPTION AGREEMENT (this "AGREEMENT"), dated August 8, 2000,
between Xxxxxxxx.xxx, Inc., a Delaware corporation ("Issuer"), and Xxxxx.xxx,
Inc., a Delaware corporation ("Grantee"),
WITNESSETH:
WHEREAS, Grantee and Issuer have entered into an Agreement and Plan of
Merger, dated as of August 8, 2000 (the "Merger Agreement"), which provides,
among other things, for the merger of Merger Sub with and into Issuer with
Issuer continuing as the surviving corporation upon the terms and subject to the
conditions set forth in the Merger Agreement (capitalized terms used herein
without definition shall have the respective meanings specified in the Merger
Agreement); and
WHEREAS, as a condition to Grantee's entering into the Merger
Agreement and in consideration therefor, Issuer has agreed to grant Grantee the
Option (as hereinafter defined).
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein and in the Merger Agreement, and
intending to be legally bound hereby, the parties hereto agree as follows:
1. GRANT OF OPTION. Issuer hereby grants to Grantee an
---------------
unconditional, irrevocable option (the "Option") to purchase, subject to the
terms hereof, nine million seven hundred twenty-four thousand four hundred sixty
(9,724,460) shares of fully paid and nonassessable common stock of the Issuer,
par value $.001 per share ("Common Stock"), equal to and in no event exceeding
nineteen and nine-tenths percent (19.9%) of the shares of Common Stock
outstanding as of the date hereof, at a purchase price of $125.7197 per share of
Common Stock as adjusted in accordance with the provisions of Section 6 of this
Agreement (such price, as adjusted if applicable, the "Option Price").
2. EXERCISE OF OPTION.
(a) Grantee may exercise the Option, in whole or part, and from time
to time, if, but only if, a Triggering Event (as hereinafter defined) shall have
occurred prior to the occurrence of an Option Termination Event (as hereinafter
defined), provided that Grantee shall have sent the written notice of such
exercise (as provided in subsection (e) of this Section 2) on or prior to the
last date of the six (6)-month period following such Triggering Event (the
"Option Expiration Date").
(b) The term "Option Termination Event" shall mean the first day after
the earliest to occur of the following dates: (i) the date on which the
Effective Time of the Merger occurs; (ii) the last date of the twelve (12) month
period beginning on the date of termination of the Merger Agreement pursuant to
Section 7.1(b)(iii); provided, that such termination has given rise to the
--------
right of Grantee to receive payment of Xxxxxxxx.xxx Expenses pursuant to Section
7.2(c)(1) of the Merger Agreement; provided, that subsequent to such
--------
termination, if an event occurs that gives rise to the obligation of Issuer to
pay the Termination Fee pursuant to Section 7.2(c)(2) of the Merger Agreement,
then the last date of the six (6) month period beginning on the date of actual
payment of the Termination Fee by Issuer to Grantee pursuant to Section
7.2(c)(2) of the Merger Agreement; (iii) the date of termination of the Merger
Agreement by either party pursuant to the provisions of any section of the
Merger Agreement other than Sections 7.1(b)(iii) (other than as provided in
clause (ii) above); provided, that such termination occurs prior to the
--------
occurrence of a Triggering Event; and (iv) the last date of the six (6) month
period beginning on the date of the first occurrence of a Triggering Event;
provided, however, that if the Option cannot be exercised as of any such date by
-------- -------
reason of any applicable judgment, decree, law, regulation or order (each, an
"Impediment"), or by reason of the waiting period under the HSR Act, then the
Option Termination Event shall be delayed until the date which is thirty (30)
days after such Impediment has been removed or such waiting period has expired.
(c) TRIGGERING EVENT. The term "Triggering Event" shall mean any
----------------
termination of the Merger Agreement which entitles Grantee to receive payment of
the Termination Fee from Issuer pursuant to Section 7.2 of the Merger Agreement.
(d) NOTICE OF TRIGGERING EVENT. Issuer shall notify Grantee promptly
--------------------------
in writing of the occurrence of any Triggering Event, and in any event within
twenty-four (24) hours, it being understood that the giving of such notice by
Issuer shall not be a condition to the right of Grantee to exercise the Option
or for a Triggering Event to have occurred.
(e) NOTICE OF EXERCISE; CLOSING. In the event Grantee is entitled to
---------------------------
and wishes to exercise the Option, it shall send to Issuer a written notice (the
date of which being herein referred to as the "Notice Date") specifying (i) the
total number of shares it will purchase pursuant to such exercise and (ii) a
place and date which shall be a business day not earlier than three (3) business
days nor later than sixty (60) business days from the Notice Date for the
closing of such purchase (the "Closing Date"); provided, that if the closing of
the purchase and sale pursuant to the Option (the "Closing") cannot be
consummated, in the reasonable opinion of Grantee, by reason of any applicable
judgment, decree, order, law or regulation, the period of time that otherwise
would run pursuant to this sentence shall run instead from the date on which
such restriction on consummation has expired or been terminated; and provided
further, without limiting the foregoing, that if, in the reasonable opinion of
Grantee, prior notification to or approval of any regulatory agency is required
in connection with such purchase, Grantee shall promptly file the required
notice or application for approval and shall expeditiously process the same and
the period of time that otherwise would run pursuant to this sentence shall run
instead from the date on which any required notification periods have expired or
been terminated or such approvals have been obtained and any requisite waiting
period or periods shall have passed. Any exercise of the Option shall be deemed
to occur on the Closing Date relating thereto.
(f) PURCHASE PRICE. At the Closing referred to in subsection (e) of
--------------
this Section 2, Grantee shall pay to Issuer the aggregate purchase price for the
shares of Common Stock purchased pursuant to the exercise of the Option in
immediately available funds by wire transfer to a bank account designated by
Issuer, provided that failure or refusal of Issuer to designate such a bank
account shall not preclude Grantee from exercising the Option.
(g) ISSUANCE OF COMMON STOCK. At such Closing, simultaneously with
------------------------
the delivery of immediately available funds as provided in subsection (f) of
this Section 2, Issuer shall deliver to Grantee a certificate or certificates
representing the number of shares of Common Stock purchased by the Grantee and,
if the Option should be exercised in part only, a new Option evidencing the
rights of Grantee thereof to purchase the balance of the shares purchasable
hereunder, and the Grantee shall deliver to Issuer this Agreement and a letter
agreeing that Grantee will not offer to sell or otherwise dispose of such shares
in violation of applicable law or the provisions of this Agreement.
(h) LEGEND. Certificates for Common Stock delivered at a Closing
------
hereunder may be endorsed with a restrictive legend that shall read
substantially as follows:
"THE TRANSFER AND VOTING OF THE SHARES REPRESENTED BY THIS CERTIFICATE
IS SUBJECT TO CERTAIN PROVISIONS OF AN AGREEMENT BETWEEN THE
REGISTERED HOLDER HEREOF AND ISSUER AND TO RESALE RESTRICTIONS ARISING
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. A COPY OF SUCH AGREEMENT
IS ON FILE AT THE PRINCIPAL OFFICE OF ISSUER AND WILL BE PROVIDED TO
THE HOLDER HEREOF WITHOUT CHARGE UPON RECEIPT BY ISSUER OF A WRITTEN
REQUEST THEREFOR."
It is understood and agreed that: (i) the reference to the resale
restrictions of the Securities Act of 1933, as amended (the "Securities Act"),
in the above legend shall be removed by delivery of substitute certificate(s)
without such reference if Grantee shall have delivered to Issuer a copy of a
letter from the staff of the SEC, or an opinion of counsel, in form and
substance reasonably satisfactory to Issuer, to the effect that such legend is
not required for purposes of the Securities Act; (ii) the reference to the
provisions of this Agreement in the above legend shall be removed by delivery of
substitute certificate(s) without such reference if the shares have been sold or
transferred in compliance with the provisions of this Agreement and under
circumstances that do not require the retention of such reference; and (iii) the
legend shall be removed in its entirety if the conditions in the preceding
clauses (i) and (ii) and both satisfied. In addition, such certificates shall
bear any other legend as may be required by law.
(i) RECORD HOLDER; EXPENSES. Upon the Closing, Grantee shall be
-----------------------
deemed to be the holder of record of the shares of Common Stock issuable upon
such exercise, notwithstanding that the stock transfer books of Issuer shall
then be closed or that certificates representing such shares of Common Stock
shall not then be actually delivered to Grantee or the Issuer shall have failed
or refused to designate the bank account described in subsection (f) of this
Section 2. Issuer shall pay all expenses, and any and all United States federal,
state and local taxes and other charges that may be payable in connection with
the preparation, issuance and delivery of stock certificates under this Section
2 in the name of Grantee or its assignee, transferee or designee.
3. CONDITIONS TO DELIVERY OF OPTION SHARES. The obligation of Issuer
---------------------------------------
to deliver Option Shares upon any exercise of the Option is subject to the
satisfaction of the following conditions:
(a) All waiting periods, if any, under the HSR Act applicable to the
issuance of Option Shares hereunder shall have expired or been terminated; and
(b) There shall be no preliminary or permanent injunction or other
order issued by any court of competent jurisdiction preventing or prohibiting
such exercise of the Option or the delivery of the Option Shares in respect of
such exercise.
4. RESERVATION OF SHARES. Issuer agrees: (i) that it shall at all
---------------------
times maintain, free from preemptive rights, sufficient authorized but unissued
or treasury shares of Common Stock (and other securities issuable pursuant to
Section 6) so that the Option may be exercised without additional authorization
of Common Stock (or such other securities) after giving effect to all other
options, warrants, convertible securities and other rights to purchase Common
Stock (or such other securities); (ii) that it will not, by charter amendment or
through reorganization, consolidation, merger, dissolution or sale of assets, or
by any other voluntary act avoid or seek to avoid the observance or performance
of any of the covenants, stipulations or conditions to be observed or performed
hereunder by Issuer; (iii) promptly to take all action as may from time to time
be required (including without limitation complying with all premerger
notification, reporting and waiting periods in the HSR Act and the rules and
regulations thereunder) in order to permit Grantee to exercise the Option and
the Issuer duly and effectively to issue shares of Common Stock pursuant hereto;
and (iv) promptly to take all action provided herein to protect the rights of
Grantee against dilution.
5. LOST OPTIONS. Upon receipt by Issuer of evidence reasonably
------------
satisfactory to it of the loss, theft, destruction or mutilation of this
Agreement, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Agreement, if mutilated, Issuer will execute and deliver a new Agreement of like
tenor and date.
6. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. The number of shares
-----------------------------------------
of Common Stock purchasable upon the exercise of the Option shall be subject to
adjustment from time to time as provided in this Section 6.
(a) In the event that any additional shares of Common Stock are issued
or otherwise become outstanding after the date hereof (other than by reason of
subsection (b) of this Section 6), the number of shares of Common Stock subject
to the Option shall be increased so that, after such issuance of additional
shares, such number of shares then remaining subject to the Option, together
with shares theretofore issued pursuant to the Option, equals nineteen and nine-
tenths percent (19.9%) of the number of such shares of Common Stock then issued
and outstanding.
(b) In the event of any change in Common Stock by reason of stock
dividends, other dividends on the Common Stock payable in securities or other
property (other than regular cash dividends), stock splits, merger,
recapitalization, combinations, subdivisions, conversions, exchanges of shares
or other similar transactions, then the type and number of shares of Common
Stock purchasable upon exercise hereof shall be appropriately adjusted, and
proper provision will be made in the agreements governing such transaction so
that Grantee shall receive upon exercise of the Option and payment of the
aggregate Option Price hereunder the number and class of shares or other
securities or property that Grantee would have received in respect of Common
Stock if the Option had been exercised in full immediately prior to such event,
or the record date therefor, as applicable.
(c) Whenever the number of shares of outstanding Common Stock changes
after the date hereof as a result of the events described in clause (b) hereof
(but not the events described in clause (a) hereof), the Option Price shall be
adjusted by multiplying the Option Price by a fraction the numerator of which
shall be equal to the aggregate number of shares of Common Stock purchasable
prior to the adjustment and the denominator of which shall be equal to the
aggregate number of shares of Common Stock purchasable immediately after the
adjustment.
(d) No adjustment made in accordance with this Section 6 shall
constitute or be deemed a waiver of any breach of any of Issuer's
representations, warranties, covenants, agreements or obligations contained in
the Merger Agreement.
(e) If the Issuer satisfies a portion of its obligation to pay Grantee
a termination fee as permitted by Section 7.2 of the Merger Agreement by issuing
to Grantee shares of Common Stock (the "Termination Fee Shares"), then the
number of shares of Common Stock subject to the Option (including those Option
Shares which may have already been exercised) will be adjusted so that the sum
of the number of shares of Common Stock subject to the Option and the number of
Termination Fee Shares equals nineteen and nine-tenths percent (19.9%) of the
number of shares of Common Stock then issued and outstanding, without giving
effect to any Option Shares or Termination Fee Shares.
7. REGISTRATION RIGHTS.
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(a) As used in this Agreement, "Registrable Securities" means each of
the Option Shares issued to Grantee hereunder and any other securities issued in
exchange for, or issued as dividends or otherwise on or in respect of, any of
such Option Shares.
(b) At any time or from time to time within three (3) years of the
first Closing, Grantee may make a written request to Issuer for registration
under and in accordance with the provisions of the Securities Act with respect
to all or any part of the Registrable Securities (a "Demand Registration"). A
Demand Registration may be, at the option of Grantee, a shelf registration or a
registration involving an underwritten offering. As soon as reasonably
practicable after Grantee's request for a Demand Registration, Issuer shall file
one or more registration statements on any appropriate form with respect to all
of the Registrable Securities requested to be so registered; provided that
Issuer will not be required to file any such registration statement during any
period of time (not to exceed sixty (60) days after such request in the case of
clause (i) below or ninety (90) days in the case of clauses (ii) or (iii) below)
when (i) Issuer is in possession of material non-public information which it
reasonably believes would be detrimental to be disclosed at such time, (ii)
Issuer is required under the Securities Act to include audited financial
statements for any period in such registration statement that are not yet
available for inclusion therein, or (iii) Issuer determines, in its reasonable
judgment, that such
registration would interfere with any financing, acquisition or other material
transaction involving Issuer or any of its affiliates. Issuer shall use its best
efforts to have the Demand Registration declared effective as soon as reasonably
practicable after such filing and to keep the Demand Registration continuously
effective for a period of at least sixty (60) days following the date on which
the Demand Registration is declared effective, in the case of an underwritten
offering, or at least one hundred twenty (120) days following the date on which
the Demand Registration is declared effective, in the case of a shelf
registration; provided that, if for any reason the effectiveness of any Demand
Registration is suspended, the required period of effectiveness shall be
extended by the aggregate number of days of each such suspension; and provided,
further, that the effectiveness of any Demand Registration may be terminated if
and when all of the Registrable Securities covered thereby shall have been sold.
Grantee shall be entitled to two (2) Demand Registrations; provided, that only
requests relating to a registration statement that has become effective under
the Securities Act shall be counted for purposes of determining the number of
Demand Registrations made. If any Demand Registration involves an underwritten
offering, (i) Issuer shall have the right to select the managing underwriter,
which shall be reasonably acceptable to Grantee and (ii) Issuer shall enter into
an underwriting agreement in customary form.
(c) If at any time within two (2) years of the first Closing, Issuer
proposes to file a registration statement under the Securities Act with respect
to any shares of any class of its equity securities to be sold for the account
of Issuer (other than a registration statement on Form S-4 or Form S-8 or any
successor form), and the registration form to be used may be used for the
registration of Registrable Securities, then Issuer shall in each case give
written notice of such proposed filing to Grantee at least twenty (20) days
before the anticipated filing date, and Grantee shall have the right to include
in such registration such number of Registrable Securities as Grantee may
request (such request to be made by written notice to Issuer within fifteen (15)
days following Grantee's receipt from Issuer of such notice of proposed filing)
(an "Incidental Registration"). Issuer shall use its commercially reasonable
efforts to cause the managing underwriter of any proposed underwritten offering
to permit Grantee to include in such offering all Registrable Securities
requested by Grantee to be included in the registration for such offering on the
same terms and conditions as any similar securities of Issuer included therein.
Notwithstanding the foregoing, if the managing underwriter of such offering
advises Grantee that, in the reasonable opinion of such underwriter, the amount
of Registrable Securities which Grantee requests to be included in such offering
would materially and adversely affect the success of such offering, then the
amount of Registrable Securities to be offered shall be reduced to the extent
necessary to reduce the total amount of securities to be included in such
offering to the amount recommended by such underwriter; provided that if the
amount of Registrable Securities shall be so reduced, Issuer shall include in
such offering (i) first all shares proposed to be included therein by the Issuer
and (ii) second the shares requested to be included therein by Grantee pro rata
with the shares intended to be included therein by any other stockholder of the
Issuer. Participation by Grantee in any Incidental registration shall not
affect the obligation of the Company to effect Demand Registrations under this
Section 4.1. The issuer may withdraw any registration under the Securities Act
that gives rise to an Incidental Registration without consent of Grantee.
(d) In the event that Registrable Securities are included in a
"piggyback" registration statement pursuant to Section 7(c) hereof, Grantee
agrees not to effect any public sale or
distribution of the issue being registered or a similar security of Issuer, or
any securities convertible into or exchangeable or exercisable for such
securities, including a sale pursuant to Rule 144 under the Securities Act,
during the ten (10) business days prior to, and during the ninety (90)-day
period beginning on, the effective date of such registration statement (except
as part of such registration), if and to the extent timely notified in writing
by Issuer, in the case of a non-underwritten public offering, or by the managing
underwriter, in the case of an underwritten public offering. In the event that
Grantee requests a Demand Registration or if Registrable Securities are included
in a "piggyback" registration pursuant to Section 7(c) hereof, Issuer agrees not
to effect any public sale or distribution of the issue being registered or a
similar security of Issuer, or any securities convertible into or exchangeable
or exercisable for such securities, during the period from such request until
ninety (90) days after the effective date of such registration statement (except
as part of such registration or pursuant to a registration of securities on Form
S-4 or Form S-8 or any successor form).
(e) Notwithstanding anything to the contrary contained herein, in the
event that Grantee requests a Demand Registration or a "piggyback" registration
of Registrable Securities pursuant to Section 7(b) or 7(c) hereof, respectively,
Issuer shall have the right to purchase all, but not less than all, of the
Registrable Securities requested to be so registered, upon the terms and subject
to the conditions set forth in this Section 7(e). If Issuer wishes to exercise
such purchase right, then within two (2) business days following receipt of a
request for a Demand Registration or a "piggyback" registration, Issuer shall
send a written notice (a "Repurchase Notice") to Grantee specifying that Issuer
wishes to exercise such purchase right, a date for the closing of such purchase,
which shall not be more than five (5) business days after delivery of such
Repurchase Notice, and a place for the closing of such purchase (a "Repurchase
Closing"). Upon delivery of a Repurchase Notice subject to applicable Delaware
law, a binding agreement shall be deemed to exist between Grantee and Issuer
providing for the purchase by Issuer of the Registrable Securities requested to
be registered by Grantee, upon the terms and subject to the conditions set forth
in this Section 7(e). The purchase price per share or other unit of Registrable
Securities (the "Repurchase Price") shall equal the average per share or per
unit closing price as quoted on the Nasdaq (or if not then quoted thereon, on
such other exchange or quotation system on which the Registrable Securities are
quoted) for the period of five (5) trading days ending on the trading day
immediately prior to the day on which Grantee requests a Demand Registration or
a "piggyback" registration of the Registrable Securities which Issuer
subsequently elects to purchase. Grantee's obligation to deliver any Registrable
Securities at a Repurchase Closing shall be subject to the condition that, at
such Repurchase Closing, Issuer shall have delivered to Grantee a certificate
signed on behalf of Issuer by Issuer's chief executive officer and chief
financial officer, which certificate shall be satisfactory in form and substance
to Grantee, to the effect that the purchase by Issuer of such Registrable
Securities (i) is permitted under applicable Delaware corporate law and under
the fraudulent conveyance provisions of the federal bankruptcy code and (ii)
does not violate any material agreement to which Issuer or any of its
subsidiaries is a party or by which any of their properties or assets is bound.
At any Repurchase Closing, Issuer shall pay to Grantee the aggregate Repurchase
Price for the Registrable Securities being purchased by wire transfer of
immediately available funds or by delivering to Grantee a certified or bank
check payable to or on the order of Grantee in an amount equal to such aggregate
Repurchase Price, and Grantee will surrender to Issuer a certificate or
certificates evidencing such Registrable Securities. A purchase of Registrable
Securities by Issuer pursuant
to this Section 7(e) shall be considered a Demand Registration for purposes of
Section 7(b) hereof.
(f) The registrations effected under this Section 7 shall be effected
at Issuer's expense except for underwriting commissions allocable to the
Registrable Securities. Issuer shall indemnify and hold harmless Grantee, its
affiliates and controlling persons and their respective officers, directors,
agents and representatives from and against any and all losses, claims, damages,
liabilities and expenses (including, without limitation, all out-of-pocket
expenses, investigation expenses, expenses incurred with respect to any judgment
and fees and disbursements of counsel and accountants) arising out of or based
upon any statements contained in, or omissions or alleged omissions from, each
registration statement (and related prospectus) filed pursuant to this Section
7; provided, however, that Issuer shall not be liable in any such case to
-------- -------
Grantee or any affiliate or controlling person of Grantee or any of their
respective officers, directors, agents or representatives to the extent that any
such loss, claim, damage, liability (or action or proceeding in respect thereof)
or expense arises out of or is based upon an untrue statement or omission or
alleged omission made in such registration statement or prospectus in reliance
upon, and in conformity with, written information furnished to Issuer
specifically for use in the preparation thereof by Grantee such affiliate,
controlling person, officer, director, agent or representative, as the case may
be.
8. REPURCHASE OF OPTION AND OPTION SHARES.
--------------------------------------
(a) At the request of and upon notice by Grantee (the "Put Notice") at
any time during the period during which the Option is exercisable pursuant to
Section 2 (the "Purchase Period"), the Issuer (or any successor entity thereof)
will purchase from Grantee all or any portion of the Option, to the extent not
previously exercised, at the price set forth in subparagraph (i) below, and all
or any portion of the Option Shares, if any, acquired by Grantee pursuant
thereto, at the price set forth in subparagraph (ii) below:
(i) The difference between the "Market/Tender Offer Price" for
the Common Stock as of the date Grantee gives notice of its intent to exercise
its rights under this Section 7(a) (defined as the higher of (A) the highest
price per share offered as of such date pursuant to any Acquisition Proposal
which was made prior to such date and (B) the average closing sale price of
Common Stock then on the Nasdaq National Market during the five (5) trading days
ending on the trading day immediately preceding such date) and the Exercise
Price, multiplied by the number of Common Stock purchasable pursuant to the
Option, but only if the Market/Tender Offer Price is greater than the Exercise
Price. For purposes of determining the highest price offered pursuant to any
Acquisition Proposal which involves consideration other than cash, the value of
such consideration will be equal to the higher of (x) if securities of the same
class of the proponent as such considerations are traded on any national
securities exchange or by any registered securities association, a value based
on the closing sale price or asked price for such securities on their principal
trading market on such date and (y) the value ascribed to such consideration by
the proponent of such Acquisition Proposal, or if no such value is ascribed, a
value determined in good faith by the Board of Directors of the Issuer.
(ii) The Market/Tender Offer Price multiplied by the number of
shares of Common Stock so purchased.
9. REPRESENTATIONS AND WARRANTIES OF THE ISSUER. Issuer hereby
--------------------------------------------
represents and warrants to Grantee as follows:
(a) Issuer has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of Issuer and no other corporate proceedings on the part of
Issuer are necessary to authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has been duly and validly executed
and delivered by Issuer. This Agreement is the valid and legally binding
obligation of Issuer, enforceable against Issuer in accordance with its terms.
(b) Issuer has taken all necessary corporate action to authorize and
reserve and to permit it to issue, and at all times from the date hereof through
the termination of this Agreement in accordance with its terms will have
reserved for issuance upon the exercise of the Option, that number of shares of
Common Stock equal to the maximum number of shares of Common Stock at any time
and from time to time issuable hereunder, and all such shares, upon issuance
pursuant hereto, will be duly authorized, validly issued, fully paid,
nonassessable, and will be delivered free and clear of all claims, liens,
encumbrance and security interests and not subject to any preemptive rights.
(c) The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby will not (i) conflict with,
or result in any violation or breach of any provision of the Certificate of
Incorporation, as amended to date, or Bylaws, as amended to date, of Issuer,
(ii) result in any violation or breach of, or constitute (with or without notice
or lapse of time, or both) a default (or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of any benefit) under any
of the terms, conditions or provisions of any note, bond, mortgage, indenture,
lease, contract or other agreement, instrument or obligation to which the Issuer
or any of its Subsidiaries is a party or by which any of them or any of their
properties or assets may be bound, or (iii) conflict or violate any permit,
concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Issuer or any of its Subsidiaries or
any of its or their properties or assets, except in the case of (ii) and (iii)
for any such violations, breaches, defaults, terminations, cancellations,
accelerations or conflicts which could not, individually or in the aggregate,
have a material adverse effect (as defined in the Merger Agreement) on Issuer
and its Subsidiaries, taken as a whole, or impair the ability of Issuer to
consummate the transactions contemplated by this Agreement.
(d) The Issuer has taken, and will in the future take, all steps
necessary to irrevocably exempt the transactions contemplated by this Agreement
from any applicable state takeover law and from any applicable charter or
contractual provision containing change of control or anti-takeover provisions.
10. REPRESENTATIONS AND WARRANTIES OF THE GRANTEE. Grantee hereby
---------------------------------------------
represents and warrants to Issuer as follows:
(a) Grantee has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of Grantee and no other corporate proceedings on the part of
Grantee are necessary to authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has been duly and validly executed
and delivered by Grantee. This Agreement is the valid and legally binding
obligation of Grantee, enforceable against Grantee in accordance with its terms.
(b) The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby will not (i) conflict with,
or result in any violation or breach of any provision of the Certificate of
Incorporation, as amended to date, or Bylaws, as amended to date, of Grantee,
(ii) result in any violation or breach of, or constitute (with or without notice
or lapse of time, or both) a default (or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of any benefit) under any
of the terms, conditions or provisions of any note, bond, mortgage, indenture,
lease, contract or other agreement, instrument or obligation to which the
Grantee or any of its Subsidiaries is a party or by which any of them or any of
their properties or assets may be bound, or (iii) conflict or violate any
permit, concession, franchise, license, judgment, order, degree, statute, law,
ordinance, rule or regulation applicable to Grantee or any of its Subsidiaries
or any of its or their properties or assets, except in the case of (ii) and
(iii) for any such violations, breaches, defaults, terminations, cancellations,
accelerations or conflicts which could not, individually or in the aggregate,
have a material adverse effect (as defined in the Merger Agreement) on Grantee
and its Subsidiaries, taken as a whole, or impair the ability of Grantee to
consummate the transactions contemplated by this Agreement.
(c) The Grantee has taken, and will in the future take, all steps
necessary to irrevocably exempt the transactions contemplated by this Agreement
from any applicable state takeover law and from any applicable charter or
contractual provision containing change of control or anti-takeover provisions.
11. GRANTEE COMPLIANCE. Grantee shall acquire the Option Shares for
------------------
investment purposes only and not with a view to any distribution thereof in
violation of the Securities Act, and shall not sell any Option Shares purchased
pursuant to this Agreement except in compliance with the Securities Act.
12. ASSIGNMENT OF OPTION BY GRANTEE. Neither of the parties hereto
-------------------------------
may assign any of its rights or obligations under this Option Agreement or the
Option created hereunder to any other person, without the express written
consent of the other party.
13. LIMITATION OF GRANTEE PROFIT.
----------------------------
(a) Notwithstanding any other provision of this Agreement, in no event
shall the Grantee's Total Profit (as hereinafter defined) exceed Two Hundred
Thirty Million Four
Hundred Fifty-Four Thousand Five Hundred Forty-Five dollars ($230,454,545.00)
(the "Profit Cap") and, if it otherwise would exceed such amount, the Grantee,
at its sole election, shall either (i) reduce the number of shares of Common
Stock subject to this Option, (ii) deliver to the Issuer for cancellation Option
Shares previously purchased by, or Termination Fee Shares (or other securities
into which such Termination Fee Shares are converted or exchanged) to Grantee
(valued, for the purposes of this Section 12(a) at the average closing sales
price per share of Common Stock (or if there is no sale on such date then the
average between the closing bid and ask prices on any such day) as reported by
the Nasdaq National Market for the five (5) consecutive trading days preceding
the day on which the Grantee's Total Profit exceeds the Profit Cap, (iii) pay
cash to the Issuer, (iv) reduce the number of Termination Fee Shares to be paid
by the Grantee or (v) any combination thereof, so that Grantee's actually
realized Total Profit shall not exceed the Profit Cap after taking into account
the foregoing actions.
(b) As used herein, the term "Total Profit" shall mean the amount
(before taxes) of the following: (a) the aggregate amount of (i) (x) the net
cash amounts received by Grantee pursuant to the sale of Option Shares or
Termination Fee Shares (or any other securities into which such Option Shares or
Termination Fee Shares are converted or exchanged) to any unaffiliated party or
to Issuer pursuant to this Agreement, less (y) the Grantee's purchase price of
such Option Shares or other securities, (ii) any amounts received by Grantee on
the transfer of the Option (or any portion thereof), if permitted hereunder, and
(iii) the amount received by Grantee pursuant to Section 7.2 of the Merger
Agreement; minus (b) the amount of cash theretofore paid to the Issuer pursuant
to this Section 12 plus the value of the Option Shares or Termination Fee Shares
or other securities theretofore delivered to the Issuer for cancellation
pursuant to this Section 12.
(c) Notwithstanding any other provision of this Agreement, nothing in
this Agreement shall affect the ability of Grantee to receive nor relieve
Issuer's obligation to pay a fee pursuant to Section 7.2 of the Merger
Agreement; provided that if Total Profit received by Grantee would exceed the
Profit Cap following the receipt of such fee, Grantee shall be obligated to
comply with the terms of Section 12(a) within five (5)days of the later of (i)
the date of receipt of such fee and (ii) the date of receipt of the net cash by
Grantee pursuant to the sale of Option Shares or Termination Fee Shares (or, any
other securities into which such Option Shares or Termination Fee Shares are
converted or exchanged) pursuant to this Agreement.
(d) Notwithstanding any other provision of this Agreement, the Option
may not be exercised for a number of Option Shares that would, as of the Notice
Date, result in a Notional Total Profit (as defined below) of more than the
Profit Cap; provided, however, that Grantee may indicate in its notice of
exercise that Grantee is taking any of the actions described in subsection (a)
hereof so as to reduce the Notional Total Profit to not more than the Profit Cap
and preserve its rights to exercise the Option for the resulting number of
Option Shares. "Notional Total Profit" shall mean, with respect to any number
of Option Shares as to which the Grantee may propose to exercise the Option, the
Total Profit determined as of the Notice Date assuming that the Option was
exercised on such date for such number of Option Shares and assuming such Option
Shares, together with all other Option Shares held by the Grantee and its
affiliates as of such date, were sold for cash at the closing sales price for
Common Stock as of the close of business on the preceding trading day.
(e) For purposes of Section 11(a) and clause (iii) of Section 11(b),
the value of any Option Shares delivered by Grantee to the Issuer shall be the
average closing sales price per share of Common Stock (or if there is no sale on
such date then the average between the closing bid and ask prices on any such
day) as reported by the Nasdaq National Market for the five (5) consecutive
trading days preceding the day the Grantee's Total Profit exceeds the Profit
Cap.
14. APPLICATION FOR REGULATORY APPROVAL. Each of Grantee and Issuer
-----------------------------------
will use its commercially reasonable efforts to make all filings with, and to
obtain consents of, all third parties and governmental authorities necessary to
the consummation of the transactions contemplated by this Agreement, including
without limitation making application to list the shares of Common Stock
issuable hereunder on the Nasdaq National Market upon official notice of
issuance.
15. SPECIFIC PERFORMANCE. The parties hereto acknowledge that
--------------------
damages would be an inadequate remedy for a breach of this Agreement by either
party hereto and that the obligations of the parties hereto shall be enforceable
by either party hereto through injunctive or other equitable relief.
16. SEPARABILITY OF PROVISIONS. If any term, provision, covenant or
--------------------------
restriction contained in this Agreement is held by a court or a federal or state
regulatory agency of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions and covenants and
restrictions contained in this Agreement shall remain in full force and effect,
and shall in no way be affected, impaired or invalidated.
17. NOTICES. All notices, claims, demands and other communications
-------
hereunder shall be deemed to have been duly given or made when delivered in
person, by overnight courier or by facsimile at the respective addresses of the
parties set forth in the Merger Agreement.
18. 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 conflicts of laws
thereof.
19. COUNTERPARTS. This Agreement may be executed in two or more
------------
counterparts, each of which will be deemed to be an original, but all of which
shall constitute one and the same agreement.
20. EXPENSES. Except as otherwise expressly provided herein or in
--------
the Merger Agreement, each of the parties hereto shall bear and pay all costs
and expenses incurred by it or on its behalf in connection with the transactions
contemplated hereunder, including fees and expenses of its own financial
consultants, investment bankers, accountants and counsel.
21. ENTIRE AGREEMENT. Except as otherwise expressly provided herein
----------------
or in the Merger Agreement, this Agreement contains the entire agreement between
the parties with respect to the transactions contemplated hereunder and
supersedes all prior arrangements or understandings with respect thereof,
written or oral. The terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Nothing in this Agreement, expressed or
implied, is intended to confer upon any party, other than the parties hereto,
and their respective successors except as assigns,
any rights, remedies, obligations or liabilities under or by reason of this
Agreement, except as expressly provided herein. Any provision of this Agreement
may be waived only in writing at any time by the party that is entitled to the
benefits of such provision. This Agreement may not be modified, amended, altered
or supplemented except upon the execution and delivery of a written agreement
executed by the parties hereto.
22. FURTHER ASSURANCES. In the event of any exercise of the Option
------------------
by Grantee, Issuer and Grantee shall execute and deliver all other documents and
instruments and take all other action that may be reasonably necessary in order
to consummate the transactions provided for by such exercise. Nothing contained
in this Agreement shall be deemed to authorize Issuer or Grantee to breach any
provision of the Merger Agreement.
23. 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.
IN WITNESS WHEREOF, Issuer and Grantee have caused this Agreement to
be signed by their respective officers thereunto duly authorized, all as of the
date first written above.
XXXXXXXX.XXX, INC.
By: _________________________________
Name:
Title:
XXXXX.XXX, INC.
By: _________________________________
Name:
Title:
Exhibit C
XXXXXXXX.XXX VOTING AGREEMENT
-----------------------------
VOTING AGREEMENT (this "Voting Agreement"), dated as of August 8,
2000, by and between Xxxxx.xxx, Inc., a Delaware corporation ("Phone") and
______________________________ (the "Stockholder").
RECITALS:
WHEREAS, concurrently with the execution of this Voting Agreement,
Xxxxxxxx.xxx, Inc., a Delaware corporation (the "Company") and Phone have
entered into an Agreement and Plan of Merger (the "Merger Agreement"), pursuant
to which the parties have agreed, upon the terms and subject to the conditions
set forth in the Merger Agreement, to a strategic combination of Phone and the
Company (the "Merger");
WHEREAS, as of the date hereof, Stockholder is the record and
Beneficial Owner (as defined hereinafter) of _________ Existing Shares (as
defined hereinafter) of the Common Stock, $0.001 par value, of the Company (the
"Company Common Stock");
WHEREAS, as inducement and a condition to entering into the Merger
Agreement, Phone has required Stockholder to agree, and Stockholder has agreed,
to enter into this Voting Agreement;
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises, representations, warranties, covenants and agreements contained
in this Voting Agreement, the parties, intending to be legally bound, agree as
follows:
Section 1. CERTAIN DEFINITIONS. In addition to the terms defined
elsewhere in this Voting Agreement, capitalized terms used and not defined in
this Voting Agreement have the respective meanings ascribed to them in the
Merger Agreement. For purposes of this Voting Agreement:
(a) "Beneficially Own" or "Beneficial Ownership" with respect to any
securities means having "beneficial ownership" of such securities as determined
pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). Without duplicative counting of the same securities by
the same holder, securities Beneficially Owned by a person include securities
Beneficially Owned by all other persons with whom such person would constitute a
"group" within the meaning of Section 13(d) of the Exchange Act with respect to
securities of the same issuer.
(b) "Existing Shares" means shares of Company Common Stock
Beneficially Owned by Stockholder as of the date of this Voting Agreement
provided that, in the event of a stock dividend or distribution, or any change
in the Company Common Stock by reason of any stock dividend, split-up,
recapitalization, combination, exchange of shares or the like, other than
pursuant to the Merger, the term "Existing Shares" will be deemed to refer to
and include the shares of Company Common Stock as well as all such stock
dividends and distributions and any shares into which or for which any or all of
the Securities (as defined hereinafter) may be changed or exchanged and
appropriate adjustments shall be made to the terms and provisions of this Voting
Agreement.
(c) "Securities" means the Existing Shares together with any shares of
Company Common Stock or other securities of the Company acquired by Stockholder
in any capacity after the date of this Voting Agreement and prior to its
termination whether upon the exercise of options, warrants, or rights, the
conversion or exchange of convertible or exchangeable securities, or by means of
purchase, dividend, distribution, split-up, recapitalization, combination,
exchange of shares, or the like, gift, bequest, inheritance, or as a successor
in interest in any capacity, or otherwise.
Section 2. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER.
Stockholder represents and warrants to Phone as follows:
(a) Ownership of Shares. Stockholder is the sole record and
-------------------
Beneficial Owner of _________ Existing Shares. On the date of this Voting
Agreement, the Existing Shares constitute all of the shares of Company Common
Stock owned of record or Beneficially Owned by Stockholder. There are no
outstanding options or other rights to acquire from Stockholder or obligations
of Stockholder to sell or to acquire, any shares of Company Common Stock.
Stockholder has sole voting power and sole power to issue instructions with
respect to the matters set forth in Sections 5, 6 and 7 hereof, sole power of
disposition, sole power of conversion, sole power to demand appraisal rights and
sole power to agree to all of the matters set forth in this Voting Agreement, in
each case with respect to all of the Existing Shares with no limitations,
qualifications, or restrictions on such rights, subject to applicable securities
laws and the terms of this Voting Agreement.
(b) Power; Binding Agreement. Stockholder has the legal capacity,
------------------------
power and authority to enter into and perform all of Stockholder's obligations
under this Voting Agreement. This Voting Agreement has been duly and
validly executed and delivered by Stockholder and constitutes a valid and
binding agreement of Stockholder, enforceable against Stockholder in accordance
with its terms except that (i) such enforcement may be subject to applicable
bankruptcy, insolvency or other similar laws, now or hereafter in effect,
affecting creditors' rights generally, and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(c) No Conflicts. Except for filings under the Xxxx-Xxxxx-Xxxxxx
------------
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and the Exchange
Act, no filing with, and no permit, authorization, consent, or approval of, any
state or federal public body or authority ("Governmental Entity") is necessary
for the execution of this Voting Agreement by Stockholder and the consummation
by Stockholder of the transactions contemplated by this Voting Agreement. None
of the execution and delivery of this Voting Agreement by Stockholder, the
consummation by Stockholder of the transactions contemplated by this Voting
Agreement or compliance by Stockholder with any of the provisions of this Voting
Agreement shall (i) conflict with or result in any breach of any organizational
documents applicable to Stockholder, (ii) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default (or give
rise to any third party right of termination, cancellation, material
modification or acceleration) under any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement, or other instrument or
obligation of any kind to which Stockholder is a party or by which Stockholder
or any of its properties or assets may be bound, or (iii) violate any order,
writ, injunction, decree, judgment, order, statute, rule, or regulation
applicable to Stockholder or any of Stockholder's properties or assets.
(d) No Encumbrance. Except as permitted by this Voting Agreement, the
--------------
Existing Shares are now and, at all times during the term of this Voting
Agreement, held by Stockholder, or by a nominee or custodian for the benefit of
Stockholder, free and clear of all mortgages, claims, charges, liens, security
interests, pledges or options, proxies, voting trusts or agreements,
understandings or arrangements, or any other rights whatsoever ("Encumbrances"),
except for any such Encumbrances arising hereunder.
(e) No Finder's Fees. No broker, investment banker, financial
----------------
advisor or other person is entitled to any broker's, finder's, financial
adviser's or other similar fee or commission in connection with the transactions
contemplated by this Voting Agreement based upon arrangements made by or on
behalf of Stockholder.
(f) Reliance by Phone. Stockholder understands and acknowledges that
-----------------
Phone is entering into the Merger Agreement in reliance upon Stockholder's
execution and delivery of this Voting Agreement.
Section 3. REPRESENTATIONS AND WARRANTIES OF PHONE. Phone
represents and warrants to Stockholder as follows:
(a) Power; Binding Agreement. Phone has the corporate power and
------------------------
authority to enter into and perform all of its obligations under this Voting
Agreement. This Voting Agreement has been duly and validly executed and
delivered by Phone and constitutes a valid and binding agreement of Phone,
enforceable against Phone in accordance with its terms, except that (i) such
enforcement may be subject to applicable bankruptcy, insolvency or other similar
laws, now or hereafter in effect, affecting creditors' rights generally, and
(ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
(b) No Conflicts. Except for filings under the HSR Act and the
------------
Exchange Act, no filing with, and no permit, authorization, consent, or approval
of, any Governmental Entity is necessary for the execution of this Voting
Agreement by Phone and the consummation by Phone of the transactions
contemplated by this Voting Agreement. None of the execution and delivery of
this Voting Agreement by Phone, the consummation by Phone of the transactions
contemplated by this Voting Agreement, or compliance by Phone with any of the
provisions of this Voting Agreement shall (i) conflict with or result in any
breach of any organizational documents applicable to either Phone, (ii) result
in a violation or breach of, or constitute (with or without notice or lapse of
time or both) a default (or give rise to any third party right of termination,
cancellation, material modification or acceleration) under any of the terms,
conditions or provisions of any note, loan agreement, bond, mortgage, indenture,
license, contract, commitment, arrangement, understanding, agreement or other
instrument or obligation of any kind to which either Phone is a party or by
which either Phone or any of its properties or assets may be bound, or (iii)
violate any order, writ, injunction, decree, judgment, order, statute, rule, or
regulation applicable to Phone or any of its properties or assets.
Section 4. DISCLOSURE. Stockholder agrees to permit Phone to
publish and disclose in all documents and schedules filed with the Securities
and Exchange Commission, and any press release or other disclosure document that
Phone, in its sole discretion, determines to be necessary or desirable in
connection with the Merger and any transactions related to the Merger,
Stockholder's identity and ownership of Company Common Stock and the nature of
Stockholder's commitments, arrangements and understandings under this Voting
Agreement.
Section 5. CERTAIN RESTRICTIONS.
(a) No Solicitation. Stockholder (in his, her or its capacity as
---------------
such) will not, and will cause its subsidiaries, partners, investment bankers,
attorneys, accountants, and other agents and representatives of Stockholder
(such subsidiaries, partners, investment bankers, attorneys, accountants, agents
and representatives of any person are collectively referred to as the
"Representatives" of such person) not to, directly or indirectly (i) initiate,
solicit or encourage, or take any action to facilitate the making of, any offer
or proposal which constitutes or is reasonably likely to lead to any Alternative
Transaction (as defined in the Merger Agreement) or any inquiry with respect
thereto or (ii) in the event of any unsolicited Alternative Transaction for the
Company or any affiliate of the Company, engage in negotiations or discussions
with, or provide any information or data to, any person (other than Phone, any
of its affiliates or representatives) relating to any Alternative Transaction;
provided, that Stockholder may engage in negotiations or discussions with or
provide any information or data to, any such person relating to an Alternative
Transaction to the extent that the Company is permitted to engage in such
activities pursuant to Section 4.2(a) of the Merger Agreement. Stockholder will,
notify Phone orally and in writing of any such offers, proposals, or inquiries
relating to the purchase or acquisition by any person of Securities (including,
without limitation, the terms and conditions thereof and the identity of the
person making it), within 24 hours of the receipt of such offers. Stockholder
will, and will cause its Representatives to, immediately cease and cause to be
terminated any and all existing activities, discussions or negotiations, if any,
with any parties conducted prior to the date of this Voting Agreement without
respect to any Alternative Transaction relating to the Company, other than
discussions or negotiations with Phone and its affiliates and their
Representatives.
(b) Certain Actions. Prior to the termination of this Voting
---------------
Agreement, Stockholder agrees not to, directly or indirectly, take any other
action that would make any representation or warranty of Stockholder contained
herein untrue or incorrect.
Section 6. VOTING OF COMPANY COMMON STOCK. Stockholder, in his, her
or its capacity as such, hereby agrees that, during the period commencing on the
date thirty (30) days prior to the Effective Time (as defined in the Merger
Agreement) and continuing until the first to occur of (a) the Effective Time (as
defined in the Merger Agreement) or (b) termination of this Voting Agreement in
accordance with its terms, Stockholder will not sell or transfer any Securities
or any interest therein to any person unless each person to which any
Securities, or any interest in any of such Securities, is or may be transferred
shall have (x) executed a counterpart of this Voting Agreement (with such
modifications as Phone may reasonably request) and (y) agreed in writing to hold
such Securities
(or interest in such Securities) subject to all of the terms and provisions of
this Voting Agreement. Stockholder, in his, her or its capacity as such, hereby
agrees that, during the period commencing on the date hereof and continuing
until the first to occur of (a) the Effective Time (as defined in the Merger
Agreement) or (b) termination of this Voting Agreement in accordance with its
terms, at any meeting (whether annual or special and whether or not an adjourned
or postponed meeting) of the holders of Company Common Stock, however called, or
in connection with any written consent of the holders of Company Common Stock,
Stockholder will appear at the meeting or otherwise cause the Securities to be
counted as present at the meeting for purposes of establishing a quorum and vote
or consent (or cause to be voted or consented) the Securities in favor of the
adoption of the Merger Agreement and the approval of other actions contemplated
by the Merger Agreement.
Section 7. DIRECTORS AND OFFICERS. Notwithstanding any provision of
this Voting Agreement to the contrary, nothing in this Voting Agreement shall
limit or restrict Stockholder from acting in Stockholder's capacity as a
director or officer of the Company (it being understood that this Agreement
shall apply to Stockholder solely in Stockholder's capacity as a stockholder of
the Company) or voting in Stockholder's sole discretion on any matter other than
those matters referred to in Section 6(ii).
Section 8. PROXY
(a) Stockholder hereby irrevocably grants to, and appoints,
____________________________ and ___________________________ or either of them
in their respective capacities as officers of Phone and any individual who shall
hereafter succeed to any such office of Phone and each of them individually,
such Stockholder's proxy and attorney-in-fact (with full power of substitution),
for and in the name, place and stead of Stockholder, to vote the Securities, or
grant a consent or approval in respect of the Securities, in favor of the
Merger, as specified in Section 6.
(b) Stockholder represents that any proxies given prior to this Voting
Agreement regarding the Existing Shares are not irrevocable, and that such
proxies are revoked.
(c) Stockholder affirms that the irrevocable proxy set forth in this
Section 8 is given in connection with the execution of the Merger Agreement, and
that such irrevocable proxy is given to secure the performance of the duties of
Stockholder under this Voting Agreement. Stockholder further affirms that the
irrevocable proxy is coupled with an interest and may under no circumstances be
revoked. Stockholder ratifies and confirms all that such irrevocable proxy may
lawfully do or cause to be done by virtue hereof.
Section 9. CONSENTS AND WAIVERS. Stockholder hereby gives any
consents or waivers that are reasonably required for the consummation of the
Merger under the terms of any agreements to which the Stockholder is a party or
pursuant to any rights Stockholder may have.
Section 10. COMMERCIALLY REASONABLE EFFORTS. Subject to the terms
and conditions of this Voting Agreement, the Stockholder agrees to use
commercially reasonable efforts to take, or cause to be taken, all actions, and
to do, or cause to be done, all things necessary under applicable laws and
regulations to consummate the transactions contemplated by this Voting
Agreement. Stockholder shall at all times publicly support the Merger; provided,
however, that in the event of a Phone Subsequent Determination (as defined in
the Merger Agreement), the Stockholder shall have no obligation pursuant to this
Section 10 other than to comply with the Stockholder's obligations under Section
6 hereof. Notwithstanding the foregoing, (i) if Stockholder is a director or
officer of the Company, nothing contained in this Voting Agreement shall
prohibit such director or officer from taking such action as a director or
officer of the Company that may be required on the part of such person as a
director or officer of the Company; and (ii) except as provided in Section 6
hereof, nothing contained in this Voting Agreement shall prohibit the
Stockholder from exercising the voting rights of a stockholder of the Company.
Section 11. TERMINATION. This Voting Agreement and the proxy
granted herein shall terminate on the earliest of (i) the termination of the
Merger Agreement, (ii) the agreement of the parties hereto to terminate this
Voting Agreement, or (iii) the consummation of the Merger.
Section 12. MISCELLANEOUS.
(a) Entire Agreement. This Voting Agreement (including the
----------------
documents and instruments referred to herein) constitutes the entire agreement
and supersedes all other prior agreements and understandings, both written and
oral, among the parties, or any of them, with respect to the subject matter of
this Voting Agreement.
(b) Successors and Assigns. This Voting Agreement shall not be
----------------------
assigned by operation of law or otherwise without the prior written consent of
the other parties. This Voting Agreement shall be binding upon, inure to the
benefit of, and be enforceable by each party and each party's respective heirs,
beneficiaries, executors, representatives, and permitted assigns.
(c) Amendment and Modification. This Voting Agreement may not be
--------------------------
amended, altered, supplemented, or otherwise modified or
terminated except upon the execution and delivery of a written agreement
executed by the parties hereto.
(d) Notices. All notices and other communications hereunder shall be
-------
in writing and shall be deemed given upon (i) transmitter's confirmation of a
receipt of a facsimile transmission, (ii) confirmed delivery by a standard
overnight carrier or when delivered by hand, or (iii) the expiration of five
business days after the day when mailed by certified or registered mail, postage
prepaid, addressed at the following addresses (or at such other address for a
party as shall be specified by like notice):
If to Phone to:
Xxxxx.xxx, Inc.
000 Xxxxxxxxxx Xxxxx
Xxxxxxx Xxxx, XX 00000
Attention: General Counsel
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxx, Esq.
Telecopy No.: (000) 000-0000
If to Stockholder, to:
________________________
________________________
________________________
________________________
with a copy to:
________________________
________________________
________________________
________________________
(e) Severability. Any term or provision of this Voting Agreement
------------
which is held to be invalid, illegal or unenforceable in any respect in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Voting Agreement or affecting the
validity or enforceability of any of the terms or provisions of this Voting
Agreement in any other jurisdiction. If any provision of this Voting Agreement
is so broad as to be unenforceable, the provision shall be interpreted to be
only so broad as is enforceable.
(f) Specific Performance. Each of the parties recognizes and
--------------------
acknowledges a breach by it of any covenants or agreements contained in this
Voting Agreement will cause the other party to sustain damages for which it
would not have an adequate remedy at law for money, damages, and therefore in
the event of any such breach the aggrieved party shall be entitled to the remedy
of specified performance of such covenants and agreements and injunctive and
other equitable relief in addition to any other remedy to which it may be
entitled, at law or in equity.
(g) No Waiver. The failure of any party to exercise any right, power
---------
or remedy provided under this Voting Agreement or otherwise available in respect
of this Voting Agreement at law or in equity, or to insist upon compliance by
any other party with its obligation under this Voting Agreement, and any custom
or practice of the parties at variance with the terms of this Voting Agreement,
will not constitute a waiver by such party of its right to exercise any such or
other right, power or remedy or to demand such compliance.
(h) No Third Party Beneficiaries. This Voting Agreement is not
----------------------------
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.
(i) Governing Law. This Voting Agreement shall be governed and
-------------
construed in accordance with the laws of the State of Delaware, without giving
effect to the principles of conflict of law thereof.
(j) Descriptive Heading. The descriptive headings used herein are for
-------------------
reference purposes only and will not affect in any way the meaning or
interpretation of this Voting Agreement.
(k) Expenses. All costs and expenses incurred in connection with
--------
this Voting Agreement and the transactions contemplated hereby shall be paid by
the party incurring the expenses.
(l) Further Assurances. From time to time, at any other party's
------------------
request and without further consideration, each party shall execute and deliver
any additional documents and take any further lawful action as may be necessary
or desirable to consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Voting Agreement.
(m) Counterparts. This Voting Agreement may be executed in two or
------------
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, Xxxxx.xxx and Stockholder have caused this
Voting Agreement to be duly executed as of the day and year first written above.
XXXXX.XXX, INC.
By: ____________________________
Name:
Title:
STOCKHOLDER:
________________________________
Name:
Exhibit D
XXXXX.XXX VOTING AGREEMENT
--------------------------
VOTING AGREEMENT (this "Voting Agreement"), dated as of August 8,
2000, by and between Xxxxxxxx.xxx, Inc., a Delaware corporation ("Xxxxxxxx.xxx")
and ______________________________ (the "Stockholder").
RECITALS:
WHEREAS, concurrently with the execution of this Voting Agreement,
Xxxxx.xxx, Inc., a Delaware corporation (the "Company") and Xxxxxxxx.xxx have
entered into an Agreement and Plan of Merger (the "Merger Agreement"), pursuant
to which the parties have agreed, upon the terms and subject to the conditions
set forth in the Merger Agreement, to a strategic combination of Phone and
Xxxxxxxx.xxx (the "Merger");
WHEREAS, as of the date hereof, Stockholder is the record and
Beneficial Owner (as defined hereinafter) of _________ Existing Shares (as
defined hereinafter) of the Common Stock, $0.001 par value, of the Company (the
"Company Common Stock");
WHEREAS, as inducement and a condition to entering into the Merger
Agreement, Xxxxxxxx.xxx has required Stockholder to agree, and Stockholder has
agreed, to enter into this Voting Agreement;
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises, representations, warranties, covenants and agreements contained
in this Voting Agreement, the parties, intending to be legally bound, agree as
follows:
Section 1. CERTAIN DEFINITIONS. In addition to the terms defined
elsewhere in this Voting Agreement, capitalized terms used and not defined in
this Voting Agreement have the respective meanings ascribed to them in the
Merger Agreement. For purposes of this Voting Agreement:
(a) "Beneficially Own" or "Beneficial Ownership" with respect to any
securities means having "beneficial ownership" of such securities as determined
pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). Without duplicative counting of the same securities by
the same holder, securities Beneficially Owned by a person include securities
Beneficially Owned by all other persons with whom such person would constitute a
"group" within the meaning of Section 13(d) of the Exchange Act with respect to
securities of the same issuer.
(b) "Existing Shares" means shares of Company Common Stock
Beneficially Owned by Stockholder as of the date of this Voting Agreement
provided that, in the event of a stock dividend or distribution, or any change
in the Company Common Stock by reason of any stock dividend, split-up,
recapitalization, combination, exchange of shares or the like, other than
pursuant to the Merger, the term "Existing Shares" will be deemed to refer to
and include the shares of Company Common Stock as well as all such stock
dividends and distributions and any shares into which or for which any or all of
the Securities (as defined hereinafter) may be changed or exchanged and
appropriate adjustments shall be made to the terms and provisions of this Voting
Agreement.
(c) "Securities" means the Existing Shares together with any shares of
Company Common Stock or other securities of the Company acquired by Stockholder
in any capacity after the date of this Voting Agreement and prior to its
termination whether upon the exercise of options, warrants, or rights, the
conversion or exchange of convertible or exchangeable securities, or by means of
purchase, dividend, distribution, split-up, recapitalization, combination,
exchange of shares, or the like, gift, bequest, inheritance, or as a successor
in interest in any capacity, or otherwise.
Section 2. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER.
Stockholder represents and warrants to Xxxxxxxx.xxx as follows:
(a) Ownership of Shares. Stockholder is the sole record and
-------------------
Beneficial Owner of _________ Existing Shares. On the date of this Voting
Agreement, the Existing Shares constitute all of the shares of Company Common
Stock owned of record or Beneficially Owned by Stockholder. There are no
outstanding options or other rights to acquire from Stockholder or obligations
of Stockholder to sell or to acquire, any shares of Company Common Stock.
Stockholder has sole voting power and sole power to issue instructions with
respect to the matters set forth in Sections 5, 6 and 7 hereof, sole power of
disposition, sole power of conversion, sole power to demand appraisal rights and
sole power to agree to all of the matters set forth in this Voting Agreement, in
each case with respect to all of the Existing Shares with no limitations,
qualifications, or restrictions on such rights, subject to applicable securities
laws and the terms of this Voting Agreement.
(b) Power; Binding Agreement. Stockholder has the legal capacity,
------------------------
power and authority to enter into and perform all of Stockholder's obligations
under this Voting Agreement. This Voting Agreement has been duly and validly
executed and delivered by Stockholder and constitutes a valid and binding
agreement of Stockholder, enforceable against Stockholder in accordance with its
terms except that (i) such enforcement may be subject to applicable bankruptcy,
insolvency or other similar laws, now or hereafter in effect, affecting
creditors' rights generally, and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
(c) No Conflicts. Except for filings under the Xxxx-Xxxxx-Xxxxxx
------------
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and the Exchange
Act, no filing with, and no permit, authorization, consent, or approval of, any
state or federal public body or authority ("Governmental Entity") is necessary
for the execution of this Voting Agreement by Stockholder and the consummation
by Stockholder of the transactions contemplated by this Voting Agreement. None
of the execution and delivery of this Voting Agreement by Stockholder, the
consummation by Stockholder of the transactions contemplated by this Voting
Agreement or compliance by Stockholder with any of the provisions of this Voting
Agreement shall (i) conflict with or result in any breach of any organizational
documents applicable to Stockholder, (ii) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default (or give
rise to any third party right of termination, cancellation, material
modification or acceleration) under any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement, or other instrument or
obligation of any kind to which Stockholder is a party or by which Stockholder
or any of its properties or assets may be bound, or (iii) violate any order,
writ, injunction, decree, judgment, order, statute, rule, or regulation
applicable to Stockholder or any of Stockholder's properties or assets.
(d) No Encumbrance. Except as permitted by this Voting Agreement, the
--------------
Existing Shares are now and, at all times during the term of this Voting
Agreement, held by Stockholder, or by a nominee or custodian for the benefit of
Stockholder, free and clear of all mortgages, claims, charges, liens, security
interests, pledges or options, proxies, voting trusts or agreements,
understandings or arrangements, or any other rights whatsoever ("Encumbrances"),
except for any such Encumbrances arising hereunder.
(e) No Finder's Fees. No broker, investment banker, financial
----------------
advisor or other person is entitled to any broker's, finder's, financial
adviser's or other similar fee or commission in connection with the transactions
contemplated by this Voting Agreement based upon arrangements made by or on
behalf of Stockholder.
(f) Reliance by Xxxxxxxx.xxx. Stockholder understands and
------------------------
acknowledges that Xxxxxxxx.xxx is entering into the Merger Agreement in reliance
upon Stockholder's execution and delivery of this Voting Agreement.
Section 3. REPRESENTATIONS AND WARRANTIES OF XXXXXXXX.XXX.
Xxxxxxxx.xxx represents and warrants to Stockholder as follows:
(a) Power; Binding Agreement. Xxxxxxxx.xxx has the corporate power
------------------------
and authority to enter into and perform all of its obligations under this Voting
Agreement. This Voting Agreement has been duly and validly executed and
delivered by Xxxxxxxx.xxx and constitutes a valid and binding agreement of
Xxxxxxxx.xxx, enforceable against Xxxxxxxx.xxx in accordance with its terms,
except that (i) such enforcement may be subject to applicable bankruptcy,
insolvency or other similar laws, now or hereafter in effect, affecting
creditors' rights generally, and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
(b) No Conflicts. Except for filings under the HSR Act and the
------------
Exchange Act, no filing with, and no permit, authorization, consent, or approval
of, any Governmental Entity is necessary for the execution of this Voting
Agreement by Xxxxxxxx.xxx and the consummation by Xxxxxxxx.xxx of the
transactions contemplated by this Voting Agreement. None of the execution and
delivery of this Voting Agreement by Xxxxxxxx.xxx, the consummation by
Xxxxxxxx.xxx of the transactions contemplated by this Voting Agreement, or
compliance by Xxxxxxxx.xxx with any of the provisions of this Voting Agreement
shall (i) conflict with or result in any breach of any organizational documents
applicable to either Xxxxxxxx.xxx, (ii) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default (or give
rise to any third party right of termination, cancellation, material
modification or acceleration) under any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which either Xxxxxxxx.xxx is a party or by which
either Xxxxxxxx.xxx or any of its properties or assets may be bound, or (iii)
violate any order, writ, injunction, decree, judgment, order, statute, rule, or
regulation applicable to Xxxxxxxx.xxx or any of its properties or assets.
Section 4. DISCLOSURE. Stockholder agrees to permit Xxxxxxxx.xxx to
publish and disclose in all documents and schedules filed with the Securities
and Exchange Commission, and any press release or other disclosure document that
Xxxxxxxx.xxx, in its sole discretion, determines to be necessary or
desirable in connection with the Merger and any transactions related to the
Merger, Stockholder's identity and ownership of Company Common Stock and the
nature of Stockholder's commitments, arrangements and understandings under this
Voting Agreement.
Section 5. CERTAIN RESTRICTIONS.
(a) No Solicitation. Stockholder in his, her or its capacity as such
---------------
will not, and will cause its subsidiaries, partners, investment bankers,
attorneys, accountants, and other agents and representatives of Stockholder
(such subsidiaries, partners, investment bankers, attorneys, accountants, agents
and representatives of any person are collectively referred to as the
"Representatives" of such person) not to, directly or indirectly (i) initiate,
solicit or encourage, or take any action to facilitate the making of, any offer
or proposal which constitutes or is reasonably likely to lead to any Alternative
Transaction (as defined in the Merger Agreement) or any inquiry with respect
thereto or (ii) in the event of any unsolicited Alternative Transaction for the
Company or any affiliate of the Company, engage in negotiations or discussions
with, or provide any information or data to, any person (other than
Xxxxxxxx.xxx, any of its affiliates or representatives) relating to any
Alternative Transaction; provided, that Stockholder may engage in negotiations
or discussions with or provide any information or data to, any such person
relating to an Alternative Transaction to the extent that Phone is permitted to
engage in such activities pursuant to Section 4.2(a) of the Merger Agreement.
Stockholder will, notify Xxxxxxxx.xxx orally and in writing of any such offers,
proposals, or inquiries relating to the purchase or acquisition by any person of
Securities (including, without limitation, the terms and conditions thereof and
the identity of the person making it), within 24 hours of the receipt of such
offers. Stockholder will, and will cause its Representatives to, immediately
cease and cause to be terminated any and all existing activities, discussions or
negotiations, if any, with any parties conducted prior to the date of this
Voting Agreement without respect to any Alternative Transaction relating to the
Company, other than discussions or negotiations with Xxxxxxxx.xxx and its
affiliates and their Representatives.
(b) Certain Actions. Prior to the termination of this Voting
---------------
Agreement, Stockholder agrees not to, directly or indirectly, take any other
action that would make any representation or warranty of Stockholder contained
herein untrue or incorrect.
Section 6. VOTING OF COMPANY COMMON STOCK. Stockholder, in his, her
or its capacity as such, hereby agrees that, during the period commencing on the
date thirty (30) days prior to the EffectiveTime (as defined in the Merger
Agreement) and continuing until the first to occur of (a) the Effective Time (as
defined in the Merger Agreement) or (b) termination of this Voting Agreement in
accordance with its terms, (i) Stockholder will not sell or transfer any
Securities or any interest therein to any person unless each person to which any
Securities, or any interest in any of such Securities, is or may be transferred
shall have (x) executed a counterpart of this Voting Agreement (with such
modifications as Xxxxxxxx.xxx may reasonably request) and (y) agreed in writing
to hold such Securities (or interest in such Securities) subject to all of the
terms and provisions of this Voting Agreement. Stockholder, in his, her or its
capacity as such, hereby agrees that, during the period commencing on the date
hereof and continuing until the first to occur of (a) the Effective Time (as
defined in the Merger Agreement) or (b) termination of this Voting Agreement in
accordance with its terms, at any meeting (whether annual or special and whether
or not an adjourned or postponed meeting) of the holders of Company Common
Stock, however called, or in connection with any written consent of the holders
of Company Common Stock, Stockholder will appear at the meeting or otherwise
cause the Securities to be counted as present at the meeting for purposes of
establishing a quorum and vote or consent (or cause to be voted or consented)
the Securities in favor of the adoption of the Merger Agreement and the approval
of other actions contemplated by the Merger Agreement.
Section 7. DIRECTORS AND OFFICERS. Notwithstanding any provision of
this Voting Agreement to the contrary, nothing in this Voting Agreement shall
limit or restrict Stockholder from acting in Stockholder's capacity as a
director or officer of the Company (it being understood that this Voting
Agreement shall apply to Stockholder solely in Stockholder's capacity as a
stockholder of the Company) or voting in Stockholder's sole discretion on any
matter other than those matters referred to in Section 6(ii).
Section 8. PROXY
(a) Stockholder hereby irrevocably grants to, and appoints,
____________________________ and ___________________________ or either of them
in their respective capacities as officers of Xxxxxxxx.xxx and any individual
who shall hereafter succeed to any such office of Xxxxxxxx.xxx and each of them
individually, such Stockholder's proxy and attorney-in-fact (with full power of
substitution), for and in the name, place and stead of Stockholder, to vote the
Securities, or grant a consent or approval in respect of the Securities, in
favor of the Merger, as specified in Section 6.
(b) Stockholder represents that any proxies given prior to this Voting
Agreement regarding the Existing Shares are not irrevocable, and that such
proxies are revoked.
(c) Stockholder affirms that the irrevocable proxy set forth in this
Section 8 is given in connection with the execution of the Merger Agreement,
and that such irrevocable proxy is given to secure the performance of the duties
of Stockholder under this Voting Agreement. Stockholder further affirms that the
irrevocable proxy is coupled with an interest and may under no circumstances be
revoked. Stockholder ratifies and confirms all that such irrevocable proxy may
lawfully do or cause to be done by virtue hereof.
Section 9. CONSENTS AND WAIVERS. Stockholder hereby gives any
consents or waivers that are reasonably required for the consummation of the
Merger under the terms of any agreements to which the Stockholder is a party or
pursuant to any rights Stockholder may have.
Section 10. COMMERCIALLY REASONABLE EFFORTS. Subject to the terms
and conditions of this Voting Agreement, the Stockholder agrees to use
commerically reasonable efforts to take, or cause to be taken, all actions, and
to do, or cause to be done, all things necessary under applicable laws and
regulations to consummate the transactions contemplated by this Voting
Agreement. Stockholder shall at all times publicly support the Merger; provided,
however, that in the event of a Phone Subsequent Determination, the Stockholder
shall have no obligation pursuant to this Section 10 other than to comply with
the Stockholder's obligations under Section 6 hereof. Notwithstanding the
foregoing, (i) if Stockholder is a director or officer of the Company, nothing
contained in this Voting Agreement shall prohibit such director or officer from
taking such action as a director or officer of the Company that may be required
on the part of such person as a director or officer of the Company; and (ii)
except as provided in Section 6 hereof, nothing contained in this Voting
Agreement shall prohibit the Stockholder from exercising the voting rights of a
stockholder of the Company.
Section 11. TERMINATION. This Voting Agreement and the proxy
granted herein shall terminate on the earliest of (i) the termination of the
Merger Agreement, (ii) the agreement of the parties hereto to terminate this
Voting Agreement, or (iii) the consummation of the Merger.
Section 12. MISCELLANEOUS.
(a) Entire Agreement. This Voting Agreement (including the documents
----------------
and instruments referred to herein) constitutes the entire agreement and
supersedes all other prior agreements and understandings, both written and oral,
among the parties, or any of them, with respect to the subject matter of this
Voting Agreement.
(b) Successors and Assigns. This Voting Agreement shall not be
----------------------
assigned by operation of law or otherwise without the prior written consent of
the other parties. This Voting Agreement shall be binding upon, inure to the
benefit
of, and be enforceable by each party and each party's respective heirs,
beneficiaries, executors, representatives, and permitted assigns.
(c) Amendment and Modification. This Voting Agreement may not be
--------------------------
amended, altered, supplemented, or otherwise modified or terminated except upon
the execution and delivery of a written agreement executed by the parties
hereto.
(d) Notices. All notices and other communications hereunder shall be
-------
in writing and shall be deemed given upon (i) transmitter's confirmation of a
receipt of a facsimile transmission, (ii) confirmed delivery by a standard
overnight carrier or when delivered by hand, or (iii) the expiration of five
business days after the day when mailed by certified or registered mail, postage
prepaid, addressed at the following addresses (or at such other address for a
party as shall be specified by like notice):
If to Xxxxxxxx.xxx to:
Xxxxxxxx.xxx, Inc.
000 Xxxxxxx Xxxxxx
Xxxxx Xxxxxxx, XX 00000
Attention: General Counsel
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Attention: Xxxxxxxxx X. Xxxxx, Esq.
Telecopy No.: (000) 000-0000
and to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation
Xxx Xxxxxx
Xxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
If to Stockholder, to:
________________________
________________________
________________________
________________________
with a copy to:
________________________
________________________
________________________
________________________
(e) Severability. Any term or provision of this Voting Agreement
------------
which is held to be invalid, illegal or unenforceable in any respect in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Voting Agreement or affecting the
validity or enforceability of any of the terms or provisions of this Voting
Agreement in any other jurisdiction. If any provision of this Voting Agreement
is so broad as to be unenforceable, the provision shall be interpreted to be
only so broad as is enforceable.
(f) Specific Performance. Each of the parties recognizes and
--------------------
acknowledges a breach by it of any covenants or agreements contained in this
Voting Agreement will cause the other party to sustain damages for which it
would not have an adequate remedy at law for money, damages, and therefore in
the event of any such breach the aggrieved party shall be entitled to the remedy
of specified performance of such covenants and agreements and injunctive and
other equitable relief in addition to any other remedy to which it may be
entitled, at law or in equity.
(g) No Waiver. The failure of any party to exercise any right, power
---------
or remedy provided under this Voting Agreement or otherwise available in respect
of this Voting Agreement at law or in equity, or to insist upon compliance by
any other party with its obligation under this Voting Agreement, and any custom
or practice of the parties at variance with the terms of this Voting Agreement,
will not constitute a waiver by such party of its right to exercise any such or
other right, power or remedy or to demand such compliance.
(h) No Third Party Beneficiaries. This Voting Agreement is not
----------------------------
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.
(i) Governing Law. This Voting Agreement shall be governed and
-------------
construed in accordance with the laws of the State of Delaware, without giving
effect to the principles of conflict of law thereof.
(j) Descriptive Heading. The descriptive headings used herein are for
-------------------
reference purposes only and will not affect in any way the meaning or
interpretation of this Voting Agreement.
(k) Expenses. All costs and expenses incurred in connection with
--------
this Voting Agreement and the transactions contemplated hereby shall be paid by
the party incurring the expenses.
(l) Further Assurances. From time to time, at any other party's
------------------
request and without further consideration, each party shall execute and deliver
any additional documents and take any further lawful action as may be necessary
or desirable to consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Voting Agreement.
(m) Counterparts. This Voting Agreement may be executed in two or
------------
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, Xxxxxxxx.xxx and Stockholder have caused this
Voting Agreement to be duly executed as of the day and year first written above.
XXXXXXXX.XXX, INC.
By: ____________________________
Name:
Title:
STOCKHOLDER:
________________________________
Name:
Exhibit E
XXXXXXXX.XXX AFFILIATE LETTER
Xxxxx.xxx, Inc.
000 Xxxxxxxxxx Xxxxx
Xxxxxxx Xxxx, XX 00000
Ladies and Gentlemen:
I have been advised that as of the date of this letter I may be deemed to be
an "affiliate" of Xxxxxxx.xxx, Inc., a Delaware corporation ("Xxxxxxxx.xxx"), as
the term "affiliate" is used in and for purposes of Accounting Series, Releases
130 and 135, as amended, of the Securities and Exchange Commission (the
"Commission"). Pursuant to the terms of the Agreement and Plan of Merger dated
as of August 8, 2000 (the "Merger Agreement"), among Xxxxx.xxx, Inc., a Delaware
corporation ("Phone"), Silver Merger Sub Inc., a Delaware corporation and a
wholly owned subsidiary of Phone ("Merger Sub"), and Xxxxxxxx.xxx, Merger Sub
will be merged with and into Xxxxxxxx.xxx (the "Merger").
As a result of the Merger, I may receive shares of common stock, par value
$0.001 per share, of Phone (the "Phone Securities") in exchange for shares owned
by me of common stock, par value $0.001 per share, of Xxxxxxxx.xxx (or upon the
exercise of options for such shares).
I hereby represent, warrant, and covenant to Phone that in the event I
receive any Phone Securities as a result of the Merger:
A. I shall not make any sale, transfer, or other disposition of the Phone
Securities in violation of the Securities Act of 1933, as amended (the "Act") or
the rules and regulations (the "Rules and Regulations") of the Commission under
the Act.
B. I have carefully read this letter and the Merger Agreement and discussed
the requirements of such documents and other applicable limitations upon my
ability to sell, transfer, or otherwise dispose of the Phone Securities, to the
extent I felt necessary, with my counsel or counsel for Xxxxxxxx.xxx.
C. I have been advised that the issuance of Phone Securities to me pursuant
to the Merger will be registered with the Commission under the Act on a
Registration Statement on Form S-4. However, I have also been advised that,
since at the time the Merger is submitted for a vote of the stockholders of
Xxxxxxxx.xxx, (i) I may be deemed to be an affiliate of Xxxxxxxx.xxx and (ii)
the distribution by me of the Phone Securities has not been registered under the
Act, I may not sell, transfer or otherwise dispose of the Phone Securities
issued to me in the Merger unless (x) such sale, transfer or other disposition
has been registered under the Act, (y) such sale, transfer or other disposition
is made in conformity with Rule 145 (as such rule may
be hereafter from time to time amended) promulgated by the Commission under the
Act, or (z) in the opinion of counsel reasonably acceptable to Phone, or a "no
action" letter obtained by me from the staff of the Commission, such sale,
transfer or other disposition is otherwise exempt from registration under the
Act.
D. I understand that Phone is under no obligation to register the sale,
transfer, or other disposition of the Phone Securities by me or on my behalf
under the Act or to take any other action necessary in order to make compliance
with an exemption from such registration available.
E. I also understand that stop transfer instructions will be given to
Phone's transfer agents with respect to the Phone Securities and that there will
be placed on the certificates for the Phone Securities issued to me, or any
substitutions therefor, a legend stating in substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A TRANSACTION TO
WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933 APPLIES, AND
MAY ONLY BE SOLD OR OTHERWISE TRANSFERRED IN COMPLIANCE WITH THE
REQUIREMENTS OF RULE 145 OR PURSUANT TO A REGISTRATION STATEMENT UNDER THAT
ACT OR AN EXEMPTION FROM SUCH REGISTRATION."
F. I also understand that unless the transfer by me of my Phone Securities
has been registered under the Act or is a sale made in conformity with the
provisions of Rule 145, Phone reserves the right to put the following legend on
the certificates issued to my transferee:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND WERE ACQUIRED FROM A PERSON WHO RECEIVED
SUCH SHARES IN A TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE
SECURITIES ACT OF 1933 APPLIES. THE SHARES HAVE BEEN ACQUIRED BY THE
HOLDER NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY
DISTRIBUTION THEREOF WITHIN THE MEANING OF THE SECURITIES ACT OF 1933 AND
MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF
1933."
It is understood and agreed that the legends set forth in paragraphs E and F
above shall be removed by delivery of substitute certificates without such
legend if such legend is not required for purposes of the Act or this Agreement.
It is understood and agreed that such legends and the stop orders referred to
above will be removed if (i) evidence or representations satisfactory to Phone
that the Phone Securities represented by such certificates are being or have
been sold in a transaction made in conformity with the provisions of Rule 145(d)
(as such rule may be hereafter from time to time amended) or (ii) Phone has
received either an opinion of counsel, which opinion and counsel shall be
reasonably satisfactory to Phone, or a "no action" letter obtained by
me from the staff of the Commission, to the effect that the restrictions imposed
by Rule 145 under the Act no longer apply to me.
I further represent to and covenant with Phone that I will not, from the date
thirty (30) days prior to the Effective Time (as defined in the Merger
Agreement), sell, transfer or otherwise dispose of or reduce my risk (as
contemplated by the SEC Accounting Series Release No. 135) with respect to any
Xxxxxxxx.xxx shares or shares of the capital stock of Phone that I may hold and
I will not sell, transfer or otherwise dispose of or reduce my risk (as
contemplated by SEC Accounting Series Release No. 135) with respect to any Phone
Securities received by me in the Merger or any other shares of the capital stock
of Phone until after such time as combined financial results (including combined
sales and net income) covering at least 30 days of combined operations of
Xxxxxxxx.xxx and Phone have been published by Phone, in the form of a quarterly
earnings report, an effective registration statement filed with the Commission,
a report to the Commission on Form 10-K, 10-Q or 8-K, or any other public filing
or announcement which includes such combined results of operations (such period
is referred to herein as the "Pooling Period"). Notwithstanding the foregoing,
I understand that during the Pooling Period, subject to obtaining the prior
written consent of Phone, I will not be prohibited from selling up to 10% of the
shares of Phone Common Stock (the "10% Shares") received by me or shares of
Phone Common Stock owned by me or making charitable contributions or bona fide
gifts of the shares of Phone Common Stock received by me or shares of Phone
Common Stock owned by me, subject to the same restrictions; provided, however,
that all holders of Phone Common Stock, as a group, and all holders of
Xxxxxxxx.xxx Common Stock, as a group, shall not be permitted to sell, in the
aggregate, in excess of one percent (1%) of the total number of shares exchanged
in the Merger (the "Threshold"). The 10% Shares shall be calculated in
accordance with SEC Accounting Series Release 135, as amended, by Staff
Accounting Bulletin No. 76. I covenant with Phone that I will not sell,
transfer or otherwise dispose of any 10% Shares during the period commencing
from the Effective Time (as defined in the Merger Agreement) and ending on the
last day of the Pooling Period except in compliance with Rule 145(d)(i) under
the Act or pursuant to charitable contributions or bona fide gifts. I
understand that Phone shall not withhold its consent to such disposition so long
as such disposition is within the Threshold.
If at any time, Phone determines that the Merger may not be accounted for as
a "pooling of interests," then the restrictions in the preceding paragraph shall
terminate 45 days from the date on which it is determined that the Merger may
not be accounted for as a "pooling of interests."
I understand that, if at any time prior to the commencement of the Pooling
Period I cease to be an "affiliate" of Xxxxxxxx.xxx, I may request in writing to
Phone that I be released from my obligations hereunder and Phone shall grant
such request if, in Phone's good faith judgment, Phone determines that I am, in
fact, no longer an "affiliate" of Xxxxxxxx.xxx and such release would not
otherwise prevent the Merger from being accounted for as a "pooling of
interests."
Execution of this letter should not be considered an admission on my part
that I am an "affiliate" of Xxxxxxxx.xxx as described in the first paragraph of
this letter, or as a waiver of any rights I may have to object to any claim that
I am such an affiliate on or after the date of this letter.
Very truly yours,
_______________________________
Name:
Accepted this day of , 2000 by
Xxxxx.xxx, Inc.
By _____________________________
Name:
Title:
Exhibit F
FORM OF XXXXX.XXX AFFILIATE LETTER
Xxxxxxxx.xxx
000 Xxxxxxx Xxxxxx
Xxxxx Xxxxxxx, XX 00000
Ladies and Gentlemen:
I have been advised that as of the date of this letter I may be deemed to be
an "affiliate" of Xxxxx.xxx, Inc., a Delaware corporation ("Phone"), as the term
"affiliate" is used in and for purposes of Accounting Series, Releases 130 and
135, as amended, of the Securities and Exchange Commission (the "Commission").
Pursuant to the terms of the Agreement and Plan of Merger dated as of August 8,
2000 (the "Merger Agreement"), among Phone, Silver Merger Sub Inc., a Delaware
corporation and a wholly owned subsidiary of Phone ("Merger Sub"), and
Xxxxxxxx.xxx, Inc., a Delaware corporation ("Xxxxxxxx.xxx"), Merger Sub will be
merged with and into Xxxxxxxx.xxx (the "Merger").
I understand that in order for the Merger to be accounted for as a pooling of
interests, affiliates of Phone and Xxxxxxxx.xxx must not reduce their interests
in or risk relative to their ownership of the shares of capital stock of either
Phone or Xxxxxxxx.xxx owned by them for a certain time period prior to and
following the Merger.
As an inducement to Xxxxxxxx.xxx to consummate the Merger, I represent to and
covenant with Xxxxxxxx.xxx that I will not, from the date thirty (30) days prior
to the Effective Time (as defined in the Merger Agreement), sell, transfer or
otherwise dispose of or reduce my risk (as contemplated by the SEC Accounting
Series Release No. 135) with respect to any shares of the capital stock of
either Xxxxxxxx.xxx or Phone that I may hold and I will not sell, transfer or
otherwise dispose of or reduce my risk (as contemplated by SEC Accounting Series
Release No. 135) with respect to any shares of the capital stock of Phone until
after such time as combined financial results (including combined sales and net
income) covering at least 30 days of combined operations of Xxxxxxxx.xxx and
Phone have been published by Phone, in the form of a quarterly earnings report,
an effective registration statement filed with the Commission, a report to the
Commission on Form 10-K, 10-Q, or 8-K, or any other public filing or
announcement which includes such combined results of operations (such period is
referred to herein as the "Pooling Period"). Notwithstanding the foregoing, I
understand that during the Pooling Period, subject to obtaining the prior
written consent of Phone, I will not be prohibited from selling up to 10% of the
shares of Phone Common Stock (the "10% Shares") owned by me, or making
charitable contributions or bona fide gifts of the shares of Phone Common Stock
owned by me, subject to the same restrictions; provided, however, that all
holders of Phone Common Stock, as a group, and all holders of Xxxxxxxx.xxx
Common Stock, as a group, shall not be permitted to sell, in the aggregate, in
excess of one percent (1%) of the total number of
shares exchanged in the Merger (the "Threshold"). The 10% Shares shall be
calculated in accordance with SEC Accounting Series Release 135, as amended, by
Staff Accounting Bulletin No. 76. I covenant with Xxxxxxxx.xxx that I will not
sell, transfer or otherwise dispose of any 10% Shares during the period
commencing from the Effective Time (as defined in the Merger Agreement) and
ending on the last day of the Pooling Period except in compliance with Rule
145(d)(i) under the Act or pursuant to charitable contributions or bona fide
gifts. I understand that Phone shall not withhold its consent to such
disposition so long as such disposition is within the Threshold.
If at any time, Phone determines that the Merger may not be accounted for as
a "pooling of interests," then the restrictions in the preceding paragraph shall
terminate 45 days from the later of (i) the Effective Time and (ii) the date on
which it is determined that the Merger may not be accounted for as a "pooling of
interests."
I understand that, if at any time prior to the commencement of the Pooling
Period I cease to be an "affiliate" of Phone, I may request in writing to Phone
that I be released from my obligations hereunder and Phone shall grant such
request if, in Phone's good faith judgment, Phone determines that I am, in fact,
no longer an "affiliate" of Phone and such release would not otherwise prevent
the Merger from being accounted for as a "pooling of interests.
Execution of this letter should not be considered an admission on my part
that I am an "affiliate" of Phone as described in the first paragraph of this
letter, or as a waiver of any rights I may have to object to any claim that I am
such an affiliate on or after the date of this letter.
Very truly yours,
__________________________________
Name:
Accepted this day of , 2000 by
Xxxxxxxx.xxx
By ______________________________
Name:
Title:
Exhibit H
XXXXXXXX.XXX SPECIAL AFFILIATE LETTER
Xxxxx.xxx, Inc.
000 Xxxxxxxxxx Xxxxx
Xxxxxxx Xxxx, XX 00000
Ladies and Gentlemen:
I have been advised that as of the date of this letter I may be deemed to be
an "affiliate" of Xxxxxxxx.xxx, Inc., a Delaware corporation ("Xxxxxxxx.xxx"),
as the term "affiliate" (i) is defined for purposes of paragraphs (c) and (d) of
Rule 145 of the rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "Act") or (ii) used in and for purposes of Accounting
Series, Releases 130 and 135, as amended, of the Commission. Pursuant to the
terms of the Agreement and Plan of Merger dated as of August 8, 2000 (the
"Merger Agreement"), among Xxxxx.xxx, Inc., a Delaware corporation ("Phone"),
Silver Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of
Phone ("Merger Sub"), and Xxxxxxxx.xxx, Merger Sub will be merged with and into
Xxxxxxxx.xxx (the "Merger").
As a result of the Merger, I may receive shares of common stock, par value
$0.001 per share, of Phone (the "Phone Securities") in exchange for shares owned
by me of common stock, par value $0.001 per share, of Xxxxxxxx.xxx (or upon the
exercise of options for such shares).
I hereby represent, warrant, and covenant to Phone that in the event I
receive any Phone Securities as a result of the Merger:
A. I shall not make any sale, transfer, or other disposition of the Phone
Securities in violation of the Act or the Rules and Regulations.
B. I have carefully read this letter and the Merger Agreement and discussed
the requirements of such documents and other applicable limitations upon my
ability to sell, transfer, or otherwise dispose of the Phone Securities, to the
extent I felt necessary, with my counsel or counsel for Xxxxxxxx.xxx.
C. I have been advised that the issuance of Phone Securities to me pursuant
to the Merger will be registered with the Commission under the Act on a
Registration Statement on Form S-4. However, I have also been advised that,
since at the time the Merger is submitted for a vote of the stockholders of
Xxxxxxxx.xxx, (i) I may be deemed to be an affiliate of Xxxxxxxx.xxx and (ii)
the distribution by me of the Phone Securities has not been registered under the
Act, I may not sell, transfer or otherwise dispose of the Phone Securities
issued to me in the Merger unless (x) such sale, transfer or other disposition
has been registered under the Act, (y) such sale, transfer
or other disposition is made in conformity with Rule 145 (as such rule may be
hereafter from time to time amended) promulgated by the Commission under the
Act, or (z) in the opinion of counsel reasonably acceptable to Phone, or a "no
action" letter obtained by me from the staff of the Commission, such sale,
transfer or other disposition is otherwise exempt from registration under the
Act.
D. I understand that Phone is under no obligation to register the sale,
transfer, or other disposition of the Phone Securities by me or on my behalf
under the Act or to take any other action necessary in order to make compliance
with an exemption from such registration available.
E. I also understand that stop transfer instructions will be given to Phone's
transfer agents with respect to the Phone Securities and that there will be
placed on the certificates for the Phone Securities issued to me, or any
substitutions therefor, a legend stating in substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A TRANSACTION TO
WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933 APPLIES, AND
MAY ONLY BE SOLD OR OTHERWISE TRANSFERRED IN COMPLIANCE WITH THE
REQUIREMENTS OF RULE 145 OR PURSUANT TO A REGISTRATION STATEMENT UNDER THAT
ACT OR AN EXEMPTION FROM SUCH REGISTRATION."
F. I also understand that unless the transfer by me of my Phone Securities
has been registered under the Act or is a sale made in conformity with the
provisions of Rule 145, Phone reserves the right to put the following legend on
the certificates issued to my transferee:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND WERE ACQUIRED FROM A PERSON WHO RECEIVED
SUCH SHARES IN A TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE
SECURITIES ACT OF 1933 APPLIES. THE SHARES HAVE BEEN ACQUIRED BY THE
HOLDER NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY
DISTRIBUTION THEREOF WITHIN THE MEANING OF THE SECURITIES ACT OF 1933 AND
MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF
1933."
It is understood and agreed that the legends set forth in paragraphs E and F
above shall be removed by delivery of substitute certificates without such
legend if such legend is not required for purposes of the Act or this Agreement.
It is understood and agreed that such legends and the stop orders referred to
above will be removed if (i) evidence or representations satisfactory to Phone
that the Phone Securities represented by such certificates are being or have
been sold in a transaction made in conformity with the provisions of Rule 145(d)
(as such rule may be hereafter from time to time amended) or (ii) Phone has
received either an opinion of counsel, which opinion and counsel shall be
reasonably satisfactory to Phone, or a "no action" letter obtained by
me from the staff of the Commission, to the effect that the restrictions imposed
by Rule 145 under the Act no longer apply to me.
I further represent to and covenant with Phone that I will not, from the date
thirty (30) days prior to the Effective Time (as defined in the Merger
Agreement), sell, transfer or otherwise dispose of or reduce my risk (as
contemplated by the SEC Accounting Series Release No. 135) with respect to any
Xxxxxxxx.xxx shares or shares of the capital stock of Phone that I may hold and
I will not sell, transfer or otherwise dispose of or reduce my risk (as
contemplated by SEC Accounting Series Release No. 135) with respect to any Phone
Securities received by me in the Merger or any other shares of the capital stock
of Phone until after such time as combined financial results (including combined
sales and net income) covering at least 30 days of combined operations of
Xxxxxxxx.xxx and Phone have been published by Phone, in the form of a quarterly
earnings report, an effective registration statement filed with the Commission,
a report to the Commission on Form 10-K, 10-Q or 8-K, or any other public filing
or announcement which includes such combined results of operations (such period
is referred to herein as the "Pooling Period"). Notwithstanding the foregoing,
I understand that during the Pooling Period, subject to obtaining the prior
written consent of Phone, I will not be prohibited from selling up to 10% of the
shares of Phone Common Stock (the "10% Shares") received by me or shares of
Phone Common Stock owned by me or making charitable contributions or bona fide
gifts of the shares of Phone Common Stock received by me or shares of Phone
Common Stock owned by me, subject to the same restrictions; provided, however,
that all holders of Phone Common Stock, as a group, and all holders of
Xxxxxxxx.xxx Common Stock, as a group, shall not be permitted to sell, in the
aggregate, in excess of one percent (1%) of the total number of shares exchanged
in the Merger (the "Threshold"). The 10% Shares shall be calculated in
accordance with SEC Accounting Series Release 135, as amended, by Staff
Accounting Bulletin No. 76. I covenant with Phone that I will not sell,
transfer or otherwise dispose of any 10% Shares during the period commencing
from the Effective Time (as defined in the Merger Agreement) and ending on the
last day of the Pooling Period except in compliance with Rule 145(d)(i) under
the Act or pursuant to charitable contributions or bona fide gifts. I
understand that Phone shall not withhold its consent to such disposition so long
as such disposition is within the Threshold.
If at any time, Phone determines that the Merger may not be accounted for as
a "pooling of interests," then the restrictions in the preceding paragraph shall
terminate 45 days from the later of (i) the Effective Time and (ii) the date on
which it is determined that the Merger may not be accounted for as a "pooling of
interests."
I understand that, if at any time prior to the commencement of the Pooling
Period I cease to be an "affiliate" of Xxxxxxxx.xxx, I may request in writing to
Phone that I be released from my obligations hereunder and Phone shall grant
such request if, in Phone's good faith judgment, Phone determines that I am, in
fact, no longer an "affiliate" of Xxxxxxxx.xxx and such release would not
otherwise prevent the Merger from being accounted for as a "pooling of
interests."
Execution of this letter should not be considered an admission on my part
that I am an "affiliate" of Xxxxxxxx.xxx as described in the first paragraph of
this letter, or as a waiver of any rights I may have to object to any claim that
I am such an affiliate on or after the date of this letter.
Very truly yours,
_______________________
Name:
Accepted this day of , 2000 by
Xxxxx.xxx
By _______________________
Name:
Title:
