PARENT AFFILIATE AGREEMENT
THIS PARENT AFFILIATE AGREEMENT (this "Agreement") is dated as of
September 9, 1998, by and between FIRST CONSULTING GROUP, INC., a Delaware
corporation ("Parent"), INTEGRATED SYSTEMS CONSULTING GROUP, INC., a
Pennsylvania corporation (the "Company"), and the undersigned affiliate of
WHEREAS, Affiliate is a stockholder of Parent.
WHEREAS, Parent, Foxtrot Acquisition Sub, Inc., a Delaware corporation
and a wholly-owned subsidiary of Parent ("Merger Sub"), and the Company have
entered into an Agreement and Plan of Merger and Reorganization dated as of
September 9, 1998 (the "Merger Agreement"), providing for the merger of Merger
Sub with and into the Company (the "Merger"). The Merger Agreement contemplates
that, upon consummation of the Merger, (i) the holders of the common stock of
the Company ("Company Common Stock") will receive shares of common stock of
Parent ("Parent Common Stock") in exchange for their shares of Company Common
Stock and (ii) the Company will become a wholly-owned subsidiary of Parent.
WHEREAS, pursuant to the Merger Agreement it is a condition to
consummation of the Merger that Parent register shares of Parent Common Stock
issued to certain stockholders of the Company in connection with the Merger
pursuant to the terms of a Registration Rights Agreement in the form of Exhibit
I to the Merger Agreement.
WHEREAS, it is a condition to the consummation of the Merger pursuant
to the Merger Agreement that the independent accounting firms that audit the
annual financial statements of Parent and the Company will have delivered the
written concurrences with the conclusions of management of Parent and the
Company to the effect that the Merger will be accounted for as a pooling of
interests under Accounting Principles Board Opinion No. 16.
NOW, THEREFORE, in order to induce Parent and the Company to consummate
the transactions contemplated by the Merger Agreement, and for other valuable
consideration (the receipt and sufficiency of which are hereby acknowledged by
Affiliate), Affiliate hereby covenants and agrees as follows:
1. Representations and Warranties. Affiliate represents and warrants to
Parent as follows:
(a) Affiliate is the holder and "beneficial owner" (as defined
in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of the
number of shares of the Parent Common Stock set forth under Affiliate's
signature below (the "Parent Shares"), and Affiliate has good and valid title to
the Parent Shares, free and clear of any liens, pledges, security
interests, adverse claims, equities, options, proxies, charges, encumbrances or
restrictions of any nature.
(b) Affiliate has carefully read this Agreement, and has
discussed with Affiliate's own independent counsel to the extent Affiliate felt
necessary the limitations imposed on Affiliate's ability to sell, transfer or
otherwise dispose of the shares of Parent Common Stock. Affiliate fully
understands the limitations this Agreement places upon Affiliate's ability to
sell, transfer or otherwise dispose of the Parent Shares.
(c) Affiliate understands that the representations, warranties
and covenants set forth herein will be relied upon by Parent, the Company, and
their respective affiliates, counsel and accounting firms for purposes of
determining Parent's eligibility to account for the Merger as a "pooling of
interests," and that substantial losses and damages may be incurred by these
persons if Affiliate's representations, warranties or covenants are breached.
2. Covenants Related to Pooling of Interests. In accordance with SEC
Staff Accounting Bulletin No. 65 ("SAB 65"), during the period contemplated by
SAB 65, until the earlier of (i) Parent's public announcement of financial
results covering at least thirty (30) days of combined operations of Parent and
the Company or (ii) the Merger Agreement is terminated in accordance with its
terms, Affiliate will not sell, exchange, transfer, pledge, distribute, or
otherwise dispose of or grant any option, establish any "short" or
put-equivalent position with respect to or enter into any similar transaction
(through derivatives or otherwise) intended or having the effect, directly or
indirectly, to reduce its risk relative to any Parent shares. Parent may, at its
discretion, place a stock transfer notice consistent with the restrictions
referred to in this Section 2 with its transfer agent with respect to such
certificates, provided such restrictive legend shall be removed and/or notice
shall be countermanded promptly upon expiration of the necessity therefor at the
request of Affiliate.
3. Permitted Transfers. Notwithstanding anything to the contrary
contained in this Agreement, Affiliate may (i) transfer a "de minimis" amount of
Parent Common Stock as contemplated by SEC Staff Accounting Bulletin No. 76
contingent upon consultation with legal counsel for Parent as to whether such
transfer qualifies as "de minimis" and (ii) may (with the written consent of
Parent, not to be unreasonably withheld): (A) transfer shares of Parent Common
Stock in payment of the exercise price of options to purchase Parent Common
Stock; (B) transfer shares of Parent Common Stock to any organization qualified
under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, so
long as such organization has traditionally been supported by contributions from
the general public (as opposed to being supported largely by a specific donor);
and (C) transfer shares of Parent Common Stock to a trust established for the
benefit of Affiliate and/or for the benefit of one or more members of
Affiliate's family, or make a bona fide gift of Parent Common Stock to one or
more members of Affiliate's family, provided that in the case of a transfer or
gift pursuant to this clause (B) or (C), a transferee of such shares agrees to
be bound by the limitations set forth in this Agreement.
4. Specific Performance. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement was not
performed in accordance with its
specific terms or was otherwise breached. Affiliate agrees that, in the event of
any breach or threatened breach by Affiliate of any covenant or obligation
contained in this Agreement, Parent shall be entitled (in addition to any other
remedy that may be available to it, including monetary damages) to seek and
obtain (a) a decree or order of specific performance to enforce the observance
and performance of such covenant or obligation, and (b) an injunction
restraining such breach or threatened breach.
5. Independence of Obligations. The covenants and obligations of
Affiliate set forth in this Affiliate Agreement shall be construed as
independent of any other agreement or arrangement between Affiliate, on the one
hand, and Parent, on the other. The existence of any claim or cause of action by
Affiliate against Parent shall not constitute a defense to the enforcement of
any of such covenants or obligations against Affiliate.
6. Notices. Any notice or other communication required or permitted to
be delivered under this Agreement shall be in writing and shall be deemed
properly delivered, given and received when delivered (by hand, by registered
mail, by courier or express delivery service or by facsimile confirmation) to
the address or facsimile telephone number set forth beneath the name of such
party below (or to such other address or facsimile telephone number as such
party shall have specified in a written notice given to the other party):
if to Parent: First Consulting Group, Inc.
000 X. Xxxxx Xxxxxxxxx- 0xx Xxxxx
Xxxx Xxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx
Fax: (000) 000-0000
with a copy to: Xxxxxx Godward LLP
Five Palo Alto Square
0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Fax: (000) 000-0000
if to Affiliate: at the address or facsimile phone
number set forth below Affiliate's
signature on the signature page
7. Severability. If any provision of this Agreement or any part of any
such provision is held under any circumstances to be invalid or unenforceable in
any jurisdiction, then (a) such provision or part thereof shall, with respect to
such circumstances and in such jurisdiction, be deemed amended to conform to
applicable laws so as to be valid and enforceable to the fullest possible
extent, (b) the invalidity or unenforceability of such provision or part thereof
under such circumstances and i such jurisdiction shall not affect the validity
or enforceability of such provision or part thereof under any other
circumstances or in any other jurisdiction, and (c) the invalidity or
unenforceability of such provision or part thereof shall not affect the validity
or enforceability of the remainder of such provision or the validity or
enforceability of any other
provision of this Agreement. Each provision of this Agreement is separable from
every other provision of this Agreement, and each part of each provision of this
Agreement is separable from every other part of such provision.
8. Governing Law. This Agreement shall be construed in accordance with,
and governed in all respects by, the laws of the State of California (without
giving effect to principles of conflicts of laws).
9. Waiver. No failure on the part of Parent to exercise any power,
right, privilege or remedy under this Agreement, and no delay on the part of
Parent in exercising any power, right, privilege or remedy under this Agreement,
shall operate as a waiver of such power, right, privilege or remedy; and no
single or partial exercise of any such power, right, privilege or remedy shall
preclude any other or further exercise thereof or of any other power, right,
privilege or remedy. Parent shall no be deemed to have waived any claim arising
out of this Agreement, or any power, right, privilege or remedy under this
Agreement, unless the waiver of such claim, power, right, privilege or remedy is
expressly set forth in a written instrument duly executed and delivered on
behalf of Parent; and any such waiver shall not be applicable or have any effect
except in the specific instance in which it is given.
10. Captions. The captions contained in this Agreement are for
convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the construction or
interpretation of this Agreement.
11. Further Assurances. Affiliate shall execute and/or cause to be
delivered to Parent such instruments and other documents and shall take such
other actions as Parent may reasonably request to effectuate the intent and
purposes of this Agreement.
12. Entire Agreement. This Agreement, constitutes the entire agreement
between the parties with respect to the subject matter hereof and thereof and
supersede all prior agreements and understandings between the parties with
13. Non-Exclusivity. The rights and remedies of Parent hereunder are
not exclusive of or limited by any other rights or remedies which Parent may
have, whether at law, in equity, by contract or otherwise, all of which shall be
cumulative (and not alternative).
14. Amendments. This Agreement may not be amended, modified, altered,
or supplemented other than by means of a written instrument duly executed and
delivered on behalf of Parent and Affiliate.
15. Binding Nature. This Agreement will be binding upon Affiliate and
Affiliate's representatives, executors, administrators, estate, heirs,
successors and assigns, and shall inure to the benefit of Parent and its
successors and assigns.
16. Attorneys' Fees and Expenses. If any legal action or other legal
proceeding relating to the enforcement of any provision of this Agreement is
brought against Affiliate, the
prevailing party shall be entitled to recover reasonable attorneys' fees, costs
and disbursements (in addition to any other relief to which the prevailing party
may be entitled).
17. Assignment. This Agreement and all obligations of Affiliate
hereunder are personal to Affiliate and may not be transferred or delegated by
Affiliate at any time. Parent may freely assign any or all of its rights under
this Affiliate Agreement in whole or in part, to any other person or entity
without obtaining the consent or approval of Affiliate.
18. Survival. Each of the representations, warranties, covenants and
obligations contained in this Agreement shall survive the consummation of the
[THIS SPACE INTENTIONALLY LEFT BLANK]
The undersigned have executed this Agreement as of the date
first set forth above.
FIRST CONSULTING GROUP, INC.
INTEGRATED SYSTEMS CONSULTING
First Consulting Group, Inc., Stock
Beneficially owned by Affiliate:
_________________shares of Common
_________________shares of Common
Stock issuable upon exercise of