AGREEMENT AND PLAN OF MERGER
BY AND AMONG
▇▇▇▇▇▇ INTERNATIONAL DISCOVERY, INC.,
EMERGISOFT HOLDING, INC.
AND
EMS ACQUISITION CORP.
DATED AS OF MARCH 28, 2001
TABLE OF CONTENTS
RECITALS.......................................................................1
ARTICLE 1 DEFINITIONS..................................................1
ARTICLE 2 THE MERGER...................................................6
Section 2.01. Basic Transaction............................................6
Section 2.02. Effective Time; Closing......................................6
Section 2.03. Effect of the Merger.........................................7
Section 2.04. Articles of Incorporation; Bylaws............................7
Section 2.05. Directors and Officers.......................................7
Section 2.06. Conversion of Securities.....................................7
Section 2.07. Exchange of Certificates.....................................8
(a) Exchange Procedures..................................................8
(b) Distributions with Respect to Unexchanged Shares of ▇▇▇▇▇▇ Common
Stock................................................................8
(c) No Further Rights in Emergisoft Shares...............................8
(d) No Liability.........................................................8
(e) Lost Certificates....................................................8
(f) No Fractional Shares.................................................8
Section 2.08. Stock Transfer Books.........................................9
Section 2.09. Stock Options, Warrants and Convertible Notes................9
(a) Options..............................................................9
(b) Common Stock Warrants................................................9
(c) Convertible Notes...................................................10
Section 2.10. Dissenters' Rights..........................................10
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF EMERGISOFT................11
Section 3.01. Organization, Qualification and Corporate Power.............11
Section 3.02. Noncontravention............................................11
Section 3.03. Capitalization..............................................11
Section 3.04. Brokers' Fees...............................................12
Section 3.05. Title to Assets.............................................12
Section 3.06. Subsidiaries................................................12
Section 3.07. Financial Statements........................................12
Section 3.08. Undisclosed Liabilities.....................................13
Section 3.09. Legal Compliance............................................13
Section 3.10. Real Property...............................................13
Section 3.11. Tangible Assets.............................................13
Section 3.12. Powers of Attorney..........................................13
Section 3.13. Insurance...................................................13
Section 3.14. Litigation..................................................14
Section 3.15. Employees...................................................14
Section 3.16. Guaranties..................................................14
Section 3.17. Certain Business Practices..................................14
Section 3.18. Parachute Payments..........................................14
Section 3.19. Disclosure..................................................14
ARTICLE 4 REPRESENTATIONS AND WARRANTIES CONCERNING ▇▇▇▇▇▇ AND ITS
SUBSIDIARIES................................................14
Section 4.01. Organization, Qualification, and Corporate Power............15
Section 4.02. Capitalization..............................................15
Section 4.03. Noncontravention............................................15
Section 4.04. Brokers' Fees...............................................16
Section 4.05. Title to Assets.............................................16
Section 4.06. Subsidiaries................................................16
Section 4.07. SEC Filings; Financial Statements...........................16
Section 4.08. Absence of Certain Changes or Events........................17
Section 4.09. Undisclosed Liabilities.....................................18
Section 4.10. Legal Compliance............................................18
Section 4.11. Tax Matters.................................................19
Section 4.12. Real Property...............................................20
Section 4.13. Tangible Assets.............................................20
Section 4.14. Contracts...................................................20
Section 4.15. Notes and Accounts Receivable...............................21
Section 4.16. Powers of Attorney..........................................21
Section 4.17. Insurance...................................................21
Section 4.18. Litigation..................................................22
Section 4.19. Employees...................................................22
Section 4.20. Employee Benefits...........................................22
Section 4.21. Guaranties..................................................22
Section 4.22. Environment, Health, and Safety.............................22
Section 4.23. Certain Business Relationships With ▇▇▇▇▇▇..................23
Section 4.24. Change of Control...........................................23
Section 4.25. Certain Business Practices..................................24
Section 4.26. Parachute Payments..........................................24
Section 4.27. Information Statement.......................................24
Section 4.28. Change of Corporate Name....................................24
Section 4.29. Disclosure..................................................24
ARTICLE 5 PRE-CLOSING COVENANTS..........................................24
Section 5.01. General.....................................................24
Section 5.02. Notices and Consents........................................24
Section 5.03. Operation of Business.......................................24
Section 5.04. Preservation of Business....................................24
Section 5.05. Full Access.................................................25
Section 5.06. Notice of Developments......................................25
Section 5.07. Exclusivity.................................................25
Section 5.08. Break-Up Fee................................................27
Section 5.09. Filing of Current Report on Form 8-K........................27
Section 5.10. Composition of ▇▇▇▇▇▇ and Surviving Corporation Board and
Officers at Effective Time..................................27
Section 5.11. Change of Corporate Name....................................27
Section 5.12. Information Statement.......................................27
Section 5.13. Disclosure Document.........................................27
Section 5.14. Section 16(b) Board Approval................................27
Section 5.15. Confidentiality.............................................27
Section 5.16. Presentation to Stockholders................................28
ARTICLE 6 POST-CLOSING COVENANTS......................................28
Section 6.01. General.....................................................28
Section 6.02. Transition..................................................28
Section 6.03. Reports on Form 8-K.........................................28
ARTICLE 7 CONDITIONS TO OBLIGATION TO CLOSE...........................28
Section 7.01. Conditions to Obligation of Emergisoft......................28
Section 7.02. Conditions to Obligation of ▇▇▇▇▇▇..........................31
ARTICLE 8 TERMINATION.................................................31
Section 8.01. Termination of Agreement....................................31
Section 8.02. Effect of Termination.......................................32
ARTICLE 9 MISCELLANEOUS...............................................32
Section 9.01. Press Releases and Public Announcements.....................32
Section 9.02. No Third Party Beneficiaries................................32
Section 9.03. Entire Agreement............................................32
Section 9.04. Succession and Assignment...................................32
Section 9.05. Counterparts................................................32
Section 9.06. Headings....................................................32
Section 9.07. Notices.....................................................32
Section 9.08. Governing Law...............................................33
Section 9.09. Amendments and Waivers......................................33
Section 9.10. Severability................................................33
Section 9.11. Expenses....................................................33
Section 9.12. Construction................................................33
Section 9.13. Incorporation of Exhibits and Schedules.....................34
Section 9.14. Submission to Jurisdiction..................................34
Section 9.15. Survival....................................................34
Exhibit A - Form of Articles of Merger
Exhibit B - Form of Tax Opinion of ▇▇▇▇▇▇'▇ Counsel or Tax Accountants
Exhibit C - Form of Opinion of ▇▇▇▇▇▇'▇ Counsel
Exhibit D - Directors and Officers of ▇▇▇▇▇▇ as of the Effective Time
Exhibit E - Form of Emergisoft Purchaser Representation Letter
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER ("Agreement") entered into as of
March 28, 2001, by and among ▇▇▇▇▇▇ International Discovery, Inc., a Nevada
corporation ("▇▇▇▇▇▇"), Emergisoft Holding, Inc., a Delaware corporation
("Emergisoft"), and EMS Acquisition Corp., a Delaware corporation and a wholly
owned subsidiary of ▇▇▇▇▇▇ ("▇▇▇▇▇▇ Sub"). ▇▇▇▇▇▇, Emergisoft and ▇▇▇▇▇▇ Sub are
referred to collectively herein as the "Parties."
R E C I T A L S:
▇. ▇▇▇▇▇▇ Sub, upon the terms and subject to the conditions of this
Agreement and in accordance with the applicable sections of the Delaware General
Corporation Law ("Delaware Law"), will merge with and into Emergisoft (the
"Merger").
B. The Board of Directors of Emergisoft has determined that the Merger
is in the best interests of Emergisoft, has approved and adopted this Agreement
and the transactions contemplated hereby, and has recommended adoption of this
Agreement by the stockholders of Emergisoft.
C. The Board of Directors of ▇▇▇▇▇▇ and ▇▇▇▇▇▇ Sub have approved and
adopted this Agreement and the transactions contemplated hereby, and the Board
of Directors of ▇▇▇▇▇▇ Sub has recommended adoption of this Agreement to the
sole stockholder of ▇▇▇▇▇▇ Sub.
D. For federal Income Tax purposes, it is intended that the
Merger will qualify as a tax-free reorganization under the provisions of
Section 368(a) of the Code (as defined below).
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows.
ARTICLE 1
DEFINITIONS
"Acquisition Proposal" has the meaning set forth in Section 5.07.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"Affiliated Group" means any affiliated group within the meaning of
Code Section 1504 or any similar group defined under a similar provision of
state, local, or foreign law.
"Agreement" has the meaning set forth in the preface above.
"Articles of Merger" has the meaning set forth in Section 2.02.
"Business Day" means a day of the year in which banks are not required
or authorized to be closed in the City of Houston.
"CERCLA" means the United States Comprehensive Environmental Response,
Compensation, and Liability Act.
"Certificates" has the meaning set forth in Section 2.07.
"Cleanup" means any investigative, monitoring, cleanup, removal,
containment or other remedial or response action required by any Environmental
Law or Occupational Safety and Health Law. The terms "removal," "remedial," and
"response action" include the types of activities covered by CERCLA.
"Closing" has the meaning set forth in Section 2.02.
"Closing Date" has the meaning set forth in Section 2.02.
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" means any information concerning the
businesses and affairs of Emergisoft that is not already generally available to
the public.
"Contravene" - an act or omission would "Contravene" something if, as
the context requires:
(i) the act or omission would conflict with it,
violate it, result in a breach or violation of or failure to
comply with it, or constitute a default under it;
(ii) the act or omission would give any Governmental Body or
other Person the right to challenge, revoke, withdraw, suspend, cancel,
terminate, or modify it, to exercise any remedy or obtain any relief
under it, or to declare a default or accelerate the maturity of any
obligation under it; or
(iii) the act or omission would result in the creation of an
Encumbrance on the stock or assets of the subject company.
"Controlled Group of Corporations" has the meaning set forth in Code
Section 1563.
"Deferred Intercompany Transaction" has the meaning set forth in
Regulation Section 1.1502-13.
"Delaware Law" has the meaning set forth in the Recitals above.
"Disclosure Document" has the meaning set forth in Section 5.13.
"Effective Time" has the meaning set forth in Section 2.02.
"Emergisoft" has the meaning set forth in the preface above.
"Emergisoft Audited Statements" shall mean Emergisoft's audited
financial statements as of and for the period ended December 31, 1999.
"Emergisoft Disclosure Schedule" has the meaning set forth in Article
3.
"Emergisoft Common Stock" means the common stock, par value $.001 per
share, of Emergisoft.
"Employee Benefit Plan" means any (a) nonqualified deferred
compensation or retirement plan or arrangement which is an Employee Pension
Benefit Plan, (b) qualified defined contribution retirement plan or arrangement
which is an Employee Pension Benefit Plan, (c) qualified defined benefit
retirement plan or arrangement which is an Employee Pension Benefit Plan
(including any Multiemployer Plan), or (d) Employee Welfare Benefit Plan,
cafeteria plan as defined in Section 125 of the Code, or material fringe benefit
plan or program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA
Section 3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA
Section 3(1).
"Encumbrance" means any charge, claim, mortgage, servitude, easement,
right of way, community or other marital property interest, covenant, equitable
interest, lien, option, pledge, security interest, preference, priority, right
of first refusal, or similar restriction.
"Environment" means soil, land surface or subsurface strata, surface
waters (including navigable water and ocean waters), groundwaters, drinking
water supply, stream sediments, ambient air (including indoor air), plant and
animal life, and any other similar medium or natural resource.
"Environmental, Health, and Safety Liabilities" means any cost,
damages, expense, Liability, or other responsibility arising from or under
Environmental Law or Occupational Safety and Health Law, including those
consisting of or relating to:
(i) any environmental, health, or safety matter or
condition (including on-site or off-site contamination,
occupational safety and health, and regulation of any chemical
substance or product);
(ii) any fine, penalty, judgment, award, settlement,
proceeding, damages, loss, claim, demand and response, investigative,
monitoring, remedial, or inspection cost or expense arising under
Environmental Law or Occupational Safety and Health Law;
(iii) financial responsibility under any Environmental Law or
Occupational Safety and Health Law for Cleanup costs or corrective
action, (whether or not such Cleanup has been required or requested by
any Governmental Body or other Person) and for any natural resource
damage; or
(iv) any other compliance, corrective, or remedial measures
required under any Environmental Law or Occupational Safety and Health
Law.
"Environmental Law" means CERCLA and any other Legal Requirement that
requires or relates to:
(i) advising appropriate Governmental Bodies, employees, or
the public of intended or actual Releases of pollutants or hazardous
substances or materials, violations of discharge limits or other
prohibitions and the commencement of activities, such as resource
extraction or construction, that could have significant impact on the
Environment;
(ii) preventing or reducing to acceptable levels the
Release of pollutants or hazardous substances or materials into the
Environment;
(iii) reducing the quantities, preventing the
Release, or minimizing the hazardous characteristics of wastes
that are generated;
(iv) assuring that products are designed, formulated,
packaged, and used so that they do not present unreasonable risks to
human health or the Environment when used or disposed of;
(v) protecting resources, species, or ecological amenities;
(vi) reducing to acceptable levels the risks inherent
in the transportation of hazardous substances, pollutants, oil, or
other potentially harmful substances;
(vii) Cleanup of pollutants that have been Released,
preventing the threat of Release, or paying the costs of such Cleanup
or prevention; or
(viii) making responsible parties pay private parties, or
groups of them, for damages done to their health or the Environment, or
permitting self-appointed representatives of the public interest to
recover for injuries done to public assets.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Ratio" has the meaning set forth in Section 2.06(a).
"Facility" means any Real Property or tangible personal property
interest owned or operated by ▇▇▇▇▇▇ or its Subsidiaries. For purposes of
Section 4.28 and the definition of "Hazardous Activity," the term also includes
any Real Property or tangible personal property interest formerly owned or
operated by ▇▇▇▇▇▇ or its Subsidiaries or any predecessor Person.
"Fiduciary" has the meaning set forth in ERISA Section 3(21).
"14(F) Information Statement" has the meaning set forth in Section
5.12.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"Good Title" means good and defensible title which is (i) evidenced by
an instrument or instruments filed of record in accordance with the conveyance
and recording laws of the applicable jurisdiction and is sufficient against
competing claims of bona fide purchasers for value without notice and (ii) free
and clear of all liens, security interest, claims, infringements, and other
burdens of encumbrances.
"Governmental Body" means any:
(i) nation, region, state, county, city, town, village,
district, or other jurisdiction;
(ii) federal, state, local, municipal, foreign or other
government;
(iii) governmental or quasi-governmental authority of any
nature (including any governmental agency, branch, department, or other
entity and any court or other tribunal);
(iv) multinational organization;
(v) body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, policy, regulatory,
or taxing authority or power of any nature; and
(vi) official of any of the foregoing.
"Hazardous Activity" means the distribution, generation, handling,
importing, management, manufacturing, processing, production, refinement,
Release, storage, transfer, transportation, treatment, or use (including any
withdrawal or other use of groundwater) of Hazardous Materials in, on, under,
about, or from any of the Facilities or any part thereof into the Environment,
and any other act, business, operation, or thing that increases the danger, or
risk of danger, or poses an unreasonable risk of harm to individuals or property
on or off the Facilities, or that may affect the value of any of the Facilities
or ▇▇▇▇▇▇ and its Subsidiaries.
"Hazardous Materials" means any waste or other substance that is
listed, defined, designated, or classified as, or otherwise determined to be,
hazardous, radioactive, or toxic or a pollutant or a contaminant under or
pursuant to any Environmental Law, including any admixture or solution thereof,
and specifically including petroleum and all derivatives thereof or synthetic
substitutes therefor and asbestos or asbestos-containing materials.
"Income Taxes" means all income and profits Taxes, capital taxes,
franchise taxes and similar Taxes based on income, profits or capital (including
any Taxes in lieu of such income or profits Taxes) imposed by any Federal,
state, local or foreign governmental agency, whether in the form of assessments
in the nature of Taxes or otherwise, together with all interest, penalties and
additions imposed with respect to (a) such Taxes or (b) the late filing or
nonfiling of returns relating to such Taxes.
"Information Statement" has the meaning set forth in Section 4.27.
"Intellectual Property" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith, (c) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith, (d) all mask works and all
applications, registrations, and renewals in connection therewith, (e) all trade
secrets and confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information, and business and
marketing plans and proposals), (f) all computer software (including data and
related documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium).
"Knowledge" means actual knowledge after reasonable investigation.
"Legal Requirement" means any constitution, law, statute, treaty, rule,
regulation, ordinance, binding case law or principle of common law, notice,
approval or Order of any Governmental Body, and any Contract with any
Governmental Body relating to compliance with any of the foregoing.
"Merger" has the meaning set forth in the Recitals above.
"Multiemployer Plan" has the meaning set forth in ERISA Section 3(37).
"Nevada Law" means Nevada Business Corporation Law.
"Occupational Safety and Health Law" means any Legal Requirement
designed to provide safe and healthful working conditions and to reduce
occupational safety and health hazards, and any program, whether governmental or
private (such as those promulgated or sponsored by industry associations and
insurance companies), designed to provide safe and healthful working conditions.
"Order" means any order, injunction, judgment, decree, ruling,
assessment or arbitration award of any Governmental Body or arbitrator.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency). In the case of Emergisoft, Ordinary Course of Business includes any
private offering and sale of securities commenced prior to the date of this
Agreement.
"OTC" means the OTC Bulletin Board.
"Outstanding Emergisoft Shares" means all Emergisoft Common Stock
issued and outstanding immediately prior to the Effective Time.
"▇▇▇▇▇▇" has the meaning set forth in the preface above.
"▇▇▇▇▇▇ Common Stock" means the common stock, par value $.001 per
share, of ▇▇▇▇▇▇.
"▇▇▇▇▇▇ Disclosure Schedule" has the meaning set forth in Article 4.
"▇▇▇▇▇▇ Sub" has the meaning set forth in the preface above.
"Parties" has the meaning set forth in the preface above.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"Real Property" means all real property of ▇▇▇▇▇▇ and its Subsidiaries,
including all parcels and tracts of land in which ▇▇▇▇▇▇ or its Subsidiaries has
a fee simple estate or a leasehold estate, and all improvements, easements and
appurtenances thereto.
"Release" means any spilling, leaking, emitting, discharging,
depositing, escaping, leaching, dumping, or other releasing into the
Environment, whether intentional or unintentional.
"Reportable Event" has the meaning set forth in ERISA Section 4043.
"SEC" means the Securities and Exchange Commission.
"SEC Reports" has the meaning set forth in Section 4.07(a).
"Secretary" has the meaning set forth in Section 2.02.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than (a) mechanic's, materialmen's,
and similar liens, (b) liens for Taxes not yet due and payable, and (c) purchase
money liens and liens securing rental payments under capital lease arrangements.
"Subsidiary" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
"Surviving Corporation" has the meaning set forth in Section 2.01.
"Taxes" shall mean all excise, real and personal property, sales, use,
customs duties, payroll, withholding, capital or franchise (based on capital
and/or activity), estimated and other taxes, including Income Taxes, imposed by
a federal, state, local or foreign governmental agency, whether in the form of
assessments which are in the nature of Taxes or otherwise, together with all
interest, penalties and additions imposed with respect to such amounts.
"Tax Returns" means returns, declarations, reports, claims for refund,
information returns or other documents (including any related or supporting
schedules, statements or information) filed or required to be filed in
connection with the determination, assessment or collection of Taxes of any
Party or the administration of any laws, regulations or administrative
requirements relating to any Taxes.
"Threatened" means an action or matter would be considered to have been
"Threatened" if a demand or statement has been made (whether orally or in
writing) or a notice has been given (whether orally or in writing), or any other
event has occurred or any other circumstances exist, that would lead a prudent
Person to conclude that such action or matter is likely to be asserted,
commenced, taken or otherwise pursued in the future.
ARTICLE 2
THE MERGER
Section 2.01. Basic Transaction. Upon the terms and subject to the
conditions set forth in this Agreement and in accordance with Delaware Law, at
the Effective Time, ▇▇▇▇▇▇ Sub shall be merged with and into Emergisoft. As a
result of the Merger, the outstanding shares of capital stock of ▇▇▇▇▇▇ Sub and
Emergisoft shall be converted or canceled in the manner provided in Section 2.06
of this Agreement, the separate corporate existence of ▇▇▇▇▇▇ Sub shall cease,
and Emergisoft will be the surviving corporation in the Merger (the "Surviving
Corporation").
Section 2.02. Effective Time; Closing. As promptly as practicable after
Closing (defined below), and in no event later than the first Business Day
following the satisfaction or, if permissible, waiver of the conditions set
forth in Article 7 (or such other date as may be agreed in writing by each of
the Parties), the Parties shall cause the Merger to be consummated by filing a
certificate of merger, substantially in the form of Exhibit A attached hereto
(collectively, the "Articles of Merger"), with the Secretary of State of the
State of Delaware (the "Secretary") in such form as is required by, and executed
in accordance with the relevant provisions of, Delaware Law. The term "Effective
Time" means the date and time of the filing of the Articles of Merger with the
Secretary (or such later time as may be agreed in writing by each of the Parties
and specified in the Articles of Merger). Immediately prior to the filing of the
Articles of Merger, a closing (the "Closing") will be held at the Houston, Texas
offices of Sonfield & Sonfield at 9:00 a.m., local time, on the first Business
Day after the date on which the last of the conditions to Closing set forth in
Article 7 hereof (other than conditions to be satisfied at the Closing) are
fulfilled or waived by the appropriate Party, as the case may be (or such other
time, date or place as the Parties may agree) (the "Closing Date").
Section 2.03. Effect of the Merger. At the Effective Time, the effect
of the Merger shall be as provided in the applicable provisions of Delaware Law.
Section 2.04. Articles of Incorporation; Bylaws.
(a) At the Effective Time, the certificate of incorporation of
Emergisoft, as in effect immediately prior to the Effective Time, shall
be the articles of incorporation of the Surviving Corporation, until
thereafter amended as provided therein or by applicable law.
(b) At the Effective Time, the bylaws of Emergisoft, as in
effect immediately prior to the Effective Time, shall be the bylaws of
the Surviving Corporation until thereafter amended as provided therein
or by applicable law.
Section 2.05. Directors and Officers. The directors of Emergisoft
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, to hold office in accordance with the certificate of
incorporation and bylaws of the Surviving Corporation until a successor is
elected or appointed and has qualified or until the earliest of such director's
death, resignation, removal or disqualification, and the officers of Emergisoft
immediately prior to the Effective Time shall be the initial officers of the
Surviving Corporation, in each case until their respective successors are duly
elected or appointed and qualified, or as otherwise provided in the bylaws of
the Surviving Corporation.
Section 2.06. Conversion of Securities. At the Effective Time, by
virtue of the Merger and without any action on the part of ▇▇▇▇▇▇ Sub or
Emergisoft:
(a) Each share of common stock, $.001 par value, of Emergisoft (the
"Emergisoft Common Stock") issued and outstanding immediately prior to
the Effective Time shall be converted into the right to receive one
fully paid, non assessable share of ▇▇▇▇▇▇ Common Stock (the "Exchange
Ratio").
(b) In any event, if between the date of this Agreement and the
Effective Time, the outstanding shares of ▇▇▇▇▇▇ Common Stock and/or
Emergisoft Common Stock shall have been changed into a different number
of shares or a different class, by reason of any declared or completed
stock dividend, subdivision, reclassification, recapitalization, split,
combination or exchange of shares, the Exchange Ratio shall be
correspondingly adjusted to the extent appropriate to reflect such
stock dividend, subdivision, reclassification, recapitalization, split,
combination or exchange of shares. Upon surrender of the certificate(s)
representing Emergisoft Shares in accordance with Section 2.07, such
holder of Emergisoft Shares shall be entitled to receive the number of
shares of ▇▇▇▇▇▇ Common Stock determined by the Exchange Ratio.
(c) From and after the Effective Time, all Emergisoft Shares shall no
longer be outstanding and shall automatically be canceled and retired
and shall cease to exist, and each certificate previously representing
any such shares shall thereafter represent the right to receive the
number of shares of ▇▇▇▇▇▇ Common Stock into which such Emergisoft
Shares were converted in the Merger, upon surrender of the
certificate(s) representing such shares in accordance with Section
2.07. Certificates previously representing shares of Emergisoft Shares
shall be exchanged for the number of shares of ▇▇▇▇▇▇ Common Stock
determined by the Exchange Ratio upon the surrender of such
certificates in accordance with the provisions of Section 2.07, without
interest.
(d) Any Emergisoft Shares held in the treasury of Emergisoft and any
shares of Emergisoft Shares owned by ▇▇▇▇▇▇ or any direct or indirect
wholly owned subsidiary of ▇▇▇▇▇▇ immediately prior to the Effective
Time shall be canceled and extinguished without any conversion thereof
and no payment shall be made with respect thereto.
(e) Each share of common stock, par value $.001 per share, of ▇▇▇▇▇▇
Sub issued and outstanding immediately prior to the Effective Time
shall be converted into and become one validly issued, fully paid and
nonassessable share of common stock of the Surviving Corporation at the
Effective Time, and the Surviving Corporation thereafter shall not have
other equity securities.
Section 2.07. Exchange of Certificates.
(a) Exchange Procedures. At the Closing, each holder of record
of a certificate or certificates (the "Certificates") which immediately
prior to the Effective Time represented Outstanding Emergisoft Shares
shall tender such Certificates to ▇▇▇▇▇▇ or its designated transfer or
exchange agent with such other documents as ▇▇▇▇▇▇ may reasonably
request, including a stock power. Upon surrender of a Certificate for
cancellation to ▇▇▇▇▇▇ together with such duly executed documents as
may be required, the holder of such Certificate shall be entitled to
receive in exchange therefor the shares of ▇▇▇▇▇▇ Common Stock which
such holder has the right to receive in respect of Emergisoft Shares
formerly represented by such Certificates, together with any dividends
or other distributions to which such holder is entitled pursuant to
Section 2.07(b). The surrendered Certificates shall then be marked
canceled. In the event of a transfer of ownership of Emergisoft Shares
which is not registered in the transfer records of Emergisoft, the
shares of ▇▇▇▇▇▇ Common Stock may be issued in accordance with Article
2 to the transferee if the Certificates representing such shares of
Emergisoft Shares are presented to ▇▇▇▇▇▇, accompanied by all documents
required to evidence and effect such transfer and by evidence that any
applicable stock transfer taxes have been paid. Until surrendered as
contemplated by this Section 2.07(a), each Certificate shall be deemed
at any time after the Effective Time to represent only the right to
receive upon such surrender the number of shares of ▇▇▇▇▇▇ Common Stock
determined by the Exchange Ratio, and any dividends or other
distributions to which such holder is entitled pursuant to Section
2.07(b).
(b) Distributions with Respect to Unexchanged Shares of ▇▇▇▇▇▇
Common Stock. No dividends or other distributions declared or made
after the Effective Time with respect to ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇ Common
Stock evidenced thereby until the holder of such Certificate shall
surrender such Certificate. Subject to the effect of applicable laws,
following surrender of any such Certificate, there shall be paid to the
holder of such Certificate, in addition to the shares of ▇▇▇▇▇▇ Common
Stock as provided in Section 2.07(a), without interest, the amount of
dividends or other distributions with a record date after the Effective
Time theretofore paid with respect to the whole shares of ▇▇▇▇▇▇ Common
Stock evidenced by such Certificate. There shall be paid to the holder
of the certificates representing whole shares of ▇▇▇▇▇▇ Common Stock
issued in exchange therefor, without interest: (i) promptly, the amount
of dividends or other distributions with a record date after the
Effective Time theretofore paid with respect to such whole shares of
▇▇▇▇▇▇ 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 surrender and a payment date occurring
after surrender, payable with respect to such whole shares of ▇▇▇▇▇▇
Common Stock.
(c) No Further Rights in Emergisoft Shares. The shares of
▇▇▇▇▇▇ Common Stock issued or paid upon conversion of the Outstanding
Emergisoft Shares in accordance with the terms hereof (including any
cash paid or other distributions pursuant to Sections 2.07(b)) shall be
deemed to have been issued or paid in full satisfaction of all rights
pertaining to such Emergisoft Shares.
(d) No Liability. Neither ▇▇▇▇▇▇ nor the Surviving Corporation
shall be liable to Emergisoft for any shares of ▇▇▇▇▇▇ Common Stock (or
dividends or distributions with respect thereto) which remain
undistributed to the holders of Emergisoft Shares for one year after
the Effective Time and are delivered to a public official pursuant to
any applicable abandoned property, escheat or similar law.
(e) Lost Certificates. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact
by the Emergisoft stockholder claiming such Certificate to be lost,
stolen or destroyed and, if required by the Surviving Corporation, the
posting by such Emergisoft stockholder of a bond in such reasonable
amount as the Surviving Corporation may direct as indemnity against any
claim that may be made against it with respect to such Certificate,
▇▇▇▇▇▇ will issue in exchange for such lost, stolen or destroyed
Certificate the number of shares of ▇▇▇▇▇▇ Common Stock determined by
the Exchange Ratio, and unpaid dividends and distributions on the
shares of ▇▇▇▇▇▇ Common Stock deliverable in respect thereof pursuant
to this Agreement.
(f) No Fractional Shares. No certificates or scrip evidencing
fractional shares of ▇▇▇▇▇▇ Common Stock shall be issued upon the
surrender for exchange of Certificates, but in lieu thereof each
stockholder of Emergisoft who would otherwise be entitled to receive a
fraction of a share of ▇▇▇▇▇▇ Common Stock, after aggregating all
fractional shares of ▇▇▇▇▇▇ Common Stock which such holder would be
entitled to receive under Section 2.06, shall receive the next larger
number of whole shares of ▇▇▇▇▇▇ Common Stock to which such holder
would otherwise be entitled.
Section 2.08. Stock Transfer Books. At the Effective Time, the stock
transfer books of Emergisoft shall be closed and there shall be no further
registration of transfers of shares of Emergisoft Shares thereafter on the
records of Emergisoft. On or after the Effective Time, any Certificates
presented to ▇▇▇▇▇▇ for any reason shall be converted into the number of shares
of ▇▇▇▇▇▇ Common Stock determined by the Exchange Ratio, and any dividends or
other distributions to which they are entitled pursuant to Section 2.07(b) in
accordance with the terms of this Agreement.
Section 2.09. Stock Options, Warrants and Convertible Notes.
(a) Options. At the Effective Time, each then outstanding
option to purchase shares of Emergisoft Common Stock granted by
Emergisoft (collectively, the "Emergisoft Options"), shall, as of the
Effective Time, automatically and without any action on the part of the
holder thereof, cease to represent a right to acquire shares of
Emergisoft Common Stock and be converted into an option to acquire
▇▇▇▇▇▇ Common Stock. The holders of such Emergisoft Options shall
continue to have, and be subject to, the same terms and conditions set
forth in the stock option agreements pursuant to which such Emergisoft
Options were issued as in effect immediately prior to the Effective
Time, except that:
(i) such Emergisoft Options shall be exercisable for
that number of whole shares of ▇▇▇▇▇▇ Common Stock equal to
the product of the number of shares of Emergisoft Common Stock
covered by the Emergisoft Option immediately prior to the
Effective Time multiplied by the Exchange Ratio rounded up to
the nearest whole number of shares of ▇▇▇▇▇▇ Common Stock; and
(ii) the per share exercise price for the shares of
▇▇▇▇▇▇ Common Stock issuable upon the exercise of such assumed
Emergisoft Option shall be equal to the quotient determined by
dividing the exercise price per share of Emergisoft Common
Stock specified for such Emergisoft Option under the
applicable stock option agreement in effect immediately prior
to the Effective Time by the Exchange Ratio, rounding the
resulting exercise price down to the nearest whole cent.
At the Effective Time, ▇▇▇▇▇▇ shall reserve for issuance the number of
shares of ▇▇▇▇▇▇ Common Stock that will become issuable upon the
exercise of the Emergisoft Options pursuant to this Section 2.09.
Notwithstanding anything to the contrary, nothing herein shall require
▇▇▇▇▇▇ to issue fractional shares of ▇▇▇▇▇▇ Common Stock upon the
exercise of any Emergisoft Option. The adjustment provided herein with
respect to any options that are "incentive options" (as defined in
Section 422 of the Code) shall be and is intended to be effectuated in
a manner which is consistent with Section 424(a) of the Code. Nothing
in this Section 2.09 shall affect the schedule of vesting (or the
acceleration thereof) with respect to the Emergisoft Options to be
converted as provided in this Section 2.09. Except as set forth above,
the duration and other terms of the new option shall be the same as the
original option except that all references to Emergisoft or any of its
subsidiaries shall be deemed to be references to ▇▇▇▇▇▇. If and to the
extent required by the terms of the plans governing the original
options or pursuant to the terms of any agreements evidencing grants
thereunder, Emergisoft shall use its reasonable efforts to obtain the
consent of each holder of outstanding options to the treatment provided
in this subparagraph (a) of this Section 2.09.
(b) Common Stock Warrants. At the Effective Time, each warrant
(collectively, the "Common Stock Warrants") granted by Emergisoft to
purchase shares of Emergisoft Common Stock that is outstanding and
unexercised immediately prior thereto shall cease to represent a right
to acquire shares of Emergisoft Common Stock and shall be converted
automatically into a warrant to purchase shares of ▇▇▇▇▇▇ Common Stock
in an amount and at an exercise price determined as provided below (and
otherwise subject to the terms of the agreements evidencing such
warrants):
(i) the number of shares of ▇▇▇▇▇▇ Common Stock to be
subject to the new warrant shall be equal to the product of
the number of shares of Emergisoft Common Stock subject to the
original Common Stock Warrant and the Exchange Ratio, provided
that any fractional shares of ▇▇▇▇▇▇ Common Stock resulting
from such multiplication shall be rounded up to the nearest
whole share; and
(ii) the exercise price per share of ▇▇▇▇▇▇ Common
Stock under the new warrant shall be equal to the exercise
price per share of Emergisoft Common Stock under the original
Common Stock Warrant divided by the Exchange Ratio, provided
that such exercise price shall be rounded down to the nearest
whole cent.
At the Effective Time, ▇▇▇▇▇▇ shall reserve for issuance the number of
shares of ▇▇▇▇▇▇ Common Stock that will become issuable upon the
exercise of the Emergisoft Warrants pursuant to this Section 2.09.
Notwithstanding anything to the contrary, nothing herein shall require
▇▇▇▇▇▇ to issue fractional shares of ▇▇▇▇▇▇ Common Stock upon the
exercise of any Emergisoft Warrants. Except as set forth in clauses (i)
and (ii) of this subparagraph (b) of this Section 2.09, the expiration
date and other terms of the new warrant shall be the same as the
original warrant except that all references to Emergisoft or any of its
subsidiaries shall be deemed to be references to ▇▇▇▇▇▇. If and to the
extent required by the terms of the Common Stock Warrants, Emergisoft
shall use its reasonable efforts to obtain the consent of each holder
of such warrants to the treatment thereof provided in this subparagraph
(b) of this Section 2.09.
(c) Convertible Notes. At the Effective Time, each then
outstanding Emergisoft convertible note (collectively, the "Emergisoft
Notes"), shall, as of the Effective Time, automatically and without any
action on the part of the holder thereof, be assumed by ▇▇▇▇▇▇. The
holders of such Emergisoft Notes shall continue to have, and be subject
to, the same terms and conditions set forth in the Emergisoft Notes as
in effect immediately prior to the Effective Time, except that such
Emergisoft Notes shall be convertible into that number of whole shares
of ▇▇▇▇▇▇ Common Stock equal to the product of the number of shares of
Emergisoft Common Stock into which such notes were convertible
immediately prior to the Effective Time multiplied by the Exchange
Ratio rounded up to the nearest whole number of shares of ▇▇▇▇▇▇ Common
Stock. At the Effective Time, ▇▇▇▇▇▇ shall reserve for issuance the
number of shares of ▇▇▇▇▇▇ Common Stock that will become issuable upon
conversion of the Emergisoft Notes pursuant to this Section 2.09.
Notwithstanding anything to the contrary, nothing herein shall require
▇▇▇▇▇▇ to issue fractional shares of ▇▇▇▇▇▇ Common Stock upon
conversion of any Emergisoft Note. If and to the extent required by the
terms of the Emergisoft Note, Emergisoft shall use its reasonable
efforts to obtain the consent of each holder of such warrants to the
treatment thereof provided in subparagraph (c) of this Section 2.09.
Section 2.10. Dissenters' Rights.
(a) Notwithstanding the provisions of Section 2.01 or any
other provision in this Agreement to the contrary, each share of
Emergisoft Common Stock issued and outstanding immediately prior to the
Effective Time and held by stockholders who have not voted such shares
in favor of the Merger or consented thereto in writing and qualify
under and have complied with all of the provisions of Section 262 of
the Delaware Law (the "Appraisal Provisions") ("Dissenting Shares")
shall not, by virtue of the Merger, be converted into ▇▇▇▇▇▇ Common
Stock. The holders of such stock shall be entitled to receive payment
of the appraised value therefor in accordance with the Appraisal
Provisions; provided, however, that if any holder of Dissenting Shares
(i) subsequently delivers a written withdrawal of his demand for
appraisal rights (with the written consent of the Surviving Corporation
if such written withdrawal is not made after the Effective Time within
the time periods required by the provisions of the Appraisal
Provisions), or (ii) fails to perfect dissenter's rights as provided in
the Appraisal Provisions, or (iii) if neither any holder of Dissenting
Shares nor the Surviving Corporation has filed a petition demanding a
determination of the value of Dissenting Shares within the time
provided in the Appraisal Provisions, the Dissenting Shares held by
such holder or holders (as the case may be) shall thereupon be deemed
to have been converted into and to have become exchangeable for, as of
the Effective Time, the right to receive ▇▇▇▇▇▇ Common Stock as
provided in this Agreement without any interest thereon.
(b) Emergisoft shall give ▇▇▇▇▇▇ prompt notice of any written
demands for appraisal, withdrawal of demands for appraisal and any
other instruments served pursuant to the Appraisal Provisions.
Emergisoft agrees that prior to the Effective Time, it will not,
without the prior written consent of ▇▇▇▇▇▇, voluntarily make or agree
to make any payment with respect to, or settle or offer to settle, any
such demands.
(c) Each holder of Dissenting Shares who becomes entitled,
pursuant to the Appraisal Provisions, to payment for his or its
Dissenting Shares shall receive payment therefor after the Effective
Time from the Surviving Corporation (but only after the amount thereof
shall have been agreed upon or finally determined pursuant to such
provisions) and such shares shall be canceled.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF EMERGISOFT
Emergisoft represents and warrants to ▇▇▇▇▇▇ that the statements
contained in this Article 3 are correct and complete in all material respects as
of the date of this Agreement and will be correct and complete in all material
respects as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Article 3),
except as set forth in the disclosure schedule delivered by Emergisoft to ▇▇▇▇▇▇
on the date hereof and initialed by the Parties (the "Emergisoft Disclosure
Schedule"). Nothing in the Emergisoft Disclosure Schedule shall be deemed
adequate to disclose an exception to a representation or warranty made herein,
however, unless the Emergisoft Disclosure Schedule identifies the exception with
reasonable particularity, describes the relevant facts in reasonable detail and
identifies the subsection of this Article 3 to which the exception applies.
Without limiting the generality of the foregoing, the mere listing (or inclusion
of a copy) of a document or other item shall not be deemed adequate to disclose
an exception to a representation or warranty made herein (unless the
representation or warranty has to do with the existence of the document or other
item itself). The Emergisoft Disclosure Schedule will be arranged in paragraphs
corresponding to the lettered and numbered paragraphs contained in this Article
3.
Section 3.01. Organization, Qualification and Corporate Power.
Emergisoft is a corporation duly organized, validly existing, and in good
standing under the laws of Delaware. Each of Emergisoft and its Subsidiaries is
duly authorized to conduct business and is in good standing under the laws of
each jurisdiction where such qualification is required. Each of Emergisoft and
its Subsidiaries has full corporate power and authority and all licenses,
permits and authorizations necessary to carry on the businesses in which it is
engaged, to own and use the properties owned and used by it and to execute and
deliver this Agreement and to perform its obligations hereunder and to
consummate the Merger and the transactions contemplated thereby. Section 3.01 of
the Emergisoft Disclosure Schedule lists the directors and officers of
Emergisoft and its Subsidiaries. Except as set forth on Section 3.01 of the
Emergisoft Disclosure Schedule, each of Emergisoft and its Subsidiaries does not
have and never has had any equity or ownership interests in any corporation,
partnership, joint venture, limited liability company or other legal entity. The
execution and delivery of this Agreement and the other agreements, documents and
instruments executed in connection herewith to which Emergisoft is a party and
the consummation by Emergisoft of the transactions contemplated hereby have been
duly and validly authorized by all necessary corporate action and no other
corporate proceedings on the part of Emergisoft are necessary to authorize this
Agreement or such other agreements, documents and instruments or to consummate
the Merger and the transactions contemplated thereby (other than the filing and
recordation of the Articles of Merger with the Secretary as required by Delaware
Law). The Agreement and the other agreements, documents and instruments executed
in connection herewith to which Emergisoft is a party has been duly and validly
executed and delivered by Emergisoft and constitute a legal, valid and binding
obligation of Emergisoft, enforceable against Emergisoft in accordance with
their respective terms. The minute books (containing the records of meetings of
the stockholders, the board of directors, and any committees of the board of
directors), the stock certificate books, and the stock record books of each of
Emergisoft and its Subsidiaries are correct and complete. None of Emergisoft and
its Subsidiaries is in default under or in violation of any provision of its
charter or bylaws.
Section 3.02. Noncontravention. Neither the execution and the delivery
of this Agreement, nor the consummation of the transactions contemplated hereby,
will (a) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Emergisoft is subject or any provision of
its charter or by-laws or (b) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
Emergisoft is a party or by which it is bound or to which any of its assets is
subject (or result in the imposition of any Security Interest upon any of its
assets). None of Emergisoft and its Subsidiaries needs to give any notice to,
make any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement, other than the filing and
recordation of the Articles of Merger with the Secretary.
Section 3.03. Capitalization. The entire authorized capital stock of
Emergisoft consists of 100,000,000 Emergisoft Common Stock shares, of which
46,155,110 Emergisoft Common Stock shares are issued and outstanding and no
Emergisoft Common Stock shares are held in treasury. All of the issued and
outstanding Emergisoft Shares have been duly authorized, are validly issued,
fully paid, and nonassessable. Except as set forth in Section 3.03(a) of the
Emergisoft Disclosure Schedule, there are no outstanding or authorized options,
warrants, purchase rights, subscription rights, conversion rights, exchange
rights, or other contracts or commitments that could require Emergisoft to
issue, sell, or otherwise cause to become outstanding any of its capital stock.
There are no outstanding or authorized stock appreciation, phantom stock, profit
participation, or similar rights with respect to Emergisoft. Except as set forth
in Section 3.03(b) of the Emergisoft Disclosure Schedule, there are no voting
trusts, proxies, or other agreements or understandings with respect to the
voting of the capital stock of Emergisoft. Emergisoft has reserved an aggregate
of 10,000,000 Emergisoft Common Stock shares for issuance pursuant to the
exercise of the outstanding options, warrants and other convertible securities
listed in Section 3.03(a) of the Emergisoft Disclosure Schedule. Section 3.03(a)
of the Emergisoft Disclosure Schedule shall set forth the date of grant,
exercise price, number of shares of Emergisoft Common Stock exercisable for and
the expiration date for each outstanding option, warrant and other convertible
security of Emergisoft. Section 3.03(b) of the Emergisoft Disclosure Schedule
shall set forth each outstanding option, warrant and other convertible security
of Emergisoft that is subject to registration rights.
Section 3.04. Brokers' Fees. None of Emergisoft and its
Subsidiaries has any liability or obligation to pay any fees or commissions to
any broker, finder, or agent with respect to the transactions contemplated
by this Agreement.
Section 3.05. Title to Assets. Except as set forth in Section 3.05 of
the Emergisoft Disclosure Schedule, Emergisoft and its Subsidiaries have good
and marketable title to, or a valid leasehold interest in, the properties and
assets used by them, located on their premises, or shown on the Emergisoft
Balance Sheet (as defined in Section 3.07) or acquired after the date thereof,
free and clear of all Security Interests, except for properties and assets
disposed of in the Ordinary Course of Business since the date of the Emergisoft
Balance Sheet.
Section 3.06. Subsidiaries. Section 3.06 of the Emergisoft Disclosure
Schedule sets forth for each Subsidiary of Emergisoft (i) its name and
jurisdiction of incorporation, (ii) the number of shares of authorized capital
stock of each class of its capital stock, (iii) the number of issued and
outstanding shares of each class of its capital stock, the names of the holders
thereof, and the number of shares held by each such holder, and (iv) the number
of shares of its capital stock held in treasury. All of the issued and
outstanding shares of capital stock of each Subsidiary of Emergisoft have been
duly authorized and are validly issued, fully paid, and nonassessable. One of
Emergisoft and its Subsidiaries holds of record and owns beneficially all of the
outstanding shares of each Subsidiary of Emergisoft, free and clear of any
restrictions on transfer (other than restrictions under the Securities Act and
state securities laws), Taxes, Security Interests, options, warrants, purchase
rights, contracts, commitments, equities, claims, and demands. There are no
outstanding or authorized options, warrants, purchase rights, subscription
rights, conversion rights, exchange rights, or other contracts or commitments
that could require any of Emergisoft and its Subsidiaries to sell, transfer, or
otherwise dispose of any capital stock of any of its Subsidiaries or that could
require any Subsidiary of Emergisoft to issue, sell, or otherwise cause to
become outstanding any of its own capital stock. There are no outstanding stock
appreciation, phantom stock, profit participation, or similar rights with
respect to any Subsidiary of Emergisoft. There are no voting trusts, proxies, or
other agreements or understandings with respect to the voting of any capital
stock of any Subsidiary of Emergisoft. None of Emergisoft and its Subsidiaries
controls directly or indirectly or has any direct or indirect equity
participation in any corporation, partnership, trust, or other business
association which is not a Subsidiary of Emergisoft.
Section 3.07. Financial Statements.
(a) The Emergisoft Audited Statements (including, in each
case, any notes thereto) (i) are in accordance with the books and
records of Emergisoft; (ii) present fairly and accurately the financial
condition of Emergisoft, as of the dates of the balance sheets; (iii)
present fairly and accurately the results of operations for the periods
covered by such statements; (iv) present fairly and accurately the
changes in stockholders' equity and cash flows for the periods covered
by such statements; (v) have been prepared in accordance with GAAP
applied on a consistent basis; and (vi) include all adjustments
(consisting of only normal recurring accruals) which are necessary for
a fair presentation of the financial condition of Emergisoft, and of
the results of operations of Emergisoft for the periods covered by such
statements, and fairly present the financial position, results of
operations and changes in stockholders' equity and cash flows of
Emergisoft and its consolidated subsidiaries as of the respective dates
thereof and for the respective periods indicated therein.
(b) The unaudited balance sheet and statement of income and
cash flow ("Emergisoft Most Recent Financial Statements") as of and for
the nine months ended September 30, 2000 for Emergisoft have been
prepared internally on a consistent basis and present fairly the
financial condition of Emergisoft as of such dates and the results of
operations of Emergisoft for such periods; provided, however, that the
Emergisoft Most Recent Financial Statements are subject to normal
year-end adjustments and lack footnotes and other presentation items.
(c) Except to the extent set forth on (i) the audited
consolidated balance sheet of Emergisoft as of December 31, 1999,
including the notes to the audited financial statements of which such
balance sheet is a part, for the year ended December 31, 1999 (the
"Emergisoft Balance Sheet"), and/or (ii) the unaudited balance sheet of
Emergisoft as of September 30, 2000, neither Emergisoft nor any of its
Subsidiaries has any liability or obligation of any nature (whether
accrued, absolute, contingent or otherwise) which would be required to
be reflected on a balance sheet on a consistent basis.
(d) Except as set forth herein or in Section 3.07 of the
Emergisoft Disclosure Schedule, since September 30, 2000, there has not
been any material adverse change in the financial condition of
Emergisoft.
Section 3.08. Undisclosed Liabilities. Except as set forth in Section
3.08 of the Emergisoft Disclosure Schedule, none of Emergisoft and its
Subsidiaries has any liability (whether asserted or unasserted, whether absolute
or contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due, including any liability for Taxes), and there
is no basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand against any of them giving
rise to any liability, except for liabilities set forth on the face of the
Emergisoft Balance Sheet (rather than in any notes thereto).
Section 3.09. Legal Compliance. Each of Emergisoft, its Subsidiaries,
and their respective predecessors and Affiliates has complied with all
applicable laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings, and charges thereunder) of federal, state,
local, and foreign governments (and all agencies thereof), including all import
and export laws relating to its products and business and the payment of all
customs duties or other official charges incurred, due or owed by Emergisoft or
its Subsidiaries, and no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, demand, or notice has been filed or commenced against
any of them alleging any failure so to comply.
Section 3.10. Real Property. Each of Emergisoft and its Subsidiaries
does not own, has never owned, does not have, nor has it ever had any interest
in any real property, other than pursuant to a valid lease.
Section 3.11. Tangible Assets. The buildings, machinery, equipment, and
other tangible assets that Emergisoft and its Subsidiaries own and lease are
free from material defects (patent and latent), have been maintained in
accordance with normal industry practice, and are in good operating condition
and repair (subject to normal wear and tear), and is suitable for the purpose
for which it presently is used.
Section 3.12. Powers of Attorney. There are no outstanding powers
of attorney executed on behalf of any of Emergisoft and its Subsidiaries.
Section 3.13. Insurance. Section 3.13 of the Emergisoft Disclosure
Schedule sets forth the following information with respect to each insurance
policy (including policies providing property, casualty, liability, and workers'
compensation coverage and bond and surety arrangements) with respect to which
any of Emergisoft and its Subsidiaries has been a party, a named insured, or
otherwise the beneficiary of coverage at any time within the past 3 years:
(a) the name, address, and telephone number of the agent;
(b) the name of the insurer, the name of the
policyholder, and the name of each covered insured;
(c) the policy number and the period of coverage;
(d) the scope (including an indication of whether the coverage
is on a claims made, occurrence, or other basis) and amount (including
a description of how deductibles and ceilings are calculated and
operate) of coverage; and
(e) a description of any retroactive premium
adjustments or other loss- sharing arrangements.
With respect to each such insurance policy: (i) the policy is legal, valid,
binding, enforceable, and in full force and effect; (ii) the policy will
continue to be legal, valid, binding, enforceable, and in full force and effect
on identical terms following the consummation of the transactions contemplated
hereby; (iii) neither any of Emergisoft and its Subsidiaries nor any other party
to the policy is in breach or default (including with respect to the payment of
premiums or the giving of notices), and no event has occurred which, with notice
or the lapse of time, would constitute such a breach or default, or permit
termination, modification, or acceleration, under the policy; and (iv) no party
to the policy has repudiated any provision thereof. Each of Emergisoft and its
Subsidiaries has been covered during the past 2 years by insurance in scope and
amount customary and reasonable for the businesses in which it has engaged
during the aforementioned period. Section 3.13 of the Emergisoft Disclosure
Schedule describes any material self-insurance arrangements affecting any of
Emergisoft and its Subsidiaries.
Section 3.14. Litigation. Section 3.14 of the Emergisoft Disclosure
Schedule sets forth each instance in which any of Emergisoft and its
Subsidiaries (a) is subject to any outstanding injunction, judgment, order,
decree, ruling, or charge or (b) is a party or, to its Knowledge, is Threatened
to be made a party to any action, suit, proceeding, hearing, or investigation
of, in, or before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any arbitrator. Except
as otherwise set forth therein, none of the actions, suits, proceedings,
hearings, and investigations set forth in Section 3.14 of the Emergisoft
Disclosure Schedule could result in any adverse change in the business,
financial condition, operations, results of operations, or future prospects of
any of Emergisoft and its Subsidiaries. None of Emergisoft and its Subsidiaries
and the directors and officers (and employees with responsibility for litigation
matters) of Emergisoft and its Subsidiaries has any reason to believe that any
such action, suit, proceeding, hearing, or investigation may be brought or
Threatened against any of Emergisoft and its Subsidiaries.
Section 3.15. Employees. None of Emergisoft and its Subsidiaries is a
party to or bound by any collective bargaining agreement, nor has it experienced
any strike or material grievance, claim of unfair labor practices, or other
collective bargaining dispute within the past three years. None of Emergisoft
and its Subsidiaries has committed any material unfair labor practice. None of
Emergisoft and its Subsidiaries and the directors and officers of Emergisoft and
its Subsidiaries has any Knowledge of any organizational effort presently being
made or Threatened by or on behalf of any labor union with respect to employees
of Emergisoft and its Subsidiaries.
Section 3.16. Guaranties. None of Emergisoft and its Subsidiaries
is a guarantor or otherwise is responsible for any liability or obligation
(including indebtedness) of any other Person.
Section 3.17. Certain Business Practices. Emergisoft and its
Subsidiaries and, to the Knowledge of Emergisoft, each director, officer,
authorized agent or employee of Emergisoft or any of its Subsidiaries have not,
directly or indirectly, (a) used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity, (b)
made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns or violated
any provision of the Foreign Corrupt Practices Act of 1977, as amended, (c) made
any other unlawful payment, (d) violated any of the provisions of Section 999 of
the Code or Section 8 of the Export Administration Act, as amended, or (e)
established or maintained any fund or asset that has not been recorded in the
books and records of Emergisoft and its Subsidiaries.
Section 3.18. Parachute Payments. Emergisoft has not entered into
any agreement that would result in the making of "parachute payments," as
defined in Section 280G of the Code, to any Person.
Section 3.19. Disclosure. The representations and warranties contained
in this Article 3 do not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements and
information contained in this Article 3 not misleading.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
CONCERNING ▇▇▇▇▇▇ AND ITS SUBSIDIARIES
▇▇▇▇▇▇ and its Subsidiaries represent and warrant to Emergisoft that
the statements contained in this Article 4 are correct and complete in all
material respects as of the date of this Agreement and will be correct and
complete in all material respects as of the Closing Date (as though made then
and as though the Closing Date were substituted for the date of this Agreement
throughout this Article 4), except as set forth in the disclosure schedule
delivered by ▇▇▇▇▇▇ to Emergisoft on the date hereof and initialed by the
Parties (the "▇▇▇▇▇▇ Disclosure Schedule"). Nothing in the ▇▇▇▇▇▇ Disclosure
Schedule shall be deemed adequate to disclose an exception to a representation
or warranty made herein, however, unless the ▇▇▇▇▇▇ Disclosure Schedule
identifies the exception with reasonable particularity, describes the relevant
facts in reasonable detail and identifies the subsection of this Article 4 to
which the exception applies. Without limiting the generality of the foregoing,
the mere listing (or inclusion of a copy) of a document or other item shall not
be deemed adequate to disclose an exception to a representation or warranty made
herein (unless the representation or warranty has to do with the existence of
the document or other item itself). The ▇▇▇▇▇▇ Disclosure Schedule will be
arranged in paragraphs corresponding to the lettered and numbered paragraphs
contained in this Article
Section 4.01. Organization, Qualification and Corporate Power. Each of
▇▇▇▇▇▇ and its Subsidiaries is a corporation duly organized, validly existing,
and in good standing under the laws of the jurisdiction of its incorporation.
Each of ▇▇▇▇▇▇ and its Subsidiaries is duly authorized to conduct business and
is in good standing under the laws of each jurisdiction where such qualification
is required. Each of ▇▇▇▇▇▇ and its Subsidiaries has full corporate power and
authority and all licenses, permits and authorizations necessary to carry on the
businesses in which it is engaged, to own and use the properties owned and used
by it and to execute and deliver this Agreement and to perform its obligations
hereunder and to consummate the Merger and the transactions contemplated
thereby. Section 4.01 of the ▇▇▇▇▇▇ Disclosure Schedule lists the directors and
officers of ▇▇▇▇▇▇ and its Subsidiaries. Except as set forth on Section 4.01 of
the ▇▇▇▇▇▇ Disclosure Schedule, each of ▇▇▇▇▇▇ and its Subsidiaries does not
have and never has had any equity or ownership interests in any corporation,
partnership, joint venture, limited liability company or other legal entity. The
execution and delivery of this Agreement by ▇▇▇▇▇▇ and the other agreements,
documents and instruments executed in connection herewith to which ▇▇▇▇▇▇ is a
party and the consummation by ▇▇▇▇▇▇ of the transactions contemplated hereby
have been duly and validly authorized by all necessary corporate action and no
other corporate proceedings on the part of ▇▇▇▇▇▇ are necessary to authorize
this Agreement or such other agreements, documents and instruments or to
consummate the Merger and the transactions contemplated thereby (other than the
filing and recordation of the Articles of Merger with the Secretary as required
by Delaware Law). The Agreement and the other agreements, documents and
instruments executed in connection herewith to which ▇▇▇▇▇▇ is a party has been
duly and validly executed and delivered by ▇▇▇▇▇▇ and constitute a legal, valid
and binding obligation of ▇▇▇▇▇▇, enforceable against ▇▇▇▇▇▇ in accordance with
their respective terms. The minute books (containing the records of meetings of
the stockholders, the board of directors, and any committees of the board of
directors), the stock certificate books, and the stock record books of each of
▇▇▇▇▇▇ and its Subsidiaries are correct and complete. None of ▇▇▇▇▇▇ and its
Subsidiaries is in default under or in violation of any provision of its charter
or bylaws.
Section 4.02. Capitalization. The entire authorized capital stock of
▇▇▇▇▇▇ consists of 750,000,000 ▇▇▇▇▇▇ Common Stock shares. There are 26,003,008
shares of ▇▇▇▇▇▇ Common Stock issued and outstanding, of which approximately
973,251 shares are unrestricted and are freely tradable, while 25,029,757 shares
are restricted. No ▇▇▇▇▇▇ Common Stock shares are held in treasury. All of the
issued and outstanding ▇▇▇▇▇▇ Common Stock shares have been duly authorized, are
validly issued, fully paid and nonassessable and not subject to preemptive
rights. Except as set forth in Section 4.02(a) of the ▇▇▇▇▇▇ Disclosure
Schedule, there are no outstanding or authorized options, warrants, purchase
rights, subscription rights, conversion rights, exchange rights, or other
contracts or commitments that could require ▇▇▇▇▇▇ to issue, sell, or otherwise
cause to become outstanding any of its capital stock. There are no outstanding
or authorized stock appreciation, phantom stock, profit participation, or
similar rights with respect to ▇▇▇▇▇▇. There are no voting trusts, proxies, or
other agreements or understandings with respect to the voting of the capital
stock of ▇▇▇▇▇▇. ▇▇▇▇▇▇ has not reserved any ▇▇▇▇▇▇ Common Stock shares for
issuance pursuant to the exercise of the outstanding options, warrants and other
convertible securities listed in Section 4.02(a) of the ▇▇▇▇▇▇ Disclosure
Schedule. Section 4.02(a) of the ▇▇▇▇▇▇ Disclosure Schedule shall set forth the
date of grant, exercise price, number of shares of ▇▇▇▇▇▇ Common Stock
exercisable for and the expiration date for each outstanding option, warrant and
other convertible security of ▇▇▇▇▇▇. Section 4.02(b) of the ▇▇▇▇▇▇ Disclosure
Schedule shall set forth each outstanding option, warrant and other convertible
security of ▇▇▇▇▇▇ that is subject to registration rights.
Section 4.03. Noncontravention. Neither the execution and the delivery
of this Agreement, nor the consummation of the transactions contemplated hereby,
will (a) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which any of ▇▇▇▇▇▇ and its Subsidiaries is
subject or any provision of the charter or bylaws of any of ▇▇▇▇▇▇ and its
Subsidiaries or (b) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
any of ▇▇▇▇▇▇ and its Subsidiaries is a party or by which it is bound or to
which any of its assets is subject (or result in the imposition of any Security
Interest upon any of its assets). None of ▇▇▇▇▇▇ and its Subsidiaries needs to
give any notice to, make any filing with, or obtain any authorization, consent,
or approval of any government or governmental agency in order for the Parties to
consummate the transactions contemplated by this Agreement, other than the
filing and recordation of the Articles of Merger with the Secretary.
Section 4.04. Brokers' Fees. Except as set forth in Section 4.04 of the
▇▇▇▇▇▇ Disclosure Schedule, none of ▇▇▇▇▇▇ and its Subsidiaries has any
liability or obligation to pay any fees or commissions to any broker, finder, or
agent with respect to the transactions contemplated by this Agreement.
Section 4.05. Title to Assets. ▇▇▇▇▇▇ and its Subsidiaries have good
and marketable title to, or a valid leasehold interest in, the properties and
assets used by them, located on their premises, or shown on the ▇▇▇▇▇▇ Balance
Sheet (as defined in Section 4.07) or acquired after the date thereof, free and
clear of all Security Interests, except for properties and assets disposed of in
the Ordinary Course of Business since the date of the ▇▇▇▇▇▇ Balance Sheet.
Section 4.06. Subsidiaries. Section 4.06 of the ▇▇▇▇▇▇ Disclosure
Schedule sets forth for each Subsidiary of ▇▇▇▇▇▇ (i) its name and jurisdiction
of incorporation, (ii) the number of shares of authorized capital stock of each
class of its capital stock, (iii) the number of issued and outstanding shares of
each class of its capital stock, the names of the holders thereof, and the
number of shares held by each such holder, and (iv) the number of shares of its
capital stock held in treasury. All of the issued and outstanding shares of
capital stock of each Subsidiary of ▇▇▇▇▇▇ have been duly authorized and are
validly issued, fully paid, and nonassessable. One of ▇▇▇▇▇▇ and its
Subsidiaries holds of record and owns beneficially all of the outstanding shares
of each Subsidiary of ▇▇▇▇▇▇, free and clear of any restrictions on transfer
(other than restrictions under the Securities Act and state securities laws),
Taxes, Security Interests, options, warrants, purchase rights, contracts,
commitments, equities, claims, and demands. There are no outstanding or
authorized options, warrants, purchase rights, subscription rights, conversion
rights, exchange rights, or other contracts or commitments that could require
any of ▇▇▇▇▇▇ and its Subsidiaries to sell, transfer, or otherwise dispose of
any capital stock of any of its Subsidiaries or that could require any
Subsidiary of ▇▇▇▇▇▇ to issue, sell, or otherwise cause to become outstanding
any of its own capital stock. There are no outstanding stock appreciation,
phantom stock, profit participation, or similar rights with respect to any
Subsidiary of ▇▇▇▇▇▇. There are no voting trusts, proxies, or other agreements
or understandings with respect to the voting of any capital stock of any
Subsidiary of ▇▇▇▇▇▇. None of ▇▇▇▇▇▇ and its Subsidiaries controls directly or
indirectly or has any direct or indirect equity participation in any
corporation, partnership, trust, or other business association which is not a
Subsidiary of ▇▇▇▇▇▇.
Section 4.07. SEC Filings; Financial Statements.
(a) ▇▇▇▇▇▇ has timely filed all forms, reports, statements and
documents (collectively, the "SEC Reports") required to be filed by it
within the past twelve months with the SEC. The SEC Reports, after
giving effect to any amendments thereto, (i) were prepared in
accordance with the requirements of the Securities Act and the Exchange
Act, as the case may be, and the rules and regulations thereunder and
(ii) did not, at the time they were filed, contain any untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they were made,
not misleading. No Subsidiary of ▇▇▇▇▇▇ is currently required to file
any form, report or other document with the SEC.
(b) Each of the financial statements (including, in each case,
any notes thereto) contained in the SEC Reports (i) are in accordance
with the books and records of ▇▇▇▇▇▇; (ii) present fairly and
accurately the financial condition of ▇▇▇▇▇▇, as of the dates of the
balance sheets; (iii) present fairly and accurately the results of
operations for the periods covered by such statements; (iv) present
fairly and accurately the changes in stockholders' equity and cash
flows for the periods covered by such statements; (v) have been
prepared in accordance with GAAP applied on a consistent basis; (vi)
include all adjustments (consisting of only normal recurring accruals
which are necessary for a fair presentation of the financial condition
of ▇▇▇▇▇▇, and of the results of operations of ▇▇▇▇▇▇ for the periods
covered by such statements; and (vii) fully comply with all
requirements of Regulation S-X and all applicable securities laws, and
each fairly presented the financial position, results of operations and
changes in stockholders' equity and cash flows of ▇▇▇▇▇▇ and its
consolidated subsidiaries as of the respective dates thereof and for
the respective periods indicated therein.
(c) Except to the extent set forth on the audited consolidated
balance sheet of ▇▇▇▇▇▇ as of June 30, 2000, including the notes to the
audited financial statements of which such balance sheet is a part and
which is included in ▇▇▇▇▇▇'▇ Form 10-KSB for the year ended June 30,
2000 (the "▇▇▇▇▇▇ Balance Sheet"), neither ▇▇▇▇▇▇ nor any of its
Subsidiaries has any liability or obligation of any nature (whether
accrued, absolute, contingent or otherwise) which would be required to
be reflected on a balance sheet, or in the notes thereto, prepared in
accordance with generally accepted accounting principles applied on a
consistent basis.
(d) ▇▇▇▇▇▇ has heretofore made available to Emergisoft, true,
complete and correct copies of all amendments and modifications (if
any) that have not been filed by ▇▇▇▇▇▇ with the SEC to all agreements,
documents and other instruments that previously had been filed by
▇▇▇▇▇▇ as exhibits to the SEC Reports and are currently in effect.
Section 4.08. Absence of Certain Changes or Events. Since June 30,
2000, there has not been any material adverse change in the business, financial
condition, operations, results of operations, or future prospects of any of
▇▇▇▇▇▇ and its Subsidiaries. Without limiting the generality of the foregoing,
since that date:
(a) none of ▇▇▇▇▇▇ and its Subsidiaries has sold,
leased, transferred, or assigned any material assets, tangible or
intangible, outside the Ordinary Course of Business;
(b) none of ▇▇▇▇▇▇ and its Subsidiaries has entered into any
material agreement, contract, lease, or license (or series of related
agreements, contracts, leases and licenses) either involving more than
$10,000 or outside the Ordinary Course of Business;
(c) no party (including any of ▇▇▇▇▇▇ and its Subsidiaries)
has accelerated, terminated, modified, or canceled any agreement,
contract, lease, or license (or series of related agreements,
contracts, leases, and licenses) involving more than $1,000 to which
any of ▇▇▇▇▇▇ and its Subsidiaries is a party or by which any of them
is bound;
(d) none of ▇▇▇▇▇▇ and its Subsidiaries has imposed any
Security Interest upon any of its assets, tangible or intangible;
(e) none of ▇▇▇▇▇▇ and its Subsidiaries has made any
capital expenditures (or series of related capital expenditures) in
excess of $1,000;
(f) except as set forth in Section 4.08(f) of the ▇▇▇▇▇▇
Disclosure Schedule, none of ▇▇▇▇▇▇ and its Subsidiaries has made any
capital investment in, any loan to, or any acquisition of the
securities or assets of, any other Person;
(g) none of ▇▇▇▇▇▇ and its Subsidiaries has issued any note,
bond, or other debt security or created, incurred, assumed, or
guaranteed any indebtedness for borrowed money and capitalized lease
obligations either involving more than $500 singly or $1,000 in the
aggregate;
(h) none of ▇▇▇▇▇▇ and its Subsidiaries has granted
any license or sublicense of any rights under or with respect to
any Intellectual Property;
(i) there has been no change made or authorized in the
charter or bylaws of any of ▇▇▇▇▇▇ and its Subsidiaries;
(j) none of ▇▇▇▇▇▇ and its Subsidiaries has issued, sold, or
otherwise disposed of any of its capital stock, or granted any options,
warrants, or other rights to purchase or obtain (including upon
conversion, exchange, or exercise) any of its capital stock;
(k) except as set forth in Section 4.08(k) of the ▇▇▇▇▇▇
Disclosure Schedule, none of ▇▇▇▇▇▇ and its Subsidiaries has declared,
set aside, or paid any dividend or made any distribution with respect
to its capital stock (whether in cash or in kind) or redeemed,
purchased, or otherwise acquired any of its capital stock;
(l) none of ▇▇▇▇▇▇ and its Subsidiaries has experienced
any damage, destruction, or loss (whether or not covered by insurance
to its property;
(m) except as set forth in Section 4.08(m) of the ▇▇▇▇▇▇
Disclosure Schedule, none of ▇▇▇▇▇▇ and its Subsidiaries has made any
loan to, or entered into any other transaction with, any of its
directors, officers, and employees;
(n) none of ▇▇▇▇▇▇ and its Subsidiaries has entered into any
employment contract or collective bargaining agreement, written or
oral, or modified the terms of any such existing contract or agreement;
(o) none of ▇▇▇▇▇▇ and its Subsidiaries has granted any
increase in the base compensation of any of its directors or
officers or any of its other employees outside the Ordinary
Course of Business;
(p) none of ▇▇▇▇▇▇ and its Subsidiaries has adopted, amended,
modified, or terminated any bonus, profit-sharing, incentive,
severance, or other plan, contract, or commitment for the benefit of
any of its directors, officers, and employees (or taken any such action
with respect to any other Employee Benefit Plan);
(q) none of ▇▇▇▇▇▇ and its Subsidiaries has made any
other change in employment terms for any of its directors, officers,
and employees; and
(r) except as set forth in Section 4.08(r) of the ▇▇▇▇▇▇
Disclosure Schedule, none of ▇▇▇▇▇▇ and its Subsidiaries has delayed or
postponed the payment of accounts payable and other liabilities outside
the Ordinary Course of Business;
(s) none of ▇▇▇▇▇▇ and its Subsidiaries has canceled,
compromised, waived, or released any right or claim (or series of
related rights and claims) either involving more than $1,000 or outside
the Ordinary Course of Business;
(t) none of ▇▇▇▇▇▇ and its Subsidiaries has made or
pledged to make any charitable or other capital contribution outside
the Ordinary Course of Business;
(u) there has not been any other occurrence, event, incident,
action, failure to act, or transaction outside the Ordinary Course of
Business involving any of ▇▇▇▇▇▇ and its Subsidiaries; and
(v) none of ▇▇▇▇▇▇ and its Subsidiaries has committed to
any of the foregoing.
Section 4.09. Undisclosed Liabilities. None of ▇▇▇▇▇▇ and its
Subsidiaries has any liability (whether asserted or unasserted, whether absolute
or contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due, including any liability for Taxes), and there
is no basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand against any of them giving
rise to any liability, except for liabilities set forth on the face of the
▇▇▇▇▇▇ Balance Sheet (rather than in any notes thereto).
Except as set forth in Section 4.09 of the ▇▇▇▇▇▇ Disclosure Schedule,
▇▇▇▇▇▇ does not have any liability (whether asserted or unasserted, whether
absolute or contingent, whether accrued or unaccrued, whether liquidated or
unliquidated, and whether due or to become due, including any liability for
Taxes), and there is no basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim or demand against
it giving rise to any liability, based on its Subsidiaries operations, ownership
of assets, actions or inactions.
Section 4.10. Legal Compliance. Each of ▇▇▇▇▇▇, its Subsidiaries, and
their respective predecessors and Affiliates has complied with all applicable
laws (including rules, regulations, codes, plans, injunctions, judgments,
orders, decrees, rulings, and charges thereunder) of federal, state, local, and
foreign governments (and all agencies thereof), including all import and export
laws relating to its products and business and the payment of all customs duties
or other official charges incurred, due or owed by ▇▇▇▇▇▇ or its Subsidiaries,
and no action, suit, proceeding, hearing, investigation, charge, complaint,
claim, demand, or notice has been filed or commenced against any of them
alleging any failure so to comply.
Section 4.11. Tax Matters.
(a) Each of ▇▇▇▇▇▇ and its Subsidiaries has filed or caused to
be filed in a timely manner (within any applicable extension periods)
all Tax Returns that it was required to file. All such Tax Returns were
complete and accurate in all material respects. All Taxes owed by any
of ▇▇▇▇▇▇ and its Subsidiaries (whether or not shown on any Tax Return)
have been paid. None of ▇▇▇▇▇▇ and its Subsidiaries is currently the
beneficiary of any extension of time within which to file any Tax
Return. No claim has ever been made by an authority in a jurisdiction
where any of ▇▇▇▇▇▇ and its Subsidiaries does not file Tax Returns that
it is or may be subject to taxation by that jurisdiction. There are no
Security Interests on any of the assets of any of ▇▇▇▇▇▇ and its
Subsidiaries that arose in connection with any failure (or alleged
failure) to pay any Tax.
(b) Each of ▇▇▇▇▇▇ and its Subsidiaries has withheld and paid
all Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor,
creditor, stockholder, or other third party.
(c) No director or officer (or employee responsible for Tax
matters) of any of ▇▇▇▇▇▇ and its Subsidiaries expects any authority to
assess any additional Taxes for any period for which Tax Returns have
been filed. There is no dispute, claim, notice or inquiry concerning
any Tax liability of any of ▇▇▇▇▇▇ or its Subsidiaries either claimed
or raised by any authority in writing or as to which any of the
directors and officers (and employees responsible for Tax matters) of
each of ▇▇▇▇▇▇ and its Subsidiaries has Knowledge based upon personal
contact with any agent of such authority. There are no material matters
under discussion between ▇▇▇▇▇▇ or its Subsidiaries and any
governmental authority regarding claims for additional Taxes or
assessments with reference to ▇▇▇▇▇▇ or its Subsidiaries or the
business or property of ▇▇▇▇▇▇ or its Subsidiaries.
(d) Section 4.11(d) of the ▇▇▇▇▇▇ Disclosure Schedule lists
all federal, state, local, and foreign Tax Returns filed with respect
to ▇▇▇▇▇▇ and its Subsidiaries for Taxable periods ended on or after
December 31, 1996, indicates those Tax Returns that have been audited,
and indicates those Tax Returns that currently are the subject of
audit. ▇▇▇▇▇▇ has delivered to Emergisoft correct and complete copies
of all federal Tax Returns, examination reports, and statements of
deficiencies assessed against, or agreed to by ▇▇▇▇▇▇ or its
Subsidiaries since December 31, 1996. None of ▇▇▇▇▇▇ and its
Subsidiaries has waived any statute of limitations in respect of Taxes
or agreed to any extension of time with respect to a Tax assessment or
deficiency.
(e) None of ▇▇▇▇▇▇ and its Subsidiaries has filed a consent
under Code Section 341(f) concerning collapsible corporations. None of
▇▇▇▇▇▇ and its Subsidiaries has made any material payments, is
obligated to make any material payments, or is a party to any agreement
that under certain circumstances could obligate it to make any material
payments that will not be deductible under Code Section 280G. None of
▇▇▇▇▇▇ and its Subsidiaries has been a United States real property
holding corporation within the meaning of Code Section 897(c)(2) during
the applicable period specified in Code Section 897(c)(1)(A)(ii). Each
of ▇▇▇▇▇▇ and its Subsidiaries has disclosed on its federal income Tax
Returns all positions taken therein that could give rise to a
substantial understatement of federal income Tax within the meaning of
Code (S)6662. None of ▇▇▇▇▇▇ and its Subsidiaries is a party to any Tax
allocation or sharing agreement. None of ▇▇▇▇▇▇ and its Subsidiaries
(i) has been a member of an Affiliated Group filing a consolidated
federal Tax Return (other than a group the common parent of which was
▇▇▇▇▇▇) or (ii) has any liability for the Taxes of any Person (other
than of ▇▇▇▇▇▇ or any of its Subsidiaries) under Treasury Regulation
Section 1.1502-6 (or any similar provision of state, local, or foreign
law), as a transferee or successor, by contract, or otherwise.
(f) Section 4.11(f) of the ▇▇▇▇▇▇ Disclosure Schedule sets
forth estimates of the following information with respect to each of
▇▇▇▇▇▇ and its Subsidiaries (or, in the case of clause (B) below, with
respect to each of the Subsidiaries) as of the most recent practicable
date: (A) the basis of ▇▇▇▇▇▇ or Subsidiary in its assets; (B) the
basis of the stockholder(s) of the Subsidiary in its stock; (C) the
amount of any net operating loss, net capital loss, unused investment
or other credit, unused foreign tax, or excess charitable contribution
allocable to ▇▇▇▇▇▇ or Subsidiary; and (D) the amount of any deferred
gain or loss allocable to ▇▇▇▇▇▇ or Subsidiary arising out of any
Deferred Intercompany Transaction.
(g) The unpaid Taxes of ▇▇▇▇▇▇ and its Subsidiaries (i) did
not, as of December 31, 1999, exceed by any material amount the reserve
for Tax liability (rather than any reserve for deferred Taxes
established to reflect timing differences between book and Tax income)
set forth on the face of the ▇▇▇▇▇▇ Balance Sheet (rather than in any
notes thereto) and (ii) will not exceed by any material amount that
reserve as adjusted for operations and transactions through the Closing
Date in accordance with the past custom and practice of ▇▇▇▇▇▇ and its
Subsidiaries in filing their Tax Returns.
Section 4.12. Real Property.
(a) Each of ▇▇▇▇▇▇ and its Subsidiaries does not own, has
never owned, does not have, nor has it ever had any interest in any
real property other than pursuant to a valid lease.
(b) Section 4.12(b) of the ▇▇▇▇▇▇ Disclosure Schedule lists
and describes briefly all real property leased or subleased to each of
▇▇▇▇▇▇ and its Subsidiaries. ▇▇▇▇▇▇ has delivered to Emergisoft correct
and complete copies of the leases and subleases listed in Section
4.12(b) of the ▇▇▇▇▇▇ Disclosure Schedule (as amended to date).
Section 4.13. Tangible Assets. The buildings, machinery, equipment, and
other tangible assets that ▇▇▇▇▇▇ and its Subsidiaries own and lease are free
from material defects (patent and latent), have been maintained in accordance
with normal industry practice, and are in good operating condition and repair
(subject to normal wear and tear), and is suitable for the purpose for which it
presently is used .
Section 4.14. Contracts. Section 4.14 of the ▇▇▇▇▇▇ Disclosure
Schedule lists the following contracts and other agreements to which any of
▇▇▇▇▇▇ and its Subsidiaries is a party:
(a) any agreement (or group of related agreements)
for the lease of personal property to or from any Person providing
for lease payments in any amount;
(b) any agreement (or group of related agreements) for the
purchase or sale of raw materials, commodities, supplies, products, or
other personal property, or for the furnishing or receipt of services,
the performance of which will extend over a period of more than one
year or involve consideration in any amount;
(c) any agreement concerning a partnership or joint venture;
(d) any agreement (or group of related agreements) under which
it has created, incurred, assumed, or guaranteed any indebtedness for
borrowed money, or any capitalized lease obligation, in any amount or
under which it has imposed a Security Interest on any of its assets,
tangible or intangible;
(e) any agreement concerning confidentiality or
noncompetition;
(f) any agreement, contract or understanding (including any
agreement, contract or understanding evidencing any outstanding
indebtedness or other similar obligations to ▇▇▇▇▇▇ or its
Subsidiaries) with any director, officer, Affiliate or "associate" (as
such term is defined in Rule 12b-2 under the Securities Exchange Act)
of ▇▇▇▇▇▇ or its Subsidiaries;
(g) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other material plan
or arrangement for the benefit of its current or former directors,
officers, and employees;
(h) any collective bargaining agreement;
(i) any agreement for the employment of any
individual on a full-time, part-time, consulting, or other basis;
(j) any agreement under which it has advanced or
loaned any amount to any of its directors, officers, and employees
outside the Ordinary Course of Business;
(k) any agreement under which the consequences of a default or
termination could have a material adverse effect on the business,
financial condition, operations, results of operations, or future
prospects of any of ▇▇▇▇▇▇ and its Subsidiaries; or
(l) any other agreement (or group of related agreements)
the performance of which involves consideration in any amount.
▇▇▇▇▇▇ has delivered to Emergisoft a correct and complete copy of each
written agreement listed in Section 4.14 of the ▇▇▇▇▇▇ Disclosure Schedule (as
amended to date) and a written summary setting forth the material terms and
conditions of each oral agreement referred to in Section 4.14 of the ▇▇▇▇▇▇
Disclosure Schedule. With respect to each such agreement: (i) the agreement is
legal, valid, binding, enforceable, and in full force and effect in all material
respects; (ii) the agreement will continue to be legal, valid, binding,
enforceable, and in full force and effect on identical terms following the
consummation of the transactions contemplated hereby; (iii) no party is in
breach or default, and no event has occurred which with notice or lapse of time
would constitute a breach or default, or permit termination, modification, or
acceleration, under the agreement; and (iv) no party has repudiated any
provision of the agreement.
Section 4.15. Notes and Accounts Receivable. All notes and accounts
receivable of ▇▇▇▇▇▇ and its Subsidiaries listed on Section 4.15 of the ▇▇▇▇▇▇
Disclosure Schedule are reflected properly on their books and records, are valid
receivables subject to no setoffs or counterclaims, are current and collectible,
and will be collected in accordance with their terms at their recorded amounts,
subject only to the reserve for bad debts set forth on the face of the ▇▇▇▇▇▇
Balance Sheet (rather than in any notes thereto) as adjusted for operations and
transactions in the Ordinary Course of Business through the Closing Date. With
respect to the accounts receivable listed on Section 4.15 of the ▇▇▇▇▇▇
Disclosure Schedule, no chargeback allowance or cooperative advertising
allowance or related liability exists that is not fully and accurately reflected
in such accounts receivable.
Section 4.16. Powers of Attorney. There are no outstanding power
of attorney executed on behalf of any of ▇▇▇▇▇▇ and its Subsidiaries.
Section 4.17. Insurance. Section 4.17 of the ▇▇▇▇▇▇ Disclosure Schedule
sets forth the following information with respect to each insurance policy
(including policies providing property, casualty, liability, and workers'
compensation coverage and bond and surety arrangements) with respect to which
any of ▇▇▇▇▇▇ and its Subsidiaries has been a party, a named insured, or
otherwise the beneficiary of coverage at any time within the past 3 years:
(a) the name, address, and telephone number of the agent;
(b) the name of the insurer, the name of the
policyholder, and the name of each covered insured;
(c) the policy number and the period of coverage;
(d) the scope (including an indication of whether the coverage
is on a claims made, occurrence, or other basis) and amount (including
a description of how deductibles and ceilings are calculated and
operate) of coverage; and
(e) a description of any retroactive premium
adjustments or other loss- sharing arrangements.
With respect to each such insurance policy: (i) the policy is legal,
valid, binding, enforceable, and in full force and effect; (ii) the policy will
continue to be legal, valid, binding, enforceable, and in full force and effect
on identical terms following the consummation of the transactions contemplated
hereby; (iii) neither any of ▇▇▇▇▇▇ and its Subsidiaries nor any other party to
the policy is in breach or default (including with respect to the payment of
premiums or the giving of notices), and no event has occurred which, with notice
or the lapse of time, would constitute such a breach or default, or permit
termination, modification, or acceleration, under the policy; and (iv) no party
to the policy has repudiated any provision thereof. Each of ▇▇▇▇▇▇ and its
Subsidiaries has been covered during the past 3 years by insurance in scope and
amount customary and reasonable for the businesses in which it has engaged
during the aforementioned period. Section 4.17 of the ▇▇▇▇▇▇ Disclosure Schedule
describes any material self-insurance arrangements affecting any of ▇▇▇▇▇▇ and
its Subsidiaries.
Section 4.18. Litigation. Section 4.18 of the ▇▇▇▇▇▇ Disclosure
Schedule sets forth each instance in which any of ▇▇▇▇▇▇ and its Subsidiaries
(a) is subject to any outstanding injunction, judgment, order, decree, ruling,
or charge or (b) is a party or, to its Knowledge, is Threatened to be made a
party to any action, suit, proceeding, hearing, or investigation of, in, or
before any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction or before any arbitrator. None of the
actions, suits, proceedings, hearings, and investigations set forth in Section
4.18 of the ▇▇▇▇▇▇ Disclosure Schedule could result in any adverse change in the
business, financial condition, operations, results of operations, or future
prospects of any of ▇▇▇▇▇▇ and its Subsidiaries. None of ▇▇▇▇▇▇ and its
Subsidiaries and the directors and officers (and employees with responsibility
for litigation matters) of ▇▇▇▇▇▇ and its Subsidiaries has any reason to believe
that any such action, suit, proceeding, hearing, or investigation may be brought
or Threatened against any of ▇▇▇▇▇▇ and its Subsidiaries.
Section 4.19. Employees. None of ▇▇▇▇▇▇ and its Subsidiaries is a party
to or bound by any collective bargaining agreement, nor has it experienced any
strike or material grievance, claim of unfair labor practices, or other
collective bargaining dispute within the past three years. None of ▇▇▇▇▇▇ and
its Subsidiaries has committed any material unfair labor practice. None of
▇▇▇▇▇▇ and its Subsidiaries and the directors and officers of ▇▇▇▇▇▇ and its
Subsidiaries has any Knowledge of any organizational effort presently being made
or Threatened by or on behalf of any labor union with respect to employees of
▇▇▇▇▇▇ and its Subsidiaries.
Section 4.20. Employee Benefits.
(a) None of ▇▇▇▇▇▇ and its Subsidiaries maintains or
contributes, or has ever maintained or contributed to any Employee
Benefit Plan.
(b) None of ▇▇▇▇▇▇, its Subsidiaries and the other members of
the Controlled Group of Corporations that includes ▇▇▇▇▇▇ and its
Subsidiaries contributes to, ever has contributed to, or ever has been
required to contribute to any Multiemployer Plan or has any liability
(whether known or unknown, whether asserted or unasserted, whether
absolute or contingent, whether accrued or unaccrued, whether
liquidated or unliquidated, and whether due or to become due),
including any withdrawal liability, under any Multiemployer Plan.
(c) None of ▇▇▇▇▇▇ and its Subsidiaries maintains or ever has
maintained or contributes, ever has contributed, or ever has been
required to contribute to any Employee Welfare Benefit Plan providing
medical, health, or life insurance or other welfare-type benefits for
current or future retired or terminated employees, their spouses, or
their dependents (other than in accordance with Code Section 4980B).
(d) No current or former employee, officer and director of
▇▇▇▇▇▇ and its Subsidiaries has any outstanding agreement, contract or
understanding with respect to ▇▇▇▇▇▇ or its Subsidiaries that provides
for bonus payments.
Section 4.21. Guaranties. None of ▇▇▇▇▇▇ and its Subsidiaries
is a guarantor or otherwise is responsible for any liability or obligation
(including indebtedness) of any other Person.
Section 4.22. Environment, Health, and Safety.
(a) Each of ▇▇▇▇▇▇ and its Subsidiaries is, and at all times
has been, in full compliance with, and has not been and is not in
Contravention of or liable under, any Environmental Law or Occupational
Safety and Health Law. Neither any of ▇▇▇▇▇▇ and its Subsidiaries has
any basis to expect, nor has any of them or any other Person for whose
conduct they are or may be held responsible received, any actual or
Threatened Order, notice, or other communication from (i) any
Governmental Body or other Person acting in the public interest, or
(ii) the current or prior owner or operator of any Facility, of any
actual or potential violation or failure to comply with any
Environmental Law, or of any actual or Threatened obligation to
undertake or bear the cost of any Environmental, Health, and Safety
Liabilities with respect to any Facility or other property or asset
(whether real, personal, or mixed) in which any of ▇▇▇▇▇▇ or its
Subsidiaries has had an interest, or with respect to any property or
Facility at or to which Hazardous Materials were generated,
manufactured, refined, transferred, imported, used, or processed by
▇▇▇▇▇▇, its Subsidiaries or any other Person for whose conduct they are
or may be held responsible, or from which Hazardous Materials have been
transported, treated, stored, handled, transferred, disposed, recycled,
or received.
(b) There are no pending or Threatened, claims, Encumbrances
or other restrictions of any nature, resulting from any Environmental,
Health, and Safety Liabilities or arising under or pursuant to any
Environmental Law or Occupational Safety and Health Law, with respect
to or affecting any Facilities or any other properties and assets
(whether real, personal, or mixed) in which any of ▇▇▇▇▇▇ or its
Subsidiaries has or had an interest.
(c) Neither any of ▇▇▇▇▇▇ or its Subsidiaries has any basis to
expect, nor has any of them or any other Person for whose conduct they
are or may be held responsible, received, any citation, directive,
inquiry, notice, Order, summons, warning, or other communication that
relates to Hazardous Activity, Hazardous Materials, or any actual,
alleged, possible or potential Contravention of or failure to comply
with any Environmental Law or Occupational Safety and Health Law, or of
any actual, alleged, possible or potential obligation to undertake or
bear the cost of any Environmental, Health, and Safety Liabilities with
respect to any Facility or other property or asset (whether real,
personal, or mixed) in which any of ▇▇▇▇▇▇ or its Subsidiaries had an
interest, or with respect to any property or facility to or by which
Hazardous Materials generated, manufactured, refined, transferred,
imported, used, or processed by any of ▇▇▇▇▇▇, its Subsidiaries, or any
other Person for whose conduct they are or may be held responsible,
have been transported, treated, stored, handled, transferred, disposed,
recycled, or received. Neither any of ▇▇▇▇▇▇ or its Subsidiaries, nor
any other Person for whose conduct they are or may be held responsible,
has any Environmental, Health, and Safety Liabilities with respect to
any Facility or with respect to any other property or asset (whether
real, personal, or mixed) in which any of ▇▇▇▇▇▇ or its Subsidiaries
(or any predecessor), has or had an interest, or at any property
geologically or hydrologically adjoining any Facility or any such other
property or asset.
(d) There are no Hazardous Materials present on or in the
Environment at any Facility or at any geologically or hydrologically
adjoining property, including any Hazardous Materials contained in
barrels, above or underground storage tanks, landfills, land deposits,
dumps, equipment (whether moveable or fixed) or other containers,
either temporary or permanent, and deposited or located in land, water,
sumps, or any other part of any Facility or such adjoining property, or
incorporated into any structure therein or thereon. None of ▇▇▇▇▇▇, its
Subsidiaries, any other Person for whose conduct they are or may be
held responsible, or any other Person has permitted or conducted, or is
aware of, any Hazardous Activity conducted with respect to any Facility
or other property or asset (whether real, personal, or mixed) in which
any of ▇▇▇▇▇▇ or its Subsidiaries has or had an interest.
(e) There has been no Release or, to ▇▇▇▇▇▇'▇ Knowledge,
Threat of Release, of any Hazardous Materials at or from any Facility
or at any other location where any Hazardous Materials were generated,
manufactured, refined, transferred, produced, imported, used, or
processed from or by any Facility, or from any other property or asset
(whether real, personal, or mixed) in which any of ▇▇▇▇▇▇ or its
Subsidiaries has or had an interest, or any geologically or
hydrologically adjoining property, whether by any of ▇▇▇▇▇▇, its
Subsidiaries, or any other Person.
(f) ▇▇▇▇▇▇ has delivered to Emergisoft true and complete
copies and results of any reports, studies, analyses, tests, or
monitoring possessed or initiated by any of ▇▇▇▇▇▇ or its Subsidiaries
pertaining to Hazardous Materials or Hazardous Activities in, on, or
under any Facilities, or concerning compliance by any of ▇▇▇▇▇▇, its
Subsidiaries, or any other Person for whose conduct they are or may be
held responsible, with Environmental Laws.
Section 4.23. Certain Business Relationships With ▇▇▇▇▇▇. Except as
disclosed in Section 4.23 of the ▇▇▇▇▇▇ Disclosure Schedule, none of the
directors and officers of ▇▇▇▇▇▇ and its Subsidiaries and their Affiliates has
been involved in any business arrangement or relationship with ▇▇▇▇▇▇ or its
Subsidiaries within the past 24 months, and none of the directors and officers
of ▇▇▇▇▇▇ and its Subsidiaries and their Affiliates owns any asset, tangible or
intangible, which is used in the business of ▇▇▇▇▇▇ or its Subsidiaries.
Section 4.24. Change of Control. ▇▇▇▇▇▇ and its Subsidiaries are not a
party to any agreement, contract, obligation, or undertaking which contains a
"change in control," "potential change in control" or similar provision and the
consummation of the transactions contemplated hereby will not (either alone or
upon the occurrence of any additional acts or events) result in any payment
(whether of severance pay or otherwise) becoming due from ▇▇▇▇▇▇ and its
Subsidiaries to any Person, materially increase any benefits otherwise payable
by ▇▇▇▇▇▇ or any of its Subsidiaries, or result in the acceleration of the time
of payment or vesting of any such benefits.
Section 4.25. Certain Business Practices. ▇▇▇▇▇▇ and its Subsidiaries
and, to the Knowledge of ▇▇▇▇▇▇, each director, officer, authorized agent or
employee of ▇▇▇▇▇▇ or any of its Subsidiaries have not, directly or indirectly,
(a) used any funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity, (b) made any unlawful payment
to foreign or domestic government officials or employees or to foreign or
domestic political parties or campaigns or violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended, (c) made any other unlawful payment,
(d) violated any of the provisions of Section 999 of the Code or Section 8 of
the Export Administration Act, as amended, or (e) established or maintained any
fund or asset that has not been recorded in the books and records of ▇▇▇▇▇▇ and
its Subsidiaries.
Section 4.26. Parachute Payments. ▇▇▇▇▇▇ has not entered into any
agreement that would result in the making of "parachute payments," as defined
in Section 280G of the Code, to any Person.
Section 4.27. Information Statement. The information supplied or to be
supplied by or on behalf of ▇▇▇▇▇▇ for inclusion or incorporated by reference in
the ▇▇▇▇▇▇ information statement pursuant to Section 14(f) of the Exchange Act,
in definitive form (the "Information Statement"), will not, at the date mailed
to the ▇▇▇▇▇▇ stockholders, 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 Information Statement, insofar as it relates
to ▇▇▇▇▇▇, will comply as to form in all material respects with the applicable
provisions of the Exchange Act and rules and regulations thereunder.
Section 4.28. Change of Corporate Name. The stockholders of ▇▇▇▇▇▇ have
duly and validly authorized the board of directors of ▇▇▇▇▇▇ to change the
corporate name of ▇▇▇▇▇▇ to any name selected by the board of directors without
further action by the stockholders of ▇▇▇▇▇▇.
Section 4.29. Disclosure. The representations and warranties contained
in this Article 4 do not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements and
information contained in this Article 4 not misleading.
ARTICLE 5
PRE-CLOSING COVENANT
The Parties agree as follows with respect to the period between the
execution of this Agreement and the Closing.
Section 5.01. General. Each of the Parties will use his, her or its
reasonable best efforts to take all actions and to do all things necessary,
proper, or advisable in order to consummate and make effective the transactions
contemplated by this Agreement (including satisfaction, but not waiver, of the
closing conditions set forth in Article 7).
Section 5.02. Notices and Consents. Each of ▇▇▇▇▇▇ and its Subsidiaries
shall give any notices to third parties, and each of ▇▇▇▇▇▇ and its Subsidiaries
shall use its best efforts to obtain any third party consents, that Emergisoft
reasonably may request in connection with the matters referred to in Section
4.03. Each of the Parties will give any notices to, make any filings with, and
use its reasonable best efforts to obtain any authorizations, consents, and
approvals of governments and governmental agencies in connection with the
matters referred to in Section 4.03.
Section 5.03. Operation of Business. Each of (i) ▇▇▇▇▇▇ and its
Subsidiaries, and (ii) Emergisoft, shall not engage in any practice, take any
action, or enter into any transaction outside the Ordinary Course of Business.
Without limiting the generality of the foregoing, ▇▇▇▇▇▇ and its Subsidiaries
and Emergisoft shall not (a) declare, set aside, or pay any dividend or make any
distribution with respect to its capital stock or redeem, purchase, or otherwise
acquire any of its capital stock, (b) become a party to any agreement of the
type referred to in Section 4.20 (only with respect to ▇▇▇▇▇▇ and its
Subsidiaries), or (c) otherwise engage in any practice, take any action, or
enter into any transaction of the sort described in Section 5.07 (only with
respect to ▇▇▇▇▇▇ and its Subsidiaries).
Section 5.04. Preservation of Business. Each of (i) ▇▇▇▇▇▇ and its
Subsidiaries, and (ii) Emergisoft, shall keep its business and properties
substantially intact, including its present operations, physical facilities,
working conditions, and relationships with lessors, licensors, suppliers,
customers, and employees.
Section 5.05. Full Access.
(a) Each of ▇▇▇▇▇▇ and its Subsidiaries shall permit
representatives of Emergisoft to have full access at all reasonable
times, and in a manner so as not to interfere with the normal business
operations of ▇▇▇▇▇▇, to all premises, properties, personnel, books,
records (including Tax records), contracts, and documents of or
pertaining to ▇▇▇▇▇▇ and its Subsidiaries.
(b) Emergisoft shall permit representatives of ▇▇▇▇▇▇ to have
full access at all reasonable times, and in a manner so as not to
interfere with the normal business operations of Emergisoft, to all
premises, properties, personnel, books, records (including Tax records,
contracts, and documents of or pertaining to Emergisoft.
Section 5.06. Notice of Developments. Emergisoft and ▇▇▇▇▇▇ will give
prompt written notice to the other party of any adverse development causing a
breach of any of the representations and warranties in Article 3 or 4,
respectively. No disclosure by any Party pursuant to this Section 5.06, however,
shall be deemed to amend or supplement the Emergisoft Disclosure Schedule or the
▇▇▇▇▇▇ Disclosure Schedule, as applicable, or to prevent or cure any
misrepresentation, breach of warranty, or breach of covenant.
Section 5.07. Exclusivity.
(a) ▇▇▇▇▇▇ agrees that it, prior to the Effective Time, shall
not, directly or indirectly, nor shall it permit any of its
Subsidiaries to, nor shall it authorize or permit any director,
officer, employee or agent of, or any investment banker, attorney,
accountant or other advisor or representative of, ▇▇▇▇▇▇ or any of its
Subsidiaries (collectively, the "▇▇▇▇▇▇ Representatives") to, directly
or indirectly through another Person, solicit, initiate, encourage,
induce or facilitate the making, submission or announcement of any
Acquisition Proposal, or participate in any discussions or negotiations
regarding, or furnish to any Person any information with respect to, or
take any other action to facilitate any inquiries or the making of any
proposal that constitutes, or would reasonably be expected to lead to,
any Acquisition Proposal, or approve, endorse or recommend any
Acquisition Proposal, or enter into any letter of intent, agreement in
principle, acquisition agreement or other document or contract
contemplating or otherwise relating to an Acquisition Proposal,
provided, however, that, the foregoing shall not prohibit ▇▇▇▇▇▇ from
furnishing information to or entering into discussions or negotiations
with, any Person that makes an unsolicited bona fide proposal to enter
into a business combination with ▇▇▇▇▇▇ pursuant to an Acquisition
Proposal which the Board of Directors of ▇▇▇▇▇▇ (or any committee
thereof considering such proposal) in good faith determines is
reasonably likely to be more favorable to the stockholders of ▇▇▇▇▇▇
than the transactions contemplated by this Agreement (a "Superior
Proposal"), so long as:
(i) prior to furnishing any information to, or
entering into discussions or negotiations with such a Person,
▇▇▇▇▇▇ provides twenty- four (24) hours' advance written
notice to Emergisoft to the effect that it is furnishing
information to, or entering into substantive discussions or
negotiations with, a Person from whom ▇▇▇▇▇▇ shall have
received an executed confidentiality agreement in form and
substance satisfactory to Emergisoft prior to furnishing such
information;
(ii) such notice shall include the terms
and conditions of such Acquisition Proposal or any
agreement proposed by, or any information supplied to, any
such Person;
(iii) prior to furnishing any nonpublic information
to any such Person, ▇▇▇▇▇▇ furnishes such nonpublic
information to Emergisoft (to the extent that such nonpublic
information has not been previously furnished by ▇▇▇▇▇▇ to
Emergisoft);
(iv) neither ▇▇▇▇▇▇ nor any of its
Subsidiaries nor any of the ▇▇▇▇▇▇ Representatives shall
have violated any of the restrictions set forth in this
Section 5.07;
(v) such unsolicited bona fide proposal relating to a
Superior Proposal is made by a third party that the Board of
Directors of ▇▇▇▇▇▇ (or any committee thereof considering such
proposal) determines in good faith has the good faith intent
to proceed with negotiations to consider such Superior
Proposal;
(vi) the Board of Directors of ▇▇▇▇▇▇ (or any
committee thereof considering such proposal), after duly
considering the written advice of outside legal counsel to
▇▇▇▇▇▇, determines in good faith that such action is required
for the Board of Directors of ▇▇▇▇▇▇ to comply with its
fiduciary duties to stockholders imposed by applicable law;
and
(vii) ▇▇▇▇▇▇ keeps Emergisoft informed in all
material respects of the status and terms of any such
negotiations or discussions (including without limitation the
identity of the Person with whom such negotiations or
discussions are being held) and provides Emergisoft copies of
such written proposals and any amendments or revisions thereto
or correspondence related thereto.
(b) ▇▇▇▇▇▇ shall notify Emergisoft orally and in writing of
the fact that it has received inquiries, offers or proposals that it
reasonably believes to be bona fide with respect to an Acquisition
Proposal within twenty-four (24) hours after the receipt thereof.
▇▇▇▇▇▇ will immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any other Person that have
been conducted heretofore with respect to a potential Acquisition
Proposal. ▇▇▇▇▇▇ agrees to inform the ▇▇▇▇▇▇ Representatives of the
obligations undertaken in this Section 5.07; provided, however, that
nothing contained in this Agreement shall prevent the Board of
Directors of ▇▇▇▇▇▇ from referring any third-party to this Section
5.07.
(c) ▇▇▇▇▇▇ agrees not to release or permit the release of any
Person from, or to waive or permit the waiver of any provision of, any
confidentiality, "standstill" or similar agreement to which ▇▇▇▇▇▇ or
any of its Subsidiaries is a party, and will use its best efforts to
enforce or cause to be enforced each such agreement at the request of
Emergisoft.
(d) Except as expressly permitted by this Section 5.07,
neither the Board of Directors of ▇▇▇▇▇▇ nor any committee thereof
shall (A) withdraw, modify or change, or propose publicly to withdraw,
modify or change, in a manner adverse to Emergisoft, the approval by
such board of directors or such committee of the board of directors,
approving or taking such action with respect to the Merger or this
Agreement, (B) approve or recommend, or propose publicly to approve or
recommend, any Superior Proposal or (C) cause ▇▇▇▇▇▇ to enter into any
letter of intent, agreement in principle, acquisition agreement or
other similar agreement (each, an "Acquisition Agreement") related to
any Acquisition Proposal. Notwithstanding the foregoing, in the event
that the Board of Directors of ▇▇▇▇▇▇ (or any committee thereof
considering an Acquisition Proposal) determines in good faith, after
consultation with outside counsel, that in light of a Superior Proposal
it is necessary to do so in order to act in a manner consistent with
its fiduciary duties to the stockholders of ▇▇▇▇▇▇ under applicable
law, the Board of Directors of ▇▇▇▇▇▇ may (subject to this and the
following sentences) withdraw, modify or change its recommendation of
the Merger, but only after twenty-four (24) hours following
Emergisoft's receipt of written notice advising Emergisoft that the
Board of Directors of ▇▇▇▇▇▇ is prepared to do so, and only if, during
such twenty-four (24) hour period, ▇▇▇▇▇▇ and its advisors shall have
negotiated in good faith with Emergisoft to make such adjustments in
the terms and conditions of this Agreement as would enable Emergisoft
to proceed with the transactions contemplated herein on such adjusted
terms.
(e) Nothing contained in this Section 5.07 shall prohibit
▇▇▇▇▇▇ from taking and disclosing to its stockholders a position
contemplated by Rules 14d-9 and/or 14e-2(a) promulgated under the
Exchange Act or from making any disclosure to the stockholders of
▇▇▇▇▇▇ if, in the good faith judgment of the Board of Directors of
▇▇▇▇▇▇, after consultation with outside counsel, failure to so disclose
would be inconsistent with its obligations under applicable law.
For purposes of this Section 5.07, "Acquisition Proposal" means any
offer or proposal for (whether or not in writing and whether or not delivered to
the stockholders of ▇▇▇▇▇▇ generally), from any Person relating to any (a)
direct or indirect acquisition or purchase of assets (x) that constitute 15% or
more of the assets of ▇▇▇▇▇▇ and its Subsidiaries taken as a whole or (y) for
which 15% or more of the net revenues or net income of ▇▇▇▇▇▇ and its
Subsidiaries taken as a whole are attributable, (b) direct or indirect
acquisition or purchase of 15% or more of any class of equity securities of
▇▇▇▇▇▇ or any of its Subsidiaries whose business constitutes 15% or more of the
net revenues, net income or assets of ▇▇▇▇▇▇ and its Subsidiaries, taken as a
whole, (c) tender offer or exchange offer that if consummated would result in
any Person beneficially owning 15% more of any class of equity securities of
▇▇▇▇▇▇ or any of its Subsidiaries whose business constitutes 15% or more of the
net revenues, net income or assets of ▇▇▇▇▇▇ and its Subsidiaries, taken as a
whole, or (d) merger, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving ▇▇▇▇▇▇ or any of its
Subsidiaries whose business constitutes 15% or more of the net revenues, net
income or assets of ▇▇▇▇▇▇ and its Subsidiaries, taken as a whole, other than
the transactions contemplated by this Agreement.
Section 5.08. Break-Up Fee. In the event ▇▇▇▇▇▇ enters into an
Acquisition Agreement related to any Acquisition Proposal, ▇▇▇▇▇▇ shall,
immediately upon exception of such Acquisition Agreement pay to Emergisoft the
cash sum of $1,000,000 as a break-up fee.
Section 5.09. Filing of Current Report on Form 8-K. Promptly after
execution of this Agreement, ▇▇▇▇▇▇ shall file if required or permitted under
the Exchange Act a Current Report on Form 8-K ("8-K") with the SEC to report the
proposed Merger and terms thereof.
Section 5.10. Composition of ▇▇▇▇▇▇ and Surviving Corporation Board and
Officers at Effective Time. ▇▇▇▇▇▇ will take all necessary actions to ensure
that, at the Effective Time, the Board of Directors of ▇▇▇▇▇▇ is comprised of,
and the officer positions of ▇▇▇▇▇▇ are filled with, the persons set forth on
Exhibit D of the Disclosure Schedule, each to serve until his or her successor
is elected and qualified or until the earlier termination, resignation or
removal.
Section 5.11. Change of Corporate Name. ▇▇▇▇▇▇ will take all
necessary actions to ensure that, at the Effective Time, the corporate
name of ▇▇▇▇▇▇ is changed to Emergisoft Holding, Inc. or other name selected
by Emergisoft.
Section 5.12. Information Statement. ▇▇▇▇▇▇, with the cooperation and
assistance of Emergisoft and its counsel, will prepare and file with the SEC no
later than five (5) Business Days after the date of this Agreement and, not less
than ten (10) days thereafter, distribute to the holders of ▇▇▇▇▇▇ Common Stock
the 14(f) Information Statement containing all the information required or
permitted by Rule 14f-1 and other applicable rules and regulations under the
Exchange Act. In addition, after the Closing Date, Emergisoft will cause to be
prepared and filed with the SEC at least ten (10) days prior to mailing to the
holders of ▇▇▇▇▇▇ Common Stock, a Schedule 14C and information statement
pursuant to Rule 14(c) ("14(c) Information Statement") describing the change of
corporate name of ▇▇▇▇▇▇ and any other corporate matters management of
Emergisoft believes is necessary or appropriate.
Section 5.13. Disclosure Document. Emergisoft, with the cooperation and
assistance of ▇▇▇▇▇▇ and its counsel, will prepare, no later than five (5)
Business Days after the date of this Agreement, and distribute to the holders of
Emergisoft securities a disclosure document ("Disclosure Document") containing
all of the information material or reasonably necessary for the Emergisoft
security holders to make an informed decision about the Merger. The Disclosure
Document will contain information about ▇▇▇▇▇▇ and Emergisoft substantially as
described in Regulation S-B of the Securities Act and offer any Emergisoft
security holder who does not consent to the Merger an opportunity to dissent and
receive payment of the fair value of his securities in accordance with the
provisions of the General Corporation Law of Delaware.
Section 5.14. Section 16(b) Board Approval. Prior to Closing, the Board
of Directors of ▇▇▇▇▇▇ shall, by resolution duly adopted by such Board of
Directors or a duly authorized committee of "non-employee directors" thereof,
approve and adopt, for purposes of exemption from "short-swing" liability under
Section 16(b) of the Exchange Act, the acquisition of ▇▇▇▇▇▇ Common Stock at the
Effective Time by officers and directors of Emergisoft who become, prior to, at
or following the Effective Time of the Merger, officers or directors of ▇▇▇▇▇▇
as a result of the conversion of shares of Emergisoft Shares in the Merger and
the assumption of any Emergisoft options or warrants by ▇▇▇▇▇▇ at the Effective
Time. Such resolution shall set forth the name of the applicable "insiders" for
purposes of Section 16 of the Exchange Act, the number of securities to be
acquired by each individual, that the approval is being granted to exempt the
transaction under Rule 16b-3 under the Exchange Act, and, for the options and
warrants of Emergisoft to be assumed by ▇▇▇▇▇▇ at the Effective Time, the
material terms of the options and warrants to purchase ▇▇▇▇▇▇ Common Stock
acquired by such insiders as a result of the assumption by ▇▇▇▇▇▇ of such
options and warrants.
Section 5.15. Confidentiality. Each of ▇▇▇▇▇▇ and its Subsidiaries
agrees that, until the earlier of (i) two years from the date of this Agreement
and (ii) the Effective Time:
(a) each of ▇▇▇▇▇▇ and its Subsidiaries will treat and hold as
such all of the Confidential Information, refrain from using any of the
Confidential Information except in connection with this Agreement, and
deliver promptly to Emergisoft or destroy, at the request and option of
Emergisoft, all tangible embodiments (and all copies) of the
Confidential Information, including in electric or magnetic form, which
are in his, her or its possession;
(b) in the event that any of ▇▇▇▇▇▇ and its Subsidiaries is
requested or required (by oral question or request for information or
documents in any legal proceeding, interrogatory, subpoena, civil
investigative demand, or similar process) to disclose any Confidential
Information, that ▇▇▇▇▇▇ and its Subsidiaries will notify Emergisoft
promptly of the request or requirement so that Emergisoft may seek an
appropriate protective order or waive compliance with the provisions of
this Section 5.15; and
(c) if, in the absence of a protective order or the receipt of
a waiver hereunder, any of ▇▇▇▇▇▇ or its Subsidiaries is, on the advice
of counsel, compelled to disclose any Confidential Information to any
tribunal or else stand liable for contempt, that ▇▇▇▇▇▇ or its
Subsidiaries may disclose the Confidential Information to the tribunal;
provided, however, that the disclosing party shall use his, her or its
reasonable best efforts to obtain, at the reasonable request of
Emergisoft, an order or other assurance that confidential treatment
will be accorded to such portion of the Confidential Information
required to be disclosed as Emergisoft shall designate.
Section 5.16. Presentation to Stockholders. Emergisoft shall, promptly
after the date of this Agreement, take all actions necessary in accordance with
the Delaware Law, Emergisoft's Certificate of Incorporation and Bylaws to
present the Merger and this Agreement to the holders of Emergisoft's Common
Stock for their consideration and approval by the vote thereof at a meeting of
Emergisoft's Common Stock duly called and convened to act on the Merger and this
Agreement (the "Stockholders' Meeting") (or, in lieu thereof, such action may be
taken by written consent in accordance with the Delaware Law and Emergisoft's
Certificate of Incorporation).
ARTICLE 6
POST-CLOSING COVENANTS
The Parties agree as follows with respect to the period following the
Closing.
Section 6.01. General. In case at any time after the Closing any
further action is necessary to carry out the purposes of this Agreement, each of
the Parties will take such further actions (including the execution and delivery
of such further instruments and documents) as any other Party reasonably may
request, all at the sole cost and expense of the requesting Party.
Section 6.02. Transition. None of ▇▇▇▇▇▇ and its Subsidiaries will take
any action that is designed or intended to have the effect of discouraging any
lessor, licensor, customer, supplier, or other business associate of ▇▇▇▇▇▇ and
its Subsidiaries from maintaining the same business relationships with ▇▇▇▇▇▇
and its Subsidiaries after the Closing as it maintained with ▇▇▇▇▇▇ and its
Subsidiaries prior to the Closing.
Section 6.03. Reports on Form 8-K. Immediately after the Closing Date,
Emergisoft will procure the prompt preparation and file with the SEC appropriate
notice describing this transaction on Form 8-K or other applicable form, which
includes the information specified in Item 1 of Form 8-K, and otherwise comply
with the provisions of the Securities Exchange Act. Within sixty (60) days after
the original report on Form 8-K must be filed, Emergisoft will procure the
prompt preparation and file with the SEC an amendment to the 8-K filed
immediately after the closing which includes the financial statements and pro
forma financial information prepared pursuant to Regulation S-X for the periods
specified in Rule 3.05(b).
ARTICLE 7
CONDITIONS TO OBLIGATION TO CLOSE
Section 7.01. Conditions to Obligation of Emergisoft. The obligation of
Emergisoft to consummate the transactions to be performed by it in connection
with the Closing is subject to satisfaction of the following conditions:
(a) the representations and warranties set forth in
Article 4 shall be true and correct in all material respects at and as
of the Closing Date;
(b) ▇▇▇▇▇▇ and its Subsidiaries shall have performed
and complied with all of their covenants hereunder in all material
respects through the Closing;
(c) ▇▇▇▇▇▇ and its Subsidiaries shall have procured
all of the material third party consents specified in Section 5.02;
(d) no action, suit, or proceeding shall be pending or
Threatened before any court or quasi-judicial or administrative agency
of any federal, state, local or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling or charge would (i) prevent consummation of any of the
transactions contemplated by this Agreement, (ii) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, (iii) affect adversely the right of Emergisoft
shareholders to own ▇▇▇▇▇▇ Common Stock shares and to control ▇▇▇▇▇▇
and its Subsidiaries, or (iv) affect materially and adversely the right
of ▇▇▇▇▇▇ and its Subsidiaries to own its assets and to operate its
businesses (and no such injunction, judgment, order, decree, ruling or
charge shall be in effect);
(e) ▇▇▇▇▇▇ and its Subsidiaries shall have delivered to
Emergisoft a certificate to the effect that each of the conditions
specified above in Section 7.01(a)-(d) is satisfied in all respects;
(f) the Parties, ▇▇▇▇▇▇ and its Subsidiaries shall have
received all other material authorizations, consents, and approvals of
governments and governmental agencies referred to in Section 4.03;
(g) Emergisoft shall have received from counsel or, in the
case of clause (i), the tax accountants of ▇▇▇▇▇▇: (i) a tax opinion in
form and substance as set forth in Exhibit B attached hereto, and (ii)
an opinion in form and substance as set forth in Exhibit C attached
hereto, each addressed to Emergisoft and dated as of the Closing Date;
(h) ▇▇▇▇▇▇ and its Subsidiaries shall have delivered to
Emergisoft releases from each of its directors and officers to the
effect that each director and officer of ▇▇▇▇▇▇ and its Subsidiaries
remises, releases and forever discharges, other than with respect to
the obligations arising on or after the Closing Date under this
Agreement: (i) ▇▇▇▇▇▇, its Subsidiaries and Affiliates and (ii)
Emergisoft and its Affiliates, and any of their respective heirs,
executors, administrators, successors and assigns (collectively,
"Releases"), from all liability whatsoever (whether actual or
contingent) which may be owing to such director or officer, including
without limitation, any and all claims, demands, proceedings, causes of
action, awards, decisions, injunctions, judgments, orders, rulings,
subpoenas, verdicts, obligations, contracts, agreements, debts and
liabilities whatsoever, whether in law or equity (including any right
of contribution), whether arising under contract or arrangement, by
operation of law or otherwise, existing or arising from any acts or
events occurring or failing to occur, or alleged to have occurred or to
have failed to occur, or any conditions existing or alleged to have
existed on or before Closing;
(i) the persons listed in Exhibit D shall have been elected
directors of ▇▇▇▇▇▇ and its Subsidiaries, and the current directors and
officers of ▇▇▇▇▇▇ and its Subsidiaries shall have resigned their
respective board and officer positions;
(j) at least ten (10) days prior to the Closing Date, ▇▇▇▇▇▇
has mailed to its stockholders of record and filed with the SEC the
14(f) Information Statement, in compliance with the requirements of
Section 14(f), Regulation 14E and Rule 14f-1 of the Exchange Act;
(k) At Closing, Emergisoft shall have received from ▇▇▇▇▇▇:
(1) all documents, books (including minute books,
stock certificate books, stock ledgers and the corporate
seal), records (including Tax records), agreements and
financial data of any sort relating to ▇▇▇▇▇▇ and its
Subsidiaries;
(2) a certified copy of the Certificate of
Incorporation of ▇▇▇▇▇▇ as in effect immediately prior to the
Effective Time certified as of a recent date by the Secretary
of State of the State of Nevada;
(3) certificates, as of the most recent practicable
dates, as to the corporate good standing of ▇▇▇▇▇▇ and its
Subsidiaries issued by the Secretary of State of the State of
Nevada and any other state in which ▇▇▇▇▇▇ and its
Subsidiaries are required to be qualified or licensed to
transact business, confirming such good standing on or
immediately prior to the Closing Date;
(4) a copy of the bylaws of ▇▇▇▇▇▇ in effect on
the Closing Date certified by the Secretary of ▇▇▇▇▇▇ as of
the Closing Date;
(5) a copy of the stockholder register of
▇▇▇▇▇▇, as of the most recent practicable date, certified
by the transfer agent for the ▇▇▇▇▇▇ Shares;
(6) resolutions of the Board of Directors of ▇▇▇▇▇▇
and ▇▇▇▇▇▇ Sub, authorizing and approving all matters in
connection with this Agreement (including matters set forth in
Section 5.12) and the transactions contemplated hereby,
certified by the Secretary of ▇▇▇▇▇▇ as of the Closing Date;
(7) stock certificates bearing the usual restrictive
legend for securities issued without registration under the
Securities Act representing the unregistered shares of ▇▇▇▇▇▇
Common Stock issuable pursuant to Article 2 upon presentation
of the Certificates;
(8) such other documents as Emergisoft may
reasonably request;
(9) a binding agreement, in all respects acceptable
to Emergisoft, between ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇ whereby ▇▇.
▇▇▇▇▇ agrees not to sell or otherwise dispose of any of his
shares of ▇▇▇▇▇▇ Common Stock prior to the first anniversary
of the Effective Time without the prior written consent of
▇▇▇▇▇▇. Such agreement is to include an indemnification
obligation of ▇▇. ▇▇▇▇▇ for breach of the representations and
warranties contained in Section 4 and a requirement for
deposit of all of ▇▇. ▇▇▇▇▇'▇ shares in escrow; and
(10) a binding agreement between ▇▇▇▇▇▇ and one or
more shareholders of ▇▇▇▇▇▇ providing for the return and
cancellation of the number of common shares of ▇▇▇▇▇▇ equal to
23,364,275, in all respects acceptable to Emergisoft.
(l) the contracts and agreements listed on Section
7.01(l) of the ▇▇▇▇▇▇ Disclosure Schedule shall have been terminated;
(m) all actions to be taken by ▇▇▇▇▇▇ in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to Emergisoft.
(n) the Merger and this Agreement shall have been approved and
adopted by the requisite vote of the stockholders of Emergisoft in
accordance with the Delaware Law and the Certificate of Incorporation
of Emergisoft;
(o) the aggregate number of Dissenting Shares held by
stockholders of Emergisoft shall not exceed 5% of the aggregate number
of shares of Emergisoft Common Stock outstanding as of the date of this
Agreement;
(p) Emergisoft shall have received from its independent
auditors, Ernst & Young, L.L.P., an unqualified opinion that the
December 31, 1999 and 2000 consolidated financial statements of
Emergisoft and its Subsidiary present fairly, in all material respects,
the financial position of Emergisoft and its Subsidiary at December 31,
1999 and 2000, and the results of their operations and their cash flows
for the years ended December 31, 1999 and 2000 in conformity with
generally accepted accounting principles; and
(q) Emergisoft shall have received from InfoSphere
Incorporated the commercial production version of Release 1.0 of
Emergisoft's CareLyncED software product, and such version shall have
passed all required acceptance testing to Emergisoft's satisfaction.
Emergisoft may waive any condition specified in this Section 7.01 if it
executes a writing so stating at or prior to the Closing.
Section 7.02 Conditions to Obligation of ▇▇▇▇▇▇. The obligation of
▇▇▇▇▇▇ to consummate the transactions to be performed by them in connection with
the Closing is subject to satisfaction of the following conditions:
(a) the representations and warranties set forth in
Article 3 shall be true and correct in all material respects at and as
of the Closing Date;
(b) Emergisoft shall have performed and complied with
all of its covenants hereunder in all material respects through the
Closing;
(c) no action, suit, or proceeding shall be pending before any
court or quasi-judicial or administrative agency of any federal, state,
local, or foreign jurisdiction or before any arbitrator wherein an
unfavorable injunction, judgment, order, decree, ruling or charge would
(i) prevent consummation of any of the transactions contemplated by
this Agreement or (ii) cause any of the transactions contemplated by
this Agreement to be rescinded following consummation (and no such
injunction, judgment, order, decree, ruling or charge shall be in
effect);
(d) Emergisoft shall have delivered to ▇▇▇▇▇▇ a
certificate to the effect that each of the conditions specified above
in Section 7.02(a)-(c) is satisfied in all respects;
(e) the Parties and ▇▇▇▇▇▇ shall have received all
other material authorizations, consents, and approvals of
governments and governmental agencies referred to in Section 4.03;
(f) all actions to be taken by Emergisoft in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to ▇▇▇▇▇▇;
(g) Emergisoft shall have delivered to ▇▇▇▇▇▇ a purchaser
representation letter from each Emergisoft security holder who receives
securities of ▇▇▇▇▇▇ substantially in the form of Exhibit E; and
(h) Emergisoft shall have delivered an agreement binding upon
▇▇▇▇▇▇ and one or more shareholders designated by ▇▇▇▇▇▇, providing
that the number of issued and outstanding shares of common stock of
▇▇▇▇▇▇ will not be reduced, except: (i) in the case of an acquisition
by ▇▇▇▇▇▇ that represents more than $5,000,000 of net asset value, (ii)
a change in voting control of ▇▇▇▇▇▇ resulting from a sale for a
consideration of not less than $5,000,000, (iii) the issuance by ▇▇▇▇▇▇
of debt or equity securities in the amount of not less than $4,000,000,
or (iv) the expiration of 12 months from the Closing Date.
▇▇▇▇▇▇ may waive any condition specified in this Section 7.02 if they
execute a writing so stating at or prior to the Closing.
ARTICLE 8
TERMINATION
Section 8.01. Termination of Agreement. Certain of the Parties
may terminate this Agreement as provided below:
(a) ▇▇▇▇▇▇ and Emergisoft may terminate this Agreement
by mutual written consent at any time prior to the Closing;
(b) Emergisoft may terminate this Agreement by giving written
notice to ▇▇▇▇▇▇ at any time prior to the Closing (i) in the event any
of ▇▇▇▇▇▇ and its Subsidiaries has breached any material
representation, warranty, or covenant contained in this Agreement in
any material respect, Emergisoft has notified ▇▇▇▇▇▇ of the breach, and
the breach has continued without cure for a period of ten (10) days
after the notice of breach or (ii) if the Closing shall not have
occurred on or before April 30, 2001, by reason of the failure of any
condition precedent under Section 7.01 hereof (unless the failure
results primarily from Emergisoft itself breaching any representation,
warranty, or covenant contained in this Agreement); and
(c) ▇▇▇▇▇▇ may terminate this Agreement by giving written
notice to Emergisoft at any time prior to the Closing (i) in the event
Emergisoft has breached any material representation, warranty, or
covenant contained in this Agreement in any material respect, ▇▇▇▇▇▇
has notified Emergisoft of the breach, and the breach has continued
without cure for a period of ten (10) days after the notice of breach
or (ii) if the Closing shall not have occurred on or before April 30,
2001, by reason of the failure of any condition precedent under Section
7.02 hereof (unless the failure results primarily from any of ▇▇▇▇▇▇
and its Subsidiaries themselves breaching any representation, warranty,
or covenant contained in this Agreement).
Section 8.02. Effect of Termination. If any Party terminates this
Agreement pursuant to Section 8.01, all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to any other Party
(except for any liability of any Party then in breach); provided, however, that
the confidentiality provisions contained in Section 5.12 shall survive
termination.
ARTICLE 9
MISCELLANEOUS
Section 9.01. Press Releases and Public Announcements. No Party shall
issue any press release or make any public announcement relating to the subject
matter of this Agreement prior to the Closing without the prior written approval
of ▇▇▇▇▇▇ and Emergisoft; provided, however, that any Party may make any public
disclosure it believes in good faith is required by applicable law or any
listing or trading agreement concerning its publicly-traded securities (in which
case the disclosing Party will use its reasonable best efforts to advise the
other Parties prior to making the disclosure).
Section 9.02. No Third Party Beneficiaries. This Agreement shall not
confer any rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns, except for Section 6.03.
Section 9.03. Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement among the Parties and
supersedes any prior understandings, agreements, or representations by or among
the Parties, written or oral, to the extent they relate in any way to the
subject matter hereof.
Section 9.04. Succession and Assignment. This Agreement shall be
binding upon and inure to the benefit of the Parties named herein and their
respective successors and permitted assigns. No Party may assign either this
Agreement or any of his, her or its rights, interests, or obligations hereunder
without the prior written approval of ▇▇▇▇▇▇ and Emergisoft.
Section 9.05. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
Section 9.06. Headings. The section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way
the meaning or interpretation of this Agreement.
Section 9.07. Notices. All notices, requests, demands, claims, and
other communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if (and then
two (2) business days after) it is sent by (a) confirmed facsimile; (b)
overnight delivery; or (c) registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to Emergisoft: Emergisoft Holding, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇, Chief Operating Officer & CFO
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
With a copy to: ▇▇▇▇▇▇ & Hanger, L.L.P.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
If to ▇▇▇▇▇▇: ▇▇▇▇▇▇ International Discovery, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇▇▇▇@▇▇▇.▇▇▇
With a copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇▇@▇▇▇.▇▇▇
Any Party may send any notice, request, demand, claim or other
communication hereunder to the intended recipient at the address set forth above
using any other means (including personal delivery, expedited courier, messenger
service, telecopy, telex, ordinary mail or electronic mail), but no such notice,
request, demand, claim or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address to which notices, requests, demands, claims and
other communications hereunder are to be delivered by giving the other Parties
notice in the manner herein set forth.
Section 9.08. Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Delaware without
giving effect to any choice or conflict of law provision or rule (whether of the
State of Delaware or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Delaware.
Section 9.09. Amendments and Waivers. No amendment of any provision of
this Agreement shall be valid unless the same shall be in writing and signed by
▇▇▇▇▇▇ and Emergisoft. No waiver by any Party of any default, misrepresentation,
or breach of warranty or covenant hereunder, whether intentional or not, shall
be deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
Section 9.10. Severability. Any term or provision of this Agreement
that is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction.
Section 9.11. Expenses. Each of the Parties will bear his, her or its
own costs and expenses (including legal fees and expenses) incurred in
connection with this Agreement and the transactions contemplated hereby.
Section 9.12. Construction. The Parties have participated jointly in
the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation.
Section 9.13. Incorporation of Exhibits and Schedules. The Exhibits,
Annexes and Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.
Section 9.14. Submission to Jurisdiction. Each of the Parties submits
to the jurisdiction of any state or federal court sitting in Tarrant County,
Texas, in any action or proceeding arising out of or relating to this Agreement
and agrees that all claims in respect of the action or proceeding may be heard
and determined in any such court. Each Party also agrees not to bring any action
or proceeding arising out of or relating to this Agreement in any other court.
Each of the Parties waives any defense of inconvenient forum to the maintenance
of any action or proceeding so brought and waives any bond, surety or other
security that might be required of any other Party with respect thereto. Any
Party may make service on any other Party by sending or delivering a copy of the
process to the Party to be served at the address and in the manner provided for
the giving of notices in Section 9.07 above. Nothing in this Section 9.14,
however, shall affect the right of any Party to bring any action or proceeding
arising out of or relating to this Agreement in any other court or to serve
legal process in any other manner permitted by law or at equity. Each Party
agrees that a final judgment in any action or proceeding so brought shall be
conclusive and may be enforced by suit on the judgment or in any other manner
provided by law or at equity.
Section 9.15. Survival. The representations and warranties of the
parties contained in this Agreement shall not survive the Effective Time. The
covenants and agreements of the parties to be performed after the Effective Time
contained in this Agreement shall survive the Effective Time.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
▇▇▇▇▇▇ INTERNATIONAL DISCOVERY, INC.
(a Nevada corporation)
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
EMERGISOFT HOLDING, INC.
(a Delaware corporation)
By: /s/ ▇▇▇ ▇▇▇▇▇
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▇▇▇ ▇▇▇▇▇, Chief Operating Officer and CFO
EMS ACQUISITION CORP.
(a Delaware corporation)
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
