EXHIBIT 10.1
AGREEMENT AND PLAN OF MERGER
By and Among
Peritus Software Services, Inc.
("Company"),
Rocket Software, Inc.
("Rocket")
and
Rocket Acquisition Company, Inc.
("Acquiror")
April 18, 2001
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER is made as of April 18, 2001, by and among
Peritus Software Services, Inc., a Massachusetts corporation ("Company"),
Rocket Software, Inc., a Massachusetts corporation ("Rocket"), and Rocket
Acquisition Company, Inc., a Massachusetts corporation ("Acquiror").
RECITALS
A. The respective Boards of Directors of Company, Rocket and Acquiror deem
the merger of Acquiror into Company on the terms and conditions set forth in
this Agreement and Plan of Merger (as from time to time amended in accordance
herewith, this "Agreement") to be desirable and generally to the welfare and
advantage of each, and in the best interests of the stockholders of each.
B. The respective Boards of Directors of Company, Rocket and Acquiror have
approved this Agreement and the merger of Acquiror into Company, with Company
as the surviving corporation, and the other transactions contemplated by this
Agreement, upon the terms and subject to the conditions set forth herein.
C. The Board of Directors of Company has determined that the consideration
to be paid for each share of Company Common Stock in the Merger is fair to and
in the best interests of the stockholders of Company.
D. The Board of Directors of Company has approved the transactions
contemplated by this Agreement in accordance with the provisions of Section 1
of Massachusetts General Laws ch. 110F.
E. The Board of Directors of Company has directed that this Agreement be
submitted to the stockholders of Company for their approval, and Rocket, the
majority stockholder of Acquiror, has heretofore approved and adopted this
Agreement.
F. Certain capitalized terms used herein are defined in Section 7 of this
Agreement or elsewhere in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained and other valuable consideration, the receipt and adequacy
whereof are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby represent, warrant, covenant and agree as follows:
Section 1. The Merger and Related Matters.
1.1 The Merger.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, and in accordance with the Massachusetts Business Corporation Law
(the "MBCL"), at the Effective Time, Acquiror shall be merged with and into
Company (the "Merger"). At the Effective Time, the separate corporate existence
of Acquiror shall cease, and Company shall continue as the surviving
corporation under the name Peritus Software Services, Inc. (the "Surviving
Corporation").
(b) Upon the terms and subject to the conditions set forth in this
Agreement, the Merger shall become effective at the time of filing of articles
of merger with the Secretary of State of the Commonwealth of Massachusetts in
accordance with the provisions of the MBCL (the "Articles of Merger"), or at
such later time in accordance with the provisions of the MBCL as is specified
in the Articles of Merger. The Articles of Merger shall be substantially in the
form of Articles of Merger attached hereto as Exhibit A. Company and Acquiror
agree to file the Articles of Merger at the time of the Closing. The date and
time when the Merger shall become effective is hereinafter referred to as the
"Effective Time."
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(c) From and after the Effective Time, the Surviving Corporation shall
possess all the rights, privileges, powers and franchises and be subject to all
of the restrictions, disabilities and duties of Acquiror and Company, and the
Merger shall otherwise have the effects provided for under the MBCL.
1.2 Closing. Unless this Agreement shall have been terminated and the
transactions contemplated hereby abandoned pursuant to Section 8, the closing
of the transactions contemplated by this Agreement (the "Closing") shall take
place at the offices of Xxxx and Door LLP, 00 Xxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx at 10:00 a.m., local time, on the first (1st) Business Day after
the date on which the last of the conditions set forth in Sections 5 and 6 is
fulfilled or waived, or at such other time, date or place as Company, Rocket
and Acquiror may mutually agree in writing. The date on which the Closing
actually takes place is hereinafter referred to as the "Closing Date".
1.3 Articles of Organization; By-Laws; Directors and Officers.
(a) The Articles of Organization of Company, as in effect immediately prior
to the Effective Time, shall be the Articles of Organization of the Surviving
Corporation until amended in accordance with the terms thereof and the MBCL.
The name of the Surviving Corporation shall be "Peritus Software Services,
Inc."
(b) The By-laws of Company, as in effect immediately prior to the Effective
Time, shall be the By-laws of the Surviving Corporation until amended in
accordance with the terms thereof, the Articles of Organization of the
Surviving Corporation and the MBCL.
(c) The directors and officers of Acquiror immediately prior to the
Effective Time shall be the directors and officers of the Surviving
Corporation, each to hold office in accordance with the Articles of
Organization and By-Laws of the Surviving Corporation.
1.4 Conversion of Shares. At the Effective Time, by virtue of the Merger and
without any action on the part of Acquiror or Company or their respective
stockholders:
(a) Each share of common stock, par value $0.01 per share, of Company (the
"Company Common Stock"), issued and outstanding immediately prior to the
Effective Time (other than Dissenting Shares and shares held by Rocket or any
of its wholly owned Subsidiaries or by Acquiror or any of its wholly owned
Subsidiaries and shares held in the treasury of Company or by any of its wholly
owned Subsidiaries) shall, by virtue of the Merger and without any action on
the part of the holder thereof, be converted into the right to receive $0.19
(the "Merger Price"), in cash, upon the surrender of the certificate
representing such share.
(b) Prior to the Effective Time, the Board of Directors of Company shall
adopt appropriate resolutions and take all other actions necessary to provide
that, except as may be otherwise agreed in writing between Acquiror and any
holder of any Company Option Securities, each Company Option Security issued
and outstanding immediately prior to the Effective Time (other than Company
Option Securities held by Rocket or any of its wholly owned Subsidiaries or
held in the treasury of Company or by any of its wholly owned Subsidiaries)
shall, by virtue of the Merger and without any action on the part of the holder
thereof, (i) in the case of Company Option Securities with a per share exercise
price that is less than the Merger Price, be converted into the right to
receive, upon the surrender of the instrument evidencing such Company Option
Security, a cash payment equal to the product (the "Company Option Security
Price") of (A) the number of shares of Company Common Stock subject to such
Company Option Security and (B) the excess, if any, of the Merger Price over
the per share exercise price of the Company Option Security, and each Company
Option Security so converted will, upon such payment, be canceled, and, (ii) in
the case of all other Company Option Securities, shall be canceled without
payment of any consideration therefor or any cost or penalty to or other
recourse to or against any of Company, Rocket and the Surviving Corporation and
without any conversion thereof. In no event shall the holder of any Company
Option Security be entitled, from and after the Effective Time, to acquire
securities of the Surviving Corporation or Rocket. Anything herein to the
contrary notwithstanding, no interest or dividends shall accrue or be payable
or paid on the Company Option Security Price to any Person hereunder.
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(c) Each share of common stock, par value $0.01 per share, of Acquiror
issued and outstanding immediately prior to the Effective Time shall, by virtue
of the Merger and without any action on the part of the holder thereof, be
converted into one share of common stock, par value $0.01 per share, of the
Surviving Corporation.
(d) Each share of Company Common Stock then held by Rocket or any direct or
indirect wholly owned Subsidiary of Rocket, or held by Acquiror or any direct
or indirect wholly owned Subsidiary of Acquiror, or held in the treasury of
Company or by any direct or indirect wholly owned Subsidiary of Company, shall
be canceled without payment of any consideration therefor and without any
conversion thereof.
(e) Notwithstanding anything in this Agreement to the contrary but only in
the circumstances and to the extent provided by the MBCL, shares of Company
Common Stock which are outstanding immediately prior to the Effective Time and
which are held by stockholders who were entitled to and did not vote such
shares in favor of the Merger or consented thereto in writing and who shall
have properly and timely delivered to Company a written demand for payment of
the fair cash value of shares of Company Common Stock in the manner provided in
and complied with all of the relevant provisions of Sections 86 and 89 of the
MBCL ("Dissenting Shares") shall not be converted into or represent the right
to receive the Merger Price. Instead, the holders thereof shall be entitled to
payment of the fair cash value of such shares in accordance with the provisions
of Sections 86 through 98 of the MBCL; provided, however, that (i) if any
holder of Dissenting Shares shall subsequently deliver a written withdrawal of
his demand for payment of the fair cash value of such shares and the Board of
Directors of Company or the Surviving Corporation, as the case may be, shall
consent thereto, or (ii) if any holder fails to establish and perfect his
entitlement to the relief provided in such Sections 86 through 98 of the MBCL
or if the right of such holder to receive the fair cash value of such shares of
Company Common Stock as to which he seeks relief otherwise terminates pursuant
to any of Sections 86 through 98 of the MBCL, such shares shall thereupon cease
to be deemed to be Dissenting Shares and shall be deemed to have been converted
into and represent the right to receive, upon the surrender of the certificate
or certificates representing such shares, as of the Effective Time, the Merger
Price. Company will not settle any demand with respect to any Dissenting Shares
without the consent of Rocket and Acquiror.
1.5 Payment. (a) Pursuant to an agreement reasonably satisfactory to
Company, Rocket and Acquiror (the "Disbursing Agent Agreement") to be entered
into before the Closing Date among Rocket, Acquiror and a disbursing agent to
be selected by Company and reasonably satisfactory to Rocket and Acquiror (the
"Disbursing Agent"), at or immediately following the Effective Time, Company
shall deposit or cause to be deposited in trust for the benefit of Company's
stockholders cash to which holders of Company Common Stock and holders of the
Company Option Securities shall be entitled at the Effective Time pursuant to
the provisions of Section 1.4. The Disbursing Agent shall invest the cash
deposited with it in such manner as the Surviving Corporation directs;
provided, however, that substantially all of such investments shall be in
obligations of or guaranteed by the United States of America, in commercial
paper obligations receiving the highest rating from either Xxxxx'x Investors
Service, Inc. or Standard & Poor's Corporation, or in certificates of deposit,
bank repurchase agreements or bankers' acceptances of commercial banks with
capital exceeding $1,000,000,000 (collectively, "Permitted Investments") or in
money market funds which are invested solely in Permitted Investments; provided
further, however, that the maturities of Permitted Investments shall be such as
to permit the Disbursing Agent to make prompt payment of the Merger Price. Any
net profit from, or interest or income produced by, Permitted Investments shall
be payable to the Surviving Corporation as and when requested by the Surviving
Corporation. The Surviving Corporation shall be required to replace any funds
lost as a result of any investment. Any funds remaining unclaimed following the
expiration of the twelfth (12th) month after the Effective Time shall be
released and repaid or redelivered by the Disbursing Agent to the Surviving
Corporation upon demand, after which time Persons entitled thereto may look,
subject to applicable escheat and other similar laws, only to the Surviving
Corporation and to Rocket, which shall remain responsible for payment thereof.
Notwithstanding the foregoing, neither the Surviving Corporation, Rocket nor
the Disbursing Agent shall be liable to any holder of a share of Company Common
Stock for any Merger Price delivered in respect of such share to a public
official pursuant to any applicable escheat or other similar law.
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(b) As soon as practicable after the Effective Time, the Disbursing Agent
shall send a notice and transmittal form to each holder of a certificate or
certificates theretofore evidencing shares of Company Common Stock, other than
certificates representing Dissenting Shares (such certificates, other than
those representing shares to be canceled pursuant to Section 1.4(d) and
Dissenting Shares, are collectively referred to herein as the "Certificates"),
advising such holder of the effectiveness of the Merger and the procedure for
surrendering to the Disbursing Agent such Certificate for payment of the Merger
Price. Upon the surrender of a Certificate to the Disbursing Agent together
with and in accordance with such transmittal form, the holder thereof shall be
entitled to receive in exchange therefor the Merger Price payable in respect of
each share of Company Common Stock represented thereby. Upon such surrender,
the Disbursing Agent will promptly pay the Merger Price. Except as otherwise
provided in Section 1.4, until so surrendered, each such Certificate shall be
deemed for all purposes to evidence only the right to receive the Merger Price.
(c) If the Merger Price (or any portion thereof) is to be paid to a Person
other than the Person in whose name the Certificate surrendered in exchange
therefor is registered, it shall be a condition to the payment of the Merger
Price that the Certificate so surrendered shall be properly endorsed or
accompanied by appropriate stock powers and otherwise be in proper form for
transfer, that such transfer otherwise be proper and that the Person requesting
such transfer pay to the Disbursing Agent any transfer or other taxes payable
by reason of the foregoing or establish to the satisfaction of the Disbursing
Agent and the Surviving Corporation that such taxes have been paid or are not
required to be paid.
(d) In the event any Certificate shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the Person claiming such
Certificate to be lost, stolen or destroyed and subject to such other
reasonable conditions as the Board of Directors of the Surviving Corporation
may impose, the Surviving Corporation shall issue in exchange for such lost,
stolen or destroyed Certificate the Merger Price deliverable in respect thereof
as determined in accordance with Section 1.4. When authorizing such issue of
the Merger Price in exchange therefor, the Board of Directors of the Surviving
Corporation may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed Certificate to
give the Surviving Corporation a bond or other surety in such sum as it may
reasonably direct as indemnity against any claim that may be made against the
Surviving Corporation with respect to the Certificate alleged to have been
lost, stolen or destroyed.
(e) Anything herein to the contrary notwithstanding, no interest or
dividends shall accrue or be payable or paid on any portion of the Merger Price
payable to any Person hereunder.
(f) At and after the Effective Time, each holder of a Certificate or of a
certificate representing shares of Company Common Stock to be canceled pursuant
to Section 1.4(d) or of Dissenting Shares shall cease to have any rights as a
stockholder of Company, except, in the case of the holder of a Certificate for
the right to surrender Certificates in the manner prescribed by Section 1.5(b)
in exchange for payment of the Merger Price or, in the case of the holder of
Dissenting Shares, the right to perfect the right to receive payment for
Dissenting Shares pursuant to Sections 86 through 98 of the MBCL. No transfer
of Company Common Stock shall be made on the stock transfer books of the
Surviving Corporation at or after the Effective Time.
(g) The Disbursing Agent Agreement shall also contain provisions of a nature
similar to those set forth in this Section with respect to payment of the
Company Option Security Price required to be made with respect to Company
Option Securities as provided for in Section 1.4(b).
Section 2. Representations, Warranties, Covenants and Agreements of Company.
Except as otherwise disclosed in the Company SEC Documents or in the
Disclosure Schedule (the "Disclosure Schedule") delivered by Company to Rocket
herewith, Company hereby represents and warrants to Rocket and Acquiror as
follows:
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2.1 Organization and Business; Power and Authority; Effect of Transaction.
(a) Company (i) is a corporation duly organized, validly existing and in
good standing under the laws of the Commonwealth of Massachusetts, (ii) has all
requisite power and authority (corporate and other) to own or hold under lease
its properties and to conduct its business as now conducted and as presently
proposed to be conducted, and has made and has in full force and effect all
Governmental Authorizations and, to Company's knowledge, Private Authorizations
to the extent required for such ownership and lease of its property and conduct
of its business, and (iii) has duly qualified and is authorized to do business
and is in good standing as a foreign corporation in each jurisdiction in which
it is required to be so qualified or authorized to do business, except where
the failure to be so qualified or authorized to do business (individually or in
the aggregate) would not have a Material Adverse Effect on Company. Complete
and correct copies of the Articles of Organization and By-laws of Company, each
as amended to date, have heretofore been made available by Company to Rocket.
Such Articles of Organization and By-laws are in full force and effect.
(b) Company has all requisite corporate power and authority necessary to
enable it to execute and deliver, and to perform its obligations under, and to
consummate the transactions contemplated by, this Agreement and each
Transaction Document executed or to be executed by Company; and the execution,
delivery and performance of this Agreement and each Transaction Document
executed or to be executed by Company have been duly authorized by all
requisite corporate action, other than the Company Stockholder Approval. This
Agreement has been duly executed and delivered by Company and constitutes, and
each Transaction Document when executed and delivered by Company will
constitute, legal, valid and binding obligations of Company, enforceable in
accordance with their respective terms, subject as to enforcement of remedies
to applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting generally the enforcement of creditors' rights and subject to a
court's discretionary authority with respect to the granting of a decree
ordering specific performance or other equitable remedies.
(c) The authorized and outstanding capital stock of Company is as set forth
in the Disclosure Schedule. All of such outstanding capital stock has been duly
authorized and validly issued, is fully paid and nonassessable and is not
subject to any preemptive or similar rights. Except as set forth in the
Disclosure Schedule, (i) there is neither outstanding nor has Company or any
Subsidiary agreed to grant or issue any shares of capital stock or any Option
Security or Convertible Security and (ii) neither Company nor any Subsidiary is
a party to or is bound by any agreement, put or commitment pursuant to which it
is obligated to purchase, redeem or otherwise acquire any shares of capital
stock or any Option Security or Convertible Security. Complete and correct
copies of each of (A) the Long-Term Incentive Plan (1992), (B) the 1997 Stock
Incentive Plan and (C) the 1997 Director Stock Option Plan of Company, together
with representative forms of option agreements issued thereunder, have
heretofore been delivered by Company to Rocket.
(d) Subject to obtaining the Company Stockholder Approval, neither the
execution and delivery of this Agreement or any Transaction Document, nor the
consummation of the transactions herein or therein contemplated, nor compliance
with the terms, conditions and provisions hereof or thereof by Company or any
of its Subsidiaries:
(i) (A) will conflict with, or result in a breach or violation of, or
constitute a default under, any Applicable Law on the part of Company or
any of its Subsidiaries or (B) will conflict with or result in a breach or
violation of, or constitute a default under, any of the Organic Documents
of Company or any of its Subsidiaries or (C) will conflict with, or result
in a breach or violation of, or constitute a default under, or permit the
acceleration of any obligation or liability under, or but for any
requirement of giving of notice or passage of time or both would constitute
such a conflict with, breach or violation of, or default under, or permit
any such acceleration of, any Contractual Obligation of Company or any of
its Subsidiaries, or
(ii) will result in or permit the creation or imposition of any
Encumbrance upon any property now owned or leased by Company or any such
other party, except, with respect to the immediately preceding
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clauses (i)(C) and (ii), in cases where such conflicts, breaches,
violations, defaults, accelerations or Encumbrances would not (individually
or in the aggregate) result in a Material Adverse Effect on Company.
(e) Company does not have any Subsidiaries other than those set forth in on
the Disclosure Schedule, each of which (i) is wholly owned, is a corporation
which is duly organized, validly existing and in good standing under the laws
of the respective state of incorporation set forth opposite its name on the
Disclosure Schedule, (ii) has duly qualified and is authorized to do business
and is in good standing as a foreign corporation in each jurisdiction in which
it is required to be so qualified or authorized to do business, except where to
failure to be so qualified or authorized to do business (individually or in the
aggregate) would not have a Material Adverse Effect on Company, and (iii) has
full corporate power and authority to carry on the business in which it is
engaged. Each such Subsidiary has made and has in full force and effect all
Governmental Authorizations and, to Company's knowledge, Private Authorizations
required for such ownership and lease of its property and conduct of its
business. Company owns all of the outstanding capital stock as shown on the
Disclosure Schedule of each such Subsidiary, free and clear of all
Encumbrances, and all such stock has been duly authorized and validly issued
and is fully paid and nonassessable. There are no outstanding Option Securities
or Convertible Securities, or agreements, puts, commitments or understandings
with respect to any of the foregoing, of any nature whatsoever relating to the
authorized and unissued or the outstanding capital stock of any such
Subsidiaries. Except as shown on the Disclosure Schedule, neither Company nor
any of its Subsidiaries owns directly or indirectly any capital stock or equity
or proprietary interest in any other Entity or enterprise, however organized
and however such interest may be denominated or evidenced, or is party to or
bound by any agreements, puts, commitments or understandings pursuant to which
it is obligated to purchase or otherwise acquire any of the foregoing. None of
the Entities, if any, so set forth in the Disclosure Schedule is a Subsidiary
of Company except as so set forth.
2.2 Company SEC Documents; Undisclosed Liabilities.
(a) Each form, report, schedule, registration statement, definitive proxy
statement and other document filed or required to be filed by Company with the
Commission (as such documents have since the time of their filing been amended,
the "Company SEC Documents"), including any financial statements filed or
required to be filed as a part thereof, has been duly and timely filed by the
Company and complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as applicable, and none of the Company SEC
Documents contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not false or misleading. Company has heretofore made available to Rocket true
and complete copies of the Company SEC Documents. None of Company's
Subsidiaries is required to file any forms, reports, schedules, registration
statements, definitive proxy statements or other documents with the Commission.
(b) The audited consolidated financial statements and unaudited interim
consolidated financial statements of Company and its Subsidiaries included in
the Company SEC Documents (i) comply in all material respects with applicable
accounting requirements and the published rules and regulations of the
Commission with respect thereto, (ii) have been prepared in accordance with
GAAP applied on a consistent basis throughout the periods covered thereby
(except as may be indicated therein or in the notes thereto, and in the case of
quarterly financial statements, as permitted by Form 10-Q under the Exchange
Act), (iii) fairly present the consolidated financial condition, results of
operations and cash flows of the Company and its Subsidiaries as of the
respective dates thereof and for the periods referred to therein, and (iv) are
substantially consistent with the books and records of the Company. Except as
set forth in the Company SEC Documents, neither Company nor any of its
Subsidiaries has any liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) required by GAAP to be set forth on a
consolidated balance sheet of Company and its Subsidiaries or in the notes
thereto, as of the respective dates thereof and for the periods referred to
therein.
(c) Company has delivered to Rocket a true and complete copy of Company's
budget for the year ending December 31, 2001, as in effect at the date hereof.
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2.3 Absence of Certain Changes or Events. Since the date of the most recent
audited financial statements of Company and its Subsidiaries included in the
Company SEC Documents: (i) there has been no Material Adverse Effect on
Company; (ii) there has been no damage, destruction or loss, whether or not
covered by insurance, that has or is likely to have a Material Adverse Effect
on Company; (iii) none of the Company and its Subsidiaries has incurred any
material liability or obligation (whether accrued, absolute, contingent or
otherwise) other than in the ordinary course of business consistent with past
practice, nor entered into any material transaction or agreement not in the
ordinary course of business; (iv) there has been no dividend or distribution of
any kind declared, paid or made by the Company or, except for dividends paid to
the Company or any of its Subsidiaries on any class of capital stock or
repurchase or redemption by the Company or any of its Subsidiaries of any class
of capital stock; (v) there has been no change in accounting methods,
principles or practices by Company or any of its Subsidiaries materially
affecting its assets, liabilities or business, except insofar as may have been
required by a change in GAAP; (vi) there has been no revaluation by Company of
any of its or any of its Subsidiaries assets, other than any indirect
revaluation effected via a change in the market price or trading volume of the
Company Common Stock; (vii) each of Company and its Subsidiaries has operated
its business in the normal, usual and customary manner in the ordinary and
regular course of business consistent with past practice, including the
maintenance of working capital at normal operating levels consistent with prior
practice; and (viii) none of Company and its Subsidiaries has Encumbered any of
its property or assets, other than Permitted Encumbrances.
2.4 Title to Properties; Leases. Each of Company and its Subsidiaries has
good and valid title to all the properties and assets reflected as owned on the
most recent balance sheet of Company and its Subsidiaries included in the
Company SEC Documents or used by Company or any of its Subsidiaries in its
business if not so reflected, or purported to have been acquired by Company or
any of its Subsidiaries since such date (other than inventory sold, or
property, plant and other equipment used up or retired, since such date, in
each case in the ordinary course of business consistent with past practice of
Company and its Subsidiaries), in each case free and clear of all Encumbrances
other than Permitted Encumbrances. The real property, improvements, equipment
and personal property held under lease by any of Company and its Subsidiaries
are held under valid and enforceable Leases, with such exceptions as are not
material and do not materially interfere with the use made or proposed to be
made of such real property, improvements, equipment or personal property by the
Company or such Subsidiary, and Company or such Subsidiary enjoys peaceful and
undisturbed possession under all Leases pursuant to which it holds any real
property, improvements, equipment or personal property. The Disclosure Schedule
contains a true, correct and complete list of all real estate owned or leased
by Company or any of its Subsidiaries and all Leases and a list of all material
items of fixed assets and machinery and equipment.
2.5 Compliance with Contractual Obligations and Private Authorizations. The
Disclosure Schedule sets forth a true, accurate and complete list of each
Private Authorization and each Contractual Obligation which individually is
material to any of Company and its Subsidiaries, all of which are in full force
and effect. True and complete copies of each such Private Authorization and
Contractual Obligation have been made available by Company to Rocket. Each of
Company and its Subsidiaries has obtained and maintained all Private
Authorizations which are necessary for the ownership by it of its properties
and the conduct of its business as now conducted which, if not obtained and
maintained, would (individually or in the aggregate) have a Material Adverse
Effect on Company. Neither Company nor any Subsidiary is in breach or violation
of, or is in default in the performance, observance or fulfillment of, any
Contractual Obligation or Private Authorization, and no Event exists or has
occurred, which constitutes, or but for any requirement of giving of notice or
passage of time or both would constitute, such a breach, violation or default,
under any Contractual Obligation or Private Authorization, except for such
defaults, breaches or violations as would (individually or in the aggregate)
have a Material Adverse Effect on Company. No Private Authorization is the
subject of any pending or, to Company's knowledge, threatened repudiation,
revocation or termination.
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2.6 Litigation; Governmental Authorizations; Compliance with Applicable Law.
(a) The Disclosure Schedule contains a list of all Legal Actions which are
pending or in which Company or any of its Subsidiaries or any of its business,
operations or properties, or any of its officers or directors in connection
therewith, is engaged, or, to Company's knowledge, which involves the business,
operations or properties of Company or any of its Subsidiaries, or, to
Company's knowledge, which is threatened or contemplated against Company or any
of its Subsidiaries or any of their business, operations or properties, or any
of their officers or directors in connection therewith.
(b) The Company and each of its Subsidiaries has obtained and maintained all
Governmental Authorizations which are necessary for the ownership of its
properties and the conduct of its business as now conducted which, if not
obtained and maintained, would (individually or in the aggregate) have a
Material Adverse Effect on Company. No such Governmental Authorization is the
subject of any pending or, to Company's knowledge, threatened revocation on
termination.
(c) The Company is not in violation of or in default with respect to any
Applicable Law which (individually or in the aggregate) would have a Material
Adverse Effect on Company.
2.7 Intellectual Property Rights. Company and its Subsidiaries own or
possess sufficient trademarks, trade names, service marks, patent rights,
copyrights, licenses, approvals, trade secrets and other similar rights
(collectively, "Intellectual Property Rights") necessary to conduct their
businesses as now conducted; and the expected expiration of any of such
Intellectual Property Rights could not reasonably be expected to result in a
Material Adverse Effect on Company. None of Company and its Subsidiaries has
received any notice of infringement or conflict with asserted intellectual
property rights of others, which infringement or conflict, if the subject of an
unfavorable decision, would have a Material Adverse Effect on Company. The
Disclosure Schedule sets forth a true, accurate and complete list of (i) each
trademark, trade name, service xxxx, patent right or application, registered
copyright owned by any of Company and its Subsidiaries and (ii) each other item
of Intellectual Property Rights owned by any of Company and its Subsidiaries
which, in the good faith judgment of management of Company, individually is
material to any of Company and its Subsidiaries, all of which are in full force
and effect. To the knowledge of Company, none of such items of Intellectual
Property Rights is being infringed or violated by any other Person. No
licenses, sublicenses or agreements pertaining to any of such items of
Intellectual Property Rights are in effect except as set forth in the
Disclosure Schedule.
2.8 Employees.
(a) To Company's knowledge, no employee of any of Company and its
Subsidiaries is in violation of any material term of any employment contract,
patent disclosure or invention agreement or non-competition agreement. There is
no pending or, to Company's knowledge, threatened action, suit, proceeding or
claim, or to its knowledge any basis therefor or threat thereof, with respect
to any contract, agreement, covenant or obligation referred to in the preceding
sentence. Company does not have any collective bargaining agreement covering
any of its employees.
(b) The Disclosure Schedule lists all employment, management, consulting,
management retention or other personal service, or compensation agreements or
arrangements covering one or more non-employees (including severance,
termination or change-of-control arrangements) and all material employment,
management, consulting, management retention or other personal service, or
compensation agreements or arrangements covering one or more employees
(including severance, termination or change-of-control arrangements), in each
case entered into by Company or any of its Subsidiaries, and a true and
complete copy of each such agreement has been delivered to Rocket.
(c) The Disclosure Schedule sets forth a true and complete list as of April
9, 2001 of the names and positions of all employees of Company or any of its
Subsidiaries and their respective base rate of compensation.
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2.9 Related Party Transactions. The Disclosure Schedule sets forth a fair
and accurate list of any Contractual Obligation, or transaction occurring after
the date of the most recent financial statements contained in the Company SEC
Documents, between Company or any of its Subsidiaries and any of the officers,
directors, employees, stockholders of any of Company or its Subsidiaries or, to
Company's knowledge, any Affiliate of any of the foregoing (other than
reasonable and customary compensation for services as officers, directors and
employees), including any providing for the furnishing of services to or by,
providing for rental of property, real, personal or mixed, to or from, or
providing for the lending or borrowing of money to or from or otherwise
requiring payments to or from, any such officer, director, employee,
stockholder or Affiliate.
2.10 Insurance. The Company and its Subsidiaries are insured by recognized
institutions with policies in such amounts and with such deductibles and
covering such risks as are generally deemed adequate and customary for their
businesses including, but not limited to, policies covering real and personal
property owned or leased by the Company and its subsidiaries against theft,
damage, destruction and acts of vandalism. The nature, amount and carriers of
all such insurance are set forth in the Disclosure Schedule. The Company has no
reason to believe that it or any Subsidiary will not be able (i) to renew its
existing insurance coverage as and when such policies expire or (ii) to obtain
comparable coverage from similar institutions as may be necessary or
appropriate to conduct its business as now conducted and at a cost that would
not result in a Material Adverse Change. Neither the Company nor any Subsidiary
has been denied any insurance coverage which it has sought or for which it has
applied.
2.11 Tax Matters. Company and its Subsidiaries have heretofore filed the Tax
Returns with respect to Tax periods ending after December 31, 1997, in the
jurisdictions specified in, the Disclosure Schedule and have paid, or made
adequate provision in accordance with GAAP consistently applied, for the
payment of, all Taxes shown to be due and payable on such Tax Returns. All
payroll and income Taxes which any of Company or its Subsidiaries is required
by law to withhold and collect have been duly withheld and collected, and have
been paid over, in a timely manner, to the proper Authorities to the extent due
and payable. Neither Company nor any of its Subsidiaries has executed any
waiver to extend, or otherwise taken any action that would have the effect of
extending, the applicable statute of limitations in respect of any Tax
liabilities of Company or any of its Subsidiaries for the fiscal years prior to
and including the most recently completed fiscal year. Neither Company nor any
of its Subsidiaries is a "consenting corporation" within the meaning of Section
341(f) of the Code. Company and each of its Subsidiaries have at all times been
taxable as a Subchapter C corporation under the Code. Neither Company nor any
Subsidiary has ever been a member of any consolidated group (other than with
Company and its Subsidiaries) for Tax purposes. Federal and state income tax
returns of Company and its Subsidiaries have been examined by the IRS or
applicable state Authority as shown in the Disclosure Schedule. At the date
hereof, there are no Encumbrances on any of the assets of Company or any of its
Subsidiaries that arose in connection with any failure (or alleged failure) to
pay any Tax. Neither Company nor any of its Subsidiaries (i) is a party to any
Tax allocation or sharing agreement, or (ii) has any liability or obligation
for the Taxes of any Person (other than Company or any of its Subsidiary) under
Treas. Reg. (S)1.1502-6 (or any similar provision of any other Applicable Law),
as a transferee or successor, by contract, or otherwise. Company is not and has
not been a United States real property holding corporation within the meaning
of Section 897(c)(2) of the Code.
2.12 Employee Benefit Plans.
(a) The Disclosure Schedule lists each material Company Employee Benefit
Plan and Company Benefit Arrangement. The Company has delivered to Rocket with
respect to each such Company Employee Benefit Plan and Company Benefit
Arrangement true and complete copies of (i) all written documents comprising
such plans and arrangements (including amendments and individual, trust or
insurance agreements relating thereto); (ii) the most recent Form 5500 series
annual reports (including all schedules thereto) filed with respect to each
such Company Employee Benefit Plan; (iii) the two most recent financial
statements and actuarial reports, if any, pertaining to each such plan or
arrangement; (iv) the summary plan description currently in effect and all
material modifications thereto, if any, for each such Company Employee Benefit
Plan; and (v) written
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communications to employees to the extent the substance of any Company Employee
Benefit Plan described therein differs materially from the other documentation
furnished under this Section.
(b) None of Company or any of its Subsidiaries nor any ERISA Affiliate of
any of them has at any time during the 6-year period preceding the date hereof
participated in or been required to make or accrue a contribution to any
Multiemployer Plan.
(c) Other than pursuant to the provisions of COBRA or other Applicable Law,
no Company Employee Benefit Plan provides benefits described in Section 3(1) of
ERISA to any former employees or retirees of Company or any of its
Subsidiaries. No condition exists that would prevent Company or any of its
Subsidiaries from amending or terminating Company Employee Benefit Plan or
Company Benefit Arrangement providing health or medical benefits in respect of
any active or retired employee other than limitations imposed by law. The
Company is in compliance in all material respects with COBRA, including all
notification requirements thereunder. Set forth in the Disclosure Schedule is a
list identifying each former employee of Company or any of its Subsidiaries or
other Person who is entitled to receive health continuation coverage under
COBRA at the date hereof, including a brief description of the coverage and the
date at which such right to coverage shall terminate.
(d) All Company Employee Benefit Plans that are Pension Plans intended to be
qualified under Section 401 of the Code are so qualified and have been so
qualified during the period since their adoption; each trust created under any
such plan is exempt from tax under Section 501(a) of the Code and has been so
exempt since its creation. A true and correct copy of the most recent
determination letter from the Internal Revenue Service regarding such qualified
status for each such plan has been delivered to Rocket. No Company Employee
Benefit Plan has incurred an accumulated funding deficiency (as defined in
section 412 of the Code), whether or not waived. As of the last applicable
annual valuation date on a termination basis, using the assumptions established
by the Pension Benefit Guaranty Corporation as in effect on such date, no
Company Employee Benefit Plan subject to Title IV of ERISA had accrued benefit
obligations which exceed the current fair market value of the assets of such
plan. None of Company and its Subsidiaries nor any ERISA Affiliate of any of
them has incurred, or reasonably expects to incur prior to the Closing Date,
any material liability under Title IV of ERISA, other than with respect to the
payment of premiums to the Pension Benefit Guaranty Corporation.
(e) Except as set forth in the Disclosure Schedule, no Company Employee will
receive or be entitled to, and none of Company or any of its Subsidiaries shall
be liable for, any additional benefits, bonuses, service or accelerated rights
to payment of benefits under any Company Plan, including the right to receive
any parachute payment, as defined in Section 280G of the Code, or become
entitled to any severance, termination allowance or similar payments as a
result of the transactions contemplated by this Agreement.
(f) Each Company Plan has at all times prior hereto been maintained, in all
material respects, in accordance with all Applicable Laws. Each Company or any
of its Subsidiaries and the ERISA Affiliates of Company or any of its
Subsidiaries have made full and timely payment of all amounts required to be
contributed under the terms of each Company Plan and Applicable Law or required
to be paid as expenses under such Company Plan. No Prohibited Transaction has
occurred with respect to any Company Employee Benefit Plan or any other
employee benefit plan or arrangement maintained by Company or any of its
Subsidiaries or any ERISA Affiliate of Company or any of its Subsidiaries which
is covered by Title I of ERISA which has resulted in or could result in
material liability of any kind to any of Company and its Subsidiaries, other
than any liability to the extent reflected in the financial statements of
Company contained in the Company SEC Documents. No Reportable Event for which
reporting has not been waived, and no event described in Section 4062 or 4063
of ERISA, has occurred in connection with any Company Employee Benefit Plan
within the last six (6) years. Neither Company or any of its Subsidiaries nor
any of its current or former ERISA Affiliates (while an ERISA Affiliate) has
within the last six (6) years engaged in, or is a successor or parent
corporation to any entity that has engaged in, a transaction described in
Section 4069 of ERISA.
2.13 Absence of Sensitive Payments. None of Company and its Subsidiaries has
(a) made any contributions, payments or gifts to or for the private use of any
governmental official, employee or agent where
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either the payment or the purpose of such contribution, payment or gift is
illegal under any Applicable Law, (b) established or maintained any unrecorded
fund or asset for any purpose or made any false or artificial entries on its
books, or (c) made any payments to any Person with the intention or
understanding that any part of such payment was to be used for any purpose
other than that described in the documents supporting the payment.
2.14 Bank Accounts, Etc. The Disclosure Schedule contains a true and correct
and complete list as of the date hereof of all banks, trust companies, savings
and loan associations and brokerage firms in which Company or any of its
Subsidiaries has an account or a safe deposit box and the names of all Persons
authorized to draw thereon, to have access thereto, or to authorize
transactions therein, the names of all Persons, if any, holding powers of
attorney from Company or any such Subsidiary and a summary statement as to the
terms thereof.
2.15 Broker or Finder. No Person assisted in or brought about the
negotiation of this Agreement or the subject matter of the transactions
contemplated hereby in the capacity of broker, agent or finder or in any
similar capacity on behalf of Company or any of its Subsidiaries other than as
set forth in the Disclosure Schedule, which sets forth a true, accurate and
complete description of the arrangements with any such Person.
2.16 Environmental Matters. Except as set forth in the Disclosure Schedule:
(a) The operations of each of Company and its Subsidiaries are in
compliance in all material respects with all applicable Environmental Laws.
(b) To Company knowledge, all real property currently or formerly owned,
leased or operated by Company or any of its Subsidiaries is free from
contamination by any Hazardous Material, and none of Company nor any of its
Subsidiaries has disposed or arranged for the disposal of Hazardous
Material so as to give rise to liability for any off-site disposal or
contamination.
(c) To the knowledge of Company, each of Company and its Subsidiaries
currently maintains all Environmental Permits necessary for their
operations and are in compliance in all material respects with such
Environmental Permits.
(d) There are no Legal Actions or Environmental Claims pending or, to
Company's knowledge, threatened, nor, to Company's knowledge,
investigations with respect to any Environmental Claim pending or
threatened, against any of Company or its Subsidiaries alleging the
violation of any Environmental Law or asserting claims regarding
Environmental Costs and Liabilities under any Environmental Law. None of
Company or its Subsidiaries has received any claims or notices alleging
liability under any Environmental Law.
(e) None of Company or its Subsidiaries nor, to the knowledge of
Company, any owner of premises leased or operated by any of Company or its
Subsidiaries has with respect to such premises, filed any formal notice
under any Environmental Law or other Law indicating past or present
generation, treatment, storage, or disposal of Hazardous Material or
reporting an Environmental Release of Hazardous Material into the
environment.
(f) There is not now nor, to the knowledge of Company, has there been in
the past on, in or under any real property owned, leased or operated by any
of Company or its Subsidiaries (i) any underground storage tanks,
aboveground storage tanks, dikes or impoundments, (ii) any friable
asbestos-containing materials or (iii) any polychlorinated biphenyls.
2.17 Certain State Statutes Inapplicable. The Board of Directors of the
Company has approved, within the meaning of Section 1 of the Massachusetts
General Laws ch. 110F, this Agreement, the Merger and the other the
transactions contemplated by this Agreement, and such approval is sufficient to
render inapplicable to this Agreement, the Merger and the other the
transactions contemplated by this Agreement the provisions of Massachusetts
General Laws ch. 110F.
2.18 Information Supplied. Neither the proxy statement relating to the
approval by the stockholders of Company of this Agreement and the Merger (such
proxy statement, including the exhibits thereto and the
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information incorporated therein by reference, as amended or supplemented from
time to time, the "Proxy Statement") nor the Transaction Statement on Schedule
13E-3 ("Schedule 13E-3") to be filed by the Company under the Exchange Act with
the Proxy Statement shall, at the respective dates first mailed to Company's
stockholders, at the time of the Company Stockholders Meeting or at the
Effective Time, as the case may be, contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not false or misleading or necessary to correct any
statement in any earlier communication with respect to the solicitation of
Proxies for the Company Stockholders Meeting which shall have become false or
misleading, except that no representation or warranty is made by Company with
respect to information supplied in writing by Rocket or Acquiror for inclusion
in the Proxy Statement or Schedule 13E-3. The Proxy Statement and Schedule 13E-
3 shall comply in all material respects as to form and content with the
requirements of the Exchange Act.
2.19 Voting Agreements and Noncompetition Agreements. To Company's
knowledge, there are no voting trusts or other agreements or understandings
with respect to the voting of Company Common Stock. Except as set forth on the
Disclosure Schedule, none of Company, its Subsidiaries or any Person in which
Company or its Subsidiaries own any interest is a party to any noncompetition
agreement or other agreement or arrangement which restrains, limits or impedes
the current or contemplated business or operations of Company or any of its
Subsidiaries or would apply to Acquiror or any of its Affiliates following the
Effective Time.
2.20 Vote Required. The vote of a majority of the outstanding shares of
Company Common Stock (the "Company Stockholder Approval") is the only vote of
the holders of any class or series of Company capital stock necessary or
required (under Applicable Law or otherwise) to approve this Agreement, the
Merger and the transactions contemplated hereby. The shares of Company Common
Stock held by Rocket at the date hereof are entitled to be voted by Rocket in
respect of this Agreement, the Merger and the other transactions contemplated
hereby.
2.21 Special Committee and Board Recommendation; Opinion of Financial
Advisor.
(a) Each of the special committee of the Board of Directors of Company
established by the Board of Directors of Company on April 9, 2001 (the "Special
Committee") and the Board of Directors of Company, at a joint meeting duly
called and held on April 17, 2001, has by unanimous vote of those Special
Committee members and directors present (who constituted 100% of the directors
then in office other than Messrs. Xxxxxxxxx and Xxxxxxx, who absented
themselves from such meeting) (i) determined that this Agreement, the Merger
and the other transactions contemplated hereby are fair to and in the best
interests of the stockholders of Company and has approved the same, and (ii)
resolved to recommend that the holders of the shares of Company Common Stock
approve this Agreement and the transactions contemplated hereby, including the
Merger.
(b) On or prior to the date of this Agreement, Company, its Board of
Directors and the Special Committee have received the Fairness Opinion of The
Catalyst Group (the "Company Financial Advisor"). The Company has been
authorized by the Company Financial Advisor, subject to prior review by the
Company Financial Advisor, to include the Fairness Opinion in the Proxy
Statement and in Schedule 13E-3. A true and complete copy of the Fairness
Opinion has been furnished by Company to Rocket.
2.22 Consents. Except (i) as set forth in the Disclosure Schedule, (ii) for
the filing with the SEC of the Proxy Statement and such reports under the
Exchange Act as may be required in connection with this Agreement and the
transactions contemplated hereby, (iii) for the filing of the Articles of
Merger with the Secretary of State of the Commonwealth of Massachusetts and
appropriate documents with the relevant authorities of other states in which
the Company is qualified to do business, (iv) for the filing of Schedule 13E-3
with the Commission, and (v) for such filings in connection with any state or
local tax which is attributable to the change in beneficial ownership of
Company's or its Subsidiaries' real property, if any (collectively, "Gains
Taxes"), (the items in clauses (i) through (iv) being collectively referred to
herein as
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("Company Consents"), no Governmental Authorizations or Private Authorizations
are required to be obtained or made by or with respect to Company or any of its
Subsidiaries on or prior to the Closing Date in connection with (A) the
execution, delivery and performance of this Agreement or any of the Transaction
Documents to which Company is a party, the consummation of the transactions
contemplated hereby and thereby or the taking by Company of any other action
contemplated hereby or thereby, (B) the continuing validity and effectiveness
of (and prevention of any material default under or violation of the terms of)
any Lease, or Private Authorization or Contractual Obligation disclosed in the
Disclosure Schedule pursuant to the first sentence of Section 2.5 above, to
which any of Company or its Subsidiaries is a party or any Governmental
Authorization of any of Company of its Subsidiaries or (C) the conduct by
Company or any of its Subsidiaries of their respective businesses following the
Closing as conducted on the date hereof.
2.23 Disclosure. No representation or warranty by Company in this Agreement,
or in any list, statement, document or information set forth in or attached to
any schedule (including the Disclosure Schedule) delivered or to be delivered
pursuant hereto, contains or will contain any untrue statement of a material
fact or omits or will omit any material fact necessary in order to make the
statements contained herein or therein, in light of the circumstances under
which they were made, not misleading.
Section 3. Representations and Warranties of Rocket and Acquiror.
Rocket and Acquiror represent and warrant to Company that:
3.1 Organization and Business; Power and Authority; Effect of Transaction.
(a) Each of Rocket and Acquiror (i) is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, and (ii) has all requisite corporate power and authority to own
or hold under lease its properties and to conduct its business as now conducted
and as presently proposed to be conducted.
(b) Each of Rocket and Acquiror has all requisite corporate authority, and
has made and has in full force and effect all Governmental Authorizations and
Private Authorizations necessary to enable it, to execute and deliver, and to
perform its obligations under, and to consummate the transactions contemplated
by, this Agreement and each Transaction Document executed or to be executed by
it; and the execution, delivery and performance of this Agreement and each such
Transaction Document have been duly authorized by all requisite corporate
action, including that, if required, of Acquiror's stockholders. This Agreement
has been duly executed and delivered by each of Rocket and Acquiror and
constitutes, and each Transaction Document executed or to be executed by it
when executed and delivered by Rocket or Acquiror will constitute, its legal,
valid and binding obligations, enforceable against it in accordance with their
respective terms, subject as to enforcement of remedies to applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
generally the enforcement of creditors' rights and subject to a court's
discretionary authority with respect to the granting of a decree ordering
specific performance or other equitable remedies.
(c) Neither the execution and delivery of this Agreement or any Transaction
Document executed or to be executed by Rocket or Acquiror, nor the consummation
of the transactions herein or therein contemplated, nor compliance with the
terms, conditions and provisions hereof or thereof by Rocket or Acquiror:
(i) (A) will conflict with, or result in a breach or violation of, or
constitute a default under, any Applicable Law on the part of Rocket or
Acquiror or (B) will conflict with or result in a breach or violation of,
or constitute a default under, any of the Organic Documents of Rocket or
Acquiror or (C) will conflict with, or result in a breach or violation of,
or constitute a default under, or permit the acceleration of any obligation
or liability under, or but for any requirement of giving of notice or
passage of time or both would constitute such a conflict with, breach or
violation of, or default under, or permit any such acceleration of, any
material Contractual Obligation of Rocket or Acquiror, or
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(ii) will require any Governmental Authorization or Private
Authorization, except for the filing with the Secretary of State of the
Commonwealth of Massachusetts of the Articles of Merger,
except, with respect to clauses (i)(A), (i)(C) and (ii) above, such conflicts,
breaches, defaults, violations, accelerations, authorizations or filings, that
(individually or in the aggregate) are not reasonably likely to result in a
Material Adverse Effect on Rocket or Acquiror or on the ability of Rocket or
Acquiror to perform any of its obligations set forth in this Agreement or any
Transaction Document.
3.3 Broker or Finder. No Person assisted in or brought about the negotiation
of this Agreement or the subject matter of the transactions contemplated hereby
in the capacity of broker, agent or finder or in any similar capacity on behalf
of Acquiror or Rocket.
3.4 Information Supplied. The information supplied in writing by Rocket or
Acquiror for inclusion in the Proxy Statement or Schedule 13E-3 will not, at
the respective dates first mailed to Company's stockholders, at the time of the
Company Stockholders Meeting or at the Effective Time, as the case may be,
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not false or misleading
or necessary to correct any statement in any earlier communication with respect
to the solicitation of Proxies for the Company Stockholders Meeting which shall
have become false or misleading, except that no representation or warranty is
made by Rocket with respect to information supplied by Company or any other
Person (other than Rocket or Acquiror) for inclusion in the Proxy Statement or
Schedule 13E-3.
3.5 Transitory Subsidiary. Acquiror was formed for the purpose of engaging
in the transactions contemplated by this Agreement and has engaged in no
business activities unrelated to this Agreement and the transactions
contemplated hereby.
3.6 Company Representations. Neither Rocket nor Acquiror nor any officer or
director of either of them, by virtue of its status as a stockholder, director
or other Affiliate of Company, has any knowledge of any breaches or violations
of any representation or warranty of Company contained in this Agreement.
3.7 Rocket Ownership of Company Common Stock. As of the date hereof, Rocket
owns of record an aggregate of 10,000,000 shares of Company Common Stock.
Section 4. Certain Covenants.
4.1 Access to Information. Company shall afford to each of Rocket and
Acquiror and their accountants, counsel, financial advisors, financing sources
and other representatives (the "Representatives") all reasonable access during
normal business hours throughout the period prior to the Effective Time to all
of its and its Subsidiaries properties, books, contracts, commitments and
records (including Tax Returns) and, during such period, shall furnish promptly
(i) a copy of each report, schedule and other document filed or received by it
pursuant to the requirements of any federal or state securities laws or
submitted to or filed with or received from the Commission or any other
Authority in connection with the transactions contemplated by this Agreement or
which management of Company has determined in good faith may have a material
effect on its business, operations, properties, prospects, personnel,
condition, financial or other, or results of operations and (ii) such other
information concerning any of the foregoing as Rocket and Acquiror shall
reasonably request; provided, however, that no investigation pursuant to this
Section shall affect any representations or warranties made herein or the
conditions to the obligations of the respective parties to consummate the
transactions contemplated hereby. Rocket and Acquiror acknowledge and agree
that, to the extent that any such information constitutes "Confidential
Information" within the meaning of that certain Confidentiality Agreement,
dated as of January 17, 2001 (the "Confidentiality Agreement"), such
information shall be and remain subject to the terms and provisions of such
Confidentiality Agreement, which remains in force and effect in accordance with
its terms.
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4.2 Agreement to Cooperate.
(a) Subject to the terms and conditions of this Agreement, each of the
parties hereto agrees to use all commercially reasonable efforts or take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable under Applicable Laws to consummate and make
effective the transactions contemplated by this Agreement, including using its
commercially reasonable efforts to obtain all necessary or appropriate waivers,
consents and approvals, if any, to effect all necessary registrations, filings
and submissions (and, in such case, to proceed with the Merger as expeditiously
as possible), subject, however, to the Company Stockholder Approval.
(b) In addition to the covenants set forth in the preceding subsection of
this Section, Company agrees to use all commercially reasonable efforts on or
prior to the Closing Date to obtain the satisfaction of the conditions
specified in Sections 5 and 6. Rocket and Acquiror agree to cooperate with and
to assist Company with respect to securing all necessary Governmental
Authorizations and Private Authorizations to the consummation of the Merger.
4.3 Expenses. Except as otherwise expressly provided herein, each party
shall pay its own expenses incident to the negotiation, execution, delivery and
performance of this Agreement (including, without limitation, all filing fees,
printing and mailing expenses and all fees and expenses of its counsel,
accountants, advisors and other consultants and representatives for all
activities undertaken in connection with this Agreement), whether or not the
transactions contemplated hereby are consummated. To the fullest extent
practicable, Company agrees not to pay such expenses prior to the Closing,
provided that all such expenses shall be paid within five (5) Business Days
after the Closing.
4.4 Public Announcements. No party shall, without the approval of the other
parties, make or cause to be made any press release or other public
announcement with respect to this Agreement or the transactions contemplated
hereby, except as and to the extent that it is required by Applicable Law to
make such press release or other public announcement. To the extent reasonably
practicable under the circumstances, the parties shall consult with each other
prior to issuing any press release or other public announcement with respect to
this Agreement or the transactions contemplated hereby. Each of the parties
hereto acknowledges and consents to that certain press release issued by
Company on March 28, 2001 entitled "Peritus Software Services Announces It Has
Received a Non-Binding Offer for Acquisition of the Company".
4.5 Stockholders' Approval.
(a) Company shall as soon as practicable submit this Agreement and the
transactions contemplated hereby for the approval of its stockholders at a duly
called and held meeting of its stockholders (the "Company Stockholders
Meeting", which term shall include any postponements or adjournments of such
meeting). Unless otherwise required by the applicable fiduciary duties of the
Board of Directors of Company, as determined in good faith by such directors
after consultation with and based upon the advice of outside legal counsel,
Company shall (i) recommend approval of this Agreement and the transactions
contemplated hereby to the stockholders of Company, (ii) include in the Proxy
Statement and Schedule 13E-3 such recommendation and the of the Board of
Directors of Company and the Special Committee described in Section 2.21 above,
and (iii) use all commercially reasonable efforts to solicit from its
stockholders proxies in favor of approval of this Agreement and the
transactions contemplated hereby and otherwise to obtain the Company
Stockholder Approval in accordance with all Applicable Law. Without limiting
the generality of the foregoing, Company agrees that its obligations under the
first sentence of this Section shall not be affected by (A) the commencement,
public proposal, public disclosure or communication to Company of any
Acquisition Proposal or (B) the withdrawal or modification by the Board of
Directors of Company or Special Committee of its approval or recommendation of
this Agreement and the transactions contemplated hereby. Company shall take all
action necessary to hold the Company Stockholders Meeting as soon as
practicable following the date hereof.
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(b) To the extent permitted by Applicable Law, each of Rocket and Acquiror
agrees to vote all shares of Company Common Stock held of record by it in favor
of this Agreement and the Merger and other transactions contemplated hereby at
the Company Stockholders Meeting; provided that (i) Company is not in material
breach of any of its representations, warranties or covenants contained herein
or in any Transaction Document, (ii) there is no bona fide written Acquisition
Proposal with respect to Company which has been received by Company and not
rejected in writing by Company, and (iii) neither the Board of Directors of
Company nor the Special Committee shall have withdrawn or modified its approval
or recommendation of this Agreement and the Merger and other transactions
contemplated hereby.
4.6 Proxy Statement; Schedule 13E-3.
(a) Company shall prepare and file with the Commission as soon as is
reasonably practicable after the date hereof, the Proxy Statement and Schedule
13E-3, and shall use its best efforts to have the Proxy Statement and Schedule
13E-3 cleared by the Commission as promptly as practicable. Company shall be
responsible for the costs and expenses, including filing fees and printing and
mailing costs, arising from the preparation, filing and mailing of the Proxy
Statement and Schedule 13E-3. Company shall also take any other action required
to be taken under Applicable Law in connection with the consummation of the
transactions contemplated by this Agreement. Rocket and Acquiror and Company
shall promptly furnish to each other all information, and take such other
actions and otherwise cooperate, as may reasonably be requested in connection
with any action by any of them in connection with the provisions of this
Section.
(b) Prior to the date of approval of the Merger by Company's stockholders,
each of Company, Rocket and Acquiror shall correct promptly any information
provided by it to be used specifically in the Proxy Statement or Schedule 13E-3
that shall have become false or misleading in any material respect and shall
take all steps necessary to file with the Commission and have cleared by the
Commission any amendment or supplement to the Proxy Statement and Schedule 13E-
3, as so corrected, to be disseminated to the stockholders of Company to the
extent required by Applicable Law. Without limiting the generality of the
foregoing, Company shall notify Rocket promptly of the receipt of the comments
of the Commission and of any request by the Commission for amendments or
supplements to the Proxy Statement or Schedule 13E-3, or for additional
information, and shall supply Rocket with copies of all correspondence between
Company or its representatives, on the one hand, and the Commission or members
of its staff, on the other hand, with respect to the Proxy Statement or
Schedule 13E-3. If at any time prior to the Company Stockholders Meeting any
event should occur relating to Company, Rocket or Acquiror or their respective
officers or directors which should be described in an amendment or supplement
to the Proxy Statement or Schedule 13E-3, the parties shall promptly inform
each other. Whenever any event occurs which should be described in an amendment
or a supplement to the Proxy Statement or Schedule 13E-3, Company, Rocket and
Acquiror shall, upon learning of such event, cooperate in promptly preparing,
filing and clearing with the Commission and mailing to the stockholders of
Company such amendment or supplement; provided, however, that, prior to such
mailing, (i) Company, Rocket and Acquiror shall consult with each other with
respect to such amendment or supplement, (ii) shall afford each other
reasonable opportunity to comment thereon, and (iii) each such amendment or
supplement shall be reasonably satisfactory to the other.
4.7 No Solicitation; Other Offers.
(a) Nothing contained in this Section 4.7(a) shall prevent the Board of
Directors of Company or Special Committee from considering, discussing, or
providing any nonpublic information to any Person relating to, an bona fide
inquiry or proposal regarding any merger, sale of substantial assets, sale of
share of capital stock (including without limitation by way of a tender offer)
or similar transactions involving Company or any Subsidiaries of Company other
than the Merger (any such inquiry or proposal being referred to herein as an
"Acquisition Proposal") not solicited in violation of this Agreement, provided
the Board of Directors of Company or the Special Committee, as the case may be,
determines in good faith (upon consultation of outside counsel) that it is
required to do so in order to discharge properly its fiduciary duties. Nothing
contained in this
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Section shall prohibit the Board of Directors of Company or the Special
Committee from complying with Rule 14e-2 promulgated under the Exchange Act
with regard to a tender or exchange offer.
(b) Company shall immediately notify Rocket and Acquiror after receipt of
any Acquisition Proposal, or any modification of or amendments to any
Acquisition Proposal, or any request for nonpublic information relating to
Company or any of its Subsidiaries in connection with an Acquisition Proposal
or for access to the properties, books or records of Company or any Subsidiary
of Company by any Person or entity that informs the Board of Directors of
Company or the Special Committee or such Subsidiary that it is considering
making, or has made, an Acquisition Proposal. Such notice to Rocket and
Acquiror shall be made orally and in writing, and shall indicate whether
Company is providing or intends to provide the Person making the Acquisition
Proposal with access to information concerning Company as provided in Section
4.7(c).
(c) If the Board of Directors of Company or the Special Committee receives a
request for material nonpublic information by a Person who makes, or indicates
that it is considering making, an Acquisition Proposal, and the Board of
Directors or the Special Committee, as the case may be, determines in good
faith after consultation with outside counsel that it would be in the best
interests of Company and its stockholders to provide such information, then,
provided such Person has executed an appropriate confidentiality agreement,
Company may provide such Person with access to information regarding Company.
Company agrees not to release any third party from the confidentiality and
standstill provisions of any confidentiality agreement to which Company is a
party.
(d) Company shall use its commercially reasonable efforts to inform the
officers, directors and employees of Company and its Subsidiaries and any
outside counsel, financial advisor, investment banker or other advisor or
representative retained by Company of the restrictions described in this
Section.
4.8 Tax Returns. Without the prior written consent of Rocket, neither
Company nor any of its Subsidiaries shall make or change any election, change
an annual accounting or Tax period, adopt or change any accounting method, file
any amended Tax Return, enter into any closing agreement, settle any Tax claim
relating to Company or its Subsidiaries, surrender any right to claim a refund
of Taxes, take or omit to take any similar action with respect to Taxes (other
than the filing of any original Tax Return), if any such election, adoption,
change, amendment, agreement, settlement, surrender or other action or omission
would have the effect of increasing the Tax liability of Company and its
Subsidiaries, by more than an aggregate amount of $25,000; provided, however,
that Company may consent to an extension of a limitation period applicable to a
Tax claim without Rocket's prior written consent (and Company will notify
Rocket of any such extension no later than five (5) Business Days after taking
such action if it would relate to the Company or its Subsidiaries).
4.9 Conduct of Business by Company Prior to the Effective Time. Except as
may be required by the terms of this Agreement or as may be consented to by
Rocket in writing, between the date hereof and the Closing Company covenants
that each of Company and its Subsidiaries:
(a) will not issue or sell or purchase or agree to issue or sell or
purchase any capital stock or any Option Security or Convertible Security,
otherwise than pursuant to any Company Option Securities or Company
Convertible Securities outstanding at the date hereof and listed on the
Disclosure Schedule pursuant to Section 2.1(c) above;
(b) will (i) operate its business in the normal, usual and customary
manner in the ordinary and regular course of business consistent with past
practice, including the maintenance of working capital at normal operating
levels consistent with past practice and the payment of accounts payable
and other expenses consistent with past practice, (ii) use its commercially
reasonable efforts consistent with past practice to preserve intact its
business organization, and (iii) use its commercially reasonable efforts to
keep available the services of its officers and employees;
(c) will not sell or otherwise dispose of or contract to sell or
otherwise dispose of, any of its properties or assets, other than inventory
sold or otherwise disposed of in the ordinary course of business consistent
with past practice;
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(d) except in each case in the ordinary course of business consistent
with past practice or with the prior written consent of Rocket (which shall
not be unreasonably withheld or delayed), (i) will not incur any
obligations or liabilities (fixed, contingent or other), (ii) will not
enter into any commitments, and (iii) will not sell or transfer any
material asset or canceled or cancel any material debts or claims;
(e) except in each case in the ordinary course of business consistent
with past practice or with the prior written consent of Rocket (which shall
not be unreasonably withheld or delayed), will not discharge or satisfy any
Encumbrance or pay any obligation or liability (absolute or contingent)
other than current liabilities or obligations under contracts existing on
the date hereof or thereafter entered into in the ordinary course of
business, and commitments under Leases existing on the date hereof or
thereafter incurred in the ordinary course of business;
(f) except in each case with the prior written consent of Rocket, will
not Encumber any of its property or assets, other than Permitted
Encumbrances;
(g) will not increase the compensation or severance payable or to become
payable to any of its officers, employees, advisers, consultants, salesmen
or agents or otherwise alter, modify or change in any material respect the
terms of their employment or engagement;
(h) except in each case with the prior written consent of Rocket (which
shall not be unreasonably withheld or delayed) or as otherwise contemplated
hereby, will not amend or terminate or enter into any Lease, Governmental
Authorization, Private Authorization, Lease, any Lease, Contractual
Obligation disclosed in the Disclosure Schedule pursuant to the first
sentence of Section 2.5 above, Company Benefit Arrangement or Company
Employee Benefit Plan, or any Contractual Obligation or transaction with
any Affiliate;
(i) will not declare, make or pay, or agree to declare, make or pay, any
Distribution other than any Distribution from a Subsidiary of Company to
Company or to another Subsidiary of Company;
(j) will not split, reclassify, combine or redeem any shares of any
class of capital stock or amend or modify any of its Organic Documents;
(l) will not take any action that would result in any representation or
warranty of Company being untrue in any material respect;
(m) will not make any change to its accounting (including Tax
accounting) methods, principles, practices, or policies, other than those
required by GAAP or Applicable Law;
(n) will not, and shall cause the Company not to, agree to do any of the
foregoing;
(o) will not make or permit to be made any change affecting any bank,
trust company, savings and loan association, brokerage firm account or safe
deposit box or in the names of the Persons authorized to draw thereon, to
have access thereto or to authorize transactions therein or in such powers
of attorney, or open any additional accounts or boxes or grant any
additional powers of attorney, without in each case promptly notifying
Rocket in writing thereof; and
(p) will timely keep Rocket informed with respect to all material
capital expenditures or other material developments with respect to Company
or any of its Subsidiaries.
4.10 Certain Notices. Company will promptly notify Rocket of any and all
Events which would require any change to be made in the Disclosure Schedule or
which could cause or result in any breach or inaccuracy in any material respect
of any of Company's representations and warranties, including without
limitation those set forth in Section 2, or which are reasonably likely to
impair the likelihood that all of the conditions specified in Sections 5 and 6
will be satisfied on or prior to the Closing Date.
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4.11 Indemnification of Officers and Directors.
(a) All rights to indemnification existing in favor of those Persons who are
directors and officers of the Company as of the date of this Agreement (the
"Indemnified Persons") for their acts and omissions occurring prior to the
Effective Time, as provided in the Company's Bylaws or Articles of Organization
(as in effect at the date of this Agreement), shall survive the Merger and
shall be observed by the Surviving Corporation to the fullest extent permitted
by Massachusetts law for a period of six (6) years from the Effective Time.
(b) From the Effective Time until the first anniversary of the Effective
Time, the Surviving Corporation shall maintain in effect, for the benefit of
the Indemnified Persons with respect to their acts and omissions occurring
prior to the Effective Time the existing $1.5 million policy of directors' and
officers' liability insurance maintained by the Company as of the date of this
Agreement in the form of disclosed by the Company to Rocket prior to the date
of this Agreement (the "Existing Policy"), provided, however, that the
Surviving Corporation may substitute for the Existing Policy a policy or
policies of comparable coverage.
4.12 Employee Benefits.
(a) Rocket agrees that all employees of Company who continue employment with
Rocket, the Surviving Corporation or any Subsidiary of the Surviving
Corporation after the Effective Time ("Continuing Employees") shall be eligible
to continue to participate in the Surviving Corporation's health and welfare
benefit plans; provided, however, that (i) the employment of each Continuing
Employee shall be "at will" employment, (ii) nothing in this Section or
elsewhere in this Agreement shall limit the right of Rocket or the Surviving
Corporation to amend or terminate any such health or welfare benefit plan at
any time, and (iii) if Rocket or the Surviving Corporation terminates any such
health or welfare benefit plan, then (upon expiration of any appropriate
transition period), the Continuing Employees shall be eligible to participate
in Rocket's health and welfare benefit plans to substantially the same extent
as similarly situated employees of Rocket. Nothing in this Section or elsewhere
in this Agreement shall be construed to create a right in any Continuing
Employee or other Person to employment with Rocket, the Surviving Corporation
or any other Subsidiary of Rocket.
(b) Company shall terminate, effective as of the day immediately preceding
the Effective Time, each Company Employee Benefit Plan sponsored or maintained
by any of Company and its Subsidiaries (or in which any of any of Company and
its Subsidiaries participate) that contains a cash or deferred arrangement
intended to qualify under Section 401(k) of the Code (a "Company 401(k) Plan")
unless Rocket provides written notice to Company prior to the Effective Time
that any such Company 401(k) Plans shall not be terminated. Rocket shall
receive from the Company prior to Closing evidence that the Company 401(k)
Plan(s) have been terminated pursuant to resolutions of the Board of Directors
of Company or the Special Committee (the form and substance of such resolutions
shall be subject to review and approval of Rocket), effective as of the day
immediately preceding the Effective Time. If Rocket has not given the notice
referred to in the first sentence of this Section 4.12(b), Rocket agrees to use
its commercially reasonable efforts to cause to be taken all actions necessary
or appropriate to cover, under substantially similar terms and conditions
applicable to similarly situated Rocket employees, the Continuing Employees
under a plan sponsored by Rocket that includes a cash or deferred arrangement
intending to qualify under Section 401(k) of the Code ("Rocket 401(k) Plan"),
effective with respect to Rocket's first full regular pay period beginning
after the Closing Date. Rocket agrees to use its commercially reasonable
efforts to cause the Rocket 401(k) Plan to accept rollover contributions of
amounts properly distributed to participants from the Company 401(k) Plan(s),
including any outstanding participant loan that is not in default as of the
time of the rollover; provided however, that neither Rocket nor any plan
administrator or trustee for the Rocket 401(k) Plan shall be obligated to
accept on behalf of the Rocket 401(k) Plan any such rollover contributions
unless (i) the participant requesting such rollover is otherwise eligible to
participate in the Rocket 401(k) Plan at the time of the rollover and (ii) a
favorable determination letter has been received from the IRS with respect to
the qualification of the applicable Company 401(k) Plan in connection with the
termination of such Company 401(k) Plan. Rocket agrees that, notwithstanding
the foregoing provisions of this Section 4.12(b), participants in Company's
401(k) Plan(s) shall continue to direct the investment of their account
balances, in accordance with applicable Plan terms, during
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the period after termination date of any such Plan until Plan distribution
elections are made available to participants in connection with the Plan's
termination.
(c) The Continuing Employees will be given credit under Rocket employee
benefit plans for services performed for Company for purposes of participation,
vesting and benefit levels, to the same extent such services are so credited
under Rocket's existing benefit plans; provided, however, that this Section
4.12(c) shall not apply for purposes of vesting under an option or other equity
incentive award granted after the Effective Time.
Section 5. Conditions Precedent to Rocket's and Acquiror's Obligations.
The obligations of Rocket and Acquiror to consummate the Merger and other
transactions contemplated hereby are subject to the satisfaction on the Closing
Date of the following conditions except to the extent that any such condition
may have been waived in writing by Rocket at or prior to the Closing Date:
5.1 No Opposition. No Legal Action or other claim shall be pending or
threatened at any time prior to or on the Closing Date before or by any
Authority seeking to restrain or prohibit, or damages or other relief in
connection with, the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby or which might in the
judgment of Rocket have any Material Adverse Effect on Company, Rocket or
Acquiror.
5.2 Representations, Warranties and Covenants. The representations and
warranties of Company contained in this Agreement or otherwise made in writing
by it or on its behalf pursuant hereto shall be true and correct in all
material respects at and as of the Closing Date with the same force and effect
as though made on and as of such date (except those which speak as of a date
certain which shall continue to be true and correct in all material respects as
of such date) on the Closing Date; each and all of the covenants, agreements
and conditions to be performed or satisfied by Company or its Board of
Directors or the Special Committee hereunder at or prior to the Closing Date
(including but not limited to the obligations of the Board of Directors of
Company set forth in Section 1.4(b) above) shall have been duly performed or
satisfied in all material respects; and Company shall have furnished Rocket
with such certificates and other documents evidencing the truth of such
representations and warranties and the performance and satisfaction of such
agreements or conditions as Rocket shall have reasonably requested.
5.3 Company's Stockholders' Approval. Company shall have duly and validly
obtained the Company Stockholder Approval.
5.4 Dissenters' Rights. The beneficial owners of no more than seven and one-
half percent (7.5%) of Company Common Stock shall have asserted dissenters'
rights in connection with the Merger.
5.5 Consents. Company shall have obtained unconditional consents to the
assignment and continuation of all Private Authorizations and Contractual
Obligations disclosed in the Disclosure Schedule pursuant to the first sentence
of Section 2.5 above, including a consent from Bull HN Information Systems,
Inc. substantially in the form included in the Disclosure Schedule or in such
other form as may be reasonably acceptable to Rocket, but excluding a consent
from Southborough/Westborough LLC under the Lease Agreement for Company's
premises located at 000 Xxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxxxxxx.
5.6 No Material Adverse Change. As of the Closing Date, there shall not have
occurred and be continuing any Material Adverse Change affecting any of Company
and its Subsidiaries from those reflected in the most recently audited
financial statements of Company and its Subsidiaries included in the Company
SEC Documents, other than any material adverse change in the financial
condition, operations or results of operations of Company and its Subsidiaries
since December 31, 2001 arising out of matters of a general economic nature or
matters affecting the industry generally, and none of Company and its
Subsidiaries shall have sustained any loss or damage to its assets that
materially affects its ability to operate its assets and business in the
ordinary course of business.
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5.7 Cash at Closing. At Closing, the remainder of (i) the aggregate amount
of cash and cash equivalents held by Company minus (ii) the lesser of (A)
$840,000 and (B) the actual aggregate amount of out-of-pocket costs and
expenses incurred by Company in connection with this Agreement and the
transactions contemplated hereby, shall be equal to at least $4,810,000.
5.8 Certain Certificates and Documents. Each of Company and its Subsidiaries
shall have furnished Rocket and Acquiror with the following:
(a) A certificate of its Clerk or Assistant Clerk as to (i) the by-laws,
(ii) all resolutions of its Board of Directors and stockholders relating to
this Agreement and (iii) incumbency of any officers signing any Transaction
Document on its behalf.
(b) A copy of each of Company's and its Subsidiaries' respective
articles of organization or certificate of incorporation or similar
document, as the case may be, as certified by the Secretary of State or
other appropriate official of the jurisdiction of organization or
incorporation of such Entity, each dated within a recent date prior to the
Closing Date.
(c) A certificate of legal existence and good standing for each of
Company and its Subsidiaries from the Secretary of State or other
appropriate official of the jurisdiction of organization or incorporation
of such Entity, each dated within a recent date prior to the Closing Date.
(d) Such other certificates, documents and instruments as may be
necessary to effect the intent of this Agreement or consummate the
transactions contemplated hereby or as Rocket or Acquiror may reasonably
request.
Section 6. Conditions Precedent to Company's Obligations.
The obligations of Company to consummate the Merger and the other the
transactions contemplated by this Agreement are subject to the satisfaction at
or prior to the Closing Date of the following conditions except to the extent
that any such condition may have been waived in writing by Company at or prior
to the Closing Date:
6.1 Representations and Covenants. The representations and warranties of
Rocket and Acquiror contained in this Agreement or otherwise made in writing by
them or on their behalf pursuant hereto shall be true and correct in all
material respects at and as of the Closing Date with the same force and effect
as though made on and as of such date except those which speak as of a date
certain which shall continue to be true and correct in all material respects as
of such date on the Closing Date; each and all of the agreements and conditions
to be performed or satisfied by Rocket or Acquiror hereunder at or prior to the
Closing Date shall have been duly performed or satisfied in all material
respects; and Rocket shall have furnished Company with such certificates and
other documents evidencing the truth of such representations and warranties and
the performance and satisfaction of such agreements and conditions as Company
shall have reasonably requested.
6.2 No Opposition. As of the Closing Date, no injunction, writ or
preliminary restraining order or order of any nature issued by any Authority of
competent jurisdiction shall be in effect preventing the consummation of the
transactions contemplated by this Agreement.
6.3 Stockholder Approval. Company shall have duly and validly obtained the
Company Stockholder Approval.
Section 7. Definitions.
7.1 Principles of Construction. As used herein, unless the context otherwise
requires, the following terms have the following respective meanings. Terms
defined in the singular shall have a comparable meaning when used in the
plural, and vice versa, and the reference to any gender shall be deemed to
include all genders. Except where the context otherwise requires, references to
"this Section" or words of similar import shall be
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deemed to refer to the entire section and not a particular subsection and
references to "hereunder," "herein," "hereof" or words of similar import shall
be deemed to refer to the entire Agreement and not the particular Section or
subsection or other provision. The words "includes" and "including" are not
limiting and mean "including without limitation." In computation or periods of
time from a specified date to a later specified date, the word "from" means
"from and including," the words "to" and "until" each means "to but excluding,"
and the word "through" means "to and including." Unless otherwise defined or
the context otherwise clearly requires, terms for which meanings are provided
in this Agreement shall have such meanings when used in any schedule hereto
(including the Disclosure Schedule) and each Instrument, notice, certificate,
communication, opinion or other document executed or required to be executed
pursuant hereto or thereto or otherwise delivered, from time to time, pursuant
hereto or thereto. All accounting terms not specifically defined herein shall
be construed in accordance with GAAP. References to any statute or regulation
are to be construed as including all statutory and regulatory provisions
consolidating, amending or replacing such statute or regulation.
7.2 Certain Defined Terms. The following terms shall have the respective
meanings specified therefor below.
"Acquiror" is defined in the preamble preceding the Recitals.
"Acquisition Proposal" is defined in Section 4.7.
"Affiliate," when used with respect to any specified Person, shall mean any
Person that directly, or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with such specified
Person.
"Agreement" is defined in the Recitals.
"Applicable Law" shall mean any Law of any Authority, whether domestic or
foreign, including all federal and state Laws, to which the Person in question
is subject or by which it or any of its property is bound, and including
without limitation any: (a) administrative, executive, judicial, legislative or
other statute, code, consent decree, constitution, decree, directive,
enactment, finding, guideline, injunction, interpretation, judgment, law,
order, ordinance, policy statement, proclamation, promulgation, regulation,
requirement, rule, rule of law, rule of public policy, settlement agreement, or
writ, of any Authority, domestic or foreign; (b) common law or other legal or
quasi-legal precedent; or (c) arbitrator's, mediator's or referee's award,
decision, finding or recommendation, or, in any case, any particular section,
part or provision thereof.
"Articles of Merger" is defined in Section 1.1.
"Authority" shall mean any governmental or quasi-governmental authority,
whether administrative, executive, judicial, legislative or other, or any
combination thereof, including any federal, state, territorial, county,
municipal or other government or governmental or quasi-governmental agency,
arbitrator, authority, board, body, branch, bureau, central bank or comparable
agency or entity, commission, corporation, court, department, instrumentality,
master, mediator, panel, referee, system or other political unit or subdivision
or other entity of any of the foregoing, whether domestic or foreign.
"Benefit Arrangement" shall mean any benefit arrangement (whether or not
written), including (a) any employment or consulting agreement, (b) any
arrangement providing for insurance coverage or workers' compensation benefits,
(c) any incentive bonus or deferred bonus arrangement, (d) any arrangement
providing termination allowance, severance or similar benefits, (e) any equity
compensation plan, (f) any deferred compensation plan and (g) any compensation
policy and practice, but excluding in any event any Employee Benefit Plan.
"Certificates" is defined in Section 1.5.
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"Closing" is defined in Section 1.2.
"Closing Date" is defined in Section 1.2.
"COBRA" shall mean the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, as set forth in Section 4980B of the Code and Part 6,
Subtitle B of Title I of ERISA.
"Code" shall mean the United States Internal Revenue Code of 1986, and the
rules and regulations thereunder, all as from time to time in effect, or any
successor law, rules or regulations, and any reference to any statutory or
regulatory provision shall be deemed to be a reference to any successor
statutory or regulatory provision.
"Commission" shall mean the Securities and Exchange Commission or any
successor Authority thereto.
"Company" is defined in the preamble preceding the Recitals.
"Company 401(k) Plan" is defined in Section 4.12.
"Company Benefit Arrangement" shall mean any Benefit Arrangement maintained
by Company or any of its Subsidiaries, or any ERISA Affiliates of Company or
any of its Subsidiaries, covering any employees, former employees, directors
or former directors of Company or any of its Subsidiaries or any ERISA
Affiliates of Company or any of its Subsidiaries, and the beneficiaries of any
of them.
"Company Common Stock" is defined in Section 1.4.
"Company Consents" is defined in Section 2.22.
"Company Convertible Securities" shall mean any Convertible Securities
directly or indirectly convertible into or exchangeable for shares of Company
Common Stock.
"Company Employee" shall mean any present or former employee of Company or
any of its Subsidiaries.
"Company Employee Benefit Plan" shall mean any Employee Benefit Plan that
is sponsored or contributed to by Company or any of its Subsidiaries, or any
of ERISA Affiliates of Company or any of its Subsidiaries covering the
employees or former employees of Company or any of its Subsidiaries or any
ERISA Affiliates of Company or any of its Subsidiaries.
"Company Financial Advisor" is defined in Section 2.21.
"Company Option Securities" shall mean any Option Securities for the
purchase or other acquisition of shares of Company Common Stock or Company
Convertible Securities.
"Company Plan" shall mean any Company Employee Benefit Plan or Company
Benefit Arrangement.
"Company SEC Documents" is defined in Section 2.2.
"Company Stockholder Approval" is defined in Section 2.20.
"Company Stockholder Meeting" is defined in Section 4.5.
"Confidentiality Agreement" is defined in Section 4.1.
"Continuing Employees" is defined in Section 4.12.
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"Contractual Obligation" shall mean, with respect to any Person, any term,
condition, provision, representation, warranty, agreement, covenant,
undertaking, commitment, indemnity or other obligation set forth or which is
outstanding or existing under any Instrument (including without limitation any
Instrument relating to or evidencing any indebtedness or capital lease
obligation) to which such Person is a party or by which it or any of its
properties is bound.
"Convertible Securities" shall mean any evidences of indebtedness, shares of
capital stock or other securities directly or indirectly convertible into or
exchangeable for shares of common stock, whether or not the right to convert or
exchange thereunder is immediately exercisable or is conditioned upon the
passage of time, the occurrence or non-occurrence or existence or non-existence
of some other Event, or both.
"Disbursing Agent" is defined in Section 1.5.
"Disbursing Agent Agreement" is defined in Section 1.5.
"Dissenting Shares" is defined in Section 1.4.
"Distribution" shall mean, with respect to any Person: (a) the declaration
or payment of any dividend on or in respect of any shares of any class of
capital stock of such Person; (b) the purchase, redemption or other retirement
of any shares of any class of capital stock of such Person or any shares of
capital stock of any Subsidiary owned by a Person other than such Person or a
wholly owned Subsidiary of such Person; and (c) any other distribution on or in
respect of any shares of any class of capital stock of such Person or any
shares of capital stock of any Subsidiary owned by a Person other than such
Person or a wholly owned Subsidiary of such Person.
"Effective Time" is defined in Section 1.1.
"Employee Benefit Plan" shall mean any benefit plan, as defined in Section
3(3) of ERISA.
"Encumber" or "Encumbrance" shall mean any of the following: mortgage; lien
(statutory or other); preference, priority or other security agreement,
arrangement or interest; hypothecation, pledge or other deposit arrangement;
assignment; charge; levy; executory seizure; attachment; garnishment;
encumbrance (including any easement, exception, variance, reservation or
limitation, right of way, zoning restriction, building or use restriction, and
the like); conditional sale, title retention or other similar agreement,
arrangement, device or restriction; preemptive or similar right; any financing
lease involving substantially the same economic effect as any of the foregoing;
the filing of any financing statement under the Uniform Commercial Code or
comparable law of any jurisdiction; restriction on sale, transfer, assignment,
disposition or other alienation; or any option, equity, claim or right of or
obligation to, any other Person, of whatever kind and character.
"Entity" shall mean any corporation, firm, unincorporated organization,
association, partnership, limited liability company, a trust (inter vivos or
testamentary), an estate of a deceased, insane or incompetent individual,
business trust, joint stock company, joint venture or other organization,
entity or business, whether acting in an individual, fiduciary or other
capacity, or any Authority.
"Environmental Claim" means any notice received by Company or any of its
Subsidiaries of violation, action, claim, Environmental Lien, demand, abatement
or other order or direction (conditional or otherwise) by any Authority or any
other Person for personal injury (including sickness, disease or death),
tangible or intangible property damage, damage to the environment, pollution,
contamination or other adverse effects on the environment, or for fines,
penalties or restrictions resulting from or based upon (a) the existence of an
Environmental Release (including, without limitation, a sudden or non-sudden
accidental or non-accidental Environmental Release) of, or exposure to, any
Hazardous Material, noxious odor or illegal audible noise in, into or onto the
environment (including, without limitation, the air, soil, surface water or
groundwater) at, in, by, from or related to any property presently or formerly
owned, operated or leased by any of Company or its Subsidiaries or any
activities or operations thereon; (b) the transportation, storage, treatment or
disposal of
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Hazardous Material in connection with any property presently or formerly owned,
operated or leased by any of Company or its Subsidiaries or their operations or
facilities; or (c) the violation, or alleged violation, of any Environmental
Law relating to environmental matters connected with any property presently or
formerly owned, leased or operated by any of Company or its Subsidiaries.
"Environmental Costs and Liabilities" means any and all losses, liabilities,
obligations, damages, fines, penalties, judgments, actions, claims, costs and
expenses (including, without limitation, fees, disbursements and expenses of
legal counsel, experts, engineers and consultants and the costs of
investigation and feasibility studies and Remedial Action) arising from or
under any Environmental Law or contract, agreement or similar arrangement with
any Authority or other Person required under any Environmental Law.
"Environmental Law" shall mean any Law relating to or otherwise imposing
liability or standards of conduct concerning pollution or protection of the
environment or health or safety, occupational or other, including without
limitation Laws relating to emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals, noises, odors or industrial,
toxic or hazardous substances, materials or wastes, including without
limitation Hazardous Materials, whether solid, liquid or gaseous in nature and
whether as matter or energy, into the environment (including, without
limitation, ambient air, surface water, ground water, mining or reclamation or
mined land, land surface or subsurface strata) or otherwise relating to the
manufacture, processing, generation, distribution, use, treatment, storage,
disposal, cleanup, transport or handling of pollutants, contaminants, chemicals
or industrial, toxic or hazardous substances or wastes, whether solid, liquid
or gaseous in nature, including without limitation any Law relating to
reporting, licensing, permitting, investigation and remediation of any of the
foregoing. Environmental Laws shall include without limitation the
Comprehensive Environmental Response, compensation and Liability Act (42 U.S.C.
Section 9601 et seq.), the Hazardous Material Transportation Act (49 U.S.C.
Section 1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C.
Section 6901 et seq.), the Clean Water Act (Federal Water Pollution Control
Act) (33 U.S.C. Section 1251 et seq.), the Clean Air Act (42 U.S.C. Section
7401 et seq.), the Toxic Substances Control Act (15 U.S.C. Section 2601 et
seq.), the Safe Drinking Water Act (42 U.S.C. Section 300f et seq.), the
Endangered Species Act (16 U.S.C. Section 1531 et seq.), the Emergency Planning
and Community Right-to-Know Act of 1986 (42 U.S.C. Section 11001 et seq.), the
Occupational Safety and Health Act (29 U.S.C. Section 651 et seq.), the Federal
Insecticide, Fungicide Rodenticide Act (7 U.S.C. Section 136 et seq.), the
Food, Drug and Cosmetic Act (21 U.S.C. Section 301 et seq.), the Medical Waste
Tracking Act of 1988, Pub. L. No. 100-582, 102 Stat. 2950 (1988), and the
Surface Mining Control and Reclamation Act of 1977 (30 U.S.C. Section 1201 et
seq.), as such laws have been amended or supplemented from time to time, and
any analogous present or future federal, state, local or foreign statutes,
including transfer of ownership notification statutes.
"Environmental Lien" means any Encumbrance arising under any Environmental
Law.
"Environmental Permit" means any permit, approval, authorization, license,
variance, registration or permission required under any applicable
Environmental Law.
"Environmental Release" means any release, spill, emission, leaking,
pumping, pouring, dumping, emptying, injection, deposit, disposal, discharge,
dispersal, leaching, or migration on or into the indoor or outdoor environment
or into or out of any property not authorized under any Environmental Permit
and requiring notification under any applicable Environmental Law.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations thereunder, all as from time to time in
effect, or any successor law, rules or regulations, and any reference to any
statutory or regulatory provision shall be deemed to be a reference to any
successor statutory or regulatory provision.
"ERISA Affiliate" shall mean a Person and/or such Person's Subsidiaries or
any trade or business (whether or not incorporated) which is under common
control with such Person's or such Person's Subsidiaries or which
A-26
is treated as a single employer with such Person or any Subsidiary of such
Person under Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(f)
of ERISA.
"Event" shall mean the occurrence or existence of any act, action, activity,
circumstance, condition, event, fact, failure to act, incident or practice, or
any set or combination of any of the foregoing.
"Exchange Act" shall mean the Securities Exchange Act of 1934, and the rules
and regulations of the Commission thereunder, all as from time to time in
effect, or any successor law, rules or regulations, and any reference to any
statutory or regulatory provision shall be deemed to be a reference to any
successor statutory or regulatory provision.
"Existing Policy" is defined in Section 4.11.
"Fairness Opinion" shall mean the written opinion, dated April [17], 2001 of
the Company Financial Advisor to the effect, without limitation, that the
consideration to be received by the holders of shares of Company Common Stock
and Company Option Securities in the Merger is fair from a financial point of
view to such holders.
"GAAP" shall mean, with respect to any Person, except to the extent that a
deviation therefrom is expressly required by this Agreement, generally accepted
accounting principles applied on a consistent basis (a) as set forth in
Opinions of the Accounting Principles Board of the American Institute of
Certified Public Accountants ("AICPA") and/or in statements of the Financial
Accounting Standards Board that are applicable in the circumstances as of the
date in question, (b) when not inconsistent with such opinions and statements,
as set forth in other AICPA publications and guidelines and/or (c) that
otherwise arise by custom for the particular industry. The requirement that
such principles be consistently applied means that the accounting principles in
a current period are comparable in all material respects to those applied in
preceding period. All accounting and financial terms used in this Agreement,
all determinations and computations required to be made pursuant to the
provisions of this Agreement, and the compliance with each covenant contained
in this Agreement that relates to financial matters shall, except as otherwise
specifically provided to the contrary, be determined in accordance with GAAP as
defined in this paragraph.
"Gains Taxes" is defined in Section 2.22.
"Governmental Authorizations" shall mean all approvals, concessions,
consents, exemptions, franchises, licenses, permits, plans, registrations and
other authorizations of and all reports and notices to and filings with all
Authorities.
"Hazardous Material" means any substance, material or waste which is
regulated by any Authority in jurisdictions in which any of Company or its
Subsidiaries operates, including, (a) any material, substance or waste which is
defined as a "hazardous waste," "hazardous material," "hazardous substance,"
"extremely hazardous waste," "restricted hazardous waste," "contaminant,"
"toxic waste" or "toxic substance" under any provision of Environmental Law,
and (b) petroleum, petroleum products, asbestos and polychlorinated biphenyls.
"Indemnified Person" is defined in Section 4.11.
"Instrument" shall mean any agreement, bond, contract, debenture, indenture,
lease, letter of credit, mortgage, note, commitment, memorandum, certificate,
notice, document or other writing (whether by formal agreement, letter or
otherwise), or any oral arrangement, understanding or commitment, under which
any debt, liability or other obligation is evidenced, assumed or undertaken, or
any lien (or right or interest therein) is granted, perfected or exists.
"Intellectual Property Rights" is defined in Section 2.7.
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"IRS" or the "Service" shall mean the United States Internal Revenue Service
or any successor Authority thereto.
"Law" shall mean any action, approval, authorization, code, consent decree,
constitution, demand, decree, directive, enactment, finding, guideline,
injunction, interpretation, judgment, law, license, order, ordinance, permit,
policy statement, proclamation, promulgation, regulation, requirement, rule,
rule of law, rule of public policy, settlement agreement, statute, or writ, or
the common law, or any particular section, part or provision thereof, or any
interpretation, directive, guideline or request (whether or not having the
force of law), of any Authority, including without limitation the judicial
systems thereof, or any particular section, part or provision thereof.
"Lease" shall mean any lease of property, whether real, personal or mixed.
"Legal Action" shall mean, with respect to any Person, any litigation or
legal or other actions, arbitrations, investigations, proceedings or suits, at
law or in arbitration, equity or admiralty (whether or not purported to be
brought on behalf of such Person) affecting such Person or any of its business
or property or assets.
"Material Adverse" or "Materially and Adversely" when used alone or in
conjunction with other terms (including without limitation "Affect," "Change"
and "Effect") in respect of any Person shall mean any Event or set of Events
which could be expected to (a) have any material adverse effect upon or result
in any material adverse change in the validity or enforceability of this
Agreement, or any of the Transaction Documents, (b) materially and adversely
affect the business, operations, management, properties or prospects, or the
condition, financial or other, or results of operation of such Person and its
Subsidiaries taken as a whole, (c) materially impair such Person's ability to
fulfill its obligations under the terms of this Agreement or any Transaction
Document, or (d) materially and adversely affect the aggregate rights and
remedies of Rocket or Acquiror under this Agreement or any Transaction
Document; provided that in no event shall any of the following constitute a
Material Adverse Effect on Company: (i) net losses of Company and its
Subsidiaries from operations in the normal, usual and customary manner in the
ordinary and regular course of business, consistent with past practice, of
Company and its Subsidiaries, (ii) a change in the market price or trading
volume of the Company Common Stock, (iii) any adverse Event principally
attributable to conditions affecting the industries in which Company and its
Subsidiaries participate, or the U.S. economy, as a whole, or (iv) any failure
by Company to meet internal projections or forecasts, analysts' expectations or
published revenue or earnings predictions for any period ending (or for which
revenues or earnings are released) on or after the date of this Agreement.
"MBCL" is defined in Section 1.1.
"Merger" is defined in Section 1.1.
"Merger Price" is defined in Section 1.4.
"Multiemployer Plan" shall mean a multiemployer plan, as defined in Sections
3(37) and 4001(a)(3) of ERISA.
"Option Securities" shall mean all rights, options and warrants, and calls
or commitments evidencing the right, to subscribe for, purchase or otherwise
acquire shares of capital stock or Convertible Securities, whether or not the
right to subscribe for, purchase or otherwise acquire is immediately
exercisable or is conditioned upon the passage of time, the occurrence or non-
occurrence or the existence or non-existence of some other Event.
"Organic Documents" shall mean, with respect to any Entity, the instrument,
as from time to time in effect, filed by such Entity under the laws of its
jurisdiction of organization for the purpose of effecting such organization,
its by-laws, partnership agreement, management agreement, operating agreement
and all
A-28
stockholder, partner and member agreements, voting trusts and similar
arrangements applicable to any of its capital stock, partnership interests or
membership interests.
"Pension Plan" shall mean any employer pension benefit plan, as defined in
Section 3(2) of ERISA.
"Permitted Encumbrances" shall mean the following: (a) liens for taxes,
assessments and governmental charges not yet due and payable; (b) rights
reserved to any Authority to regulate the affected property; (c) as to leased
assets, interests of lessors and encumbrances affecting the interests of the
lessors; and (d) leases, encumbrances or restrictions that do not in any
material respect, individually or in the aggregate, affect or impair the value
or use of the affected asset or property.
"Permitted Investments" is defined in Section 1.5.
"Person" shall mean any human being or any Entity.
"Private Authorizations" shall mean all franchises, permits, licenses,
approvals, consents, concessions and other authorizations of or notices to or
filings with all Persons (other than Authorities) including without limitation
those with respect to patents, trademarks, service marks, trade names,
copyrights, computer software programs, technology and know-how.
"Prohibited Transaction" shall mean a transaction that is prohibited under
Section 4975 of the Code or Section 406 of ERISA and not exempt under Section
4975 of the Code or Section 408 of ERISA, respectively.
"Proxy Statement" is defined in Section 2.18.
"Remedial Action" means all actions required under any applicable
Environmental Law or otherwise undertaken by any Authority, including any
capital expenditures, required or undertaken to (a) clean up, remove, treat, or
in any other way address any Hazardous Material; (b) prevent an Environmental
Release or the threat of an Environmental Release, or minimize any further
Environmental Release so it does not migrate or endanger or threaten to
endanger public health or welfare or the indoor or outdoor environment; (c)
perform pre-remedial studies and investigations or post-remedial monitoring and
care; or (d) bring facilities on any property owned, operated or leased by any
of Company or its Subsidiaries and operations conducted thereon into compliance
with any applicable Environmental Law or Environmental Permit.
"Representatives" is defined in Section 4.1.
"Reportable Event" shall mean a "reportable event", as defined in Section
4043 of ERISA, whether or not the reporting of such event to the Pension
Benefit Guaranty Corporation has been waived.
"Rocket" is defined in the preamble preceding the Recitals.
"Rocket 401(k) Plan" is defined in Section 4.12.
"Schedule 13E-3" is defined in Section 2.18.
"Subsidiary" shall mean, with respect to any Person, any Entity a majority
of the capital stock ordinarily entitled to vote for the election of directors,
or if no such voting stock is outstanding a majority of the equity interests,
of which is owned directly or indirectly by such Person or any other Person
which is a Subsidiary of such Person.
"Special Committee" is defined in Section 2.21.
"Surviving Corporation" is defined in Section 1.1.
A-29
"Tax" or "Taxes" shall mean all taxes, charges, fees, imposts, levies or
other assessments, including, without limitation, all net income, franchise,
profits, gross receipts, capital, sales, use, ad valorem, value added,
transfer, transfer gains, inventory, capital stock, license, withholding,
payroll, employment, social security, unemployment, excise, severance, stamp,
occupation, real or personal property, and estimated taxes, water, rent and
sewer service charges, custom duties, fees, assessments and charges of any kind
whatsoever, together with any interest and any penalties, fines, additions to
tax or additional amounts thereon, imposed by any taxing authority or other
Authority (federal, state, local or foreign) and shall include any transferee
liability in respect of Taxes.
"Tax Return" shall mean any return, declaration, report, estimate,
information return or statement required to be filed in respect of any Taxes.
"Termination Date" is defined in Section 8.1.
"Transfer" shall mean any sale, assignment, conveyance, transfer or other
disposition, mortgage, pledge or other Encumbrance, lease, exchange,
abandonment, parting with control of, gift, granting of an option or proxy or
other act of alienation.
"Transaction Document" shall mean any Instrument executed or to be executed
in connection with the consummation of the Merger and the other transactions
contemplated hereby, whether or not expressly referred to in this Agreement.
Section 8. Termination.
8.1 Termination. Anything contained in this Agreement to the contrary
notwithstanding, this Agreement may be terminated, whether before or after the
Company Stockholder Approval:
(a) By mutual written agreement of the parties; or
(b) By any party, by written notice to the other parties, if, other than
as a result of a breach of this Agreement by the terminating party, the
Closing shall not have occurred on or before June 30, 2001 or such later
date as may be mutually agreed in writing by the parties (the "Termination
Date"); or
(c) By any party, by written notice to the other parties, if a court of
competent jurisdiction or governmental, regulatory or administrative agency
or commission shall have issued an order, decree or ruling (which order,
decree, ruling or action the parties hereto shall use their best efforts to
lift or reverse), in each case permanently restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement, and
such order, decree, ruling or other action shall have become final and
nonappealable; or
(d) (i) By Company, by written notice to the other parties, if both (A)
it is not in material breach of any of its representations, warranties or
covenants contained herein or in any Transaction Document and (B) there has
been a material breach of a representation or warranty in this Agreement by
Rocket or Acquiror, or a material breach by Rocket or Acquiror of any
covenant set forth herein, or a failure of any condition to which the
obligations of Company hereunder are subject, and such breach or failure
cannot be cured by the Termination Date and has not been waived, or (ii) by
Rocket and Acquiror, by written notice to Company, if both (A) neither
Rocket nor Acquiror is in material breach of any of its representations,
warranties or covenants contained herein or in any Transaction Document and
(B) there has been a material breach of a representation or warranty in
this Agreement by Company, or a material breach by Company of any covenant
set forth herein, or a failure of any condition to which the obligations of
Rocket and Acquiror hereunder are subject, and such breach or failure
cannot be cured by the Termination Date and has not been waived.
(e) By any party, by written notice to the other parties, if the Company
Stockholder Approval shall not have been obtained by reason of the failure
to obtain the required vote upon a vote held at the
A-30
Company Stockholders Meeting contemplated by Section 4.5 (including any
postponements or adjournments thereof).
(f) By Rocket and Acquiror, by written notice to Company, if the Board
of Directors of Company shall have (i) withdrawn or modified, in a manner
adverse to Acquiror, its approval or recommendation of this Agreement or
any of the transactions contemplated hereby, (ii) failed to include such
recommendation in the Proxy Statement, (iii) approved or recommended any
Acquisition Proposal from any Person other than Rocket or Acquiror or (iv)
resolved to do any of the foregoing.
In the event of any termination pursuant to this Section (other than
pursuant to clause (a) above), written notice setting forth the reasons thereof
shall forthwith be given by the terminating party to the other party and, in
the case of paragraph (d) the breach or failure set forth in such notice shall
not have been cured within seven (7) days of such written notice.
8.2 Effect of Termination. In the event of termination of this Agreement
pursuant to Section 8.1, this Agreement shall forthwith become void, there
shall be no liability on the part of any party, or any of its respective
stockholders, partners, officers or directors, to the other and all rights and
obligations of each party shall cease, except that such termination shall not
relieve any party from liability for any misrepresentation or breach of any of
its warranties, covenants or agreements set forth in this Agreement occurring
prior to termination.
Section 9. General Provisions.
9.1 Nature and Survival of Representations and Warranties.
(a) All representations, warranties, covenants and agreements made in this
Agreement or in any agreement, instrument, other document or certificates
delivered in connection with the transactions contemplated hereby shall be
deemed material and relied on by each party notwithstanding any investigation
made by it or on its behalf. All representations, warranties, covenants and
agreements made in this Agreement shall terminate at the Effective Time or upon
termination of this Agreement pursuant to Section 8.1, except for those
covenants and agreements herein that by their terms are to be performed in
whole or in part after the Effective Time. Nothing in this Section shall
relieve any party from liability for any misrepresentation or breach of any of
its warranties, covenants or agreements set forth in this Agreement occurring
prior to its termination.
(b) All statements contained in the Disclosure Schedule or in any
certificate delivered by or on behalf of Company or any of its Subsidiaries
pursuant to or in connection with this Agreement or any amendments to any
thereof, shall constitute representations and warranties made under this
Agreement.
9.2 Entire Agreement. This Agreement (which term, unless the context
otherwise specifically requires, includes any exhibits or schedules hereto and
all agreements, instruments and certificates delivered pursuant hereto or
thereto) and the Confidentiality Agreement constitute the entire agreement
between the parties with respect to the subject matter hereof and supersede all
prior agreements, arrangements, covenants, promises, conditions,
understandings, inducements, representations and negotiations, expressed or
implied, written or oral, between them as to such subject matter, including,
without limitation, any so-called "letters of intent" with respect thereto.
9.3 Specific Performance; Other Rights and Remedies. The parties recognize
that certain of their rights under this Agreement are unique and, accordingly,
the parties shall, in addition to such other remedies as may be available to
any of them at law or in equity, have the right to enforce their rights
hereunder by actions for injunctive relief and specific performance to the
extent permitted by law. The parties hereby waive any requirement for security
or the posting of any bond or other surety in connection with any temporary or
permanent award of injunctive, mandatory or other equitable relief. The rights
and remedies of the parties under this Agreement are cumulative and are not in
lieu of, but are in addition to, any other rights and remedies
A-31
which the parties shall have under or by virtue of any statute, rule or
regulation or any rule of law, or in equity, or any other agreement or
obligation between the parties or any of them.
9.4 Waivers; Amendments. Anything in this Agreement to the contrary
notwithstanding, required consents and approvals may be granted, compliance
with any term, covenant, agreement, condition or other provision set forth
herein may be omitted or waived, and misrepresentations and breaches of
warranties may be waived, either generally or in a particular instance and
either retroactively or prospectively with, but only with, the written consent
of the party entitled to the benefit thereof. This Agreement may be altered or
amended only by an instrument in writing, duly executed by each of the parties
hereto, at any time before or after the Company Stockholder Approval, but after
such approval no alteration or amendment shall be made which by Applicable Law
requires further approval by the stockholders of Company.
9.5 Assignment; Successors and Assigns. This Agreement shall not be
assignable by any party without the prior written consent of the other parties.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective heirs, executors, legal representatives,
successors and permitted assigns, including, without limitation, successors by
operation of law pursuant to any merger, consolidation or sale of assets
involving any of the parties. Nothing in this Agreement expressed or implied is
intended to and shall not be construed to confer upon or create in any person
(other than the parties hereto and their permitted successors and assigns) any
rights or remedies under or by reason of this Agreement, including without
limitation any rights to enforce this Agreement.
9.6 Notices. All notices and other communications which by any provision of
this Agreement are required or permitted to be given shall be given in writing
and shall be (a) mailed by first-class or express mail, postage prepaid, (b)
sent by telegram, telecopy or other form of rapid transmission, confirmed by
mailing (by first class or express mail, postage prepaid) written confirmation
at substantially the same time as such rapid transmission, or (c) personally
delivered to the receiving party (which if other than an individual shall be an
officer or other responsible party of the receiving party). All such notices
and communications shall be mailed, sent or delivered as follows:
If to Rocket or Acquiror, at:
Rocket Software, Inc.
0 Xxxxx Xxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xx. Xxxxx Xxxxxxxxx
Facsimile: 000-000-0000
with a copy to:
Xxxxxx Gesmer & Xxxxxxxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx, Esq.
Facsimile: 000-000-0000
If to Company, at:
Peritus Software Services, Inc.
000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
Attention: Xx. Xxxx X. Xxxxxxxx
President
Facsimile: 000-000-0000
A-32
with a copy to:
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxx, Esq.
Facsimile: 617-526-5000
or to such other person(s), telex or facsimile number(s) or address(es) as the
party to receive any such communication or notice may have designated by
written notice to the other party.
9.7 Severability. If any provision of this Agreement shall be held or deemed
to be, or shall in fact be, invalid, inoperative, illegal or unenforceable as
applied to any particular case in any jurisdiction or jurisdictions, or in all
jurisdictions or in all cases, because of the conflicting of any provision with
any constitution or statute or rule of public policy or for any other reason,
such circumstance shall not have the effect of rendering the provision or
provisions in question invalid, inoperative, illegal or unenforceable in any
other jurisdiction or in any other case or circumstance or of rendering any
other provision or provisions herein contained invalid, inoperative, illegal or
unenforceable to the extent that such other provisions are not themselves
actually in conflict with such constitution, statute or rule of public policy,
but this Agreement shall be reformed and construed in any such jurisdiction or
case as if such invalid, inoperative, illegal or unenforceable provision had
never been contained herein and such provision reformed so that it would be
valid, operative and enforceable to the maximum extent permitted in such
jurisdiction or in such case, except when such reformation and construction
would operate as an undue hardship on either party, or constitute a substantial
deviation from the general intent and purpose of such party as reflected in
this Agreement.
9.8 Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument, binding upon all the parties hereto,
notwithstanding that all the parties are not signatories to the original or the
same counterpart. In pleading or proving any provision of this Agreement, it
shall not be necessary to produce more than one of such counterparts.
9.9 Section Headings. The headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
9.10 Further Acts. Each of the parties hereto agrees to do all such things
and execute and deliver all such further instruments, agreements and documents
and to take all such further action as any other party may reasonably request
in order to effectuate the terms and conditions of this Agreement.
9.11 Governing Law. Except for provisions required to be governed by the
MBCL, the validity, interpretation, construction and performance of this
Agreement shall be governed by, and construed in accordance with, the laws of
the Commonwealth of Massachusetts applicable to contracts made and performed in
such jurisdiction and, in any event, without giving effect to any choice or
conflict of laws provision or rule that would cause the application of domestic
substantive laws of any other jurisdiction.
9.12 Consent to Jurisdiction and Service. To the extent permitted by
Applicable Law, each of the parties hereto absolutely and irrevocably consents
and submits to the jurisdiction of the courts of the Commonwealth of
Massachusetts and of any Federal Court located in the said jurisdiction in
connection with any actions or proceedings brought against it by any other
party to this Agreement arising out of or relating to this Agreement and hereby
irrevocably agrees that all claims in respect of any such action or proceeding
may be heard and determined in any such court.
9.13 No Presumption. This Agreement shall be construed without regard to any
presumption or other rule requiring construction against the party causing this
Agreement to be drafted.
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IN WITNESS WHEREOF, each of the undersigned parties has caused this
Agreement to be entered into and signed, effective and delivered as of the date
first-above written.
COMPANY:
Peritus Software Services, Inc.
/s/ Xxxx X. Xxxxxxxx
By:__________________________________
Name: Xxxx X. Xxxxxxxx
Title: President and Chief
Executive Officer
ROCKET:
Rocket Software, Inc.
/s/ Xxxxx Xxxxxxxxx
By: _________________________________
Name: Xxxxx Xxxxxxxxx
Title: Director, Chief Operating
Officer
ACQUIROR:
Rocket Acquisition Company, Inc.
/s/ Xxxxx Xxxxxxxxx
By: _________________________________
Name: Xxxxx Xxxxxxxxx
Title: President
A-34
Exhibit A
FEDERAL FEDERAL
IDENTIFICATION IDENTIFICATION NO.
NO. 00-0000000 04-
The Commonwealth of Massachusetts
Xxxxxxx Xxxxxxx Xxxxxx
Secretary of the Commonwealth
Xxx Xxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000-0000
ARTICLES OF MERGER
(General Laws, Chapter 156B, Section 78)
merger of
Peritus Software Services, Inc.
and
Rocket Acquisition Company, Inc.
the constituent corporations, into
Peritus Software Services, Inc.
one of the constituent corporations.
The undersigned officers of each of the constituent corporations certify
under the penalties of perjury as follows:
1. An agreement of merger has been duly adopted in compliance with the
requirements of General Laws, Chapter 156B, Section 78, and will be kept as
provided by Subsection (d) thereof. The surviving corporation will furnish a
copy of said agreement to any of its stockholders, or to any person who was a
stockholder of any constituent corporation, upon written request and without
charge.
2. The effective date of the merger determined pursuant to the agreement of
merger shall be the date approved and filed by the Secretary of the
Commonwealth. If a later effective date is desired, specify such date which
shall not be more than thirty days after the date of filing:
3. (For a merger)
**The following amendments to the Articles of Organization of the surviving
corporation have been effected pursuant to the agreement of merger:
Article III is hereby amended to change the authorized capital to:
200,000 shares common, $.01 par value per share
--------
* Delete the inapplicable word
** If there are no provisions state "None".
Note: If the space provided under any article or item on this form is
insufficient, additions shall be set forth on separate 8 1/2 x 11 sheets of
paper with a left margin of at least 1 inch. Additions to more than one article
may be made on a single sheet as long as each article requiring each addition
is clearly indicated.
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(For a consolidation)
(a) The purpose of the resulting corporation is to engage in the following
business activities:
(b) State the total number of shares and the par value, if any, of each
class of stock which the resulting corporation is authorized to issue.
Without Par Value With Par Value
------------------------------ -----------------------------------------------
Type Number of Shares Type Number of Shares Par Value
---------- ---------------- ---------- ---------------- ---------
Common: Common:
Preferred: Preferred:
**(c) If more than one class of stock is authorized, state a distinguishing
designation for each class and provide a description of the preferences,
voting powers, qualifications, and special or relative rights or privileges of
each class and of each series then established.
**(d) The restrictions, if any, on the transfer of stock contained in the
agreement of consolidation are:
**(e) Other lawful provisions, if any, for the conduct and regulation of
the business and affairs of the corporation, for its voluntary dissolution, or
for limiting, defining, or regulating the powers of the corporation, or of its
directors or stockholders, or of any class of stockholders:
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4. The information contained in Item 4 is not a permanent part of the
Articles of Organization of the surviving corporation.
(a) The street address of the surviving corporation in Massachusetts is:
(post office boxes are not acceptable)
0 Xxxxx Xxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000
(b) The name, residential address, and post office address of each director
and officer of the *resulting / *surviving corporation is:
Name Residential Address Post Office Address
---- ------------------- -------------------
President: Xxxxx Xxxxxxxxx 0000 Xxxxx Xxxxxxxxx
Xxx Xxxxx, Xxx Xxxxxxxxx
00000
Treasurer: Xxxxx Xxxxxxxxx same as above
Clerk: Xxxxx Xxxxxxxxx same as above
Directors: Xxxxx Xxxxxxxxx same as above
Asst. Xxxxxx Xxxxxxx 00 Xxxxxxxx Xxxxxx
Clerk: Xxxxxx, Xxxxxxxxxxxxx 00000
Asst. Xxxxxxx Xxxxxxxxx 15 Xxxxx Xxxxx Drive
Clerk: Xxxxx, Xxxxxxxxxxxxx 00000
(c) The fiscal year (i.e. tax year) of the surviving corporation shall end
on the last day of the month of:
December
(d) The name and business address of the resident agent, if any, of the
surviving corporation is:
Xxxxxx Xxxxxxx, 0 Xxxxx Xxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000
The undersigned officers of the several constituent corporations listed
above further state under the penalties of perjury as to their respective
corporations that the agreement of merger has been duly executed on behalf of
such corporation and duly approved by the stockholders of such corporation in
the manner required by General Laws, Chapter 156B, Section 78.
____________________________________________________________________, President
Xxxxx Xxxxxxxxx
________________________________________________________________________, Clerk
Xxxxx Xxxxxxxxx
of Rocket Acquisition Company, Inc.
_______________________________________________________________________________
(Name of constituent corporation)
____________________________________________________________________, President
Xxxx X. Xxxxxxxx
________________________________________________________________________, Clerk
Xxxxx X. Xxxx
of Peritus Software Services, Inc.
_______________________________________________________________________________
(Name of constituent corporation)
X-00
XXX XXXXXXXXXXXX XX XXXXXXXXXXXXX
ARTICLES OF *CONSOLIDATION / *MERGER
(General Laws, Chapter 156B, Section 78)
----------------
I hereby approve the within Articles of
*Consolidation/*Merger and, the filing fee in the amount
of $ , having been paid, said articles are deemed to
have been filed with me this day of , .
Effective date: __________________________________________
XXXXXXX XXXXXXX XXXXXX
Secretary of the Commonwealth
TO BE FILLED IN BY CORPORATION
Photocopy of document to be sent to:
Xxxxxx Xxxxxxxx, Legal Specialist
Xxxxxx, Gesmer & Xxxxxxxxx LLP
00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone: (000) 000-0000
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