Exhibit 1
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
among
DOUBLECLICK INC.,
NJ MERGER CORPORATION
and
NETGRAVITY, INC.
Dated as of July 12, 1999
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS 2
SECTION 1.01 Certain Defined Terms 2
ARTICLE II THE MERGER 6
SECTION 2.01 The Merger 6
SECTION 2.02 Closing 6
SECTION 2.03 Effective Time 6
SECTION 2.04 Effect of the Merger 6
SECTION 2.05 Certificate of Incorporation; Bylaws; Directors and Officers of Surviving Corporation 6
ARTICLE III CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES 7
SECTION 3.01 Conversion of Shares 7
SECTION 3.02 Exchange of Shares Other than Treasury Shares 8
SECTION 3.03 Stock Transfer Books 10
SECTION 3.04 No Fractional Share Certificates 10
SECTION 3.05 Options to Purchase Company Common Stock 10
SECTION 3.06 Unvested Stock 11
SECTION 3.07 Certain Adjustments 12
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF COMPANY 12
SECTION 4.01 Organization and Qualification; Subsidiaries 13
SECTION 4.02 Certificate of Incorporation and Bylaws 13
SECTION 4.03 Capitalization 13
SECTION 4.04 Authority Relative to This Agreement 14
SECTION 4.05 No Conflict; Required Filings and Consents 15
SECTION 4.06 Permits; Compliance with Laws 15
SECTION 4.07 SEC Filings; Financial Statements 16
SECTION 4.08 Absence of Certain Changes or Events 16
SECTION 4.09 Employee Benefit Plans; Labor Matters 17
SECTION 4.10 Pooling; Certain Tax Matters 20
SECTION 4.11 Contracts 20
SECTION 4.12 Litigation 20
SECTION 4.13 Environmental Matters 21
SECTION 4.14 Intellectual Property 21
SECTION 4.15 Taxes 23
SECTION 4.16 Insurance 24
SECTION 4.17 Properties 24
SECTION 4.18 Affiliates 25
SECTION 4.19 Opinion of Financial Advisor 25
SECTION 4.20 Brokers 25
SECTION 4.21 Certain Business Practices 25
SECTION 4.22 Section 203 of the DGCL Not Applicable 26
SECTION 4.23 Business Activity Restriction 26
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT 26
SECTION 5.01 Organization and Qualification; Subsidiaries 26
SECTION 5.02 Certificate of Incorporation and Bylaws 27
SECTION 5.03 Capitalization 27
SECTION 5.04 Authority Relative to this Agreement 28
SECTION 5.05 No Conflict; Required Filings and Consents 28
SECTION 5.06 SEC Filings; Financial Statements 29
SECTION 5.07 Pooling; Certain Tax Matters 29
SECTION 5.08 Opinion of Financial Advisor 30
SECTION 5.09 Brokers 30
SECTION 5.10 Affiliates 30
ARTICLE VI COVENANTS 30
SECTION 6.01 Conduct of Business by Company Pending the Closing 30
SECTION 6.02 Notices of Certain Events 33
SECTION 6.03 Access to Information; Confidentiality 33
SECTION 6.04 No Solicitation of Transactions 34
SECTION 6.05 Tax-Free Transaction; Pooling 35
SECTION 6.06 Control of Operations 35
SECTION 6.07 Further Action; Consents; Filings 35
SECTION 6.08 Additional Reports 36
SECTION 6.09 Tax Information 36
ARTICLE VII ADDITIONAL AGREEMENTS 36
SECTION 7.01 Registration Statement; Proxy Statement 36
SECTION 7.02 Stockholders'Meeting 38
SECTION 7.03 Affiliates 39
SECTION 7.04 Directors'and Officers'Indemnification and Insurance 39
SECTION 7.05 No Shelf Registration 40
SECTION 7.06 Public Announcements 40
SECTION 7.07 NNM Listing 41
SECTION 7.08 Blue Sky 41
SECTION 7.09 Employee Benefit Matters 41
ARTICLE VIII CONDITIONS TO THE MERGER 41
SECTION 8.01 Conditions to the Obligations of Each Party to Consummate the Merger 41
SECTION 8.02 Conditions to the Obligations of Company 42
SECTION 8.03 Conditions to the Obligations of Parent 43
ARTICLE IX TERMINATION, AMENDMENT AND WAIVER 44
SECTION 9.01 Termination 44
SECTION 9.02 Effect of Termination 46
SECTION 9.03 Amendment 46
SECTION 9.04 Waiver 46
SECTION 9.05 Termination Fee; Expenses 46
ARTICLE X GENERAL PROVISIONS 47
SECTION 10.01 Non-Survival of Representations and Warranties 47
SECTION 10.02 Notices 47
SECTION 10.03 Severability 48
SECTION 10.04 Assignment; Binding Effect; Benefit 49
SECTION 10.05 Incorporation of Exhibits 49
SECTION 10.06 Governing Law 49
SECTION 10.07 Waiver of Jury Trial 49
SECTION 10.08 Headings; Interpretation 50
SECTION 10.09 Counterparts 50
SECTION 10.10 Entire Agreement 50
ANNEXES
ANNEX A Form of Stockholder Agreement
ANNEX B Form of Company Affiliate Agreement
ANNEX C Form of Parent Affiliate Agreement
ANNEX D Form of Employment Agreement
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION, dated as of July 12, 1999
(as amended, supplemented or otherwise modified from time to time, this
"AGREEMENT"), among DOUBLECLICK INC., a Delaware corporation ("PARENT"),
NETGRAVITY, INC., a Delaware corporation ("COMPANY"), and NJ MERGER CORPORATION,
a Delaware corporation and a direct wholly owned subsidiary of Parent ("MERGER
SUB"):
W I T N E S S E T H:
WHEREAS, the boards of directors of Parent and Company have determined that
it is advisable and in the best interests of their respective companies and
stockholders to enter into a business combination by means of the merger of
Merger Sub with and into Company (the "MERGER") and have approved and adopted
this Agreement;
WHEREAS, concurrently with the execution of this Agreement and as an
inducement to Parent to enter into this Agreement, certain stockholders of
Company have entered into a stockholder agreement (each, a "STOCKHOLDER
AGREEMENT") in the form attached hereto as Annex A;
WHEREAS, upon the terms and subject to the conditions of this Agreement and
in accordance with the General Corporation Law of the State of Delaware (the
"DGCL"), Parent will acquire all of the common stock of Company through the
merger of Merger Sub with and into Company;
WHEREAS, for financial reporting purposes, it is intended that the Merger
be accounted for as a "pooling of interests" under United States generally
accepted accounting principles ("U. S. GAAP") and the accounting standards of
the United States Securities and Exchange Commission (the "SEC"); and
WHEREAS, for United States Federal income tax purposes, it is intended that
the Merger shall qualify as a tax-free reorganization under Section 368(a) of
the Internal Revenue Code of 1986, as amended (together with the rules and
regulations promulgated thereunder, the "CODE"), and that this Agreement shall
be, and hereby is, adopted as a plan of reorganization for purposes of Section
368 of the Code;
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements set forth herein, and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto
hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 CERTAIN DEFINED TERMS
Unless the context otherwise requires, the following terms, when used in
this Agreement, shall have the respective meanings specified below (such
meanings to be equally applicable to the singular and plural forms of the terms
defined):
"AFFILIATE" shall mean, with respect to any person, any other person that
controls, is controlled by or is under common control with the first person.
"BLUE SKY LAWS" shall mean state securities or "blue sky" laws.
"BUSINESS DAY" shall mean any day on which the principal offices of the SEC
in Washington, D.C. are open to accept filings, or, in the case of determining a
date when any payment is due, any day on which banks are not required or
authorized by law or executive order to close in New York.
"COMPANY DISCLOSURE SCHEDULE" shall mean the disclosure schedule delivered
by Company to Parent prior to the execution of this Agreement and forming a part
hereof.
"COMPANY MATERIAL ADVERSE EFFECT" shall mean any change in or effect on
the business of Company and the Company Subsidiaries that, individually or in
the aggregate (taking into account all other such changes or effects), is, or
is reasonably likely to be, materially adverse to the business, liabilities,
financial condition or results of operations of Company and the Company
Subsidiaries, taken as a whole, except to the extent any such change or
effect results from or is attributable to (i) changes in general economic
conditions or changes affecting the industry generally in which Company
operates (provided that such changes do not affect Company in a materially
disproportionate manner), (ii) any litigation or loss of current or
prospective customers, employees or revenues that Company successfully bears
the burden of proving arose from Company entering into this Agreement or
(iii) any matter described in Section 1.01 of the Company Disclosure
Schedule; PROVIDED, HOWEVER, that in no event shall a decrease in the trading
price of Company Common Stock or litigation relating thereto be considered a
Company Material Adverse Effect.
"COMPANY STOCK PLANS" shall mean Company's 1995 Stock Option Plan, 1998
Stock Plan, Company Stock Purchase Plan and 1998 Director Option Plan.
"COMPANY STOCK PURCHASE PLAN" shall mean Company's 1998 Employee Stock
Purchase Plan.
"COMPETING TRANSACTION" shall mean any of the following involving Company
(other than the Merger):
(i) any merger, consolidation, share exchange, business combination or
other similar transaction (other than, for the purpose of Section
9.05(b)(ii)(B) and 9.05(c), such a transaction in which Company
acquires another Person and the shares of Company Common Stock
issued to the equityholders of such other Person constitute less
than 50% of the capital stock of the successor company in such
transaction);
(ii) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition of 20% or more of the assets (excluding, for the purpose
of Section 9.05(b)(ii)(B) and 9.05(c), cash or cash equivalents) of
Company and its subsidiaries, taken as a whole, in a single
transaction or series of related transactions;
(iii) any tender offer or exchange offer for 20% or more of the
outstanding voting securities of Company or the filing of a
registration statement under the Securities Act in connection
therewith; or
(iv) any person having acquired beneficial ownership or the right to
acquire beneficial ownership of, or any "group" (as such term is
defined under Section 13(d) of the Exchange Act) having been formed
that beneficially owns or has the right to acquire beneficial
ownership of, 20% or more of the outstanding voting securities of
Company;
(v) other than for the purpose of Section 9.05(b)(ii)(B) and 9.05(c),
any solicitation in opposition to the approval of this Agreement by
the stockholders of Company; or
(vi) other than for the purpose of Section 9.05(b)(ii)(B) and 9.05(c),
any public announcement of a proposal, plan or intention to do any
of the foregoing or any agreement to engage in any of the foregoing.
"CONFIDENTIALITY AGREEMENT" shall mean the confidentiality agreement, dated
as of July 6, 1999 between Parent and Company.
"$" shall mean United States Dollars.
"ENVIRONMENTAL LAW" shall mean any Law and any enforceable judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, relating to pollution or protection of the
environment or natural resources, including, without limitation, those relating
to the use, handling, transportation, treatment, storage, disposal, release or
discharge of Hazardous Material, as in effect as of the date hereof.
"ENVIRONMENTAL PERMIT" shall mean any permit, approval, identification
number, license or other authorization required under or issued pursuant to any
applicable Environmental
Law.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended,
together with the rules and regulations promulgated thereunder.
"EXPENSES" shall mean, with respect to any party hereto, all out-of-pocket
expenses (including, without limitation, all fees and expenses of counsel,
accountants, investment bankers, experts and consultants to a party hereto and
its affiliates) incurred by such party or on its behalf in connection with or
related to the authorization, preparation, negotiation, execution and
performance of its obligations pursuant to this Agreement and the consummation
of the Merger, the preparation, printing, filing and mailing of the Registration
Statement and the Proxy Statement, the solicitation of stockholder approvals,
the filing of HSR Act notice, if any, and all other matters related to the
transactions contemplated hereby and the closing of the Merger.
"GOVERNMENTAL ENTITY" shall mean any United States Federal, state or local
or any foreign governmental, regulatory or administrative authority, agency or
commission or any court, tribunal or arbitral body.
"GOVERNMENTAL ORDER" shall mean any order, writ, judgment, injunction,
decree, stipulation, determination or award entered by or with any Governmental
Entity.
"HAZARDOUS MATERIAL" shall mean (i) any petroleum, petroleum products,
by-products or breakdown products, radioactive materials, asbestos-containing
materials or polychlorinated biphenyls or (ii) any chemical, material or
substance defined or regulated as toxic or hazardous or as a pollutant or
contaminant or waste under any applicable Environmental Law.
"HSR ACT" shall mean ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976,
as amended, together with the rules and regulations promulgated thereunder.
"IRS" shall mean the United States Internal Revenue Service.
"LAW" shall mean any Federal, state, foreign or local statute, law,
ordinance, regulation, rule, code, order, judgment, decree, other requirement or
rule of law of the United States or any other jurisdiction, and any other
similar act or law.
"PARENT DISCLOSURE SCHEDULE" shall mean the disclosure schedule delivered
by Parent to Company prior to the execution of this Agreement and forming a part
hereof.
"PARENT MATERIAL ADVERSE EFFECT" shall mean any change in or effect on the
business of Parent and the Parent Subsidiaries that, individually or in the
aggregate (taking into account all other such changes or effects), is, or is
reasonably likely to be, materially adverse to the business, liabilities,
financial condition or results of operations of Parent and the Parent
Subsidiaries, taken as a whole, except to the extent any such change or effect
results from or is attributable to (i) changes in general economic conditions or
changes affecting the industry generally in which Parent operates (provided that
such changes do not affect Parent in a materially disproportionate manner) or
(ii) any litigation or loss of current or prospective customers, employees or
revenues that Parent successfully bears the burden of proving arose from Parent
entering into this Agreement; PROVIDED, HOWEVER, that in no event shall a
decrease in the trading price of Parent Common Stock or litigation relating
thereto be considered a Parent Material Adverse Effect.
"PARENT STOCK PLANS" shall mean Parent's 1997 Stock Incentive Plan and 1996
Stock Option Plan.
"PERSON" shall mean an individual, corporation, partnership, limited
partnership, limited liability company, limited liability partnership,
syndicate, person (including, without limitation, a "person" as defined in
Section 13(d)(3) of the Exchange Act), trust, association, entity or government
or political subdivision, agency or instrumentality of a government.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended,
together with the rules and regulations promulgated thereunder.
"SUBSIDIARY" shall mean, with respect to any person, any corporation,
partnership, limited partnership, limited liability company, limited liability
partnership, joint venture or other legal entity of which such person (either
alone or through or together with any other subsidiary of such person) owns,
directly or indirectly, a majority of the stock or other equity interests, the
holders of which are generally entitled to vote for the election of the board of
directors or other governing body of such corporation or other legal entity.
"TAX" shall mean (i) any and all taxes, fees, levies, duties, tariffs,
imposts and other charges of any kind (together with any and all interest,
penalties, additions to tax and additional amounts imposed with respect thereto)
imposed by any Governmental Entity or taxing authority, including, without
limitation, taxes or other charges on or with respect to income, franchises,
windfall or other profits, gross receipts, property, sales, use, capital stock,
payroll, employment, social security, workers' compensation, unemployment
compensation or net worth; taxes or other charges in the nature of excise,
withholding, ad valorem, stamp, transfer, value-added or gains taxes; license,
registration and documentation fees; and customers' duties, tariffs and similar
charges; (ii) any liability for the payment of any amounts of the type described
in (i) as a result of being a member of an affiliated, combined, consolidated or
unitary group for any Taxable period; and (iii) any liability for the payment of
amounts of the type described in (i) or (ii) as a result of being a transferee
of, or a successor in interest to, any person or as a result of an express or
implied obligation to indemnify any person.
"TAX RETURN" shall mean any return, statement or form (including, without
limitation, any estimated tax reports or return, withholding tax reports or
return and information report or return) required to be filed with respect to
any Taxes. ARTICLE II
ARTICLE II
THE MERGER
SECTION 2.01 THE MERGER
Upon the terms and subject to the conditions set forth in this Agreement,
and in accordance with the DGCL, at the Effective Time (as defined in Section
2.03), Merger Sub shall be merged with and into Company. As a result of the
Merger, the separate corporate existence of Merger Sub shall cease and Company
shall continue as the surviving corporation of the Merger as a wholly owned
subsidiary of Parent (the "SURVIVING CORPORATION").
SECTION 2.02 CLOSING
Unless this Agreement shall have been terminated and the Merger herein
contemplated shall have been abandoned pursuant to Section 9.01 and subject to
the satisfaction or waiver of the conditions set forth in Article VIII, the
consummation of the Merger shall take place as promptly as practicable (and in
any event within three business days) after satisfaction or waiver of the
conditions set forth in Article VIII, at a closing (the "CLOSING") to be held at
the offices of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇▇ Street Tower, One Market,
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ unless another date, time or place is agreed to
by Parent and Company.
SECTION 2.03 EFFECTIVE TIME
At and after the time of the Closing, the parties shall cause the Merger to
be consummated by filing a certificate of merger (the "CERTIFICATE OF MERGER")
with the Secretary of State of the State of Delaware in such form as required
by, and executed in accordance with the relevant provisions of, the DGCL (the
date and time of such filing, or such later date and time as may be set forth
therein, being the "EFFECTIVE TIME").
SECTION 2.04 EFFECT OF THE MERGER
At the Effective Time, the effect of the Merger shall be as provided in the
applicable provisions of the DGCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, except as otherwise
provided herein, all the property, rights, privileges, powers and franchises of
Company and Merger Sub shall vest in Company as the Surviving Corporation, and
all debts, liabilities and duties of Company and Merger Sub shall become the
debts, liabilities and duties of Company as the Surviving Corporation.
SECTION 2.05 CERTIFICATE OF INCORPORATION; BYLAWS; DIRECTORS AND OFFICERS
OF SURVIVING CORPORATION
Unless otherwise agreed by Parent and Company before the Effective Time, at
the Effective Time:
(a) the Certificate of Incorporation and the Bylaws of Merger Sub in
effect immediately prior to the Effective Time shall be the
Certificate of Incorporation and the Bylaws of the Surviving
Corporation, until thereafter amended as provided by Law and such
Certificate of Incorporation or Bylaws; PROVIDED, HOWEVER, that
Article I of the Certificate of Incorporation of the Surviving
Corporation shall be amended to read as follows: "The name of the
corporation is NetGravity, Inc.";
(b) the officers of Merger Sub immediately prior to the Effective Time
shall serve in their respective offices of the Surviving Corporation
from and after the Effective Time, in each case until their
successors are elected or appointed and qualified or until their
resignation or removal; and
(c) the directors of Merger Sub immediately prior to the Effective Time
shall serve as the directors of the Surviving Corporation from and
after the Effective Time, in each case until their successors are
elected or appointed and qualified or until their resignation or
removal.
ARTICLE III
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 3.01 CONVERSION OF SHARES
At the Effective time, by virtue of the Merger, and without any action on
the part of Parent, Merger Sub, Company or the holders of any of the following
securities:
(a) each share of Common Stock, $.001 par value, of Company ("COMPANY
COMMON STOCK") issued and outstanding immediately before the
Effective Time (excluding those held in the treasury of Company and
those owned by any wholly owned subsidiary of Company) and all
rights in respect thereof, shall, forthwith cease to exist and be
converted into and become exchangeable for .28 shares (the "EXCHANGE
RATIO") of common stock, $.001 par value, of Parent ("PARENT COMMON
STOCK");
(b) each share of Company Common Stock held in the treasury of Company
or owned by any wholly owned subsidiary of Company immediately prior
to the Effective Time shall be canceled and retired and no shares of
stock or other securities of Parent, the Surviving Corporation or
any other corporation shall be issuable, and no payment of other
consideration shall be made, with respect thereto; and
(c) each issued and outstanding share of capital stock of Merger Sub
shall be converted into and become one fully paid and nonassessable
share of common stock of the Surviving Corporation.
SECTION 3.02 EXCHANGE OF SHARES OTHER THAN TREASURY SHARES
(a) EXCHANGE AGENT. As of the Effective Time, Parent shall enter into an
agreement with a bank or trust company to act as exchange agent for
the Merger (the "EXCHANGE AGENT") as may be designated by Parent and
shall be reasonably acceptable to Company.
(b) PARENT TO PROVIDE COMMON STOCK AND CASH. Promptly after the
Effective Time, Parent shall make available to the Exchange Agent
for the benefit of the holder of Company Common Stock: (i)
Certificates of Parent Common Stock ("PARENT CERTIFICATES")
representing the number of whole shares of Parent Common Stock
issuable pursuant to Section 3.01(a) in exchange for shares of
Company Common Stock outstanding immediately prior to the Effective
Time; and (ii) sufficient funds to permit payment in lieu of
fractional shares pursuant to Section 3.04.
(c) EXCHANGE PROCEDURES. The Exchange Agent shall mail to each holder of
record of certificates of Company Common Stock ("COMPANY
CERTIFICATES"), whose shares were converted into the right to
receive shares of Parent Common Stock (and cash in lieu of
fractional shares) pursuant to Section 3.04) promptly after the
Effective Time (and in any event no later than three business days
after the later to occur of the Effective Time and receipt by Parent
of a complete list from Company of the names and addresses of its
holders of record): (i) a letter of transmittal (which shall specify
that delivery shall be effected, and risk of loss and title to the
Company Certificates shall pass, only upon receipt of the Company
Certificates by the Exchange Agent, and shall be in such form and
have such other provisions as Parent may reasonably specify); and
(ii) instructions for use in effecting the surrender of the Company
Certificates in exchange for Parent Certificates (and cash in lieu
of fractional shares). Upon surrender of a Company Certificate for
cancellation to the Exchange Agent or to such other agent or agents
as may be appointed by Parent, together with such letter of
transmittal, duly completed and validly executed, and such other
documents as may be reasonably required by the Exchange Agent, the
holder of such Company Certificate shall be entitled to receive in
exchange therefor a Parent Certificate representing the number of
whole shares of Parent Common Stock that such holder has the right
to receive pursuant to this Article III and payment of cash in lieu
of fractional shares which such holder has the right to receive
pursuant to Section 3.04, and the Company Certificate so surrendered
shall forthwith be canceled. Until so surrendered, each outstanding
Company Certificate that, prior to the Effective Time, represented
shares of Company Common Stock will be deemed from and after the
Effective Time, for all corporate purposes other than the payment of
dividends and distributions, to evidence the ownership of the number
of full shares of Parent Common Stock into which such shares of
Company Common Stock shall have been so converted and the right to
receive an amount in cash in lieu of the issuance of any fractional
shares in accordance with Section 3.04. Notwithstanding any other
provision of this Agreement, no interest will be paid or will accrue
on any cash payable to holders of Company Certificates pursuant to
the provisions of this Article III.
(d) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No dividends or
other distributions with respect to Parent Common Stock with a
record date after the Effective Time will be paid to the holder of
any unsurrendered Company Certificate with respect to the shares of
Parent Common Stock represented thereby until the holder of record
of such Company Certificate shall surrender such Company
Certificate. Subject to the effect of applicable escheat or similar
laws, following surrender of any such Company Certificate, there
shall be paid to the record holder of the Parent Certificates issued
in exchange therefor, without interest, at the time of such
surrender, the amount of any such dividends or other distributions
with a record date after the Effective Time theretofore payable (but
for the provisions of this Section 3.02(d)) with respect to such
shares of Parent Common Stock.
(e) TRANSFER OF OWNERSHIP. If any Parent Certificate is to be issued in
a name other than that in which the Company Certificate surrendered
in exchange therefor is registered, it will be a condition of the
issuance thereof that the Company Certificate so surrendered will be
properly endorsed and otherwise in proper form for transfer and that
the person requesting such exchange will have paid to Parent or any
agent designated by it any transfer or other taxes required by
reason of the issuance of a Parent Certificate for shares of Parent
Common Stock in any name other than that of the registered holder of
the Company Certificate surrendered, or established to the
satisfaction of Parent or any agent designated by it that such tax
has been paid or is not payable.
(f) TERMINATION OF EXCHANGE AGENT FUNDING. Any portion of funds
(including any interest earned thereon) or Parent Certificates held
by the Exchange Agent which have not been delivered to holders of
Company Certificates pursuant to this Article III within six months
after the Effective Time shall promptly be paid or delivered, as
appropriate, to Parent, and thereafter holders of Company
Certificates who have not theretofore complied with the exchange
procedures outlined in and contemplated by this Section 3.02 shall
thereafter look only to Parent (subject to abandoned property,
escheat and similar laws) only as general creditors thereof for
their claim for shares of Parent Common Stock, any cash in lieu of
fractional shares of Parent Common Stock and any dividends or
distributions (with a record date after the Effective Time) with
respect to Parent Common Stock to which they are entitled.
(g) NO LIABILITY. Notwithstanding anything to the contrary in this
Section 3.02, none of the Exchange Agent, the Surviving Corporation
or any party hereto shall be liable to any person in respect of any
shares of Parent Common Stock or cash delivered to a public official
pursuant to any applicable abandoned property, escheat or similar
law.
(h) LOST, STOLEN OR DESTROYED COMPANY CERTIFICATES. In the event any
Company Certificates shall have been lost, stolen or destroyed, the
Exchange Agent shall issue in exchange for such lost, stolen or
destroyed Company Certificates, upon the making of an affidavit of
that fact by the holder thereof, a Parent Certificate representing
such shares of Parent Common Stock (and cash in lieu of fractional
shares) as may be required pursuant to this Article III; PROVIDED,
HOWEVER, that Parent may, in its discretion and as a condition
precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed Company Certificates to
indemnify Parent against any claim that may be made against Parent,
the Surviving Corporation or the Exchange Agent with respect to the
Company Certificates alleged to have been lost, stolen or destroyed.
SECTION 3.03 STOCK TRANSFER BOOKS
At the Effective Time, the stock transfer books of Company shall each be
closed, and there shall be no further registration of transfers of shares of
Company Common Stock thereafter on the records of any such stock transfer books.
In the event of a transfer of ownership of shares of Company Common Stock that
is not registered in the stock transfer records of Company at the Effective
Time, a certificate or certificates representing the number of full shares of
Parent Common Stock into which such shares of Company Common Stock shall have
been converted shall be issued to the transferee together with a cash payment in
lieu of fractional shares, if any, in accordance with Section 3.04 hereof, and a
cash payment in the amount of dividends, if any, in accordance with Section
3.02(d) hereof, if the certificate or certificates representing such shares of
Company Common Stock is or are surrendered as provided in Section 3.02(c)
hereof, accompanied by all documents required to evidence and effect such
transfer and by evidence of payment of any applicable stock transfer tax.
SECTION 3.04 NO FRACTIONAL SHARE CERTIFICATES
No scrip or fractional share Parent Certificate shall be issued upon the
surrender for exchange of Company Certificates, and an outstanding fractional
share interest shall not entitle the owner thereof to vote, to receive dividends
or to any rights of a stockholder of Parent or of Surviving Corporation with
respect to such fractional share interest. As promptly as practicable following
the Effective Time, Parent shall deposit with the Exchange Agent an amount in
cash sufficient for the Exchange Agent to pay each holder of Company Common
Stock an amount in cash equal to the product obtained by multiplying (i) the
fractional share interest to which such holder would otherwise be entitled
(after taking into account all shares of Company Common Stock held at the
Effective Time by such holder) by (ii) the closing price for a share of Parent
Common Stock on the Nasdaq National Market (the "NNM") on the first business day
immediately following the Effective Time. As soon as practicable after the
determination of the amount of cash, if any, to be paid to holders of Company
Common Stock with respect to any fractional share interests, the Exchange Agent
shall make available such amounts, net of any required withholding Taxes, to
such holders of Company Common Stock, subject to and in accordance with the
terms of Section 3.02 hereof.
SECTION 3.05 OPTIONS TO PURCHASE COMPANY COMMON STOCK
At the Effective Time, each option or warrant granted by Company to
purchase shares of Company Common Stock ("COMPANY STOCK OPTIONS"), which is
outstanding and unexercised immediately prior to the Effective Time, and the
Company Stock Plans shall be assumed by Parent, and the Company Stock Options
shall be converted into an option or warrant,
as the case may be, to purchase shares of Parent Common Stock in such number and
at such exercise price as provided below and otherwise having the same terms and
conditions as in effect immediately prior to the Effective Time (except to the
extent that such terms, conditions and restrictions may be altered in accordance
with their terms as a result of the Merger contemplated hereby and except that
all references in each such Company Stock Option to Company shall be deemed to
refer to Parent):
(a) the number of shares of Parent Common Stock to be subject to the new
option or warrant, as the case may be, shall be equal to the product
of (x) the number of shares of Company Common Stock subject to the
original Company Stock Option immediately prior to the Effective
Time and (y) the Exchange Ratio;
(b) the exercise price per share of Parent Common Stock under the new
option or warrant shall be equal to (x) the exercise price per share
of Company Common Stock in effect under the original Company Stock
Option immediately prior to the Effective Time divided by (y) the
Exchange Ratio; and
(c) in effecting such assumption and conversion, the aggregate number of
shares of Parent Common Stock to be subject to each assumed Company
Stock Option will be rounded down, if necessary, to the next whole
share and the aggregate exercise price shall be rounded up, if
necessary, to the next whole cent while preserving the aggregate
intrinsic value.
The adjustments provided herein with respect to any options that are
"incentive stock options" (as defined in Section 422 of the Code) shall be
effected in a manner consistent with the requirements of Section 424(a) of the
Code so as to retain their character as incentive stock options. The assumption
of the outstanding Company Stock Options in the Merger and their conversion into
options for Parent Common Stock will not result in any accelerated vesting of
those options or the shares purchasable thereunder other than as contemplated in
currently existing agreements to which Company is a party, copies of which
agreements have been provided to Parent, and the vesting schedule in effect for
each Company Stock Option immediately prior to the Effective Time shall remain
in full force after the assumption thereof by Parent.
SECTION 3.06 UNVESTED STOCK
At the Effective Time, any unvested shares of Company Common Stock awarded
to employees, directors or consultants pursuant to any of the Company's plans or
arrangements and outstanding immediately prior to the Effective Time shall be
converted into unvested shares of Parent Common Stock in accordance with the
Exchange Ratio and shall remain subject to the same terms, restrictions and
vesting schedule as in effect immediately prior to the Effective Time, except to
the extent by their terms such unvested shares of Company Common Stock vest at
the Effective Time and copies of the relevant agreements governing such vesting
have been provided to Parent. All outstanding rights which Company may hold
immediately prior to the
Effective Time to repurchase unvested shares of Company Common Stock shall be
assigned to the Parent in the Merger and shall thereafter be exercisable by
Parent upon the same terms and conditions in effect immediately prior to the
Effective Time, except that the shares purchasable pursuant to such rights and
the purchase price payable per share shall be adjusted to reflect the Exchange
Ratio.
SECTION 3.07 EMPLOYEE STOCK PURCHASE PLAN
At the Effective Time, the Company Stock Purchase Plan and each outstanding
purchase right under the Company Stock Purchase Plan shall be assumed by Parent.
Within five business days of the date hereof, Company shall deliver a schedule
that sets forth a true and complete list as of the date hereof of all holders of
outstanding purchase rights under the Company Stock Purchase Plan, including the
payroll deduction amount elected by each holder and the price per share of
Company Common Stock at the start of the current purchase periods. On the
Closing Date, Company shall deliver to Parent an updated version of such
schedule, current as of such date. Each such purchase right so assumed by Parent
under this Agreement shall continue to have, and be subject to, the terms and
conditions set forth in the Company Stock Purchase Plan and the documents
governing the outstanding purchase rights under the Company Stock Purchase Plan
immediately prior to the Effective Time, except that the purchase price of
shares of Parent Common Stock and the number of shares of Parent Common Stock to
be issued upon the exercise of each such purchase right shall be adjusted in
accordance with the Exchange Ratio (with the number of shares rounded down to
the nearest whole share and the purchase price rounded up to the nearest whole
cent). The assumed outstanding purchase rights under the Company Stock Purchase
Plan shall be exercised at such times following the Effective Time as set forth
in the Company Stock Purchase Plan, and each participant shall, accordingly, be
issued shares of Parent Common Stock at such times. The Company Stock Purchase
Plan, and all outstanding purchase rights thereunder, shall terminate with the
exercise of the last assumed purchase right, and no additional purchase rights
shall be granted under the Company Stock Purchase Plan following the Effective
Time.
SECTION 3.08 CERTAIN ADJUSTMENTS
If between the date of this Agreement and the Effective Time, the
outstanding shares of Parent Common Stock or Company Common Stock shall be
changed into a different number of shares by reason of any reclassification,
recapitalization, split-up, combination or exchange of shares, or any dividend
payable in stock or other securities shall be declared thereon with a record
date within such period, or the number of shares of Company Common Stock on a
fully diluted basis is in excess of that specified in Section 4.03 and disclosed
in Section 4.03 of the Company Disclosure Schedule (regardless of whether such
excess is a result of an additional issuance of capital stock or a correction to
such Sections), then the Exchange Ratio established pursuant to the provisions
of Section 3.01 shall be adjusted accordingly to provide to Parent the same
economic effect as contemplated by this Agreement prior to such
reclassification, recapitalization, split-up, combination, exchange, dividend or
increase.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF COMPANY
Company hereby represents and warrants to Parent, subject to the exceptions
specifically disclosed in writing in the Company Disclosure Schedule, all such
exceptions to be referenced to a specific representation set forth in this
Article IV or to otherwise be clearly applicable to representations hereof not
specifically referenced, that:
SECTION 4.01 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES
(a) Company and each directly and indirectly owned subsidiary of Company
(the "COMPANY SUBSIDIARIES") has been duly organized and is validly
existing and in good standing (to the extent applicable) under the
laws of the jurisdiction of its incorporation or organization, as
the case may be, and has the requisite corporate power and authority
to own, lease and operate its properties and to carry on its
business as it is now being conducted. Company and each Company
Subsidiary is duly qualified or licensed to do business, and is in
good standing (to the extent applicable), in each jurisdiction where
the character of the properties owned, leased or operated by it or
the nature of its business makes such qualification or licensing
necessary, except for such failures to be so qualified or licensed
and in good standing that could not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect.
(b) Section 4.01 of the Company Disclosure Schedule sets forth, as of
the date of this Agreement, a true and complete list of each Company
Subsidiary, together with (i) the jurisdiction of incorporation or
organization of each Company Subsidiary and the percentage of each
Company Subsidiary's outstanding capital stock or other equity
interests owned by Company or another Company Subsidiary and (ii) an
indication of whether each Company Subsidiary is a "Significant
Subsidiary" as defined in Regulation S-X under the Exchange Act.
Except as set forth in Section 4.01 of the Company Disclosure
Schedule, neither Company nor any Company Subsidiary owns an equity
interest in any partnership or joint venture arrangement or other
business entity.
SECTION 4.02 CERTIFICATE OF INCORPORATION AND BYLAWS
The copies of Company's certificate of incorporation and bylaws previously
provided to Parent by Company are true, complete and correct copies thereof.
Such certificate of incorporation and bylaws are in full force and effect.
Company is not in violation of any of the provisions of its certificate of
incorporation or bylaws.
SECTION 4.03 CAPITALIZATION
The authorized capital stock of Company consists of 50,000,000 shares of
Company Common Stock and 5,000,000 shares of preferred stock ("COMPANY PREFERRED
STOCK"). As of the date hereof, (i) 17,822,448 shares of Company Common Stock
are issued and outstanding, all of which are validly issued, fully paid and
nonassessable, (ii) no shares of Company Common Stock are held in the treasury
of Company, (iii) no shares of Company Common Stock are held by Company
Subsidiaries, (iv) 4,586,903 shares of Company Common Stock are reserved for
future issuance pursuant to Company Stock Options, of which 3,489,904 shares of
Company Common Stock are reserved for future issuance pursuant to unvested,
outstanding and vested, outstanding, unexercised Company Stock Options
(excluding the Company Stock Purchase Plan), (v) 665,224 shares of Company
Common Stock are reserved for issuance under the Company Stock Purchase Plan and
(vi) no shares of Company Preferred Stock are outstanding. The name of each
holder of a company Stock Option as of the date hereof, the grant date of each
Company Stock Option, and the number of shares of Company Common Stock for which
each Company Stock Option is exercisable and the exercise price of each Company
Stock Option are set forth in Section 4.03 of the Company Disclosure Schedule.
Except for shares of Company Common Stock issuable pursuant to Company Stock
Plans, there are no options, warrants or other rights, agreements, arrangements
or commitments of any character to which Company is a party or by which Company
is bound relating to the issued or unissued capital stock of Company or any
Company Subsidiary or obligating Company or any Company Subsidiary to issue or
sell any shares of capital stock of, or other equity interests in, Company or
any Company Subsidiary. All shares of Company Common Stock subject to issuance
as aforesaid, upon issuance prior to the Effective Time on the terms and
conditions specified in the instruments pursuant to which they are issuable,
will be duly authorized, validly issued, fully paid and nonassessable. There are
no outstanding contractual obligations of Company or any Company Subsidiary to
repurchase, redeem or otherwise acquire any shares of Company Common Stock or
any capital stock of any Company Subsidiary. Each outstanding share of capital
stock of each Company Subsidiary is duly authorized, validly issued, fully paid
and nonassessable and each such share owned by Company or another Company
Subsidiary is free and clear of all security interests, liens, claims, pledges,
options, rights of first refusal, agreements, limitations on Company's or such
other Company Subsidiary's voting rights, charges and other encumbrances of any
nature whatsoever. There are no material outstanding contractual obligations of
Company or any Company Subsidiary to provide funds to, or make any material
investment (in the form of a loan, capital contribution or otherwise) in, any
Company Subsidiary or any other person.
SECTION 4.04 AUTHORITY RELATIVE TO THIS AGREEMENT
Company has all necessary corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. The execution and delivery of this
Agreement by Company and the consummation by Company of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action, and no other corporate proceedings on the part of Company are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby (other than, with respect to the Merger, the approval of
this Agreement by
the holders of a majority of the outstanding shares of Company Common Stock
entitled to vote with respect thereto at the Company Stockholders' Meeting (as
defined in Section 7.01), and the filing and recordation of the Certificate of
Merger as required by the DGCL). This Agreement has been duly executed and
delivered by Company and, assuming the due authorization, execution and delivery
by the other parties hereto, constitutes legal, valid and binding obligations of
Company, enforceable against Company in accordance with its terms, subject to
the effect of any applicable bankruptcy, moratorium, insolvency, reorganization
or other similar law affecting the enforceability of creditors' rights generally
and to the effect of general principles of equity which may limit the
availability of remedies (whether in a proceeding at law or in equity).
SECTION 4.05 NO CONFLICT; REQUIRED FILINGS AND CONSENTS
(a) The execution and delivery of this Agreement by Company do not, and
the performance by Company of its obligations hereunder and the
consummation of the Merger will not, (i) conflict with or violate
any provision of the certificate of incorporation or bylaws of
Company or any equivalent organizational documents of any Company
Subsidiary, (ii) assuming that all filings and notifications
described in Section 4.05(b) have been made, conflict with or
violate any Law applicable to Company or any Company Subsidiary or
by which any property or asset of Company or any Company Subsidiary
is bound or affected or (iii) result in any material breach of or
constitute a material default (or an event which with the giving of
notice or lapse of time or both could reasonably be expected to
become a default) under, or give to others any right of termination,
amendment, acceleration or cancellation of, or result in the
creation of a lien or other encumbrance on any material property or
asset of Company or any Company Subsidiary pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation.
(b) The execution and delivery of this Agreement by Company do not, and
the performance by Company of its obligations hereunder and the
consummation of the Merger will not, require any consent, approval,
authorization or permit of, or filing by Company with or
notification by Company to, any Governmental Entity, except pursuant
to applicable requirements of the Exchange Act, the Securities Act,
Blue Sky Laws, the rules and regulations of the NNM, state takeover
laws, the premerger notification requirements of the HSR Act, and
the filing and recordation of the Certificate of Merger as required
by the DGCL.
SECTION 4.06 PERMITS; COMPLIANCE WITH LAWS
Company and the Company Subsidiaries are in possession of all material
franchises, grants, authorizations, licenses, establishment registrations,
product listings, permits, easements, variances, exceptions, consents,
certificates, identification and registration numbers, approvals and orders of
any Governmental Entity necessary for Company or any Company Subsidiary to carry
on its business as it is now being conducted (collectively, the "COMPANY
PERMITS"), and, as of the date of this Agreement, none of the material Company
Permits has been suspended or cancelled nor is any such suspension or
cancellation pending or, to the knowledge
of Company, threatened. Except with respect to Environmental Permits that are
addressed in Section 4.13 hereof, neither Company nor any Company Subsidiary
is in conflict in any material respect with, or in material default or
violation of, (i) any Law applicable to Company or any Company Subsidiary or
by which any property or asset of Company or any Company Subsidiary is bound
or affected or (ii) any Company Permits. Section 4.06 of the Company
Disclosure Schedule sets forth, as of the date of this Agreement, all
actions, proceedings, investigations or surveys pending or, to the knowledge
of Company, threatened against Company or any Company Subsidiary that could
reasonably be expected to result in the suspension or cancellation of any
other Company Permit. Since March 1, 1996, neither Company nor any Company
Subsidiary has received from any Governmental Entity any written notification
with respect to possible conflicts, defaults or violations of Laws.
SECTION 4.07 SEC FILINGS; FINANCIAL STATEMENTS
(a) Company has timely filed all forms, reports, statements and
documents required to be filed by it (A) with the SEC since June 11,
1998 (collectively, together with any such forms, reports,
statements and documents Company may file subsequent to the date
hereof until the Closing, the "COMPANY REPORTS") and (B) with any
other Governmental Entities. Each Company Report (i) was prepared in
all material respects in accordance with the requirements of the
Securities Act, the Exchange Act or the rules and regulations of the
NNM, as the case may be, and (ii) did not at the time it was filed
(or, in the case of registration statements filed under the
Securities Act, at the time of effectiveness) contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under
which they were made, not misleading. Each material form, report,
statement and document referred to in clause (B) of this paragraph
was prepared in all material respects in accordance with the
requirements of applicable Law. No Company Subsidiary is subject to
the periodic reporting requirements of the Exchange Act or required
to file any form, report or other document with the SEC, the NNM,
any other stock exchange or any other comparable Governmental
Entity.
(b) Each of the consolidated financial statements (including, in each
case, any notes thereto) contained in the Company Reports was
prepared in accordance with U.S. GAAP (except as may be permitted by
Form 10-Q under the Exchange Act) applied on a consistent basis
throughout the periods indicated (except as may be indicated in the
notes thereto) and each presented fairly, in all material respects,
the consolidated financial position of Company and the consolidated
Company Subsidiaries as at the respective dates thereof and for the
respective periods indicated therein, except as otherwise noted
therein (subject, in the case of unaudited statements, to normal and
recurring immaterial year-end adjustments).
(c) Except as and to the extent set forth or reserved against on the
consolidated balance sheet of Company and the Company Subsidiaries
as reported in the Company Reports, including the notes thereto,
none of Company or any Company Subsidiary has any liabilities or
obligations of any nature (whether accrued, absolute, contingent or
otherwise) that would be required to be
reflected on a balance sheet or in notes thereto prepared in
accordance with U.S. GAAP, except for immaterial liabilities or
obligations incurred in the ordinary course of business consistent
with past practice since December 31, 1998.
SECTION 4.08 ABSENCE OF CERTAIN CHANGES OR EVENTS
Since December 31, 1998, Company and the Company Subsidiaries have
conducted their businesses in all material respects only in the ordinary course
consistent with past practice and, since such date, there has not been (i) any
Company Material Adverse Effect, (ii) any event that could reasonably be
expected to prevent or materially delay the performance of Company's obligations
pursuant to this Agreement and the consummation of the Merger by Company, (iii)
any material change by Company in its accounting methods, principles or
practices, (iv) any declaration, setting aside or payment of any dividend or
distribution in respect of the shares of Company Common Stock or any redemption,
purchase or other acquisition of any of Company's securities, (v) except for
changes in the ordinary course of business consistent with past practice that
only affect non-officer employees of the Company, any increase in the
compensation or benefits or establishment of any bonus, insurance, severance,
deferred compensation, pension, retirement, profit sharing, stock option
(including, without limitation, the granting of stock options, stock
appreciation rights, performance awards or restricted stock awards), stock
purchase or other employee benefit plan, or any other increase in the
compensation payable or to become payable to any employees, officers,
consultants or directors of Company or any Company Subsidiary, (vi) any issuance
or sale of any stock, notes, bonds or other securities other than pursuant to
offerings registered under the Securities Act or pursuant to the exercise of
outstanding securities, or entering into any agreement with respect thereto,
(vii) any amendment to the Company's certificate of incorporation or bylaws,
(viii) other than in the ordinary course of business consistent with past
practice, any (x) purchase, sale, assignment or transfer of any material assets,
(y) mortgage, pledge or existence of any lien, encumbrance or charge on any
material assets or properties, tangible or intangible, except for liens for
Taxes not yet delinquent and such other liens, encumbrances or charges which do
not, individually or in the aggregate, have a Company Material Adverse Effect,
or (z) waiver of any rights of material value or cancellation or any material
debts or claims, (ix) any incurrence of any material liability (absolute or
contingent), except for current liabilities and obligations incurred in the
ordinary course of business consistent with past practice, (x) any incurrence of
any damage, destruction or similar loss, whether or not covered by insurance,
materially affecting the business or properties of Company or any Company
Subsidiary, or (xi) any entering into any transaction of a material nature other
than in the ordinary course of business, consistent with past practice.
SECTION 4.09 EMPLOYEE BENEFIT PLANS; LABOR MATTERS
(a) The Company Disclosure Schedule lists each employee benefit fund,
plan, program, arrangement and contract (including, without
limitation, any "pension" plan, fund or program, as defined in
Section 3(2) of ERISA, and any "employee benefit plan," as defined
in Section 3(3) of ERISA and any plan, program, arrangement or
contract providing for severance; medical, dental or
vision benefits; life insurance or death benefits; disability
benefits, sick pay or other wage replacement; vacation, holiday or
sabbatical; pension or profit-sharing benefits; stock options or
other equity compensation; bonus or incentive pay or other material
fringe benefits), whether written or not ("BENEFIT PLANS"),
maintained, sponsored or contributed to or required to be
contributed to by Company or any Company Subsidiary (the "COMPANY
BENEFIT PLANS"). With respect to each Company Benefit Plan, Company
has delivered or made available to Parent a true, complete and
correct copy of (i) such Company Benefit Plan (of, if not written, a
written summary of its material terms) and the most recent summary
plan description, if any, related to such Company Benefit Plan, (ii)
each trust agreement or other funding arrangement, if any, relating
to such Company Benefit Plan, (iii) the most recent annual report
(Form 5500), if any, filed with the IRS with respect to such Company
Benefit Plan (and, if the most recent annual report is a Form 5500R,
the most recent Form 5500C filed with respect to such Company
Benefit Plan), (iv) the most recent actuarial report or financial
statement, if any, relating to such Company Benefit Plan and (v) the
most recent determination, notification, advisory or opinion letter,
issued by the IRS with respect to such Company Benefit Plan and any
pending request for such a determination letter. Neither Company nor
any Company Subsidiary nor, to the knowledge of Company, any other
person or entity, has any express or implied commitment, whether
legally enforceable or not, to modify, change or terminate any
Company Benefit Plan, other than with respect to a modification,
change or termination required by ERISA or the Code.
(b) Each Company Benefit Plan has been administered in all material
respects in accordance with its terms and all applicable laws,
including ERISA and the Code, and all material contributions
required to be made under the terms of any of the Company Benefit
Plans as of the date of this Agreement have been timely made or, if
not yet due, have been properly reflected on the most recent
consolidated balance sheet filed or incorporated by reference in the
Company Reports prior to the date of this Agreement. With respect to
the Company Benefit Plans, no event has occurred and, to the
knowledge of Company, there exists no condition or set of
circumstances in connection with which Company or any Company
Subsidiary could be subject to any material liability (other than
for routine benefit liabilities) under the terms of, or with respect
to, such Company Benefit Plans, ERISA, the Code or any other
applicable Law.
(c) Company on behalf of itself and each Company ERISA Affiliate (as
defined below) hereby represents that: (i) each Company Benefit Plan
which is intended to qualify under Section 401(a), Section 401(k),
Section 401(m) or Section 4975(e)(6) of the Code has received a
favorable determination, notification, advisory or opinion letter
from the IRS as to its qualified status, and each trust established
in connection with any Company which is intended to be exempt from
federal income taxation under Section 501(a) of the Code has
received a determination letter from the IRS that it is so exempt,
and to Company's knowledge no fact or event has occurred that is
reasonably likely to adversely affect the qualified status of any
such Company Benefit Plan or the exempt status of any such trust;
(ii) to Company's knowledge there has been no prohibited transaction
(within the meaning of Section 406 of ERISA or Section 4975 of the
Code and other than a transaction that is exempt under a statutory
or administrative
exemption) with respect to any Company Plan that could result in
liability to the Company or a Company Subsidiary and (iii) each
Company Benefit Plan can be amended, terminated or otherwise
discontinued after the Effective Time in accordance with its terms,
without liability (other than (A) liability for ordinary
administrative expenses typically incurred in a termination event or
(B) if the Company Benefit Plan is pension benefit plan subject to
Part 2 of Title I of ERISA, liability for the accrued benefits as of
the date of such termination (if and to the extent required by
ERISA) to the extent that either there are sufficient assets set
aside in a trust or insurance contract to satisfy such liability or
such liability is reflected on the most recent consolidated balance
sheet filed or incorporated by reference in the Company Reports
prior to the date of this Agreement. No suit, administrative
proceeding, action or other litigation has been brought, or to the
knowledge of Company is threatened, against or with respect to any
such Company Benefit Plan, including any audit or inquiry by the IRS
or United States Department of Labor (other than routine benefits
claims).
(d) No Company Benefit Plan is a multiemployer pension plan (as defined
in Section 3(37) of ERISA) or other pension plan subject to Title IV
of Part 3 of Title I of ERISA or Section 412 of the Code and neither
the Company, any Company Subsidiary nor any other trade or business
(whether or not incorporated) that is under "common control" with
Company or a Company Subsidiary (within the meaning of ERISA Section
4001) or with respect to which Company or any Company Subsidiary
could otherwise incur liability under Title IV of ERISA (a "COMPANY
ERISA AFFILIATE") has sponsored or contributed to or been required
to contribute to a multiemployer pension plan or other pension plan
subject to Title IV of ERISA. No material liability under Title IV
of ERISA has been incurred by Company, any Company Subsidiary or any
Company ERISA Affiliate that has not been satisfied in full, and no
condition exists that presents a material risk to Company or any
Company Subsidiary of incurring or being subject (whether primarily,
jointly or secondarily) to a material liability thereunder. None of
the assets of Company or any Company Subsidiary is, or may
reasonably be expected to become, the subject of any lien arising
under ERISA or Section 412(n) of the Code.
(e) Company has made available to Parent copies of (i) all employment
agreements with officers and all consulting agreements of Company
and each Company Subsidiary providing for annual compensation in
excess of $100,000, (ii) all severance plans, agreements, programs
and policies of Company and each Company Subsidiary with or relating
to their respective employees, directors or consultants, and (iii)
all plans, programs, agreements and other arrangements of Company
and each Company Subsidiary with or relating to their respective
employees, directors or consultants which contain "change of
control" provisions. No payment or benefit which may be required to
be made by Company or any Company Subsidiary or which otherwise may
be required to be made under the terms of any Company Benefit Plan
or other arrangement will constitute a parachute payment under Code
Section 280(G)(1), and the consummation of the transactions
contemplated by this Agreement will not, alone or in conjunction
with any other possible event (including termination of employment),
(i) entitle any current or former employee or other service provider
of Company or any Company Subsidiary to severance benefits or any
other payment, compensation or benefit (including forgiveness of
indebtedness), except as expressly provided by this Agreement, or
(ii) accelerate the time of payment or vesting, or increase the
amount of compensation or benefit due any such employee or service
provider.
(f) Neither Company nor any Company Subsidiary is a party to, or has any
obligations under or with respect to, any collective bargaining or
other labor union contract applicable to persons employed by Company
or any Company Subsidiary and no collective bargaining agreement is
being negotiated by Company or any Company Subsidiary or any person
or entity that may obligate the Company or any Company Subsidiary
thereunder. As of the date of this Agreement, there is no labor
dispute, strike or work stoppage against Company or any Company
Subsidiary pending or, to the knowledge of Company, threatened which
may materially interfere with the respective business activities of
Company or any Company Subsidiary. As of the date of this Agreement,
to the knowledge of Company, none of Company, any Company
Subsidiary, or any of their respective representatives or employees
has committed any unfair labor practice in connection with the
operation of the respective businesses of Company or any Company
Subsidiary, and there is no charge or complaint against Company or
any Company Subsidiary by the National Labor Relations Board or any
comparable Governmental Entity pending or threatened in writing.
(g) Except as required by Law, no Company Benefit Plan provides any of
the following retiree or post-employment benefits to any person:
medical, disability or life insurance benefits. To Company's
knowledge, Company and the Company ERISA Affiliates are in
compliance in all material respects with (i) the requirements of the
applicable health care continuation and notice provisions of the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
("COBRA") and the regulations (including proposed regulations)
thereunder and (ii) the applicable requirements of the Health
Insurance Portability and Accountability Act of 1996, as amended,
and the regulations (including the proposed regulations) thereunder.
SECTION 4.10 POOLING; CERTAIN TAX MATTERS
Neither Company nor, to the knowledge of Company, any of its affiliates has
taken or agreed to take any action (other than actions contemplated by this
Agreement) that could be expected to prevent (a) the Merger from being treated
for accounting purposes as a "pooling of interests" in accordance with U.S. GAAP
and the accounting standards of the SEC or (b) the Merger from constituting a
"reorganization" under Section 368 of the Code. Company is not aware of any
agreement or plan to which Company or any of its affiliates is a party or other
circumstances relating to Company or any of its affiliates that could reasonably
be expected to prevent the Merger from being so treated as a "pooling of
interests" or from so qualifying as a reorganization under Section 368 of the
Code.
SECTION 4.11 CONTRACTS
Section 4.11 of the Company Disclosure Schedule sets forth a list of each
contract or agreement that is material to the business, assets, liabilities,
financial condition or results of
operations of Company and Company Subsidiaries, taken as a whole (each, a
"MATERIAL CONTRACT"). Neither Company nor any Company Subsidiary is in material
violation of or in material default under (nor does there exist any condition
which with the passage of time or the giving of notice could reasonably be
expected to cause such a material violation of or material default under) any
Material Contract. Each Material Contract is in full force and effect and is a
legal, valid and binding obligation of Company or a Company Subsidiary and, to
the knowledge of Company, each of the other parties thereto, enforceable in
accordance with its terms.
SECTION 4.12 LITIGATION
There is no suit, claim, action, proceeding or investigation pending or, to
the knowledge of Company, threatened against Company or any Company Subsidiary
that could reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect or materially interfere with Company's ability
to consummate the transactions contemplated hereby, and, to the knowledge of
Company, there are no existing facts or circumstances that could reasonably be
expected to result in such a suit, claim, action, proceeding or investigation.
Company is not aware of any facts or circumstances which could reasonably be
expected to result in the denial of insurance coverage under policies issued to
Company and Company Subsidiaries in respect of such suits, claims, actions,
proceedings and investigations, except in any case as could not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect. Neither Company nor any Company Subsidiary is subject to any outstanding
order, writ, injunction or decree which could reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect or
materially interfere with Company's ability to consummate the transactions
contemplated hereby.
SECTION 4.13 ENVIRONMENTAL MATTERS
Except as could not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect, (i) Company and the Company
Subsidiaries are in compliance with all applicable Environmental Laws and all
Environmental Permits; (ii) all past noncompliance of Company or any Company
Subsidiary with Environmental Laws or Environmental Permits has been resolved
without any pending, ongoing or future obligation, cost or liability; and (iii)
neither Company nor any Company Subsidiary has released a Hazardous Material at,
or transported a Hazardous Material to or from, any real property currently or
formerly owned, leased or occupied by Company or any Company Subsidiary, in
violation of any Environmental Law.
SECTION 4.14 INTELLECTUAL PROPERTY
(a) All patents, trademarks, trade names, service marks, trade dress,
Internet domain names, copyrights and any renewal rights therefor,
technology, supplier lists, trade secrets, know-how, computer
software programs or applications in both source and object code
form, technical
documentation of such software programs ("TECHNICAL DOCUMENTATION"),
databases, data, registrations and applications for any of the
foregoing and all other tangible or intangible proprietary
information or materials that are or have been used (including
without limitation in the development of) Company's business and/or
in any product, technology or process (i) currently being or
formerly manufactured, published or marketed by Company or (ii)
previously or currently under development for possible future
manufacturing, publication, marketing or other use by Company are
hereinafter referred to as the "COMPANY INTELLECTUAL PROPERTY."
(b) Section 4.14 of the Company Disclosure Schedule contains a true and
complete list of Company's patents, patent applications, trademarks,
trademark applications, trade names, service marks, service ▇▇▇▇
applications, Internet domain names, Internet domain name
applications and other filings and formal actions made or taken
pursuant to Federal, state, local and foreign laws by Company to
protect its interests in the Company Intellectual Property.
(c) The Company Intellectual Property consists solely of items and
rights which are: (i) owned by Company; (ii) in the public domain;
or (iii) rightfully used by Company pursuant to a valid license (the
"COMPANY LICENSED INTELLECTUAL PROPERTY"), the parties and date of
each such license agreement (each, a "LICENSE AGREEMENT") being set
forth on Section 4.14(c) of the Company Disclosure Schedule. Company
has all rights in Company Intellectual Property necessary to carry
out Company's current activities (and had all rights necessary to
carry out its former activities at the time such activities were
being conducted), including without limitation, to the extent
required to carry out such activities, rights to make, use,
reproduce, modify, adopt, create derivative works based on,
translate, distribute (directly and indirectly), transmit, display
and perform publicly, license, rent and lease and, other than with
respect to the Company Licensed Intellectual Property, assign and
sell, the Company Intellectual Property.
(d) The reproduction, manufacturing, distribution, licensing,
sublicensing, sale or any other exercise of rights in any Company
Intellectual Property, product, service, work, technology or process
as now used or offered or proposed for use, licensing or sale by
Company does not infringe on any copyright, trade secret, trademark,
service ▇▇▇▇, trade name, trade dress, firm name, Internet domain
name, logo, trade dress, mask work or other proprietary or personal
right of any person or, to the knowledge of Company, the patent of
any person. Notwithstanding the foregoing, with respect to Company
Licensed Intellectual Property that (i) has a license fee of less
than $1,000 per copy used in Company's products and (ii) (x) is used
on a stand alone basis or (y) causes Company Intellectual Property
to be subject to a claim (for reasons other than that the
combination of such Company Licensed Intellectual Property with
other Company Intellectual Property is infringing), Company relies
on the representations and warranties of non-infringement contained
in the agreements pursuant to which Company is authorized to use
such Company Licensed Intellectual Property. No claims (i)
challenging the validity, effectiveness or, other than with respect
to the Company Licensed Intellectual Property, ownership by Company
of any of the Company Intellectual Property, or (ii) to the effect
that the use, distribution, licensing, sublicensing, sale or any
other exercise of rights in any product, service, work,
technology or process as now used or offered or proposed for use,
licensing, sublicensing or sale by Company infringes or will
infringe on any intellectual property or other proprietary or
personal right of any person have been asserted or, to the knowledge
of Company, are threatened by any person, nor are there, to
Company's knowledge, any valid grounds for any bona fide claim of
any such kind. All registered, granted or issued patents,
trademarks, Internet domain names and copyrights held by Company are
subsisting and, to Company's knowledge, enforceable. To the
knowledge of Company, there is no unauthorized use, infringement or
misappropriation of any of the Company Intellectual Property by any
third party, employee or former employee.
(e) All personnel, including employees, agents, consultants and
contractors, who have contributed to or participated in the
conception and development of the Company Intellectual Property on
behalf of Company, have executed nondisclosure agreements
substantially in the form set forth on Appendix C to the Company
Disclosure Schedule and either (i) have been a party to a
"work-for-hire" arrangement or agreements with Company in accordance
with applicable national and state law that has accorded Company
full, effective, exclusive and original ownership of all tangible
and intangible property thereby arising, or (ii) have executed
appropriate instruments of assignment in favor or Company as
assignee that have conveyed to Company effective and exclusive
ownership of all tangible and intangible property thereby arising.
(f) Company is not, nor as a result of the execution or delivery of this
Agreement, or performance of Company's obligations hereunder, will
Company be, in violation of any license, sublicense, agreement or
instrument to which Company is a party or otherwise bound, nor will
execution or delivery of this Agreement, or performance of Company's
obligations hereunder, cause the diminution, termination or
forfeiture of any Company Intellectual Property.
(g) Section 4.14(g) of the Company Disclosure Schedule contains a true
and complete list of all of Company's software programs
commercialized by Company (the "COMPANY SOFTWARE PROGRAMS"). Except
with respect to software or technology licensed by Company, Company
owns full and unencumbered right and good, valid and marketable
title to such Company Software Programs free and clear of all
mortgages, pledges, liens, security interests, conditional sales
agreements, encumbrances or charges of any kind other than licenses
granted in the ordinary course of business.
(h) The source code and system documentation relating to the Company
Software Programs (i) have at all times been maintained in strict
confidence, (ii) have been disclosed by Company only to employees
who have a "need to know" the contents thereof in connection with
the performance of their duties to Company and who have executed the
nondisclosure agreements referred to in Section 4.14, and (iii) have
not been disclosed to any third party except pursuant to
nondisclosure agreements or in the ordinary course of business with
respect to APIs and similar code disclosures to enhance
marketability of Company Software Programs.
(i) The Company Software Programs (i) have been designed to ensure year
2000 compatibility,
which includes, but is not limited to, date data century
recognition, and calculations that accommodate same century and
multi-century formulas and date values; (ii) operate and will
operate in accordance with their specifications prior to, during and
after the calendar year 2000 AD; and (iii) shall not end abnormally
or provide invalid or incorrect results as a result of date data,
specifically including date data which represents or references
different centuries or more than one century.
SECTION 4.15 TAXES
(a) Company and each of Company Subsidiaries, and any consolidated,
combined, unitary or aggregate group for Tax purposes of which
Company or any Company Subsidiary is or has been a member, have
properly completed and timely filed all material Tax Returns
required to be filed by them and have paid all Taxes shown thereon
to be due. Company has provided adequate accruals in accordance with
generally accepted accounting principles in its latest financial
statements included in the Company Reports for any Taxes that have
not been paid, whether or not shown as being due on any Tax Returns.
Other than Taxes incurred in the ordinary course of business,
Company and the Company Subsidiaries have no material liability for
unpaid Taxes accruing after the date of the Company's latest
financial statements included in the Company Reports.
(b) There is (i) no material claim for Taxes that is a lien against the
property of Company or any Company Subsidiary or is being asserted
against Company or any Company Subsidiary other than liens for Taxes
not yet due and payable, (ii) no audit of any Tax Return of Company
or any Company Subsidiary being conducted by a Tax Authority; (iii)
no extension of the statute of limitations on the assessment of any
Taxes granted by Company or any Company Subsidiary and currently in
effect, and (iv) no agreement, contract or arrangement to which
Company or any Company Subsidiary is a party that may result in the
payment of any amount that would not be deductible by reason of
Section 280G or Section 404 of the Code.
(c) Company and the Company Subsidiaries have not been and will not be
required by reason of the Merger to include any material adjustment
in Taxable income for any Tax period (or portion thereof) pursuant
to Section 481 or 263A of the Code or any comparable provision under
state or foreign Tax laws as a result of transactions, events or
accounting methods employed prior to the Merger.
(d) Neither Company nor any Company Subsidiary has filed or will file
any consent to have the provisions of paragraph 341(f)(2) of the
Code (or comparable provisions of any state Tax laws) apply to
Company or any Company Subsidiary.
(e) Neither Company nor any Company Subsidiary is a party to any Tax
sharing or Tax allocation agreement nor does Company or any Company
Subsidiary have any liability or potential liability to another
party under any such agreement.
(f) Neither Company nor any Company Subsidiary has filed any disclosures
under Section 6662 or comparable provisions of state, local or
foreign law to prevent the imposition of penalties with respect to
any Tax reporting position taken on any Tax Return.
(g) Neither Company nor any Company Subsidiary has ever been a member of
a consolidated, combined or unitary group of which Company was not
the ultimate parent corporation.
(h) Company and each Company Subsidiary has in its possession receipts
for any Taxes paid to foreign Tax authorities. Neither Company nor
any Company Subsidiary has ever been a "personal holding company"
within the meaning of Section 542 of the Code or a "United Sates
real property holding corporation" within the meaning of Section 897
of the Code.
SECTION 4.16 INSURANCE
Company and each Company Subsidiary is presently insured, and during each
of the past three calendar years has been insured, against such risks as
companies engaged in a similar business would, in accordance with good business
practice, customarily be insured. The policies of fire, theft, liability and
other insurance maintained with respect to the assets or businesses of Company
and Company Subsidiaries provide adequate coverage against loss. Company has
heretofore furnished to Parent a complete and correct list as of the date hereof
of all insurance policies maintained by Company or the Company Subsidiaries, and
has made available to Parent complete and correct copies of all such policies,
together with all riders and amendments thereto. All such policies are in full
force and effect and all premiums due thereon have been paid to the date hereof.
Company and the Company Subsidiaries have complied in all material respects with
the terms of such policies.
SECTION 4.17 PROPERTIES
Company and the Company Subsidiaries have good and marketable title, free
and clear of all material mortgages, liens, pledges, charges or other
encumbrances to all their material tangible properties and assets, real,
personal or mixed, reflected in the Company's consolidated financial statements
contained in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998, as being owned by Company and the Company Subsidiaries as of
the date thereof, other than (i) any properties or assets that have been sold or
otherwise disposed of in the ordinary course of business since the date of such
financial statements, (ii) liens disclosed in the notes to such financial
statements, (iii) liens arising in the ordinary course of business after the
date of such financial statements and (iv) liens that are not material in amount
or do not materially affect the value or operations of Company and the Company
Subsidiaries. All buildings, and all fixtures, equipment and other property and
assets that are material to its business on a consolidated basis, held under
leases or sub-leases by Company or any Company Subsidiary are held under valid
instruments enforceable in accordance with their respective terms, subject to
applicable laws of bankruptcy, insolvency or similar laws relating to creditors'
rights generally and to general principles of equity (whether applied in a
proceeding in law or
equity). Substantially all of Company's and the Company Subsidiaries'
equipment in regular use which is material to the operation of Company or the
Company Subsidiaries, has been reasonably maintained and is in serviceable
condition, reasonable wear and tear excepted.
SECTION 4.18 AFFILIATES
Section 4.18 of the Company Disclosure Schedule sets forth the names of
each person who is, in Company's reasonable judgment, an affiliate (as such
term is used in Rule 145 under the Securities Act or under applicable SEC
accounting releases with respect to pooling of interests accounting
treatment) of Company.
SECTION 4.19 OPINION OF FINANCIAL ADVISOR
BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. ("▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇") has delivered to
the board of directors of Company its written opinion to the effect that, as of
the date hereof, the Exchange Ratio is fair to the holders of shares of Company
Common Stock from a financial point of view.
SECTION 4.20 BROKERS
No broker, finder or investment banker (other than ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇) is
entitled to any brokerage, finder's or other fee or commission in connection
with the Merger based upon arrangements made by or on behalf of Company. Company
has heretofore made available to Parent true, complete and correct copies of all
agreements between Company and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ pursuant to which such firm
would be entitled to any payment relating to the Merger.
SECTION 4.21 CERTAIN BUSINESS PRACTICES
Neither Company nor any Company Subsidiary nor any directors, officers,
agents or employees of Company or any Company Subsidiary (in their capacities as
such) has (i) used any funds for unlawful contributions, gifts, entertainment or
other unlawful expenses relating to political activity, (ii) made any unlawful
payment to foreign or domestic government officials or employees or to foreign
or domestic political parties or campaigns or violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended, or (iii) made any other
unlawful payment.
SECTION 4.22 SECTION 203 OF THE DGCL NOT APPLICABLE
The Board of Directors of Company has approved the Merger, this Agreement
and the Stockholder Agreements, and such approval is sufficient to render
inapplicable to the Merger, this Agreement and the Stockholder Agreements and
the transactions contemplated by this Agreement and the Stockholder Agreements
the provisions of Section 203 of the DGCL. To Company's knowledge, no other
state takeover statute or similar statute or regulation applies or purports to
apply to the Merger, this Agreement, the Stockholders Agreements or the
transactions
contemplated by this Agreement and the Stockholders Agreements.
SECTION 4.23 BUSINESS ACTIVITY RESTRICTION
There is no non-competition or other similar agreement, commitment,
judgment, injunction, order or decree to which Company or any subsidiary of
Company is a party or subject to that has or could reasonably be expected to
have the effect of prohibiting or impairing the conduct of business by Company
in any material respect. Company has not entered into any agreement under which
Company is restricted in any material respect from selling, licensing or
otherwise distributing any of its technology or products to, or providing
services to, customers or potential customers or any class of customers, in any
geographic area, during any period of time or in any segment of the market or
line of business.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent hereby represents and warrants to Company, subject to the exceptions
specifically disclosed in the Parent Disclosure Schedule, all such exceptions to
be referenced to a specific representation set forth in this Article V or to
otherwise be clearly applicable to representations hereof not specifically
referenced, that:
SECTION 5.01 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES
(a) Parent and each directly and indirectly owned subsidiary of Parent
(the "PARENT SUBSIDIARIES") has been duly organized and is validly
existing and in good standing (to the extent applicable) under the
laws of the jurisdiction of its incorporation or organization, as
the case may be, and has the requisite corporate power and authority
and all necessary governmental approvals to own, lease and operate
its properties and to carry on its business as it is now being
conducted. Parent, and each Parent Subsidiary is duly qualified or
licensed to do business, and is in good standing (to the extent
applicable), in each jurisdiction where the character of the
properties owned, leased or operated by it or the nature of its
business makes such qualification or licensing necessary, except for
such failures to be so qualified or licensed and in good standing
that could not reasonably be expected to have, individually or in
the aggregate, a Parent Material Adverse Effect.
(b) Section 5.01 of the Parent Disclosure Schedule sets forth, as of the
date of this Agreement, a true and complete list of each Parent
Subsidiary, together with (i) the jurisdiction of incorporation or
organization of each Parent Subsidiary and the percentage of each
Parent Subsidiary's outstanding capital stock or other equity
interests owned by Parent or another Parent Subsidiary and (ii) an
indication of whether each Parent Subsidiary is a "Significant
Subsidiary" as defined in Regulation S-X under the Exchange Act.
Neither Parent nor any Parent Subsidiary owns an
equity interest in any partnership or joint venture arrangement or
other business entity that is material to the business, assets,
liabilities, financial condition or results of operations of Parent
and the Parent Subsidiaries, taken as a whole.
SECTION 5.02 CERTIFICATE OF INCORPORATION AND BYLAWS
The copies of each of Parent's and Merger Subs' certificate of
incorporation and bylaws previously provided to Company by Parent are true,
complete and correct copies thereof. Such certificates of incorporation and
bylaws are in full force and effect.
SECTION 5.03 CAPITALIZATION
The authorized capital stock of Parent consists of 400,000,000 shares of
Parent Common Stock and 5,000,000 shares of preferred stock. As of the date
hereof (i) 39,763,603 shares of Parent Common Stock are issued and outstanding,
all of which are validly issued, fully paid and nonassessable, (ii) no shares of
Parent Common Stock are held in the treasury of the Company, (iii) no shares of
Parent Common Stock are held by the Parent Subsidiaries, (iv) 5,495,205 shares
of Parent Common Stock are reserved for future issuance pursuant to outstanding
options and warrants to purchase Parent Common Stock ("PARENT STOCK OPTION"), of
which 4,195,377 and 1,299,828 shares of Parent Common Stock are reserved for
future issuance pursuant to unvested, outstanding and vested, outstanding,
unexercised Parent Stock Options, respectively, and (v) no shares of Parent
preferred stock are issued and outstanding. Except for the shares of Parent
Common Stock issuable pursuant to the Parent Stock Plans, there are no options,
warrants or other rights, agreements, arrangements or commitments of any
character to which Parent is a party or by which Parent is bound relating to the
issued or unissued capital stock of Parent or any Parent Subsidiary or
obligating Parent or any Parent Subsidiary to issue or sell any shares of
capital stock of, or other equity interests in, Parent or any Parent Subsidiary.
All shares of Parent Common Stock subject to issuance as aforesaid, upon
issuance prior to the Effective Time on the terms and conditions specified in
the instruments pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid and nonassessable. There are no outstanding
contractual obligations of Parent or any Parent Subsidiary to repurchase, redeem
or otherwise acquire any shares of Parent Common Stock or any capital stock of
any Parent Subsidiary. Each outstanding share of capital stock of each Parent
Subsidiary is duly authorized, validly issued, fully paid and nonassessable and
each such share owned by Parent or another Parent Subsidiary is free and clear
of all security interests, liens, claims, pledges, options, rights of first
refusal, agreements, limitations on Parent's or such other Parent Subsidiary's
voting rights, charges and other encumbrances of any nature whatsoever. There
are no material outstanding contractual obligations of Parent or any Parent
Subsidiary to provide funds to, or make any material investment (in the form of
a loan, capital contribution or otherwise) in, any Parent Subsidiary or any
other person.
SECTION 5.04 AUTHORITY RELATIVE TO THIS AGREEMENT
Each of Parent and Merger Sub has all necessary corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by each of Parent and Merger Sub and the
consummation by Parent and Merger Sub of the transactions contemplated hereby
have been duly and validly authorized by all necessary corporate action, and no
other corporate proceedings on the part of Parent or Merger Sub are necessary to
authorize this Agreement or to consummate such transactions. This Agreement has
been duly executed and delivered by each of Parent and Merger Sub and, assuming
the due authorization, execution and delivery by Company, constitutes a legal,
valid and binding obligation of each of Parent and Merger Sub enforceable
against Parent and Merger Sub in accordance with its terms, subject to the
effect of any applicable bankruptcy, moratorium, insolvency, reorganization or
other similar law affecting the enforceability of creditors' rights generally
and to the effect of general principles of equity which may limit the
availability of remedies (whether in a proceeding at law or in equity).
SECTION 5.05 NO CONFLICT; REQUIRED FILINGS AND CONSENTS
(a) The execution and delivery of this Agreement by Parent and Merger
Sub does not, and the performance by Parent and Merger Sub of their
obligations hereunder and the consummation of the Merger will not,
(i) conflict with or violate any provision of the certificate of
incorporation or bylaws of Parent or any equivalent organizational
documents of any Parent Subsidiary, (ii) assuming that all consents,
approvals, authorizations and permits described in Section 5.05(b)
have been obtained and all filings and notifications described in
Section 5.05(b) have been made, conflict with or violate any Law
applicable to Parent or any other Parent Subsidiary or by which any
property or asset of Parent or any Parent Subsidiary is bound or
affected or (iii) result in any breach of or constitute a default
(or an event which with the giving of notice or lapse of time or
both could reasonably be expected to become a default) under, or
give to others any right of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or other
encumbrance on any property or asset of Parent or any Parent
Subsidiary pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other
instrument or obligation.
(b) The execution and delivery of this Agreement by Parent and Merger
Sub does not, and the performance by Parent and Merger Sub of their
obligations hereunder and the consummation of the Merger will not,
require any consent, approval, authorization or permit of, or filing
by Parent with or notification by Parent to, any Governmental
Entity, except pursuant to applicable requirements of the Exchange
Act, the Securities Act, Blue Sky Laws, the rules and regulations of
the NNM, state takeover laws, the premerger notification
requirements of the HSR Act, if any, and the filing and recordation
of the Certificate of Merger as required by the DGCL.
SECTION 5.06 SEC FILINGS; FINANCIAL STATEMENTS
(a) Parent has timely filed all forms, reports, statements and documents
required to be filed by it (A)
with the SEC since March 1, 1998 (collectively, together with any
such forms, reports, statements and documents Parent may file
subsequent to the date hereof until the Closing, the "PARENT
REPORTS") and (B) with any other Governmental Entities. Each Parent
Report (i) was prepared in all material respects in accordance with
the requirements of the Securities Act, the Exchange Act or the NNM,
as the case may be, and (ii) did not at the time it was filed (or,
in the case of registration statements filed under the Security Act,
at the time of effectiveness) contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not
misleading. Each material form, report, statement and document
referred to in clause (B) of this paragraph was prepared in all
material respects in accordance with the requirements of applicable
Law. No Parent Subsidiary is subject to the periodic reporting
requirements of the Exchange Act or required to file any form,
report or other document with the SEC, the NNM, any other stock
exchange or any other comparable Governmental Entity.
(b) Except as is provided in the Parent Reports, each of the
consolidated financial statements (including, in each case, any
notes thereto) contained in the Parent Reports was prepared in
accordance with U.S. GAAP applied on a consistent basis throughout
the periods indicated (except as may be indicated in the notes
thereto) and each presented fairly, in all material respects, the
consolidated financial position of Parent and the consolidated
Parent Subsidiaries as at the respective dates thereof and for the
respective periods indicated therein, except as otherwise noted
therein (subject, in the case of unaudited statements, to normal and
recurring immaterial year-end adjustments).
(c) Except as and to the extent set forth or reserved against on the
consolidated balance sheet of Parent and the Parent Subsidiaries as
reported in the Parent Reports, including the notes thereto, none of
Parent or any Parent Subsidiary has any liabilities or obligations
of any nature (whether accrued, absolute, contingent or otherwise)
that would be required to be reflected on a balance sheet or in
notes thereto prepared in accordance with U.S. GAAP, except for
liabilities or obligations incurred in the ordinary course of
business consistent with past practice since December 31, 1998 that
have not had and could not reasonably be expected to have,
individually or in the aggregate, a Parent Material Adverse Effect.
SECTION 5.07 POOLING; CERTAIN TAX MATTERS
Neither Parent nor, to the knowledge of Parent, any of its affiliates has
taken or agreed to take any action (other than actions contemplated by this
Agreement) that could reasonably be expected to prevent (a) the Merger from
being treated for accounting purposes as a "pooling of interests" in accordance
with U.S. GAAP and the accounting standards of the SEC or (b) the Merger from
constituting a "reorganization" under Section 368 of the Code. Parent is not
aware of any agreement, plan or other circumstance that could reasonably be
expected to prevent the Merger from being so treated as a "pooling of interests"
or from so qualifying as a reorganization under Section 368 of the Code.
SECTION 5.08 OPINION OF FINANCIAL ADVISOR
▇▇▇▇▇▇▇, Sachs & Co. ("▇▇▇▇▇▇▇ ▇▇▇▇▇") has delivered to the board of
directors of Parent its written opinion to the effect that, as of the date
hereof, the Exchange Ratio is fair, from a financial point of view, to Parent.
SECTION 5.09 BROKERS
No broker, finder or investment banker (other than ▇▇▇▇▇▇▇ Sachs) is
entitled to any brokerage, finder's or other fee or commission in connection
with the Merger based upon arrangements made by or on behalf of Parent. Parent
has heretofore made available to Company true, complete and correct copies of
all agreements between Parent and ▇▇▇▇▇▇▇ ▇▇▇▇▇ pursuant to which such firm
would be entitled to any payment relating to the Merger.
SECTION 5.10 AFFILIATES
Section 5.10 of the Parent Disclosure Schedule sets forth the names of
each person who is, in Parent's reasonable judgment, an affiliate of Parent.
ARTICLE VI
COVENANTS
SECTION 6.01 CONDUCT OF BUSINESS BY COMPANY PENDING THE CLOSING
Company agrees that, between the date of this Agreement and the Effective
Time, unless Parent shall otherwise agree in writing, (x) the respective
businesses of Company and the Company Subsidiaries shall be conducted only in,
and Company and the Company Subsidiaries shall not take any action except in,
the ordinary course of business consistent with past practice and (y) Company
shall use all reasonable efforts to keep available the services of such of the
current officers, significant employees and consultants of Company and the
Company Subsidiaries and to preserve the current relationships of Company and
the Company Subsidiaries with such of the corporate partners, customers,
suppliers and other persons with which Company or any Company Subsidiary has
significant business relations in order to preserve substantially intact its
business organization. By way of amplification and not limitation, neither
Company nor any Company Subsidiary shall, between the date of this Agreement and
the Effective Time, directly or indirectly, do, or agree to do, any of the
following without the prior written consent of Parent:
(a) amend or otherwise change its certificate of incorporation or bylaws
or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, transfer, lease, license,
guarantee or encumber, or authorize
the issuance, sale, pledge, disposition, grant, transfer, lease,
license or encumbrance of, (i) any shares of capital stock of
Company or any Company Subsidiary of any class, or securities
convertible into or exchangeable or exercisable for any shares of
such capital stock, or any options, warrants or other rights of any
kind to acquire any shares of such capital stock, or any other
ownership interest (including, without limitation, any phantom
interest), of Company or any Company Subsidiary, other than (x) the
issuance of shares of Company Common Stock pursuant to the exercise
of warrants or stock options therefor outstanding as of the date of
this Agreement, or (y) the issuance in the ordinary course of
business consistent with past practice of up to an additional
500,000 shares of Company Common Stock under Company's Stock
Plans pursuant to new grants of options or share purchase rights
or (ii) any property or assets of Company or any Company
Subsidiary except sales of inventory in the ordinary course of
business consistent with past practice;
(c) (i) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets) any interest in
any corporation, partnership, other business organization or person
or any division thereof (other than in connection with the formation
of foreign subsidiaries and the capitalization thereof with no more
than $500,000); (ii) incur any indebtedness for borrowed money
(other than in de minimus amounts) or issue any debt securities or
assume, guarantee or endorse, or otherwise as an accommodation
become responsible for, the obligations of any person for borrowed
money or make any loans or advances material to the business,
assets, liabilities, financial condition or results of operations of
Company and the Company Subsidiaries, taken as a whole; (iii)
terminate, cancel or request any material change in, or agree to any
material change in, any Company Material Contract or other material
License Agreement (other than as described in Section 6.01(c)(iii)
of the Company Disclosure Schedule); (iv) make or authorize any
capital expenditure, other than capital expenditures in the ordinary
course of business that have been described in the Disclosure
Schedule and that are not, in the aggregate, in excess of $4,000,000
for Company and the Company Subsidiaries taken as a whole; or (v)
enter into or amend any contract, agreement, commitment or
arrangement that, if fully performed, would not be permitted under
this Section 6.01(c);
(d) declare, set aside, make or pay any dividend or other distribution,
payable in cash, stock, property or otherwise, with respect to any
of its capital stock, except that any Company Subsidiary may pay
dividends or make other distributions to Company or any other
Company Subsidiary;
(e) reclassify, combine, split, subdivide or redeem, purchase or
otherwise acquire, directly or indirectly, any of its capital stock
except repurchases of unvested shares at cost in connection with the
termination of the employment relationship with any employee
pursuant to stock option or purchase agreements in effect on the
date hereof;
(f) amend or change the period (or permit any acceleration, amendment or
change) of exercisability of options granted under the Company Stock
Plans or authorize cash payments in exchange for any Company Stock
Options granted under any of such plans, except pursuant to existing
arrangements disclosed to Parent prior to the date hereof;
(g) amend the terms of, repurchase, redeem or otherwise acquire, or
permit any Company Subsidiary to repurchase, redeem or otherwise
acquire, any of its securities or any securities of any Company
Subsidiary or propose to do any of the foregoing;
(h) other than pursuant to existing agreements of Company previously
provided to Parent, increase the compensation payable or to become
payable to its directors, officers, consultants or employees (other
than any such increases for non-officers that are made in the
ordinary course of business consistent with past practice), grant
any rights to severance or termination pay to, or enter into any
employment or severance agreement which provides benefits upon a
change in control of Company that would be triggered by the Merger
with, any director, officer, consultant or other employee of Company
or any Company Subsidiary who is not currently entitled to such
benefits from the Merger, establish, adopt, enter into or amend any
collective bargaining, bonus, profit sharing, thrift, compensation,
stock option, restricted stock, pension, retirement, deferred
compensation, employment, termination, severance or other plan,
agreement, trust, fund, policy or arrangement for the benefit of any
director, officer, consultant or employee of Company or any Company
Subsidiary (except as allowed under Section 6.01(b)), except to the
extent required by applicable Law or the terms of a collective
bargaining agreement, or enter into or amend any contract,
agreement, commitment or arrangement between Company or any Company
Subsidiary and any of Company's directors, officers, consultants or
employees (except as allowed under Section 6.01(b));
(i) except as permitted under Section 6.01(c), pay, discharge or satisfy
any claims, liabilities or obligations (absolute, accrued, asserted
or unasserted, contingent or otherwise), other than the payment,
discharge or satisfaction in the ordinary course of business and
consistent with past practice of liabilities (A) reflected or
reserved against on the consolidated balance sheet of Company and
the consolidated the Company Subsidiaries dated as of March 31, 1999
included in Company's quarterly report on Form 10-Q for the period
then ended (the "COMPANY BALANCE SHEET") and only to the extent of
such reserves or (B) that are both immaterial in amount and incurred
in the ordinary course of business consistent with past practice
after the date of the Company Balance Sheet;
(j) make any change with respect to Company's accounting policies,
principles, methods or procedures, including, without limitation,
revenue recognition policies, other than as required by U.S. GAAP;
(k) make any material Tax election or settle or compromise any material
Tax liability; or
(l) authorize or enter into any formal or informal agreement or
otherwise make any commitment to do any of the foregoing or to take
any action which would make any of the representations or warranties
of Company contained in this Agreement untrue or incorrect in any
material respect or result in any of the conditions to the Merger
set forth herein not being satisfied, except as
specifically permitted hereunder.
SECTION 6.02 NOTICES OF CERTAIN EVENTS
Each of Parent and Company shall give prompt notice to the other of (i)
any notice or other communication from any person alleging that the consent
of such person is or may be required in connection with the Merger; (ii) any
notice or other communication from any Governmental Entity in connection with
the Merger; (iii) any actions, suits, claims, investigations or proceedings
commenced or, to its knowledge, threatened against, relating to or involving
or otherwise affecting Parent or the Parent Subsidiaries or Company or the
Company Subsidiaries, respectively, or that relate to the consummation of the
Merger; (iv) the occurrence of a default or event that, with the giving of
notice or lapse of time or both, will become a default under any Material
Contract of Parent or Company Material Contract, respectively; and (v) any
change that could reasonably be expected to have a Parent Material Adverse
Effect or a Company Material Adverse Effect, respectively, or to delay or
impede the ability of either Parent or Company, respectively, to perform
their respective obligations pursuant to this Agreement and to effect the
consummation of the Merger.
SECTION 6.03 ACCESS TO INFORMATION; CONFIDENTIALITY
(a) Except as required pursuant to any confidentiality agreement or
similar agreement or arrangement to which Parent or Company or any
of the Parent Subsidiaries or the Company Subsidiaries is a party or
pursuant to applicable Law or the regulations or requirements of any
stock exchange or other regulatory organization with whose rules a
party hereto is required to comply, from the date of this Agreement
to the Effective Time, Parent and Company shall (and shall cause the
Parent Subsidiaries and Company Subsidiaries, respectively, to) (i)
provide to the other (and its officers, directors, employees,
accountants, consultants, legal counsel, agents and other
representatives (collectively, "REPRESENTATIVES")) access at
reasonable times upon prior notice to its and its subsidiaries'
officers, employees, agents, properties, offices and other
facilities and to the books and records thereof, and (ii) furnish
promptly such information concerning its and its subsidiaries'
business, properties, contracts, assets, liabilities and personnel
as the other party or its Representatives may reasonably request. No
investigation conducted pursuant to this Section 6.03 shall affect
or be deemed to modify any representation or warranty made in this
Agreement.
(b) The parties hereto shall comply with, and shall cause their
respective Representatives to comply with, all of their respective
obligations under the Confidentiality Agreement with respect to the
information disclosed pursuant to this Section 6.03.
SECTION 6.04 NO SOLICITATION OF TRANSACTIONS
Until this Agreement has been terminated as provided herein, Company shall
not, directly or indirectly, and shall cause its Representatives not to,
directly or indirectly, solicit,
initiate or encourage (including by way of furnishing nonpublic information),
any inquiries or the making of any proposal or offer (including, without
limitation, any proposal or offer to its stockholders) that constitutes, or may
reasonably be expected to lead to, any Competing Transaction, or enter into or
maintain or continue discussions or negotiate with any person in furtherance of
such inquiries or to obtain a Competing Transaction, or agree to or endorse any
Competing Transaction, or authorize or permit any of Company's Representatives
or subsidiaries, or any Representative retained by Company's subsidiaries, to
take any such action; PROVIDED, HOWEVER, that nothing contained in this
Agreement, including this Section 6.04, shall prohibit the Company or the board
of directors of Company (i) from complying with Rule 14d-9 or 14e-2(a)
promulgated under the Exchange Act with regard to a tender or exchange offer not
made in violation of this Section 6.04 or (ii) prior to receipt of the approval
by the stockholders of Company of this Agreement and the Merger from providing
information (subject to a confidentiality agreement at least as restrictive as
the Confidentiality Agreement) in connection with, and negotiating, another
unsolicited, bona fide written proposal regarding a Competing Transaction that
(i) Company's board of directors shall have concluded in good faith, in part on
the basis of advice of independent outside counsel of nationally recognized
reputation, that such action is necessary to prevent Company's board of
directors from violating its fiduciary duties to Company's stockholders under
applicable law, (ii) if any cash consideration is involved, shall not be subject
to any financing contingency, and with respect to which Company's board of
directors shall have determined (based in part upon the advice of Company's
independent financial advisors of nationally recognized reputation) that the
acquiring party is reasonably capable of consummating such Competing Transaction
on the terms proposed, and (iii) Company's board of directors reasonably
believes in good faith that such Competing Transaction provides greater value to
the stockholders of Company than the Merger (based in part upon the written
opinion of Company's independent financial advisors of nationally recognized
reputation that such Competing Transaction is superior from a financial point of
view) (any such Competing Transaction being referred to herein as a "SUPERIOR
PROPOSAL"). Any violation of the restrictions set forth in this Section 6.04 by
any Representative of Company or any of its Subsidiaries, whether or not such
Person is purporting to act on behalf of Company or otherwise, shall be deemed
to be a breach of this Section 6.04 by Company. Company shall notify Parent
promptly if any proposal or offer, or any inquiry or contact with any person
with respect thereto, regarding a Competing Transaction is made, such notice to
include the identity of the person making such proposal, offer, inquiry or
contact, and the terms of such Competing Transaction, and shall keep Parent
apprised, on a current basis, of the status of such Competing Transaction and of
any modifications to the terms thereof. Company immediately shall cease and
cause to be terminated all existing discussions or negotiations with any parties
conducted heretofore with respect to a Competing Transaction. Company shall not
release any third party from, or waive any provision of, any confidentiality or
standstill agreement to which it is a party.
SECTION 6.05 TAX-FREE TRANSACTION; POOLING
From and after the date of this Agreement, each party hereto shall use all
reasonable efforts to cause the Merger to qualify, and shall not knowingly take
any actions or cause any actions to be taken which could reasonably be expected
to prevent the Merger from (a) qualifying as a "reorganization" under Section
368(a) of the Code or (b) being treated for financial accounting purposes as a
"pooling of interests" in accordance with U.S. GAAP and the accounting standards
of the SEC.
SECTION 6.06 CONTROL OF OPERATIONS
Nothing contained in this Agreement shall give Parent, directly or
indirectly, the right to control or direct the operations of Company and the
Company Subsidiaries prior to the Effective Time. Prior to the Effective Time,
Company shall exercise, consistent with the terms and conditions of this
Agreement, complete control and supervision over its operations.
SECTION 6.07 FURTHER ACTION; CONSENTS; FILINGS
(a) Upon the terms and subject to the conditions hereof, each of the
parties hereto shall use all reasonable efforts to (i) take, or
cause to be taken, all appropriate action, and do, or cause to be
done, all things necessary, proper or advisable under applicable Law
or otherwise to consummate and make effective the Merger, (ii)
obtain from Governmental Entities any consents, licenses, permits,
waivers, approvals, authorizations or orders required to be obtained
or made by Parent or Company or any of their respective subsidiaries
in connection with the authorization, execution and delivery of this
Agreement and the consummation of the Merger and (iii) make all
necessary filings, and thereafter make any other required or
appropriate submissions, with respect to this Agreement and the
Merger required under (A) the rules and regulations of the NNM, (B)
the Securities Act, the Exchange Act and any other applicable
Federal or state securities Laws, (C) the HSR Act, if any, and (D)
any other applicable Law. The parties hereto shall cooperate and
consult with each other in connection with the making of all such
filings, including by providing copies of all such documents to the
nonfiling parties and their advisors prior to filing, and none of
the parties shall file any such document if any of the other parties
shall have reasonably objected to the filing of such document. No
party shall consent to any voluntary extension of any statutory
deadline or waiting period or to any voluntary delay of the
consummation of the Merger at the behest of any Governmental Entity
without the consent and agreement of the other parties hereto, which
consent shall not be unreasonably withheld or delayed.
(b) Each of Company and Parent will give (or will cause their respective
subsidiaries to give) any notices to third persons, and use, and
cause their respective subsidiaries to use, reasonable efforts to
obtain any consents from third persons necessary, proper or
advisable (as determined in good faith by Parent with respect to
such notices or consents to be delivered or obtained by Company) to
consummate the transactions contemplated by this Agreement.
SECTION 6.08 ADDITIONAL REPORTS
Company and Parent shall each furnish to the other copies of any reports of
the type referred to in Sections 4.07 and 5.06, which it files with the SEC on
or after the date hereof, and Company and Parent, as the case may be, covenant
and warrant that as of the respective dates thereof, such reports will not
contain any 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 misleading. Any
unaudited consolidated interim financial statements included in such reports
(including any related notes and schedules) will fairly present in all material
respects the financial position of Company and its consolidated subsidiaries or
Parent and its consolidated subsidiaries, as the case may be, as of the dates
thereof and the results of operations and changes in financial position or other
information including therein for the periods or as of the date then ended
(subject, where appropriate, to normal year-end adjustments), in each case in
accordance with past practice and U.S. GAAP consistently applied during the
periods involved (except as otherwise disclosed in the notes thereto).
SECTION 6.09 TAX INFORMATION
Company shall provide the following information to Parent not later than
two weeks after the date of this Agreement: (i) a complete list of the types of
Tax Returns being filed by Company and each Company Subsidiary in each taxing
jurisdiction, (ii) a list of all closed years with respect to each such type of
Tax Return filed in each jurisdiction, and (iii) a list of any deferred
intercompany gain with respect to transactions to which Company or any Company
Subsidiary has been a party. Company shall provide Parent and its accountants,
counsel and other representatives reasonable access, during normal business
hours during the period prior to the Effective Time, to all of Company's and
Company Subsidiaries' Tax Returns and other records and workpapers relating to
Taxes.
SECTION 6.10 CONDUCT OF BUSINESS BY PARENT.
During the period from the date of this Agreement and continuing until the
earlier of the termination of this Agreement pursuant to its terms or the
Effective Time, Parent shall not knowingly take any action a principal purpose
of which is, and the reasonably likely result of which would be, a material
delay in or interference with the consummation of the Merger.
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.01 REGISTRATION STATEMENT; PROXY STATEMENT
(a) As promptly as practicable after the execution of this Agreement,
Parent and Company shall jointly prepare and shall file with the SEC
a document or documents that will constitute (i) the prospectus
forming part of the registration statement on Form S-4 of Parent
(together with all
amendments thereto, the "REGISTRATION STATEMENT"), in connection
with the registration under the Securities Act of Parent Common
Stock to be issued to Company's stockholders pursuant to the Merger
and (ii) the proxy statement with respect to the Merger relating to
the special meeting of Company's stockholders to be held to
consider approval of this Agreement and the Merger (the "COMPANY
STOCKHOLDERS' MEETING") (together with any amendments thereto, the
"PROXY STATEMENT"). Copies of the Proxy Statement shall be provided
to the NNM in accordance with its rules. Each of the parties hereto
shall use all reasonable efforts to cause the Registration Statement
to become effective as promptly as practicable after the date
hereof, and, prior to the effective date of the Registration
Statement, the parties hereto shall take all action required under
any applicable Laws in connection with the issuance of shares of
Parent Common Stock pursuant to the Merger. Parent or Company, as
the case may be, shall furnish all information concerning Parent or
Company as the other party may reasonably request in connection with
such actions and the preparation of the Registration Statement and
the Proxy Statement. As promptly as practicable after the effective
date of the Registration Statement, the Proxy Statement shall be
mailed to the stockholders of Company. Each of the parties hereto
shall cause the Proxy Statement to comply as to form and substance
as to such party in all material respects with the applicable
requirements of (i) the Exchange Act, (ii) the Securities Act, (iii)
the rules and regulations of the NNM.
(b) The Proxy Statement shall include (i) the approval of the Merger and
the recommendation of the board of directors of Company to Company's
stockholders that they vote in favor of approval of this Agreement
and the Merger, subject to the right of the board of directors of
Company to withdraw its recommendation and recommend a Superior
Proposal in compliance with Section 6.04 of this Agreement, and (ii)
the opinion of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ referred to in Section 4.19. The
board of directors of Company shall submit this Agreement to
Company's stockholders whether or not at any time subsequent to the
date hereof such board determines that it can no longer make such
recommendation; PROVIDED, HOWEVER, that, in the case of such
withdrawal of such board's recommendation, Company may delay or
adjourn the meeting at which this Agreement is submitted to such
stockholders by as many as ten business days in order to give such
stockholders a reasonable opportunity to consider such withdrawal of
recommendation.
(c) No amendment or supplement to the Proxy Statement or the
Registration Statement shall be made without the approval of Parent
and Company, which approval shall not be unreasonably withheld or
delayed; PROVIDED, HOWEVER, that the consent of Parent shall not be
required to amend or supplement the Proxy Statement to reflect the
withdrawal of the recommendation of Company's board of directors
that Company's stockholders vote in favor of the approval of this
Agreement and/or the recommendation that Company's stockholders
approve of a Superior Proposal. Each of the parties hereto shall
advise the other parties hereto, promptly after it receives notice
thereof, of the time when the Registration Statement has become
effective or any supplement or amendment has been filed, of the
issuance of any stop order, of the suspension of the qualification
of the Parent Common Stock issuable in connection with the Merger
for offering or sale in any jurisdiction, or of any request by the
SEC for amendment of the Proxy
Statement or the Registration Statement or comments thereon and
responses thereto or requests by the SEC for additional information.
(d) None of the information supplied by Company for inclusion or
incorporation by reference in the Registration Statement or the
Proxy Statement shall, at the respective times filed with the SEC or
other regulatory agency and, in addition, (A) in the case of the
Proxy Statement, at the date it or any amendments or supplements
thereto are mailed to stockholders of Company, at the time of the
Company Stockholders' Meeting and at the Effective Time and (B) in
the case of the Registration Statement, when it becomes effective
under the Securities Act and at the Effective Time, contain any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
are made, not misleading. If at any time prior to the Effective Time
any event or circumstance relating to Company or any Company
Subsidiary, or their respective officers or directors, should be
discovered by Company that should be set forth in an amendment or a
supplement to the Registration Statement or the Proxy Statement,
Company shall promptly inform Parent. All documents that Company is
responsible for filing with the SEC in connection with the Merger
will comply as to form in all material respects with the applicable
requirements of the rules and regulations of the Securities Act and
the Exchange Act.
(e) None of the information supplied by Parent for inclusion or
incorporation by reference in the Registration Statement or the
Proxy Statement shall, at the respective times filed with the SEC or
other regulatory agency and, in addition, (A) in the case of the
Proxy Statement, at the date it or any amendments or supplements
thereto are mailed to stockholders of Company, at the time of
Company Stockholders' meeting and at the Effective Time and (B) in
the case of the Registration Statement, when it becomes effective
under the Securities Act and at the Effective Time, contain any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
are made, not misleading. If, at any time prior to the Effective
Time, any event or circumstance relating to Parent or any Parent
Subsidiary, or their respective officers or directors, should be
discovered by Parent that should be set forth in an amendment or a
supplement to the Registration Statement or the Proxy Statement,
Parent shall promptly inform Company. All documents that Parent is
responsible for filing with the SEC in connection with the Merger
will comply as to form in all material respects with the applicable
requirements of the rules and regulations of the Securities Act and
the Exchange Act.
SECTION 7.02 STOCKHOLDERS' MEETING
Company shall call and hold the Company Stockholders' Meeting as promptly
as practicable after the date hereof for the purpose of voting upon the approval
of this Agreement and the Merger pursuant to the Proxy Statement, and Company
shall use all reasonable efforts to hold the Company Stockholders' Meeting as
soon as practicable after the date on which the Registration Statement becomes
effective, subject to Company's right to delay or adjourn such meeting as
provided in Section 7.01(c). Unless Company's board of directors has withdrawn
its
recommendation of this Agreement and the Merger in compliance with Section
6.04, Company shall use all reasonable efforts to solicit from its stockholders
proxies in favor of the approval of this Agreement and the Merger pursuant to
the Proxy Statement and shall take all other action necessary or advisable to
secure the vote or consent of stockholders required by the DGCL or applicable
other stock exchange requirements to obtain such approval. Company shall take
all other action necessary or, in the reasonable opinion of Parent, advisable to
promptly and expeditiously secure any vote or consent of stockholders required
by applicable Law and Company's certificate of incorporation and bylaws to
effect the Merger. Company shall call and hold the Company Stockholders' Meeting
for the purpose of voting upon the approval of this Agreement and the Merger
whether or not Company's board of directors at any time subsequent to the date
hereof determines that this Agreement is no longer advisable or recommends that
Company's stockholders reject it.
SECTION 7.03 AFFILIATES
(a) Company will use reasonable efforts to obtain an executed letter
agreement substantially in the form of Annex B hereto from (i) each
person identified in Section 4.18 of the Company Disclosure Schedule
within 15 days following the execution and delivery of this
Agreement and (ii) from any person who, to the knowledge of Company,
may be deemed to have become an affiliate of Company after the date
of this Agreement and prior to the Effective Time as soon as
practicable after attaining such status. The foregoing
notwithstanding, Parent shall be entitled to place legends as
specified in the Affiliate Agreement on the certificates evidencing
any of the Parent Common Stock to be received by (i) any affiliate
of Company or (ii) any person Parent reasonably identifies (by
written notice to Company) as being a person who may be deemed an
"affiliate" within the meaning of Rule 145 promulgated under the
Securities Act, and to issue appropriate stop transfer instructions
to the transfer agent for such Parent Common Stock, consistent with
the terms of the Affiliate Agreement, regardless of whether such
person has executed Affiliate Agreement and regardless of whether
such person's name appears on Section 4.18 of the Company
Disclosure Schedule.
(b) Parent will use reasonable efforts to obtain an executed letter
agreement substantially in the form of Annex C hereto from (i) each
person identified in Section 5.10 of the Parent Disclosure Schedule
within 15 days following the execution and delivery of this
Agreement and (ii) from any person who, to the knowledge of Parent,
may be deemed to have become an affiliate of Parent after the date
of this Agreement and prior to the Effective Time as soon as
practicable after attaining such status.
SECTION 7.04 DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE
(a) Parent and the Merger Sub agree that all rights to indemnification,
advancement of expenses, exculpation, limitation of liability and
any and all similar rights now existing in favor of each present and
former director, officer, employee and agent of Company and each
Company Subsidiary (collectively, the "Indemnified Parties") as
provided in the Company's present
charter, by-laws or contractual arrangements in effect on the date
hereof, shall survive the Merger and shall continue in full force
and effect for a period of six years from the Effective Time, which
provisions shall not be amended, repealed or otherwise modified for
a period of six years from the Effective Time in any manner that
would affect adversely the rights thereunder of individuals who at
any time prior to the Effective Time were directors, officers,
employees or agents of the Company, unless such modification shall
be required by law, and Parent agrees to cause the Surviving
Corporation to comply with its obligations thereunder; provided,
however, that in the event any claim or claims are asserted or made
within such six-year period, all rights to indemnification in
respect to any such claim or claims shall continue until the
disposition of any and all such claims.
(b) In the event the Company or the Surviving Corporation or any of
their respective successors or assigns (i) consolidates with or
merges into any other person and shall not be the continuing or
surviving corporation or entity of such consolidation or merger or
(ii) transfers a material amount of its properties and assets to any
person in a single transaction or a series of transactions, then,
and in each such case, Parent will either guaranty the
indemnification obligations referred to in this Section 7.04 or will
make or cause to be made proper provision so that the successors and
assigns of the Company or the Surviving Corporation, as the case may
be, assume the indemnification obligations described herein for the
benefit of the Indemnified Parties and have substantially equal
financial ability as the Company (immediately prior to the Effective
Time) to satisfy the obligations of the parties pursuant to this
Section 7.04 as a condition to such merger, consolidation or
transfer becoming effective.
(c) The provisions of this Section 7.04 are (i) intended to be for the
benefit of, and will be enforceable by, each of the Indemnified
Parties and (ii) in addition to, and not in substitution for, any
other rights to indemnification or contribution that any such person
may have by contract or otherwise.
(d) For a period of three years after the Effective Time, Parent shall
use its best efforts to maintain in effect the directors' and
officers' liability insurance policies maintained by Company;
PROVIDED, HOWEVER, that in no event shall Parent be required to
expend in any one year in excess of 150% of the annual premium
currently paid by Company for such coverage, which Company hereby
represents is $250,000, and provided further, that if the premium
for such coverage exceeds such amount, Parent shall purchase a
policy with the greatest coverage available for such 150% of the
annual premium.
SECTION 7.05 NO SHELF REGISTRATION
Parent shall not be required to amend or maintain the effectiveness of the
Registration Statement for the purpose of permitting resale of the shares of
Parent Common Stock received pursuant hereto by the persons who may be deemed to
be "affiliates" of Company within the meaning of Rule 145 promulgated under the
Securities Act.
SECTION 7.06 PUBLIC ANNOUNCEMENTS
The initial press release concerning the Merger shall be a joint press
release and, thereafter, Parent and Company shall consult with each other before
issuing any press release or otherwise making any public statements with respect
to this Agreement or the Merger and shall not issue any such press release or
make any such public statement without the prior written approval of the other,
except to the extent required by applicable Law or the requirements of the rules
and regulations of the NNM, in which case the issuing party shall use all
reasonable efforts to consult with the other party before issuing any such
release or making any such public statement.
SECTION 7.07 NNM LISTING
Prior to the Effective Time, Parent shall file with the NNM a Notification
Form for Listing of Additional Shares with respect to the Parent Common Stock
issued or issuable in connection with the Merger and shall use all reasonable
efforts to obtain approval from NNM of the listing of such Parent Common Stock
as of the Effective Time, subject to official notice of issuance.
SECTION 7.08 BLUE SKY
Parent shall use all reasonable efforts to obtain prior to the Effective
Time all necessary permits and approvals required under Blue Sky Laws to permit
the distribution of the shares of Parent Common Stock to be issued in accordance
with the provisions of this Agreement.
SECTION 7.09 EMPLOYEE BENEFIT MATTERS
Unless Parent consents otherwise in writing, Company shall take all action
necessary to terminate, or cause to terminate, before the Effective Time, any
Company Benefit Plan that is a 401(k) plan or other defined contribution
retirement plan.
SECTION 7.10 REGISTRATION STATEMENT ON FORM S-8.
On the date of the Effective Time or as soon thereafter as is practicable,
Parent shall file a registration statement on Form S-8 covering the issuance of
Parent Common Stock issuable under the Company Stock Plans.
ARTICLE VIII
CONDITIONS TO THE MERGER
SECTION 8.01 CONDITIONS TO THE OBLIGATIONS OF EACH PARTY TO CONSUMMATE
THE MERGER
The obligations of the parties hereto to consummate the Merger are subject
to the satisfaction or, if permitted by applicable Law, waiver of the following
conditions:
(a) the Registration Statement shall have been declared effective by the
SEC under the Securities Act and no stop order suspending the
effectiveness of the Registration Statement shall have been issued
by the SEC and no proceeding for that purpose shall have been
initiated by the SEC and not concluded or withdrawn;
(b) this Agreement and the Merger shall have been duly approved by the
requisite vote of stockholders of Company in accordance with the
DGCL;
(c) no court of competent jurisdiction shall have issued or entered any
order, writ, injunction or decree, and no other Governmental Entity
shall have issued any order, which is then in effect and has the
effect of making the Merger illegal or otherwise prohibiting its
consummation;
(d) any waiting period (and any extension thereof) applicable to the
consummation of the Merger under the HSR Act or any other applicable
competition, merger control or similar Law shall have expired or
been terminated; and
(e) all consents, approvals and authorizations legally required to be
obtained to consummate the Merger shall have been obtained from all
Governmental Entities, except where the failure to obtain any such
consent, approval or authorization could not reasonably be expected
to result in a Parent Material Adverse Effect or a Company Material
Adverse Effect.
SECTION 8.02 CONDITIONS TO THE OBLIGATIONS OF COMPANY
The obligations of Company to consummate the Merger, or to permit the
consummation of the Merger are subject to the satisfaction or, if permitted by
applicable Law, waiver of the following further conditions:
(a) each of the representations and warranties of Parent contained in
this Agreement shall be true, complete and correct in all respects
(ignoring for this purpose all materiality or Material Adverse
Effect qualifications in such representations and warranties) both
when made and on and as of the Effective Time as if made at and as
of the Effective Time (other than (i) representations and warranties
which address matters only as of a certain date which shall have
been true, complete and correct as of such certain date, and (ii)
failures to be true, complete and correct that do not, in the
aggregate, constitute a Parent Material Adverse Effect), and Company
shall have received a certificate of the Chief Executive Officer and
Chief Financial Officer of Parent to such effect;
(b) Parent shall have performed or complied in all material respects
with all covenants required by this Agreement to be performed or
complied with by it on or prior to the Effective Time and Company
shall have received a certificate of the Chief Executive Officer and
Chief Financial Officer of Parent to that effect;
(c) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, legal counsel to Company, shall
have issued its opinion, such opinion dated on the date of the
Closing, addressed to Company, and reasonably satisfactory to it,
based upon customary representations of Company and Parent and
customary assumptions, to the effect that the Merger will constitute
a "reorganization" within the meaning of Section 368(a) of the Code,
which opinion shall not have been withdrawn or modified in any
material respect; PROVIDED, HOWEVER, that if such firm does not
render such opinion, this condition shall nonetheless be deemed
satisfied if such opinion, dated as of the date of the Closing, is
rendered to Company by ▇▇▇▇▇▇▇, Phleger & ▇▇▇▇▇▇▇▇ LLP, counsel to
Parent; and
(d) There shall have been no Parent Material Adverse Effect since the
date of this Agreement.
SECTION 8.03 CONDITIONS TO THE OBLIGATIONS OF PARENT
The obligations of Parent to consummate the Merger are subject to the
satisfaction or waiver of the following further conditions:
(a) each of the representations and warranties of Company contained in
this Agreement shall be true, complete and correct in all respects
(ignoring for this purpose all materiality or Material Adverse
Effect qualifications in such representations and warranties) both
when made and on and as of the Effective Time as if made at and as
of the Effective Time (other than (i) representations and warranties
which address matters only as of a certain date which shall have
been true, complete and correct as of such certain date, and (ii)
failures to be true, complete and correct that do not, in the
aggregate, constitute a Company Material Adverse Effect), and Parent
shall have received a certificate of the Chief Executive Officer and
Chief Financial Officer of Company to such effect;
(b) Company shall have performed or complied in all material respects
with all covenants required by this Agreement to be performed or
complied with by it on or prior to the Effective Time and Parent
shall have received a certificate of the Chief Executive Officer and
Chief Financial Officer of Company to that effect;
(c) ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, special counsel to Parent, shall
have issued its opinion, such opinion dated on the date of the
Closing, addressed to Parent, and reasonably satisfactory to it,
based upon customary representations of Company and Parent and
customary assumptions, to the effect that the Merger will constitute
a "reorganization" within the meaning of Section 368(a) of the Code,
which opinion shall not have been withdrawn or modified in any
material respect; PROVIDED, HOWEVER, that if such firm does not
render such opinion, this condition shall nonetheless be deemed
satisfied if such opinion, dated as of the date of Closing, is
rendered to Parent by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, legal
counsel to Company;
(d) Parent shall have been advised in writing by PricewaterhouseCoopers
LLP as of the date upon which the Effective Time is to occur, in a
form and in substance reasonably acceptable to Parent, that the
Merger can properly be accounted for as a "pooling of interests"
business combination in accordance with U.S. GAAP and the accounting
standards of the SEC; Company shall have been advised in writing by
KPMG LLP as of the date upon which the Effective Time is to occur
that such firm concurs with the management of the Company that there
is no reason why the Merger cannot be treated for financial
accounting purposes as a "pooling of interests" business combination
in accordance with U.S. GAAP and the accounting standards of the
SEC;
(e) There shall have been no Company Material Adverse Effect since the
date of this Agreement;
(f) All consents of third parties required pursuant to the terms of any
Material Contract as a result of the Merger shall have been
obtained; and
(g) At least five of the employees of Company set forth on Schedule
8.03(g) shall have either (i) entered into employment, proprietary
invention and non-competition agreements substantially in the form
of Annex D or (ii) if so permitted as provided on Schedule 8.03(g),
allowed Parent to assume their respective employment agreement as in
effect on the date hereof and entered into a non-competition and
proprietary invention agreement with Parent in substantially the
form included in Annex D.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.01 TERMINATION
This Agreement may be terminated and the Merger may be abandoned at any
time prior to the Effective Time, notwithstanding any requisite adoption and
approval of this Agreement, as follows:
(a) by mutual written consent duly authorized by the boards of directors
of each of Parent and Company;
(b) by either Parent or Company, if the Effective Time shall not have
occurred on or before January 31, 2000; PROVIDED, HOWEVER, that the
right to terminate this Agreement under this Section 9.01(b) shall
not be available to any party whose material breach of this
Agreement shall have caused, or resulted in, the failure of the
Effective Time to occur on or before such date;
(c) by either Parent or Company, if any Governmental Order, writ,
injunction or decree preventing the consummation of the Merger shall
have been entered by any court of competent jurisdiction and shall
have become final and nonappealable;
(d) by Parent, if (i) the board of directors of Company withdraws,
modifies or changes its recommendation of this Agreement or the
Merger in a manner adverse to Parent or its stockholders, (ii) the
board of directors of Company shall have recommended to the
stockholders of Company a Competing Transaction, (iii) the Company
fails to comply in all material respects with Section 6.04 or
Section 7.02, (iv) a Competing Transaction shall have been announced
or otherwise publicly known and the board of directors of Company
shall have (A) failed to recommend against acceptance of such by its
stockholders (including by taking no position, or indicating its
inability to take a position, with respect to the acceptance by its
stockholders of a Competing Transaction involving a tender offer or
exchange offer) within 5 business days of delivery of a written
request from Parent for such action, (B) failed to reconfirm its
approval and recommendation of this Agreement and the transactions
contemplated hereby within 5 business days of delivery of a written
request from Parent for such action or (C) determined that such
Competing Transaction was a Superior Proposal and to take any of the
actions allowed by clause (ii) of Section 6.04 (and shall not have,
prior to Parent's termination of this Agreement pursuant to this
Section 9.01(d)(iv)(C), (x) reconfirmed its approval and
recommendation of this Agreement and (y) recommended against
acceptance of such Superior Proposal by its stockholders), or (v)
the board of directors of Company resolves to take any of the
actions described above;
(e) by Parent or Company, if this Agreement and the Merger shall fail to
receive the requisite votes for approval at the Company
Stockholders' Meeting or any adjournment or postponement thereof;
(f) by Parent, upon a breach of any representation, warranty, covenant
or agreement on the part of Company set forth in this Agreement, or
if any representation or warranty of Company shall have become
untrue, incomplete or incorrect, in either case such that the
conditions set forth in Section 8.03 would not be satisfied (a
"TERMINATING COMPANY BREACH"); PROVIDED, HOWEVER, that if such
Terminating Company Breach is curable by Company through the
exercise of its reasonable efforts within 20 days and for so long as
Company continues to exercise such reasonable efforts, Parent may
not terminate this Agreement under this Section 9.01(f); and
PROVIDED, FURTHER that the preceding proviso shall not in any event
be deemed to extend any date set forth in paragraph (b) of this
Section 9.01; or
(g) by Company, upon breach of any representation, warranty, covenant or
agreement on the part of Parent set forth in this Agreement, or if
any representation or warranty of Parent shall have become untrue,
incomplete or incorrect, in either case such that the conditions set
forth in Section 8.02 would not be satisfied (a "TERMINATING PARENT
BREACH"); PROVIDED, HOWEVER, that if such Terminating Parent Breach
is curable by Parent through the exercise of its reasonable efforts
within 20 days and for so long as Parent continues to exercise such
reasonable efforts, Company may not terminate this Agreement under
this Section 9.01(g); and PROVIDED, FURTHER that the preceding
proviso shall not in any event be deemed to extend any date set
forth in paragraph (b) of this Section 9.01.
The right of any party hereto to terminate this Agreement pursuant to this
Section 9.01 will remain operative and in full force and effect regardless of
any investigation made by or on behalf of any party hereto, any person
controlling any such party or any of their respective officers, directors,
representatives or agents, whether prior to or after the execution of this
Agreement.
SECTION 9.02 EFFECT OF TERMINATION
Except as provided in Section 9.05, in the event of termination of this
Agreement pursuant to Section 9.01, this Agreement shall forthwith become void,
there shall be no liability under this Agreement on the part of any party hereto
or any of its affiliates or any of its or their officers or directors, and all
rights and obligations of each party hereto shall cease; PROVIDED, HOWEVER, that
nothing herein shall relieve any party hereto from liability for the willful or
intentional breach of any of its representations and warranties or the willful
or intentional breach of any of its covenants or agreements set forth in this
Agreement. No termination of this Agreement shall affect the obligation of the
parties contained in the Confidentiality Agreements, which shall survive
termination of this Agreement and remain in full force and effect in accordance
with their terms.
SECTION 9.03 AMENDMENT
This Agreement may be amended by the parties hereto by action taken by or
on behalf of their respective boards of directors at any time prior to the
Effective Time; PROVIDED, HOWEVER, that, after the approval of this Agreement by
the stockholders of Company, no amendment may be made that changes the amount or
type of consideration into which Company common stock will be converted pursuant
to this Agreement. This Agreement may not be amended except by an instrument in
writing signed by the parties hereto.
SECTION 9.04 WAIVER
At any time prior to the Effective Time, any party hereto may (a) extend
the time for or waive compliance with the performance of any obligation or other
act of any other party hereto, (b) waive any inaccuracy in the representations
and warranties contained herein or in any document delivered pursuant hereto and
(c) waive compliance by the other party with any of the agreements or conditions
contained herein. Any such extension or waiver shall be valid if set forth in an
instrument in writing signed by the party or parties to be bound thereby.
SECTION 9.05 TERMINATION FEE; EXPENSES
(a) Except as set forth in this Section 9.05, all Expenses incurred in
connection with this Agreement and the Merger shall be paid by the
party incurring such Expenses, whether or not the Merger is
consummated, except that Parent and Company each shall pay one-half
of all Expenses (other than attorneys' and accountants' fees and
expenses) incurred solely for printing, filing and mailing the
Registration Statement and the Proxy Statement and all SEC and other
regulatory
filing fees incurred in connection with the Registration Statement
and the Proxy Statement and any fees required to be paid under the
HSR Act.
(b) In the event that (i) Parent shall terminate this Agreement pursuant
to Section 9.01(d) or (ii) this Agreement shall be terminated
pursuant to Section 9.01(b) or pursuant to Section 9.01(e) as a
result of the failure to obtain the requisite approval of the
Company stockholders and (A) at or prior to such termination, there
shall exist or have been publicly proposed a Competing Transaction
with respect to Company and (B) within 12 months after such
termination, Company shall enter into a definitive agreement with
respect to any Competing Transaction or any Competing Transaction
involving Company shall be consummated, then, in the case of (i),
promptly after such termination, or in the case of (ii), immediately
before the execution and delivery of such agreement or such
consummation, Company shall pay to Parent an amount equal to $30
million (the "TERMINATION FEE").
(c) In the event that Parent shall terminate this Agreement pursuant to
Section 9.01(f), then Company shall promptly reimburse Parent for
Parent's Expenses, and if, within twelve months of such termination
of this Agreement, Company shall enter into a definitive agreement
with respect to any Competing Transaction or any Competing
Transaction involving Company shall be consummated, then,
immediately before the execution and delivery of such agreement or
such consummation, Company shall pay to Parent an amount in cash
equal to the Termination Fee less the amount of any Expenses of
Parent previously reimbursed by Company pursuant to this
Section 9.05(c).
(d) Parent and Company agree that the agreements contained in Section
9.05(b) and 9.05(c) above are an integral part of the transaction
contemplated by this Agreement and constitute liquidated damages and
not a penalty. Accordingly, if Company fails to pay to Parent any
amounts due under Section 9.05(b) or 9.05(c), Company shall pay the
cash and expenses (including legal fees and expenses) in connection
with any action, including the filing of any lawsuit of other legal
action, taken to collect payment, together with interest on such
amounts at the prime rate of Citibank, N.A. in effect on the date
such payment was required to be made.
ARTICLE X
GENERAL PROVISIONS
SECTION 10.01 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations and warranties in this Agreement shall terminate at the
Effective Time or upon the termination of this Agreement pursuant to Section
9.01, as the case may be. This Section 10.01 shall not limit any covenant or
agreement of the parties which by its terms contemplates performance after the
Effective Time.
SECTION 10.02 NOTICES
All notices, requests, claims, demands and other communications hereunder
shall be in writing and shall be given (and shall be deemed to have been duly
given upon receipt) by delivery in person, by telecopy or facsimile, by
registered or certified mail (postage prepaid, return receipt requested) or by a
nationally recognized courier service to the respective parties at the following
addresses (or at such other address for a party as shall be specified in a
notice given in accordance with this Section 10.02):
(a) if to Company:
NetGravity, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Professional Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to Parent or Merger Sub:
DoubleClick Inc.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, General Counsel
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇, Phleger & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 10.03 SEVERABILITY
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of Law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the Merger is not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner to the fullest extent permitted by
applicable Law in order that the Merger may be consummated as originally
contemplated to the fullest extent possible.
SECTION 10.04 ASSIGNMENT; BINDING EFFECT; BENEFIT
Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto (whether by operation
of Law or otherwise) without the prior written consent of the other parties
hereto. Subject to the preceding sentence, this Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Notwithstanding anything contained in this
Agreement to the contrary, other than Section 7.04, nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the parties
hereto or their respective successors and permitted assigns any rights or
remedies under or by reason of this Agreement.
SECTION 10.05 INCORPORATION OF EXHIBITS
The Parent Disclosure Schedule, the Company Disclosure Schedule and all
Exhibits attached hereto and referred to herein are hereby incorporated herein
and made a part of this Agreement for all purposes as if fully set forth herein.
SECTION 10.06 GOVERNING LAW
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE OTHER THAN CONFLICT OF LAWS
PRINCIPLES THEREOF DIRECTING THE APPLICATION OF ANY LAW OTHER THAN THAT OF
DELAWARE. COURTS WITHIN THE STATE OF DELAWARE WILL HAVE JURISDICTION OVER ALL
DISPUTES BETWEEN THE PARTIES HERETO ARISING OUT OF OR RELATING TO THIS AGREEMENT
AND THE AGREEMENTS, INSTRUMENTS AND DOCUMENTS CONTEMPLATED HEREBY. THE PARTIES
HEREBY CONSENT TO AND AGREE TO SUBMIT TO THE JURISDICTION OF SUCH COURTS. EACH
OF THE PARTIES HERETO WAIVES, AND AGREES NOT TO ASSERT IN ANY SUCH DISPUTE, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY CLAIM THAT (I) SUCH PARTY IS
NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, (II) SUCH PARTY AND
SUCH PARTY'S PROPERTY IS IMMUNE FROM ANY LEGAL PROCESS ISSUED BY SUCH COURTS OR
(III) ANY LITIGATION COMMENCED IN SUCH
COURTS IS BROUGHT IN AN INCONVENIENT FORUM.
SECTION 10.07 WAIVER OF JURY TRIAL
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY PROCEEDING (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY TRANSACTION OR AGREEMENT CONTEMPLATED HEREBY
OR THE ACTIONS OF ANY PARTY HERETO IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT HEREOF.
SECTION 10.08 HEADINGS; INTERPRETATION
The descriptive headings contained in this Agreement are included for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties, and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of any
provisions of this Agreement.
SECTION 10.09 COUNTERPARTS
This Agreement may be executed and delivered (including by facsimile
transmission) in one or more counterparts, and by the different parties hereto
in separate counterparts, each of which when executed and delivered shall be
deemed to be an original but all of which taken together shall constitute one
and the same agreement.
SECTION 10.10 ENTIRE AGREEMENT
This Agreement (including the Exhibits, the Parent Disclosure Schedule and
the Company Disclosure Schedule) and the Confidentiality Agreement constitute
the entire agreement among the parties with respect to the subject matter hereof
and supersede all prior agreements and understandings among the parties with
respect thereto. No addition to or modification of any provision of this
Agreement shall be binding upon any party hereto unless made in writing and
signed by all parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.
DOUBLECLICK INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: President and Chief Operating Officer
NETGRAVITY, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief Executive Officer
NJ MERGER CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: President