1
EXHIBIT 1
AGREEMENT AND
PLAN OF MERGER
AMONG
FOURTHSTAGE TECHNOLOGIES, INC.,
APERIAN, INC.,
APERIAN MERGER CORPORATION, INC.,
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇,
VAN DE VREDE FAMILY TRUST, ▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, TRIPLE FIVE INVESTMENTS,
REGENT NET LLC, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ AND ▇▇▇▇▇ ▇▇▇▇▇
DATED AS OF APRIL 6, 2001
2
TABLE OF CONTENTS
PAGE
----
ARTICLE 1 THE MERGER ............................................................... 2
SECTION 1.1. The Merger ........................................................ 2
SECTION 1.2. Merger Consideration .............................................. 3
SECTION 1.3. Options and Warrants .............................................. 3
ARTICLE 2 CERTIFICATES, BYLAWS, DIRECTORS AND OFFICERS ............................. 4
SECTION 2.1. Certificate of Incorporation of Surviving Corporation ............. 4
SECTION 2.2. Bylaws of Surviving Corporation ................................... 4
SECTION 2.3. Directors and Officers of Surviving Corporation ................... 4
SECTION 2.4. Bylaws of Aperian ................................................. 4
SECTION 2.5. Directors and Officers of Aperian ................................. 4
SECTION 2.6. Composition of Nominating and Governance Committee of Aperian ..... 4
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND FOURTHSTAGE SHAREHOLDERS 5
SECTION 3.1. Corporate Existence and Power ..................................... 5
SECTION 3.2. Subsidiaries ...................................................... 5
SECTION 3.3. Corporate Records ................................................. 5
SECTION 3.4. Corporate Authorization ........................................... 5
SECTION 3.5. Governmental Authorization ........................................ 6
SECTION 3.6. Non-Contravention ................................................. 6
SECTION 3.7. Capitalization .................................................... 7
SECTION 3.8. Company Financial Statements ...................................... 7
SECTION 3.9. Absence of Certain Changes ........................................ 8
SECTION 3.10. Litigation ....................................................... 8
SECTION 3.11. Employee Benefit Plans ........................................... 9
SECTION 3.12. Taxes ............................................................ 9
i
3
SECTION 3.13. Compliance With Laws ............................................. 9
SECTION 3.14. Finders' Fees .................................................... 9
SECTION 3.15. Material Contracts ............................................... 9
SECTION 3.16. Title to Assets .................................................. 9
SECTION 3.17. Investment Intent ................................................ 9
SECTION 3.18. Sophisticated Investor Status .................................... 10
SECTION 3.19. Legend ........................................................... 10
SECTION 3.20. No Other Representations ......................................... 10
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF APERIAN AND MERGER SUB ................. 11
SECTION 4.1. Corporate Existence and Power ..................................... 11
SECTION 4.2. Subsidiaries ...................................................... 11
SECTION 4.3. Corporate Records ................................................. 11
SECTION 4.4. Corporate Authorization ........................................... 11
SECTION 4.5. Governmental Authorization ........................................ 12
SECTION 4.6. Non-Contravention ................................................. 12
SECTION 4.7. Aperian SEC Reports and Financial Statements ...................... 13
SECTION 4.8. Capitalization .................................................... 14
SECTION 4.9. Aperian Financial Statements ...................................... 14
SECTION 4.10. Absence of Certain Changes ....................................... 15
SECTION 4.11. Litigation ....................................................... 15
SECTION 4.12. Employee Benefit Plans ........................................... 16
SECTION 4.13. Taxes ............................................................ 16
SECTION 4.14. Compliance With Laws ............................................. 16
SECTION 4.15. Takeover Statutes ................................................ 16
SECTION 4.16. Finders' Fees .................................................... 16
SECTION 4.17. Material Contracts ............................................... 16
SECTION 4.18. Title to Assets .................................................. 16
ii
4
SECTION 4.19. No Other Representations ......................................... 17
SECTION 4.20. Financing ........................................................ 17
ARTICLE 5 INDEMNIFICATION .......................................................... 17
SECTION 5.1. Survival of Representations and Warranties ........................ 17
SECTION 5.2. Company Indemnity; Set-off Arrangements ........................... 17
SECTION 5.3. Maximum Payments .................................................. 20
SECTION 5.4. Indemnification by Aperian ........................................ 20
SECTION 5.5. Special Tax Indemnification ....................................... 20
SECTION 5.6. Indemnification Procedures ........................................ 20
SECTION 5.7. Resolution of Conflicts; Arbitration .............................. 21
ARTICLE 6 ADDITIONAL AGREEMENTS .................................................... 21
SECTION 6.1. Stockholders' and Shareholders' Approval .......................... 21
SECTION 6.2. Reasonable Efforts/Consents ....................................... 21
SECTION 6.3. Additional Nasdaq Listing ......................................... 21
SECTION 6.4. Closing Conditions ................................................ 21
SECTION 6.5. ▇▇▇▇▇ Non-Compete ................................................. 21
SECTION 6.6. Board Representation .............................................. 22
ARTICLE 7 CONDITIONS TO THE MERGER ................................................. 22
SECTION 7.1. Conditions to the Obligations of Each Party ....................... 22
SECTION 7.2. Conditions to Obligations of Aperian .............................. 22
SECTION 7.3. Conditions to Obligations of the Company .......................... 23
ARTICLE 8 MISCELLANEOUS ............................................................ 24
SECTION 8.1. Notices ........................................................... 24
SECTION 8.2. Amendments; No Waivers ............................................ 25
SECTION 8.3. Expenses .......................................................... 25
SECTION 8.4. Entire Agreement/No Third Party Beneficiaries ..................... 25
iii
5
SECTION 8.5. Waivers ........................................................... 25
SECTION 8.6. Amendments, Supplements or Modifications .......................... 25
SECTION 8.7. Successors and Assigns ............................................ 25
SECTION 8.8. Governing Law ..................................................... 25
SECTION 8.9. Exclusive Jurisdiction ............................................ 26
SECTION 8.10. Disclosure Schedules ............................................. 26
SECTION 8.11. Counterparts; Effectiveness ...................................... 26
SECTION 8.12. Severability ..................................................... 26
SECTION 8.13. Incorporation of Exhibits and Schedules .......................... 26
SECTION 8.14. Headings ......................................................... 26
SECTION 8.15. Knowledge ........................................................ 26
SECTION 8.16. Construction ..................................................... 27
iv
6
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER is dated as of April 6, 2001, and
is by and among FOURTHSTAGE TECHNOLOGIES, INC., an Arizona corporation (the
"Company"), APERIAN, INC., a Delaware corporation ("Aperian"), APERIAN MERGER
CORPORATION, INC., a Delaware corporation and a wholly-owned subsidiary of
Aperian ("Merger Sub") and ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇, Van de Vrede Family
Trust, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Triple Five Investments, Regent Net LLC, ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ (collectively, the
"Fourthstage Shareholders").
RECITALS
WHEREAS, the Boards of Directors of Company and Aperian deem it
advisable and in the best interests of their respective shareholders that they
combine their businesses, and to that end the Boards of Directors of the
Company, Aperian and Merger Sub have approved the merger of Company with and
into the Merger Sub upon the terms and subject to the conditions set forth
herein; and
WHEREAS, Aperian has authorized capital stock consisting of
75,000,000 shares of common stock, par value $.01 per share (the "Aperian Common
Stock"), of which 13,559,954 shares are currently issued and outstanding, and
10,000,000 shares of preferred stock, par value $.01 per share (the "Aperian
Preferred Stock"), of which no shares are currently issued and outstanding; and
WHEREAS, Aperian currently also has outstanding common stock
purchase warrants and options entitling the holders thereof to purchase an
aggregate of up to 4,456,937 shares of Aperian Common Stock, all as further
described herein (collectively, the "Aperian Warrants and Options"); and
WHEREAS, Company has authorized capital stock consisting of
50,000,000 shares of common stock, $.001 par value per share (the "Company
Common Stock"), of which 6,780,000 shares are currently issued and outstanding;
and
WHEREAS, Company currently also has outstanding common stock options
entitling the holders thereof to purchase an aggregate of up to 2,235,000 shares
of Company Common Stock, all as further described herein (collectively, the
"Company Options").
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties and covenants set forth herein and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1
7
ARTICLE 1
THE MERGER
SECTION 1.1. The Merger.
(a) On the terms and subject to the conditions of this
Agreement, at the Effective Time (as defined in Section 1.1(b)), the
Company shall be merged with and into Merger Sub (the "Merger") in
accordance with the relevant provisions of the Arizona Business
Corporation Law (the "ABCL") and the Delaware General Corporation Law (the
"DGCL"), whereupon the separate existence of the Company shall cease, and
Merger Sub shall be the surviving corporation (the "Surviving
Corporation"). The existence of the Company shall cease at the Effective
Time as a consequence of the Merger.
(b) The consummation of the Merger (the "Closing") shall take
place (i) at the offices of ▇▇▇▇▇ ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ at 10:00 A.M., on such date (the "Closing
Date") which is the later to occur of (A) April 15, 2001 and (B) the date
on which the last of the conditions set forth in Article 7 hereof shall
have been satisfied or waived in accordance with this Agreement, or (ii)
such other place, time and date as the parties hereto shall agree. Prior
to the Closing, Merger Sub and the Company shall execute and deliver to
(a) the Secretary of State of the State of Delaware (the "Delaware
Secretary of State"), a Certificate of Merger in the form attached hereto
as Exhibit 1.1(b)(i) hereto for filing under the DGCL on the day of the
Closing, and (b) the Arizona Corporation Commission (the "Arizona
Corporation Commission"), a Certificate and Articles of Amendment and
Merger in the form attached hereto as Exhibit 1.1(b)(ii) hereto for filing
under the ABCL on the day of Closing with the Arizona Corporation
Commission, and the Merger shall become effective upon the filing of the
Certificate of Merger with the Delaware Secretary of State and the filing
of the Certificate of Merger with the Arizona Corporation Commission or at
such later time as may be specified in the Certificates of Merger, such
time being herein called the "Effective Time."
(c) The Merger shall have the effects set forth in the ABCL
and DGCL. Without limiting the generality of the foregoing, at the
Effective Time (i) the Surviving Corporation shall possess all assets and
property of every description, and every interest therein, wherever
located, and the rights, privileges, immunities, powers, franchises, and
authority, of a public as well as of a private nature, of each of the
Company and Merger Sub and all obligations belonging to or due each of
them shall be vested in the Surviving Corporation without further act or
deed, (ii) title to any real estate or any interest therein vested in
either of the Company or Merger Sub shall not revert or in any way be
impaired by reason of the Merger, (iii) all rights of creditors and all
liens on any property of the Company and Merger Sub shall be preserved
unimpaired, and (iv) the Surviving Corporation shall be liable for all the
obligations of the Company and Merger Sub, and any claim existing, or
action or proceeding pending, by or against either of them, may be
prosecuted to judgment with the right of appeal, as if the Merger had not
taken place.
(d) If, at any time after the Effective Time, the Surviving
Corporation shall consider or be advised that any deeds, bills of sale,
assignments, assurances or any other actions
2
8
or things are necessary or desirable to vest, perfect or confirm of record
or otherwise in the Surviving Corporation its right, title or interest in,
to or under any of the rights, properties, or assets of the Company or
Merger Sub acquired or to be acquired as a result of, or in connection
with, the Merger or to otherwise carry out this Agreement, the officers
and directors of the Surviving Corporation shall and will be authorized to
execute and deliver, in the name and on behalf of the parties hereto or
otherwise, all such deeds, bills of sale, assignments and assurances and
to take and do, in the name and on behalf of such parties or otherwise,
all such other actions and things as may be necessary or desirable to
vest, perfect or confirm any and all right, title and interest in, to and
under such rights, properties or assets in the Surviving Corporation or
otherwise to carry out this Agreement.
SECTION 1.2. Merger Consideration. At the Effective Time, by virtue
of the Merger and without any action on the part of the holder thereof:
(a) each share of the Company Common Stock held by the Company
as treasury stock prior to the Effective Time shall be canceled, retired,
and shall cease to exist, and no payment shall be made with respect
thereto;
(b) each share of common stock of Merger Sub issued and
outstanding immediately prior to the Effective Time shall be converted
into and become one share of common stock of the Surviving Corporation
held by Aperian with the same rights, powers and privileges as the shares
so converted and such shares in the aggregate shall constitute the only
outstanding shares of capital stock of the Surviving Corporation; and
(c) Shareholders of Company Common Stock outstanding
immediately prior to the Effective Time ("Shares") shall, in return for
the exchange and cancellation of such Shares, receive their pro rata share
of the following: (i) cash equal to three million dollars ($3,000,000)
(the "Cash Consideration"), (ii) 2,698,430 shares of Aperian Common Stock,
and (iii) 8,396,077 shares of Aperian Preferred Stock with the rights and
preferences set forth on the Certificate of Designation set forth in
Exhibit 1.2(c). One million five hundred thousand dollars ($1,500,000) of
the Cash Consideration shall be paid at Closing by wire transfer of
immediately available funds. Subject to Section 5 hereof, the remaining
$1,500,000 portion of the Cash Consideration (the "Set-off Amount"), if
any, shall be paid in twelve equal monthly installments commencing seven
months after Closing.
SECTION 1.3. Options and Warrants.
(a) At the Effective Time, each holder of a Company Option
then outstanding to the Company's Stock Option Plan ("Plan"), whether or
not such Company Option is exercisable at such time, and whether or not
such Company Option is vested at such time, shall be entitled, in exchange
for the termination of such Company Option, to receive an option to
purchase such number of Shares of Aperian Common Stock as are set forth on
Exhibit 1.3, at the per Share purchase price stated therein pursuant to
the Plan.
(b) All Aperian Options and Warrants shall remain outstanding
on the same terms and conditions as existed prior to the Merger.
3
9
ARTICLE 2
CERTIFICATES, BYLAWS, DIRECTORS AND OFFICERS
SECTION 2.1. Certificate of Incorporation of Surviving Corporation.
The Certificate of Incorporation of Merger Sub in effect at the Effective
Time shall be the Certificate of Incorporation of the Surviving
Corporation. Upon Closing of the Merger, the Certificate of Incorporation
of Merger Sub shall be amended to change the name of Merger Sub to
Fourthstage Technologies, Inc.
SECTION 2.2. Bylaws of Surviving Corporation. The bylaws of Merger
Sub in effect at the Effective Time shall be the bylaws of the Surviving
Corporation until amended in accordance with the applicable law.
SECTION 2.3. Directors and Officers of Surviving Corporation. From
and after the Effective Time, until successors are duly elected or
appointed and qualified in accordance with applicable law, (a) ▇▇▇▇▇ ▇▇▇▇▇
(Chairman), ▇▇▇▇▇▇ ▇▇▇▇▇, and ▇▇▇▇▇ ▇▇▇▇▇▇▇ shall be the directors of the
Surviving Corporation, and (b) the officers of Company at the Effective
Time shall be the officers of the Surviving Corporation.
SECTION 2.4. Bylaws of Aperian. The Bylaws of Aperian in effect at
the Effective Time shall be as set forth on Exhibit 2.4, attached hereto,
until amended in accordance with the applicable law.
SECTION 2.5. Directors and Officers of Aperian. As of the Effective
Time, Aperian shall reduce the size of its Board of Directors to a total
of seven (7) persons. From and after the Effective Time, until their
successors are duly elected or appointed and qualified in accordance with
applicable law, (a) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ (Chairman) and ▇▇▇▇▇ ▇▇▇▇▇ (Vice
Chairman) shall serve as the directors of Aperian, and (b) the officers of
Aperian at the Effective Time shall be ▇▇▇▇▇▇ ▇▇▇▇▇ (Chairman and co-Chief
Executive Officer), ▇▇▇▇▇ ▇▇▇▇▇ (Vice Chairman, President and co-Chief
Executive Officer), ▇▇▇▇▇ ▇▇▇▇▇ (Executive Vice President and Chief
Operating Officer), ▇▇▇▇ ▇▇▇▇▇▇▇▇ (Vice President - Chief Financial
Officer), ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (Vice President - New Markets), Miles ▇▇▇▇▇ (Vice
President - Corporate Communication, Marketing), ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (Vice
President - General Counsel, Secretary), ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (Vice President
- Accounting), ▇▇▇▇ ▇▇▇▇▇ (Vice President - Technology Development), and
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (Vice President - Sales).
SECTION 2.6. Composition of Nominating and Governance Committee of
Aperian. From and after the Effective Time, until their successors are
duly elected or appointed and qualified in accordance with applicable law,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ shall serve as the members of the
Nominating and Governance Committee of the Board of Directors of Aperian,
with such Committee to be chaired by ▇▇▇▇▇ ▇▇▇▇▇.
4
10
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY AND FOURTHSTAGE SHAREHOLDERS
The Company and Fourthstage Shareholders jointly and severally
represent and warrant to Aperian that, except as otherwise disclosed on
the disclosure schedules delivered on or prior to the date hereof to
Aperian by the Company (collectively, the "Company Disclosure Schedule"):
SECTION 3.1. Corporate Existence and Power. The Company is a
corporation duly incorporated, validly existing and in good standing under
the laws of the State of Arizona, and has all corporate powers and all
licenses, authorizations, consents and approvals required to carry on its
business as now conducted other than any such licenses, authorizations,
permits, registrations, consents and approvals the failure of which to
have would not reasonably be expected to have a Company Material Adverse
Effect (as defined below). The Company is duly qualified to do business as
a foreign corporation and is in good standing in each jurisdiction where
the character of the property owned or leased by it or the nature of its
activities makes such qualification necessary, except for those
jurisdictions where the failure to be so qualified would not reasonably be
expected to have a Company Material Adverse Effect. The Company has
heretofore delivered to Aperian true and complete copies of the Company's
Articles of Incorporation and Bylaws as currently in effect. For purposes
of this Agreement, a "Company Material Adverse Effect" means a material
adverse effect on the assets, liabilities, business or operations of the
Company taken as a whole, or on the ability of Company to perform its
obligations hereunder. Notwithstanding anything to the contrary herein, a
Company Material Adverse Effect shall not include events, changes or
effects relating to or caused by (i) general economic or industry
conditions or (ii) the announcement or pendency of this Agreement or any
of the transactions or actions contemplated hereby.
SECTION 3.2. Subsidiaries. Except as set forth in Section 3.2 of the
Company Disclosure Schedule, the Company does not have and has never had
any subsidiaries or affiliated companies and does not otherwise own and
has never otherwise owned any shares of capital stock or any interest in,
or control, directly or indirectly, any other corporation, partnership,
association, joint venture or other business entity.
SECTION 3.3. Corporate Records. The corporate minute books, transfer
books and stock ledgers of the Company which have been made available to
Aperian are complete in all material respects.
SECTION 3.4. Corporate Authorization.
(a) The execution, delivery and performance by the Company of
this Agreement and the consummation by the Company of the transactions
contemplated hereby are within the Company's corporate powers, subject to
the conditions set forth in this Agreement. This Agreement, the Merger,
and the transactions contemplated hereby have been duly authorized by all
necessary corporate action. Assuming due authorization, execution and
delivery of this Agreement by Aperian and Merger Sub, this Agreement
constitutes a valid and
5
11
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting
generally the enforcement of creditors rights and by the availability of
equitable remedies.
(b) The Company's Board of Directors by a unanimous written
consent or at a meeting duly called and held, has, by majority vote of the
members of the Company's Board of Directors present at such meeting, duly
and validly approved, and taken all corporate actions required to be taken
by the Company's Board of Directors for the consummation of, the Merger
and the other transactions contemplated hereby. Without limiting the
generality of the foregoing, the Company's Board of Directors has (i)
determined that the Merger is fair and in the best interests of the
Company and its shareholders, (ii) adopted this Agreement in accordance
with the Arizona law, and (iii) directed that this Agreement and the
Merger be submitted to the shareholders of the Company for their adoption
and approval and resolved to recommend that the shareholders of the
Company approve and adopt this Agreement and the Merger.
(c) The Company's shareholders, by a unanimous written
consent, have duly and validly approved the Merger and the other
transactions contemplated hereby.
SECTION 3.5. Governmental Authorization. The execution, delivery and
performance by the Company and the Fourthstage Shareholders of this
Agreement and the consummation of the Merger by the Company require no
action by or in respect of, or filing with, any court or tribunal or
administrative governmental or regulatory body, agency, official or
authority other than (a) the filing of a certificate of merger in
accordance with the ABCL and DGCL; (b) compliance with any applicable
requirements of the Securities Act of 1933, as amended (the "Securities
Act"); (c) compliance with any applicable foreign or state securities or
blue sky laws; (d) compliance with state takeover, antitrust and
competition law filings and approvals; and (e) such actions by or filings
with governmental bodies, agencies, officials or authorities, the failure
of which to obtain or make would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect.
SECTION 3.6. Non-Contravention. The execution, delivery and
performance by the Company and the Fourthstage Shareholders of this
Agreement and the consummation by the Company and the Fourthstage
Shareholders of the transactions contemplated hereby do not and will not,
(a) contravene or conflict with the Articles or Certificate of
Incorporation or Bylaws (or similar governing documents) of the Company,
or (b) except for any such matters that do not have, and would not
reasonably be expected to have, a Company Material Adverse Effect or
except as set forth on Section 3.6 of the Company Disclosure Schedule, (i)
assuming compliance with the matters referred to in Section 3.5,
contravene or conflict with or constitute a violation of any provision of
any law, rule, regulation, judgment, injunction, order or decree binding
upon or applicable to the Company or any of their respective assets, (ii)
result in a violation or breach of, or constitute a default under, or give
rise to a right of termination, amendment, cancellation or acceleration of
any right or obligation of the Company and/or the Fourthstage Shareholders
or to a loss of any benefit to which the Company is entitled under any
provision of any note, bond, mortgage, indenture, lease, agreement,
contract or other instrument binding upon the Company and the Fourthstage
Shareholders or to which the Company and/or the Fourthstage Shareholders
6
12
is a party or by which it is affected or any license, franchise, permit or
other similar authorization held by the Company or to which the Company is
a party or by which it is affected, or (iii) result in the creation or
imposition of any Lien (as defined below) on any asset of the Company. For
purposes of this Agreement, "Lien" means, with respect to an asset, any
mortgage, lien, pledge, charge, security interest or encumbrance of any
kind in respect of such asset.
SECTION 3.7. Capitalization.
(a) The authorized capital stock of the Company consists of
50,000,000 shares of Company Common Stock. There are issued and
outstanding 6,780,000 shares of Company Common Stock and Company Options
(all documents with respect to which have been made available to Aperian
for inspection) to purchase 2,235,000 shares of Company Common Stock.
(b) Except as set forth in Section 3.7(b) of the Company
Disclosure Schedule, all outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid
and nonassessable and were issued free of preemptive or similar rights and
in compliance with all applicable state and federal securities laws and
regulations. Except as set forth in this Section 3.7, there are
outstanding (i) no other shares of capital stock or other voting
securities of the Company, (ii) no securities of the Company convertible
into or exchangeable for shares of capital stock or voting securities of
the Company, and (iii) no other options, warrants, calls, rights
(including preemptive rights), commitments or any other agreement of any
character to acquire from the Company, and no obligation of the Company to
issue, transfer, dispose of, sell, purchase, redeem or otherwise acquire
(or to refrain from doing any of the foregoing), any capital stock, voting
securities or securities convertible into or exchangeable for capital
stock or voting securities of the Company (the items in clauses (i), (ii)
and (iii) being referred to collectively as the "Company Securities").
(c) All of the Company Options have been issued pursuant to
the Plan. Section 3.7(c) of the Company Disclosure Schedule sets forth a
true, correct and complete list, as of the date of this Agreement, of the
name of each holder of outstanding Company Options, the exercise price
therefor and the number of shares of Company Common Stock exercisable
therefor, and indicating the portion of such Company Options that are
vested.
(d) Except as set forth on Section 3.7(d) of the Company
Disclosure Schedule and except for the Company Options, there are no
shareholders agreements, investors' rights agreements, voting trusts or
other agreements or understandings to which the Company is a party or by
which the Company is bound relating to the voting of, or placing any
restrictions on, any shares of the capital stock of the Company. Except as
provided in Section 1.2 of this Agreement, no consideration is required to
be paid to any Person as a result of its ownership of any equity of the
Company with respect to the Merger.
(e) None of the securities of the Company are registered or
required to be registered under the Securities Act and/or the Exchange
Act.
SECTION 3.8. Company Financial Statements. The Company's unaudited
balance sheet as of February 28, 2001 (the "Company Balance Sheet Date"),
unaudited balance sheet as
7
13
of December 31, 2000, and the related unaudited statements of operations,
stockholders' deficit and cash flows for the period from January 1, 2001
to February 28, 2001, and for the twelve-month period ended December 31,
2000 (collectively, the "Company Financials"), are correct in all material
respects and have been prepared in accordance with generally accepted
accounting principles ("GAAP") applied on a basis consistent throughout
the periods indicated and consistent with each other. The Company
Financials fairly present the financial condition and operating results of
the Company as of the dates and during the periods indicated therein.
SECTION 3.9. Absence of Certain Changes. Except as described in
Section 3.9 of the Company Disclosure Schedule, since the Company Balance
Sheet Date, the Company has conducted its business in the ordinary and
usual course and there has not been:
(a) any declaration, setting aside or payment of any dividend
or other distribution with respect to any shares of capital stock of the
Company, or any repurchase, redemption or other acquisition by the Company
of any outstanding shares of capital stock or other ownership interests
in, the Company;
(b) any incurrence, assumption or guarantee by the Company of
any outstanding amount of indebtedness for borrowed money or any other
liabilities of any nature, whether or not accrued, contingent or
otherwise, other than in the ordinary course of business;
(c) any transaction or commitment made, or any contract or
agreement entered into, by the Company relating to its assets or business
(including the acquisition or disposition of any assets) or any loss or
relinquishment by the Company of any material contract or other material
right, other than transactions and commitments in the ordinary course of
business in accordance with its customary practices;
(d) any material change in any method of accounting or
accounting practice or policy or application thereof by the Company,
except as required by GAAP;
(e) any increase in (or commitment, oral or written, to
increase) the rate or terms (including, without limitation, any
acceleration of the right to receive payment) of compensation payable or
to become payable by the Company to its directors, officers, employees or
consultants, except increases occurring in the ordinary course of
business; or
(f) any increase in (or commitment, oral or written, to
increase) the rate or terms (including, without limitation, any
acceleration of the right to receive payment) of any bonus, insurance,
pension or other employee benefit plan or contract, payment or arrangement
made to, for or with any director, officer, employee or consultant of the
Company, except increases occurring in the ordinary course of business.
SECTION 3.10. Litigation. Except as set forth in Section 3.10 of the
Company Disclosure Schedule, or as otherwise disclosed to Aperian, there
is no material action, suit or proceeding of any nature pending or, to the
best of the Company's knowledge, threatened against the Company, its
properties or any of its officers or directors, in their respective
capacities as such, or any Fourthstage Shareholders related to their
ownership of Company Common Stock.
8
14
SECTION 3.11. Employee Benefit Plans. Except as set forth in Section
3.11 of the Company Disclosure Schedule, the Company does not have any
employee pension benefit plan as defined in Section 3(2) of ERISA, that
would be subject to the Federal ERISA laws.
SECTION 3.12. Taxes. All federal, state and other returns and
reports required to be filed by the Company have been duly and timely
filed by the Company and, except as set forth in Section 3.12 of the
Company Disclosure Schedule, all material taxes and other assessments and
levies (including all interest and penalties) including, without
limitation, income, franchise, real estate, sales, gross receipts, use and
services taxes, and employment and employee withholding taxes, owed by the
Company have been paid in full by the Company unless being contested in
good faith. Except as set forth in Section 3.12 of the Company Disclosure
Schedule, all such taxes and other assessments and levies which the
Company is required by law to have withheld, collected or deposited have
been duly withheld and collected and deposited with the proper
governmental authorities or segregated and set aside for such payment, and
if so segregated and set aside, shall be so paid by the Company as
required by law.
SECTION 3.13. Compliance With Laws. Except as disclosed in Section
3.13 of the Company Disclosure Schedule, and except for any matter that
would not reasonably be expected to have a Company Material Adverse
Effect, the Company is not in violation of any applicable provisions of
any laws, statutes, ordinances or regulations.
SECTION 3.14. Finders' Fees. No investment banker, broker, finder or
other intermediary has been retained by or is authorized to act on behalf
of the Company who would be entitled to any fee or commission upon
consummation of the transactions contemplated by this Agreement.
SECTION 3.15. Material Contracts. The Company is not in default of,
nor is in anticipatory breach of, any of its material contracts with third
parties, nor does the Company have any reason to believe that it will be
so in the future.
SECTION 3.16 Title to Assets. Except as set forth in Section 3.16 of
the Company Disclosure Schedule and except where the failure to have a
good, valid and indefeasible title would not reasonably be expected to
have a Company Material Adverse Effect, the Company has good, valid and
indefeasible title to all of the assets purported to be owned by it,
whether real, personal or mixed. All property owned by the Company is free
and clear of restrictions on or conditions to transfer or assignment, and
free and clear of mortgages, liens, pledges, charges, encumbrances,
equities, claims, easements, rights of way, covenants, conditions or
restrictions, except for those disclosed in the Company Financial
Statements, except for matters disclosed on any policies of title
insurance issued to the Company with respect to any facilities and made
available to Aperian and except for those not reasonably expected to have
a Company Material Adverse Effect.
SECTION 3.17. Investment Intent. Each Fourthstage Shareholder is
acquiring the Aperian Common Stock and the Aperian Preferred Stock
pursuant hereto for his own account and not with a view to, or for offer
or resale in connection with, any distribution thereof (within the meaning
of Section 2(11) of the Securities Act), nor with any present intention of
distributing
9
15
or selling the same; and, other than pursuant to the provisions of the
Registration Rights Agreement, no Fourthstage Shareholder has any present
or contemplated agreement, undertaking, arrangement, obligation,
indebtedness, or commitment providing for the disposition thereof.
SECTION 3.18. Sophisticated Investor Status. Each Fourthstage
Shareholder is an Accredited Investor, as such term is defined in Rule 501
promulgated under the Securities Act. Each Fourthstage Shareholder
acknowledges and agrees that the acquisition of Aperian Common Stock and
the Aperian Preferred Stock pursuant to this Agreement carries a certain
degree of risk and that he has taken full cognizance of and understands
all of the risks related to an acquisition of Aperian Common Stock and the
Aperian Preferred Stock.
SECTION 3.19. Legend. Each Fourthstage Shareholder understands,
acknowledges, and agrees that a legend will be placed on any certificates
evidencing the Aperian Common Stock and the Aperian Preferred Stock
delivered hereunder in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
STATE SECURITIES LAWS OF ANY STATE. WITHOUT SUCH
REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD, PLEDGED,
HYPOTHECATED, OR OTHERWISE TRANSFERRED AT ANY TIME
WHATSOEVER, EXCEPT UPON DELIVERY TO APERIAN, INC., A
DELAWARE CORPORATION (THE "COMPANY"), OF AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS
NOT REQUIRED FOR SUCH TRANSFER AND/OR THE SUBMISSION TO
THE COMPANY OF SUCH OTHER EVIDENCE AS MAY BE
SATISFACTORY TO THE COMPANY THAT ANY SUCH TRANSFER WILL
NOT BE IN VIOLATION OF THE SECURITIES ACT OF 1933, AS
AMENDED, AND/OR APPLICABLE STATE SECURITIES LAWS, AND/OR
ANY RULE OR REGULATION PROMULGATED THEREUNDER.
SECTION 3.20. No Other Representations. Neither the Company nor any
Person affiliated therewith shall be deemed to have made to Aperian or any
other Person any representation or warranty other than as expressly made
by the Company in this Article 3. Neither the Company nor any Person
affiliated therewith makes any representation or warranty regarding any
projections, estimates, budgets or forward-looking information heretofore
delivered to or made available to Aperian or any other Person regarding
future revenues, expenses or expenditures, future results of operation or,
except as expressly covered by a representation and warranty contained in
Article 3 hereof, any other information or documents made available to
Aperian or any other Person with respect to the Company.
10
16
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF APERIAN AND MERGER SUB
Aperian and Merger Sub jointly and severally represent and warrant
to the Company that, except as otherwise disclosed on a disclosure
schedule delivered on or prior to the date hereof to the Company by
Aperian (the "Aperian Disclosure Schedule") or any Aperian SEC Reports (as
defined herein):
SECTION 4.1. Corporate Existence and Power. Aperian is a corporation
duly incorporated, validly existing and in good standing under the laws of
the State of Delaware and Merger Sub is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of
Delaware and each of Aperian and Merger Sub has all corporate powers and
all governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted other than any such licenses,
authorizations, permits, registrations, consents and approvals the failure
of which to have would not reasonably be expected to have a Aperian
Material Adverse Effect (as defined below). Each of Aperian and Merger Sub
is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where the character of the property owned or
leased by it or the nature of its activities makes such qualification
necessary, except for those jurisdictions where the failure to be so
qualified would not reasonably be expected to have a Aperian Material
Adverse Effect. Aperian has heretofore delivered to the Company true and
complete copies of the Certificate of Incorporation and Bylaws as
currently in effect for each of Aperian and Merger Sub. For purposes of
this Agreement, an "Aperian Material Adverse Effect" means a material
adverse effect on the assets, liabilities, business or operations of
Aperian and/or any of the Aperian Subsidiaries (as defined below) taken as
a whole, or on the ability of Aperian to perform its obligations
hereunder. The Aperian Disclosure Schedule contains a true and complete
list of all of Aperian's subsidiaries (the "Aperian Subsidiaries").
Notwithstanding anything to the contrary herein, an Aperian Material
Adverse Effect shall not include events, changes or effects relating to or
caused by (i) general economic or industry conditions or (ii) the
announcement or pendency of this Agreement or any of the transactions or
actions contemplated hereby.
SECTION 4.2. Subsidiaries. Except as set forth in Section 4.2 of the
Aperian Disclosure Schedule, Aperian does not have and has never had any
subsidiaries or affiliated companies and does not otherwise own and has
never otherwise owned any shares of capital stock or any interest in, or
control, directly or indirectly, any other corporation, partnership,
association, joint venture or other business entity.
SECTION 4.3. Corporate Records. The corporate minute books, transfer
books and stock ledgers of Aperian are complete and accurate in all
material respects.
SECTION 4.4. Corporate Authorization.
(a) The execution, delivery and performance by Aperian and
Merger Sub of this Agreement and the consummation by Aperian and Merger
Sub of the transactions
11
17
contemplated hereby are within Aperian's and Merger Sub's corporate
powers, subject to the conditions set forth in this Agreement. This
Agreement, the Merger, and the transactions contemplated hereby have been
duly authorized by all necessary corporate action, except for approval by
Aperian's shareholders of the issuance of Aperian Common Stock upon the
conversion of Aperian Preferred Stock, which will be solicited as provided
herein. Assuming due authorization, execution and delivery of this
Agreement by the Company, this Agreement constitutes a valid and binding
agreement of Aperian and Merger Sub, enforceable against Aperian in
accordance with its terms, except as limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting
generally the enforcement of creditors rights and by the availability of
equitable remedies.
(b) Aperian's Board of Directors, at a meeting duly called and
held, has, by majority vote of the members of Aperian's Board of Directors
present at such meeting, duly and validly approved, and taken all
corporate actions required to be taken by Aperian's Board of Directors for
the consummation of, the Merger and the other transactions contemplated
hereby. Without limiting the generality of the foregoing, Aperian's Board
of Directors has (i) determined that the Merger is fair and in the best
interests of Aperian and its shareholders, (ii) received the opinion of
Tejas Securities Group, Inc., to the effect that the consideration to be
paid by Aperian in the Merger is fair to Aperian from a financial point of
view, (iii) adopted this Agreement in accordance with Delaware law, and
(iv) directed that this Agreement and the Merger be submitted to the
shareholders of Aperian for their adoption and approval and resolved to
recommend that the shareholders of Aperian approve and adopt this
Agreement and the Merger.
SECTION 4.5. Governmental Authorization. The execution, delivery and
performance by Aperian and Merger Sub of this Agreement and the
consummation of the Merger by Aperian and Merger Sub require no action by
or in respect of, or filing with, any court or tribunal or administrative
governmental or regulatory body, agency, official or authority other than
(a) the filing of a certificate of merger in accordance with the ABCL and
DGCL; (b) compliance with any applicable requirements of the Exchange Act
and the rules and regulations promulgated thereunder; (c) compliance with
any applicable requirements of the Securities Act; (d) compliance with any
applicable foreign or state securities or blue sky laws; (e) compliance
with state takeover, antitrust and competition law filings and approvals;
and (f) such actions by or filings with governmental bodies, agencies,
officials or authorities, the failure of which to obtain or make would not
reasonably be expected to have, individually or in the aggregate, an
Aperian Material Adverse Effect.
SECTION 4.6. Non-Contravention. The execution, delivery and
performance by Aperian and/or Merger Sub of this Agreement and the
consummation by Aperian and Merger Sub of the transactions contemplated
hereby do not and will not, (a) contravene or conflict with the Articles
or Certificate of Incorporation or Bylaws (or similar governing documents)
of Aperian and Merger Sub, or (b) except for any such matters that do not
have, and would not reasonably be expected to have, an Aperian Material
Adverse Effect or except as set forth on Section 4.6 of Aperian Disclosure
Schedule, (i) assuming compliance with the matters referred to in Section
4.5, contravene or conflict with or constitute a violation of any
provision of any law, rule, including, but not limited to, the Rules of
the Association as set forth in the National Association of Securities
Dealers Manual, regulation, judgment, injunction, order or decree
12
18
binding upon or applicable to Aperian and Merger Sub or any of their
respective assets, (ii) result in a violation or breach of, or constitute
a default under, or give rise to a right of termination, amendment,
cancellation or acceleration of any right or obligation of Aperian and
Merger Sub or to a loss of any benefit to which Aperian or Merger Sub is
entitled under any provision of any note, bond, mortgage, indenture,
lease, agreement, contract or other instrument binding upon Aperian and
Merger Sub or to which Aperian and Merger Sub is a party or by which it is
affected or any license, franchise, permit or other similar authorization
held by Aperian and Merger Sub or to which Aperian and Merger Sub is a
party or by which it is affected, or (iii) result in the creation or
imposition of any Lien (as defined below) on any asset of Aperian and
Merger Sub. For purposes of this Agreement, "Lien" means, with respect to
an asset, any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such asset. Notwithstanding anything
written in this Section 4.6, the representation regarding the compliance
of this Agreement and the transactions contemplated pursuant thereto, with
the Rules of Association of the National Association of Securities Dealers
Manual does not, and shall not, constitute a representation of a factual
matter but rather included herein for purposes of risk allocation and
shall only implicate Aperian's indemnity obligation associated therewith
SECTION 4.7. Aperian SEC Reports and Financial Statements. Aperian
has delivered to the Company true and complete copies of each registration
statement, report and proxy or information statement, including, without
limitation, its Annual Reports to Shareholders incorporated in material
part by reference in certain of such reports, in the form (including
exhibits and any amendments thereto) required to be filed with the
Securities and Exchange Commission (the "SEC") since January 1, 1999
(collectively, the "Aperian SEC Reports"). Except as set forth in the
Aperian Disclosure Schedule, as of the respective dates such Aperian SEC
Reports were filed or, if any such Aperian SEC Reports were amended, as of
the date such amendment was filed, each of the Aperian SEC Reports (i)
complied in all material respects with all applicable requirements of the
Securities Act and the Exchange Act, and the rules and regulations
promulgated thereunder, and (ii) did not 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 therein, in light of
the circumstances under which they were made, not misleading. Each of the
audited consolidated financial statements and unaudited consolidated
interim financial statements of Aperian (including any related notes and
schedules) included (or incorporated by reference) in its Annual Reports
on Form 10-KSB for each of the three fiscal years ended 1998, 1999 and
2000, when filed, and Quarterly Reports on Form 10-QSB for all interim
periods subsequent thereto (the "Aperian Financial Statements") fairly
present, in conformity with GAAP applied on a consistent basis (except as
may be indicated in the notes thereto), the consolidated financial
position of Aperian and the Aperian Subsidiaries as of its date and the
consolidated results of operations and cash flows for the period then
ended (subject to normal year-end adjustments in the case of any unaudited
interim financial statements). There has been no change in Aperian's
accounting policies or methods of making accounting estimates or changes
in estimates that are material to the Aperian Financial Statements, except
as described in the notes thereto.
13
19
SECTION 4.8. Capitalization.
(a) The authorized capital stock of Aperian consists of
75,000,000 shares of Aperian Common Stock. There are issued and
outstanding 13,559,954 shares of Aperian Common Stock and Aperian Options
(all documents with respect to which have been made available to Company
and Fourthstage Shareholders for inspection) to purchase 4,062,770 shares
of Aperian Common Stock. The authorized capital stock of Merger Sub
consists of 1,000 shares of Merger Sub Common Stock. There are outstanding
1,000 shares of Merger Sub Common Stock. Aperian owns all 1,000 Shares of
Merger Sub Common Stock.
(b) Except as set forth in Section 4.8 of Aperian Disclosure
Schedule, all outstanding shares of capital stock of Aperian and Merger
Sub have been duly authorized and validly issued and are fully paid and
nonassessable and were issued free of preemptive or similar rights and in
compliance with all applicable state and federal securities laws and
regulations. Except as set forth in this Section 4.8, there are
outstanding (i) no other shares of capital stock or other voting
securities of Aperian and Merger Sub, (ii) no securities of Aperian and
Merger Sub convertible into or exchangeable for shares of capital stock or
voting securities of Aperian and Merger Sub, and (iii) no other options,
warrants, calls, rights (including preemptive rights), commitments or any
other agreement of any character to acquire from Aperian and Merger Sub,
and no obligation of Aperian to issue, transfer, dispose of, sell,
purchase, redeem or otherwise acquire (or to refrain from doing any of the
foregoing), any capital stock, voting securities or securities convertible
into or exchangeable for capital stock or voting securities of Aperian
(the items in clauses (i), (ii) and (iii) being referred to collectively
as the "Aperian Securities").
(c) Except as set for in Section 4.8(c) of Aperian Disclosure
Schedule, all of Aperian Options were issued pursuant to Aperian's 2000
Stock Option Plan and 2000 Stock Incentive Plan. Section 4.8(c) of Aperian
Disclosure Schedule sets forth a true, correct and complete list, as of
the date of this Agreement, of the name of each holder of outstanding
Company Options, the exercise price therefor and the number of shares of
Company Common Stock exercisable therefor, and indicating the portion of
such Company Options that are vested.
(d) Except as set forth on Section 4.8(d) of Aperian
Disclosure Schedule and except for Aperian Options, there are no
shareholders agreements, investors' rights agreements, voting trusts or
other agreements or understandings to which Aperian is a party or by which
Aperian is bound relating to the voting of, or placing any restrictions
on, any shares of the capital stock of Aperian.
(e) The issuance of the 2,698,412 Shares of Aperian Common
Stock and 8,396,016 Shares of Aperian Preferred Stock has been duly
authorized by the Board of Directors of Aperian, and all of such shares
upon issuance will be validly issued and will be fully paid and
non-assessable, and will be issued in compliance with all applicable state
and federal securities laws and regulations. Aperian has, and will at all
applicable times reserve, a number of Shares of Common Stock sufficient
for the conversion of the Preferred Stock in accordance with its terms.
SECTION 4.9. Aperian Financial Statements. Aperian's unaudited
balance sheet as of February 28, 2001 (the "Aperian Balance Sheet Date"),
audited balance sheet as of March 31,
14
20
2000, and the related audited statements of operations, stockholders'
deficit and cash flows for the periods from April 1, 1999 to March 31,
2000, and unaudited statements of operations for the eleven months ended
February 28, 2001 (collectively, the "Aperian Financials"), are correct in
all material respects and have been prepared in accordance with GAAP
applied on a basis consistent throughout the periods indicated and
consistent with each other. The Aperian Financials fairly present the
financial condition and operating results of Aperian as of the dates and
during the periods indicated therein.
SECTION 4.10. Absence of Certain Changes. Except as described in
Section 4.10 of Aperian Disclosure Schedule, since the Aperian Balance
Sheet Date, Aperian and Aperian Subsidiaries have conducted their
respective businesses in the ordinary and usual course and there has not
been:
(a) any declaration, setting aside or payment of any dividend
or other distribution with respect to any shares of capital stock of
Aperian, or any repurchase, redemption or other acquisition by Aperian of
any outstanding shares of capital stock or other ownership interests in,
Aperian;
(b) any incurrence, assumption or guarantee by Aperian or any
of Aperian Subsidiaries of any outstanding amount of indebtedness for
borrowed money or any other liabilities of any nature, whether or not
accrued, contingent or otherwise, other than in the ordinary course of
business;
(c) any transaction or commitment made, or any contract or
agreement entered into, by Aperian relating to their respective assets or
businesses (including the acquisition or disposition of any assets) or any
loss or relinquishment by Aperian of any material contract or other
material right, other than transactions and commitments in the ordinary
course of business in accordance with their customary practices;
(d) any material change in any method of accounting or
accounting practice or policy or application thereof by Aperian, except as
required by GAAP;
(e) any increase in (or commitment, oral or written, to
increase) the rate or terms (including, without limitation, any
acceleration of the right to receive payment) of compensation payable or
to become payable by Aperian to their directors, officers, employees or
consultants, except increases occurring in the ordinary course of
business; or
(f) any increase in (or commitment, oral or written, to
increase) the rate or terms (including, without limitation, any
acceleration of the right to receive payment) of any bonus, insurance,
pension or other employee benefit plan or contract, payment or arrangement
made to, for or with any director, officer, employee or consultant of
Aperian, except increases occurring in the ordinary course of business.
SECTION 4.11. Litigation. Except as set forth in Section 4.11 of
Aperian Disclosure Schedule, there is no material action, suit or
proceeding of any nature pending or, to the best of
15
21
Aperian's knowledge, threatened against Aperian, its properties or any of
its officers or directors, in their respective capacities as such.
SECTION 4.12. Employee Benefit Plans. Except as described in Section
4.12 of Aperian Disclosure Schedule, Aperian does not have any employee
pension benefit plans, as defined in Section 3(2) of ERISA, plans that
would be covered by the Federal ERISA laws.
SECTION 4.13. Taxes. All federal, state and other returns and
reports required to be filed by Aperian have been duly and timely filed by
Aperian and, except as set forth in Section 4.13 of Aperian Disclosure
Schedule, all material taxes and other assessments and levies (including
all interest and penalties) including, without limitation, income,
franchise, real estate, sales, gross receipts, use and services taxes, and
employment and employee withholding taxes, owed by Aperian have been paid
in full by Aperian unless being contested in good faith. Except as set
forth in Section 4.13 of Aperian Disclosure Schedule, all such taxes and
other assessments and levies which Aperian is required by law to have
withheld, collected or deposited have been duly withheld and collected and
deposited with the proper governmental authorities or segregated and set
aside for such payment, and if so segregated and set aside, shall be so
paid by Aperian as required by law.
SECTION 4.14. Compliance With Laws. Except as disclosed in Section
4.14 of Aperian Disclosure Schedule, and except for any matter that would
not reasonably be expected to have a Company Material Adverse Effect,
Aperian is not in violation of any applicable provisions of any laws,
statutes, ordinances or regulations.
SECTION 4.15. Takeover Statutes. No "fair price," "moratorium" or
"control share acquisition" or other similar anti-takeover statute or
regulation (each a "Takeover Statute") or any applicable anti-takeover
provision in Aperian's Certificate of Incorporation or Bylaws is
applicable to Aperian, this Agreement, the Merger or any of the other
transactions contemplated by this Agreement.
SECTION 4.16. Finders' Fees. Except as described in Section 4.16 of
Aperian Disclosure Schedule, no investment banker, broker, finder or other
intermediary has been retained by or is authorized to act on behalf of
Aperian who would be entitled to any fee or commission upon consummation
of the transactions contemplated by this Agreement.
SECTION 4.17. Material Contracts. Aperian is not in default of, nor
is in anticipatory breach of, any of its material contracts with third
parties, nor does Aperian have any reason to believe that it will be so in
the future.
SECTION 4.18. Title to Assets. Except as set forth in Section 4.18
of Aperian Disclosure Schedule and except where the failure to have a
good, valid and indefeasible title would not reasonably be expected to
have a Company Material Adverse Effect, Aperian has good, valid and
indefeasible title to all of the assets purported to be owned by it,
whether real, personal or mixed. All property owned by Aperian is free and
clear of restrictions on or conditions to transfer or assignment, and free
and clear of mortgages, liens, pledges, charges, encumbrances, equities,
claims, easements, rights of way, covenants, conditions or restrictions,
16
22
except for those disclosed in Aperian Financial Statements, except for
matters disclosed on any policies of title insurance issued to Aperian
with respect to any facilities and made available to Aperian and except
for those not reasonably expected to have an Aperian Material Adverse
Effect.
SECTION 4.19. No Other Representations. Neither Aperian nor any
Person affiliated therewith shall be deemed to have made to Aperian or any
other Person any representation or warranty other than as expressly made
by Aperian in this Article 4. Neither Aperian nor any Person affiliated
therewith makes any representation or warranty regarding any projections,
estimates, budgets or forward-looking information heretofore delivered to
or made available to Aperian or any other Person regarding future
revenues, expenses or expenditures, future results of operation or, except
as expressly covered by a representation and warranty contained in Article
3 hereof, any other information or documents made available to Aperian or
any other Person with respect to Aperian.
SECTION 4.20. Financing. Aperian has, and until the Effective Time
will continuously have, sufficient funds or binding commitments therefor,
subject to no material conditions other than those contained herein, in
amounts sufficient to fund all amounts payable hereunder.
ARTICLE 5
INDEMNIFICATION
SECTION 5.1. Survival of Representations and Warranties. The
representations and warranties of Company, Fourthstage Shareholders,
Aperian and Merger Sub in this Agreement or in any instrument delivered
pursuant to this Agreement shall terminate on the six (6) month
anniversary of the Closing (the "Expiration Date").
SECTION 5.2. Company Indemnity; Set-off Arrangements.
(a) Set-off Amount. The Set-off Amount, as defined in Section
1.2(c), shall be available to compensate Aperian for any claims, losses,
liabilities, damages, deficiencies, costs and expenses, including
reasonable attorneys' fees and expenses, and expenses of investigation and
defense (hereinafter individually a "Loss" and collectively "Losses")
incurred by Aperian directly or indirectly as a result of any inaccuracy
or breach of a representation or warranty of Company or Fourthstage
Shareholders contained in Article 3 (as modified by the Company Disclosure
Schedule) or any breach of any covenant or agreement of Company or
Fourthstage Shareholders contained in this Agreement. Aperian may not
deduct any funds from the Set-off Amount unless and until Board
Certificates (as defined in paragraph (c) below) identifying Losses, the
aggregate amount of which exceed $75,000, have been delivered to the
Shareholder Agent as provided in paragraph (c); in such case, Aperian may
recover from the Set-off Amount the amount of its Losses that exceed
$75,000.
(b) Set-off Period; Distribution Upon Termination of Set-off
Period. Subject to the following requirements, the Set-off Amount shall be
available for the assertion of claimed
17
23
Losses immediately following the Effective Time and until 5:00 p.m.
Arizona time, on the Expiration Date (the "Set-off Period"); provided that
the Set-off Period shall not terminate with respect to such amount (or
some portion thereof), that together with the aggregate amount remaining
in the Set-off Amount is necessary in the reasonable judgment of a
majority of the Aperian Directors, subject to the objection of the
Shareholder Agent and the subsequent arbitration of the matter in the
manner provided in Section 5.2(d) hereof, to satisfy any pending
unsatisfied claims concerning facts and circumstances existing prior to
the termination of such Set-off Period specified in any Board Certificate
delivered to the Shareholder Agent prior to termination of such Set-off
Period. As soon as the Set-off Period has terminated and all such claims
have been resolved, Aperian shall deliver to the Fourthstage Shareholders
the remaining portion of the Set-off Amount not required to satisfy such
pending unsatisfied claims. Deliveries of Set-off Amounts to the
Fourthstage Shareholders pursuant to this Section 5.2(b) shall be made in
proportion to their respective original allocations of the Cash
Contribution as set forth in Article 2.
(c) Claims Upon Set-off Amount/Objections to Claims. Aperian
may make a claim against the Set-off Amount by providing a Board
Certificate to the Shareholder Agent. Upon receipt by the Shareholder
Agent at any time on or prior to the expiration of the Set-off Period of a
certificate signed by a majority of the Aperian Directors not including
those directors nominated by the Aperian Preferred Shareholders pursuant
to Section 6.6 (a "Board Certificate"): (i) stating that Aperian has paid
or properly accrued or reasonably anticipates that it will have to pay or
accrue Losses, and (ii) specifying in reasonable detail the individual
items of Losses included in the amount so stated, the date each such item
was paid or properly accrued, or the basis for such anticipated liability,
and the nature of the misrepresentation or breach of warranty to which
such item is related, the Shareholder Agent shall have the right to
dispute such claim by providing written objection to such claim within
thirty (30) days of receipt of such Board Certificate. Board Certificates
not disputed within such time shall be deemed accepted by the Shareholder
Agent and shall reduce the Set-off Amount accordingly.
(d) Resolution of Conflicts; Arbitration.
(i) If the Shareholder Agent shall object in writing to
any claim or claims made in any Board Certificate a Fourthstage
Shareholder has, the Shareholder Agent and Aperian shall attempt in good
faith to agree upon the rights of the respective parties with respect to
each of such claims. If the Shareholder Agent and Aperian should so agree,
a memorandum setting forth such agreement shall be prepared and signed by
both parties.
(ii) If no such agreement can be reached after good
faith negotiation, either Aperian or the Shareholder Agent may demand
arbitration of the matter unless the amount of the damage or loss is at
issue in pending litigation with a third party, in which event arbitration
shall not be commenced until such amount is ascertained or both parties
agree to arbitration; and in either such event the matter shall be settled
by arbitration conducted by one arbitrator. The American Arbitration
Association (the "AAA") shall choose the arbitrator. Each party to the
arbitration shall have the right to a single objection to an arbitrator
proposed by the AAA. The arbitrator shall set a limited time period and
establish procedures designed to reduce the cost and time for discovery
while allowing the parties an opportunity, adequate in the sole judgment
of the
18
24
arbitrator, to discover relevant information from the opposing parties
about the subject matter of the dispute, provided that not more than two
depositions may be noticed by any party to the arbitration. The arbitrator
shall rule upon motions to compel or limit discovery and shall have the
authority to impose sanctions, including attorneys fees and costs, to the
extent as a court of competent law or equity, should the arbitrator
determine that discovery was sought without substantial justification or
that discovery was refused or objected to without substantial
justification or that discovery was refused or objected to without
substantial justification. The arbitration hearing shall be held in a
single hearing (which may continue for consecutive days). The decision of
the arbitrator as to the validity and amount of any claim in such Board
Certificate shall be binding and conclusive upon the parties to this
Agreement, and notwithstanding anything in Section 5.2 hereof, Aperian
shall be entitled to act in accordance with such decision and make or
withhold payments out of the Set-off Amount in accordance therewith. Such
decision shall be written and shall be supported by written findings of
fact and conclusions which shall set forth the award, judgment, decree or
order awarded by the arbitrator.
(iii) Judgment upon any award rendered by the arbitrator
may be entered in any court having jurisdiction. Any such arbitration
shall be held in Phoenix, Arizona under the rules then in effect of the
AAA (including the rules for discovery thereunder). For purposes of this
Section 5.2(d), in any arbitration hereunder in which any claim or the
amount thereof stated in the Board Certificate is at issue, Aperian shall
be deemed to be the Non-Prevailing Party in the event that the arbitrator
awards Aperian less than the sum of one-half (1/2) of the disputed amount
plus any amounts not in dispute; otherwise, the Fourthstage Shareholders
as represented by the Shareholder Agent shall be deemed to be the
Non-Prevailing Party. The Non-Prevailing Party to an arbitration shall pay
its own expenses, the fees of each arbitrator, the administrative costs of
the arbitration, and the expenses, including without limitation,
reasonable attorneys' fees and costs, incurred by the other party to the
arbitration.
(e) Shareholder Agent of the Shareholders; Power of Attorney.
(i) In the event that the Merger is approved, effective
upon such vote, and without further act of any Fourthstage Shareholder,
▇▇▇▇▇ ▇▇▇▇▇ shall be appointed as agent and attorney-in-fact (the
"Shareholder Agent") for each Fourthstage Shareholder for and on behalf of
the Fourthstage Shareholders, to give and receive notices and
communications, to agree to, negotiate, enter into settlements and
compromises of, and demand arbitration and comply with orders of courts
and awards of arbitrators with respect to such claims, and to take all
actions necessary or appropriate in the judgment of Shareholder Agent for
the accomplishment of the foregoing.
(ii) The Shareholder Agent shall not be liable for any
act done or omitted hereunder as Shareholder Agent while acting in good
faith and in the exercise of reasonable judgment. The Fourthstage
Shareholders on whose behalf the Set-off Amount is held shall severally
indemnify the Shareholder Agent and hold the Shareholder Agent harmless
against any loss, liability or expense incurred without negligence or bad
faith on the part of the Shareholder Agent and arising out of or in
connection with the acceptance or administration of the Shareholder
Agent's duties hereunder, including the reasonable fees and expenses of
any legal counsel retained by the Shareholder Agent.
19
25
SECTION 5.3. Maximum Payments. The liability of each Fourthstage
Shareholder under the representations, warranties, covenants and
agreements of Company contained in this Agreement, including without
limitation pursuant to this Article 5 or otherwise for any claims under
law or at equity, regardless of the legal theory upon which such claims
are premised, shall be limited to such Fourthstage Shareholder's pro rata
portion of the Set-off Amount.
SECTION 5.4. Indemnification by Aperian. Aperian and Merger Sub
jointly and severally indemnify the Fourthstage Shareholders against, and
agree to hold the Fourthstage Shareholders harmless from, all losses,
liabilities and expenses (including but not limited to, reasonable fees
and expenses of counsel and expenses of investigation) incurred directly
or indirectly as a result of any inaccuracy or breach of any
representation or warranty contained in Article 4 (as modified by the
Aperian Disclosure Schedule) or any breach or failure to fulfill in any
respect any of Aperian's covenants, agreements or obligations under this
Agreement or under any document delivered in accordance with this
Agreement which is required to be fulfilled after the Closing. The
liability of Aperian under the representations, warranties, covenants and
agreement of Aperian contained in this Agreement, including without
limitation pursuant to this Article 5 or otherwise for any claims under
law or at equity, regardless of the legal theory upon which such claims
are premised, shall be limited to $15 million. However, the Company and
Fourthstage Shareholders shall not be entitled to recover for breaches of
representations, warranties, covenants and agreements of Aperian contained
in this Agreement, until the liability of Aperian by such breaches exceeds
$75,000 and in such case the Company and Fourthstage Shareholders may
recover only the amount that exceeds $75,000.
SECTION 5.5. Special Tax Indemnification. Aperian hereby agrees to
fully indemnify the Fourthstage Shareholders for any tax liabilities or
other expenses incurred as a result of the Merger failing to qualify as a
tax-free reorganization pursuant to Section 368 of the Internal Revenue
Code of 1986, as amended (the "Code"), if but for the failure of Aperian's
Shareholders to approve conversion of the Aperian Preferred Stock in
accordance with Section 6.1, the Merger would have qualified as a tax-free
reorganization pursuant to the Code. Such indemnification obligation shall
include the payment of an amount sufficient to pay any and all taxes due
with respect to indemnification payments made under this Section 5.5
("Gross Up Payment") and any taxes due with respect to the Gross Up
Payment. For those Fourthstage Shareholders entitled to receive special
tax indemnification pursuant to this Section 5.5, the grossed-up
indemnification payments shall be calculated at an assumed tax rate of
twenty-five percent (25%) for those Fourthstage Shareholders who recognize
long-term capital gains and thirty-five percent (35%) for those
Fourthstage Shareholders who recognize short-term capital gains.
Notwithstanding anything contained in this Section 5.5, Aperian makes no
representation or warranty that the Merger shall qualify as a tax-free
reorganization pursuant to the Code even if Aperian Shareholders approve
conversion of the Aperian Preferred Stock in accordance with Section 6.1.
SECTION 5.6. Indemnification Procedures. Claims for indemnification
under Section 5.4 or 5.5 may be asserted by the Shareholder Agent by
written notice to Aperian. Upon assertion of any such claim, the
Shareholder Agent asserting the claims and Aperian shall attempt in good
faith shall agree upon the rights of the respective parties with respect
to each of such claims. If the Shareholder Agent and Aperian should so
agree, a memorandum setting forth their agreement shall be prepared and
signed by both parties. If no such agreement can be reached
20
26
after good faith negotiation, either Aperian or the Shareholder Agent
asserting the claim may demand arbitration in accordance with the
procedures set forth in Section 5.2(d)(ii) and (iii).
SECTION 5.7. Resolution of Conflicts; Arbitration. Except for
actions seeking a preliminary restraining order, temporary injunction or
other remedy to maintain the status quo pending resolution of a dispute,
all disputes and claims between any of the parties to this Agreement shall
be resolved in accordance with the arbitration provisions set forth in
Article 5 of this Agreement. In any such arbitration proceeding, the
arbitrator shall be entitled to award compensatory or punitive damages, to
the fullest extent permitted by law.
ARTICLE 6
ADDITIONAL AGREEMENTS
SECTION 6.1. Stockholders' and Shareholders' Approval. Aperian shall
use its best efforts to obtain approval by its Shareholders of the
conversion of Aperian Preferred Stock into Aperian Common Stock and to
obtain approval of any required amendments to Aperian Stock Option Plans
needed to facilitate the conversion of Company Options pursuant to Section
1.3 herein, at a duly called meeting of Aperian Shareholders on or before
September 30, 2001. Aperian's Board of Directors will recommend approval
of the conversion in a proxy statement prepared and circulated in
accordance with applicable proxy regulations and will actively solicit
proxies in favor of conversion from Aperian Shareholders.
SECTION 6.2. Reasonable Efforts/Consents. Subject to the terms and
conditions provided in this Agreement, each of the parties hereto shall
use its reasonable efforts to take promptly, or cause to be taken, all
actions, and to do promptly, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate
and make effective the transactions contemplated hereby to obtain all
necessary waivers, consents and approvals and to effect all necessary
registrations and filings and to remove any injunctions or other
impediments or delays, legal or otherwise, in order to consummate and make
effective the transactions contemplated by this Agreement for the purpose
of securing to the parties hereto the benefits contemplated by this
Agreement.
SECTION 6.3. Additional Nasdaq Listing. Aperian shall take all
necessary steps, including the filing of an additional listing application
prior to the effectiveness of the Registration Statement contemplated in
the Registration Rights Agreement, to qualify for trading and listing on
Nasdaq all Aperian Common Stock issued to Fourthstage Shareholders at the
time of the Merger and to be issued on conversion of the Aperian Preferred
Stock.
SECTION 6.4. Closing Conditions. Each party shall undertake its best
efforts to satisfy the conditions to Closing stated in Article 7.
SECTION 6.5. ▇▇▇▇▇ Non-Compete. ▇▇▇▇▇ ▇▇▇▇▇ agrees that for a period
of one (1) year, he shall be restricted from accepting employment with, or
acting as a consultant, contractor, advisor or in any other capacity for,
a competitor of Aperian anywhere within the United States
21
27
of America. Should a court or other adjudicative body of competent
jurisdiction deem that this restrictive covenant exceeds the scope needed
to protect Aperian's legitimate financial and commercial interests, the
parties hereto authorize and request such court or adjudicative body to
amend and modify the scope of this Section 6.5 as needed.
SECTION 6.6. Board Representation. So long as any Aperian Preferred
Shares remain outstanding, but not later than July 15, 2002: (a) ▇▇▇▇▇
▇▇▇▇▇, or the successors in interest to his Common Stock, on behalf of the
former Shareholders of Fourthstage Technologies, Inc., shall have the
right to nominate three (3) individuals to serve on the Board, (b) the
Board shall consist of not more than seven (7) persons, and (c) the Board
shall undertake all actions necessary and appropriate to effect the
purposes of this Section 6.6.
ARTICLE 7
CONDITIONS TO THE MERGER
SECTION 7.1. Conditions to the Obligations of Each Party. The
obligations of the Company, Aperian and Merger Sub to consummate the
Merger are subject to the satisfaction or waiver at or prior to the
Closing of the following conditions:
(a) the transactions contemplated by this Agreement shall have
been approved by any federal, state, foreign or local governmental or
regulatory authority or self-regulatory body the approval of which is
required to permit the consummation thereof;
(b) no court, arbitrator or governmental body, agency or
official shall have issued any order or injunction and there shall not be
any statute, rule or regulation, restraining or prohibiting the
consummation of the Merger; provided that prior to invoking this
condition, each party shall use all commercially reasonable efforts to
have any such order, injunction, legal restraint or prohibition vacated;
(c) all actions by or in respect of or filings with any
governmental body, agency, official, or authority required to permit the
consummation of the Merger, shall have been obtained;
(d) Execution of employment agreements, substantially in the
form of Exhibit 7.1(d)(1) hereto, in form reasonably acceptable to the
Company and Aperian, as the case may be, shall have been duly executed and
delivered by each of the individuals listed on Exhibit 7.1(d)(2) hereto,
and shall be in full force and effect; and
(e) Aperian and each of the Fourthstage Shareholders shall
have executed and delivered the Registration Rights Agreement in the form
attached hereto as Exhibit 7.1(e).
SECTION 7.2. Conditions to Obligations of Aperian. The obligation of
Aperian to consummate the transactions contemplated by this Agreement
shall be subject to the satisfaction or waiver at or prior to the Closing
of the following additional conditions:
22
28
(a) The representations and warranties of the Company set
forth in Article 3 shall also be true and correct as of the Closing
(except to the extent that any change therein is as a result of the
transactions contemplated hereby) with the same effect as though made on
the date of the Closing;
(b) The Company shall have performed in all material respects
all obligations required to be performed by it under this Agreement at or
prior to the Effective Time;
(c) The Company shall have given all notices to, and obtained
all consents, approvals or authorizations of or from, any Person which may
be necessary to permit the consummation of the transactions contemplated
hereby (including, without limitation, any consents required under
contracts and agreements to which the Company is a party or by which the
Company or any of its assets may be bound, or which may be required to
permit the change of ownership of the Company); provided, however, that
the condition specified in this Section 7.2(c) shall not include any
required novations under any government contract or any notice, consent,
approval or authorization which if not obtained by the Company, would not
have a Company Material Adverse Effect;
(d) Aperian shall have received the opinions of the Company's
counsel, dated the Effective Time, substantially in the form of Exhibit
7.2(d) hereto; and
(e) Aperian shall have received a certificate dated as of the
date of the Closing and signed on behalf of Company by the Chief Executive
Officer and Chief Financial Officer of the Company, to the effect that the
conditions to Aperian's obligations set forth in Sections 7.2(a), (b) and
(c) have been satisfied.
SECTION 7.3. Conditions to Obligations of the Company. The
obligation of the Company to consummate the transactions contemplated by
this Agreement shall be subject to the satisfaction or waiver at or prior
to the Closing of the following additional conditions:
(a) The representations and warranties of Aperian set forth in
Article 4 shall also be true and correct in all material respects as of
the Closing (except to the extent that any change therein is as a result
of the transactions contemplated hereby) with the same effect as though
made on the date of the Closing;
(b) Aperian and Merger Sub shall have performed in all
material respects all obligations required to be performed by them under
this Agreement at or prior to the Effective Time;
(c) The Company shall have received the opinions of the
Aperian's counsel, dated the Effective Time, substantially in the form of
Exhibit 7.3(c) hereto;
(d) Aperian shall have adopted, effective as of the Effective
Time, the Bylaws attached hereto as Exhibit 2.4;
(e) Aperian shall have taken all actions necessary to amend
the Plan to include the Aperian Stock Options to be exchanged for Company
Stock Options; and
23
29
(f) The Company shall have received a certificate dated as of
the date of the Closing and signed on behalf of Aperian and Merger Sub by
the respective Chief Executive Officers and Chief Financial Officers of
each such entity, to the effect that the conditions to the Company's
obligations set forth in Sections 7.3(a), (b), (d) and (e) have been
satisfied.
ARTICLE 8
MISCELLANEOUS
SECTION 8.1. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including telecopy or similar
writing) and shall be given,
if to Aperian or Merger Sub, to: Aperian, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.C.
3700 Thanksgiving Tower
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Company, to: Fourthstage Technologies, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇ ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Shareholder Agent, to: ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address or facsimile number as such party may hereafter specify by
notice to the other parties hereto. Each such notice, request or other
communication shall be effective (a) if given by facsimile, when such facsimile
is transmitted to the facsimile number specified in this
24
30
Section and the appropriate facsimile confirmation is received or (b) if given
by any other means, when delivered at the address specified in this Section.
SECTION 8.2. Amendments; No Waivers.
(a) Any provision of this Agreement may be amended or waived
prior to the Effective Time if, and only if, such amendment or waiver is
in writing and signed, in the case of an amendment, by the Company,
Aperian and Merger Sub or in the case of a waiver, by the party against
whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
SECTION 8.3. Expenses. Aperian shall pay all legal and accounting
fees, costs and expenses in connection with the consummation of the
Merger.
SECTION 8.4. Entire Agreement/No Third Party Beneficiaries. All
prior negotiations and agreements between the parties hereto relating to
the subject matter hereof are superseded by this Agreement and as of the
date hereof there are no representations, warranties, understandings or
agreements, whether written or oral, expressed or implied, other than
those specifically set forth herein. Except for the shareholders,
directors, officers, employees and agents of the Company to the extent
such persons benefit from the provisions set forth herein, there are no
third party beneficiaries to this Agreement.
SECTION 8.5. Waivers. Any failure by any of the parties hereto to
comply with any of the obligations, agreements or conditions set forth
herein may be waived by the other party or parties, provided, however,
that any such waiver shall not be deemed a waiver of any other obligation,
agreement or condition.
SECTION 8.6. Amendments, Supplements or Modifications. Each of the
parties agrees to cooperate fully in the effectuation of the transactions
contemplated hereby and to execute any and all additional documents or
take such additional actions as shall be reasonably necessary or
appropriate for such purpose.
SECTION 8.7. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, provided that no party
may assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement without the prior written consent of the
other parties hereto.
SECTION 8.8. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws and not the conflicts of
laws provisions of the State of Delaware.
25
31
SECTION 8.9. Exclusive Jurisdiction. Subject to the provisions of
Section 5.7 (Resolution of Conflicts; Arbitration), the parties agree that
any legal action, suit or proceeding arising out of or relating to this
Agreement or the agreements and transactions contemplated hereby shall be
instituted in a court located in the city of Phoenix, Arizona, which shall
be the exclusive jurisdiction and venue of any legal proceedings, and each
party hereto waives any objection which such party may now or hereafter
have to the laying of venue of any such action, suit or proceeding.
SECTION 8.10. Disclosure Schedules. Notwithstanding anything herein
to the contrary, any matter disclosed in any Section of either the Company
Disclosure Schedule or the Aperian Disclosure Schedule shall be deemed to
be disclosed in all parts of such Schedules regardless of whether such
matter is specifically cross-referenced. The disclosure of any matter in a
Schedule is not to be deemed determinative of or an indication that such
matter is material to the operations of the Company or Aperian, as the
case may be.
SECTION 8.11. Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the
same instrument. This Agreement shall become effective when each party
hereto shall have received counterparts hereof signed by all of the other
parties hereto.
SECTION 8.12. Severability. If any term or other provision of this
Agreement is invalid, illegal, or incapable of being enforced by any rule
or 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 transactions contemplated by this
Agreement are 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 mutually acceptable manner in
order that the transactions contemplated by this Agreement be consummated
as originally contemplated to the fullest extent possible.
SECTION 8.13. Incorporation of Exhibits and Schedules. The Company
Disclosure Schedule, the Aperian Disclosure Schedule and all Exhibits
attached hereto and referred to herein are hereby incorporated herein and
made a part hereof for all purposes as if fully set forth herein.
SECTION 8.14. Headings. 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.
SECTION 8.15. Knowledge. Whenever used in this Agreement, the terms
"knowledge," "to the knowledge of" "has received no notice" or "is not
aware" (and all variants and derivatives thereof) with respect to any
Person, means the current actual knowledge of such Person. Notwithstanding
the foregoing, the foregoing terms, when applied to the Company, shall
mean the actual knowledge of ▇▇▇▇▇ ▇▇▇▇▇, and when applied to Aperian,
shall mean the actual knowledge of any and all Persons listed in Section
8.15 of the Aperian Disclosure Schedule.
26
32
SECTION 8.16. Construction. The language used in this Agreement will
be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against
either party. Whenever required by the context, any gender shall include
any other gender, the singular shall include the plural and the plural
shall include the singular. Whenever the word "including" is used in this
Agreement, it shall be deemed to mean "including, without limitation,"
"including, but not limited to" or other words of similar import such that
the items following the word "including" shall be deemed to be a list by
way of illustration only and shall not be deemed to be an exhaustive list
of applicable items in the context thereof.
27
33
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and
year first above written.
FOURTHSTAGE TECHNOLOGIES, INC.
By:
------------------------------------
Name:
Title:
APERIAN, INC.
By:
------------------------------------
Name:
Title:
APERIAN MERGER CORPORATION, INC.
By:
------------------------------------
Name:
Title:
SHAREHOLDER AGENT
By:
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Signature Page to Agreement and Plan of Merger
28
34
By executing this signature page to the Agreement and Plan of Merger
among Fourthstage Technologies, Inc., Aperian Inc. and Aperian Merger
Corporation, Inc., the below signed Shareholder hereby consents to the
merger of Fourthstage Technologies, Inc. with and into Aperian
Acquisitions, Inc. on the terms and conditions set forth herein and waives
any dissenter's appraisal or similar rights under applicable law.
FOURTHSTAGE SHAREHOLDERS:
-----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
29
35
VAN DE VREDE FAMILY TRUST
By:
-------------------------------------
Name:
Title:
TRIPLE FIVE INVESTMENTS
By:
-------------------------------------
Name:
Title:
REGENT NET LLC
By:
-------------------------------------
Name:
Title:
* Executed by ▇▇▇▇▇ ▇▇▇▇▇ pursuant to a
power of attorney granted to ▇▇. ▇▇▇▇▇ for
that purpose.
30
36
EXHIBITS
EXHIBIT 1.1(b) FORM OF CERTIFICATES OF MERGER
EXHIBIT 1.2(c) CERTIFICATE OF DESIGNATION
EXHIBIT 1.3 COMPANY OPTION CONVERSION TABLE
EXHIBIT 2.1 AMENDED CERTIFICATE OF INCORPORATION
EXHIBIT 2.4 BYLAWS OF APERIAN
EXHIBIT 7.1(d)(1) FORM OF EMPLOYMENT AGREEMENT
EXHIBIT 7.1(d)(2) NAMES OF PERSONS TO HAVE EMPLOYMENT AGREEMENTS
EXHIBIT 7.1(e) REGISTRATION RIGHTS AGREEMENT
EXHIBIT 7.2(d) FORM OF COMPANY COUNSEL'S OPINION
EXHIBIT 7.3(c) FORM OF APERIAN COUNSEL'S OPINION
31
