AGREEMENT AND PLAN OF MERGER BY AND AMONG SOFTWARE AG, WIZARD ACQUISITION, INC. AND WEBMETHODS, INC. DATED AS OF APRIL 4, 2007
Exhibit
2.1
EXECUTION COPY
BY AND AMONG
SOFTWARE AG,
WIZARD ACQUISITION, INC.
AND
WEBMETHODS, INC.
DATED AS OF APRIL 4, 2007
TABLE OF CONTENTS
Page | ||||
ARTICLE I THE OFFER |
2 | |||
Section 1.1 The Offer |
2 | |||
Section 1.2 Company Action |
4 | |||
Section 1.3 Directors |
5 | |||
Section 1.4 Top-Up Option |
6 | |||
ARTICLE II THE MERGER |
8 | |||
Section 2.1 The Merger |
8 | |||
Section 2.2 Closing |
8 | |||
Section 2.3 Effective Time |
8 | |||
Section 2.4 Effect of the Merger |
8 | |||
Section 2.5 Conversion of the Shares |
8 | |||
Section 2.6 Certificate of Incorporation; Bylaws |
9 | |||
Section 2.7 Officers and Directors of the Surviving Corporation |
9 | |||
Section 2.8 Company Stock Options |
9 | |||
Section 2.9 Restricted Stock; Deferred Compensation Plan |
10 | |||
Section 2.10 Company ESPP |
11 | |||
Section 2.11 Appraisal Shares |
11 | |||
Section 2.12 Adjustments to Prevent Dilution |
11 | |||
ARTICLE III EXCHANGE OF CERTIFICATES |
12 | |||
Section 3.1 Paying Agent |
12 | |||
Section 3.2 Exchange Procedures |
12 | |||
Section 3.3 No Further Ownership Transfers |
12 | |||
Section 3.4 Termination of Exchange Fund |
13 | |||
Section 3.5 No Liability |
13 | |||
Section 3.6 Lost, Stolen or Destroyed Certificates |
13 | |||
Section 3.7 Withholding of Tax |
13 | |||
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
14 | |||
Section 4.1 Organization and Good Standing; Charter Documents |
14 | |||
Section 4.2 Authority for Agreement |
14 | |||
Section 4.3 Capitalization |
15 | |||
Section 4.4 Company Subsidiaries |
16 |
i
Page | ||||
Section 4.5 No Conflict; Required Filings and Consents |
16 | |||
Section 4.6 Compliance |
17 | |||
Section 4.7 Litigation |
17 | |||
Section 4.8 Company SEC Reports; Financial Statements |
17 | |||
Section 4.9 Absence of Certain Changes or Events |
19 | |||
Section 4.10 Taxes |
19 | |||
Section 4.11 Title to Personal Properties; No Real Property |
21 | |||
Section 4.12 Officers, Directors, Employees and Affiliates |
22 | |||
Section 4.13 Employee Benefit Plans |
22 | |||
Section 4.14 Labor Relations |
25 | |||
Section 4.15 Contracts and Commitments |
25 | |||
Section 4.16 Intellectual Property |
27 | |||
Section 4.17 Insurance Policies |
29 | |||
Section 4.18 Brokers; Expenses |
30 | |||
Section 4.19 Company Financial Advisor Opinion |
30 | |||
Section 4.20 Disclosure Documents |
30 | |||
Section 4.21 Environmental Matters |
31 | |||
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB |
32 | |||
Section 5.1 Organization and Good Standing |
32 | |||
Section 5.2 Authority for Agreement |
32 | |||
Section 5.3 No Conflict; Required Filings and Consents |
32 | |||
Section 5.4 Litigation |
33 | |||
Section 5.5 Financing |
33 | |||
Section 5.6 Brokers |
34 | |||
Section 5.7 Interim Operations of Merger Sub |
34 | |||
Section 5.8 Ownership of Shares |
34 | |||
Section 5.9 Disclosure Documents |
34 | |||
ARTICLE VI COVENANTS |
35 | |||
Section 6.1 Conduct of Business by the Company Pending the Merger |
35 | |||
Section 6.2 Access to Information and Employees |
38 | |||
Section 6.3 Reasonable Efforts; Notification |
39 | |||
Section 6.4 Proxy Statement |
42 |
ii
Page | ||||
Section 6.5 Company Stockholders Meeting |
43 | |||
Section 6.6 No Solicitation of Transactions |
43 | |||
Section 6.7 Public Announcements |
45 | |||
Section 6.8 Litigation |
45 | |||
Section 6.9 Employee Benefit Matters |
45 | |||
Section 6.10 Directors’ and Officers’ Indemnification and Insurance |
46 | |||
Section 6.11 Financing |
47 | |||
ARTICLE VII CONDITIONS PRECEDENT |
49 | |||
Section 7.1 Conditions to Each Party’s Obligation to Effect the Merger |
49 | |||
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER |
49 | |||
Section 8.1 Termination |
49 | |||
Section 8.2 Expenses |
51 | |||
Section 8.3 Effect of Termination |
51 | |||
Section 8.4 Amendment |
51 | |||
Section 8.5 Extension; Waiver |
51 | |||
ARTICLE IX GENERAL PROVISIONS |
52 | |||
Section 9.1 Nonsurvival of Representations and Warranties |
52 | |||
Section 9.2 Notices |
52 | |||
Section 9.3 Certain Definitions |
53 | |||
Section 9.4 Interpretation |
64 | |||
Section 9.5 Counterparts |
64 | |||
Section 9.6 Entire Agreement; No Third-Party Beneficiaries |
64 | |||
Section 9.7 Governing Law |
65 | |||
Section 9.8 Assignment |
65 | |||
Section 9.9 Enforcement |
65 | |||
Section 9.10 Consent to Jurisdiction; Venue |
65 | |||
Section 9.11 Waiver of Trial by Jury |
65 |
iii
THIS AGREEMENT AND PLAN OF MERGER (this “Agreement”), is entered into as of this 4th
day of April 2007, by and among Software AG, a stock corporation (Aktiengesellschaft) organized
under the laws of the Federal Republic of Germany (“Parent”), Wizard Acquisition, Inc., a
Delaware corporation and wholly-owned indirect subsidiary of Parent (“Merger Sub”), and
webMethods, Inc., a Delaware corporation (the “Company”).
WHEREAS, Parent, Merger Sub and the Company each have determined that it is advisable, fair to
and in the best interests of their respective stockholders for Parent to acquire the Company upon
the terms and conditions set forth in this Agreement;
WHEREAS, in furtherance of such acquisition, Merger Sub has agreed to commence a tender offer
(as it may be amended from time to time in accordance with this Agreement, the “Offer”) to
purchase all of the outstanding shares of common stock, par value $0.01 per share of the Company,
including the associated share purchase rights (each, a “Right”) under the Company’s Rights
Agreement dated as of October 18, 2001, by and between the Company and American Stock Transfer &
Trust Company, as rights agent, (the “Rights Plan”) (the “Company Common Stock”),
but excluding any Company Restricted Stock (as defined herein), at a price of $9.15 per share, net
to the seller in cash (such amount, or any higher amount per share offered pursuant to the Offer in
accordance with the terms of this Agreement, the “Offer Price”), on the terms and subject
to the conditions set forth herein;
WHEREAS, following the consummation of the Offer, Merger Sub shall merge with and into the
Company with the Company surviving as a wholly-owned subsidiary of Parent (the “Merger”),
and each share of Company Common Stock that is not tendered and accepted pursuant to the Offer will
thereupon be canceled and converted into the right to receive cash in an amount equal to the Offer
Price, on the terms and subject to the conditions set forth herein;
WHEREAS, the board of directors of the Company (the “Company Board of Directors”) has
(i) determined that this Agreement, the Offer, the Merger and the other transactions contemplated
hereby, taken together, are at a price and on terms that are fair to, advisable and in the best
interests of the Company and its stockholders (the “Company Stockholders”) and (ii) adopted
resolutions approving this Agreement and the transactions contemplated hereby, including the Offer
and the Merger, declaring their advisability and recommending the adoption by the Company
Stockholders of this Agreement, the Offer, the Merger and the other transactions contemplated
hereby; and
WHEREAS, the board of directors of Merger Sub has unanimously (i) determined that this
Agreement, the Offer, the Merger and the other transactions contemplated hereby, taken together,
are at a price and on terms that are fair to, advisable and in the best interests of Merger Sub and
its sole stockholder and (ii) adopted resolutions approving this Agreement and the transactions
contemplated hereby, including the Offer and the Merger, declaring their advisability and
recommending the adoption by its sole stockholder of this Agreement, the Offer, the Merger and the
other transactions contemplated hereby. Following the execution and delivery of this Agreement,
the sole stockholder of Merger Sub will adopt this Agreement.
WHEREAS, concurrently with the execution and delivery of this Agreement, and as a condition
and inducement to Parent’s and Merger Sub’s willingness to enter into this Agreement, each of the
executive officers and directors of the Company are entering into Tender and Support Agreements
substantially in the form attached as Exhibit A hereto (the “Tender and Support
Agreements”).
NOW, THEREFORE, in consideration of the premises and the mutual promises herein made, and in
consideration of the representations, warranties and covenants herein contained, the parties agree
as follows:
ARTICLE I
THE OFFER
Section 1.1 The Offer.
(a) As promptly as practicable after the date of this Agreement (and in no event later than
the date that is twelve (12) Business Days after the date of this Agreement (the “Outside
Commencement Date”)), Merger Sub shall, and Parent shall cause Merger Sub to, commence (within
the meaning of Rule 14d-2 under the Exchange Act) the Offer. The Offer shall be subject to the
condition that there shall be validly tendered in accordance with the terms of the Offer, prior to
the scheduled expiration of the Offer (as it may be extended hereunder) and not properly withdrawn,
a number of Shares that, together with the Shares then owned beneficially by Parent and/or Merger
Sub (together with their wholly-owned subsidiaries), represents at least a majority of the Shares
then outstanding on a fully-diluted basis (the “Minimum Condition”) and to the other
conditions set forth in Annex I. Merger Subsidiary expressly reserves the right to waive any of
the conditions to the Offer and to make any change in the terms of or conditions to the Offer;
provided that unless otherwise provided by this Agreement or previously approved by the Company in
writing, (i) the Minimum Condition may not be waived, (ii) no change may be made that changes the
form of consideration to be paid, decreases the Offer Price or the number of Shares sought in the
Offer, imposes conditions to the Offer in addition to those set forth in Annex I or otherwise
amends or modifies the Offer in any manner adverse to the holders of Shares and (iii) the Offer may
not be extended except as set forth in this Section 1.1(a). Subject to the prior
satisfaction or waiver by Parent or Merger Sub of the Minimum Condition, with the written consent
of the Company, and the other conditions of the Offer set forth in Annex I, Merger Sub shall
consummate the Offer in accordance with its terms and accept for payment and pay for all Shares
tendered and not properly withdrawn pursuant to the Offer as soon as practicable after Merger Sub
is legally permitted to do so under Applicable Law. Subject to the terms and conditions of this
Agreement, the Offer shall expire at midnight, New York City time, on the date that is 20 business
days (calculated in accordance with Rule 14d-1(g)(3) under the Exchange Act) after the date that
the Offer is commenced. Merger Sub shall extend the Offer for successive periods of up to twenty
(20) Business Days each (1) if, at the scheduled or extended expiration date of the Offer, any of
the conditions to the Offer shall not have been satisfied or waived, from time to time, until the
earliest to occur of (x) the satisfaction or waiver of such conditions and (y) the Outside
Termination Date and (2) for
any period required by any rule, regulation, interpretation or position of the SEC or the
staff thereof applicable to the Offer or any period required by Applicable Law. Following
expiration
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of the Offer, Merger Sub may, in its sole discretion, provide for one or more subsequent
offering periods (together, the “Subsequent Offering Period”) in accordance with Rule
14d-11 of the Exchange Act, if, as of the commencement of each such period, there shall not have
been validly tendered and not withdrawn pursuant to the Offer and any prior Subsequent Offering
Period that number of Shares necessary to permit the Merger to be effected without a meeting of
stockholders of the Company, in accordance with Section 253(a) of the DGCL. Subject to the
foregoing, including the requirements of Rule 14d-11, and upon the terms and subject to the
conditions of the Offer, Merger Sub shall, and Parent shall cause Merger Sub to, accept for payment
all Shares (A) validly tendered and not withdrawn pursuant to the Offer after the final expiration
of the Offer, with payment for such Shares to be made as promptly as practicable after the final
expiration of the Offer and (B) validly tendered in any Subsequent Offering Period, with payment
for such Shares to be made as promptly as practicable after such Shares are validly tendered. The
Offer Price payable in respect of each Share validly tendered and not withdrawn pursuant to the
Offer or validly tendered in any Subsequent Offering Period shall be paid net to the holder thereof
in cash, subject to reduction for any applicable withholding Taxes.
(b) As soon as practicable on the date of commencement of the Offer, Parent and Merger Sub
shall (i) file with the SEC a Tender Offer Statement on Schedule TO with respect to the Offer
(together with all amendments and supplements thereto and including exhibits thereto, the
“Schedule TO”) that shall include the summary term sheet required thereby and, as exhibits,
the Offer to Purchase and forms of a letter of transmittal and summary advertisement, if any, in
respect of the Offer and other ancillary documents and instruments pursuant to which the Offer will
be made (collectively, together with any amendments or supplements thereto, the “Offer
Documents”) and (ii) cause the Offer Documents to be disseminated to holders of Shares, in each
case as and to the extent required by applicable U.S. federal securities Laws. The Company shall
promptly furnish to Parent and Merger Sub in writing all information concerning the Company that
may be required by applicable securities Laws or reasonably requested by Parent or Merger Sub for
inclusion in the Schedule TO or the Offer Documents. Each of Parent, Merger Sub and the Company
agrees promptly to correct any information provided by it for use in the Schedule TO and the Offer
Documents if and to the extent that such information shall have become false or misleading in any
material respect, and to correct any material omissions in the Schedule TO and the Offer Documents.
Parent and Merger Sub agree to take all steps necessary to cause the Schedule TO as so corrected
to be filed with the SEC and the Offer Documents as so corrected to be disseminated to holders of
Shares, in each case as and to the extent required by applicable U.S. federal securities Laws. The
Company and its counsel shall be given a reasonable opportunity to review and comment on the
Schedule TO and the Offer Documents each time before any such document is filed with the SEC, and
Parent and Merger Sub shall give reasonable and good faith consideration to any comments made by
the Company and its counsel. Parent and Merger Sub shall provide the Company and its counsel with
(A) any comments or other communications, whether written or oral, that Parent, Merger Sub or their
counsel may receive from time to time from the SEC or its staff with respect to the Schedule TO or
Offer Documents promptly after receipt of those comments or other communications and (B) a
reasonable opportunity to participate in the response of Parent and Merger Sub to those comments
and to provide comments on that response (to which reasonable and good faith consideration shall be
given), including by participating with
Parent and Merger Sub or their counsel in any discussions or meetings with the SEC. If the
Offer is terminated or withdrawn by Merger Sub, or this Agreement is terminated prior to the
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purchase of the Shares in the Offer, Parent and Merger Sub shall promptly return, and shall cause
any depository or paying agent acting on behalf of Parent and Merger Sub to return, all tendered
Shares to the holders entitled thereto.
(c) Parent shall provide or cause to be provided to Merger Sub on a timely basis the funds
necessary to purchase any Shares that Merger Sub becomes obligated to purchase pursuant to the
Offer and shall cause Merger Sub to perform all of its obligations hereunder.
Section 1.2 Company Action.
(a) Subject to Section 6.6, the Company hereby consents to the Offer and represents
that the Company Board of Directors, at a meeting duly called and held prior to the execution of
this Agreement at which substantially all directors of the Company were present, has (i) determined
that this Agreement and the transactions contemplated hereby, including the Offer and the Merger,
are fair to and in the best interests of the Company Stockholders, (ii) approved and adopted this
Agreement and the transactions contemplated hereby, including the Offer and the Merger, and
declared this Agreement advisable, in accordance with the requirements of the DGCL, (iii) approved
and adopted an amendment to the Rights Plan to cause the provisions of the Rights Plan not to be
applicable to this Agreement or the Transaction Documents or to the transactions contemplated
hereby or thereby and to provide for the expiration of the Rights upon the consummation of the
Merger and (iv) recommended that the Company Stockholders accept the Offer, tender their Shares to
Merger Sub pursuant to the Offer and, if applicable, approve and adopt this Agreement and the
Merger. The Company hereby consents to the inclusion of the foregoing determinations and approvals
in the Offer Documents and, to the extent that no Adverse Recommendation Change has occurred in
accordance with Section 6.6, the Company hereby consents to the inclusion in the Offer
Documents of the recommendation referenced in clause (iv) of the immediately preceding sentence.
The Company has been advised that its executive officers and directors who own Shares intend to
tender their Shares pursuant to the Offer in accordance with the terms of the Tender and Support
Agreement. The Company shall cause its transfer agent to promptly furnish Parent with a list of
its stockholders, mailing labels and any available listing or computer file containing the names
and addresses of all record holders of Shares and lists of securities positions of Shares held in
stock depositories, as of the most recent practicable date, and shall provide to Parent such
additional information (including updated lists of stockholders, mailing labels and lists of
securities positions) and such other assistance as Parent may reasonably request in connection with
communicating the Offer to record and beneficial holders of Shares in accordance with this
Agreement and applicable U.S. federal securities Laws. Parent and Merger Sub shall treat the
information contained in such lists, labels and files and any additional information referred to in
the preceding sentence as confidential in accordance with the terms and conditions of the
Confidentiality Agreement.
(b) On the date that the Offer Documents are filed with the SEC, the Company shall file with
the SEC and disseminate to holders of Shares, in each case as and to the
extent required by applicable U.S. federal securities Laws, a Solicitation/Recommendation
Statement on Schedule 14D-9 (together with any amendments or supplements thereto, the “Schedule
14D-9”) that, subject to Section 6.6, shall reflect the recommendations of the Company
Board of Directors referred to above. Each of Parent and Merger Sub shall promptly
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furnish to the
Company in writing all information concerning Parent and Merger Sub that may be required by
applicable securities Laws or reasonably requested by the Company for inclusion in the Schedule
14D-9. Each of the Company, Parent and Merger Sub agrees promptly to correct any information
provided by it for use in the Schedule 14D-9 if and to the extent that it shall have become false
or misleading in any material respect and to correct any material omissions in the Schedule 14D-9.
The Company agrees to take all steps necessary to cause the Schedule 14D-9 as so corrected to be
filed with the SEC and to be disseminated to holders of Shares with the Offer Documents, in each
case as and to the extent required by applicable U.S. federal securities Laws. Parent and its
counsel shall be given a reasonable opportunity to review and comment on the Schedule 14D-9 prior
to its filing with the SEC, and the Company shall give reasonable and good faith consideration to
any comments made by Parent, Merger Sub and their counsel. The Company shall provide Parent,
Merger Sub and their counsel with (i) any comments or other communications, whether written or
oral, that the Company or its counsel may receive from time to time from the SEC or its staff with
respect to the Schedule 14D-9 promptly after receipt of those comments or other communications and
(ii) a reasonable opportunity to participate in the Company’s response to those comments and to
provide comments on that response (to which reasonable and good faith consideration shall be
given), including by participating with the Company or its counsel in any discussions or meetings
with the SEC.
Section 1.3 Directors.
(a) Promptly upon the acceptance for payment of any Shares pursuant to the Offer, and from
time to time thereafter (including, without limitation, upon acceptance of Shares tendered during
any Subsequent Offering Period), Merger Sub shall be entitled to designate such number of
directors, rounded up to the next whole number, on the Company Board of Directors as will give
Merger Sub representation on the Company Board of Directors equal to the greater of (i) the product
of (x) the total number of directors on the Company Board of Directors (after giving effect to any
increase in the number of directors pursuant to this Section 1.3) and (y) the percentage
that the number of Shares owned by Merger Sub (when combined with all Shares owned by Parent and
its wholly-owned Subsidiaries) bears to the total number of Shares outstanding and (ii) the number
of directors that, after their designation by Merger Sub, constitutes a majority of the Company
Board of Directors, and the Company shall in each case promptly increase the size of the Company
Board of Directors or use its reasonable best efforts to secure the resignations of such number of
directors as is necessary to provide Merger Sub with such level of representation and shall cause
Merger Sub’s designees to be so elected or appointed. The Company shall also use its reasonable
best efforts to cause individuals designated by Merger Sub to constitute the same percentage of
each committee of the Company Board of Directors as the percentage of the entire Company Board of
Directors represented by individuals designated by Merger Sub. The Company’s obligations to
appoint designees to the Company Board of Directors shall be subject to Section 14(f) of the
Exchange Act. The
Company shall take all actions necessary to effect any such election or appointment of Merger
Sub’s designees, including mailing to its stockholders the information required by Section 14(f) of
the Exchange Act and Rule 14f-l promulgated thereunder which, unless Merger Sub otherwise elects,
shall be so mailed together with the Schedule 14D-9. Parent and Merger Sub will supply to the
Company all information with respect to themselves and their respective officers, directors
- 5 -
and
Affiliates required by Section 14(f) of the Exchange Act and Rule 14f-l promulgated thereunder.
(b) Following the election or appointment of Merger Sub’s designees pursuant to Section 1.3(a)
and prior to the Effective Time, any amendment or termination of this Agreement requiring action by
the Company Board of Directors, any extension of time for the performance of any of the obligations
or other acts of Parent or Merger Sub under this Agreement, any waiver of compliance with any of
the agreements or conditions under this Agreement that are for the benefit of the Company, any
exercise of the Company’s rights or remedies under this Agreement, any action to seek to enforce
any obligation of Parent or Merger Sub under this Agreement (or any other action by the Company
Board of Directors with respect to this Agreement or the Merger if such other action adversely
affects, or could reasonably be expected to adversely affect, any of the holders of Shares other
than Parent or Merger Sub) may only be authorized by, and will require the authorization of, a
majority of the directors of the Company then in office who are directors of the Company on the
date hereof or their successors as appointed by such continuing directors (the “Continuing
Directors”); provided, however, that if there shall be no Continuing Directors
as a result of such individuals’ deaths, disabilities, resignations or refusal to serve, then such
actions may be effected by majority vote of the directors who are considered “independent
directors” within the meaning of the Nasdaq’s corporate governance rules and applicable U.S.
federal securities Laws, or, if no such directors are then in office, by a majority vote of the
Company Board of Directors. Between the time Merger Sub becomes entitled to designate directors
pursuant to this Section 1.3 and the Effective Time, none of Parent, Merger Sub or their
respective Affiliates shall take any action to remove a Continuing Director from office.
Section 1.4 Top-Up Option.
(a) Subject to the terms and conditions set forth herein, the Company hereby irrevocably
grants to Merger Sub an option (the “Top-Up Option”), exercisable only after the acceptance
by Merger Sub of, and payment for, Shares tendered in the Offer and upon the terms and conditions
set forth in this Section 1.4, to purchase that number (but not less than that number) of
shares of Company Common Stock (the “Top-Up Option Shares”) equal to the lowest number of
shares that, when added to the number of Shares directly or indirectly owned by Parent or Merger
Sub or their Subsidiaries at the time of such exercise, shall constitute one share more than 90% of
the Shares (taking into account the issuance of the Top-Up Option Shares) at a price per share
equal to the Offer Price; provided that (i) the Top-Up Option shall be exercisable only once, on or
prior to the earlier to occur of the 21st business day (calculated in accordance with Rule
14d-1(g)(3) under the Exchange Act) after the expiration date of the Offer or the termination of
this Agreement in accordance with its terms, (ii) in no event shall the Top-Up Option be
exercisable for a number of Shares (x) in excess of the then authorized and
unissued shares of Company Common Stock (giving effect, for purposes of this Section
1.4, to shares reserved for issuance under any Employee Benefit Plan as if such shares were
outstanding) or (y) that would require the Company to obtain the approval of its stockholders under
Applicable Law or any Nasdaq rule or regulation, (iii) the Top-Up Option may not be exercised if
any provision of Applicable Law or any judgment, injunction, order or decree of any Governmental
Entity shall prohibit, or require any action, consent, approval, authorization or permit of, action
by, or filing with or notification to, any Governmental Entity or the Company’s
- 6 -
stockholders in
connection with the exercise of the Top-Up Option or the delivery of the Top-Up Option Shares in
respect of such exercise, which action, consent, approval, authorization or permit, action, filing
or notification has not theretofore been obtained or made, as applicable.
(b) If Merger Sub wishes to exercise the Top-Up Option, Merger Sub shall send to the Company a
written notice (a “Top-Up Exercise Notice”, and the date of receipt of such notice the
“Top-Up Notice Date”) specifying the place for the closing of the purchase and sale of
Shares pursuant to the Top-Up Option (the “Top-Up Closing”). The Company shall, promptly
after receipt of the Top-Up Exercise Notice, deliver a written notice to Merger Sub confirming (i)
the number of Shares then outstanding on a fully-diluted basis, and (ii) the number of Top-Up
Shares and the aggregate purchase price therefor.
(c) At the Top-Up Closing, subject to the terms and conditions of this Agreement, the Company
shall deliver to Merger Sub a certificate or certificates evidencing the applicable number of
Top-Up Option Shares, and Merger Sub shall purchase each Top-Up Option Share from the Company at a
price per Share equal to the Offer Price. Payment by Merger Sub of the purchase price for the
Top-Up Option Shares may be made, at Merger Sub’s option, by delivery of immediately available
funds by wire transfer to an account designated by the Company. The parties shall cooperate to
ensure that the issuance of the Top-Up Option Shares is accomplished consistent with all applicable
legal requirements, including all federal securities Laws.
(d) Upon the delivery by Merger Sub to the Company of the Top-Up Exercise Notice, and the
tender of the consideration described in Section 1.4(c), Merger Sub shall be deemed to be the
holder of record of the Top-Up Option Shares issuable upon that exercise, notwithstanding that the
stock transfer books of the Company shall then be closed or that certificates representing those
Top-Up Option Shares shall not then be actually delivered to Merger Sub or the Company shall have
failed or refused to designate the account described in Section 1.4(c).
(e) Any certificates evidencing Top-Up Option Shares may include any legends required by
applicable securities Laws.
(f) Parent and Merger Sub acknowledge that the Shares that Merger Sub may acquire upon
exercise of the Top-Up Option will not be registered under the Securities Act and will be issued in
reliance upon an exemption thereunder for transactions not involving a public offering. Each of
Parent and Merger Sub hereby represents and warrants to the Company that Merger Sub is, and will be
upon the purchase of the Top-Up Option Shares, an “accredited investor”, as defined in Rule 501 of
Regulation D under the Securities Act. Merger Sub agrees that the Top-Up Option and the Top-Up
Option Shares to be acquired upon exercise of the Top-
Up Option are being and will be acquired by Merger Sub for the purpose of investment and not
with a view to, or for resale in connection with, any distribution thereof (within the meaning of
the Securities Act).
- 7 -
ARTICLE II
THE MERGER
Section 2.1 The Merger. Upon the terms and subject to the conditions set forth in
this Agreement, at the Effective Time, Merger Sub shall be merged with and into the Company in
accordance with the DGCL, whereupon the separate existence of Merger Sub shall cease and the
Company shall continue as the Surviving Corporation under the Laws of the State of Delaware.
Section 2.2 Closing. Subject to the terms and conditions of this Agreement, the
Closing will take place at the offices of Xxxxx Xxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, at 10:00 a.m., local time, as soon as practicable but in no event later than the
second Business Day after the satisfaction or waiver of the conditions (other than those conditions
that by their nature are to be satisfied at the Closing, but subject to the fulfillment or waiver
of those conditions) set forth in Article VII, or at another time, date or place agreed to
by the parties.
Section 2.3 Effective Time. On the Closing Date the parties hereto shall cause the
Merger to be consummated by filing all necessary documentation, including a Certificate of Merger
or a Certificate of Ownership and Merger, as the case may be, with the Delaware Secretary, and
Parent will deliver the Exchange Fund to the Paying Agent in the manner provided in Section
3.1. The Merger shall be effective upon filing of the Certificate of Merger with the Delaware
Secretary, or on such later date as may be specified therein (the time of such effectiveness being,
the “Effective Time”).
Section 2.4 Effect of the Merger . The Merger shall have the effects set forth in the
DGCL and other applicable Law. Accordingly, from and after the Effective Time, the Surviving
Corporation shall have all the properties, rights, privileges, powers, interests and franchises and
shall be subject to all restrictions, disabilities, debts, duties and Liabilities of the Company
and Merger Sub. The Surviving Corporation may, at any time after the Effective Time, take any
action (including executing and delivering any document) in the name and on behalf of either the
Company or Merger Sub in order to carry out and effectuate the transactions contemplated by this
Agreement.
Section 2.5 Conversion of the Shares. At the Effective Time, by virtue of the Merger
and without any action on the part of Parent, Merger Sub, the Company or the holders of any of the
following securities:
(a) Except as provided in Section 2.5(b) or Section 2.5(c), each share of
Company Common Stock issued and outstanding immediately prior to the Effective Time (excluding
Appraisal Shares) (the “Shares”) shall be canceled and shall by virtue of the Merger and
without any action on the part of the holder thereof be converted automatically into the right to
receive an amount equal to the Offer Price in cash, without interest (the “Merger
Consideration”), upon surrender of the Certificate representing such Shares as provided in
Article III. All such Shares, when so converted, shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and each holder of a Certificate
representing such Shares shall cease to have any rights with respect thereto, except the right to
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receive the Merger Consideration into which such Shares have been converted, as provided herein.
(b) Each Share that is owned by the Company (or any Subsidiary of the Company) as treasury
stock or otherwise and each Share owned by Parent or Merger Sub (whether as a result of the Offer
or otherwise) immediately prior to the Effective Time shall be canceled and retired and cease to
exist and no payment or distribution shall be made with respect thereto.
(c) Each share of common stock of Merger Sub issued and outstanding immediately prior to the
Effective Time shall be converted into and become one validly issued, fully paid and nonassessable
share of common stock, par value $0.01 per share, of the Surviving Corporation and shall constitute
the only outstanding shares of capital stock of the Surviving Corporation.
Section 2.6 Certificate of Incorporation; Bylaws.
(a) At the Effective Time, the certificate of incorporation of the Company, as in effect
immediately prior to the Effective Time, shall be the certificate of incorporation of the Surviving
Corporation. Thereafter, the certificate of incorporation of the Surviving Corporation may be
amended in accordance with its terms and as provided by Law.
(b) At the Effective Time, the bylaws of the Company as in effect immediately prior to the
Effective Time shall be the bylaws of the Surviving Corporation. Thereafter, the bylaws of the
Surviving Corporation may be amended or repealed in accordance with their terms and the certificate
of incorporation of the Surviving Corporation and as provided by Law.
Section 2.7 Officers and Directors of the Surviving Corporation. At the Effective
Time (i) the directors of Merger Sub shall continue as the directors of the Surviving Corporation,
and (ii) the officers of the Company shall be the individuals and shall hold the respective offices
designated in writing by Parent to the Company prior to the Effective Time, in each case until the
earlier of their resignation or removal or until their respective successors are duly elected or
appointed and qualified in accordance with and subject to Applicable Law and the Certificate of
Incorporation and Bylaws of the Surviving Corporation.
Section 2.8 Company Stock Options.
(a) Prior to the Effective Time, each Company Stock Option under or pursuant to any Company
Option Plans that is outstanding, unexercised and unexpired, prior to the Effective Time shall be
accelerated in full so that each such Company Stock Option is fully vested and exercisable
immediately prior to the Effective Time. Upon the terms and subject to the conditions set forth in
this Agreement, at the Effective Time, by virtue of the Merger and without any action on the part
of Parent, Merger Sub, the Company or the holders of Company Stock Options, each Company Stock
Option shall be canceled and extinguished and automatically converted into the right to receive an
amount in cash equal to the product obtained by multiplying (x) the aggregate number of shares of
Company Common Stock that were issuable upon exercise of such Company Stock Option immediately
prior to the Effective Time
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and (y) the Merger Consideration less the per share exercise price of
such Company Stock Option (the “Option Consideration”) (it being understood and agreed that
such exercise price shall not actually be paid to the Company by the holder of a Company Stock
Option). In the event the Option Consideration to any holder of a Company Stock Option is equal to
or less than zero, it shall be understood and agreed that any such Company Stock Option shall be
canceled and extinguished immediately upon to the Effective Time without any payment. Parent
shall, or shall cause the Surviving Corporation to, pay to holders of Company Stock Options the
Option Consideration, less applicable Taxes required to be deducted and withheld with respect to
such payments, as soon as practicable after the Effective Time and in any case within ten (10)
Business Days thereafter. To the extent that such amounts are so deducted or withheld, such
amounts shall be treated for all purposes under this Agreement as having been paid to the holders
of such Company Stock Options to whom such amounts would otherwise have been paid.
(b) Except as otherwise agreed to by the parties, the Company Option Plans shall terminate as
of the Effective Time and the provisions in any other plan, program or arrangement providing for
the issuance or grant of any other interest in respect of the capital stock of the Company or any
Subsidiary thereof shall be canceled as of the Effective Time.
(c) The Company shall provide notice (in a form reasonably satisfactory to Parent) to each
holder of an outstanding Company Stock Option describing the treatment of such Company Stock Option
in accordance with this Section 2.8.
(d) Prior to the Effective Time, the Company shall take such actions as may be necessary to
give effect to the transactions contemplated by this Section 2.8, including, but not
limited to, satisfaction of the requirements of Rule 16b-3(e) under the Exchange Act.
Section 2.9 Restricted Stock; Deferred Compensation Plan.
(a) If any share of Company Common Stock outstanding immediately prior to the Effective Time
is unvested or subject to a repurchase option or forfeiture in favor of the Company (any such
shares, “Company Restricted Stock”), then, effective immediately prior to
the Effective Time, such Company Restricted Stock shall be fully vested and any repurchase
option or forfeiture restriction shall lapse.
(b) Prior to the Effective Time, all accrued account balances under the Company’s Deferred
Compensation Plan for Directors (the “Deferred Compensation Plan”) shall be distributed
pursuant to Section 5.B of such plan. Shares of Company Common Stock so distributed under the
Deferred Compensation Plan shall be subject to Section 2.5 of this Agreement. Following
and subject to the payment of all accrued account balances under the Deferred Compensation Plan,
the Company shall take all actions necessary so that such plan shall terminate at the Effective
Time.
(c) Immediately prior to the Effective Time, the holder of each Director Deferred Share will
receive from the Company an amount in cash equal to the Offer Price in exchange for the surrender
to the Company of the certificate or other document evidencing such Director Deferred Share and
each outstanding Director Deferred Share thereupon will be
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canceled and the holders of Director
Deferred Shares will have no further rights in respect of any Director Deferred Share.
Section 2.10 Company ESPP. The Company shall take all actions necessary pursuant to
the terms of the Company ESPP in order to (i) shorten the offering period under the Company ESPP
which includes the date on which the Effective Time occurs (the “Current ESPP Offering”),
if applicable, such that the Current ESPP Offering shall terminate on the payroll date immediately
prior to the Effective Time (the “New Exercise Date”) and (ii) ensure that no offerings
under the Company ESPP commence after the date of this Agreement. On the New Exercise Date, any
purchase rights existing under the Company ESPP to acquire Company Common Stock shall be exercised.
Conditional upon the Closing, the Company shall terminate the Company ESPP. The Company shall
provide notice (in a form reasonably satisfactory to Parent) at least ten (10) days prior to the
New Exercise Date to each participant in the Company ESPP describing the treatment of purchase
rights under the Company ESPP in accordance with this Section 2.10.
Section 2.11 Appraisal Shares. Notwithstanding anything in this Agreement to the
contrary, any Appraisal Shares shall not be converted into the right to receive the Merger
Consideration as provided in Section 2.5(a), but instead such holders of Appraisal Shares
shall be entitled to payment of the fair value of such shares in accordance with the provisions of
Section 262. Notwithstanding the foregoing, if any such holder shall fail to perfect or otherwise
shall waive, withdraw or lose the rights to appraisal under Section 262 or a court of competent
jurisdiction shall determine that such holder is not entitled to an appraisal of such holder’s
Shares under Section 262, then the right of such holder to be paid the fair value of such holder’s
Shares under Section 262 shall cease and such Shares shall be deemed to have been converted at the
Effective Time into, and shall have become, the right to receive the Merger Consideration as
provided in Section 2.5(a), without interest. The Company shall serve prompt notice to
Parent of any demands for appraisal of any of the Shares, attempted withdrawals of such demands and
any other instruments served pursuant to Section 262 received by the Company, and Parent shall have
the right to participate in and direct all
negotiations and proceedings with respect to such demands. The Company shall not, without the
prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or
delayed), or as otherwise required under the DGCL, voluntarily make any payment with respect to, or
settle or offer to settle, any such demands, or agree to do or commit to do any of the foregoing.
Section 2.12 Adjustments to Prevent Dilution. Subject to the restrictions contained
in Section 6.1, in the event that the Company changes the number of Shares, or securities
convertible or exchangeable into or exercisable for Shares, issued and outstanding prior to the
Effective Time as a result of a reclassification, stock split (including a reverse stock split),
stock dividend or distribution, recapitalization, merger, subdivision, issuer tender or exchange
offer, or other similar transaction, the Offer Price and the Merger Consideration shall be
proportionately adjusted to reflect such change.
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ARTICLE III
EXCHANGE OF CERTIFICATES
Section 3.1 Paying Agent. Prior to the Effective Time, Parent shall appoint a paying
agent (the “Paying Agent”) to act as paying agent for the payment of the Merger
Consideration upon surrender of the Certificates pursuant to this Article III. At or prior
to the Effective Time, Parent shall deposit with the Paying Agent cash in an amount sufficient to
pay the aggregate Merger Consideration (such cash being hereinafter referred to as the
“Exchange Fund”), payable pursuant to Section 2.5 in exchange for outstanding
Shares. Any income from investment of the Exchange Fund, which shall be in accordance with the
instructions of Parent, will be payable solely to Parent. Parent shall, or shall cause the
Surviving Corporation to, pay all fees and expenses of the Paying Agent.
Section 3.2 Exchange Procedures.
(a) As soon as practicable after the Effective Time, the Paying Agent shall mail to each
holder of record of a Certificate or Certificates that, immediately prior to the Effective Time,
represented outstanding Shares subsequently converted into the right to receive the Merger
Consideration, as set forth in Section 2.5: (i) a letter of transmittal (a “Letter of
Transmittal”) that (A) shall specify that delivery shall be effected and risk of loss and title
to the Certificates shall pass only upon proper delivery of the Certificates to the Paying Agent
(or an affidavit of loss in lieu thereof, together with any bond or indemnity agreement, as
contemplated by Section 3.6) and (B) shall be in such form and have such other provisions
as the Surviving Corporation may reasonably specify and the Company shall have reasonably approved
and (ii) instructions for use in effecting the surrender of the Certificates in exchange for the
applicable Merger Consideration.
(b) Upon surrender of a Certificate for cancellation to the Paying Agent, together with a
Letter of Transmittal, duly completed and executed, and any other documents reasonably required by
the Paying Agent or the Surviving Corporation, (i) the holder of such Certificate shall be entitled
to receive in exchange therefor a check representing the applicable amount of cash that such holder
has the right to receive pursuant to Section 2.5 and (ii) the Certificate so surrendered
shall forthwith be canceled. No interest will be paid or accrued on the cash payable upon
surrender of the Certificates. Until surrendered as contemplated by this Section 3.2, each
such Certificate shall be deemed at any time after the Effective Time to represent only the right
to receive upon such surrender the applicable Merger Consideration.
(c) In the event of a transfer of ownership of Shares that is not registered in the transfer
records of the Company, the appropriate amount of the Merger Consideration may be paid to a
transferee if the Certificate representing such Shares is presented to the Paying Agent properly
endorsed or accompanied by appropriate stock powers and otherwise in proper form for transfer and
accompanied by all documents reasonably required by the Paying Agent to evidence and effect such
transfer and to evidence that any applicable Taxes have been paid.
Section 3.3 No Further Ownership Transfers. All Merger Consideration paid upon the
surrender for exchange of the Certificates representing Shares in accordance with the terms
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hereof
shall be deemed to have been paid in full satisfaction of all rights pertaining to such Shares and,
after the Effective Time, there shall be no further registration of transfers on the transfer books
of the Surviving Corporation of the Shares that were outstanding immediately prior to the Effective
Time. If, after the Effective Time, Certificates are presented to the Surviving Corporation for
any reason, they shall be canceled and exchanged as provided in this Article III, subject
to applicable Law in the case of Appraisal Shares.
Section 3.4 Termination of Exchange Fund. Any portion of the Exchange Fund (including
any interest and other income received with respect thereto) that remains undistributed to the
former Company Stockholders on the date 365 days after the Effective Time shall be delivered to
Parent upon demand, and any former holder of Shares who has not theretofore received any applicable
Merger Consideration to which such Company Stockholder is entitled under this Article III
shall thereafter look only to Parent or the Surviving Corporation (subject to abandoned property,
escheat or other similar Laws) for payment of claims with respect thereto and only as a general
creditor thereof.
Section 3.5 No Liability. None of Parent, the Surviving Corporation or Merger Sub
shall be liable to any holder of Shares for any part of the Merger Consideration delivered to a
public official pursuant to any applicable abandoned property, escheat or similar Law. Any amounts
remaining unclaimed by holders of any such Shares at such date as is immediately prior to the time
at which such amounts would otherwise escheat to, or become property of, any Governmental Entity
shall, to the extent permitted by applicable Law or Order, become the property of Parent free and
clear of
any claims or interest of any such holders or their successors, assigns or personal
representatives previously entitled thereto.
Section 3.6 Lost, Stolen or Destroyed Certificates. If any Certificate shall have
been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed and, if required by and at the discretion of
Parent or the Surviving Corporation, the posting by such Person of a bond in such reasonable amount
as Parent or the Surviving Corporation may direct, or the execution and delivery by such Person of
an indemnity agreement in such form as Parent or the Surviving Corporation may direct, in each case
as indemnity against any claim that may be made against it with respect to such Certificate, the
Paying Agent shall issue in exchange for such lost, stolen or destroyed Certificate the appropriate
amount of the Merger Consideration.
Section 3.7 Withholding of Tax. Parent, the Surviving Corporation, any Affiliate
thereof or the Paying Agent shall be entitled to deduct and withhold from amounts otherwise payable
pursuant to this Agreement to any holder of Shares, Appraisal Shares or Company Stock Options such
amount as Parent, the Surviving Corporation, any Affiliate thereof or the Paying Agent is legally
required to deduct and withhold with respect to the making of such payment under the Code or any
provision of Law relating to Taxes. To the extent that amounts are so withheld by Parent, the
Surviving Corporation, any Affiliate thereof or the Paying Agent, such withheld amounts shall be
(a) paid over to the applicable Governmental Entity in accordance with applicable Law or Order and
(b) treated for all purposes of this Agreement as having been paid to the holder in respect of
which such deduction and withholding was made.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Company SEC Reports filed after March 31, 2006, and prior to the
date of this Agreement, or as disclosed in the Company Disclosure Schedules, the Company represents
and warrants to Parent and Merger Sub as follows:
Section 4.1 Organization and Good Standing; Charter Documents.
(a) The Company and each of its Subsidiaries (i) is a corporation duly organized, validly
existing and in good standing (with respect to jurisdictions that recognize such concept) under the
Laws of its jurisdiction of incorporation, (ii) has full corporate power and authority and all
necessary governmental approvals to own, lease and operate its properties and assets and to conduct
its business as presently conducted, and (iii) is duly qualified or licensed to do business as a
foreign corporation and is in good standing (with respect to jurisdictions that recognize such
concept) in each jurisdiction where the character of the properties owned, leased or operated by it
or the nature of its business makes such qualification or licensing necessary,
except where the failure to be so qualified or licensed would not reasonably be expected to
have a Company Material Adverse Effect.
(b) The copies of the Company Certificate of Incorporation and Company Bylaws that are filed
as exhibits to the Company 10-K are complete and correct copies thereof as in effect on the date
hereof. The Company is not in violation of any of the provisions of the Company Certificate of
Incorporation or the Company Bylaws.
Section 4.2 Authority for Agreement.
(a) The Company has all necessary corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the Merger and the other
transactions contemplated by this Agreement. The execution, delivery and performance by the
Company of this Agreement, and the consummation by the Company of the Merger and the other
transactions contemplated by this Agreement, have been duly authorized by all necessary corporate
action (including the approval of the Company Board of Directors) and no other corporate
proceedings on the part of the Company, and no other votes or approvals of any class or series of
capital stock of the Company, are necessary to authorize this Agreement or to consummate the Merger
or the other transactions contemplated hereby (other than, with respect to the consummation of the
Merger and the adoption of this Agreement and to the extent required by Applicable Law, the Company
Stockholder Vote). This Agreement has been duly executed and delivered by the Company and,
assuming the due authorization, execution and delivery by Parent and Merger Sub, constitutes a
legal, valid and binding obligation of the Company enforceable against the Company in accordance
with its terms, except as enforcement thereof may be limited against the Company by (i) bankruptcy,
insolvency, reorganization, moratorium and similar Laws affecting the enforcement of creditors’
rights or remedies in general as from time to time in effect or (ii) the exercise by courts of
equity powers.
- 14 -
(b) At a meeting duly called and held, the Company Board of Directors has (i) determined that
this Agreement, the Merger and the other transactions contemplated hereby, taken together, are at a
price and on terms that are fair to, advisable and in the best interests of the Company
Stockholders, and (ii) adopted resolutions approving this Agreement and the transactions
contemplated hereby, including the Merger, declaring its advisability and recommending the adoption
by the Company Stockholders of this Agreement and the Merger and the other transactions
contemplated hereby.
(c) As of the date of this Agreement, each of the Company and the Company Board of Directors
has taken all action required to be taken by it to exempt this Agreement and the other Transaction
Documents, and the Offer and the other transactions contemplated hereby and thereby from, and this
Agreement and the other Transaction Documents, and the Offer and the other transactions
contemplated hereby and thereby are exempt from, the requirements of Section 203 of the DGCL and
any and all other Antitakeover Laws.
(d) As of the date of this Agreement, each of the Company and the Company Board of Directors
has taken all action required to be taken by it to cause the provisions of the
Rights Plan not to be applicable to this Agreement or the other Transaction Documents or to
the Offer or the other transactions contemplated hereby or thereby and to provide for the
expiration of the Rights upon the consummation of the Merger.
Section 4.3 Capitalization.
(a) The authorized capital stock of the Company consists of 500,000,000 shares of Company
Common Stock and 50,000,000 shares of preferred stock. As of March 31, 2007, 56,794,631 shares of
Company Common Stock are issued and outstanding, no shares of preferred stock are issued and
outstanding and no shares of Company Common Stock or preferred stock are held in the Company’s
treasury. All outstanding Shares are duly authorized and validly issued, fully paid and
nonassessable, free of any Encumbrances other than Encumbrances imposed upon the holder thereof by
reason of the acts or omissions of such holder, not subject to any preemptive rights or rights of
first refusal created by statute, and issued in compliance in all material respects with all
applicable federal and state securities Laws.
(b) As of March 31, 2007, there are outstanding Company Stock Options to purchase 16,683,584
shares of Company Common Stock pursuant to the Company Option Plans and 9,297,720 additional shares
of Company Common Stock are authorized and reserved for future issuance pursuant to the Company
Option Plans. As of March 31, 2007, 96,282 shares of Company Common Stock were subject to
outstanding awards of Director Deferred Shares. All shares of Company Common Stock subject to
issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments
pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and
nonassessable and issued in compliance in all material respects with all applicable federal and
state securities Laws. Except as set forth above and other than (i) shares of Company Common Stock
issued after March 31, 2007 through the exercise of Company Stock Options outstanding as of Xxxxx
00, 0000, (xx) the Rights, (iii) rights pursuant to the Company ESPP, (iv) shares of Company Common
Stock and Company Stock Options issued after the date of this Agreement in accordance with the
provisions of Section 6.1(b)(v) hereof, (v) shares issuable in connection with the Deferred
Compensation Plan and (vi) Director
- 15 -
Deferred Shares issued pursuant to agreements that were in
place as of March 31, 2007, there are no outstanding (x) shares of capital stock of or other voting
securities or ownership interests in the Company or (y) Company Stock Rights. The copies of the
Company Option Plans that are filed as exhibits to the Company SEC Reports are complete and correct
copies thereof as in effect on the date hereof.
(c) As of March 31, 2007, the Company has reserved 6,750,000 shares of Company Common Stock
for issuance under the Company ESPP.
(d) As of March 31, 2007, 130,000 shares of Company Common Stock are subject to a repurchase
option or forfeiture in favor of the Company that lapses over a vesting period related to the
holder’s period of employment.
(e) There are no rights of first refusal, co-sale rights or registration rights granted by and
binding upon the Company with respect to the Company’s capital stock and in
effect as of the date hereof. Except as set forth above, there are no outstanding contractual
obligations of the Company to repurchase, redeem or otherwise acquire any Shares or to pay any
dividend or make any other distribution in respect thereof. As of the date hereof, there are no
voting trusts or other agreements or understandings to which the Company is a party with respect to
the voting of stock of the Company.
Section 4.4 Company Subsidiaries. A true and complete list of all the Subsidiaries of
the Company is set forth on Section 4.4 of the Company Disclosure Schedules. The Company
is the owner of all outstanding shares of capital stock of each Subsidiary of the Company and all
such shares are duly authorized, validly issued, fully paid and nonassessable. All of the
outstanding shares of capital stock of each Subsidiary of the Company are owned by the Company free
and clear of all Encumbrances. Except as set forth on Section 4.4 of the Company
Disclosure Schedules, there are no outstanding Subsidiary Stock Rights.
Section 4.5 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by the Company do not, and the performance of
this Agreement by the Company and the consummation of the Merger (subject to the adoption of this
Agreement by the Company Stockholder Vote, if required by Applicable Law) and the other
transactions contemplated by this Agreement will not, (i) conflict with or violate any provision of
the Company Certificate of Incorporation or Company Bylaws, or the equivalent charter documents of
any Subsidiary of the Company, (ii) conflict with or violate any Law applicable to the Company or
its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is
bound or affected, or (iii) result in a breach of or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, give to others (immediately or with
notice or lapse of time or both) any right of termination, amendment, acceleration or cancellation
of, result (immediately or with notice or lapse of time or both) in triggering any payment or other
obligations, or result (immediately or with notice or lapse of time or both) in the creation of an
Encumbrance on any property or asset of the Company or its Subsidiaries pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which the Company or any of its
- 16 -
Subsidiaries is a party or by which the
Company or any of its Subsidiaries, or any property or asset of the Company or any of its
Subsidiaries, is bound or affected, except in the case of clauses (ii) and (iii) above for any such
conflicts, violations, breaches, defaults or other occurrences that would not reasonably be
expected to have a Company Material Adverse Effect.
(b) The execution and delivery of this Agreement by the Company do not, and the performance of
this Agreement by the Company and the consummation of the Merger and the other transactions
contemplated by this Agreement will not, require any action, consent, approval, authorization or
permit of, or filing with or notification to, or registration or qualification with, any
Governmental Entity, except for applicable requirements, if any, of the Securities Act, the
Exchange Act, state securities laws or “blue sky” laws, any Antitrust Law, the
Exon-Xxxxxx Amendment to the Defense Production Act of 1950 (“Exon-Xxxxxx”) and the
filing and recordation of the Certificate of Merger, as required by the DGCL.
Section 4.6 Compliance. The Company and its Subsidiaries hold all Company Permits and
are in compliance with the terms of such Company Permits, except where the failure to hold or be in
compliance with such Company Permits would not reasonably be expected to have a Company Material
Adverse Effect. The business of the Company and its Subsidiaries is not being conducted in
violation of any Law or Order, except for violations that would not reasonably be expected to have
a Company Material Adverse Effect. Except as set forth on Section 4.6 of the Company
Disclosure Schedules, no investigation or review by any Governmental Entity with respect to the
Company or any of its Subsidiaries or their respective businesses is pending or, to the Knowledge
of the Company, threatened.
Section 4.7 Litigation.
(a) There is no claim, suit, action, proceeding, investigation or arbitration pending or, to
the Knowledge of the Company, threatened against or affecting the Company or any of its
Subsidiaries or their respective directors or officers in their capacities as such, other than as
disclosed in the Company SEC Reports filed prior to the date of this Agreement or as set forth on
Section 4.7 of the Company Disclosure Schedules.
(b) There is no Order outstanding against the Company or any of its Subsidiaries or their
respective businesses that (i) would reasonably be expected to have the effect of materially
restricting or materially impairing any current or future business practice of, or acquisition of
property by, the Company or any of its Subsidiaries or Affiliates or (ii) would reasonably be
expected to have a Company Material Adverse Effect.
Section 4.8 Company SEC Reports; Financial Statements.
(a) Except as set forth on Section 4.8(a) of the Company Disclosure Schedules, the
Company has timely filed all Company SEC Reports required to be filed with the SEC on or prior to
the date hereof. Each Company SEC Report has complied in all material respects with the applicable
requirements of the Securities Act, and the rules and regulations promulgated thereunder, and the
Exchange Act, and the rules and regulations promulgated thereunder, as applicable, each as in
effect on the date so filed. None of the Company SEC Reports (including any financial statements
or schedules included or incorporated by reference
- 17 -
therein) contained when filed (and, in the case
of registration statements and proxy statements, on the dates of effectiveness and the dates of
mailing, respectively) any untrue statement of a material fact or omitted to state a material fact
required to be stated or incorporated by reference therein or necessary to make the statements
therein, in the light of the circumstances under which they were or are made, not misleading.
(b) The Company has made available (including via the SEC’s XXXXX system, as applicable) to
Parent all of the Company Financial Statements. All of the Company Financial Statements have been
prepared in accordance with GAAP applied on a consistent basis throughout the periods involved
(except as may be indicated in the notes thereto) and fairly present in all material respects the
consolidated financial position of the Company at the respective dates thereof and the consolidated
results of its operations and changes in cash flows for the periods indicated (subject, in the case
of unaudited statements, to normal year-end audit adjustments consistent with GAAP).
(c) Except as disclosed in the Company 10-K or as set forth on Section 4.8(c) of the
Company Disclosure Schedules, as of the date hereof the Company and its Subsidiaries have
implemented and maintain a system of internal accounting controls sufficient to provide reasonable
assurances regarding the reliability of financial reporting and the preparation of financial
statements in accordance with GAAP. Except as disclosed in the Company 10-K or as set forth on
Section 4.8(c) of the Company Disclosure Schedules, as of the date hereof the Company has
implemented and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the
Exchange Act) designed to ensure that information relating to the Company, including its
consolidated Subsidiaries, required to be disclosed in the reports the Company files or submits
under the Exchange Act is made known on a timely basis to the chief executive officer and the chief
financial officer of the Company by others within those entities.
(d) Except as disclosed in the Company Disclosure Schedules, there are no Liabilities of the
Company or any of its Subsidiaries of any kind other than:
(i) Liabilities disclosed in the consolidated balance sheet of the Company dated December 31,
2006 (including the notes thereto) or in the Company SEC Reports filed prior to the date of this
Agreement;
(ii) Transaction Expenses and other Liabilities incurred on behalf of the Company under this
Agreement;
(iii) Liabilities under any Company Material Contract (other than Liabilities arising from
breach thereof);
(iv) Liabilities incurred in the ordinary course of business consistent with past practice
since December 31, 2006 that would not reasonably be expected to have a Company Material Adverse
Effect; and
(v) Liabilities not required by GAAP to be set forth or reserved on a consolidated balance
sheet of the Company or in the notes thereto.
- 18 -
Section 4.9 Absence of Certain Changes or Events. Except as disclosed in the Company
SEC Reports, since March 31, 2006 through to the date of this Agreement, and except as specifically
contemplated by, or as disclosed in, this Agreement, the Company and its Subsidiaries have
conducted their businesses in the ordinary course consistent with past practice and, since such
date, there has not been, with respect to the Company and its Subsidiaries, (i) any action that, if
taken during the period from the date of this
Agreement through the Effective Time, would constitute a breach of any of Sections
6.1(b)(i)-(iv), (vii)-(x), (xii)-(xiv) or (xvii)(A), (ii) any damage,
destruction or other casualty loss (whether or not covered by insurance) affecting the business or
assets of the Company or any of its Subsidiaries that is or would reasonably be expected to be
material to the Company and its Subsidiaries, taken as a whole, (iii) any material labor dispute,
other than routine individual grievances, or, to the Knowledge of the Company, any activity or
proceeding by a labor union or representative thereof to organize any employees of the Company or
any of its Subsidiaries, which employees were not subject to a collective bargaining agreement at
March 31, 2006, or any material lockouts, strikes, slowdowns, work stoppages or threats thereof by
or with respect to such employees or (iv) any event, occurrence, development or state of
circumstances or facts that has had or would reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect.
Section 4.10 Taxes.
(a) The Company and each of its Subsidiaries has filed by the applicable deadlines (taking
into account any extensions) with the appropriate Governmental Entities all Tax Returns that are
required to have been filed by it. All such Tax Returns were correct and complete in all material
respects. Except as set forth on Section 4.10(a) of the Company Disclosure Schedules, all
material Taxes required to have been paid by the Company and each of its Subsidiaries (whether or
not shown on such Tax Returns) have been paid or are either currently being disputed by appropriate
proceedings described in Section 4.10(c) or are reserved for in the most recently filed
Company Financial Statements. Neither the Company nor any of its Subsidiaries currently is the
beneficiary of any extension of time within which to file any unfiled Tax Return. No claim has
been made in writing by a Governmental Entity in a jurisdiction where the Company or its
Subsidiaries do not currently file Tax Returns that any such company is subject to taxation by that
jurisdiction. There are no security interests or other liens on any of the assets of the Company
or its Subsidiaries that arose in connection with any failure (or alleged failure) to timely pay
any Tax.
(b) The Company and its Subsidiaries have withheld and paid to the appropriate Governmental
Entity all material Taxes required to have been withheld and paid by the Company or its
Subsidiaries in connection with amounts paid to any employee, independent contractor, creditor,
stockholder or other Third Party.
(c) Except as set forth on Section 4.10(c) of the Company Disclosure Schedules, there
are no claims, audits, actions, suits, proceedings or investigations presently pending with respect
to the Company or any of its Subsidiaries in respect of any Tax or Tax Return of which the Company
or its Subsidiaries has received written notice, or of which the Company otherwise has Knowledge,
none of the Company or its Subsidiaries has received written notice of any threatened audits or
investigations relating to any Tax or Tax Return of the
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Company or its Subsidiaries and do not
otherwise have any Knowledge of any material threatened audits or investigations relating to any
Tax or Tax Return of the Company or its Subsidiaries.
(d) Neither the Company nor any of its Subsidiaries has waived any statute of limitations in
respect of assessment or collection of Taxes or agreed to, or requested, any extension of time for
assessment or collection of any Tax, which waiver or extension is currently effective.
(e) The Company has made available to Parent complete and accurate copies of (i) all material
Tax Returns filed by the Company and any of its Subsidiaries with a Governmental Entity on or prior
to the date hereof for taxable periods beginning on or after January 1, 2002; (ii) all written
rulings from, and written agreements with, any Governmental Entity relating to Taxes of the Company
or its Subsidiaries that would have continuing effect in the determination of Tax for a taxable
period for which a Tax Return has not yet been filed by the Company or its Subsidiaries; (iii) all
elections relating to Taxes of the Company or any of its Subsidiaries that have been filed with any
Governmental Entity (other than elections which are included in or apparent from the Tax Returns
referred to in (i) above) that would have continuing effect in the determination of Tax for any
taxable period for which a Tax Return has not yet been filed by the Company or its Subsidiaries.
(f) Except as set forth on Section 4.10(f) of the Company Disclosure Schedules, there
are no agreements relating to the allocating or sharing of Taxes to which the Company or any of its
Subsidiaries is a party the principal purpose of which is or was the allocation of Tax Liabilities
computed on a consolidated, combined, unitary or similar basis among entities that have or will be
required to compute their Tax Liability by filing Tax Returns on such a basis other than agreements
solely among the Company and its Subsidiaries.
(g) None of the Company or its Subsidiaries is or has been a member of an affiliated group
(within the meaning of section 1504(a) of the Code) or similar group of entities with which the
Company or any of its Subsidiaries joined, or was or may be required to join, for any taxable
period through the date hereof in making a consolidated federal income Tax Return or other Tax
Return in which Tax Liability was or would be computed on a consolidated, combined, unitary or
similar basis, and which would cause the Company or its Subsidiaries to be liable for Taxes of
another Person pursuant to Treasury Regulations Section 1.1502-6(a) or any similar provision of
Law, other than such a group of entities including only the Company, its Subsidiaries, and
predecessors thereof.
(h) Neither the Company nor any of its Subsidiaries has been either a “distributing
corporation” or a “controlled corporation” within the meaning of Section 355(a)(1)(A) of the Code
in a distribution qualifying (or intended to qualify) under Section 355 of the Code (or so much of
Section 356 as relates to Section 355) since January 1, 2002.
(i) Neither the Company nor any of its Subsidiaries has been a United States real property
holding corporation within the meaning of Section 897(c)(2) of the Code at any time during the
applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
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(j) Neither the Company nor any of its Subsidiaries has constituted either an “expatriated
entity” within the meaning of Section 7874(a)(2)(A) of the Code or a “surrogate foreign
corporation” within the meaning of Section 7874(a)(2)(B) of the Code.
(k) Neither the Company nor any of its Subsidiaries has agreed, or is it required, to make any
adjustment to income pursuant to Section 481(a) of the Code or any similar provision of state,
local or foreign law by reason of a change in accounting method initiated by it or any other
relevant party, and no Governmental Entity has proposed any such change in accounting method in
writing or, to the Knowledge of the Company, otherwise proposed any material change in accounting
method, nor does the Company or any of its Subsidiaries have any application pending with any
Governmental Entity requesting permission for any changes in accounting method that relates to the
business or assets of the Company or any of its Subsidiaries that would require such an adjustment.
(l) None of the Company or its Subsidiaries has been a beneficiary of or participated in any
“reportable transaction” within the meaning of Treasury Regulations Section 1.6011-4(b)(1) that
was, is, or, to the Knowledge of the Company, will ever be, required to be disclosed under Treasury
Regulations Section 1.6011-4. No Tax Return filed by or on behalf of the Company or its
Subsidiaries has contained a disclosure statement under Section 6662 of the Code (or any similar
provision of Law).
(m) Except as described in Section 4.10(m) of the Company Disclosure Schedules, the
Company and its Subsidiaries have not made any payments or provided any benefits, are not obligated
to make any payments or provide any benefits, and are not a party to any contract, agreement, plan
or arrangement requiring it to make any payments or provide any benefits to any person that would,
either alone or in combination with another event, be a parachute payment (within the meaning of
Section 280G of the Code) as a result of any event connected with the acquisition of the Company by
Parent contemplated by this Agreement.
(n) None of the Company or its Subsidiaries (i) is a party to any joint venture, partnership
or other agreement or arrangement which is treated as a partnership for U.S. federal income Tax
purposes or (ii) owns any interest in an entity that either is treated as an entity disregarded as
separate from its owner for federal Tax purposes or is an entity as to which an election pursuant
to Treasury Regulations Section 301.7701-3 has been made.
(o) Schedule 4.10(o) contains a list of all jurisdictions (whether foreign or domestic) in
which the Company or any of its Subsidiaries currently files income Tax Returns.
Section 4.11 Title to Personal Properties; No Real Property. Each of the Company and
its Subsidiaries has good and marketable title to, or a valid leasehold interest in, all of its
tangible personal properties and assets reflected in the Company 10-K or acquired after March 31,
2006 (other than assets disposed of since March 31, 2006 in the ordinary course of business
consistent with past practice), in each case free and clear of all Encumbrances, except for
Encumbrances that secure indebtedness and that are properly reflected in the Company 10-K and
Encumbrances that can be removed for a cost of less than $50,000. The tangible personal property
and assets of the Company and its Subsidiaries are in good operating condition and in a state of
good maintenance and repair, ordinary wear and tear excepted, are operated in accordance with all
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applicable licenses, permits, consents and governmental authorizations, and are usable in the
regular and ordinary course of business, except as would not reasonably be expected to have a
Company Material Adverse Effect. Each
of the Company and each of its Subsidiaries either owns, or has valid leasehold interests in,
all tangible personal properties and assets used by it in the conduct of its business, except where
the absence of such ownership or leasehold interest would not reasonably be expected to have a
Company Material Adverse Effect. Neither the Company nor any of its Subsidiaries has any legal
obligation, absolute or contingent, to any other Person to sell or otherwise dispose of any of its
tangible personal properties or assets (other than the sale of the Company’s products in the
ordinary course of business) with an individual value in excess of $50,000 or an aggregate value in
excess of $100,000. Neither the Company nor any of its Subsidiaries owns any real property.
Section 4.12 Officers, Directors, Employees and Affiliates.
(a) Except as disclosed in the Company SEC Reports filed since March 31, 2006 and prior to the
date hereof or as set forth on Section 4.12(a) of the Company Disclosure Schedules, (i)
neither the Company nor any of its Subsidiaries is a party to or bound by any Employment Agreement
and (ii) except as otherwise contemplated by Section 2.8, Section 2.9 and
Section 2.10, no severance or other payment will become due or benefits or compensation
increase or accelerate as a result of the transactions contemplated by this Agreement, solely or
together with any other event, including a subsequent termination of employment.
(b) Except for compensation and benefits received in the ordinary course of business as an
employee or director of the Company or its Subsidiaries, no director, officer or other Affiliate or
Associate of the Company or any entity in which, to the Knowledge of the Company, any such
director, officer or other Affiliate or Associate owns any beneficial interest (other than a
beneficial interest in a publicly held corporation whose stock is traded on a national securities
exchange or in the over-the-counter market and less than 5% of the stock of which is beneficially
owned by any such Persons) is currently a party to or has any interest in (i) any partnership,
joint venture, contract, arrangement or understanding with, or relating to, the business or
operations of the Company or its Subsidiaries, (ii) any loan, arrangement, understanding, agreement
or contract for or relating to indebtedness of the Company or its Subsidiaries or (iii) any
property (real, personal or mixed), tangible or intangible, used or currently intended to be used
in the business or operations of the Company or its Subsidiaries.
Section 4.13 Employee Benefit Plans.
(a) Section 4.13(a) of the Company Disclosure Schedules sets forth a true and complete
list of each Company Benefit Plan.
(b) In respect of each Company Benefit Plan, a complete and correct copy of each of the
following documents (if applicable) has been made available to Parent: (i) the most recent plan
documents or written agreement thereof, and all amendments thereto and all related trust or other
funding vehicles or insurance policies with respect to each such Company Benefit Plan; (ii) the
most recent summary plan description, and all related summaries of material modifications thereto;
(iii) the most recent Form 5500 (including schedules and attachments) and
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financial statements for the past three (3) plan years; and (iv) the most recent IRS
determination or opinion letter.
(c) Neither the Company nor any entity treated as a single employer with the Company under
Section 414(b), (c), (m) or (o) of the Code maintains, contributes to or is required to maintain or
contribute to, or has in the past six years maintained or contributed to, or been required to
maintain or contribute to, or had any liability in respect of, any Employee Benefit Plan that (i)
is a “multiemployer plan” as defined in Sections 3(37) of ERISA, (ii) is subject to the funding
requirements of Section 412 of the Code or Title IV of ERISA, or (iii) provides for post-retirement
medical, life insurance or other welfare-type benefits (other than, at the sole expense of the
employee or former employee, as required by Part 6 of Subtitle B of Title I of ERISA or Section
4980B of the Code or under a similar state law).
(d) The Company Benefit Plans and their related trusts intended to qualify under Sections 401
and 501(a) of the Code are subject to current favorable determination or opinion letters from the
IRS and, to the Knowledge of the Company, nothing has occurred that is reasonably likely to
adversely affect such determination or opinion.
(e) Except as set forth on Section 4.13(e) of the Company Disclosure Schedules, the
Company Benefit Plans have been maintained and administered in all material respects in accordance
with their terms and Applicable Law.
(f) There are no suits, actions, disputes, claims (other than routine claims for benefits),
arbitrations, administrative or other proceedings of the IRS, the United States Department of Labor
or any other Governmental Entity pending or, to the Knowledge of the Company, threatened,
anticipated or expected to be asserted with respect to any Company Benefit Plan or any related
trust or other funding medium thereunder or with respect to the Company or its Subsidiaries as the
sponsor or fiduciary thereof or with respect to any other fiduciary thereof, and no facts or
circumstances exist that could give rise to any such suits, actions, disputes, claims, arbitrations
or proceedings, which would reasonably be expected to have a Company Material Adverse Effect.
(g) Section 4.13(g)(i) of the Company Disclosure Schedules lists each Company Benefit
Plan that is subject to any law or applicable custom of any jurisdiction outside of the United
States (each, an “International Plan”). Each International Plan has been maintained in
material compliance with its terms and with the requirements prescribed by Applicable Law
(including any special provisions relating to qualified plans where such International Plan was
intended to so qualify) and has been maintained in good standing with the applicable regulatory
authorities. Except as set forth in Section 4.13(g)(ii) of the Company Disclosure
Schedule, according to the actuarial assumptions and valuations most recently used for the purpose
of funding each International Plan (or, if the same has no such assumptions and valuations or is
unfunded or is not subject to statutory funding requirements, according to the actuarial
assumptions and valuations prescribed by applicable local accounting standards and principles), as
of December 31, 2006, the total amount or value of the funds available under such International
Plan to pay benefits accrued thereunder or segregated in respect of such accrued benefits, together
with any reserve or accrual with respect thereto, exceeded the present value of all benefits
(actual or contingent) accrued as of such date of all participants and past participants
- 23 -
therein in respect of which the Company or any of its Subsidiaries has or would have after the
Effective Time any obligation.
(h) No transaction prohibited by Section 406 of ERISA or Section 4975 of the Code has occurred
with respect to any Company Benefit Plan that is covered by Title I of ERISA, which transaction has
or will cause the Company or any of its Subsidiaries to incur any material liability under ERISA,
the Code or otherwise, excluding transactions effected pursuant to and in compliance with a
statutory or administrative exemption.
(i) Neither the Company nor any of its Subsidiaries has effectuated (i) a “plant closing” (as
defined in WARN) affecting any site of employment or one or more facilities or operating units
within any site of employment or facility of the Company or any of its Subsidiaries; (ii) a “mass
layoff” (as defined in WARN); or (iii) such other transaction, layoff, reduction in force or
employment terminations sufficient in number to trigger application of any similar Law that could
result in a material liability to the Company and its Subsidiaries, taken as a whole.
(j) No Company Benefit Plan (i) would reasonably be expected to give rise to the payment of
any amount that would not be deductible pursuant to the terms of Section 162(m) of the Code or (ii)
would reasonably be expected to cause any participant therein to incur additional taxes or interest
under Section 409A of the Code or any regulations or IRS guidance promulgated thereunder (including
with respect to any stock option that has an exercise price that has been or may be less than the
fair market value of the underlying stock as of the date such option was granted).
(k) All contributions and payments accrued under each Company Benefit Plan, determined in
accordance with prior funding and accrual practices, as adjusted to include proportional accruals
for the period ending as of the date hereof, have been discharged and paid on or prior to the date
hereof except to the extent reflected as a liability on the Company’s Financial Statements.
(l) On or prior to the date hereof, the Compensation Committee of the Company Board of
Directors (the “Compensation Committee”) has (i) approved each agreement set forth in
Section 4.13(l) of the Company Disclosure Schedules (each, a “Company Compensation
Arrangement”) as an “employment compensation, severance or other employee benefit arrangement”
within the meaning of Rule 14d-10(d)(2) under the Exchange Act, and (ii) taken all other action
necessary to satisfy the requirements of the non-exclusive safe harbor with respect to such Company
Compensation Arrangements in accordance to Rule 14d-10(d)(3) under the Exchange Act (the approvals
and actions referred to in clauses (i) and (ii) above, the “Company Compensation
Approvals”). The Company Board has determined that each of the members of the Compensation
Committee is an “independent director” as defined in the Nasdaq Marketplace Rules.
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Section 4.14 Labor Relations.
(a) Except as set forth on Section 4.14(a) of the Company Disclosure Schedules, the
Company and its Subsidiaries are in compliance with all applicable Laws and Orders governing or
concerning conditions of employment, employment discrimination and harassment, wages, hours or
occupational safety and health, including the Labor Laws, except where the failure to so comply
would not reasonably be expected to have a Company Material Adverse Effect.
(b) Except as set forth on Section 4.14(b) of the Company Disclosure Schedules, the
employees of the Company and its Subsidiaries have not been, and currently are not, represented by
a labor organization or group that was either certified or voluntarily recognized by any labor
relations board, including the NLRB, or certified or voluntarily recognized by any other
Governmental Entity and there is not, to the Knowledge of the Company, any attempt to organize any
employees of the Company or its Subsidiaries. There has not been, nor is there existent or, to the
Knowledge of the Company, threatened, any material strike, slowdown, picketing or work stoppage by
the employees of the Company or its Subsidiaries. Except as would not, individually or in the
aggregate, be material to the Company and its Subsidiaries, taken as a whole, there are no unfair
labor practice charges or complaints against the Company or any of its Subsidiaries pending before
the NLRB or any foreign equivalent.
(c) Except as set forth on Section 4.14(c) of the Company Disclosure Schedules, no
claim, complaint, charge or investigation for unpaid wages, bonuses, commissions, employment
withholding Taxes, penalties, overtime or other compensation, benefits, child labor or
record-keeping violations has been filed and is pending or, to the Knowledge of the Company, is
threatened under the FLSA, the Xxxxx-Xxxxx Act, the Xxxxx-Xxxxxx Act or the Service Contract Act,
or any other Law. No discrimination, illegal harassment and/or retaliation claim, complaint,
charge or investigation has been filed and is pending or, to the Knowledge of the Company, is
threatened against the Company or any Subsidiary of the Company under the 1964 Civil Rights Acts,
the Equal Pay Act, the ADEA, the ADA, the FMLA, the FLSA, ERISA or any other federal Law or
comparable state fair employment practices act or foreign Law, including any provincial Law
regulating discrimination in the workplace. No wrongful discharge, retaliation, libel, slander or
other claim, complaint, charge or investigation that arises out of the employment relationship
between the Company or any of its Subsidiaries and their respective employees has been filed and is
pending or, to the Knowledge of the Company, is threatened against the Company or any of its
Subsidiaries under any applicable Law.
Section 4.15 Contracts and Commitments.
(a) Except as disclosed in the Company SEC Reports filed since March 31, 2006 and prior to the
date hereof or as otherwise listed on Section 4.15 of the Company
Disclosure Schedules, neither the Company nor any of its Subsidiaries is a party to, is bound
or affected by, or receives any benefits under, any agreement, contract or legally binding
understanding, whether oral or written: (i) providing for (A) aggregate noncontingent unpaid
payments by or to the Company or any of its Subsidiaries in excess of $100,000 or (B) potential
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unpaid payments by or to the Company or any of its Subsidiaries reasonably expected to exceed
$500,000 during the current term thereof, in each case other than an Excluded Contract; (ii)
limiting the freedom of the Company to engage in any line of business or sell, supply or distribute
any service or product, or to compete with any entity or to conduct business in any geography;
(iii) any agreement (A) that after the Effective Time would, to the Company’s Knowledge, have the
effect of limiting in any material respect the freedom of Parent or any of its Subsidiaries (other
than the Company and its Subsidiaries) to engage in any line of business or sell, supply or
distribute any service or product, or to compete with any entity or to conduct business in any
geography, (B) pursuant to which the Company or any of its Subsidiaries has granted pricing to a
Third Party on a “most favored nation” or similar basis or (C) pursuant to which the Company or any
of its Subsidiaries has agreed to deal with a Third Party on an exclusive basis; (iv) providing for
any joint venture, partnership or similar arrangement; (v) relating to the borrowing of money or
the guarantee of any such obligation (other than trade payables and instruments relating to
transactions entered into in the ordinary course of business); (vi) containing severance or
termination pay Liabilities related to termination of employment; (vii) related to product supply,
manufacturing, distribution or development, or the license of Company Intellectual Property to or
from the Company or its Subsidiaries (except for nonexclusive software licenses granted to end-user
customers, value added resellers, OEMs, integrators and distributors in the ordinary course of
business (“Excluded Contracts”), or standard licenses purchased by the Company or its
Subsidiaries for off-the-shelf software and except for licenses in which either the aggregate
noncontingent payments to or by the Company are not in excess of $100,000 or the potential payment
to or by the Company is not expected to exceed $500,000 during any term thereof); or (viii)
otherwise required to be filed as an exhibit to an Annual Report on Form 10-K, as provided by Rule
601 of Regulation S-K promulgated under the Exchange Act. Each contract of the type described in
the immediately preceding sentence is referred to herein as a “Company Material Contract.”
The Company has heretofore made available to Parent a complete and correct copy of each Company
Material Contract, including any amendments or modifications thereto.
(b) Each Company Material Contract is valid and binding on the Company or any Subsidiaries of
the Company party thereto and, to the Knowledge of the Company, each other party thereto, and is in
full force and effect, and the Company and each of its Subsidiaries have performed in all material
respects all obligations required to be performed by them under each Company Material Contract and,
to the Knowledge of the Company, each other party to each Company Material Contract has performed
in all material respects all obligations required to be performed by it under such Company Material
Contract, except, in each case, as would not reasonably be expected to have a Company Material
Adverse Effect. To the Knowledge of the Company, there has been no, and the Company has not
received notice of any, violation or default under (or any condition that with the passage of time
or the giving of notice, or both, would cause such a violation of or default under) any Company
Material Contract or any other agreement or contract to which it is a party or by which it or any
of its properties or assets is bound, except for violations or defaults that would not reasonably
be expected to have a Company Material Adverse Effect.
(c) Except as specified on Sections 4.15(c)(i-iii) of the Company Disclosure
Schedules, neither the Company nor any of its Subsidiaries is a party to, is bound or affected by,
or receives any benefits under, any agreement, contract or legally binding understanding,
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whether
oral or written, (i) containing any “security ready” provision pursuant to Section 52.204-2 of the
Federal Acquisition Regulations or any similar provision that, in the absence of a post-closing
proxy, voting trust or similar arrangement, would result in any breach or default by the Company or
any of its Subsidiaries, (ii) pursuant to which notice to any defense or intelligence agency of the
United States of America is required under the terms of the contract with such agency in connection
with the Offer, the Merger or the other transactions contemplated by this Agreement or (iii)
directly as a prime contractor or to its Knowledge, indirectly as a subcontractor, with any defense
or intelligence agency of the United States of America (the “Specified Contracts”).
Section 4.15(c)(iv) of the Company Disclosure Schedules lists each Specified Contract and,
(x) to the extent legally permissible, the general subject matter thereof, (y) the current annual
revenues generated by each Specified Contract and (z) any express prohibition set forth in the
contract that precludes the Company from terminating such Contract.
Section 4.16 Intellectual Property.
(a) To the Knowledge of the Company, the Company or each of its Subsidiaries owns, or is
licensed under, or otherwise possesses sufficient rights under, the Intellectual Property necessary
to conduct the business of the Company or its Subsidiaries as currently conducted.
(b) Section 4.16(b) of the Company Disclosure Schedules sets forth a true and complete
list of (i) all patents and pending patent applications and all registered and material
unregistered trademarks, trade names and service marks, and all registered copyrights, and domain
names included in the Company Intellectual Property (the “Registered Company Intellectual
Property”), including, to the extent applicable, the jurisdictions in which each such Company
Intellectual Property right has been issued or registered or in which any application for such
issuance and registration has been filed, (ii) all material licenses, sublicenses and other
agreements to which the Company or any Subsidiary of the Company is a party and pursuant to which
any person is authorized to use or has an option to obtain the right to use any material Company
Intellectual Property other than in the ordinary course of business, and (iii) all material
licenses, sublicenses and other agreements as to which the Company or any of its Subsidiaries is a
party and pursuant to which the Company or any of its Subsidiaries is authorized to use any
material Intellectual Property of any Third Party (other than standard-form end user license
agreements for commercial off-the-shelf software with an acquisition cost of less than $50,000 per
license or that constitutes enterprise-wide license agreements for standard desktop software).
Neither the Company nor any of its Subsidiaries nor, to the Knowledge of the Company, any Third
Party, is in violation of any license, sublicense or agreement described in Section 4.16(b)
of the Company Disclosure Schedules except where any such violation would not have a Company
Material Adverse Effect. Except as otherwise described in Section 4.16(b) of the Company
Disclosure Schedules, the execution and delivery of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby will not (A) cause the Company
or any of its Subsidiaries to be in material violation or material default
under any such license, sublicense or agreement, (B) result in the termination or modification
of any such license, sublicense or agreement, or entitle any other party to any such license,
sublicense or agreement to terminate or modify such license, sublicense or agreement, (C) entitle
any Third Party to claim any right to use or practice under any Merger Sub’s, Parent’s or any of
their respective Affiliates’ Intellectual Property rights or (D) materially alter, encumber or
impair
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any Company Intellectual Property or Intellectual Property licensed to the Company. To the
Knowledge of the Company, the Company is the owner of all right, title and interest in and to the
Company Intellectual Property and, subject to any non-exclusive license agreements to which the
Company or any of its Subsidiaries is a party and pursuant to which the Company or any of its
Subsidiaries licenses others to use any such Company Intellectual Property (all of which have been
entered into in the normal course of business), has sole and exclusive rights to the use thereof or
the material covered thereby in connection with the services or products in respect of which such
Company Intellectual Property is being used by the Company or any of its Subsidiaries.
(c) To the Knowledge of the Company, there is no material unauthorized use, disclosure,
infringement or misappropriation of any Company Intellectual Property rights by any Third Party,
including any employee or former employee of the Company or any of its Subsidiaries. Neither the
Company nor any of its Subsidiaries has entered into any agreement to indemnify any other Person
against any charge of infringement of any Company Intellectual Property, other than indemnification
obligations arising under or in connection with purchase orders or agreements entered into in the
ordinary course of business for the sale, license or distribution of any Company Intellectual
Property or products containing or produced under Company Intellectual Property.
(d) Except as set forth on Section 4.16(d) of the Company Disclosure Schedules: (i)
to the Knowledge of the Company, all Registered Company Intellectual Property is valid and existing
and (ii) there is no assertion or claim pending challenging the validity of any Company
Intellectual Property. Neither the Company nor any of its Subsidiaries is a party to any suit,
action or proceeding that involves a claim of infringement by the Company or any of its
Subsidiaries of any Intellectual Property of any Third Party nor, to the Knowledge of the Company,
is any such suit, action or proceeding being threatened against the Company or any of its
Subsidiaries. To the Knowledge of the Company, (i) neither the Company nor any Subsidiary has
infringed or misappropriated any Intellectual Property of any Third Party in any material respect
and (ii) neither the conduct of the business of the Company and each of its Subsidiaries as
currently conducted nor the development, manufacture, sale, licensing or use of any of the products
of the Company or any of its Subsidiaries as now developed, manufactured, sold, licensed or used
infringes in any material respect on any Intellectual Property of any Third Party. No Third Party
has notified the Company that it is challenging the ownership by the Company or any of its
Subsidiaries, or the validity of, any of the Company Intellectual Property. Neither the Company
nor any of its Subsidiaries is bringing any action, suit or proceeding for infringement of the
Company Intellectual Property or breach of any license or agreement involving Company Intellectual
Property against any Third Party. There are no pending or threatened interference,
re-examinations, or oppositions involving any patents or patent applications of the Company or any
of its Subsidiaries, except such as may have been commenced by the Company or any of its
Subsidiaries in their reasonable judgment.
(e) The Company or its Subsidiaries have, in the ordinary course of business, taken
commercially reasonable steps, in accordance with normal industry practice, to protect and preserve
the confidentiality of all material confidential information of the Company or its Subsidiaries.
Except as would not result in or would not reasonably be expected to be material to the Company and
its Subsidiaries, taken as a whole, each employee, consultant and independent
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contractor of the
Company and its Subsidiaries has executed a proprietary information and confidentiality agreement
substantially in the Company’s standard forms, which forms have been made available to Parent.
None of the Intellectual Property of the Company or any Subsidiary that is material to the business
or operations of the Company and its Subsidiaries and the value of which to the Company and its
Subsidiaries is contingent upon maintaining the confidentiality thereof, has been disclosed other
than to employees, representatives and agents of the Company or any Subsidiary who are bound by
written confidentiality agreements.
(f) No government funding, facilities of a university, college, other educational institution
or research center was used in the development of any Intellectual Property owned by the Company.
(g) No party other than the Company or its Subsidiaries possesses any current or contingent
rights to any source code that is part of the Intellectual Property owned by the Company other than
in connection with any software escrow arrangement entered into between the Company and its
customers in the ordinary course of business pursuant to a written agreement, in the form of or
substantially similar to the Company’s standard form of software escrow agreement as previously
furnished to Parent.
(h) None of the software included in the Company Intellectual Property or distributed by the
Company or any of its Subsidiaries contains any software code that is licensed under any terms or
conditions and used in a manner that requires that such software be (i) made available or
distributed in source code form, (ii) licensed for the purpose of making derivative works, (iii)
licensed under terms that allow reverse engineering, reverse assembly or disassembly of any kind or
(iv) redistributable by a licensee at no charge.
(i) To the Knowledge of the Company, none of the software included in the Company Intellectual
Property contains any virus, worm, Trojan Horse, bomb, backdoor, clock, timer, or other similar
code, feature, design or routine which (i) other than in connection with time-limited evaluation
licenses for Company products, can cause such software to be erased, inoperable, or otherwise
incapable of being used, either automatically or upon command by any Person, (ii) permits any
unauthorized Person to access such software in any manner not generally advertised or set forth in
its user specifications, or (iii) other than in connection with time-limited evaluation licenses
for Company products, would prevent such software from performing substantially in accordance with
its user specifications.
Section 4.17 Insurance Policies. The Company and its Subsidiaries maintain insurance
with reputable insurers for the business and assets of the Company and its Subsidiaries against all
risks normally insured against, and in amounts normally carried by, corporations of similar size
engaged in similar lines of business. All insurance policies and bonds with respect to the
business and assets of the
Company and its Subsidiaries are in full force and effect, and the Company and its
Subsidiaries have not reached or exceeded their policy limits for any insurance policies in effect
at any time during the past five years.
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Section 4.18 Brokers; Expenses.
(a) No broker, finder or investment banker (other than the Company Financial Advisor, a true
and complete copy of whose engagement letter has been made available to Parent) is entitled to any
brokerage, finder’s or other fee or commission in connection with this Agreement, the Offer, the
Merger or the other transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company, its Subsidiaries or any of their respective directors, officers or
employees.
(b) Section 4.18(b) of the Company Disclosure Schedules sets forth the Company’s good
faith estimate (based on the facts and information reasonably available to the Company as of the
date of this Agreement) of all Transaction Expenses that the Company has incurred from January 1,
2007 through March 31, 2007.
Section 4.19 Company Financial Advisor Opinion. The Company Board of Directos has
received the opinion of the Company Financial Advisor to the effect that, as of the date of such
opinion, the consideration to be received in the Offer and the Merger by the holders (other than
Parent and its Affiliates) of Shares pursuant to this Agreement is fair, from a financial point of
view, to such holders.
Section 4.20 Disclosure Documents.
(a) Each document required to be filed by the Company with the SEC or required to be
distributed or otherwise disseminated to the Company Stockholders in connection with the
transactions contemplated by this Agreement (the “Company Disclosure Documents”), including
the Schedule 14D-9, the Proxy Statement, if any, to be filed with the SEC in connection with the
Merger, and any amendments or supplements thereto, when filed, distributed or disseminated, as
applicable, will comply as to form in all material respects with the applicable requirements of the
Exchange Act.
(b) (i) The Proxy Statement, as supplemented or amended, if applicable, at the time such Proxy
Statement or any amendment or supplement thereto is first mailed to the Company Stockholders and at
the time the Company Stockholders vote on adoption of this Agreement and (ii) any Company
Disclosure Document (other than the Proxy Statement), at the time of the filing of such Company
Disclosure Document or any supplement or amendment thereto and at the time of any distribution or
dissemination thereof, will not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not misleading. If at any
time prior to the Effective Time any event with
respect to the Company or any of its Subsidiaries shall occur which is required to be
described in the Proxy Statement, such event shall be so described, and an amendment or supplement
shall be promptly filed with the SEC and, as required by law, disseminated to the Company
Stockholders. Notwithstanding the foregoing, the Company makes no representation or warranty with
respect to any information supplied by Parent or Merger Sub that is contained in any Company
Disclosure Document.
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(c) The information with respect to the Company or any of its Subsidiaries that the Company
furnishes to Parent in writing specifically for use in the Schedule TO and the Offer Documents, at
the time of the filing of the Schedule TO, at the time of any distribution or dissemination of the
Offer Documents and at the time of the consummation of the Offer, will not contain any untrue
statement of a material fact required to be stated therein or omit to state any material fact
required to be stated therein or necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading.
Section 4.21 Environmental Matters.
(a) Except as would not reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect:
(i) no notice, notification, demand, request for information, citation, summons or order has
been received, no complaint has been filed, no penalty has been assessed, and no investigation,
action, claim, suit, proceeding or review is pending or, to the Knowledge of the Company, is
threatened by any Governmental Entity or other Person relating to the Company or any Subsidiary and
relating to or arising out of any Environmental Law;
(ii) the Company and its Subsidiaries are and have been in compliance in all material respects
with all Environmental Laws and all Environmental Permits; and
(iii) there are no material liabilities or obligations of the Company or any of its
Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise arising under or relating to any Environmental Law or any Hazardous
Substance and, to the Knowledge of the Company, there is no condition, situation or set of
circumstances that could reasonably be expected to result in or be the basis for any such liability
or obligation.
(b) There has been no environmental investigation, study, audit, test, review or other
analysis conducted of which the Company has Knowledge in relation to the current or prior business
of the Company or any of its Subsidiaries or any property or facility now or previously owned or
leased by the Company or any of its Subsidiaries that has not been delivered to Parent at least
five Business Days prior to the date hereof.
(c) Neither the Company nor any of its Subsidiaries owns, leases or operates or has owned,
leased or operated any real property in New Jersey or Connecticut.
(d) For purposes of this Section 4.21, the terms “Company” and
“Subsidiaries” shall include any entity that is, in whole or in part, a predecessor of the
Company or any of its Subsidiaries.
(e) This Section sets forth the sole representations and warranties of the Company with
respect to environmental matters, including without limitation all matters arising under
Environmental Laws and Environmental Permits.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub represent and warrant to the Company as follows:
Section 5.1 Organization and Good Standing. Parent is a stock corporation
(Aktiengesellschaft) duly registered with the Commercial Register in Darmstadt, Germany, and is
validly existing under the laws of Germany. Merger Sub (i) is a corporation duly organized,
validly existing and in good standing (with respect to jurisdictions that recognize such concept)
under the Laws of its jurisdiction of incorporation, (ii) has full corporate power and authority
and all necessary governmental approvals to own, lease and operate its properties and assets and to
conduct its business as presently conducted, and (iii) is duly qualified or licensed to do business
as a foreign corporation and is in good standing (with respect to jurisdictions that recognize such
concept) in each jurisdiction where the character of the properties owned, leased or operated by it
or the nature of its business makes such qualification or licensing necessary, except where the
failure to be so qualified or licensed would not reasonably be expected to have a Parent Material
Adverse Effect.
Section 5.2 Authority for Agreement. Each of Parent and Merger Sub has all necessary
corporate power and authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the Merger and the other transactions contemplated by this Agreement.
The execution, delivery and performance by Parent and Merger Sub of this Agreement, and the
consummation by Parent and Merger Sub of the Merger and the other transactions contemplated by this
Agreement, have been duly authorized by all necessary corporate action and no other corporate
proceedings on the part of Parent or Merger Sub, and no other votes or approvals of any class or
series of capital stock of Parent or Merger Sub, are necessary to authorize this Agreement or to
consummate the Merger or the other transactions contemplated hereby. This Agreement has been duly
executed and delivered by Parent and Merger Sub and, assuming the due authorization, execution and
delivery by the Company, constitutes a legal, valid and binding obligation of Parent and Merger Sub
enforceable against Parent and Merger Sub in accordance with its terms, except as enforcement
thereof may be limited against Parent or Merger Sub by (a) bankruptcy, insolvency, reorganization,
moratorium and similar Laws affecting the enforcement of creditors’ rights or remedies in general
as from time to time in effect or (b) the exercise by courts of equity powers.
Section 5.3 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Parent and Merger Sub do not, and the
performance of this Agreement by Parent and Merger Sub and the consummation of the Merger and the
other transactions contemplated by this Agreement will not, (i) conflict with or violate Parent’s
organizational or charter documents, or the equivalent charter documents of Merger Sub, (ii)
conflict with or violate any Law applicable to Parent or its Subsidiaries or by which any material
property or asset of Parent or any of its Subsidiaries is bound or affected, or (iii) result
in a breach of or constitute a default (or an event that with notice or lapse of time or both would
become a default) under, give to others (immediately or with notice or lapse of time or both) any
right of termination, amendment, acceleration or cancellation of, result
- 32 -
(immediately or with
notice or lapse of time or both) in triggering any payment or other obligations, or result
(immediately or with notice or lapse of time or both) in the creation of an Encumbrance on any
material property or asset of Parent or its Subsidiaries pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation
to which Parent or any of its Subsidiaries is a party or by which Parent or any of its
Subsidiaries, or any material property or asset of Parent or any of its Subsidiaries, is bound or
affected, except in the case of clauses (ii) and (iii) above for any such conflicts, violations,
breaches, defaults or other occurrences that would not reasonably be expected to have a Parent
Material Adverse Effect or restrict, delay or otherwise prohibit or interfere with the consummation
of the Offer or the Merger.
(b) The execution and delivery of this Agreement by Parent and Merger Sub do not, and the
performance of this Agreement by Parent and Merger Sub will not, require any consent, approval,
authorization or permit of, or filing with or notification to, or registration or qualification
with, any Governmental Entity, except for applicable requirements, if any, of the Securities Act,
the Exchange Act, or state securities laws or “blue sky” laws, any Antitrust Law, Exon-Xxxxxx and
the filing and recordation of the Certificate of Merger, as required by the DGCL.
Section 5.4 Litigation. There are no suits, actions or proceedings pending or, to the
Knowledge of Parent, threatened against Parent or any of its Subsidiaries, including Merger Sub,
that would reasonably be expected to have a Parent Material Adverse Effect.
Section 5.5 Financing. Section 5.5 of the Parent’s Disclosure Schedules sets
forth a true, accurate and complete copy of an executed commitment letter (as the same may be
amended or replaced in accordance with Section 6.11, the “Commitment Letter”) from
Commerzbank Aktiengesellschaft (as the same may be substituted or replaced in accordance with
Section 6.11, the “Lender”), pursuant to which, and subject to the terms and
conditions thereof, the Lender has committed to lend the amount set forth therein to Parent and
Merger Sub for the purpose of funding the transactions contemplated by this Agreement (the
“Financing”). The Commitment Letter, in the
form so delivered, is a legal, valid and binding obligation of the Lender. Except as
permitted by Section 6.11 as to matters occurring after the date hereof, the Commitment
Letter has not been amended, modified, withdrawn or rescinded in any respect. No event has
occurred which, with or without notice, lapse of time or both, would constitute a default or breach
on the part of Parent or Merger Sub under any term or condition of the Commitment Letter. Neither
Parent nor Merger Sub has any reason to believe that it will be unable to satisfy on a timely basis
any term or condition of the closing to be satisfied by it contained in the Commitment Letter.
Parent or Merger Sub has fully paid any and all commitment fees or other fees required by the
Commitment Letter to be paid on or before the date of this Agreement. The Financing is sufficient
to pay the aggregate consideration to be paid in the Offer and the Merger and the aggregate Option
Consideration, to allow Parent and Merger Sub to perform all of their other obligations under this
Agreement and to consummate all the transactions contemplated by this Agreement and pay all fees
and expenses to be paid by Parent or Merger Sub related to the transactions contemplated by this
Agreement. There are no contractual contingencies, side letters or similar arrangements under any
agreement relating to the transactions contemplated by this Agreement to which Parent, Merger Sub
or any of their
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Affiliates is a party that would permit the Lender to reduce the total amount of
the Financing or impose any additional condition precedent to the availability of the Financing.
Section 5.6 Brokers. Except for Arma Partners, whose fees will be borne by Parent, no
broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or
commission in connection with this Agreement, the Offer, the Merger or the other transactions
contemplated by this Agreement based upon arrangements made by or on behalf of Parent or Merger Sub
or any of their respective directors, officers or employees, for which the Company may become
liable.
Section 5.7 Interim Operations of Merger Sub. Merger Sub was formed solely for the
purpose of engaging in the transactions contemplated by this Agreement, and Merger Sub has engaged
in no business other than in connection with the transactions contemplated by this Agreement.
Section 5.8 Ownership of Shares. During the period three (3) years prior to the date
hereof (other than by reason of the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby and thereby), neither Parent nor any of its
Subsidiaries, including Merger Sub, was an “interested stockholder” of the Company as such term is
defined in Section 203 of the DGCL.
Section 5.9 Disclosure Documents.
(a) The information with respect to Parent and any of its Subsidiaries that Parent furnishes
to the Company in writing specifically for use in any Company Disclosure Document will not contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading (i) in the case of the
Proxy Statement, as supplemented or amended, if applicable, at the time such Proxy Statement or any
amendment or supplement thereto is first mailed to the Company Stockholders and at the Company
Stockholders vote on adoption of this Agreement, and (ii) in the case of any Company Disclosure
Document other than the Proxy Statement, at the time of the filing of such Company Disclosure
Document or any supplement or amendment thereto and at the time of any distribution or
dissemination thereof.
(b) The Schedule TO, when filed, and the Offer Documents, when distributed or disseminated,
will comply as to form in all material respects with the applicable requirements of the Exchange
Act and, at the time of such filing, at the time of such distribution or dissemination and at the
time of consummation of the Offer, will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make the statements made
therein, in the light of the circumstances under which they were made, not misleading. If at any
time prior to the Effective Time any event with respect to Parent or Merger Sub shall occur which
is required to be described in any Company Disclosure Document, Parent shall promptly disclose such
event to the Company. Notwithstanding the foregoing, Parent makes no representation or warranty
with respect to any information supplied by the Company that is contained in the Schedule TO or any
other Offer Document.
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ARTICLE VI
COVENANTS
Section 6.1 Conduct of Business by the Company Pending the Merger.
(a) The Company covenants and agrees that between the date of this Agreement and the Effective
Time, unless Parent shall otherwise agree in writing (and except as set forth on Section
6.1 of the Company Disclosure Schedules or as otherwise expressly contemplated, permitted or
required by this Agreement), the Company shall and shall cause each of its Subsidiaries to (i)
maintain its existence in good standing under applicable Law, (ii) subject to the restrictions and
exceptions set forth in Section 6.1(b) or elsewhere in this Agreement, conduct its business
and operations only in the ordinary and usual course of business and in a manner consistent with
prior practice and (iii) use commercially reasonable efforts to preserve substantially intact its
business organizations, to keep available the services of its current officers and key employees
and to preserve the current relationships of the Company and its Subsidiaries with customers,
suppliers, distributors and other Persons with which the Company or any of its Subsidiaries has
business relations.
(b) Without limiting the foregoing, the Company covenants and agrees that between the date of
this Agreement and the Effective Time, the Company shall not and shall cause each of its
Subsidiaries not to (except as expressly contemplated, permitted or required by
this Agreement, as set forth on the applicable subsection of Section 6.1(b) of the
Company Disclosure Schedules or with the prior written approval of Parent):
(i) cause or permit any amendments to the Company Certificate of Incorporation, the Company
Bylaws or other governing documents, or equivalent organizational documents of the Company’s
Subsidiaries;
(ii) declare, set aside, make or pay any dividends or other distributions (whether in cash,
stock or property or any combination thereof) in respect of any of its capital stock;
(iii) adjust, split, combine or reclassify any of its capital stock or that of its
Subsidiaries or issue or authorize or propose the issuance of any other securities in respect of,
in lieu of or in substitution for shares of its capital stock or that of its Subsidiaries;
(iv) repurchase, redeem or otherwise acquire, directly or indirectly, any shares of its or its
Subsidiaries’ capital stock or any Company Stock Rights or Subsidiary Stock Rights, except pursuant
to restricted stock award agreements outstanding on the date hereof or permitted to be entered into
after the date hereof under clauses (v)(A), (B) or (C) of this Section 6.1(b);
(v) issue, deliver or sell, pledge, encumber or amend any term of any shares of its or its
Subsidiaries’ capital stock or any Company Stock Rights, other than (A) the issuance of shares of
Company Common Stock upon the exercise of Company Stock Options or distribution of Director
Deferred Shares, (B) pursuant to the Company ESPP or (C) the issuance
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of Company Stock Options
pursuant to, and in amounts no greater than those specified in, any offer letters outstanding as of
the date of this Agreement;
(vi) (A) knowingly take any action that is reasonably likely to make any representation or
warranty of the Company hereunder, or omit to take any action necessary to prevent any
representation or warranty hereunder from being, inaccurate in any material respect at, or as of
any time before, the Effective Time or (B) take any action that would reasonably be expected to
materially impair the ability of the Company to consummate the Merger or the other transactions
contemplated by this Agreement in accordance with the terms hereof or materially delay the
consummation of the Merger;
(vii) incur, create, assume or otherwise become liable for any indebtedness for borrowed
money, other than indebtedness of the Company’s Subsidiaries to the Company or any of its
wholly-owned Subsidiaries and short-term borrowings under existing lines of credit (or under any
refinancing of such existing lines) incurred in the ordinary course of business consistent with
prior practice or assume, guaranty, endorse or otherwise become liable or responsible for the
obligations of any other Person, or enter into any arrangement having the economic effect of any of
the foregoing;
(viii) make any loans, advances or capital contributions to or investments in any other
Person, other than (A) by the Company or any of its Subsidiaries to or in the Company or any of its
Subsidiaries, or (B) loans, advances, capital contributions or
investments made in the ordinary course of business consistent with prior practice that are
not, individually or in the aggregate, in an amount greater than $250,000;
(ix) merge or consolidate with any other entity or adopt a plan of complete or partial
liquidation, dissolution, restructuring, recapitalization or other reorganization;
(x) change its accounting methods, principles or practices, except as required by GAAP or
applicable Laws;
(xi) (A) increase the amount of compensation, bonus or other benefits payable to any current
or former director, officer or employee of the Company or its Subsidiaries, (B) grant any severance
or termination pay or benefits (or increase the amount of such pay or benefits, or extend the
notice periods for termination) to any current or former director, officer, employee or independent
contractor of the Company or any of its Subsidiaries, except (1) any such grants that the Company
is required to make pursuant to any agreement in effect as of the date hereof and disclosed on
Section 6.1(b)(xi) of the Company Disclosure Schedule or (2) pursuant to clauses (G) or (H)
below, (C) establish, pay, agree to grant or increase any special bonus, stay bonus, retention
bonus or any similar benefit under any plan, agreement, award or arrangement, (D) (1) prior to July
1, 2007, hire any employee at an aggregate annual rate of base compensation of more than $175,000;
provided, that Parent shall respond to any request by the Company for consent to an exception to
this Section 6.1(b)(xi)(D)(1) promptly, and in any event within three Business Days after
receiving a written request for consent thereto or (2) after July 1, 2007, hire any employee other
than in the ordinary course of business consistent with the Company’s fiscal 2008 operating plan
set forth in Section 6.1(b)(xi) of the Company Disclosure Schedule (the “Operating
Plan”), after first consulting in
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good faith with Parent, (E) enter into any new employment,
severance, change in control, Tax gross-up, deferred compensation or other similar agreement or
arrangement (or amend any such existing agreement), except as set forth on Section
6.1(b)(xi) of the Company Disclosure Schedule and other than the Company’s standard form offer
letters with new hires the hiring of whom is otherwise consistent with this Section 6.1(b), (F)
except as required by Applicable Law, enter into or amend in any material respect any collective
bargaining agreement or other contract or understanding with any labor union or organization, (G)
except as required by Applicable Law or as the Company deems necessary or appropriate to avoid
adverse Tax consequences to itself or its current or former directors, officers, or employees,
establish, adopt, amend or terminate any Company Benefit Plan or any plan, agreement, program,
policy, trust, fund or other arrangement that would be a Company Benefit Plan if it had been in
existence as of the date of this Agreement or (H) except as the Company deems necessary or
appropriate to avoid adverse Tax consequences to itself or its current or former directors,
officers, employees or independent contractors, enter into or amend in any material respect any
agreement, contract or arrangement with any such individual or commit to provide any material
payment or any material benefit to any such individual (with “material” for the purposes of this
clause (H) meaning material in relation to such agreement, contract or arrangement); provided,
however, that in the case of clauses (G) and (H), the Company shall not take any action to avoid
such adverse Tax consequences that would result in more than a de minimis increase in the costs to
Parent of the transactions contemplated by this Agreement or that would result in a more than de
minimis diminution of the benefits that would reasonably be expected to accrue to Parent from the
Merger or the consummation of the transactions contemplated hereby;
(xii) sell, license, mortgage, transfer, lease, pledge or otherwise subject to any Encumbrance
or otherwise dispose of any material properties or assets (including stock or other ownership
interests of its Subsidiaries), other than in the ordinary course of business consistent with prior
practice;
(xiii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise),
directly or indirectly, any asset, security, property, interest or business, other than the
acquisition of assets or properties used in the operations of the Company’s and its Subsidiaries’
business in the ordinary course of business consistent with past practice;
(xiv) enter into any material joint venture, partnership or similar arrangement;
(xv) make or change any material Tax election not consistent with prior practice, settle or
compromise any material income Tax claim, audit or assessment, enter into any closing agreement,
surrender any right to claim a material Tax refund, offset or other reduction in Tax Liability,
fail to file any material Tax Return when due or fail to cause such Tax Returns when filed to be
complete and accurate in all material respects;
(xvi) incur or commit to any capital expenditures or any obligations or liabilities in
connection therewith in excess of $750,000 per three-month period; provided that after July 1,
2007, no such consent shall be required if such capital expenditures are in amounts that do not
exceed the amounts contemplated in the Operating Plan (after good faith consultation with Parent);
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(xvii) (A) enter into any agreement or arrangement that limits or otherwise restricts in any
material respect the Company, any of its Subsidiaries or any of their respective Affiliates or any
successor thereto or that could, after the Effective Time, limit or restrict in any material
respect the Company, any of its Subsidiaries, the Surviving Corporation, Parent or any of their
respective Affiliates, from engaging or competing in any line of business, in any location or with
any Person or (B) enter into, amend in any material respect, modify in any material respect or
terminate any Company Material Contract or any license to or from any Person with respect to any
material Intellectual Property (other than (i) entering into nonexclusive licenses of Company
products or generally commercially available off-the-shelf software licenses, in each case in the
ordinary course of business and (ii) after July 1, 2007, other than as consistent with the
Operating Plan (after good faith consultation with Parent)), or (C) otherwise waive, release or
assign any material rights, claims or benefits of the Company or any of its Subsidiaries; provided,
that Parent shall respond promptly, and in any event within three (3) Business Days, after
receiving a written request by the Company for consent to an exception to Section
6.1(b)(xvii)(B);
(xviii) transfer or license to any Person or otherwise extend, amend or modify any rights to
any material Company Intellectual Property, other than in the ordinary course of business
consistent with past practice or pursuant to any contract or agreement of the Company that has been
disclosed in writing to Parent prior to the date of this Agreement;
(xix) initiate, settle or agree to settle, (i) any material Proceeding or other claim
involving or against the Company or any of its Subsidiaries, (ii) any stockholder litigation or
dispute against the Company or any of its officers or directors or (iii) any Proceeding that
relates to the transactions contemplated hereby;
(xx) other than as expressly permitted by Section 6.6, take any action for the purpose
of preventing, delaying or impeding the consummation of the Merger or the other transactions
contemplated by this Agreement; or
(xxi) agree, resolve or commit to take any of the actions described in this Section
6.1(b).
Section 6.2 Access to Information and Employees. Upon reasonable notice, the Company
shall (and shall cause its Subsidiaries to) afford to the officers, employees, accountants, counsel
and other Representatives of Parent, reasonable access at normal business hours, during the period
prior to the Effective Time, to all of their properties, books, Company Material Contracts,
commitments and records. The Company shall (and shall cause its Subsidiaries to) furnish promptly
to Parent all information concerning their business, properties and personnel as Parent may
reasonably request, and shall make available to Parent the appropriate individuals (including
attorneys, accountants and other professionals) for discussion of the business, properties and
personnel of the Company and the Subsidiaries of the Company as Parent may reasonably request.
Parent shall keep all information obtained pursuant to this Section 6.2 confidential in
accordance with the terms of the Confidentiality Agreement between Parent and the Company.
Notwithstanding the foregoing, neither Parent nor any of its Representatives shall (i) contact or
have any discussions with any of the employees, agents or representatives of the Company or any
Subsidiary, unless in each case Parent obtains the prior
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written consent of the Company, which
shall not be unreasonably withheld, conditioned or delayed; (ii) contact or have any discussions
with any of the landlords/sublandlords, customers, suppliers or licensees or franchisees of the
Company or its Subsidiaries, unless in each case Parent obtains the prior written consent of the
Company, which shall not be unreasonably withheld; or (iii) perform any onsite procedure or
investigation (including any onsite environmental investigation or study) without the Company’s
prior written consent, which shall not be unreasonably withheld. Parent shall schedule and
coordinate all inspections with the Company and shall give the Company at least three Business
Days’ prior written notice thereof, setting forth the inspection or materials that Parent or its
Representatives intend to conduct. The Company shall be entitled to have representatives present
at all times during any such inspection. Notwithstanding the foregoing, neither the Company nor
any Subsidiary of the Company shall be required to provide access to any information, property or
personnel if (X) the Company believes in good faith that such access is subject to any
confidentiality obligations or would be reasonably likely to jeopardize the Company’s
attorney-client, work product or similar legal privilege; (Y) any applicable Law (including U.S.
and international antitrust or competition laws) requires the Company to restrict or prohibit
access to any such information, properties or personnel; or (Z) such access would materially and
unreasonably disrupt the businesses and operations of the Company.
Section 6.3 Reasonable Efforts; Notification.
(a) Upon the terms and subject to the conditions set forth in this Agreement, each of Parent,
Merger Sub and the Company agrees to use its commercially reasonable efforts to take, or cause to
be taken, all actions and to do, or cause to be done, and to assist and cooperate with the other
parties in doing, all things necessary, proper or advisable to fulfill all conditions applicable to
such party pursuant to this Agreement and to consummate and make effective, in the most expeditious
manner practicable, the Merger and the other transactions contemplated by the Transaction
Documents, including (i) obtaining all necessary, proper or advisable actions or non-actions,
waivers, consents, qualifications and approvals from Governmental Entities and making all
necessary, proper or advisable registrations, filings and notifications and taking all reasonable
steps as may be necessary to obtain an approval, clearance, non-action letter, waiver or exemption
from any Governmental Entity (including, without limitation, under the HSR Act and Exon-Xxxxxx);
(ii) obtaining all necessary, proper or advisable consents, qualifications, approvals, waivers or
exemptions from non-governmental Third Parties; and (iii) executing and delivering any additional
documents or instruments necessary, proper or advisable to consummate the transactions contemplated
by, and to fully carry out the purposes of, the Transaction Documents.
(b) Without limiting the foregoing, (i) each of the Company, Parent and Merger Sub shall use
its commercially reasonable efforts to make an appropriate filing of a Notification and Report Form
pursuant to the HSR Act with respect to the transactions contemplated hereby as promptly as
practicable and in any event within ten (10) Business Days of the date hereof and any other
required submissions under the HSR Act which the Company or Parent determines should be made, in
each case with respect to the Merger and the transactions contemplated hereby, and to take all
other actions necessary to cause the expiration or termination of the applicable waiting periods
under the HSR Act as soon as practicable; (ii) each of the Company, Parent and Merger Sub shall use
its commercially reasonable efforts to (A)
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submit a draft of a joint Exon-Xxxxxx notification to
the Committee on Foreign Investment in the United States (“CFIUS”) no later than one (1)
Business Day following the date hereof, (B) submit a joint Exon-Xxxxxx notification to CFIUS as
soon as practicable, but in any event no later than ten (10) Business Days, following the date
hereof and (C) make any other submissions under Exon-Xxxxxx that are required to be made or which
the Company and Parent mutually agree should be made as soon as practicable following the date
hereof, in each case, in connection with this Agreement and the transactions contemplated hereby;
and (iii) Parent, Merger Sub and the Company shall cooperate with one another (A) in promptly
determining whether any filings are required to be or should be made or consents, approvals,
permits or authorizations are required to be or should be obtained under any other federal, state
or foreign Law or regulation or whether any consents, approvals or waivers are required to be or
should be obtained from other parties to loan agreements or other contracts or instruments material
to the Company’s business in connection with the consummation of the transactions contemplated by
this Agreement and (B) in promptly making any such filings, furnishing information required in
connection therewith and seeking to obtain timely any such consents, permits, authorizations,
approvals or waivers.
(c) The Company, Parent, and Merger Sub shall cooperate with each other in connection with the
making of all such filings, including providing copies of all such documents to the non-filing
party and its advisors prior to filing and, if requested, accepting reasonable additions, deletions
or changes suggested in connection therewith. The Company, Parent, and Merger Sub shall use their
respective commercially reasonable efforts to furnish to each other all information required for
any application or other filing to be made pursuant to any Law (including all information required
to be included in the Offer Documents and the Company Disclosure Documents) in connection with the
transactions contemplated by this Agreement. Each party hereto shall (i) give the other parties
hereto prompt notice upon obtaining Knowledge of the making or commencement of any request,
inquiry, investigation, action or legal proceeding by or before any Governmental Entity with
respect to the Merger or any of the other transactions contemplated by this Agreement, (ii) keep
the other parties hereto reasonably informed as to the status of any such request, inquiry,
investigation, action or legal proceeding, and (iii) promptly inform the other parties hereto of
any material communication to or from the U.S. Federal Trade Commission, the U.S. Department of
Justice, any foreign competition authority or any other Governmental Entity regarding the Merger or
any of the other transactions contemplated by this Agreement. The parties hereto will consult and
cooperate with one another, and consider in good faith the views of one another, in connection
with, and provide to the other parties in advance, any analyses, appearances, presentations,
memoranda, briefs, arguments, opinions and proposals to be made or submitted by or on behalf of any
party hereto, including reasonable access to any materials submitted pursuant to any Second Request
or in connection with any other proceedings under or relating to any Antitrust Law. Any party may,
as it deems advisable and necessary, reasonably designate any competitively sensitive material
provided to the other parties under this section as “outside counsel only.” Such materials and the
information contained therein shall be given only to the outside legal counsel of the recipient and
will not be disclosed by such outside counsel to employees, officers, or directors of the
recipient, unless express written permission is obtained in advance from the source of the
materials. In addition, except as may be prohibited by any Governmental Entity or by any
Law, each party hereto will permit authorized Representatives of the other parties to be present at
each meeting or telephone conference with representatives of any Governmental Entity relating to
any such request, inquiry, investigation, action or legal proceeding and to have access to and be
consulted in connection
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with any document, opinion or proposal made or submitted to any
Governmental Entity in connection with any such request, inquiry, investigation, action or
proceeding.
(d) Without limiting any other obligations of Parent hereunder, Parent shall agree to the
acceptance of any reasonable restrictions imposed by any Governmental Entity as a result of the
CFIUS review on the business or operations of the Company or its subsidiaries or the control
thereof by Parent (“Reasonable Restrictions”); provided, however, that under no
circumstances shall any of the restrictions set forth in of the Section 6.3(d) Company Disclosure
Schedules be deemed to be “Reasonable Restrictions”. Except for the obligation to accept
Reasonable Restrictions as set forth in the immediately preceding sentence, nothing in this
Agreement shall, as a result of the CFIUS review, require Parent or any of its Subsidiaries to, nor
shall the Company or any of its Subsidiaries without the prior written consent of Parent agree or
offer to: (i) effect any divestiture of, or hold separate (including by establishing a trust or
otherwise), or agree to restrict its ownership or operation of, any business or assets of the
Company or its Subsidiaries or of Parent or its Subsidiaries, or to enter into any settlement or
consent decree, or agree to any undertaking, with respect to any business or assets of the
Company or its Subsidiaries or of Parent or its Subsidiaries, (ii) enter into, amend or agree
to enter into or amend, any contract, agreement, license or other undertaking of the Company or its
Subsidiaries or of Parent or its Subsidiaries or (iii) otherwise waive, abandon or alter any rights
or obligations of the Company or its Subsidiaries or of Parent or its Subsidiaries.
(e) Notwithstanding anything to the contrary herein and except as set forth in Section 6.3(d),
nothing in this Agreement shall require Parent or any of its Subsidiaries to, nor shall the Company
or any of its Subsidiaries without the prior written consent of Parent agree or offer to: (i)
effect any divestiture of, or hold separate (including by establishing a trust or otherwise), or
agree to restrict its ownership or operation of, any business or assets of the Company or its
Subsidiaries or of Parent or its Subsidiaries, or to enter into any settlement or consent decree,
or agree to any undertaking, with respect to any business or assets of the Company or its
Subsidiaries or of Parent or its Subsidiaries, (ii) enter into, amend or agree to enter into or
amend, any contract, agreement, license or other undertaking of the Company or its Subsidiaries or
of Parent or its Subsidiaries or (iii) otherwise waive, abandon or alter any rights or obligations
of the Company or its Subsidiaries or of Parent or its Subsidiaries, except in each case as would
not, individually or in the aggregate, materially diminish the benefits that would reasonably be
expected to accrue to Parent from the Merger or the consummation of the transactions contemplated
hereby.
(f) Each of the Company, on the one hand, and Parent and Merger Sub, on the other, shall, to
the extent permitted by Applicable Law and subject to all privileges (including the attorney client
privilege), promptly (and in any event within five (5) Business Days) notify the other party in
writing of:
(i) any notice or other communication from any Person alleging that the consent of such Person
is or may be required in connection with the transactions contemplated by this Agreement;
(ii) any notice or other communication from any Governmental Entity in connection with the
transactions contemplated by this Agreement;
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(iii) any actions, suits, claims, investigations or proceedings commenced or, to its
Knowledge, threatened against, relating to or involving or otherwise affecting the Company or any
of its Subsidiaries or Parent and any of its Subsidiaries, as the case may be, that, if pending on
the date of this Agreement, would have been required to have been disclosed pursuant to any of the
representations and warranties contained herein, or that relate to the consummation of the
transactions contemplated by this Agreement;
(iv) any inaccuracy of any representation or warranty contained in this Agreement at any time
during the term hereof that would reasonably be expected to cause the conditions set forth in Annex
I hereto not to be satisfied;
(v) any failure of that party to comply with or satisfy any covenant, condition or agreement
to be complied with or satisfied by it hereunder;
provided, however, that the delivery of any notice pursuant to this Section 6.3(f) shall not
limit or otherwise affect the remedies available hereunder to the party receiving that notice.
Section 6.4 Proxy Statement.
(a) If, following the consummation of the Offer (or, if applicable, any Subsequent Offering
Period), the adoption of this Agreement by the Company Stockholders is required under the DGCL to
consummate the Merger, the Company shall, as promptly as practicable after the consummation of the
Offer, prepare and file with the SEC preliminary proxy materials which shall constitute the Proxy
Statement. As promptly as practicable after comments are received from the SEC thereon and after
the furnishing by the Company and Parent of all information required to be contained therein, the
Company shall, in consultation with Parent, prepare and the Company shall file any required
amendments to, and the definitive, Proxy Statement with the SEC. The Company shall notify Parent
promptly of the receipt of any comments from the SEC or its staff and of any request by the SEC or
its staff for amendments or supplements to the Proxy Statement or for additional information and
shall consult with Parent regarding, and supply Parent with copies of, all correspondence between
the Company or any of its Representatives, on the one hand, and the SEC or its staff, on the other
hand, with respect to the Proxy Statement. The Company shall use reasonable efforts to have the
Proxy Statement cleared by the SEC and shall thereafter mail to the Company Stockholders as
promptly as possible the Proxy Statement and all other proxy materials for such meeting. If at any
time prior to the Company Stockholders Meeting there shall occur any event that should be set forth
in an amendment or supplement to the Proxy Statement so that such document would not include any
misstatement of a material fact or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading, the Company
shall promptly prepare and mail to its stockholders such an amendment or supplement.
(b) Parent shall, following the date on which Stockholder Approval is determined to be
required in accordance with this Section 6.4, furnish the Company with all information concerning
Parent required for use in the Proxy Statement, and Parent shall take
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such other action as the
Company may reasonably request in connection with the preparation of the Proxy Statement, including
any amendments or supplements thereto.
(c) The Company and Parent shall make any necessary filings with respect to the Merger under
the Exchange Act and the rules and regulations thereunder.
Section 6.5 Company Stockholders Meeting. If, following the consummation of the Offer
(or, if applicable, any Subsequent Offering Period), the adoption of this Agreement by the Company
Stockholders is required under the DGCL to consummate the Merger, the Company shall, as promptly as
practicable after the consummation of the Offer, take all actions in accordance with Applicable
Law, the Company Certificate of Incorporation, the Company Bylaws and the rules of Nasdaq to duly
call, give notice of, convene and hold as promptly as practicable the Company Stockholders Meeting
for the purpose of considering and voting upon the adoption of this Agreement. Subject to
Section
6.6(c), to the fullest extent permitted by Applicable Law, (i) the Company Board of
Directors shall declare this Agreement advisable and recommend adoption of this Agreement and
approval of the Merger by the Company Stockholders and include such recommendation in the Proxy
Statement and (ii) neither the Company Board of Directors nor any committee thereof shall withdraw
or modify, or propose or resolve to withdraw or modify in a manner adverse to Parent, the
recommendation of the Company Board of Directors that the Company Stockholders vote in favor of the
adoption of this Agreement and approval of the Merger. Unless this Agreement has been duly
terminated in accordance with the terms herein (including payment of any termination fees payable
under Article VIII), the Company shall, subject to the right of the Company Board of
Directors to modify its recommendation in a manner adverse to Parent under certain circumstances as
specified in Section 6.6(c), take all lawful action to solicit from the Company
Stockholders proxies in favor of the proposal to adopt this Agreement and approve the Merger and
shall take all other action necessary or advisable to secure the vote or consent of the Company
Stockholders that are required by the rules of Nasdaq or the DGCL. Notwithstanding anything to the
contrary contained in this Agreement, the Company, after consultation with Parent, may adjourn or
postpone the Company Stockholders Meeting to the extent necessary to ensure that any legally
required supplement or amendment to the Proxy Statement is provided to the Company Stockholders or,
if as of the time for which the Company Stockholders Meeting is originally scheduled (as set forth
in the Proxy Statement), there are insufficient shares of Company Common Stock represented (either
in person or by proxy) to constitute a quorum necessary to conduct the business of the Company
Stockholders Meeting.
Section 6.6 No Solicitation of Transactions.
(a) The Company shall, and shall cause its Affiliates, Representatives and any other agents
to, immediately cease any discussions, negotiations or communications with any party or parties
with respect to any Alternative Transaction.
(b) The Company shall not, nor shall it authorize or permit any Affiliate or Representative of
the Company or its Subsidiaries to, (i) solicit, initiate or intentionally facilitate or encourage
the submission of any Alternative Transaction or (ii) participate in any discussions or
negotiations regarding, or furnish to any Third Party any information or data with respect to or
provide access to the properties, offices, books, records, officers, directors or employees of, or
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take any other action to knowingly facilitate, induce or encourage the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Alternative Transaction.
Notwithstanding the foregoing, if prior to the consummation of the Offer (A) the Company has
complied with this Section 6.6 and (B) the Company Board of Directors reasonably determines
in good faith that an Alternative Transaction constitutes or would reasonably be expected to lead
to a Superior Proposal, then, to the extent such action is consistent with the fiduciary
obligations of the Company Board of Directors, as determined in good faith by a majority thereof
after consultation with the Company’s outside counsel, the Company may, subject to the Company’s
providing prior written notice to Parent of its decision to take such action and compliance by the
Company with Section 6.6(d), furnish information with respect to the Company to, and
participate in discussions and negotiations directly or through its Representatives with, such
Third Party, subject to a confidentiality agreement not materially less favorable to the Company
than the Confidentiality Agreement (a copy of which shall be provided to Parent for
informational purposes only).
(c) Neither the Company Board of Directors nor any committee thereof shall (i) withdraw or
modify, or resolve to withdraw or modify, in a manner adverse to Parent or Merger Sub, the approval
and recommendation by the Company Board of Directors of the Merger and this Agreement, the
Transaction Documents, the transactions contemplated hereby and thereby and the actions taken in
connection herewith and therewith, (ii) approve or recommend, or resolve to approve or recommend,
any Alternative Transaction, (iii) approve or recommend, or resolve to approve or recommend, or
execute or enter into, any Acquisition Agreement, (iv) approve or recommend, or resolve to approve
or recommend, or execute or enter into, any agreement requiring it to abandon, terminate or fail to
consummate the Merger, this Agreement, any Transaction Document or the transactions contemplated
hereby or thereby, or (v) agree or publicly announce any intention to do any of the foregoing
constituting or related to, or that is intended to lead to, any Alternative Transaction (any of the
foregoing in clauses (i) through (v), an “Adverse Recommendation Change”). Notwithstanding
the foregoing, prior to the consummation of the Offer, in response to a Superior Proposal that was
not solicited, initiated, intentionally encouraged, participated in or otherwise facilitated by the
Company in breach of Section 6.6(b), the Company Board of Directors may, if it determines
in good faith (after consulting with the Company’s outside legal counsel) that the failure to do so
would be inconsistent with the fiduciary duties of the Company Board of Directors to the Company
Stockholders under applicable Law or Order, (A) modify or resolve to modify, in a manner adverse to
Parent or Merger Sub, the approvals and recommendations of the Company Board of Directors of the
Offer, the Merger, or the transactions contemplated hereby or by the Transaction Documents (or
otherwise make any Adverse Recommendation Change), or (B) terminate this Agreement in accordance
with Section 8.1(c).
(d) In addition to the obligations set forth in Sections 6.6(a), (b) and
(c), the Company shall advise Parent orally and, if requested by Parent, in writing of (i)
the existence of an Alternative Transaction or any offer, proposal or inquiry with respect to or
which could reasonably be expected to lead to an Alternative
Transaction received by any officer or director of the Company or, to the Knowledge of the Company, other Representative of the Company
and (ii) the material terms and conditions of such Alternative Transaction, and any amendment or
modification thereto, including the identity of the Person proposing such Alternative Transaction,
within one Business Day following receipt by the Company or any officer or
- 44 -
director of the Company
or, to the Knowledge of the Company, any other Representative of the Company of such offer,
proposal or inquiry. The Company shall keep Parent fully informed, on a current basis, of the
status and material details of any such offer, proposal or inquiry. In addition, the Company Board
of Directors shall not make an Adverse Recommendation Change or terminate this Agreement for
purposes of entering into an agreement with respect to an Alternative Transaction unless (x) the
Company notifies Parent, in writing at least three Business Days before taking such action, of its
intention to do so in response to an offer, proposal or inquiry to enter into an Alternative
Transaction that it has determined constitutes a Superior Proposal and attaching the most current
version of any proposed agreement or a summary of all material terms of any such proposal and the
identity of the offeror, (y) the Company shall have, during such three Business Day period,
negotiated in good faith with Parent with respect to any changes to this Agreement that Parent
shall have proposed and (z) Parent does not make, within
three Business Days after its receipt of that written notification, an offer that is at least
as favorable to the stockholders of the Company as such Superior Proposal, it being understood that
the Company shall not enter into any binding agreement with respect to such Superior Proposal
during such three Business Day period.
(e) Nothing contained in this Section 6.6 or any other provision hereof shall prohibit
the Company or the Company Board of Directors from taking and disclosing to the Company
Stockholders pursuant to Rules 14d-9 and 14e-2 promulgated under the Exchange Act a position with
respect to a tender or exchange offer by a Third Party that is consistent with its obligations
hereunder; provided, however, that neither the Company nor the Company Board of
Directors may either, except as provided by Section 6.6(c), make an Adverse Recommendation
Change.
Section 6.7 Public Announcements. The Company and Parent shall consult with each
other before issuing any press release or otherwise making any public statements with respect to
this Agreement or any of the transactions contemplated by the Transaction Documents and shall not
issue any such press release or make any such public statement without the prior consent of the
other party, which consent shall not be unreasonably withheld or delayed; provided,
however, that a party may, without the prior consent of the other party, issue such press
release or make such public statement as may be required by Law or Order or the applicable rules of
Nasdaq or any listing agreement if it has used its commercially reasonable efforts to consult with
the other party and to obtain such party’s consent but has been unable to do so prior to the time
such press release or public statement is so required to be issued or made.
Section 6.8 Litigation. Subject to Section 6.3(d), each of Parent, Merger Sub
and the Company agrees to use its commercially reasonable efforts to defend any lawsuits or other
legal proceedings, whether judicial or administrative, challenging, or seeking damages or other
relief as a result of, the Offer, the Merger, this Agreement or the transactions contemplated by
the Transaction Documents, including seeking to have any Order adversely affecting the ability of
the parties to consummate the transactions contemplated by the Transaction Documents entered by any
court or other Governmental Entity promptly vacated or reversed.
Section 6.9 Employee Benefit Matters.
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(a) From and after the Effective Time, Parent shall cause the Surviving Corporation to honor
and provide for payment of all accrued obligations and benefits under all Company Benefit Plans set
forth, and identified as such, in the Company Disclosure Schedules (including, without limitation,
employment or severance agreements between the Company and Persons who are or had been employees of
the Company or any of its Subsidiaries at or prior to the Effective Time), all in accordance with
their respective terms.
(b) Parent will provide, or cause the Surviving Corporation to provide, each Company Employee
with compensation (including bonus and incentive compensation opportunities, but excluding
equity-based compensation) and employee benefits that are substantially comparable in the aggregate
to the compensation and employee benefits provided to Parent’s similarly-situated employees
employed in the same country as such Company Employee (or, if Parent has no employees employed in
such country, as provided to such Company Employee) as of the Closing Date, as the same may be
modified or adjusted from time to time thereafter. For purposes of the Parent Benefit Plans,
Parent shall use its reasonable efforts to cause Company Employees to receive credit for past
service with the Company for purposes of accrual of vacation time and for purposes of eligibility
for participation, vesting, and benefit accrual under the applicable Parent Benefit Plans;
provided, however, that such service shall not be recognized to the extent that
such recognition would result in a duplication of benefits.
(c) For purposes of the Parent Benefit Plans, Parent shall use its reasonable efforts to cause
the waiver of all actively-at-work or similar limitations, eligibility waiting periods and evidence
of insurability requirements under any Parent Benefit Plan that is a group health plan with respect
to such Company Employees and their eligible dependents, in each case, to the same extent as
service with the Company or its Subsidiaries was taken into account under the comparable Company
Benefit Plan, and credit shall be provided for any co-payments, deductibles and offsets (or similar
payments) made under Company Benefit Plans for the portion of the applicable plan year prior to the
Effective Time for purposes of satisfying any applicable deductible, out-of-pocket or similar
requirements under any Parent Benefit Plans in which they become eligible to participate after the
Effective Time.
(d) Notwithstanding anything in this Agreement to the contrary, from and after the Effective
Time, the Surviving Corporation will have sole discretion over the hiring, promotion, retention,
firing and other terms and conditions of the employment of employees of the Surviving Corporation.
Except as otherwise provided in this Section 6.9, nothing herein shall prevent Parent or
the Surviving Corporation, as applicable, from amending or terminating any Parent Benefit Plan or
Company Benefit Plan in accordance with its terms.
Section 6.10 Directors’ and Officers’ Indemnification and Insurance.
(a) For a period of six (6) years after the Effective Time, the Surviving Corporation shall
indemnify, advance expenses to and hold harmless all past and present officers and directors of the
Company for acts or omissions occurring at or prior to the Effective Time, to the fullest extent
permitted by the DGCL or any other Applicable Law or provided under the Company Certificate of
Incorporation and the Company Bylaws in effect on the date hereof; provided that such
indemnification shall be subject to any limitation imposed from time to time under Applicable Law.
Parent shall guarantee such performance by the Surviving Corporation.
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The certificate of
incorporation and the bylaws of the Surviving Corporation will contain provisions with respect to
exculpation, indemnification and advancement of expenses that are at least as favorable to the
indemnified parties as those contained in the Company Certificate of Incorporation and the Company
Bylaws as in effect on the date hereof, which provisions will not be amended, repealed or otherwise
modified for a period of not less than six years from the
Effective Time in any manner that would adversely affect the rights thereunder of individuals
who, immediately prior to the Effective Time, were directors, officers, employees or agents of the
Company, unless such a modification is required by Law.
(b) For a period of six (6) years from the Effective Time, Parent shall cause the Surviving
Corporation to maintain in effect (or Parent may instead elect to maintain pursuant to Parent’s
policy or policies) for the benefit of the Company’s current directors and officers an insurance
and indemnification policy that provides coverage for acts or omissions occurring prior to the
Effective Time that is substantially equivalent to the Company’s existing policy on terms with
respect to coverage in the aggregate no less favorable than those of such policy in effect on the
date hereof, or, if substantially equivalent insurance coverage is unavailable, the best available
coverage; provided, however, that the Surviving Corporation shall not be required
to pay an aggregate premium for such insurance in excess of 250% of the last annual premiums paid
prior to the date hereof (which premiums the Company has disclosed to Parent), but in such case
shall purchase as much coverage as possible for such amount.
(c) This Section 6.10 shall survive the consummation of the Merger, is intended to
benefit the Company, the Surviving Corporation and each indemnified party, shall be binding on all
successors and assigns of the Surviving Corporation and Parent, and shall be enforceable by the
indemnified parties. If Parent or the Surviving Corporation or any of their respective successors
or assigns (i) shall consolidate with or merger into any other corporation or entity and shall not
be the continuing or surviving corporation or entity of such consolidation or merger or shall cease
to continue to exist for any reason or (ii) shall transfer all or substantially all of its
properties and assets to any individual, corporation or other entity, then, and in each such case,
proper provisions shall be made so that the successors and assigns of Parent and the Surviving
Corporation and the transferee or transferees of such properties and assets, as applicable, shall
assume all of the obligations set forth in this Section 6.10. The provisions of this
Section 6.10 are intended to be for the benefit of, and will be enforceable by, each
indemnified party, his or her heirs, and his or her representatives and are in addition to, and not
in substitution for, any other rights to indemnification or contribution that any such Person may
have by contract or otherwise.
Section 6.11 Financing.
(a) Parent and Merger Sub shall use their reasonable best efforts to (i) arrange for the
Financing on the terms and conditions described in the Commitment Letter; (ii) enter into
definitive agreements with respect to the Financing, which agreements shall be in effect as
promptly as practicable after the date hereof, but in no event later than the Closing; (iii)
satisfy all conditions applicable to Parent and Merger Sub in such definitive agreements; and (iv)
consummate the Financing no later than the Outside Termination Date. Parent may, in its sole
discretion, obtain or seek to obtain substitute or replacement Financing from one or more
alternative Lenders; provided, that any such substitute or replacement Financing shall be on
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comparable or more favorable terms to Parent (as determined in the reasonable good-faith judgment
of Parent) than the terms of the Financing being replaced and shall not have an adverse effect on
Parent’s ability to consummate the Offer or the Merger. Solely in the event that any portion of
the Financing becomes unavailable on the terms and conditions contemplated in the Commitment
Letter, Parent shall use its reasonable best efforts to obtain any such unavailable
portion from alternative sources on comparable or more favorable terms to Parent (as
determined in the reasonable good-faith judgment of Parent) as promptly as practicable following
the occurrence of such event but in no event later than the Outside Termination Date. Parent shall
promptly provide the Company with the documentation evidencing any replacement or alternative
sources of financing and shall give the Company prompt notice (but in any event within two Business
Days) of any material breach by any party to the Commitment Letter or any termination of the
Commitment Letter. Parent shall keep the Company informed on a reasonably current basis in
reasonable detail of the status of its efforts to arrange for the Financing (or replacements
thereof) and shall not permit any material amendment or modification to be made to, or any waiver
of any material provision or remedy under, the Commitment Letter (or replacements thereof) without
first consulting with the Company or, if such amendment would or would be reasonably expected to
prevent, delay or hinder Parent and/or Merger Sub’s ability to consummate the transactions
contemplated by this Agreement, without first obtaining the Company’s prior written consent which
shall not be unreasonably withheld, conditioned or delayed. For the avoidance of doubt, if the
Financing (or any replacement or alternative financing) has not been obtained, Parent and Merger
Sub shall continue to be obligated to consummate the Offer and the Merger on the terms contemplated
by this Agreement and subject only to the satisfaction or waiver of the conditions set forth in
Annex I hereto and to Parent’s rights and obligations under Sections 8.1(b),
(d), (e) and (f).
(b) The Company shall and shall cause its Subsidiaries and their respective Representatives to
provide all reasonable cooperation in connection with the arrangement of the Financing as may be
reasonably required by Parent; provided that such requested cooperation does not
unreasonably interfere with the ongoing operations of the Company and its Subsidiaries. Parent
shall, promptly upon request by the Company, reimburse the Company for all reasonable out-of-pocket
costs incurred by the Company or the Subsidiaries in connection with such cooperation. Parent and
Merger Sub shall, on a joint and several basis, indemnify and hold harmless the Company, its
Subsidiaries and their respective Representatives for and against any and all liabilities, losses,
damages, claims, costs, expenses, interest, awards, judgments and penalties suffered or incurred by
them in connection with the arrangement of the Financing and any information utilized in connection
therewith, except for any liabilities, losses, damages, claims, costs, expenses, interest, awards,
judgments or penalties that arise out of or relate to (i) information furnished to Parent by the
Company for use in connection with the Financing or (ii) information contained in the Company SEC
Reports. Notwithstanding anything to the contrary, the condition set forth in paragraph (e) of
Annex I of this Agreement, as it applies to the Company’s obligations under this Section
6.11(b), shall be deemed satisfied unless the Financing (or any alternative financing) has not
been obtained primarily as a result of the Company’s willful and material breach of its obligations
under this Section 6.11(b).
(c) All non-public information or Evaluation Material (as defined in the Confidentiality
Agreement) regarding the Company obtained by Parent or its Representatives
- 48 -
pursuant to Section
6.11(b) above shall be kept confidential in accordance with the Confidentiality Agreement.
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1 Conditions to Each Party’s Obligation to Effect the Merger. The
obligations of the parties to effect the Merger on the Closing Date are subject to the satisfaction
or waiver on or prior to the Closing Date of the following conditions:
(a) if required by the DGCL, the Company Stockholder Vote shall have been obtained;
(b) no temporary restraining order, preliminary or permanent injunction or other Order issued
by any court of competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect; and there shall not be any governmental action
taken, or any statute, rule, regulation or Order enacted, entered, enforced or deemed applicable to
the Merger, which makes the consummation of the Merger illegal; and
(c) Merger Sub shall have accepted for payment and paid for all of the Shares validly tendered
pursuant to the Offer and not withdrawn.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination. This Agreement may be terminated and the Offer and the
Merger (and the other transactions contemplated by the Transaction Documents) may be abandoned at
any time prior to the Effective Time (notwithstanding if the Company Stockholder Vote has been
obtained):
(a) by the mutual written consent of the Company and Parent, which consent shall have been
approved by the action of their respective Boards of Directors;
(b) by the Company or Parent, if any Governmental Entity shall have issued an Order or taken
any other action permanently enjoining, restraining or otherwise prohibiting the Offer or the
Merger or any of the other transactions contemplated hereby or by any of the Transaction Documents,
and such Order or other action shall have become final and nonappealable; provided,
however, that the party seeking to terminate this Agreement pursuant to this clause (b)
shall, subject to Section 6.3(d), have used all commercially reasonable efforts to remove
such Order or to reverse such action;
(c) by the Company, prior to the consummation of the Offer, in order to enter into an
Acquisition Agreement for a Superior Proposal; provided, however, that this
Agreement may not be so terminated unless (i) the Company Board of Directors shall have complied
with the procedures set forth in Sections 6.6(c) and (d) and (ii) all of the
payments required by Section 8.2 have been made in full to Parent;
- 49 -
(d) by Parent if, prior to the consummation of the Offer (i) the Company Board of Directors
shall have withdrawn or adversely modified its approvals or recommendations of the Merger or the
transactions contemplated hereby or by the Transaction Documents (it being understood, however,
that for all purposes of this Agreement, the fact that the Company has supplied any Person with
information regarding the Company or has entered into discussions or negotiations with such Person
as permitted by this Agreement, or the disclosure of such facts, shall not be deemed in and of
itself a withdrawal or modification of such approvals or recommendations), (ii) the Company Board
of Directors shall have made any other Adverse Recommendation Change, (iii) the Company shall have
materially breached any of its obligations under Sections 6.6(b), (c) or
(d), or Section 6.5, or (iv) any Third Party shall have commenced a tender or
exchange offer or other transaction constituting or potentially constituting an Alternative
Transaction and the Company shall not have sent to its security holders pursuant to Rule 14e-2
promulgated under the Securities Act, within ten (10) Business Days after such tender or exchange
offer is first published, sent or given, a statement disclosing that the Company recommends
rejection of such tender or exchange offer;
(e) by Parent or the Company, if the conditions set forth on Annex I shall not have been
satisfied or waived prior to September 15, 2007 (the “Outside Termination Date”);
provided, however, that the right to terminate this Agreement under this
Section 8.1(e) shall not be available to any party whose failure to fulfill any obligation
under this Agreement has been the cause of, or results in, the failure of such conditions to be
satisfied on or before such date;
(f) by Parent, if prior to the consummation of the Offer (i) there has been a breach by the
Company of any representation, warranty, covenant or agreement contained in this Agreement that
would, individually or in the aggregate, result in a failure of a condition set forth in paragraph
(d) or (e) of Annex I hereto if continuing on the expiration date of the Offer and (ii) such breach
shall not have been cured (or is not capable of being cured) before the Outside Termination Date
(it being understood that Parent may not terminate this Agreement pursuant to this Section
8.1(f) if such breach by the Company is so cured, or if Parent shall have materially breached
this Agreement);
(g) by the Company, if Merger Sub shall have (i) failed to commence the Offer within ten (10)
calendar days after the Outside Commencement Date or (ii) failed to accept for payment and pay for
Shares as and when required pursuant to the Offer, unless such inaction shall have been caused by
or resulted from the failure of the Company to perform, in any material respect, any of its
covenants or agreements contained in this Agreement or the material breach by the Company of any of
its representations or its warranties contained in this Agreement.
The party desiring to terminate this Agreement pursuant to subsection (b), (c),
(d), (e), (f) or (g) of this Section 8.1 shall give written
notice of such termination to the other party in accordance with Section 9.2, specifying
the provision or provisions hereof pursuant to which such termination is effected. The right of
any party hereto to terminate this Agreement pursuant to this Section 8.1 shall remain
operative and in full force and effect regardless of any investigation made by or on behalf of any
party hereto, or any of their respective Affiliates or Representatives, whether prior to or after
the execution of this Agreement.
- 50 -
Section 8.2 Expenses.
(a) Expense Allocation. Except as otherwise specified in this Section 8.2 or
agreed in writing by the parties, all out-of-pocket costs and expenses incurred in connection with
the Transaction Documents, the Offer, the Merger and the other transactions contemplated hereby
shall be paid by the party incurring such cost or expense. Each of the Company and Parent shall
have responsibility for its respective costs associated with preparation of the filings under the
HSR Act and other applicable Antitrust Laws; provided, however, that Parent shall
be solely responsible for the HSR filing fee and any filing fee required under any other applicable
Antitrust Laws.
(b) Company Termination Fees. If this Agreement is terminated (i) by the Company
pursuant to Section 8.1(c), (ii) by Parent pursuant to Section 8.1(d), or (iii) by
Parent or the Company pursuant to Section 8.1(e) (but only, in the case of this clause
(iii), if all conditions to the Offer have been satisfied at the time of such termination other
than the Minimum Condition and the conditions set forth in paragraphs (d) and (e) of Annex I), the
Company shall promptly, and in any event within five (5) Business Days after the date of such
termination, pay Parent the Company Termination Fee by wire transfer of immediately available
funds; provided, however, that in the case of a termination pursuant to clause
(iii) above: (A) such payment shall be made only if following the date hereof and prior to
termination of this Agreement, there has been publicly announced an Alternative Transaction that if
consummated would be a Company Acquisition and within twelve (12) months following the termination
of this Agreement a Company Acquisition is consummated or the Company shall have entered into any
contract or agreement providing for a Company Acquisition that is consummated and (B) such payment
shall be made no later than the consummation of such Company Acquisition.
Section 8.3 Effect of Termination. In the event of termination of this Agreement by
either the Company or Parent as provided in Section 8.1, this Agreement shall forthwith
become void and have no effect, without any liability or obligation on the part of Parent and
Merger Sub or the Company, except that (a) the provisions of Section 8.1, Section
8.2, this Section 8.3 and Article IX shall survive termination and (b) nothing
herein shall relieve any party from liability for such party’s willful breach of this Agreement or
for fraud.
Section 8.4 Amendment. This Agreement may be amended by the parties in writing by
action of their respective Boards of Directors at any time prior to the filing of the Certificate
of Merger with the Delaware Secretary; provided, however, that, after the Company
Stockholder Vote shall have been obtained, no such amendment, modification or supplement shall
alter the amount or change the form of the Merger Consideration to be delivered to the Company
Stockholders or alter or change any of the terms or conditions of this Agreement if such alteration
or change would adversely affect the Company Stockholders. This Agreement may not be amended,
changed or
supplemented or otherwise modified except by an instrument in writing signed on behalf of all
of the parties.
Section 8.5 Extension; Waiver. At any time prior to the Effective Time, each of the
Company, Parent and Merger Sub may (a) extend the time for the performance of any of the
obligations or other acts of the other party, (b) waive any inaccuracies in the representations and
warranties of the other party contained in this Agreement or in any document delivered pursuant
- 51 -
to
this Agreement, or (c) subject to the provisions of Section 8.4, waive compliance with any
of the agreements or conditions of the other parties contained in this Agreement. Any agreement on
the part of a party to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party. The failure of any party to this Agreement
to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of
those rights.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument delivered pursuant to this
Agreement shall survive the Effective Time. This Section 9.1 shall not limit any covenant
or agreement of the parties in this Agreement that by its terms contemplates performance after the
Effective Time.
Section 9.2 Notices. All notices, requests, claims, demands and other communications
under this Agreement shall be in writing (and made orally if so required pursuant to any section of
this Agreement) and shall be deemed given (and duly received) if delivered personally, sent by
overnight courier (providing proof of delivery and confirmation of receipt by telephonic notice to
the applicable contact person) to the parties or sent by fax (providing proof of transmission and
confirmation of transmission by telephonic notice to the applicable contact person) at the
following addresses or fax numbers (or at such other address or fax number for a party as shall be
specified by like notice):
if to Parent, to
Software AG
Xxxxxxxxxxxxx 00
00000 Xxxxxxxxx
Xxxxxxx
Xxxxxxxxxxxxx 00
00000 Xxxxxxxxx
Xxxxxxx
Attn: General Counsel
Phone: x00 0000 00 0000
Fax: x00 0000 00 0000
Phone: x00 0000 00 0000
Fax: x00 0000 00 0000
with a copy to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
Xxxxxxx X. Xxxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
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if to the Company, to
webMethods, Inc.
South Tower
0000 Xxxxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
South Tower
0000 Xxxxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
Phone: (000) 000-0000
Fax: (000) 000-0000
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx Xxxxxxxxx
Xxxxx 000
XxXxxx, Xxxxxxxx 00000
0000 Xxxxxx Xxxxxxxxx
Xxxxx 000
XxXxxx, Xxxxxxxx 00000
Attn:
Xxxxxxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
Xxxxxxx X. Xxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
Section 9.3 Certain Definitions.
“Acquisition Agreement” shall mean any letter of intent, agreement in principle,
merger agreement, stock purchase agreement, asset purchase agreement, acquisition agreement, option
agreement or similar agreement relating to an Alternative Transaction.
“ADA” shall mean the Americans with Disabilities Act.
“ADEA” shall mean the Age Discrimination in Employment Act.
“Adverse Recommendation Change” shall have the meaning set forth in Section
6.6(c).
“Affiliate” of any Person shall mean another Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under common control with,
such first Person.
“Agreement” shall have the meaning set forth in the Preamble.
“Alternative Transaction” shall mean any proposal, offer or inquiry, whether in
writing or otherwise, from any Third Party (i) to acquire beneficial ownership (as defined in Rule
13d-3 under the Exchange Act) of all or more than 15% of the consolidated assets of the Company,
(ii) to acquire beneficial ownership of 15% or more of any class of equity securities of the
Company, in each case pursuant to a merger, consolidation or other business combination, sale of
shares of stock, sale of assets, tender offer, exchange offer or similar transaction or series of
related transactions, which is structured to permit such Third Party to acquire beneficial
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ownership of more than (A) 15% of the consolidated assets of the Company or (B) 15% or more of any
class of equity securities in the Company, as the case may be or (iii) to engage in any other
merger, consolidation, share exchange, business combination, asset sale, reorganization,
recapitalization, liquidation, dissolution or similar transaction involving the Company or any of
its Subsidiaries whose assets, individually or in the aggregate, constitute more than 15% of the
consolidated assets of the Company.
“Antitakeover Laws” shall mean any “moratorium,” “control share,” “fair price,”
“affiliate transaction,” “business combination” or other antitakeover laws and regulations of any
state or other jurisdiction, including the provisions of Section 203 of the DGCL.
“Antitrust Law” shall mean the HSR Act, the Xxxxxxx Act, as amended, the Xxxxxxx Act,
as amended, the Federal Trade Commission Act, as amended, and any other federal, state or foreign
law, regulation or decree designed to prohibit, restrict or regulate actions for the purpose or
effect of monopolization or restraint of trade.
“Applicable Law” means, with respect to any Person, any Law that is binding upon or
applicable to such Person, as amended unless expressly specified otherwise.
“Appraisal Shares” shall mean Shares issued and outstanding immediately prior to the
Effective Time that are held by any holder who is entitled to demand and properly demands appraisal
of such Shares pursuant to, and who complies in all respects with, the provisions of Section 262.
“Associate” of any Person shall have the meaning assigned thereto by Rule 12b-2 under
the Exchange Act.
“Business Day” shall mean (i) for purposes of all portions of this Agreement other
than Article I, any day other than a Saturday, Sunday or a day on which banking
institutions in New York, New York or Frankfurt, Germany are authorized or obligated by Law or
executive order to be closed and (ii) for purposes of Article I hereof, any day other than
a Saturday, Sunday or a day on which banking institutions in New York, New York are authorized or
obligated by Law or executive order to be closed.
“Certificate” shall mean each certificate representing one or more Shares or, in the
case of uncertificated Shares, each entry in the books of the Company representing uncertificated
Shares.
“Certificate of Merger” shall mean the certificate of merger or certificate of
ownership and merger, as the case may be, with respect to the Merger, containing the provisions
required by, and executed in accordance with, the DGCL.
“CFIUS” shall have the meaning set forth in Section 6.3(b).
“Closing” shall mean the closing of the Merger, as contemplated by Section
2.2.
“Closing Date” shall mean the date on which the Closing occurs.
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“Code” shall mean the Internal Revenue Code of 1986, as amended.
“Commitment Letter” shall have the meaning set forth in Section 5.5.
“Company” shall have the meaning set forth in the Preamble.
“Company Acquisition” shall mean (i) a merger, consolidation or business combination
involving the Company pursuant to which the stockholders of the Company immediately preceding such
transaction hold less than 50% of the equity interest in the surviving or resulting entity of such
transaction, (ii) a sale or other disposition by the Company of 50% or more of the Company’s
consolidated assets, (iii) the acquisition by any Person or group (including by way of a tender
offer or an exchange offer or issuance by the Company), directly or indirectly, of beneficial
ownership of shares representing in excess of 50% of the voting power of the then-outstanding
shares of capital stock of the Company or (iv) the adoption or implementation by the Company of a
plan of liquidation, recapitalization or share repurchase relating to more than 50% of the
then-outstanding shares of capital stock of the Company or an extraordinary dividend relating to
more than 50% of such outstanding shares or 50% of the Company’s consolidated assets.
“Company Benefit Plan” shall mean (i) each “employee welfare benefit plan,” as defined
in Section 3(1) of ERISA, including, but not limited to, any medical plan (including any
self-insured plan), life insurance plan, short-term or long-term disability plan or dental plan,
(ii) each “employee pension benefit plan,” as defined in Section 3(2) of ERISA, including, but not
limited to, any excess benefit plan, top hat plan or deferred compensation plan or arrangement,
nonqualified retirement plan or arrangement or qualified defined contribution or defined benefit
arrangement, and (iii) each other benefit plan, policy, program, arrangement or agreement,
including, but not limited to, any fringe benefit plan or program, bonus or incentive plan, stock
option, restricted stock, stock bonus or other equity-based compensation, sick pay, bonus program,
service award, deferred bonus plan, salary reduction agreement, change-of-control agreement,
employment agreement or consulting agreement, which in all cases is sponsored, maintained or
contributed to by the Company or any of its Subsidiaries or with respect to which the Company or
any of its Subsidiaries is a party or has any liability and in which any employee of the Company or
its Subsidiaries is eligible to participate or derive a benefit.
“Company Board of Directors” shall have the meaning set forth in the Preamble.
“Company Bylaws” shall mean the Second Amended and Restated Bylaws of the Company,
including any amendments thereto, as in effect as of the date hereof.
“Company Certificate of Incorporation” shall mean the Company’s Fifth Amended and
Restated Certificate of Incorporation, including any amendments thereto, as in effect as of the
date hereof.
“Company Common Stock” shall have the meaning set forth in the Preamble.
“Company Compensation Approvals” shall have the meaning set forth in Section
4.13(l).
- 55 -
“Company Compensation Arrangement” shall have the meaning set forth in Section
4.13(l).
“Company Disclosure Documents” shall have the meaning set forth in Section
4.20(a).
“Company Disclosure Schedules” shall mean the Company Disclosure Schedules dated the
date hereof and delivered by the Company to Parent concurrently with the execution of this
Agreement, each section of which qualifies the correspondingly numbered representation and warranty
or covenant to the extent specified therein; provided that any disclosure set forth with respect to
any particular section shall be deemed to be disclosed in reference to any other applicable section
of this Agreement as to which the relevance of that disclosure to such other applicable section of
this Agreement would be reasonably apparent, without any independent knowledge on the part of the
reader regarding the matter so disclosed.
“Company Employees” shall mean employees of the Company who remain employees of the
Surviving Corporation after the Effective Time.
“Company ESPP” shall mean the Company’s Employee Stock Purchase Plan, as adopted
November 17, 1999.
“Company Financial Advisor” shall mean Bear, Xxxxxxx & Co. Inc.
“Company Financial Statements” shall mean all of the financial statements of the
Company and its Subsidiaries included in the Company SEC Reports.
“Company Intellectual Property” shall mean all Intellectual Property used in the
business of the Company and its Subsidiaries as currently conducted by the Company and as to which
the Company or any of its Subsidiaries claims rights by virtue of ownership of title to such
Intellectual Property.
“Company Knowledge Person” shall mean the Persons set forth on Section 9.3 of
the Company Disclosure Schedules.
“Company Material Adverse Effect” shall mean, with respect to the Company, any change,
event, violation, inaccuracy, effect or circumstance (any such item, an “Effect”) that,
individually or taken together with all other Effects that have occurred prior to the date of
determination of the occurrence of the Company Material Adverse Effect, is or is reasonably likely
to (i) be materially adverse to the business, operations, properties, condition (financial or
otherwise), assets or Liabilities of the Company or (ii) prevent or materially delay the
performance by the Company of any of its obligations under this Agreement or the consummation of
the Merger or the other transactions contemplated by the Transaction Documents; provided,
however, that in no event shall any of the following occurring after the date hereof, alone
or in combination, be deemed to constitute, nor be taken into account in determining whether there
has been or will be, a Company Material Adverse Effect: (A) any change in the Company’s stock
price or trading volume (it being understood that except for Effects described in clauses (C)
through (G) of this definition, the cause of any such change may be deemed to constitute, in and of
itself, a Company Material Adverse Effect and may be taken into consideration in determining
whether a Company Material Adverse Effect has occurred),
- 56 -
(B) any failure by the Company to meet
published or internal revenue or earnings projections (it being understood that except for Effects
described in clauses (C) through (G) of this definition, the cause of any such failure may be
deemed to constitute, in and of itself, a Company Material Adverse Effect and may be taken into
consideration in determining whether a Company Material Adverse Effect has occurred), (C) any
Effect that results from changes affecting the business integration and optimization software
industry generally (to the extent such Effect is not disproportionate with respect to the Company
in any material respect) or the United States economy generally (to the extent such Effect is not
disproportionate with respect to the Company in any material respect), (D) any Effect that results
from changes affecting general worldwide economic or capital market conditions (to the extent such
Effect is not disproportionate with respect to the Company in any material respect), (E) any Effect
resulting from compliance with the terms and conditions of this Agreement, (F) any Effect caused by
an impact to the Company’s relationships with its employees, customers, suppliers or partners as a
result of the announcement or pendency of the Offer or the Merger, or (G) any stockholder
litigation arising from allegations of a breach of fiduciary duty relating to this Agreement and
the transactions contemplated hereby.
“Company Material Contract” shall have the meaning set forth in Section 4.15.
“Company Option Plans” shall mean the Company’s 2006 Omnibus Stock Incentive Plan;
Amended and Restated Stock Option Plan; Infravio, Inc. 2000 Stock Plan; Translink Software, Inc.
Stock Option Plan; Alier, Inc. 1996 Stock Option Plan; Alier, Inc. 1997 Stock Option Plan; Active
Software 1996 Stock Plan; Active Software 1996A Stock Plan; Active Software 1999 Stock Plan; Active
Software 1999 Directors’ Stock Option Plan; and the Company’s Stock Option Plan, in each case as
amended and/or restated prior to the date hereof.
“Company Permits” shall mean all authorizations, licenses, permits, certificates,
approvals and orders of all Governmental Entities necessary for the lawful conduct of the
businesses of the Company and its Subsidiaries.
“Company Restricted Stock” shall have the meaning set forth in Section 2.9.
“Company SEC Reports” shall mean all forms, reports, statements, information and other
documents (as supplemented and amended since the time of filing) filed or required to be filed by
the Company with the SEC since March 31, 2004.
“Company Stock Option” shall mean each outstanding option to purchase shares of
Company Common Stock under the Company Option Plans.
“Company Stock Rights” shall mean any options, warrants, convertible securities,
subscriptions, stock appreciation rights, phantom stock plans or stock equivalents or other rights,
agreements, arrangements or commitments (contingent or otherwise) obligating the Company to issue
or sell any shares of capital stock of, or options, warrants, convertible securities, subscriptions
or other equity interests in, the Company.
“Company Stockholder Vote” shall mean the affirmative vote of the holders of a
majority of the outstanding Shares in favor of adoption and approval of this Agreement and the
Merger.
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“Company Stockholders” shall have the meaning set forth in the Preamble.
“Company Stockholders Meeting” shall mean a meeting of the Company Stockholders to be
called to consider the Merger.
“Company 10-K” shall mean the Company’s Annual Report on Form 10-K for the fiscal year
ended March 31, 2006.
“Company Termination Fee” shall mean an amount in cash equal to $13,640,000.
“Compensation Committee” shall have the meaning set forth in Section 4.13(l).
“Confidentiality Agreement” shall mean the confidentiality and non-disclosure
agreement between the Company and Parent dated January 30, 2007, as amended.
“Continuing Directors” shall have the meaning set forth in Section 1.3(b).
“Current ESPP Offering” shall have the meaning set forth in Section 2.10.
“Deferred Compensation Plan” shall have the meaning set forth in Section
2.9(b).
“DGCL” shall mean the General Corporation Law of the State of Delaware.
“Director Deferred Share” means any unfunded promise to issue or deliver a share of
Company Common Stock granted to a director of the Company under the Company Option Plans or
otherwise.
“Effective Time” shall have the meaning set forth in Section 2.3.
“Employee Benefit Plan” shall mean, with respect to any Person, each plan, fund,
program, agreement, arrangement or scheme, including, but not limited to, each plan, fund,
program, agreement, arrangement or scheme maintained or required to be maintained, in each
case that is at any time sponsored or maintained or required to be sponsored or maintained by such
Person or to which such Person makes or has made, or has or has had an obligation to make,
contributions providing for employee benefits or for the remuneration, direct or indirect, of the
current or former employees, directors, officers, consultants, independent contractors, contingent
workers or leased employees of such Person or the dependents of any of them (whether written or
oral), including: each deferred compensation, bonus, incentive compensation, pension, retirement,
stock purchase, stock option and other equity compensation plan or “welfare” plan (within the
meaning of Section 3(1) of ERISA, determined without regard to whether such plan is subject to
ERISA); each “pension” plan (within the meaning of Section 3(2) of ERISA, determined without regard
to whether such plan is subject to ERISA); and each severance plan or agreement, health, vacation,
summer hours, supplemental unemployment benefit, hospitalization insurance, medical, dental, legal
and each other employee benefit plan, fund, program, agreement or arrangement.
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“Employment Agreements” shall mean any contracts, termination or severance agreements,
change of control agreements or any other agreements respecting the terms and conditions of
employment of any officer, employee or former employee.
“Environmental Laws” means any Applicable Laws or any agreement with any Governmental
Entity or other third party, relating to the environment or to Hazardous Substances.
“Environmental Permits” means all permits, licenses, franchises, certificates,
approvals and other similar authorizations of Governmental Entities relating to or required under
Environmental Laws and affecting, or relating to, the business of the Company or any Subsidiary as
currently conducted.
“Encumbrance” shall mean any lien, mortgage, pledge, deed of trust, security interest,
charge, encumbrance or other adverse claim or interest. For purposes of this Agreement, a Person
shall be deemed to own subject to an Encumbrance any property or asset that it has acquired or
holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such property or asset.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
“Exchange Fund” shall have the meaning set forth in Section 3.1.
“Excluded Contract” shall have the meaning set forth in Section 4.15.
“Exon-Xxxxxx” shall have the meaning set forth in Section 4.5(b).
“Financing” shall have the meaning set forth in Section 5.5.
“FLSA” shall mean the Fair Labor Standards Act.
“FMLA” shall mean the Family and Medical Leave Act.
“GAAP” shall mean United States generally accepted accounting principles.
“Governmental Entity” shall mean any United States federal, state or local or any
foreign government or any court of competent jurisdiction, administrative or regulatory agency or
commission or other governmental authority or agency, domestic or foreign.
“Hazardous Substance” means any pollutant, contaminant, waste or chemical or any
toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous substance, waste or
material, or any substance, waste or material having any constituent elements displaying any of the
foregoing characteristics, including any substance, waste or material regulated under any
Environmental Law.
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“HSR Act” shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, and the rules and regulations thereunder.
“Intellectual Property” shall mean (i) patents and patent applications (including all
reissues, divisions, continuations, continuations-in-part, extensions and reexaminations thereof)
and rights to apply for patents, (ii) trademarks, trade names, service marks and domain names
(whether or not registered), including all registrations and applications for registration of any
of the foregoing and all goodwill associated with the foregoing, (iii) copyrights and registrations
and applications for registration thereof, schematics, industrial models and inventions, (iv)
know-how and trade secrets, (v) computer software programs (whether in source code, object code or
bytecode form), (vi) databases and data collections and (vii) all other intangible proprietary
information.
“International Plan” shall have the meaning set forth in Section 4.13(g).
“IRS” shall mean the United States Internal Revenue Service.
“Knowledge,” or any similar expression, shall mean (i) with respect to the Company,
the actual knowledge of any Company Knowledge Person and (ii) with respect to Parent (or any of its
Subsidiaries), the actual knowledge of any Parent Knowledge Person.
“Labor Laws” shall mean ERISA, the Immigration Reform and Control Act of 1986, the
National Labor Relations Act, the Civil Rights Acts of 1866 and 1964, the Equal Pay Act, ADEA, ADA,
FMLA, WARN, the Occupational Safety and Health Act, the Xxxxx-Xxxxx Act, the Xxxxx-Xxxxx Act, the
Service Contract Act, Executive Order 11246, FLSA and the Rehabilitation Act of 1973, and all
regulations under such acts.
“Law” shall mean any federal, state, local or foreign law (statutory, common or
otherwise), regulation, requirement, interpretation, permit, license, approval, authorization,
rule, ordinance, code, order, injunction, judgment, decree, ruling, policy or rule of common law of
any Governmental Entity, including any judicial or administrative interpretation thereof.
“Lender” shall have the meaning set forth in Section 5.5.
“Letter of Transmittal” shall have the meaning set forth in Section 3.2.
“Liabilities” shall mean any and all debts, liabilities and obligations of any nature
whatsoever, whether accrued or fixed, absolute or contingent, matured or unmatured or determined or
determinable, including those arising under any Law, those arising under any contract, agreement,
commitment, instrument, permit, license, franchise or undertaking and those arising as a result of
any act or omission.
“Merger” shall have the meaning set forth in the Preamble.
“Merger Consideration” shall have the meaning set forth in Section 2.5.
“Merger Sub” shall have the meaning set forth in the Preamble.
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“Minimum Condition” shall have the meaning set forth in Section 1.1(a).
“Nasdaq” shall mean The Nasdaq National Market System, a.k.a. the Nasdaq Stock Market.
“New Exercise Date” shall have the meaning set forth in Section 2.10.
“NLRB” shall mean the United States National Labor Relations Board.
“Offer” shall have the meaning set forth in the Preamble.
“Offer Documents” shall have the meaning set forth in Section 1.1(b).
“Offer Price” shall have the meaning set forth in the Preamble.
“Operating Plan” shall have the meaning set forth in Section 6.1(b)(xi).
“Option Consideration” shall have the meaning set forth in Section 2.8.
“Order” shall mean any writ, judgment, injunction, consent, order, decree,
stipulation, award or executive order of or by any Governmental Entity.
“Outside Commencement Date” shall have the meaning set forth in Section
1.1(a).
“Outside Termination Date” shall have the meaning set forth in Section 8.1.
“Parent” shall have the meaning set forth in the Preamble.
“Parent Benefit Plan” shall mean (i) each “employee welfare benefit plan,” as defined
in Section 3(1) of ERISA, including, but not limited to, any medical plan, life insurance plan,
short-term or long-term disability plan or dental plan; (ii) each “employee pension benefit plan,”
as defined in Section 3(2) of ERISA, including, but not limited to, any excess benefit plan, top
hat plan or deferred compensation plan or arrangement, nonqualified retirement plan or arrangement,
or qualified defined contribution or defined benefit arrangement; and (iii) each other material
benefit plan, policy, program, arrangement or agreement, including, but not
limited to, any material fringe benefit plan or program, bonus or incentive plan, stock
option, restricted stock, stock bonus, sick pay, bonus program, service award, deferred bonus plan,
salary reduction agreement, change-of-control agreement, employment agreement or consulting
agreement, which in all cases is sponsored or maintained by Parent or any of its Subsidiaries for
the benefit of its employees.
“Parent Knowledge Person” shall mean the Persons set forth on Section 9.3 of
the Parent Disclosure Schedules.
“Parent Material Adverse Effect” shall mean, with respect to Parent and Merger Sub,
any Effect that, individually or taken together with all other Effects that have occurred prior to
the date of determination of the occurrence of the Parent Material Adverse Effect, is or would be
reasonably likely to prevent or materially delay the performance by Parent or Merger Sub of any
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of
its obligations under this Agreement or the consummation of the Merger or the other transactions
contemplated by the Transaction Documents.
“Paying Agent” shall have the meaning set forth in Section 3.1.
“Person” shall mean any individual, corporation, partnership (general or limited),
limited liability company, limited liability partnership, trust, joint venture, joint-stock
company, syndicate, association, entity, unincorporated organization or government, or any
political subdivision, agency or instrumentality thereof.
“Proceeding” means any suit, claim, action, litigation, arbitration, proceeding
(including any civil, criminal, administrative, investigative or appellate proceeding), hearing,
audit, review, examination or investigation commenced, brought, conducted or heard by or before, or
otherwise involving, any court or other Governmental Entity or any arbitrator or arbitration panel.
“Proxy Statement” shall mean a definitive proxy statement, including the related
preliminary proxy statement and any amendment or supplement thereto, relating to the Merger and
this Agreement to be mailed to the Company Stockholders in connection with the Company Stockholders
Meeting.
“Reasonable Restrictions” shall have the meaning set forth in Section 6.3(d).
“Registered Company Intellectual Property” shall have the meaning set forth in
Section 4.16(b).
“Representatives” shall mean officers, directors, employees, auditors, attorneys and
financial advisors (including the Company Financial Advisor).
“Right” shall have the meaning set forth in the Preamble.
“Rights Plan” shall have the meaning set forth in the Preamble.
“Schedule 14D-9” shall have the meaning set forth in Section 1.2(b).
“Schedule TO” shall have the meaning set forth in Section 1.1(b).
“SEC” shall mean the Securities and Exchange Commission.
“Second Request” shall mean a request for additional information or documentary
material issued by a Governmental Entity pursuant to 16 C.F.R. § 803.20 in connection with the
transactions contemplated by this Agreement.
“Section 262” shall mean Section 262 of the DGCL.
“Securities Act” shall mean the Securities Act of 1933, as amended.
“Shares” shall have the meaning set forth in Section 2.5.
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“Specified Company Representations” shall mean the representations and warranties of
the Company contained in Sections 4.2, 4.3 and 4.18(a).
“Specified Contracts” shall have the meaning set forth in Section 4.15(c).
“Subsequent Offering Period” shall have the meaning set forth in Section
1.1(a).
“Subsidiary” of any Person shall mean any corporation, partnership, limited liability
company, joint venture or other legal entity of which such Person (either directly or through or
together with another Subsidiary of such Person) owns more than 50% of the voting stock or value of
such corporation, partnership, limited liability company, joint venture or other legal entity.
“Subsidiary Stock Rights” shall mean any options, warrants, convertible securities,
subscriptions, stock appreciation rights, phantom stock plans or stock equivalents or other rights,
agreements, arrangements or commitments (contingent or otherwise) of any character issued or
authorized by the Company or any Subsidiary of the Company relating to the issued or unissued
capital stock of the Subsidiaries of the Company or obligating the Company or any of its
Subsidiaries to issue or sell any shares of capital stock of, or options, warrants, convertible
securities, subscriptions or other equity interests in, any Subsidiary of the Company.
“Superior Proposal” shall mean a bona fide, unsolicited written proposal or offer made
by a Third Party to acquire, directly or indirectly, including pursuant to a tender offer, exchange
offer, merger, consolidation, business combination, recapitalization, liquidation, dissolution or
similar transaction, more than 50% of the voting power of the capital stock of the Company then
outstanding or all or substantially all of the assets of the Company on terms the Company Board of
Directors determines in good faith (after consulting with the Company’s outside legal counsel and
the Company Financial Advisor), taking into account, among other things, all legal, financial,
regulatory, timing and other aspects of the offer and the Third Party making the offer, are more
favorable from a financial point of view to the Company Stockholders than the Offer, the Merger and
the other transactions contemplated by this Agreement, and is reasonably capable of being
consummated.
“Surviving Corporation” shall mean the corporation surviving the Merger.
“Tax” (and, with correlative meaning, “Taxes”) shall mean any federal, state,
local or foreign income, gross receipts, property, sales, use, license, excise, franchise,
employment, payroll, premium, withholding, alternative or added minimum, ad valorem, transfer or
excise tax, or any other tax of any kind whatsoever, together with any interest or penalty or
addition thereto, whether disputed or not, imposed by any Governmental Entity.
“Tax Return” shall mean any return, report or similar statement actually filed or
required to be filed with respect to any Tax (including any attached schedules), including any
information return, claim for refund, amended return or declaration of estimated Tax.
“Tender and Support Agreements” shall have the meaning set forth in the
Preamble.
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“Third Party” shall mean any Person or group (as defined in Section 13(d)(3) of the
Exchange Act) other than Parent, Merger Sub or any Affiliates thereof.
“Top-Up Option” shall have the meaning set forth in Section 1.4(a).
“Top-Up Option Shares” shall have the meaning set forth in Section 1.4(a).
“Transaction Documents” shall mean this Agreement, the Tender and Support Agreements
and all other agreements, instruments and documents to be executed by Parent, Merger Sub and the
Company in connection with the transactions contemplated by such agreements.
“Transaction Expenses” shall mean all Third Party fees and expenses incurred by the
Company in connection with the Merger, this Agreement, the transactions contemplated hereby and
otherwise in connection with the potential sale of the Company, in each case whether or not paid,
billed or accrued (including, without limitation, any fees and expenses of the Company Financial
Advisor and the Company’s legal counsel).
“WARN” shall mean the United States Worker Adjustment and Retraining Notification Act.
Section 9.4 Interpretation. When a reference is made in this Agreement to an Article
or a Section, such reference shall be to an Article or a Section of this Agreement unless otherwise
indicated. The table of contents, headings and index of defined terms contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the word “include,” “includes” or “including” is used in this Agreement,
it shall be deemed to be followed by the words “without limitation.” The words “hereof,” “herein”
and “hereby” refer to this Agreement. The Company Disclosure Schedules and Parent Disclosure
Schedules, as well as any schedules thereto and any exhibits hereto, shall be deemed part of this
Agreement and included in any reference to this Agreement.
Section 9.5 Counterparts . This Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same agreement and shall become effective when one or more counterparts have
been signed by each of the parties and delivered to the other parties.
Section 9.6 Entire Agreement; No Third-Party Beneficiaries. This Agreement (including
the documents and instruments referred to herein, including the Confidentiality Agreement) (a)
constitutes the entire agreement, and supersedes all prior agreements and understandings, both
written and oral, among the parties, or any of them, with respect to the subject matter of this
Agreement and (b) is not intended to and does not confer upon any Person other than the parties
hereto any rights or remedies hereunder, other than the Persons intended to benefit from the
provisions of Section 6.10 (Directors’ and Officers’ Indemnification and Insurance), who
shall have the right to enforce such provisions directly. Notwithstanding clause (b) of the
immediately preceding sentence, following the Effective Time the provisions of Articles I and
II shall be enforceable by holders of Certificates.
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Section 9.7 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without regard to the conflicts of laws
principles thereof.
Section 9.8 Assignment. Neither this Agreement nor any of the rights, interests or
obligations under this Agreement shall be assigned or delegated, in whole or in part, by operation
of Law or otherwise by any of the parties without the prior written consent of the other parties,
except that Merger Sub’s rights and obligations may be assigned to and assumed by Parent or any
other corporation directly or indirectly wholly owned by Parent; provided, however,
that any such assignment does not affect the economic or legal substance of the transactions
contemplated hereby and provided further that such assignment does not create adverse Tax
consequences for the Company Stockholders. Subject to the preceding sentence, this Agreement will
be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective
successors and assigns.
Section 9.9 Enforcement. The parties agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in any state or federal court sitting in
the State of Delaware, this being in addition to any other remedy to which they are entitled at Law
or in equity.
Section 9.10 Consent to Jurisdiction; Venue.
(a) Each of the parties hereto irrevocably submits, for itself and its property, to the
exclusive jurisdiction of the state courts of Delaware, or, if no state court has proper
jurisdiction, the United States District Court for the District of Delaware, and any appellate
court thereof, for the purpose of any action arising out of or relating to this Agreement and
agreements related hereto, and each of the parties hereto irrevocably agrees that all claims in
respect to such action may be heard and determined exclusively in any Delaware state or federal
court sitting in the State of Delaware. Each of the parties hereto agrees that a final judgment in
any action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law.
(b) Each of the parties hereto irrevocably consents to the service of any summons and
complaint and any other process in any other action relating to the Merger, on behalf of itself or
its property, by the personal delivery of copies of such process to such party. Nothing in this
Section 9.10 shall affect the right of any party hereto to serve legal process in any other
manner permitted by law.
Section 9.11 Waiver of Trial by Jury. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH SUCH PARTY HERBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH
PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF OR RELATING TO THIS
- 65 -
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY
CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF THIS WAIVER, (C) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH SUCH
PARTY HAS BEEN INDUCED TO ENTER THIS AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND
CERTIFICATIONS IN THIS SECTION 9.11.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their
respective officers thereunto duly authorized, all as of the date first written above.
SOFTWARE AG | ||||||
By: | /s/ Xxxx-Xxxxx Xxxxxxxxx | |||||
Name: | ||||||
Title: | Chief Executive Officer | |||||
By: | /s/ Arnd Zinnhardt | |||||
Name: | Arnd Zinnhardt | |||||
Title: | Chief Financial Officer | |||||
WIZARD ACQUISITION, INC. | ||||||
By: | /s/ Xxxx-Xxxxx Xxxxxxxxx | |||||
Name: | Xxxx-Xxxxx Xxxxxxxxx | |||||
Title: | Chief Executive Officer | |||||
WEBMETHODS, INC. | ||||||
By: | /s/ Xxxxx Xxxxxxxx | |||||
Name: | Xxxxx Xxxxxxxx | |||||
Title: | President and Chief Executive Officer |
- 67 -
ANNEX I
Notwithstanding any other provision of the Offer, Merger Sub shall not be required to accept
for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-l(c)
under the Exchange Act (relating to Merger Sub’s obligation to pay for or return tendered Shares
promptly after the termination or withdrawal of the Offer), to pay for any Shares, and, subject to
the terms of the Agreement (including Section 1.1(a)), may terminate the Offer, if
immediately prior to the expiration date of the Offer (as extended from time to time), (i) the
Minimum Condition (as defined in the Agreement) shall not have been satisfied or (ii) any of the
following conditions shall not have been satisfied and such non-satisfaction shall be continuing:
(a) No Injunctions or Restraints; Illegality. No temporary restraining order,
preliminary or permanent injunction or other Order issued by any court of competent jurisdiction or
other legal restraint or prohibition preventing the consummation of the Offer or the Merger, other
than the application of the waiting period provisions of the HSR Act or any foreign Antitrust Law
or any requirement for affirmative approval of a Governmental Entity under any foreign Antitrust
Law, shall be in effect; and there shall not be any governmental action taken, or any statute,
rule, regulation or Order enacted, entered, enforced or deemed applicable to the Offer or the
Merger, which makes the consummation of the Offer or the Merger illegal.
(b) HSR Act or other Foreign Competition Law. The applicable waiting periods,
together with any extensions thereof, under the HSR Act or any other applicable pre-clearance
requirement of any other Antitrust Law shall have expired or been terminated.
(c) Exon-Xxxxxx. The period of time for any applicable review process by CFIUS under
Exon-Xxxxxx (including, if applicable, any investigation commenced thereunder) shall have expired
or been terminated, CFIUS shall have provided a written notice to the effect that review of the
transactions contemplated by this Agreement has been concluded and that a determination has been
made that there are no issues of national security sufficient to warrant investigation under the
Exon-Xxxxxx Act, or the President shall have made a decision not to block the transaction.
(d) Representations and Warranties. The Specified Company Representations shall in
each case be true and correct (other than in de minimis respects) at and as of the date hereof and
as of the expiration of the Offer as if made at and as of such time (except to the extent expressly
made as of an earlier date, in which case as of such earlier date). The representations and
warranties of the Company contained in this Agreement other than the Specified Company
Representations shall be true and correct at and as of the date hereof and as of the expiration of
the Offer as if made at and as of such time (except to the extent expressly made as of an earlier
date, in which case as of such earlier date), except where the failure of such representations and
warranties to be true and correct (without giving effect to any limitation as to “materiality” or
“Company Material Adverse Effect” set forth therein) would not reasonably be expected to have a
Company Material Adverse Effect. Parent shall have received a certificate signed by an executive
officer of the Company on its behalf to the foregoing effect.
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(e) Agreements and Covenants. The Company shall have performed or complied in all
material respects with all agreements and covenants required by this Agreement to be performed or
complied with by it on or prior to the consummation of the Offer, or shall have cured any
nonperformance or noncompliance. Parent shall have received a certificate signed by an executive
officer of the Company on its behalf to the foregoing effect.
(f) Governmental Litigation. There shall not have been instituted or pending any
Proceeding by any Governmental Entity under or relating to any Antitrust Law (i) challenging or
seeking to make illegal, to delay materially or otherwise directly or indirectly to restrain or
prohibit the consummation of the Offer or the Merger, seeking to obtain material damages or
otherwise directly or indirectly relating to the transactions contemplated by the Offer and the
Merger, (ii) requesting or seeking to require Parent or any of its Subsidiaries or the Company or
any of its Subsidiaries to: (A) effect any divestiture of, or hold separate (including by
establishing a trust or otherwise), or agree to restrict its ownership or operation of, any
business or assets of the Company or its Subsidiaries or of Parent or its Subsidiaries, or to enter
into any settlement or consent decree, or agree to any undertaking, with respect to any business or
assets of the Company or its Subsidiaries or of Parent or its Subsidiaries, (B) enter into, amend
or agree to enter into or amend, any contract, agreement, license or other undertaking of the
Company or its Subsidiaries or of Parent or its Subsidiaries or (C) otherwise waive, abandon or
alter any rights or obligations of the Company or its Subsidiaries or of Parent or its
Subsidiaries, except in each case as would not, individually or in the aggregate, materially
diminish the benefits that would reasonably be expected to accrue to Parent from the Merger or the
consummation of the transactions contemplated hereby.
(g) Company Material Adverse Effect. There shall not have occurred and be continuing
as of the expiration of the Offer any event, occurrence, revelation or development of a state of
circumstances or facts which, individually or in the aggregate, has had a Company Material Adverse
Effect.
(h) Definitive Agreement. The Agreement shall be in full force and effect and shall
not have been terminated.
- 69 -
SCHEDULES
Schedule Section | Description | |
Section 4.1
|
Organization and Good Standing; Charter Documents | |
Section 4.4
|
Company Subsidiaries | |
Section 4.5
|
No Conflict; Required Filings and Consents | |
Section 4.6
|
Compliance | |
Section 4.7
|
Litigation | |
Section 4.8
|
Company SEC Reports; Financial Statements | |
Section 4.9
|
Absence of Certain Changes or Events | |
Section 4.10
|
Taxes | |
Section 4.11
|
Title to Personal Properties; No Real Property | |
Section 4.12(a)
|
Officers, Directors, Employees and Affiliates | |
Section 4.13(a)
|
Employee Benefit Plans | |
Section 4.13(e)
|
Compliance of Employee Benefit Plans | |
Section 4.13(g)(i)
|
International Employee Benefit Plans | |
Section 4.13(l)
|
Compensation Committee Approvals | |
Section 4.14(a)
|
Compliance with Labor Laws | |
Section 4.14(b)
|
Representation by Labor Organizations | |
Section 4.14(c)
|
Labor-related Claims | |
Section 4.15
|
Contracts and Commitments | |
Section 4.16(b)
|
Intellectual Property | |
Section 4.16(d)
|
Intellectual Property Litigation | |
Section 4.18
|
Transaction Expenses Estimate | |
Section 4.21
|
Environmental Matters | |
Section 6.1(b)(xi)
|
Severance and Termination Benefits | |
Section 6.1(b)(xvii)
|
Agreement Amendments and Renewals | |
Section 6.3(d)
|
Reasonable Restrictions | |
Section 9.3
|
Company Knowledge Persons |