PARENT AFFILIATE AGREEMENT
THIS PARENT AFFILIATE AGREEMENT (this "AGREEMENT") is dated as of September
9, 1998, by and between FIRST CONSULTING GROUP, INC., a Delaware corporation
("PARENT"), INTEGRATED SYSTEMS CONSULTING GROUP, INC., a Pennsylvania
corporation (the "COMPANY"), and the undersigned affiliate of Parent
("AFFILIATE").
RECITALS
WHEREAS, Affiliate is a stockholder of Parent.
WHEREAS, Parent, Foxtrot Acquisition Sub, Inc., a Delaware corporation and a
wholly-owned subsidiary of Parent ("MERGER SUB"), and the Company have entered
into an Agreement and Plan of Merger and Reorganization dated as of September 9,
1998 (the "MERGER AGREEMENT"), providing for the merger of Merger Sub with and
into the Company (the "MERGER"). The Merger Agreement contemplates that, upon
consummation of the Merger, (i) the holders of the common stock of the Company
("COMPANY COMMON STOCK") will receive shares of common stock of Parent ("PARENT
COMMON STOCK") in exchange for their shares of Company Common Stock and (ii) the
Company will become a wholly-owned subsidiary of Parent.
WHEREAS, pursuant to the Merger Agreement it is a condition to consummation
of the Merger that Parent register shares of Parent Common Stock issued to
certain stockholders of the Company in connection with the Merger pursuant to
the terms of a Registration Rights Agreement in the form of Exhibit I to the
Merger Agreement.
WHEREAS, it is a condition to the consummation of the Merger pursuant to the
Merger Agreement that the independent accounting firms that audit the annual
financial statements of Parent and the Company will have delivered the written
concurrences with the conclusions of management of Parent and the Company to the
effect that the Merger will be accounted for as a pooling of interests under
Accounting Principles Board Opinion No. 16.
AGREEMENT
NOW, THEREFORE, in order to induce Parent and the Company to consummate the
transactions contemplated by the Merger Agreement, and for other valuable
consideration (the receipt and sufficiency of which are hereby acknowledged by
Affiliate), Affiliate hereby covenants and agrees as follows:
1. REPRESENTATIONS AND WARRANTIES. Affiliate represents and warrants to
Parent as follows:
(A) Affiliate is the holder and "beneficial owner" (as defined in Rule
13d-3 under the Securities Exchange Act of 1934, as amended) of the number
of shares of the Parent Common Stock set forth under Affiliate's signature
below (the "PARENT SHARES"), and Affiliate has good and valid title to the
Parent Shares, free and clear of any liens, pledges, security interests,
adverse claims, equities, options, proxies, charges, encumbrances or
restrictions of any nature.
(B) Affiliate has carefully read this Agreement, and has discussed with
Affiliate's own independent counsel to the extent Affiliate felt necessary
the limitations imposed on Affiliate's ability to sell, transfer or
otherwise dispose of the shares of Parent Common Stock. Affiliate fully
understands the limitations this Agreement places upon Affiliate's ability
to sell, transfer or otherwise dispose of the Parent Shares.
(C) Affiliate understands that the representations, warranties and
covenants set forth herein will be relied upon by Parent, the Company, and
their respective affiliates, counsel and accounting firms for purposes of
determining Parent's eligibility to account for the Merger as a "pooling of
interests,"
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and that substantial losses and damages may be incurred by these persons if
Affiliate's representations, warranties or covenants are breached.
2. COVENANTS RELATED TO POOLING OF INTERESTS. In accordance with SEC Staff
Accounting Bulletin No. 65 ("SAB 65"), during the period contemplated by SAB 65,
until the earlier of (i) Parent's public announcement of financial results
covering at least thirty (30) days of combined operations of Parent and the
Company or (ii) the Merger Agreement is terminated in accordance with its terms,
Affiliate will not sell, exchange, transfer, pledge, distribute, or otherwise
dispose of or grant any option, establish any "short" or put-equivalent position
with respect to or enter into any similar transaction (through derivatives or
otherwise) intended or having the effect, directly or indirectly, to reduce its
risk relative to any Parent shares. Parent may, at its discretion, place a stock
transfer notice consistent with the restrictions referred to in this Section 2
with its transfer agent with respect to such certificates, provided such
restrictive legend shall be removed and/or notice shall be countermanded
promptly upon expiration of the necessity therefor at the request of Affiliate.
3. PERMITTED TRANSFERS. Notwithstanding anything to the contrary contained
in this Agreement, Affiliate may (i) transfer a "de minimis" amount of Parent
Common Stock as contemplated by SEC Staff Accounting Bulletin No. 76 contingent
upon consultation with legal counsel for Parent as to whether such transfer
qualifies as "de minimis" and (ii) may (with the written consent of Parent, not
to be unreasonably withheld): (A) transfer shares of Parent Common Stock in
payment of the exercise price of options to purchase Parent Common Stock; (B)
transfer shares of Parent Common Stock to any organization qualified under
Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, so long as
such organization has traditionally been supported by contributions from the
general public (as opposed to being supported largely by a specific donor); and
(C) transfer shares of Parent Common Stock to a trust established for the
benefit of Affiliate and/or for the benefit of one or more members of
Affiliate's family, or make a bona fide gift of Parent Common Stock to one or
more members of Affiliate's family, provided that in the case of a transfer or
gift pursuant to this clause (B) or (C), a transferee of such shares agrees to
be bound by the limitations set forth in this Agreement.
4. SPECIFIC PERFORMANCE. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement was not
performed in accordance with its specific terms or was otherwise breached.
Affiliate agrees that, in the event of any breach or threatened breach by
Affiliate of any covenant or obligation contained in this Agreement, Parent
shall be entitled (in addition to any other remedy that may be available to it,
including monetary damages) to seek and obtain (a) a decree or order of specific
performance to enforce the observance and performance of such covenant or
obligation, and (b) an injunction restraining such breach or threatened breach.
5. INDEPENDENCE OF OBLIGATIONS. The covenants and obligations of Affiliate
set forth in this Affiliate Agreement shall be construed as independent of any
other agreement or arrangement between Affiliate, on the one hand, and Parent,
on the other. The existence of any claim or cause of action by Affiliate against
Parent shall not constitute a defense to the enforcement of any of such
covenants or obligations against Affiliate.
6. NOTICES. Any notice or other communication required or permitted to be
delivered under this Agreement shall be in writing and shall be deemed properly
delivered, given and received when delivered (by hand, by registered mail, by
courier or express delivery service or by facsimile confirmation) to the address
or facsimile telephone number set forth beneath the name of such party below (or
to such other
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address or facsimile telephone number as such party shall have specified in a
written notice given to the other party):
IF TO PARENT: FIRST CONSULTING GROUP, INC.
000 X. Xxxxx Xxxxxxxxx--0(xx) Xxxxx
Xxxx Xxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx
Fax: (000) 000-0000
WITH A COPY COOLEY GODWARD LLP
TO: Five Palo Alto Square
0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Fax: (000) 000-0000
IF TO at the address or facsimile phone number set forth
AFFILIATE: below Affiliate's signature on the signature page
hereof.
7. SEVERABILITY. If any provision of this Agreement or any part of any
such provision is held under any circumstances to be invalid or unenforceable in
any jurisdiction, then (a) such provision or part thereof shall, with respect to
such circumstances and in such jurisdiction, be deemed amended to conform to
applicable laws so as to be valid and enforceable to the fullest possible
extent, (b) the invalidity or unenforceability of such provision or part thereof
under such circumstances and in such jurisdiction shall not affect the validity
or enforceability of such provision or part thereof under any other
circumstances or in any other jurisdiction, and (c) the invalidity or
unenforceability of such provision or part thereof shall not affect the validity
or enforceability of the remainder of such provision or the validity or
enforceability of any other provision of this Agreement. Each provision of this
Agreement is separable from every other provision of this Agreement, and each
part of each provision of this Agreement is separable from every other part of
such provision.
8. GOVERNING LAW. This Agreement shall be construed in accordance with,
and governed in all respects by, the laws of the State of California (without
giving effect to principles of conflicts of laws).
9. WAIVER. No failure on the part of Parent to exercise any power, right,
privilege or remedy under this Agreement, and no delay on the part of Parent in
exercising any power, right, privilege or remedy under this Agreement, shall
operate as a waiver of such power, right, privilege or remedy; and no single or
partial exercise of any such power, right, privilege or remedy shall preclude
any other or further exercise thereof or of any other power, right, privilege or
remedy. Parent shall not be deemed to have waived any claim arising out of this
Agreement, or any power, right, privilege or remedy under this Agreement, unless
the waiver of such claim, power, right, privilege or remedy is expressly set
forth in a written instrument duly executed and delivered on behalf of Parent;
and any such waiver shall not be applicable or have any effect except in the
specific instance in which it is given.
10. CAPTIONS. The captions contained in this Agreement are for convenience
of reference only, shall not be deemed to be a part of this Agreement and shall
not be referred to in connection with the construction or interpretation of this
Agreement.
11. FURTHER ASSURANCES. Affiliate shall execute and/or cause to be
delivered to Parent such instruments and other documents and shall take such
other actions as Parent may reasonably request to effectuate the intent and
purposes of this Agreement.
12. ENTIRE AGREEMENT. This Agreement, constitutes the entire agreement
between the parties with respect to the subject matter hereof and thereof and
supersede all prior agreements and understandings between the parties with
respect thereto.
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13. NON-EXCLUSIVITY. The rights and remedies of Parent hereunder are not
exclusive of or limited by any other rights or remedies which Parent may have,
whether at law, in equity, by contract or otherwise, all of which shall be
cumulative (and not alternative).
14. AMENDMENTS. This Agreement may not be amended, modified, altered, or
supplemented other than by means of a written instrument duly executed and
delivered on behalf of Parent and Affiliate.
15. BINDING NATURE. This Agreement will be binding upon Affiliate and
Affiliate's representatives, executors, administrators, estate, heirs,
successors and assigns, and shall inure to the benefit of Parent and its
successors and assigns.
16. ATTORNEYS' FEES AND EXPENSES. If any legal action or other legal
proceeding relating to the enforcement of any provision of this Agreement is
brought against Affiliate, the prevailing party shall be entitled to recover
reasonable attorneys' fees, costs and disbursements (in addition to any other
relief to which the prevailing party may be entitled).
17. ASSIGNMENT. This Agreement and all obligations of Affiliate hereunder
are personal to Affiliate and may not be transferred or delegated by Affiliate
at any time. Parent may freely assign any or all of its rights under this
Affiliate Agreement in whole or in part, to any other person or entity without
obtaining the consent or approval of Affiliate.
18. SURVIVAL. Each of the representations, warranties, covenants and
obligations contained in this Agreement shall survive the consummation of the
Merger.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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The undersigned have executed this Agreement as of the date first set forth
above.
FIRST CONSULTING GROUP, INC.
By: ------------------------------------
Printed Name: --------------------------
Title: ---------------------------------
INTEGRATED SYSTEMS CONSULTING GROUP, INC.
By: ------------------------------------
Printed Name: --------------------------
Title: ---------------------------------
AFFILIATE:
By: ------------------------------------
Printed Name: --------------------------
Address:
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Facsimile:
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FIRST CONSULTING GROUP, INC., Stock
Beneficially owned by Affiliate:
----------------------------------------- shares
of Common Stock
----------------------------------------- shares
of Common Stock issuable upon exercise of
outstanding options
PARENT AFFILIATE AGREEMENT SIGNATURE PAGE
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