Exhibit 2.1
EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
PITNEY XXXXX INC.
GERMANIUM ACQUISITION CORPORATION
and
GROUP 1 SOFTWARE, INC.
Dated as of April 12, 2004
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TABLE OF CONTENTS
Page
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ARTICLE I THE MERGER...................................................1
SECTION 1.1 The Merger.........................................1
SECTION 1.2 Closing............................................2
SECTION 1.3 Effective Time.....................................2
SECTION 1.4 Effects of the Merger..............................2
SECTION 1.5 The Certificate of Incorporation...................2
SECTION 1.6 The By-Laws........................................2
SECTION 1.7 Directors and Officers.............................2
SECTION 1.8 Additional Actions.................................3
ARTICLE II EFFECT OF THE MERGER ON CAPITAL STOCK; EXCHANGE OF
CERTIFICATES............................................3
SECTION 2.1 Effect on Capital Stock of the Company.............3
SECTION 2.2 Conversion of Common Stock of Merger Sub...........4
SECTION 2.3 Payment for Shares.................................4
SECTION 2.4 Existing Stock Options; Warrants...................5
SECTION 2.5 Dissenting Shares..................................7
SECTION 2.6 Adjustments........................................7
SECTION 2.7 Withholding Taxes..................................7
SECTION 2.8 Closing of the Company's Transfer Books............8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY..............8
SECTION 3.1 Organization and Qualification.....................8
SECTION 3.2 Capitalization.....................................8
SECTION 3.3 Authority for this Agreement; Binding Effect......10
SECTION 3.4 Consents and Approvals; No Violation..............11
SECTION 3.5 Reports; Financial Statements.....................12
SECTION 3.6 Absence of Certain Changes........................13
SECTION 3.7 Proxy Statement...................................13
SECTION 3.8 Brokers...........................................13
SECTION 3.9 Employee Benefit Matters..........................13
SECTION 3.10 Litigation, etc...................................17
SECTION 3.11 Tax Matters.......................................17
SECTION 3.12 Compliance with Law...............................18
SECTION 3.13 Environmental Matters.............................19
SECTION 3.14 Intellectual Property.............................19
SECTION 3.15 Real Property.....................................22
SECTION 3.16 Material Contracts................................23
SECTION 3.17 Opinion of Financial Advisor......................24
SECTION 3.18 Anti-takeover Plan; State Takeover Statutes.......24
SECTION 3.19 Insurance.........................................25
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SECTION 3.20 Trade Relations...................................25
SECTION 3.21 Warranties; Product Claims........................25
SECTION 3.22 Potential Conflicts of Interest...................26
SECTION 3.23 Amendment to the Company Rights Plan..............26
SECTION 3.24 Voting Requirements...............................27
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB....27
SECTION 4.1 Organization and Qualification....................27
SECTION 4.2 Authority for this Agreement......................27
SECTION 4.3 Proxy Statement...................................27
SECTION 4.4 Consents and Approvals; No Violation..............27
SECTION 4.5 Operations of Merger Sub..........................28
SECTION 4.6 Funds.............................................28
SECTION 4.7 Brokers...........................................28
ARTICLE V COVENANTS...................................................28
SECTION 5.1 Conduct of Business of the Company................28
SECTION 5.2 No Solicitation...................................32
SECTION 5.3 Access to Information.............................34
SECTION 5.4 Reasonable Efforts; Further Actions...............34
SECTION 5.5 Indemnification and Insurance.....................35
SECTION 5.6 Proxy Statement...................................36
SECTION 5.7 Special Meeting...................................38
SECTION 5.8 Notification of Certain Matters...................38
SECTION 5.9 Press Releases and Communications.................38
SECTION 5.10 Employee Benefits Matters.........................39
SECTION 5.11 HSR Act Filings...................................39
SECTION 5.12 Stockholder Litigation............................41
SECTION 5.13 Rights Agreement..................................41
SECTION 5.14 Resignations of Directors and Officers............41
SECTION 5.15 FIRPTA Affidavit..................................41
ARTICLE VI CONDITIONS TO CONSUMMATION OF THE MERGER...................41
SECTION 6.1 Conditions to Each Party's Obligation to Effect the
Merger............................................41
SECTION 6.2 Conditions to Obligations of Parent and Merger Sub42
SECTION 6.3 Conditions to Obligation of the Company...........43
ARTICLE VII TERMINATION; AMENDMENT; WAIVER............................44
SECTION 7.1 Termination.......................................44
SECTION 7.2 Effect of Termination.............................46
SECTION 7.3 Fees and Expenses.................................46
SECTION 7.4 Amendment.........................................47
SECTION 7.5 Extension; Waiver; Remedies.......................47
ARTICLE VIII MISCELLANEOUS............................................48
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SECTION 8.1 Definitions.......................................48
SECTION 8.2 Survival of Representations and Warranties........54
SECTION 8.3 Entire Agreement; Assignment......................54
SECTION 8.4 Validity..........................................54
SECTION 8.5 Notices...........................................54
SECTION 8.6 GOVERNING LAW.....................................55
SECTION 8.7 Jurisdiction......................................56
SECTION 8.8 Waiver of Jury Trial..............................56
SECTION 8.9 Descriptive Headings..............................56
SECTION 8.10 Parties in Interest...............................56
SECTION 8.11 Counterparts......................................56
SECTION 8.12 Further Assurances................................56
SECTION 8.13 Specific Performance..............................57
Exhibits
Exhibit A Form of Voting Agreement
Exhibit B Form of Certificate of Incorporation of the Surviving Corporation
iii
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of April 12, 2004 (as
amended, modified or supplemented from time to time, this "Agreement"), by and
among Pitney Xxxxx Inc., a Delaware corporation ("Parent"), Germanium
Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of
Parent ("Merger Sub"), and Group 1 Software, Inc., a Delaware corporation (the
"Company").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the respective Boards of Directors of Parent, Merger Sub
and the Company have each determined that this Agreement and the transactions
contemplated hereby, including the Merger (as hereinafter defined), are
advisable and fair to, and in the best interests of, their respective
stockholders;
WHEREAS, the Board of Directors of the Company has adopted
resolutions approving the acquisition of the Company by Parent and Merger Sub,
this Agreement and the transactions contemplated by this Agreement, and has
agreed to recommend that the stockholders of the Company approve this Agreement,
the Merger and the transactions contemplated by this Agreement;
WHEREAS, concurrently with the execution of this Agreement, as a
condition to the willingness of Parent to enter into this Agreement, a certain
stockholder of the Company is entering into a Voting Agreement, a copy of which
is attached hereto as Exhibit A (the "Voting Agreement"), providing for, among
other things, the agreement of such stockholder to vote his Shares (as
hereinafter defined), and an irrevocable proxy to vote his Shares, in each case
in favor of the approval and adoption of this Agreement and the Merger at the
Special Meeting;
WHEREAS, capitalized terms used and not otherwise defined herein
shall have the respective meanings ascribed to them in Section 8.1; and
WHEREAS, Parent, Merger Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with this
Agreement.
NOW THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
THE MERGER
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SECTION 1.1 The Merger. Upon the terms and subject to the conditions
set forth in this Agreement, at the Effective Time and in accordance with the
General Corporation Law of the State of Delaware (the "Corporation Law"), Merger
Sub shall be merged with and into the Company (the "Merger") in accordance with
this Agreement and the separate corporate existence of Merger Sub shall cease.
The Company shall be the successor or the surviving corporation in the Merger
(sometimes referred to as the "Surviving Corporation") and shall continue to be
governed by the laws of the State of Delaware, and the separate corporate
existence of the Company with all its rights, privileges, immunities, powers and
franchises shall continue unaffected by the Merger. The Company and Merger Sub
are sometimes referred to herein, collectively, as the "Constituent
Corporations."
SECTION 1.2 Closing. Unless this Agreement shall have terminated and
the transactions contemplated in the Agreement shall have been abandoned
pursuant to Section 7.1 hereof, the closing of the Merger (the "Closing") shall
take place (a) at the offices of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, 1285
Avenue of the Americas, New York, New York, at 10:00 a.m. on the second (2nd)
Business Day after the day on which the last to be fulfilled or waived of the
conditions set forth in Article VI (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) shall be satisfied or waived in accordance with this
Agreement or (b) at such other place and time and/or on such other date as
Parent and the Company may agree in writing (the "Closing Date").
SECTION 1.3 Effective Time. As soon as practicable following the
Closing, the parties hereto will cause a Certificate of Merger (the "Certificate
of Merger") to be signed, acknowledged and delivered for filing with the
Secretary of State of the State of Delaware as provided in Section 251 of the
Corporation Law. The Merger shall become effective at the time when the
Certificate of Merger has been duly filed with the Secretary of State of the
State of Delaware or such other subsequent date or time as shall be agreed upon
by the parties and set forth in the Certificate of Merger and in accordance with
the Corporation Law (the time the Merger becomes effective being referred to
herein as the "Effective Time").
SECTION 1.4 Effects of the Merger. The Merger shall have the effects
set forth in the Corporation Law, including Section 259 of the Corporation Law.
SECTION 1.5 The Certificate of Incorporation. The certificate of
incorporation of the Company in effect immediately prior to the Effective Time
shall be amended at the Effective Time to read in its entirety as set forth in
Exhibit B attached hereto, until duly amended as provided therein or by
applicable Law.
SECTION 1.6 The By-Laws. The by-laws of the Company in effect
immediately prior to the Effective Time shall be amended at the Effective Time
to read in their entirety as the by-laws of Merger Sub then read and shall, as
so amended, from and after the Effective Time, be the by-laws of the Surviving
Corporation until duly amended as provided therein or by applicable Law.
SECTION 1.7 Directors and Officers. From and after the Effective
Time, the officers of the Company shall be the officers of the Surviving
Corporation and the directors of Merger Sub shall be the directors of the
Surviving Corporation, in each case until their respective death, permanent
disability, resignation or removal or until their respective successors are duly
elected and qualified all in accordance with applicable Law.
SECTION 1.8 Additional Actions. If, at any time after the Effective
Time, the Surviving Corporation shall consider or be advised that any further
deeds, assignments or assurances in law or any other acts are necessary or
desirable (i) to vest, perfect or confirm, of record or otherwise, in the
Surviving Corporation, title to and possession of any property or right of
either Constituent Corporation acquired or to be acquired by reason of, or as a
result of, the Merger, or (ii) otherwise to carry out the purposes of this
Agreement, each Constituent Corporation hereby grants to the Surviving
Corporation an irrevocable power of attorney to execute and deliver all such
deeds, assignments and assurances in law and to do all acts necessary or proper
to vest, perfect or confirm title to and possession of such property or rights
in the Surviving Corporation and otherwise to carry out the purposes of this
Agreement; and the officers and directors of the Surviving Corporation shall be
fully authorized in the name of either Constituent Corporation to take any and
all such action.
ARTICLE II
EFFECT OF THE MERGER ON CAPITAL STOCK;
EXCHANGE OF CERTIFICATES
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SECTION 2.1 Effect on Capital Stock of the Company. At the Effective
Time, as a result of the Merger and without any action on the part of the holder
of any capital stock of the Company:
(a) Merger Consideration. Each share of the common stock, par
value $0.50 per share, of the Company (the "Common Stock"), including the
associated rights ("Rights") to purchase shares of Common Stock, issued pursuant
to the Company Rights Plan (the Common Stock together with the Rights are
hereinafter referred to each as a "Share" and collectively, the "Shares") issued
and outstanding immediately prior to the Effective Time (other than Excluded
Shares and Dissenting Shares) shall be converted by virtue of the Merger and
without any action on the part of the holder thereof into the right to receive
and become exchangeable for TWENTY-THREE UNITED STATES DOLLARS ($23.00) in cash
(the "Merger Consideration"), without interest thereon, upon surrender of the
certificates representing such shares of Common Stock as provided in Section
2.3. The amount of the Merger Consideration shall be subject to adjustment as
provided in Section 2.6.
(b) Cancellation of Shares. Each Share issued and outstanding
and owned by Parent, Merger Sub or any other Subsidiary or affiliate of Parent
or Merger Sub or Shares that are owned by the Company and in each case not held
on behalf of third parties (collectively, "Excluded Shares") immediately prior
to the Effective Time shall, by virtue of the Merger and without any action on
the part of the holder of such Excluded Share, no longer be outstanding, shall
be canceled and retired without payment of any consideration therefor and shall
cease to exist.
SECTION 2.2 Conversion of Common Stock of Merger Sub. Each share of
common stock, par value $0.01 per share, of Merger Sub issued and outstanding
immediately prior to the Effective Time shall, by virtue of the Merger and
without any action on the part of the holder thereof, be converted into and
become one share of common stock of the Surviving Corporation.
SECTION 2.3 Payment for Shares.
(a) Prior to the Effective Time, Parent will, or will cause
Merger Sub to make available to a bank or trust company designated by Parent and
reasonably acceptable to the Company (the "Paying Agent") sufficient funds to
make the payments pursuant to Section 2.1(a) hereof on a timely basis to holders
(other than holders of Excluded Shares) of Shares that are issued and
outstanding immediately prior to the Effective Time (such amounts being
hereinafter referred to as the "Payment Fund"). The Paying Agent shall make the
payments provided for in the preceding sentence out of the Payment Fund. The
Payment Fund shall not be used for any other purpose, except as provided in this
Agreement. Parent shall pay all fees and expenses of the Paying Agent.
(b) As soon as reasonably practicable after the Effective Time
but in no event later than 10 Business Days thereafter, the Surviving
Corporation shall cause the Paying Agent to mail to each record holder (other
than Parent or Merger Sub or any of their respective Subsidiaries or
affiliates), as of the Effective Time, of an outstanding certificate or
certificates which immediately prior to the Effective Time represented Shares
(the "Certificates"), a form of letter of transmittal (each a "Letter of
Transmittal") (which 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) and customary instructions for use in
effecting the surrender of the Certificate and receiving payment therefor.
Following surrender to the Paying Agent of a Certificate, together with such
Letter of Transmittal duly executed and such other documents as may be
reasonably required by the Paying Agent, the holder of such Certificate shall
promptly be paid in exchange therefor cash in an amount (subject to any
applicable withholding tax as specified in Section 2.7 hereof) equal to the
product of the number of Shares represented by such Certificate multiplied by
the Merger Consideration, and each such Certificate shall forthwith be canceled.
No interest shall be paid or accrued on the cash payable upon the surrender of
the Certificates. If payment is to be made to a Person other than the Person in
whose name the Certificate surrendered is registered, it shall be a condition of
payment that the Certificate so surrendered shall be properly endorsed or
otherwise be in proper form for transfer and that the Person requesting such
payment (A) pay any transfer or other taxes required by reason of the payment to
a Person other than the registered holder of the Certificate surrendered or (B)
establish to the satisfaction of the Surviving Corporation that such tax has
been paid or is not applicable. From and after the Effective Time and until
surrendered in accordance with the provisions of this Section 2.3(b), each
Certificate (other than Certificates representing Excluded Shares and Dissenting
Shares) shall represent for all purposes solely the right to receive, in
accordance with the terms hereof, the Merger Consideration in cash multiplied by
the number of Shares evidenced by such Certificate.
(c) 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 the
Surviving Corporation, the posting by such Person of a bond in such reasonable
amount as the Surviving Corporation may direct as indemnity against any claim
that may be made against it with respect to such Certificate, the Paying Agent
will deliver in exchange for such affidavit, the applicable Merger Consideration
with respect to the Shares formerly represented by such Certificate.
(d) Any portion of the aggregate Merger Consideration made
available to the Paying Agent to pay for Shares for which appraisal rights have
been perfected shall be returned to Parent upon demand. Any portion of the
Payment Fund (including the proceeds of any investments thereof) that remains
unclaimed by the former stockholders of the Company for six (6) months after the
Effective Time shall be repaid to Parent. Any former stockholders of the Company
who have not complied with this Section 2.3(d) hereof prior to the end of such
six (6) month period shall thereafter look only to Parent (subject to abandoned
property, escheat or other similar Law) but only as general creditors thereof
for payment of their claim for the Merger Consideration, without any interest
thereon, upon due surrender of the Certificates held by them. Neither Parent,
the Surviving Corporation nor the Paying Agent, shall be liable to any holder of
Shares for any monies delivered from the Payment Fund or otherwise to a public
official pursuant to any applicable abandoned property, escheat or similar Law.
SECTION 2.4 Existing Stock Options; Warrants.
(a) Except to the extent set forth in Section 2.4(a) of the
Disclosure Letter, which options shall be cancelled by the Company upon the
Effective Time, the Company shall take all reasonable actions to ensure that
each option or right to acquire Shares (the "Existing Stock Options") granted
under any stock option or similar plan of the Company or under any agreement to
which the Company or any Subsidiary is a party (the "Stock Option Plans") which
is outstanding as of the Effective Time, whether or not then exercisable or
vested, shall by virtue of the Merger and without any action on the part of the
Company or the holder thereof, be converted into and represent only the right to
receive an amount in cash, without interest, with respect to each Share subject
thereto equal to the excess, if any, of the Merger Consideration over the per
share exercise or purchase price of such Existing Stock Option. Except to the
extent set forth in Section 2.4(a) of the Disclosure Letter, on the Effective
Time, each holder of an Existing Stock Option shall be entitled to receive, in
full satisfaction of such Existing Stock Option, an amount in cash without
interest in respect thereof equal to the product of (i) the excess, if any, of
the Merger Consideration over the per share exercise or purchase price of such
Existing Stock Option and (ii) the number of Shares subject to such Existing
Stock Option (such amount being hereinafter referred to as the "Option
Consideration") and each Existing Stock Option (including those Existing Stock
Options set forth on Section 2.4(a) of the Disclosure Letter) shall be canceled
upon payment to the Option holder of the Option Consideration reduced by any
income or employment tax withholding required under the Code or any provision of
state, local or foreign tax law. To the extent that amounts are so withheld,
such withheld amounts shall be treated for all purposes of this Agreement as
having been paid to the holder of such Existing Stock Option. Prior to the
Effective Time, the Company shall use its reasonable best efforts to obtain all
necessary consents or releases from holders of Existing Stock Options under the
Stock Option Plans and take all such other lawful action as may be necessary to
give effect to the transactions contemplated by this Section 2.4(a). The Company
shall take all reasonable actions to ensure (i) that the Stock Option Plans
shall terminate as of the Effective Time and (ii) that following the Effective
Time no participant in the Stock Option Plans or other plans, programs or
arrangements shall have any right thereunder to acquire any capital stock of the
Company, the Surviving Corporation or any subsidiary thereof. All administrative
and other rights and authorities granted under any Stock Option Plan to the
Company, the Board of Directors of the Company or any Committee or designee
thereof, shall, following the Effective Time, reside with the Surviving
Corporation.
(b) The Company shall take all reasonable actions required to
qualify for the exemption contemplated by Rule 16b-3 under the Exchange Act for
the treatment of the Existing Stock Options contemplated hereby, including, if
necessary or appropriate, obtaining the approval of the Company's Board of
Directors, of the type described in a pertinent SEC no-action letter dated
January 12, 1999.
(c) Each warrant to acquire Shares (the "Existing Warrants")
granted under any warrant or similar agreement set forth in Section 2.4(c) of
the Disclosure Letter to which the Company or any Subsidiary is a party which is
outstanding as of the Effective Time, whether or not then exercisable or vested,
shall by virtue of the Merger and without any action on the part of the Company
or the holder thereof, be converted into and shall represent only the right to
receive an amount in cash, without interest, with respect to each Share subject
thereto equal to the excess, if any, of the Merger Consideration over the per
share exercise price of such Existing Warrant. On and after the date hereof, the
Company shall grant no additional warrants. After the Effective Time, following
delivery of a duly executed Letter of Transmittal and such other documents as
may be reasonably required by the Company or the Paying Agent, each holder of an
Existing Warrant shall be entitled to receive, in full satisfaction of such
Existing Warrant (subject to any applicable withholding tax as specified in
Section 2.7), an amount in cash without interest in respect thereof equal to the
product of (i) the excess, if any, of the Merger Consideration over the per
share exercise or purchase price of such Existing Warrant and (ii) the number of
Shares subject to such Existing Warrant (such amount being hereinafter referred
to as the "Warrant Consideration") and each Existing Warrant shall be canceled
as of the Effective Time. Such payment shall be reduced by any income or
employment tax withholding required under the Code or any provision of state,
local or foreign tax law. To the extent that amounts are so withheld, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of such Existing Warrant.
SECTION 2.5 Dissenting Shares.
(a) Notwithstanding anything in this Agreement to the
contrary, Shares that are held by any record holder who has not voted in favor
of the Merger or consented thereto in writing and who has demanded appraisal
rights in accordance with Section 262 of the Corporation Law (the "Dissenting
Shares") shall not be converted into the right to receive the Merger
Consideration, but shall become the right to receive such consideration as may
be determined to be due in respect of such Dissenting Shares pursuant to the
Corporation Law; provided, however, that any holder of Dissenting Shares who
shall have failed to perfect or shall have withdrawn or lost his rights of
appraisal with respect to such Dissenting Shares, in each case under the
Corporation Law, shall forfeit the right to appraisal of such Dissenting Shares,
and such Dissenting Shares shall be deemed to have been converted into the right
to receive, as of the Effective Time, the Merger Consideration, without
interest. Notwithstanding anything to the contrary contained in this Section
2.5(a), if the Merger is rescinded or abandoned, then the right of any
stockholder to be paid the fair value of such stockholder's Dissenting Shares
shall cease. The Surviving Corporation shall comply with all of its obligations
under the Corporation Law with respect to holders of Dissenting Shares.
(b) The Company shall give Parent (i) prompt notice of any
demands for appraisal, and any withdrawals of such demands, received by the
Company and any other related instruments served pursuant to the Corporation
Law, and received by the Company and (ii) the opportunity to direct all
negotiations and proceedings with respect to demands for appraisal under the
Corporation Law. The Company shall not, except with the prior written consent of
Parent, make any payment with respect to any demands for appraisal, or negotiate
or offer to settle any such demands.
SECTION 2.6 Adjustments. If during the period between the date of
this Agreement and the Effective Time, any change in the outstanding Shares
shall occur, by reason of any reclassification, recapitalization, stock
dividend, stock split or combination, exchange or readjustment of Shares, or any
stock dividend thereon with a record date during such period (but not as a
result of the exercise of (i) Existing Stock Options or (ii) Existing Warrants),
the Merger Consideration shall be appropriately adjusted.
SECTION 2.7 Withholding Taxes. Parent, Merger Sub and the Surviving
Corporation shall be entitled to deduct and withhold from the consideration
otherwise payable to a holder of Shares, Existing Stock Options or Existing
Warrants, pursuant to the Merger such amounts as are required to be withheld
under the Internal Revenue Code of 1986, together with the rules and regulations
promulgated thereunder, as amended (the "Code"), or any applicable provision of
state, local or foreign Tax Law. To the extent that amounts are so withheld,
such withheld amounts shall be treated for all purposes of this Agreement as
having been paid to the holder of the Shares, Existing Stock Options or Existing
Warrants, as the case may be, in respect of which such deduction and withholding
were made.
SECTION 2.8 Closing of the Company's Transfer Books. At the close of
business on the day of the Effective Time, the stock transfer books of the
Company shall be closed. At and after the Effective Time, there shall be no
registration of transfers of shares of capital stock which were outstanding
immediately prior to the Effective Time on the stock transfer books of the
Surviving Corporation. From and after the Effective Time, the holders of shares
of capital stock outstanding immediately prior to the Effective Time shall cease
to have any rights with respect to such shares of capital stock, except as
otherwise provided in this Agreement or by applicable Law. All cash paid upon
the surrender of Certificates in accordance with the terms of this Article II
shall be deemed to have been paid in full satisfaction of all rights pertaining
to the shares of capital stock previously represented by such Certificates. If,
after the Effective Time, Certificates are presented to the Surviving
Corporation for any reason, they shall be canceled and exchanged for cash as
provided in this Article II.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
Except as set forth in the corresponding section of the disclosure
letter (each section of which qualifies the correspondingly numbered
representation and warranty or covenant to the extent expressly specified
therein) delivered by the Company to Parent and Merger Sub prior to the
execution of this Agreement (the "Disclosure Letter"), the Company represents
and warrants to Parent and Merger Sub, as follows:
SECTION 3.1 Organization and Qualification. The Company and each of
its Subsidiaries is a duly organized and validly existing corporation in good
standing under the laws of its jurisdiction of incorporation, with all corporate
power and authority to own its properties and conduct its business as currently
conducted on the date hereof, except where the failure to be so organized,
existing and in good standing or to have such power and authority has not had or
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect. Except as set forth in Section 3.1 of the Disclosure
Letter, the Company and each of its Subsidiaries is duly qualified and in good
standing as a foreign corporation authorized to do business in each of the
jurisdictions in which the character of the properties owned or held under lease
by it or the nature of the business transacted by it makes such qualification
necessary, except where the failure to be so qualified and in good standing has
not had or would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. Section 3.1 of the Disclosure Letter sets
forth a true and complete list of each of the Company's Subsidiaries.
SECTION 3.2 Capitalization.
(a) The authorized capital stock of the Company consists of
(i) 200,000,000 Shares and (ii) 1,200,000 shares of "blank check" preferred
stock. As of the close of business on April 9, 2004, 13,929,259 Shares were
issued and outstanding and no shares of preferred stock were issued and
outstanding. Section 3.2(a)(i) of the Disclosure Letter contains a list, as of
April 9, 2004, of the name of each Existing Stock Option holder, the number of
outstanding Existing Stock Options held by such holder, the number of Shares
such holder is entitled to receive upon the exercise of each Existing Stock
Option and the corresponding exercise price. Section 3.2(a)(i) of the Disclosure
Letter also contains a list, as of the close of business on the day immediately
preceding the date hereof, of any Shares issued subsequent to April 9, 2004 upon
the exercise of Existing Stock Options. Section 3.2(a)(ii) of the Disclosure
Letter contains a list, as of April 9, 2004, of the name of each Existing
Warrant holder, the number of outstanding Existing Warrants held by such holder,
the number of Shares such holder is entitled to receive upon the exercise of
each Existing Warrant and the corresponding exercise price. Section 3.2(a)(ii)
of the Disclosure Letter also contains a list, as of the close of business on
the day immediately preceding the date hereof, of any Shares issued subsequent
to April 9, 2004 upon the exercise of Existing Warrants. Except as disclosed in
Sections 3.2(a)(i) and 3.2(a)(ii) of the Disclosure Letter, since April 9, 2004,
the Company has not issued any Shares (other than pursuant to the exercise of
any (i) Existing Warrants or (ii) Existing Stock Options), has not granted any
options, warrants or rights or entered into other agreements or commitments to
issue or purchase Shares (under the Stock Option Plans or otherwise) and has not
split, combined or reclassified any of its shares of capital stock. All of the
outstanding shares of capital stock of the Company have been, and all Shares
that may be issued pursuant to the exercise of options or warrants will be, when
issued in accordance with the respective terms thereof, duly authorized, validly
issued and fully paid and non-assessable, and have not been (and will not be)
issued in violation of (nor are any of the authorized shares of capital stock
subject to) any preemptive or similar rights created by statute, the Certificate
of Incorporation of the Company or By-laws of the Company, or any agreement to
which the Company is a party or is bound. Except for the Rights, the Existing
Stock Options and the Existing Warrants, there are not now and as of the
Effective Time there will not be, any (i) securities of the Company convertible
into or exchangeable for shares of capital stock or voting securities or
ownership interests in the Company, (ii) options (including stock option plans
and programs), warrants, rights or other agreements or commitments to acquire
from the Company, or obligations of the Company to issue, sell, deliver,
exchange, convert, transfer or cause to be issued, sold, delivered, exchanged,
converted or transferred from the Company, any capital stock, voting securities
or other ownership interests in (or securities convertible into or exchangeable
for capital stock or voting securities or other ownership interests in) the
Company, (iii) obligations of the Company to grant, extend or enter into any
subscription, warrant, right, convertible or exchangeable security or other
similar agreement or commitment relating to any capital stock, voting securities
or other ownership interests in the Company, (iv) bonds, debentures, notes or
other indebtedness of the Company having the right to vote on any matters on
which stockholders of the Company may vote (the items in clauses (i), (ii),
(iii) and (iv), together with the capital stock of the Company, being referred
to collectively as "Company Securities") or (v) obligations by the Company or
any of its Subsidiaries to make any payments based on the price or value of the
Shares. There are no outstanding obligations of the Company or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any Company Securities,
other than by exercise of holders of Existing Stock Options or Existing
Warrants. There are no voting trusts or other agreements or understandings to
which the Company or any of its Subsidiaries is a party with respect to the
voting of capital stock of the Company or any of its Subsidiaries.
(b) The Company is directly or indirectly the record and
beneficial owner of all the outstanding shares of capital stock of each Company
Subsidiary, except as set forth in Section 3.2(b) of the Disclosure Letter, free
and clear of any Lien, and there are no irrevocable proxies with respect to any
such shares. There are no outstanding (i) securities of the Company or any of
its Subsidiaries convertible into or exchangeable for shares of capital stock or
other voting securities or ownership interests in any Subsidiary of the Company,
(ii) options (including stock option plans and programs), warrants, rights or
other agreements or commitments to acquire from the Company or any of its
Subsidiaries (or obligations of the Company or any of its Subsidiaries to issue,
sell, deliver, exchange, convert, transfer or cause to be issued, sold,
delivered, exchanged, converted or transferred) any capital stock, voting
securities or other ownership interests in, or any securities convertible into
or exchangeable for any capital stock, voting securities or ownership interests
in, any of its Subsidiaries, (iii) obligations of the Company or any of its
Subsidiaries to grant, extend or enter into any subscription, warrant, right,
convertible or exchangeable security or other similar agreement or commitment
relating to any capital stock, voting securities or other ownership interests in
any of the Company's Subsidiaries (the items in clauses (i), (ii) and (iii),
together with the capital stock of such Subsidiaries, being referred to
collectively as "Subsidiary Securities") or (iv) obligations of the Company or
any of its Subsidiaries to make any payment based on the value of any shares of
capital stock of any Subsidiary. Except as set forth in Section 3.2(b) of the
Disclosure Letter, there are no outstanding obligations of the Company or any of
its Subsidiaries to repurchase, redeem or otherwise acquire any outstanding
Subsidiary Securities.
(c) Except as set forth in Section 3.2(c) of the Disclosure
Letter, the Company does not directly or indirectly own any equity or similar
interest in, or any interest convertible into or exchangeable or exercisable for
any equity or similar interest in, any Person.
SECTION 3.3 Authority for this Agreement; Binding Effect. The
Company has all necessary corporate power and authority to execute and deliver
this Agreement and, subject to obtaining the Requisite Company Vote, to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of the Company and no other corporate proceedings on the part
of the Company are necessary to authorize this Agreement or to consummate the
transactions so contemplated, other than the approval of the Merger, this
Agreement and the transactions contemplated by this Agreement, by the holders of
a majority of the outstanding Shares prior to the consummation of the Merger.
This Agreement has been duly and validly executed and delivered by the Company
and constitutes a legal, valid and, assuming the due authorization, execution
and delivery of this Agreement by Merger Sub and Parent, binding agreement of
the Company, enforceable against the Company in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws relating to or affecting the rights and remedies of creditors
generally and to general principles of equity (regardless of whether considered
in a proceeding in equity or at law).
SECTION 3.4 Consents and Approvals; No Violation.
(a) Neither the execution and delivery of this Agreement by
the Company nor the consummation of the transactions contemplated hereby will
(i) conflict with or result in any breach of any provision of the respective
Certificate of Incorporation or By-laws (or other similar governing documents)
of the Company or any of its Subsidiaries, (ii) require any consent, approval,
authorization or permit of, or filing with or notification to, any foreign,
federal, state or local government or subdivision thereof, or governmental,
judicial, legislative, executive, administrative or regulatory authority,
agency, commission, tribunal, body or instrumentality (including tribal bodies
or any official thereof or any arbitrator or panel thereof) (each a
"Governmental Entity"), other than (A) filing of appropriate merger documents in
accordance with the Corporation Law and (B) compliance with the applicable
requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (together with the rules and regulations thereunder, the "HSR Act"), the
Securities Act, the Exchange Act and the "blue sky" or securities laws of any
state, (iii) except as set forth in Section 3.4(a) of the Disclosure Letter,
require any consent, waiver or approval or result in a default (or give rise to
any right of termination, cancellation, modification or acceleration) under any
of the terms, conditions or provisions of any contract, agreement, lease or
sub-lease, license, franchise, loan or credit agreement, note, bond, mortgage,
indenture or other instrument, arrangement, commitment or obligation to which
the Company or any of its Subsidiaries is a party or by which the Company or any
of its Subsidiaries or any of their respective assets may be bound, (iv) result
in the creation or imposition of any imperfection of title, mortgage, Lien or
encumbrance of any kind on any asset of the Company or any of its Subsidiaries
or (v) assuming compliance with the matters set forth in the preceding
subsection (ii), violate any order (including one issued by an arbitrator),
writ, injunction, decree, statute, rule or regulation applicable to the Company
or any of its Subsidiaries or by which any of their respective assets are bound,
except in the case of clauses (ii), (iii), (iv) and (v) for any of the foregoing
that has not had or would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect or a material adverse effect on the
ability of the parties to consummate the Merger.
(b) The Board of Directors of the Company (at a meeting or
meetings duly called and held prior to the date hereof) has by the unanimous
vote of the directors present (who constitute one hundred percent (100%) of the
directors in office) (A) determined that the terms of the Merger are advisable
and fair to, and in the best interests of, the stockholders of the Company, (B)
approved and adopted this Agreement and the transactions contemplated hereby
(including the Merger) and (C) resolved to recommend the approval and adoption
of this Agreement, the Merger and the transactions contemplated by this
Agreement by the stockholders of the Company and directed that this Agreement
and the Merger be submitted to the stockholders of the Company for approval.
SECTION 3.5 Reports; Financial Statements.
(a) Except as set forth in Section 3.5(a) of the Disclosure
Letter, since April 1, 2001, the Company has duly filed all forms, reports,
schedules, proxy statements and documents required to be filed by it with the
SEC. True and correct copies of all filings made by the Company with the SEC
since such date and prior to the date hereof (the "Company SEC Report"), whether
or not required by Law and including any registration statement filed by the
Company under the Securities Act, have been either made available or are
publicly available to Parent and Merger Sub. As of their respective dates, the
Company SEC Reports (other than preliminary material) complied in all material
respects with the requirements of the Securities Act or the Exchange Act, as
applicable, and the rules and regulations of the SEC thereunder applicable to
such Company SEC Reports and none of the Company SEC Reports, at the time filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. No Subsidiary of the Company is subject to periodic reporting
requirements of the Exchange Act or is otherwise required to file documents with
the SEC or comparable Governmental Entity or any national securities exchange or
quotation service.
(b) The audited consolidated financial statements of the
Company for the year ended March 31, 2003 and the audited and unaudited
consolidated financial statements of the Company included (or incorporated by
reference) in the Company SEC Reports (the "Financial Statements") comply as to
form in all material respects with applicable accounting requirements and with
the rules and regulations of the SEC with respect thereto and were prepared in
accordance with United States generally accepted accounting principles applied
on a consistent basis throughout the periods involved ("GAAP") (except as may be
indicated in the notes thereto) and fairly present in all material respects the
consolidated financial position of the Company and its Subsidiaries as of their
respective dates, and the consolidated income, stockholders equity, results of
operations and changes in consolidated financial position or cash flows for the
periods presented therein, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments. The
books and records of the Company and its Subsidiaries accurately reflect in all
material respects, the transactions and accounts of the Company and its
Subsidiaries.
(c) Except (i) as reflected or reserved against or disclosed
in the Financial Statements, (ii) for liabilities that are not required to be
recorded or reflected on a balance sheet pursuant to GAAP and (iii) as incurred
in the ordinary course of business since December 31, 2003, neither the Company
nor any of its Subsidiaries has any liabilities of any nature, whether accrued,
absolute, fixed, contingent or otherwise, or whether due or to become due, other
than liabilities that have not had or would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(d) The Company is in compliance in all material respects with
the applicable provisions of the Xxxxxxxx-Xxxxx Act of 2002 and the related
rules and regulations promulgated thereunder (the "Xxxxxxxx-Xxxxx Act").
SECTION 3.6 Absence of Certain Changes. Except (i) for liabilities
incurred in connection with this Agreement or the transactions contemplated
hereby, (ii) as disclosed by the Company SEC Reports or (iii) as set forth in
Section 3.6 of the Disclosure Letter, since December 31, 2003, (a) the Company
and its Subsidiaries have not suffered any change, condition, event or
development that has had, or would reasonably be expected to have, a Material
Adverse Effect, (b) the Company and its Subsidiaries have conducted in all
material respects their respective businesses only in the ordinary course
consistent with past practice, except for the negotiation and execution and
delivery of this Agreement and (c) there has not been any action by the Company
or any of its Subsidiaries which would constitute a breach of clauses (a)-(z) of
Section 5.1.
SECTION 3.7 Proxy Statement. The Proxy Statement, and any other
schedule or document required to be filed by the Company in connection with the
Merger, will not, at the time the Proxy Statement is first mailed and at the
time of the Special Meeting, 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 therein, in light of the circumstances under which they are
made, not misleading, except that no representation or warranty is made by the
Company with respect to information supplied in writing by Parent, Merger Sub or
an affiliate of Parent or Merger Sub for inclusion therein. The Proxy Statement
will comply in all material respects with the requirements of the Exchange Act
and any other applicable laws. If at any time prior to the date of the Special
Meeting any event occurs which should be described in an amendment to the Proxy
Statement, the Company will file and disseminate, as required, an amendment or
supplement which complies in all material respects with the Exchange Act and any
other applicable laws. Prior to its filing with the SEC, the amendment or
supplement shall be delivered to Parent and its outside counsel.
SECTION 3.8 Brokers. Except as set forth in Section 3.8 of the
Disclosure Letter and except for Friedman, Billings, Xxxxxx & Co., Inc., whose
fees will be paid by the Company pursuant to an engagement letter, a copy of
which has previously been provided to Parent, no Person is entitled to receive
any brokerage, finder's or other fee or commission in connection with this
Agreement or the transactions contemplated hereby based upon agreements made by
or on behalf of the Company or any of its Subsidiaries.
SECTION 3.9 Employee Benefit Matters.
(a) Section 3.9(a) of the Disclosure Letter lists all material
pension, retirement, savings, disability, medical, dental, health, life
(including all individual life insurance policies as to which the Company or any
of its Subsidiaries is the owner, beneficiary or both), death benefit, group
insurance, profit sharing, deferred compensation, stock option or other
equity-based compensation, bonus, incentive, vacation pay, severance pay,
"cafeteria" or "flexible benefit" plan under Section 125 of the Code, or other
employee benefit plan, trust, arrangement, contract, agreement, policy or
commitment (including without limitation, all employee pension benefit plans as
defined in Section 3(2) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), and all material employee welfare benefit plans as defined
in Section 3(l) of ERISA), (A) under which current or former employees of the
Company or any of its Subsidiaries or their respective ERISA Affiliates are
entitled to participate by reason of their employment with the Company or any of
its Subsidiaries or their respective ERISA Affiliates, whether or not any of the
foregoing is funded, whether insured or self-funded and whether written or oral
and with respect to which the Company or any of its Subsidiaries or their
respective ERISA Affiliates are a party or a sponsor or a fiduciary thereof or
by which the Company or any of its Subsidiaries or their respective ERISA
Affiliates (or any of their rights, properties or assets) are bound or (B) with
respect to which the Company or any of its Subsidiaries otherwise may have any
material liability (collectively, the "Employee Benefit Plans"). For each
Employee Benefit Plan, the Company has made available true and correct copies of
all plan documents, all employment agreements, summary plan descriptions,
determination letters, all material communications with any government entity or
agency (including the Internal Revenue Service and the PBGC) given or received
with respect to any Employee Benefit Plan other than non-material communications
received in the ordinary course within the past five (5) years, and the three
(3) most recent Forms 5500, including all financial or actuarial reports, if
applicable, and all other attached schedules.
(b) Except as set forth in Section 3.9(b) of the Disclosure
Letter and except as have not had or would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, the Company, its
Subsidiaries and their respective ERISA Affiliates and, to their knowledge, any
"administrator(s)" (as described in Section 3(16)(A) of ERISA) of the Employee
Benefit Plans have complied in all material respects with such Plans' terms and
with the applicable requirements of ERISA, the Code and any other applicable
Law, specifically including the reporting and disclosure requirements of Part 1
of Title I, and Title IV of ERISA and the Code, in a timely and accurate manner,
such that no material penalties are reasonably expected to be imposed on the
Company or its Subsidiaries or their respective ERISA Affiliates, and no
material penalties may be imposed on Parent or Merger Sub under ERISA, the Code
or otherwise with respect to the Employee Benefit Plans or any related trusts.
(c) For purposes of this Agreement, "ERISA Affiliates" shall
mean any trade or business (whether or not incorporated) that is part of the
same controlled group, or under common control with, or part of an affiliated
service group that includes, the Company or any of its Subsidiaries within the
meaning of Section 414(b), (c), (m) or (o) of the Code.
(d) With respect to the Employee Benefit Plans:
(i) No Employee Benefit Plan is, and no "employee
benefit plan" within the meaning of Section 3(3) of ERISA which the Company or
any ERISA Affiliate has maintained or contributed to within the six (6) years
immediately preceding the date hereof was, (A) subject to Title IV of ERISA or
Section 412 of the Code, (B) a "multiemployer" plan within the meaning of
Section 3(37) of ERISA or (C) a "multiple employer plan" within the meaning of
the Code or ERISA. Except as set forth in Section 3.9(d)(i) of the Disclosure
Letter or except as have not had or would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, each of the
Employee Benefit Plans intended to be "qualified" within the meaning of Section
401(a) of the Code has received a favorable determination letter that the plan
complies with the Code, as amended, pursuant to a request which accurately
described such plan, and has been administered and operated in all material
respects in accordance with all Laws so as to maintain such qualification.
(ii) Except as have not had or would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect,
all contributions or other amounts payable by the Company or any of its
Subsidiaries or their ERISA Affiliates through the date hereof with respect to
each Employee Benefit Plan in respect of current or prior plan years have been
either paid or accrued on the Financial Statements to the extent required under
the terms of such plan or in accordance with GAAP.
(iii) Except as have not had or would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect,
there are no pending, or to the Company's knowledge, threatened or anticipated
material claims (other than routine claims for benefits) by, on behalf of or
against any of the Employee Benefit Plans or any trust related thereto or, to
the knowledge of the Company, by, on behalf of or against any fiduciary of such
plans.
(e) Except as have not had or would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect, neither
the Company nor any of its Subsidiaries has any material liability, whether
absolute or contingent, direct or indirect, including any obligations under any
Employee Benefit Plan, with respect to any misclassification of a person as an
independent contractor rather than as an employee or with respect to any
employees "leased" from another employer.
(f) The consummation of the transactions contemplated by this
Agreement will not, with respect to employees or former employees of the Company
or any of its Subsidiaries: (A) except as set forth in Section 3.9(f) of the
Disclosure Letter, entitle any individual to severance pay; or (B) except as set
forth in Section 2.4, accelerate the time of payment or vesting of, increase the
amount of, or satisfy a condition to the compensation due to any individual
under any Employee Benefit Plan. Except as set forth in Section 3.9(f) of the
Disclosure Letter, the consummation of the transactions contemplated by this
Agreement will not, with respect to employees or former employees of the Company
or any of its Subsidiaries, result in the payment of an amount that could,
individually or in combination with any other such payment, constitute an
"excess parachute payment" under Section 280G(b)(1) of the Code.
(g) Except as set forth in Section 3.9(g) of the Disclosure
Letter, (A) neither the Company nor any of its Subsidiaries has or will have any
material liability or obligation under any Employee Benefit Plan which provides
medical or death benefits with respect to current or former employees of the
Company or any of its Subsidiaries beyond their termination of employment (other
than coverage mandated by Law); and (B) except as have not had or would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, each of the Company, its Subsidiaries and their respective ERISA
Affiliates which maintains a "group health plan," within the meaning of Section
607(l) of ERISA has materially complied with the provisions of the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended, the Health Insurance
Portability and Accountability Act of 1996, as amended, and any other applicable
Law.
(h) Except as have not had or would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect, no
"prohibited transaction" (as such term is defined in Section 406 of ERISA or
Section 4975 of the Code) has occurred with respect to any Employee Benefit Plan
subject to ERISA, other than such a transaction subject to an administrative or
statutory exemption, with respect to which a material tax, penalty or other
amount may reasonably be expected to be imposed on the Company or any of its
Subsidiaries or their respective ERISA Affiliates.
(i) None of the Company or any of its Subsidiaries, or any of
their respective ERISA Affiliates, or any organization with respect to which any
such entity is a successor or parent corporation, within the meaning of Section
4069(b) of ERISA, has engaged in any transaction described in Section 4069 of
ERISA which has had or would reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.
(j) To the Company's knowledge, there has been no "mass
layoff" or "plant closing," as each such term is defined in the Worker
Adjustment and Retraining Notification Act of 1986, as amended ("WARN"), with
respect to the employees of the Company or any of its Subsidiaries, with respect
to which there could be any future material liability to such employees under
WARN.
(k) Except as set forth in Section 3.9(k) of the Disclosure
Letter, none of the Company or any of its Subsidiaries is a party to any
collective bargaining or other labor union contract. To the Company's knowledge,
there are no union organization attempts underway with respect to any employees
of the Company or any of its Subsidiaries. There is no pending or, to the
knowledge of the Company, threatened material labor dispute, strike or work
stoppage involving such employees. To the knowledge of the Company, neither the
Company nor any of its Subsidiaries has committed any material unfair labor
practices (as defined in the National Labor Relations Acts of 1947, as amended)
in connection with the operation of its business and, except as set forth in
Section 3.9(k) of the Disclosure Letter, there is no pending or, to the
knowledge of the Company, threatened material charge or complaint against the
Company or any of its Subsidiaries by the National Labor Relations Board or any
comparable state or local agency.
(l) Except as set forth in Section 3.9(l) of the Disclosure
Letter, the Company represents and warrants to Parent and Merger Sub that since
December 31, 2003, neither the Board of Directors of the Company nor any
committee of the Board of Directors of the Company has approved, committed or
taken any other action to approve any bonuses for the Company's employees.
SECTION 3.10 Litigation, etc. Except as set forth in Section 3.10 of
the Disclosure Letter, there is no claim, charge, action, suit, arbitration,
proceeding or investigation ("Claim") pending or, to the knowledge of the
Company, threatened (a) against the Company or any of its Subsidiaries, (b)
affecting their respective assets, rights or businesses or (c) against any of
their directors, officers or employees that if adversely determined would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect or that in any manner challenges or seeks to prevent, enjoin,
alter or materially delay the Merger or seeks an award of damages with respect
thereto. Neither the Company nor any of its Subsidiaries is subject to any
judgment, decree, injunction, rule or order of any Governmental Entity or
arbitrator outstanding against the Company or any Subsidiary of the Company that
has had or would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
SECTION 3.11 Tax Matters.
Except as set forth in Section 3.11 of the Disclosure Letter and
except to the extent that the failure of the following has not had and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect:
(a) The Company and its Subsidiaries have duly filed all Tax
Returns required to be filed by Law with respect to the Company and its
Subsidiaries (or any of them) or any of their income, properties or operations
as of the date hereof in a timely manner and, to the knowledge of the Company,
there are no extensions of time within which to file any Tax Return that are
currently in effect. All such Tax Returns are accurate and complete in all
material respects. All Tax Returns required to be filed by or with respect to
the Company and its Subsidiaries (or any of them) after the date hereof and on
or before the Effective Time shall be prepared and timely filed (taking into
account applicable filing extensions). No penalties or other charges in a
material amount in excess of amounts reserved for Taxes and accrued Taxes
established on the Financial Statements of the Company are or will become due
with respect to the late filing of any Tax Return of the Company and its
Subsidiaries (or any of them) or payment of any Tax of the Company and its
Subsidiaries (or any of them), required to be filed or paid on or before the
Effective Time.
(b) With respect to all Tax Returns filed or required to be
filed by or with respect to the Company and its Subsidiaries (or any of them):
(i) the statute of limitations for the assessment of
United States federal corporate income taxes has expired for all years prior to
2000;
(ii) no audit is in progress and neither the Company nor
any of its Subsidiaries has received written notice of any audit;
(iii) no waiver or agreement has been executed for the
extension of time for the assessment or payment of any Tax;
(iv) no deficiency has been proposed in writing or
assessed in writing by a taxing authority against the Company or any of its
Subsidiaries; and
(v) there are no Liens for Taxes on the assets of the
Company or any of its Subsidiaries, other than Liens for Taxes not yet due and
payable or being contested in good faith by appropriate proceedings for which
adequate reserves have been provided on the consolidated balance sheet of the
Company dated December 31, 2003.
(c)
(i) all amounts required to be paid on or before the
date hereof by or with respect to the Company and its Subsidiaries (or any of
them) with respect to Taxes have been timely paid; and
(ii) any amounts required to be paid by or with respect
to the Company and its Subsidiaries (or any of them) with respect to Taxes after
the date hereof and on or before the Effective Time shall be timely paid.
(d) Neither the Company nor any of its Subsidiaries has been
or is a party to any tax sharing agreement or similar arrangement.
(e) The Company and its Subsidiaries have made adequate
provisions in accordance with GAAP for each of the Company and its Subsidiaries
in the Financial Statements for the payment of all Taxes for which each of the
Company and its Subsidiaries may be liable for the periods covered thereby that
were not yet due and payable as of the dates thereof.
SECTION 3.12 Compliance with Law. Neither the Company nor any of its
Subsidiaries (a) is, in any material respect, in conflict with, in default
under, in violation of or under investigation pursuant to any Law applicable to
the Company or any of its Subsidiaries or by which any property or asset of the
Company or any of its Subsidiaries is bound or affected or (b) has received
notice of or, to the knowledge of the Company, been threatened to be charged
with any of the foregoing, except where the failure to so comply has not had or
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect. The Company and its Subsidiaries have all permits,
licenses, authorizations, consents, approvals, certificates and franchises from
Governmental Entities required to conduct their businesses as currently
conducted (the "Company Permits"), except as set forth in Section 3.12 of the
Disclosure Letter and except for such permits, licenses, authorizations,
consents, approvals, certificates and franchises the absence of which has not
had or would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect or a material adverse effect on the ability
of the parties to consummate the Merger. The Company and its Subsidiaries are in
compliance with the terms of the Company Permits, except where the failure so to
comply has not had or would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect or a material adverse effect on the
ability of the parties to consummate the Merger.
SECTION 3.13 Environmental Matters. The Company and each of its
Subsidiaries have been and are in compliance with all applicable Environmental
Laws except for such instances of non-compliance that have not had or would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. The Company and each of its Subsidiaries have all material
permits, licenses, consents, approvals, certificates, waivers, variances and
other authorizations ("Authorizations") that are required with respect to the
operation of their respective businesses, properties and assets under the
Environmental Laws and are in compliance with such Authorizations and all such
Authorizations are in full force and effect except for such non-compliance or
failures to be in full force and effect that have not had and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. Except as set forth in Section 3.13 of the Disclosure Letter,
none of the Company or its Subsidiaries is subject to any material claims,
actions, suits, proceedings, investigations, decrees, judgments or orders
pursuant to Environmental Law or principles of common law relating to pollution
of the environment or health and safety which have had or would reasonably be
expected to have a Material Adverse Effect. There are no events, conditions or
circumstances which have resulted or are reasonably likely to result in
liability or costs pursuant to Environmental Laws or principles of common law
relating to pollution or protection of the environment or health and safety
which have had or would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
SECTION 3.14 Intellectual Property.
(a) Except as set forth in Section 3.14(a) of the Disclosure
Letter, the Company and its Subsidiaries own, or otherwise have the right
pursuant to a valid license, sublicense or other agreement to, the Company
Intellectual Property, free and clear of all Liens, and have the right (subject
to any such license terms, if applicable) to use, make, have made, sell, offer
to sell, import, license, sublicense and otherwise exploit all Company
Intellectual Property in accordance with applicable Law.
(b) Section 3.14(b) of the Disclosure Letter sets forth all
registrations, issuances, filings and applications for any Intellectual Property
filed by the Company, its Subsidiaries or any predecessors, specifying as to
each item, as applicable: the nature of the item, including the title; the owner
of the item; the jurisdictions in which the item is issued or registered or in
which an application for issuance or registration has been filed; and the
issuance, registration, or application numbers and dates.
(c) Section 3.14(c) of the Disclosure Letter sets forth all
material IP Licenses under which the Company or any Subsidiary is a (i)
licensor, except for licenses of its commercially-marketed Software in the
ordinary course of business substantially under the Company's standard terms and
conditions for such licenses, or (ii) licensee, distributor, or reseller. The
Company and its Subsidiaries have substantially performed all obligations
imposed on them pursuant to the IP Licenses. The Company and its Subsidiaries
have made all payments to date required under all material IP Licenses, and are
not, nor to the knowledge of the Company or any Subsidiary is another party
thereto, in breach of or material default thereunder in any respect, nor is
there any event that with notice or lapse of time or both would constitute a
material default thereunder. All of the material IP Licenses are valid,
enforceable, and in full force and effect in accordance with their terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws relating to or affecting the rights and remedies of creditors
generally and to general principles of equity (regardless of whether considered
in a proceeding in equity or at law), and, with respect to the Company and its
Subsidiaries, will continue to be so on identical terms immediately following
the completion of the transactions contemplated by this Agreement. The
transactions contemplated by this Agreement will not result in the termination
of, or otherwise require the consent of any party to, any material IP License.
(d) All of the Company's and the Subsidiaries' rights in the
Company Intellectual Property are valid and enforceable with respect to all
Intellectual Property rights other than Patents and Trademarks, and to the best
of the Company's knowledge, with respect to Patents and Trademarks. The Company
and the Subsidiaries have taken commercially reasonable actions to maintain and
protect each item of Company Intellectual Property owned or purported to be
owned by the Company or any Subsidiary. The Company and the Subsidiaries have
taken commercially reasonable precautions to protect the secrecy,
confidentiality, and value of their material Trade Secrets and the proprietary
nature and value of their Intellectual Property. To the knowledge of the
Company, none of the Company's or any Subsidiary's material Trade Secrets, the
value of which is contingent upon maintenance of confidentiality thereof, has
been disclosed to any employee, representative or agent of the Company, a
Subsidiary or any other Person not obligated to maintain such material Trade
Secret in confidence under applicable law or pursuant to a confidentiality
agreement entered into with the Company or the applicable Subsidiary, except as
required by the applicable patent office pursuant to the filing of a patent
application by the Company or the applicable Subsidiary.
(e) Substantially all present employees involved with Software
development and each officer, consultant or any other Person not employed by the
Company or any of its Subsidiaries who developed any part of any Company or
Subsidiary product or any Intellectual Property that is or will be made, had
made, used, imported, or sold, offered for sale, licensed, sublicensed or
otherwise exploited by the Company or a Subsidiary within the past five (5)
years have executed a valid and enforceable agreement with the Company or the
applicable Subsidiary that (i) conveys any and all right, title and interest in
and to all Intellectual Property developed within the scope of such Person's
employment or engagement by such Person to the Company or the applicable
Subsidiary, (ii) establishes that to the extent such Person is an author of a
copyrighted work created in connection with such Person's employment or
contract, such work is a "work made for hire," and (iii) obligates the employee
or contractor to keep any confidential information of the Company or any
Subsidiary confidential both during and for a period of time after the term of
employment or contract. No such employee, consultant or other Person has
excluded works or inventions related to any business of the Company or the
Company Intellectual Property made prior to his employment with or work for the
Company or applicable Subsidiary from his/her assignment of inventions pursuant
to such proprietary invention agreements.
(f) To the knowledge of the Company, no former employer or
client of any employee of the Company or any Subsidiary, and no current or
former client of any consultant of the Company or any Subsidiary, has made a
material Claim against such employee, consultant or any other Person, that such
employee or such consultant is utilizing or infringing upon Intellectual
Property of such former employer or client.
(g) Except as set forth in Section 3.14(g) of the Disclosure
Letter, it is not necessary for the Company's or any Subsidiary's business to
use any Intellectual Property owned by any present or past director, officer,
employee or consultant of the Company or any Subsidiary (or Persons the Company
presently intends to hire).
(h) None of the Intellectual Property, products or services
owned, used, developed, provided, sold, licensed or imported by the Company or
any Subsidiary, or made for, used or sold by or licensed to the Company or any
Subsidiary by any Person (i) infringes upon or otherwise violates any
Intellectual Property rights (other than Patents and Trademarks) of any Person,
or (ii) to the knowledge of the Company, infringes upon or otherwise violates
any Patent or Trademark rights of any Person. To the knowledge of the Company,
other than as set forth in Section 3.14(h) of the Disclosure Letter, no Person
is infringing upon or otherwise violating the Intellectual Property rights of
the Company or any Subsidiary.
(i) Except as set forth in Section 3.14(i) of the Disclosure
Letter, there are no Claims pending, or to the knowledge of any of the Company,
threatened, and the Company knows of no basis for any Claim, (i) contesting the
right of the Company or any Subsidiary to use, make, have made, sell, offer to
sell, import, license, or otherwise exploit any of the Company's or any
Subsidiary's products or services currently or previously made, had made, sold,
offered for sale, licensed, imported or made available to any person or used by
the Company or any Subsidiary or (ii) opposing or attempting to cancel any of
the Company's or any Subsidiary's rights in or to any Company Intellectual
Property.
(j) Except as set forth in Section 3.14(j) of the Disclosure
Letter, neither the Company nor any Subsidiary is party to or bound by any
license or other agreement requiring the payment by the Company or any
Subsidiary of any material royalty or license payment, excluding such agreements
relating to Off-the-Shelf Software.
(k) Except as set forth in Section 3.14(k) of the Disclosure
Letter, neither the Company nor any Subsidiary is bound by any non-competition
or similar agreement that would be binding upon Parent or Merger Sub after
completion of the transactions contemplated by this Agreement.
(l) All Software currently sold or licensed by the Company or
any Subsidiary for use by the Company's customers is identified in Section
3.14(l) of the Disclosure Letter. The Software performs in substantial
conformance with its documentation and, except as set forth in Section 3.14(l)
of the Disclosure Letter, is fully and freely transferable to Parent or Merger
Sub without any third party consents, is free from any material software defect
and, except as set forth in Section 3.14(l) of the Disclosure Letter, does not
contain any Self-Help Mechanism or Unauthorized Code.
(m) Neither the Company nor the Subsidiary is, nor, as a
result of the execution, delivery or performance of this Agreement or the
consummation of the transactions contemplated hereby or thereby, will be, in
violation of any agreement relating to any Company Intellectual Property. Upon
Closing, Merger Sub will own all right, title, and interest in and to or have a
valid written license to use all Company Intellectual Property on identical
terms and conditions as the Company or the applicable Subsidiary enjoyed
immediately prior to such transactions.
SECTION 3.15 Real Property.
(a) The Company and its Subsidiaries have good and marketable
title to, or have a valid and enforceable right to use or a valid and
enforceable leasehold interest in, all real property (including all buildings,
fixtures and other improvements thereto) owned by them and material to the
conduct of their respective businesses as such businesses are now being
conducted. Neither the Company's nor any of its Subsidiaries' ownership of or
leasehold interest in any such property is subject to any mortgage, pledge,
Lien, option, conditional sale agreement, encumbrance, security interest, title,
exception or restriction or claim or charge of any kind ("Encumbrances"), except
for such Encumbrances as are set forth in Section 3.15(a) of the Disclosure
Letter or that have not had or would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. All such property
is in good condition and repair, normal wear and tear excepted, and adequate in
all material respects for the continued conduct of the business of the Company
and its Subsidiaries in the manner in which it is currently conducted, except to
the extent that the condition of any property is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect.
(b) Section 3.15(b) of the Disclosure Letter sets forth a list
of all material leases, subleases and other agreements under which the Company
or any of its Subsidiaries uses or occupies or has the right to use or occupy,
now or in the future, any material real property (the "Real Property Leases").
Each Real Property Lease is valid, binding and in full force and effect, and to
the knowledge of the Company, no termination event or condition or uncured
default of a material nature on the part of the Company or any such Subsidiary
exists under any Real Property Lease. Each of the Company and its Subsidiaries
has a good and valid leasehold interest in each parcel of real property leased
by it free and clear of all Liens, except (i) those reflected or reserved
against in the balance sheet of the Company dated as of December 31, 2003, (ii)
Taxes and general and special assessments not in default and payable without
penalty and interest and (iii) other Liens that do not materially interfere with
the Company's use and enjoyment of such real property or materially detract from
or diminish the value thereof or that have not had or would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
SECTION 3.16 Material Contracts.
(a) Section 3.16(a) of the Disclosure Letter sets forth a list
of (i) all customers that have current maintenance contracts with the Company or
one of its Subsidiaries, (ii) the top 16 of all Value Added Reseller contracts
or Original Equipment Manufacturer contracts that the Company or one of its
Subsidiaries is a party to, as determined by revenue for the last two (2) years
ended December 31, 2003, and (iii) all other contracts, agreements, commitments,
arrangements, leases (including with respect to personal property) and other
instruments which have not been fully performed and for which the Company or any
of its Subsidiaries has any continuing obligations or liabilities thereunder (to
which the Company or any of its Subsidiaries is a party or by which the Company,
any of its Subsidiaries or any of their respective assets is bound) that
involves or could involve aggregate payments of more than $250,000 that (A) are
not described in clauses (i) or (ii) or otherwise not set forth in any of
Sections 3.9, 3.14 or 3.15 of the Disclosure Letter, (B) are not liabilities and
obligations for fees and expenses incurred in connection with this transaction
and (C) do not relate to routine overhead and administrative costs or expenses
with respect to the facilities of the Company or its Subsidiaries that are
incurred in the ordinary course of business, consistent with past practices (the
contracts, agreements, commitments, arrangements, leases (including with respect
to personal property) and other instruments set forth in clauses (i) through
(iii) above, together with any contract, agreement or understanding required to
be set forth in Section 3.16(c) of the Disclosure Letter, each, a "Scheduled
Contract" and collectively, the "Scheduled Contracts"). Copies of all Scheduled
Contracts have been previously delivered to or made available by the Company for
inspection by Parent and Merger Sub, and such copies are true, complete and
correct.
(b) Each of the material Scheduled Contracts set forth in
clauses (ii) and (iii) of Section 3.16(a) are valid and binding and are in full
force and effect and enforceable in accordance with their respective terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws relating to or affecting the rights and remedies of creditors
generally and to general principles of equity (regardless of whether considered
in a proceeding in equity or at law) and except for such failures to be in full
force and effect or enforceable that has not had or would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
The Company is not, in any material respect, in violation or breach of or
default under any Scheduled Contract nor, to the Company's knowledge, is any
other party to any such Scheduled Contract.
(c) Except as set forth in Section 3.16(c) of the Disclosure
Letter, neither the Company nor any of its Subsidiaries is a party to or bound
by any (x) contract, agreement or arrangement (including any lease of real
property) in the case of clauses (i-ii) and (iv-vi) or (y) any material
contract, agreement or arrangement (including any lease of real property), in
either case, entered into subsequent to January 1, 1990, (i) restricting the
ability of the Company or any of its Subsidiaries (or after the Merger, Parent
or any or its Subsidiaries) to compete in any material respect in or conduct any
line of business or to engage in business in any geographic area or to hire any
individual or group of individuals, (ii) containing covenants of any other
Person not to compete in any material respect with the Company or any of its
Subsidiaries, (iii) containing any so-called "most favored nation" provisions or
any similar provision requiring the Company or any Subsidiary (or after the
Merger, Parent or any of its Subsidiaries) to offer a third party terms or
concessions at least as favorable as offered to one or more other parties, (iv)
providing for "earn-outs," "performance guarantees" or contingent payments by
the Company or any of its Subsidiaries involving more than $100,000 over the
term of the contract, agreement or arrangement, (v) relating to indebtedness for
borrowed money, letters of credit, the deferred purchase price of property,
conditional sale arrangements, capital lease obligations, obligations secured by
a Lien, or interest rate or currency hedging activities (including guarantees
(other than the Company's guarantee of its Subsidiaries warranty obligations) or
other contingent liabilities in respect of any of the foregoing but in any event
excluding trade payables arising in the ordinary course of business consistent
with past practice, intercompany indebtedness and immaterial leases for
telephones, copy machines, facsimile machines and other office equipment) and
(vi) relating to any material joint venture, partnership, strategic alliance or
similar arrangement (including, without limitation, any franchising agreement).
SECTION 3.17 Opinion of Financial Advisor. The Board of Directors of
the Company has received the opinion of Friedman, Billings, Xxxxxx & Co., Inc.,
a copy of which has been provided to Parent, to the effect that, as of the date
of this Agreement, the consideration to be received in the Merger, by the
holders of Shares (other than Parent or its affiliates) is fair to such holders
from a financial point of view.
SECTION 3.18 Anti-takeover Plan; State Takeover Statutes. Except for
the Company Rights Plan, neither the Company nor any Subsidiary has in effect
any stockholder rights plan or similar device or arrangement, commonly or
colloquially known as a "poison pill" or "anti-takeover" plan or any similar
plan, device or arrangement and the Board of Directors of the Company has not
adopted or authorized the adoption of such a plan, device or arrangement. The
Board of Directors of the Company has taken all necessary actions to exempt the
Merger, this Agreement and the transactions contemplated by this Agreement from
Section 203 of the Corporation Law. No other "fair price," "moratorium,"
"control share acquisition," "business combination" or other similar state
takeover statute or similar statute or regulation of any jurisdiction applies or
purports to apply to the Merger, this Agreement, or any of the transactions
contemplated by this Agreement.
SECTION 3.19 Insurance. Except as set forth in Section 3.19 of the
Disclosure Letter or except as has not had or would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect, (i) the
Company and each of its Subsidiaries maintain, and have maintained, without
interruption, during its existence, policies or binders of insurance covering
such risk, and events, including personal injury, property damage and general
liability in amounts the Company reasonably believes adequate for its business
and operations, (ii) the Company has not received notice of termination or
cancellation of any such policy and such policies shall not terminate as a
result of the consummation of the transactions contemplated hereby, (iii) the
Company or its Subsidiaries are named insureds under such policies, (iv) all
premiums required to be paid with respect thereto covering all periods up to and
including the Effective Time have been paid and (v) there has been no lapse in
coverage under such policies during any period for which the Company and its
Subsidiaries have conducted their respective operations. None of the Company or
its Subsidiaries has any obligation for retrospective premiums for any period
prior to the Effective Time which has had or would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect. All such
policies are in full force and effect and will remain in full force and effect
to and including the Effective Time, unless replaced with comparable insurance
policies having comparable terms and conditions. Except as set forth in Section
3.19 of the Disclosure Letter, no insurer has put the Company or any of its
Subsidiaries on notice that coverage may be denied with respect to any claim
submitted to such insurer by the Company or any such Subsidiary.
SECTION 3.20 Trade Relations. There exists no actual or, to the
knowledge of the Company, threatened termination, cancellation or limitation of,
or any adverse modification or change in, the business relationship of the
Company or any of its Subsidiaries with any distribution partner, customer or
supplier or any group of customers or suppliers whose purchases or inventories
provided to the Company's or any of its Subsidiaries' business are, in the
aggregate, material to the Company and its Subsidiaries, and there exists no
present condition or state of facts or circumstances that has had or would
reasonably be expected to prevent the Company or any of its Subsidiaries from
continuing such business relationships or such business with any such
distribution partner, customer, supplier or group of customers or suppliers in
the same manner as heretofore conducted by the Company or any of its
Subsidiaries, as the case may be.
SECTION 3.21 Warranties; Product Claims.
(a) Except as set forth in Section 3.21(a) of the Disclosure
Letter, the products manufactured by the Company and its Subsidiaries and sold
to end user customers and, to the Company's knowledge, the products manufactured
by the Company and its Subsidiaries and sold for use by original equipment
manufacturer customers or the products sold by the Company or its Subsidiaries
but manufactured by third parties, conform to design in all material respects
and comply in all material respects with all applicable Laws. To the Company's
knowledge, there is no pending federal or state legislation, not otherwise
applicable to the Company's industry, which if adopted or enacted would
reasonably be expected to result in a Material Adverse Effect as a result of the
products sold by the Company and its Subsidiaries.
(b) Section 3.21(b) of the Disclosure Letter sets forth a
summary of each material recall (voluntary or involuntary) of products
manufactured by the Company or its Subsidiaries (or products containing products
manufactured by the Company or any of its Subsidiaries) during the three (3)
year period prior to the date hereof, describing in each case the nature of the
problem giving rise to such recall, the approximate number of products recalled
and the aggregate costs incurred by the Company or any of its Subsidiaries for
each such recall. Except as set forth in Section 3.21(b) of the Disclosure
Letter, during the three (3) year period prior to the date hereof, neither the
Company nor any of its Subsidiaries has experienced any material return or
Warranty Claims which in the aggregate in each of the last three (3) years, has
exceeded $250,000, with respect to products sold or services performed by the
Company and its Subsidiaries, nor are there any pending or, to the Company's
knowledge, threatened material return or Warranty Claims with respect to
products sold or services performed by the Company and its Subsidiaries for
which the Company or its Subsidiaries may have continuing liability or
obligations as of the date hereof.
SECTION 3.22 Potential Conflicts of Interest. Except as set forth in
Section 3.22 of the Disclosure Letter, no director, officer, employee or the
beneficial owner of one percent (1%) or more of the Shares nor any relative of
any such individual, (a) owns, directly or indirectly, any interest in, or is an
officer, director, employee or consultant of, any Person which is, or is engaged
in business as, a competitor, lessor, lessee, supplier, distributor, sales agent
or customer of, or lender to or borrower from, the Company or any of its
Subsidiaries, (b) owns, directly or indirectly, in whole or in part, any
tangible or intangible property that the Company or any of its Subsidiaries has
used, or that the Company or any of its Subsidiaries intends to use within the
next twelve months, in the conduct of their business or (c) receives any payment
or other benefit from the Company or any of its Subsidiaries, has any cause of
action or other claim whatsoever against, or owes or has advanced any amount to,
the Company or any of its Subsidiaries, except for claims in the ordinary course
of business such as for accrued vacation pay, accrued benefits under employee
benefit plans, and similar matters and agreements existing as of the date
hereof. Except as disclosed in the Company SEC Reports, there are no
transactions, arrangements or contracts between the Company and its
Subsidiaries, on the one hand, and the Company's affiliates (other than
Subsidiaries of the Company) or other Persons, on the other hand, that would be
required to be disclosed under Item 404 of Regulation S-K under the Securities
Act.
SECTION 3.23 Amendment to the Company Rights Plan. The Board of
Directors of the Company has taken all necessary action (including any amendment
thereof) under the Company Rights Plan (without redeeming the Rights) so that
none of the execution or delivery of this Agreement, the consummation of the
Merger or any other transaction contemplated by this Agreement will cause (i)
the Rights to become exercisable under the Company Rights Plan or to separate
from the stock certificates to which they are attached, (ii) a Flip-in Date or
Stock Acquisition Date (each as defined in the Company Rights Plan) to occur or
(iii) Parent, Merger Sub or any of their Affiliates to be deemed an Acquiring
Person (as defined in the Company Rights Plan). The Company has furnished Parent
with complete and correct copies of all such actions of the Board of Directors
of the Company. The Company has delivered to Parent a true, complete and correct
copy of the Company Rights Plan and the Company Rights Plan has not been further
modified or amended.
SECTION 3.24 Voting Requirements. The affirmative vote at the
Special Meeting or any adjournment or postponement thereof of the holders of a
majority of the outstanding Shares in favor of adopting this Agreement (the
"Requisite Company Vote") is the only vote of the holders of any class or series
of the Company's capital stock necessary to approve or adopt this Agreement and
the consummation of the transactions contemplated hereby.
ARTICLE IV
REPRESENTATIONS AND
WARRANTIES OF PARENT AND MERGER SUB
-----------------------------------
Parent and Merger Sub represent and warrant to the Company as
follows:
SECTION 4.1 Organization and Qualification. Each of Parent and
Merger Sub is a duly organized and validly existing corporation in good standing
under the laws of the jurisdiction of its organization. All of the issued and
outstanding capital stock of Merger Sub is owned directly or indirectly by
Parent.
SECTION 4.2 Authority for this Agreement. Each of Parent and Merger
Sub has all requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by Parent and Merger Sub and the consummation of
the transactions contemplated hereby have been duly and validly authorized by
all necessary corporate proceedings on the part of Parent and Merger Sub. This
Agreement has been duly and validly executed and delivered by Parent and Merger
Sub and assuming the due authorization, execution and delivery of this Agreement
by the Company, constitutes a legal, valid and binding agreement of each of
Parent and Merger Sub, enforceable against each of Parent and Merger Sub in
accordance with its terms.
SECTION 4.3 Proxy Statement. None of the information supplied by
Parent, Merger Sub or any affiliate of Parent or Merger Sub for inclusion in the
Proxy Statement will, at the date of filing with the SEC, and at the time the
Proxy Statement is mailed and at the time of the Special Meeting, 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 therein, in light of
the circumstances under which they were made, not misleading.
SECTION 4.4 Consents and Approvals; No Violation. Neither the
execution and delivery of this Agreement by Parent or Merger Sub nor the
consummation of the transactions contemplated hereby will (a) conflict with or
result in any breach of any provision of the respective Certificate of
Incorporation or By-laws (or other similar governing documents) of Parent or
Merger Sub, (b) require any consent, approval, authorization or permit of, or
filing with or notification to, any Governmental Entity, except (i) as may be
required under the HSR Act, the Securities Act, the Exchange Act, the
Corporation Law and the "takeover," "blue sky" or securities laws of any state
or (ii) where the failure to obtain such consent, approval, authorization or
permit, or to make such filing or notification, could not, individually or in
the aggregate, reasonably be expected to have a material adverse effect on the
ability of the parties hereto to consummate the transactions contemplated
hereby, (c) require any consent, waiver or approval or result in a default (or
give rise to any right of termination, cancellation, modification or
acceleration) under any of the terms, conditions or provisions of any note,
license, agreement, contract, indenture or other instrument or obligation to
which Parent or Merger Sub or any of their respective Subsidiaries is a party or
by which Parent or any of its Subsidiaries or any of their respective assets may
be bound, except for such defaults (or rights of termination, cancellation,
modification or acceleration) as to which requisite waivers or consents have
been obtained or which could not, individually or in the aggregate, reasonably
be expected to have a material adverse effect on the ability of the parties
hereto to consummate the transactions contemplated hereby or (d) violate any
order (including one issued by an arbitrator), writ, injunction, decree,
statute, rule or regulation applicable to Parent, Merger Sub or any of their
respective Subsidiaries or by which any of their respective assets are bound,
except for violations which could not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the ability of the
parties hereto to consummate the transactions contemplated hereby.
SECTION 4.5 Operations of Merger Sub. Merger Sub was formed solely
for the purpose of engaging in the transactions contemplated hereby, has engaged
in no other business activities and has conducted and will conduct its
operations only as contemplated hereby.
SECTION 4.6 Funds. Parent or Merger Sub has or will have the funds
necessary to consummate the Merger.
SECTION 4.7 Brokers. Except as disclosed in a letter delivered by
Parent to the Company as of the date hereof, no Person is entitled to receive
any brokerage, finder's or other fee or commission in connection with this
Agreement or the transactions contemplated hereby based upon agreements made by
or on behalf of the Company or any of its Subsidiaries.
ARTICLE V
COVENANTS
---------
SECTION 5.1 Conduct of Business of the Company. Except (i) as set
forth in Section 5.1 of the Disclosure Letter, (ii) as expressly contemplated by
this Agreement or (iii) as consented to in writing by Parent from time to time,
during the period from the date of this Agreement to the earlier of the
Effective Time or until the earlier termination of this Agreement, the Company
will conduct and will cause each of its Subsidiaries to:
(a) act and carry on their respective businesses in the
ordinary course of business substantially consistent with past practice and use
their respective commercially reasonable efforts (i) to preserve substantially
intact their current material business organizations, (ii) to keep available the
services of their current officers and employees (except for terminations of
employees in the ordinary course of business), (iii) to preserve their material
relationships with others having significant business dealings with them and
(iv) to ensure continued compliance in all material respects with the
Xxxxxxxx-Xxxxx Act;
(b) not issue, sell, grant options or rights to purchase,
pledge, or authorize or propose the issuance, sale, grant of options or rights
to purchase or pledge of (i) any Company Securities (including any Existing
Stock Option and Existing Warrants) or Subsidiary Securities, or grant or
accelerate any right to convert or exchange any Company Securities or Subsidiary
Securities, other than Shares issuable upon exercise of the Existing Stock
Options and exercise of the Existing Warrants or (ii) any other securities in
respect of, in lieu of or in substitution for Shares outstanding on the date
hereof;
(c) not acquire or redeem, directly or indirectly, or amend
any Company Securities or Subsidiary Securities (other than Existing Stock
Options or Existing Warrants as contemplated by Section 2.4);
(d) not split, combine or reclassify its capital stock or
declare, set aside, make or pay any dividend or distribution (whether in cash,
stock or property) on any shares of its capital stock (other than cash dividends
paid to the Company by its wholly-owned Subsidiaries with regard to their
capital stock);
(e) not propose or adopt any amendment to their Certificate of
Incorporation or By-laws (or similar documents);
(f) except as contemplated by Section 3.23 and Section 5.13,
(i) not amend or modify the Company Rights Plan or (ii) not take any action with
respect to, or make any determination under, the Company Rights Agreement
(including a redemption of the Rights or any action to facilitate an Alternative
Proposal);
(g) not grant any stock related performance or similar awards
to any employees of the Company;
(h) except as contemplated by this Agreement, not enter into
any new, or amend any existing, employment, severance, consulting or salary
continuation agreements with or for the benefit of any officers, directors or
employees (including, without limitation, amendment of, but not the entering
into of, the employment and consulting agreements being entered into on the date
hereof listed on Section 5.1(h) of the Disclosure Schedule), or grant any
increases in the compensation, bonuses or benefits to officers, directors and
employees (other than normal compensation increases to persons who are not
officers or directors in the ordinary course of business consistent with past
practices and that, in the aggregate, do not result in a material increase in
benefits or compensation expense of the Company);
(i) not (i) acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial portion of the assets of, or
by any other manner, any business or any corporation, partnership, joint
venture, association or other business organization or division thereof or (ii)
acquire or agree to acquire, lease or manage any assets, other than in the
ordinary course of business consistent with past practice acquire assets that
are immaterial to the Company and its Subsidiaries taken as a whole;
(j) other than in the ordinary course of business consistent
with past practice, not sell, lease, license, mortgage or otherwise encumber or
subject to any Lien or otherwise dispose of any of its properties or assets,
including, without limitation, the Company Intellectual Property, or stock or
other ownership interest in any of its properties or subsidiaries other than (i)
any Liens for taxes not yet due and payable or being contested in good faith by
appropriate proceedings for which adequate reserves have been provided on the
consolidated balance sheet of the Company at December 31, 2003 and (ii) such
mechanics and similar liens, if any, as do not materially detract from the value
of any of such properties, assets, stock or ownership interests or materially
interfere with the present use of any of such properties or assets;
(k) not make any commitment or enter into, or amend, modify,
or terminate, or waive any rights under, any material contract, agreement or
understanding, without the prior written consent of Parent (which consent shall
not be unreasonably withheld), other than in the ordinary course of business
consistent with past practice;
(l) not (i) incur any indebtedness for borrowed money or
guarantee any such indebtedness of another Person, issue or sell any debt
securities or warrants or other rights to acquire any debt securities of the
Company or any of its Subsidiaries, guarantee any debt securities of another
Person, enter into any "keep well" or other agreement to maintain any financial
statement condition of another Person or enter into any arrangement having the
economic effect of any of the foregoing, except for borrowings under its line of
credit for working capital purposes and the endorsement of checks in the normal
course of business or (ii) make any loans, advances or capital contributions to,
or investments in, any other Person, other than to the Company or any direct or
indirect wholly owned Subsidiary of the Company and other than (A) sales
commissions draws and (B) travel and entertainment advances to employees in the
ordinary course of business consistent with past practice;
(m) not establish, adopt, enter into or amend any collective
bargaining, bonus, profit sharing, thrift, compensation stock option, restricted
stock, pension, retirement, deferred compensation, employment termination,
severance or other plan, agreement, trust, fund, policy or arrangement for the
benefit of any current or former director, officer and employee (except (i) as
required by Law, (ii) for bonus arrangements with new hires that are entered
into in the ordinary course of business consistent with past practice and that
are no more favorable than arrangements for similarly positioned employees of
the Company or (iii) for reasonable employment termination or severance
agreements entered into in the ordinary course of business consistent with past
practice);
(n) except as disclosed in the Company's SEC Reports and
except as may be required as a result of a change in Law or in GAAP or a change
in order to comply with SEC requirements, not change any of their accounting
policies or procedures (including, without limitation, procedures with respect
to the payment of accounts payable and collection of accounts receivable);
(o) ensure that it and each of its Subsidiaries shall use its
commercially reasonable efforts to keep or cause to be kept its material
existing insurance policies (or substantial equivalents) in such amounts in
force until the Effective Time and shall give Parent notice of any material
change in its insurance policies;
(p) not make any material election with regard to Taxes or
settle or compromise any material federal, state, local or foreign income tax
liability without the prior written consent of Parent, which consent shall not
be unreasonably withheld. All Tax Returns required to be filed by or with
respect to the Company and its Subsidiaries (or any of them) after the date
hereof and on or before the Effective Time shall be prepared in a manner
consistent with prior years, unless otherwise required pursuant to a final
determination (which shall include the execution of an IRS Form 870-AD or
successor form);
(q) not, without the prior written consent of Parent (which
consent shall not be unreasonably withheld or delayed), (x) pay, discharge or
satisfy any material claims (including claims of stockholders), liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), except for the payment, discharge or satisfaction of (i) liabilities
or obligations in the ordinary course of business consistent with past practice
or in accordance with their terms as in effect as of the date hereof, (ii)
liability or obligations not to exceed $100,000 individually or $500,000 in the
aggregate or (iii) claims settled or compromised to the extent permitted by
Section 5.1(s), or (y) waive, release, grant, or transfer any rights of material
value pursuant to any material contract, agreement or understanding other than
in the ordinary course of business consistent with past practice;
(r) not adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or
reorganization;
(s) not settle or compromise any litigation (whether or not
commenced prior to the date of this Agreement) other than settlements or
compromises of litigation where the settlement is limited solely to monetary
payment and the release of claims and the amount paid by the Company in all such
settlements or compromises does not exceed $250,000 in the aggregate or $50,000
for any individual settlement or compromise (net of any insurance contribution
or coverage that has not been objected to or disclaimed);
(t) not engage in any transaction with, or enter into any
agreement, arrangement, or understanding with, directly or indirectly, any of
the Company's or its Subsidiaries' affiliates, including, without limitation,
any transactions, agreements, arrangements or understandings with any affiliate
or other Person covered under Item 404 of SEC Regulation S-K that would be
required to be disclosed under such Item 404 other than transactions between the
Company and its wholly-owned Subsidiaries or between the Company's wholly-owned
Subsidiaries;
(u) not effectuate a "plant closing" or "mass layoff," as
those terms are defined in WARN, affecting in whole or in part any site of
employment, facility, operating unit or employee of the Company or any of its
Subsidiaries;
(v) take commercially reasonable actions to protect and
maintain the Company Intellectual Property, including without limitation,
prosecuting all pending applications for Patents or registration of Trademarks
and Copyrights used in the Company's business and maintaining, to the extent
permitted by law, each Patent or registration owned by the Company or any
Subsidiary;
(w) not do any act or knowingly omit to do any act whereby any
Company Intellectual Property may become invalidated, abandoned or dedicated to
the public domain, and will use commercially reasonable efforts to prevent any
licensee or sublicensee thereof from doing the same;
(x) notify Parent or Merger Sub promptly (i) if it knows, or
has reason to know, that any Company Intellectual Property may become abandoned
or dedicated to the public domain, (ii) it has received notice of any adverse
determination or development (including, without limitation, the institution of,
or any such determination or development in, any proceeding in the U.S. Patent
and Trademark Office (the "PTO") or the U.S. Copyright Office (the "Copyright
Office") or equivalent office in any foreign jurisdiction, any court or tribunal
in the United States or any political sub-division thereof, or any court or
tribunal in any foreign jurisdiction), other than non-final determinations of
the PTO or the Copyright Office, regarding its ownership of any Intellectual
Property or its right to register the same or to keep, maintain and use the
same;
(y) shall promptly notify Parent or Merger Sub of any material
infringement of any Company Intellectual Property of which it becomes aware; and
(z) not agree in writing or otherwise to take any of the
foregoing actions to the extent it would constitute a default under Section 5.1.
SECTION 5.2 No Solicitation.
(a) The Company shall not, and shall cause its Subsidiaries
and affiliates and each of their respective officers, directors, employees,
representatives (including, without limitation, investment bankers, attorneys
and accountants) or other agents (collectively, the "Representatives") not to,
directly or indirectly, (i) encourage, solicit or initiate any proposal or offer
with respect to an Acquisition Proposal or (ii) participate in any discussions
or negotiations (that are reasonably intended to facilitate the making of an
Acquisition Proposal) with, or provide, furnish or disclose any information to,
or afford any access to the properties, books or records of the Company or any
of its Subsidiaries, or otherwise take any other action to assist or facilitate
(including granting any waiver or release under any standstill or similar
agreement with respect to any securities of the Company), any "person" or
"group" (as such terms are used for purposes of Section 13(d)(3) of the Exchange
Act) (other than Parent or Merger Sub or any affiliate or associate of Parent or
Merger Sub) (each, a "Potential Acquiror") concerning any Acquisition Proposal.
In the event the Company receives any Acquisition Proposal, the Company shall as
promptly as practicable notify Parent of such receipt and provide Parent with
the identity of the Potential Acquiror and a copy of such Acquisition Proposal
or a reasonably detailed written summary setting forth the material terms and
conditions thereof. Without limiting the foregoing, the Company agrees that any
breach of the restrictions set forth in this Section 5.2(a) by any Subsidiary or
affiliate of the Company or any Representative shall be deemed to be a breach by
the Company of this Section 5.2(a).
(b) Notwithstanding the provisions of Section 5.2(a), the
Company may take any of the actions referred to in Section 5.2(a)(ii) with
respect to a Potential Acquiror that has made an unsolicited written Acquisition
Proposal provided that all of the following conditions are satisfied: (i) the
Board of Directors of the Company (acting by a majority of the entire board)
determines in good faith, (A) after consultation with its independent financial
advisor, that such Acquisition Proposal is reasonably likely to result in the
making of a Superior Proposal, and (B) after consultation with its outside legal
counsel, that the failure to take such action in their reasonable judgment may
result in a breach of its fiduciary duties pursuant to applicable Law; (ii) the
Company in its reasonable judgment keeps Parent advised on a current basis of
any material developments with respect to such Acquisition Proposal, (iii) the
Company receives from such Potential Acquiror an executed confidentiality
agreement customary for a transaction of this type; provided, that if the
Company modifies or waives any standstill provision in such agreement for the
benefit of any such Potential Acquiror, the Company shall in the same manner
simultaneously modify or waive the standstill provision in the confidentiality
agreement that the Parent is a party to with the Company for the benefit of
Parent, and (iv) the Company furnishes or makes available to Parent the same
information provided to such Person (to the extent not previously furnished or
made available).
(c) The Company shall, and shall cause its Subsidiaries and
affiliates and their respective Representatives to, immediately cease and cause
to be terminated any existing solicitation, activity, discussions or
negotiations with any Person (other than Parent, Merger Sub or any of their
respective affiliates or associates) conducted prior to the date hereof with
respect to any Acquisition Proposal.
(d) The Company shall not (i) withdraw or modify, or propose
publicly to withdraw or modify, in a manner adverse to Parent or Merger Sub, the
approval or recommendation of the Merger and this Agreement, (ii) approve or
recommend, or propose publicly to approve or recommend, any Acquisition
Proposal, including, without limitation, for purposes of Section 203 of the
Corporation Law or (iii) enter into any letter of intent, agreement in principle
or acquisition agreement related to any Acquisition Proposal.
(e) Nothing contained in this Section 5.2(e) shall prohibit
the Company or its Board of Directors from taking and disclosing to the
Company's stockholders a position with respect to an Acquisition Proposal by a
third party pursuant to Rules 14d-9 and 14e-2(a) promulgated under the Exchange
Act or otherwise communicating with the Company's stockholders to the extent
required by Law.
SECTION 5.3 Access to Information.
(a) From and after the date of this Agreement, the Company
shall (i) give Parent and Merger Sub and their appropriate Representatives
reasonable access (during regular business hours upon reasonable notice) to the
facilities and books and records of the Company and its Subsidiaries and (ii)
cause its officers and those of its Subsidiaries to furnish Parent and Merger
Sub with such reasonable financial and operating data and other information with
respect to the business, properties and personnel of the Company and its
Subsidiaries as Parent or Merger Sub may from time to time reasonably request;
provided, however, that the Company may restrict the foregoing access to the
extent that it reasonably concludes (A) it would interfere with the operation of
the Company's business in the ordinary course of business, (B) in the reasonable
judgment of the Company, after consultation with Company's outside counsel, any
law, treaty, rule or regulation of any Governmental Entity applicable to the
Company requires the Company or its Subsidiaries to restrict or prohibit access
to any such properties or information, (C) in the reasonable judgment of the
Company, after consultation with Company's outside counsel, the information is
subject to confidentiality obligations to a third party, or (D) disclosure of
any such information or document would, after consultation with Company's
outside counsel, result in the loss of attorney-client privilege.
(b) Information obtained by Parent or Merger Sub pursuant to
Section 5.3(a) shall be subject to the provisions of the Confidentiality
Agreement (as amended or supplemented from time to time in accordance with the
terms thereof), the terms of which are incorporated herein by reference.
SECTION 5.4 Reasonable Efforts; Further Actions.
(a) Subject to the terms and conditions herein provided for
(including, without limitation, Section 5.11), each of the parties hereto agrees
to use its commercially reasonable efforts to take, or cause to be taken, all
appropriate action, and to do, or cause to be done, all things necessary, proper
or advisable under applicable Laws to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated by this Agreement.
Without limiting the foregoing, (i) each of the Company, Parent and Merger Sub
shall use its commercially reasonable efforts to make promptly any required
submissions under any applicable Law that the Company or Parent determines
should be made, in each case, with respect to the Merger and the transactions
contemplated hereby and to respond as promptly as practicable to all inquiries
received from any Governmental Entity with respect to such submissions for
additional information or documentation, and (ii) Parent, Merger Sub and the
Company shall cooperate with one another (A) in promptly determining, in
connection with the consummation of the transactions contemplated by this
Agreement, 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 applicable Law or whether any consents, approvals or waivers are
required to be or should be obtained from other parties to any material
contract, agreement or understanding (including, without limitation, under any
contract, agreement or understanding set forth in Section 3.4 of the Disclosure
Letter) 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.
(b) In case at any time after the Effective Time any further
action is necessary or desirable to carry out the purposes of this Agreement,
Parent shall cause the proper officers and directors of each party to this
Agreement to take all such necessary action.
(c) In the event that any action, suit, proceeding or
investigation relating hereto or to the transactions contemplated hereby is
commenced, the parties hereto agree to cooperate and use all commercially
reasonable to defend vigorously against it and respond thereto.
SECTION 5.5 Indemnification and Insurance.
(a) Parent and Merger Sub agree that all rights to
indemnification existing in favor of the present or former directors, officers
and employees (or any individual who served at the Company's or any of its
Subsidiaries' request as an officer, director, or agent) of the Company or any
of its Subsidiaries (or any other entity or enterprise, such as a partnership,
joint venture, trust or employee benefit plan) as provided in (i) the Company's
Certificate of Incorporation or By-laws, (ii) or the articles of organization,
by-laws or similar organizational documents of any of the Company's Subsidiaries
or other entity or enterprise or (iii) under any indemnification agreements of
the Company set forth in Section 5.5(a) of the Disclosure Letter as in effect as
of the date hereof, with respect to matters occurring prior to the Effective
Time, shall be assumed by the Surviving Corporation and Parent in the Merger,
without further action, and shall continue in full force and effect without
modification (other than modifications that would enlarge the indemnification
rights) for a period of not less than the statutes of limitations applicable to
such matters, and Parent shall, and shall cause the Surviving Corporation to
comply fully with its obligations hereunder and thereunder.
(b) In the event that the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges into any other Person
(other than another direct or indirect Subsidiary of Parent) and is not the
continuing or surviving corporation or entity of such consolidation or merger or
(ii) transfers or conveys all or substantially all of its properties and assets
to any Person (other than any direct or indirect Subsidiary of Parent), or
otherwise dissolves the Surviving Corporation, then, and in each such case,
Parent shall cause proper provision to be made so that the successors and
assigns of the Surviving Corporation assume the obligations set forth in this
Section 5.5(b) by operation of law or otherwise.
(c) Parent shall or shall cause the Surviving Corporation to
maintain in effect for a period of six (6) years after the Effective Time, in
respect of acts or omissions occurring prior to the Effective Time, policies of
directors' and officers' liability insurance and fiduciary liability insurance
and fiduciary insurance covering the individuals described in Section 5.5(a)
(which may include naming such individuals under Parent's existing policies);
and such policies provided by Parent shall provide substantially similar
coverage as is provided for the individuals who are covered by the Company's
existing policies; provided, however, that Parent shall not be required in order
to maintain such policies to pay an annual premium in excess of two hundred
percent (200%) of the price set forth on Section 5.5(c) of the Disclosure
Letter; provided, further, that, if equivalent coverage cannot be obtained, or
can be obtained only by paying an annual premium in excess of two hundred
percent (200%) of such amount, the Surviving Corporation shall only be required
to obtain as much coverage as can be obtained by paying an annual premium equal
to two hundred percent (200%) of such amount.
(d) The provisions of this Section 5.5(d) are (i) 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 (ii) in addition to, and not in
substitution for, any other rights to indemnification or contribution that any
such person may have by contract or otherwise.
SECTION 5.6 Proxy Statement. As promptly as reasonably practicable
after the execution and delivery of this Agreement, the Company shall:
(a) prepare and, after consultation with and review by Parent,
file with the SEC a preliminary proxy statement relating to the special meeting
of the stockholders of the Company (the "Special Meeting") to be held to
consider approval and adoption of this Agreement and the Merger and use its
commercially reasonable efforts (i) to obtain and furnish the information
required to be included by the SEC in the Proxy Statement and, after
consultation with and review by Parent, to respond promptly to any comments made
by the SEC with respect to the preliminary Proxy Statement and promptly cause a
definitive Proxy Statement to be mailed to its stockholders and, if necessary,
after the definitive Proxy Statement shall have been so mailed, promptly
circulate amended or supplemental proxy material and, if required in connection
therewith, resolicit proxies; provided, that no such amended or supplemental
proxy material will be mailed by the Company without consultation with and
review by Parent and (ii) to obtain the necessary approvals of the Merger and
this Agreement by its stockholders;
(b) promptly notify Parent of the receipt of the comments of
the SEC and of any request from the SEC for amendments or supplements to the
preliminary Proxy Statement or the definitive Proxy Statement or for additional
information, and will promptly supply Parent with copies of all written
correspondence between the Company or its representatives, on the one hand, and
the SEC or members of its staff, on the other hand, with respect to the
preliminary Proxy Statement, the definitive Proxy Statement or the Merger; and
(c) promptly inform Parent if at any time prior to the Special
Meeting any event should occur that is required by applicable law to be set
forth in an amendment of, or a supplement to, the Proxy Statement, in which
case, the Company, with the cooperation of and in consultation with Parent,
will, upon learning of such event, promptly prepare and mail such amendment or
supplement.
(d) Parent and Merger Sub each agree that none of the
information supplied in writing by it to be included or incorporated by
reference in the Proxy Statement or any amendment thereof or supplement thereto,
will, on the date of the mailing of the Proxy Statement or any amendment or
supplement thereto, and at the time of the Special Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. It is expressly
understood and agreed that (i) Parent, Merger Sub and the Company will cooperate
with each other in connection with all aspects of the preparation, filing and
clearance by the SEC of the Proxy Statement (including the preliminary proxy and
any and all amendments or supplements thereto), (ii) the Company shall give
Parent and its outside counsel the opportunity to review the Proxy Statement
prior to it being filed with the SEC and shall give Parent and its outside
counsel the opportunity to review all amendments and supplements to the Proxy
Statement and all responses to requests for additional information and replies
to comments prior to their being filed with, or sent to, the SEC and each of the
Company and Parent agrees to use its commercially reasonable efforts, after
consultation with the other, to respond promptly to all such comments of and
requests by the SEC, (iii) to the extent practicable, the Company and its
outside counsel shall permit Parent and its outside counsel to participate in
all communications with the SEC and its staff (including, without limitation,
all meetings and telephone conferences) relating to the Proxy Statement, this
Agreement or any of the transactions contemplated thereby and (iv) the Company
will not file with, or send to, the SEC the Proxy Statement (including the
preliminary Proxy Statement and any and all amendments or supplements thereto
and any and all responses to requests for additional information and replies to
comments relating thereto) or mail any Proxy Statement (including the
preliminary Proxy Statement and any and all amendments or supplements thereto)
or use any proxy material in connection with the Special Meeting, in each case
without Parent's prior approval (not to be unreasonably withheld).
(e) The Proxy Statement shall include the unanimous and
unconditional recommendation of the Board of Directors of the Company to the
stockholders of the Company that they vote in favor of the adoption of this
Agreement and the Merger; provided, however, that the Board of Directors of the
Company may, at any time prior to the Effective Time, withdraw, modify or change
any such recommendation solely in accordance with the provisions of Section 5.2
hereof. In addition, the Proxy Statement and the Proxy Materials will include a
copy of the written opinion of the Financial Advisor referred to in Section
3.17.
SECTION 5.7 Special Meeting. The Company shall call and hold the
Special Meeting as promptly as reasonably practicable after the mailing of the
Proxy Statement to the stockholders of the Company for the purpose of voting
upon the approval of this Agreement and Parent and the Company will cooperate
with each other to cause the Special Meeting to be held as soon as reasonably
practicable following the mailing of the Proxy Materials to the stockholders of
the Company. The Company shall use its commercially reasonable efforts (through
its agents or otherwise) to solicit from its stockholders proxies in favor of
the approval of this Agreement, and shall take all other action necessary or
advisable to secure the Requisite Company Vote, except to the extent that the
Board of Directors of the Company withdraws, modifies or changes its
recommendation in favor of the Merger as provided in Section 5.2(d) hereof.
SECTION 5.8 Notification of Certain Matters. The Company shall give
prompt notice to Parent and Merger Sub, and Parent or Merger Sub, as the case
may be, shall give prompt notice to the Company, of the occurrence, or
non-occurrence, of any event the occurrence, or non-occurrence, of which is
likely (a) to cause any representation or warranty of such party contained in
this Agreement to be untrue or inaccurate in any material respect if made as of
any time at or prior to the Effective Time and (b) to result in any material
failure of such party to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied hereunder; provided, however, that
the delivery of any notice pursuant to this Section 5.8 shall not limit or
otherwise affect the remedies available hereunder to any of the parties sending
or receiving such notice.
SECTION 5.9 Press Releases and Communications.
(a) Parent, Merger Sub and the Company will consult with each
other before issuing any press release or otherwise making any public statements
with respect to the Merger or this Agreement and shall not issue any such press
release or make any such public statement prior to such consultation (and
affording the other party or parties an opportunity to comment thereon), except
as may be required by applicable Law or by the rules of any stock exchange on
which such party is listed.
(b) The Company, Parent and Merger Sub shall, and shall cause
each of their respective Subsidiaries and Representatives, not to communicate
with respect to this Agreement and the transactions contemplated hereby except
in compliance with applicable Law.
SECTION 5.10 Employee Benefits Matters.
(a) Other than as specifically provided in this Agreement,
from and after the Effective Time, Parent will, and will cause the Company to,
honor in accordance with their terms all existing employment, severance and
consulting agreements of any current or former officer, director, employee or
consultant of the Company or any of its Subsidiaries that were disclosed on
Section 3.9(a) of the Disclosure Letter; provided, however, that nothing herein
shall preclude Parent or any of its Affiliates from having the right to
terminate the employment of any employee, with or without cause, or to amend or
terminate in accordance with its terms and applicable law any (i) Employee
Benefit Plan or (ii) employee benefit plan of Parent established, maintained or
contributed to by Parent or any of its Affiliates ("Parent Benefit Plan") after
the Effective Time.
(b) Except as specifically provided herein, from and after the
Effective Time, Parent will, and will cause the Company to, cause service
rendered by employees of the Company and its Subsidiaries prior to the Effective
Time to be taken into account for vesting and eligibility purposes under all
employee benefit plans, programs, policies and arrangements of Parent, the
Company and its Subsidiaries in which such employees participate or are offered
participation (other than any retiree medical plans or defined benefit pension
plans sponsored or maintained by the Parent), to the same extent as such service
was taken into account under the corresponding plans of the Company and its
Subsidiaries for those purposes prior to the Effective Time, provided that
nothing herein shall result in the duplication of any benefits. Employees of the
Company and its Subsidiaries will not be subject to any pre-existing condition
limitation under any health plan of Parent, the Company or its Subsidiaries for
any condition for which they would have been entitled to coverage under the
corresponding plan of the Company or its Subsidiaries in which they participated
prior to the Effective Time. Parent will and will cause the Company and its
Subsidiaries to give employees credit under such plans for co-payments made and
deductibles satisfied prior to the Effective Time.
(c) From and after the Effective Time until the first
anniversary thereof, Parent shall provide, or cause the Company to provide,
benefits to employees of the Company or its Subsidiaries that are no less
favorable, in the aggregate than the benefits provided under the Employee
Benefit Plans (but excluding any such Employee Benefit Plan providing for
options or other stock-based awards); provided, however, that nothing herein
shall preclude Parent or any of its Affiliates from having the right to amend or
terminate in accordance with its terms and applicable law any Employee Benefit
Plan or Parent Benefit Plan.
SECTION 5.11 HSR Act Filings.
(a) Each of Parent and the Company shall (A) make or cause to
be made the filings required of such party hereto or any of its subsidiaries or
affiliates under the HSR Act and any similar foreign competition or Antitrust
Laws with respect to the transactions contemplated by this Agreement as promptly
as practicable and, with respect to the HSR Act, in any event within ten (10)
Business Days after the date of this Agreement, (B) comply at the earliest
practicable date with any request under the HSR Act or any similar foreign
competition or Antitrust Laws for additional information, documents, or other
materials received by such party hereto or any of its subsidiaries from the
United States Federal Trade Commission or the United States Department of
Justice or any other Governmental Entity in respect of such filings or such
transactions, and (C) cooperate with the other party in connection with any such
filing (including, with respect to the party hereto making a filing, providing
copies of all such documents to the non-filing party and its advisors prior to
filing and, if requested, to accept all reasonable additions, deletions or
changes suggested in connection therewith) and in connection with resolving any
investigation or other inquiry of any such agency or other Governmental Entity
under any Antitrust Laws with respect to any such filing or any such
transaction. Each of Parent and the Company shall promptly inform the other
parties hereto of any communication with, and any proposed understanding,
undertaking, or agreement with, any Governmental Entity regarding any such
filing. No party hereto shall independently participate in any meeting, or
engage in any substantive conversation, with any Governmental Entity in respect
of any such filings, investigation, or other inquiry without giving the other
party hereto prior notice of the meeting and, to the extent permitted by such
Governmental Entity, the opportunity to attend and/or participate. The parties
hereto will consult and cooperate with one another, in connection with any
analyses, appearances, presentations, memoranda, briefs, arguments, opinions and
proposals made or submitted by or on behalf of any party hereto in connection
with proceedings under or relating to the HSR Act or other foreign competition
or Antitrust Laws. Each of the parties hereto will use all commercially
reasonable efforts to secure termination of any waiting periods under the HSR
Act and any similar foreign competition or Antitrust Laws and obtain the
approval of any other Governmental Entity for the transactions contemplated by
this Agreement. Each of Parent and the Company may, as each deems advisable and
necessary, reasonably designate any competitively sensitive material provided to
the other under this Section 5.11 "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 permission is obtained in
advance from the source of the materials (Parent or the Company, as the case may
be) or its legal counsel; provided, however, that materials concerning the
valuation of the Company may be redacted.
(b) Notwithstanding anything to the contrary in this
Agreement, (i) neither Parent nor any of its Subsidiaries shall be required to
hold separate (including by trust or otherwise) or to divest any of their
respective businesses or assets, or to take or agree to take any action or agree
to any limitation with respect to the ownership or holding of any of their
respective businesses or assets, (ii) neither the Company nor any of its
Subsidiaries shall be required to hold separate (including by trust or
otherwise) or to divest any of their respective businesses or assets, or to take
or agree to take any other action or agree to any limitation with respect to the
ownership or holding of any of their respective businesses or assets, (iii)
neither any party hereto nor their respective Subsidiaries shall be required to
take any action that could reasonably be expected to substantially impair the
benefits expected to be realized by Parent from consummation of the Merger or
(iv) Parent shall not be required after consummation of the Merger to Company to
hold separate (including by trust or otherwise) or to divest any of the
respective businesses or assets of the Company or any of its Subsidiaries, or to
take or agree to take any other action or agree to any limitation with respect
to the ownership or holding of any of the respective businesses or assets of the
Company or any of its Subsidiaries.
SECTION 5.12 Stockholder Litigation. To the extent consistent with
the fiduciary duties of the Board of Directors, the Company shall consult with
Parent in connection with any stockholder litigation against the Company and/or
its directors relating to the transactions contemplated by this Agreement or the
Voting Agreements, and no settlement shall be agreed with respect to such
stockholder litigation without Parent's prior written consent (which consent
shall not be unreasonably withheld).
SECTION 5.13 Rights Agreement. The Board of Directors of the Company
shall take all further action (in addition to that referred to in Section 3.23)
reasonably requested in writing by Parent in order to render the Rights
inapplicable to the Merger and the other transactions contemplated by this
Agreement.
SECTION 5.14 Resignations of Directors and Officers. The Company
shall take all actions necessary to cause (i) each of the directors of the
Company and each of its Subsidiaries to have tendered to Merger Sub their
written resignations from the Board of Directors of the Company or such
Subsidiary, as the case may be, in each case effective as of the Effective Time,
and (ii) each of the officers of the Company and each of its Subsidiaries set
forth in Section 5.14 of the Company Disclosure Schedule, to have tendered to
Merger Sub their written resignations from such offices of the Company or such
Subsidiary, as the case may be, effective as of the Effective Time.
SECTION 5.15 FIRPTA Affidavit. Prior to the Effective Time, the
Company shall provide to Parent a certificate stating that the Company is not a
"United States Real Property Holding Corporation" as defined in section 897 of
the Code in accordance with Treasury Regulations promulgated under sections 897
and 1445 of the Code; provided, however, that if the Company does not provide
such certificate, Parent may withhold Taxes as provided in Section 2.7 of this
Agreement.
ARTICLE VI
CONDITIONS TO CONSUMMATION OF THE MERGER
----------------------------------------
SECTION 6.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each party to effect the Merger and
consummate the other transactions contemplated hereby to be consummated on the
Closing Date is subject to the satisfaction or waiver at or prior to the
Effective Time of each of the following conditions:
(a) Stockholder Approval. This Agreement (including the Plan
of Merger) and consummation of the Merger shall have been duly approved by the
Requisite Company Vote.
(b) Governmental Consents. The waiting period applicable to
the consummation of the Merger under the HSR Act shall have expired or been
terminated and other than the filing provided for in Section 1.3, all notices,
reports and other filings required to be made prior to the Effective Time by the
Company or Parent or any of their respective subsidiaries with, and all
consents, registrations, approvals, permits and authorizations required to be
obtained prior to the Effective Time by the Company or Parent or any of their
respective subsidiaries from any Governmental Entity in connection with the
execution and delivery of this Agreement and the consummation of the Merger and
the other transactions contemplated hereby shall have been made or obtained (as
the case may be) upon terms and conditions that would not reasonably be expected
to result in Material Adverse Effect.
(c) Orders, Injunctions. No Law, order, injunction or decree
that prohibits, restrains, enjoins or otherwise prohibits (whether temporarily,
preliminarily or permanently) consummation of the Merger shall have been
enacted, issued, promulgated, enforced or entered by any court or Governmental
Entity of competent jurisdiction and there shall not be pending any suit, action
or proceeding by any Governmental Entity which seeks to restrain, enjoin or
otherwise prohibit (whether temporarily, preliminarily or permanently)
consummation of the Merger.
SECTION 6.2 Conditions to Obligations of Parent and Merger Sub. The
obligations of each of Parent and Merger Sub to effect the Merger and consummate
the other transactions contemplated hereby to be consummated on the Closing Date
are also subject to the satisfaction or waiver by Parent at or prior to the
Effective Time of the following conditions:
(a) Representations and Warranties. (i) The representations
and warranties of the Company set forth in Section 3.2(a) shall be true and
correct in all material respects (A) on the date of this Agreement and (B) on
the Closing Date with the same effect as though such representations and
warranties had been made on and as of the Closing Date (except to the extent
that such representation and warranty expressly speaks as of an earlier date, in
which case such representation and warranty shall be true and correct as of such
earlier date); and (ii) the other representations and warranties of the Company
set forth in this Agreement shall be true and correct (A) on the date of this
Agreement and (B) on the Closing Date with the same effect as though such
representations and warranties had been made on and as of the Closing Date
(except to the extent that such representation and warranty expressly speaks as
of an earlier date, in which case such representation and warranty shall be true
and correct as of such earlier date); provided, however, that notwithstanding
anything herein to the contrary, the condition set forth in this Section
6.2(a)(ii) shall be deemed to have been satisfied even if any representations
and warranties of the Company are not true and correct unless the failure of
such representations and warranties of the Company to be true and correct (read
for purposes of this Section 6.2(a)(ii) without any "materiality" or Material
Adverse Effect qualification) has had or would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(b) Performance of Obligations of the Company. The Company
shall have performed in all material respects all other obligations required to
be performed by it under this Agreement at or prior to the Closing Date, and
Parent shall have received a certificate signed on behalf of the Company by an
executive officer of the Company to such effect.
(c) Material Adverse Effect. Since the date of this Agreement,
there shall have been no Material Adverse Effect, and Parent shall have received
a certificate of an executive officer of the Company to such effect.
(d) Consents Under Agreements. The Company shall have obtained
the consent, approval or waiver of each person whose consent, approval or waiver
shall be required in order to consummate the transactions contemplated by this
Agreement, except those for which the failure to obtain such consent, approval
or waiver, individually or in the aggregate, would not reasonably be expected to
result in a Material Adverse Effect.
(e) Governmental Actions. There shall not have been
instituted, pending or threatened any action or proceeding by any Governmental
Entity (i) challenging or seeking to make illegal, to delay materially or
otherwise directly or indirectly to restrain or prohibit the consummation of the
Merger, (ii) seeking to obtain material damages or otherwise directly or
indirectly relating to the transactions contemplated by the Merger, (iii)
seeking to restrain or prohibit Parent's ownership or operation (or that of its
respective Subsidiaries or affiliates) of all or any portion of the business or
assets of the Company or its Subsidiaries or of Parent and its Subsidiaries or
to compel Parent or any of its Subsidiaries or affiliates to dispose of or hold
separate all or any portion of the business or assets of the Company and its
Subsidiaries or of Parent and its Subsidiaries, (iv) seeking to impose or
confirm material limitations on the ability of Parent, Merger Sub or any of
Parent's other Subsidiaries or affiliates effectively to exercise full rights of
ownership of the Shares, including, without limitation, the right to vote any
Shares acquired or owned by Parent, Merger Sub or any of Parent's other
Subsidiaries or affiliates on all matters properly presented to the Company's
stockholders, (v) seeking to require divestiture by Parent, Merger Sub or any of
Parent's other Subsidiaries or affiliates of any Shares or (vi) that otherwise,
has had or would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
(f) Rights Plan. No Distribution Date (as defined in the
Company Rights Agreement) shall have occurred.
SECTION 6.3 Conditions to Obligation of the Company. The obligation
of the Company to effect the Merger and consummate the other transactions
contemplated hereby to be consummated on the Closing Date is also subject to the
satisfaction or waiver by the Company at or prior to the Effective Time of the
following conditions:
(a) Representations and Warranties. The representations and
warranties of each of Parent and Merger Sub set forth in this Agreement shall be
true and correct (A) on the date of this Agreement and (B) on the Closing Date
with the same effect as though such representations and warranties had been made
on and as of the Closing Date (except to the extent that such representation and
warranty expressly speaks as of an earlier date, in which case such
representation and warranty shall be true and correct as of such earlier date);
provided, however, that notwithstanding anything herein to the contrary, the
condition set forth in this Section and 6.3(a) shall be deemed to have been
satisfied even if any representations and warranties of the Parent and Merger
Sub are not true and correct unless the failure of such representations and
warranties of the Parent and Merger Sub to be true and correct (read for
purposes of this Section 6.3(a) without any "materiality" qualification) has had
or would reasonably be expected to have, individually or in the aggregate, a
material and adverse effect on the financial condition, business, properties,
assets, liabilities, results of operations or prospects of the Parent, Merger
Sub and its other Subsidiaries taken as a whole; and the Company shall have
received a certificate signed on behalf of each of Parent and Merger Sub to such
effect.
(b) Performance of Obligations of Parent and Merger Sub. Each
of Parent and Merger Sub shall have performed in all material respects all
obligations required to be performed by it under this Agreement at or prior to
the Closing Date.
ARTICLE VII
TERMINATION; AMENDMENT; WAIVER
------------------------------
SECTION 7.1 Termination. This Agreement may be terminated and the
Merger may be abandoned at any time (notwithstanding approval thereof by the
stockholders of the Company) prior to the Effective Time (with any termination
by Parent also being an effective termination by Merger Sub):
(a) by mutual written consent of the Company and Parent;
(b) by written notice by either the Company or Parent, if the
Merger has not been consummated on or before September 30, 2004 (provided, that
the right to terminate this Agreement under this Section 7.1(b) shall not be
available to any party whose failure to fulfill any of its obligations under
this Agreement has been the cause of or resulted in the failure to consummate
the Merger by such date);
(c) by written notice by either the Company or Parent, if
there shall be any applicable law, rule or regulation that makes consummation of
the Merger illegal or otherwise prohibited or if any judgment, injunction, order
or decree of a Governmental Entity of competent jurisdiction shall restrain or
prohibit the consummation of the Merger, and such judgment, injunction, order or
decree shall become final and nonappealable;
(d) by written notice by either the Company or Parent, if (i)
there has been a breach by the other party of any representation or warranty
contained in this Agreement which has had or would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect or (ii) there
has been a material breach of any of the material covenants or agreements set
forth in this Agreement on the part of the other party, which breach is, in
either case, not curable or, if curable, is not cured within thirty (30) days
after written notice of such breach is given by the terminating party to the
other party;
(e) by written notice by Parent, if, prior to Requisite
Company Vote being obtained, (i) the Board of Directors of the Company shall
have failed to recommend, or shall have withdrawn or modified in a manner
adverse to Parent, its approval or recommendation of this Agreement or the
Merger or shall have recommended, or entered into, or publicly announced its
intention to enter into, an agreement or an agreement in principle with respect
to a Superior Proposal (or shall have resolved to do any of the foregoing), (ii)
the Company shall have breached any of its obligations under Section 5.2 (other
than any inadvertent and immaterial breaches of such section), (iii) the Board
of Directors of the Company shall have refused to affirm its approval or
recommendation of this Agreement or the Merger within ten (10) Business Days of
any written request from Parent, (iv) the Board of Directors of the Company
shall exempt any other Person from the provisions of Section 203 of the
Corporation Law or (v) the Board of Directors shall exempt any other Person
under the Company Rights Plan;
(f) by written notice by Parent, if any Person or "group" (as
defined in Section 13(d)(3) of the Exchange Act), other than Parent or any of
its affiliates, shall have acquired beneficial ownership of more than
twenty-five percent (25%) of the Shares or more than twenty-five percent (25%)
of the book value or fair market value of the assets of the Company and its
Subsidiaries taken as whole, or the right to acquire ownership of such Shares or
assets;
(g) by written notice by the Company, if the Board of
Directors of the Company shall approve and the Company shall enter into, a
definitive agreement providing for the implementation of a Superior Proposal;
provided, however, that (i) the Company is not and has not been in breach of
Section 5.2, (ii) the Board of Directors of the Company authorizes the Company,
subject to complying with the terms of this Agreement, to enter into a binding
written agreement concerning a transaction that constitutes a Superior Proposal
and the Company notifies Parent in writing that it intends to enter into such an
agreement, attaching the most current version of such agreement to such notice
(including any subsequent amendments or modifications) or otherwise providing a
reasonably detailed written summary of the Superior Proposal, (iii) during the
five (5) Business Day period after the Company's notice, (x) the Company shall
have offered to negotiate with (and, if accepted, negotiate with), and shall
have caused its respective financial and legal advisors to have offered to
negotiate with (and if accepted, negotiate with), Parent to attempt to make such
commercially reasonable adjustments in the terms and conditions of this
Agreement as will enable the Company to proceed with this Agreement, as amended
and (y) the Board of Directors of the Company shall have concluded, after
considering the results of such negotiations and the revised proposal made by
Parent, if any, that any Superior Proposal giving rise to the Company's notice
continues to be a Superior Proposal, (iv) such termination is within five (5)
Business Days following the five (5) Business Day period referred to above and
(v) no termination pursuant to this Section 7.1(g) shall be effective unless the
Company shall simultaneously make the payment required by Section 7.3(b); or
(h) by written notice by Parent or the Company, if the
Requisite Company Vote shall not have been obtained at the Special Meeting or at
any adjournment or postponement hereof.
SECTION 7.2 Effect of Termination. If this Agreement is terminated
and the Merger is abandoned pursuant to Section 7.1 hereof, this Agreement,
except for the provisions of Sections 5.3(b), 7.2, 7.3 and Article VIII hereof,
shall forthwith become void and have no effect, without any liability on the
part of any party or its directors, officers or stockholders. Nothing in this
Section 7.2 shall relieve any party to this Agreement of liability for any
willful breach of this Agreement.
SECTION 7.3 Fees and Expenses.
(a) All fees, costs and expenses incurred in connection with
the Merger, this Agreement and the transactions contemplated by this Agreement
(including, without limitation, legal, accounting and investment banking fees
and expenses) (collectively, "Expenses") shall be paid by the party incurring
such Expenses, whether or not the Merger is consummated.
(b) Notwithstanding the foregoing, in the event that this
Agreement is terminated (i) pursuant to Section 7.1(e), (f) or (g) or (ii)
pursuant to Section 7.1(d) or (h) and, with respect to this clause (ii) only,
(x) at the time of termination pursuant to Section 7.1(d) or (h) the conditions
set forth in Section 6.3 have been satisfied and an Acquisition Proposal existed
or has been previously announced and (y) within twelve (12) months after
termination pursuant to Section 7.1(d) or (h) an Acquisition Proposal shall have
been consummated, then the Company shall pay Parent a termination fee of
Fourteen Million United States Dollars ($14,000,000) (the "Termination Fee").
(c) Any amounts payable pursuant to Section 7.3(b) shall be
payable as promptly as practicable following termination of this Agreement (and
in any event no later than two (2) Business Days thereafter) (or, in the case of
7.3(b)(ii), no later than two (2) Business Days after the date on which an
Acquisition Proposal shall have been consummated) by wire transfer of
immediately available funds to an account designated by Parent and, if the
Company is the party seeking to terminate this Agreement, prior to such
termination as a condition to the effectiveness thereof.
(d) The Company acknowledges that the agreements contained in
Section 7.3 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, Parent and Merger Sub would not
have entered into this Agreement. Accordingly, if the Company fails to pay
promptly any amounts due pursuant to Section 7.3, and, in order to obtain such
payment, Parent commences a suit which results in a judgment against the Company
for the fee or expense reimbursement set forth in this Section 7.3, the Company
shall pay to Parent its costs and expenses (including reasonable attorneys' fees
and expenses) in connection with such suit, together with interest from the date
of termination of this Agreement on the amounts so owed at the prime rate of
Chase Manhattan Bank in effect from time to time during such period plus two
percent (2%).
(e) The prevailing party in any legal action undertaken to
enforce this Agreement or any provision hereof shall be entitled to recover from
the other party the costs and expenses (including reasonable attorneys' and
expert witness fees) incurred in connection with such action.
SECTION 7.4 Amendment. To the extent permitted by applicable Law,
this Agreement may be amended by action taken by or on behalf of the Boards of
Directors of the Company, Parent and Merger Sub, at any time before or after
approval of this Agreement by the stockholders of the Company but, after any
such stockholder approval, no amendment shall be made which decreases the Merger
Consideration or which adversely affects the rights of the Company's
stockholders hereunder without the approval of the stockholders of the Company.
This Agreement may not be amended, changed, supplemented or otherwise modified
except by an instrument in writing signed on behalf of all of the parties.
SECTION 7.5 Extension; Waiver; Remedies.
(a) At any time prior to the Effective Time, the parties
hereto, by action taken by or on behalf of the respective Boards of Directors of
the Company, Parent and Merger Sub, may (i) extend the time for the performance
of any of the obligations or other acts of the other parties hereto, (ii) waive
any inaccuracies in the representations and warranties contained herein by any
other applicable party or in any document, certificate or writing delivered
pursuant hereto by any other applicable party or (iii) waive compliance with any
of the agreements or conditions contained herein. Any agreement on the part of
any 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.
(b) All rights, powers and remedies provided under this
Agreement or otherwise available in respect hereof at law or in equity shall be
cumulative and not alternative, and the exercise of any thereof by any party
shall not preclude the simultaneous or later exercise of any other such right,
power or remedy by such party. The failure of any party hereto to exercise any
rights, power or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and any custom or practice of the
parties at variance with the terms hereof, shall not constitute a waiver by such
party of its right to exercise any such or other right, power or remedy or to
demand such compliance.
ARTICLE VIII
MISCELLANEOUS
-------------
SECTION 8.1 Definitions.
(a) Definitions shall apply equally to both the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. All
references herein to Articles, Sections and Exhibits shall be deemed to be
references to Articles and Sections of, and Exhibits to, this Agreement unless
the context shall otherwise require. All Exhibits attached hereto shall be
deemed incorporated herein as if set forth in full herein and, unless otherwise
defined therein, all terms used in any Exhibit shall have the meaning ascribed
to such term in this Agreement. The words "include," "includes" and "including"
shall be deemed to be followed by the phrase "without limitation." The words
"hereof," "herein" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. Unless otherwise expressly provided herein, any
agreement, instrument or statute defined or referred to herein or in any
agreement or instrument that is referred to herein means such agreement,
instrument or statute as from time to time amended, modified or supplemented,
including (in the case of agreements or instruments) by waiver or consent and
(in the case of statutes) by succession of comparable successor statutes and
references to all attachments thereto and instruments incorporated therein. For
the purposes of this Agreement, the following terms shall have the following
meanings:
"Acquisition Proposal" shall mean (a) any offer or proposal,
or any indication of interest in making an offer or proposal, made to the
Company, any Subsidiary, affiliate or Representative by a Person or group at any
time which is structured to permit such Person or group to acquire, directly or
indirectly, beneficial ownership of at least twenty percent (20%) of the assets
of the Company and its Subsidiaries taken as a whole, or at least twenty percent
(20%) of the outstanding shares of capital stock of the Company pursuant to a
merger, consolidation or other business combination, joint venture, dissolution,
liquidation, sale of shares of capital stock, sale of assets, tender offer or
exchange offer or similar transaction, including any single or multi-step
transaction or series of related transactions, in each case other than the
Merger and (b) any offer or proposal made in the context of a proxy contest with
respect to any of the foregoing.
"Antitrust Laws" means the HSR Act, the Xxxxxxx Act, as
amended, the Xxxxxxx Act, as amended, the Federal Trade Commission Act, as
amended, and any other United States federal or state or foreign statutes,
rules, regulations, orders, decrees, administrative or judicial doctrines or
other laws that are designed to prohibit, restrict or regulate actions having
the purpose or effect of monopolization or restraint of trade.
"affiliate" and "associate" shall have the meanings given to
such terms in Rule 12b-2 under the Exchange Act.
"beneficial ownership" shall have the meaning given to such
term in Rule 13d-3 under the Exchange Act.
"Business Day" shall have the meaning given to such term in
Rule 14d-1(g)(3) under the Exchange Act.
"Company Rights Plan" means Stockholder Protection Rights
Agreement, dated as of August 12, 1999, between the Company and American Stock
Transfer & Trust Company, as Rights Agent.
"Company Intellectual Property" shall mean all Intellectual
Property owned by the Company and/or used in connection with the business of the
Company as presently conducted or contemplated.
"Copyrights" means, as they exist in any country in the world
in which the Company has any licensee or sublicensee of its Software products,
copyrights and mask works, including all renewals and extensions thereof,
copyright registrations and applications for registration thereof, and
non-registered copyrights.
"Environmental Law" shall mean any statute, law, ordinance,
rule, regulation, order, judgment or decree applicable to the Company or any of
its Subsidiaries relating to (i) pollution or the protection or preservation of
the environment or natural resources, (ii) Releases or threatened Releases, and
(iii) the management (including use, treatment, handling, storage, disposal,
transportation, recycling or remediation) of any hazardous, toxic, dangerous or
industrial substance, chemical or other material or (iv) employee health and
safety.
"Exchange Act" shall mean the Securities Exchange Act of 1934
and the rules and regulations promulgated thereunder, as amended.
"Hazardous Substance" shall mean any substance, pollutant,
contaminant, chemical or other material (including petroleum or any fraction
thereof, asbestos or asbestos-containing material, polychlorinated biphenyls,
urea formaldehyde foam insulation) or waste that is identified or regulated
under any Environmental Law.
"Intellectual Property" means all Copyrights, Internet
Assets, Patents, Software, Trade Secrets and Trademarks.
"Internet Assets" means, as they exist in any country in the
world in which the Company has any licensee or sublicensee of its Software
products, domain names, Internet addresses and other computer identifiers, web
sites, web pages and similar rights and items.
"IP Licenses" means all licenses, sublicenses, distributor
agreements or permissions, including without limitation, the right to receive
royalties or any other consideration relating to Copyrights, Internet Assets,
Patents, Software, Trade Secrets and Trademarks.
"Law" shall mean any federal, state, local or foreign law,
statute, rule, regulation, order, judgment, writ, injunction, ordinance,
administrative order, decree or arbitration award in effect as of the date
hereof or as of the Effective Time.
"Lien" means any lien, pledge, mortgage, deed of trust,
security interest, claim, lease, license, charge, option, right of first
refusal, easement, servitude, transfer restriction, encumbrance or any other
restriction or limitation whatsoever, including, without limitation, the
necessity of obtaining any waiver, consent or permission of any third party.
"Material Adverse Effect" shall mean any material and adverse
effect on the financial condition, business, properties, assets, liabilities,
results of operations or prospects of the Company and its Subsidiaries taken as
a whole or the ability of the Company to consummate the transactions
contemplated by this Agreement in any material respect, other than any change,
effect, event, occurrence, state of facts or development (i) relating to the
U.S. economy in general, (ii) relating to the industry in which the Company
operates that do not affect the Company disproportionately to other Persons in
such industry, (iii) arising out of or resulting from actions taken by the
Company after the date hereof which are consented to by the Parent in accordance
with Section 5.1 of this Agreement, (iv) relating to any regulatory or
legislative change affecting companies in general, or (v) that arises primarily
from changes in the Company's stock price that do not relate to the financial
condition, business properties, assets, liabilities, results of operations or
prospects of the Company and its Subsidiaries taken as a whole.
"Off-the-Shelf Software" means off-the-shelf software as such
term is commonly understood, that is commercially available on a retail basis
for less than $2,000 per CPU and $50,000 in the aggregate, and used solely on
the computers of the Company and the Subsidiaries.
"Patents" means, as they exist in any country in the world in
which the Company has any licensee or sublicensee of its Software products,
patents, patent applications and inventions, designs and improvements described
and claimed therein, patentable inventions and other patent rights (including
any divisions, continuations, continuations-in-part, reissues, reexaminations,
or interferences thereof, whether or not patents are issued on any such
applications and whether or not any such applications are modified, withdrawn,
or resubmitted).
"Person" shall mean any natural person, firm, corporation,
limited liability company, partnership, association, joint venture, Governmental
Entity, labor union, trust, estate or other entity or organization.
"Proxy Statement" shall mean the letter to stockholders,
notice of meeting, proxy statement and form of proxy, or the information
statement, as the case may be, that may be provided to stockholders of the
Company in connection with the Merger (including any amendments or supplements),
and any schedules required to be filed with the SEC in connection therewith, as
from time to time amended or supplemented.
"Release" shall mean any spill, discharge, leak, emission,
disposal, injection, escape, dumping, leaching, dispersal, emanation, migration
or release of any kind whatsoever of any Hazardous Substance in, on, into,
through or onto the environment.
"SEC" shall mean the United States Securities and Exchange
Commission or any similar agency then having jurisdiction to enforce the
Securities Act.
"Securities Act" shall mean the Securities Act of 1933 and the
rules and regulations promulgated thereunder, as amended.
"Self-Help Mechanism" means any back door, time bomb, drop
dead device, or other software routine designed to disable a computer program
automatically with the passage of time or under the positive control of a Person
other than an authorized licensee or owner of a copy of the program or the right
and title in and to the program.
"Software" means, as they exist anywhere in the world,
computer software programs, including, without limitation, all source code,
object code, specifications, designs and documentation related thereto.
"Subsidiary" shall mean, when used with reference to an
entity, any other entity of which securities or other ownership interests having
ordinary voting power, directly or indirectly, to elect a majority of the board
of directors or other persons performing similar functions, or a majority of the
outstanding voting securities of which, are owned directly or indirectly by such
entity.
"Superior Proposal" shall mean any unsolicited, bona fide
written Acquisition Proposal which would result in a Person (or in the case of a
direct merger between a Person and the Company, the stockholders of such Person)
acquiring, directly or indirectly, more than fifty percent (50%) of the voting
power of the Shares or all or substantially all the assets of the Company and
its Subsidiaries, taken as a whole, which the Board of Directors of the Company
(acting by a majority of the entire board) determines in its good faith judgment
(after consultation with its independent financial advisors and independent
legal counsel) taking into account all relevant aspects of the Acquisition
Proposal, that (i) such Acquisition Proposal is more favorable from a financial
point of view to the Company's stockholders than this Agreement and (ii) the
conditions to the consummation of such Acquisition Proposal are reasonably
capable of being satisfied promptly and (iii) financing for such transaction, to
the extent required, is then committed or for which the Board of Directors after
consultation with its outside financial advisor concludes in good faith is
reasonably likely to be available on commercially reasonable terms.
"Tax" shall mean all taxes, charges, fees, levies, imposts,
duties, and other assessments, including without limitation any income,
alternative minimum or add-on tax, estimated, gross income, gross receipts,
sales, use, transfer, transactions, intangibles, ad valorem, value-added,
franchise, registration, title, license, capital, paid-up capital, profits,
withholding, employee withholding, payroll, worker's compensation, unemployment
insurance, social security, employment, excise (including the federal
communications excise tax under Section 4251 of the Code), severance, stamp,
transfer occupation, premium, recording, real property, personal property,
federal highway use, commercial rent, environmental (including taxes under
Section 59A of the Code) or windfall profit tax, custom, duty or other tax, fee
or other like assessment or charge of any kind whatsoever, together with any
interest, penalties, related liabilities, fines or additions to tax that may
become payable in respect thereof imposed by any country, any state, county,
provincial or local government or subdivision or agency thereof.
"Tax Returns" shall mean all returns and reports required to
be filed by the Company and its Subsidiaries (or any of them) with respect to
Taxes.
"threatened" when used with respect to a claim, proceeding,
investigation, dispute action, or other matter, shall mean, if any demand or
statement has been made (orally or in writing) or any notice has been given
(orally or in writing) or if any other event has occurred or any other
circumstance exists, that could reasonably be expected to lead a director or
officer of a company comparable to the Company to conclude that such a claim,
proceeding, dispute, action, or other matter is likely to be asserted,
commenced, taken or otherwise pursued in the future.
"Trade Secrets" means, as they exist anywhere in the world,
trade secrets, know-how, inventions, processes, procedures, databases,
confidential business information, concepts, ideas, designs, research or
development information, techniques, technical information, specifications,
operating and maintenance manuals, engineering drawings, methods, technical
data, discoveries, modifications, extensions, improvements, and other
proprietary information and rights (whether or not patentable or subject to
copyright, mask work, or trade secret protection.
"Trademarks" means, as they exist in any country in the world
in which the Company has any licensee or sublicensee of its Software products,
trademarks, service marks, trade dress, trade names, brand names, designs,
logos, or corporate names, whether registered or unregistered, and all
registrations and applications for registration thereof, and all goodwill
related thereto.
"Unauthorized Code" means any virus, trojan horse, worm, or
other software routines or hardware components designed to permit unauthorized
access; or to disable, erase, or otherwise harm any computer, systems or
Software.
"Warranty Claim" shall mean any claim arising out of any
injury to individuals or property as a result of the ownership, possession or
use of any product manufactured, sold or delivered by the Company or its
Subsidiaries (or products containing products manufactured by the Company or its
Subsidiaries).
(b) As used herein, the following terms shall have the
meanings ascribed to them in the Section of this Agreement opposite each such
term:
Term Section
---- -------
Agreement Preamble
Authorizations 3.13
Certificate of Merger 1.3
Certificates 2.3(b)
Claim 3.10
Closing 1.2
Closing Date 1.2
Code 2.7
Common Stock 2.1(a)
Company Preamble
Company Permits 3.12
Company SEC Report 3.5(a)
Company Securities 3.2(a)
Constituent Corporations 1.1
Copyright Office 5.1(x)
Corporation Law 1.1
Disclosure Letter Preamble to Article III
Dissenting Shares 2.5(a)
Effective Time 1.3
Employee Benefit Plans 3.9(a)
Encumbrances 3.15(a)
ERISA 3.9(a)
ERISA Affiliates 3.9(c)
Excluded Shares 2.1(b)
Expenses 7.3(a)
Existing Stock Options 2.4(a)
Existing Warrants 2.4(c)
Financial Statements 3.5(b)
GAAP 3.5(b)
Governmental Entity 3.4(a)
HSR Act 3.4(a)
Letter of Transmittal 2.3(b)
Merger 1.1
Merger Consideration 2.1(a)
Merger Sub Preamble
Option Consideration 2.4(a)
Parent Preamble
Parent Benefit Plan 5.10(a)
Paying Agent 2.3(a)
Payment Fund 2.3(a)
Potential Acquirer 5.2(a)
PTO 5.1(x)
Real Property Leases 3.15(b)
Representatives 5.2(a)
Requisite Company Vote 3.24
Rights 2.1(a)
Scheduled Contract 3.16(a)
Shares 2.1(a)
Special Meeting 5.6(a)
Stock Option Plans 2.4(a)
Subsidiary Securities 3.2(b)
Surviving Corporation 1.1
Termination Fee 7.3(b)
Voting Agreement Recitals
WARN 3.9(j)
Warrant Consideration 2.4(c)
SECTION 8.2 Survival of Representations and Warranties. The
representations and warranties made in Articles III and IV shall not survive
beyond the Effective Time. This Section 8.2 shall not limit any covenant or
agreement of the parties hereto that by its terms contemplates performance after
the Effective Time.
SECTION 8.3 Entire Agreement; Assignment. This Agreement, the
Disclosure Letter and the Confidentiality Agreement constitute the entire
agreement between the parties with respect to subject matter hereof and
supersede all other prior agreements and understandings, both written and oral,
between the parties with respect to subject matter hereof. The Agreement shall
not be assigned by any party by operation of law or otherwise without the prior
written consent of the other parties; provided, however, that Parent or Merger
Sub may assign any of their respective rights and obligations to any direct or
indirect Subsidiary of Parent, in which event all references herein to Merger
Sub shall be deemed references to such other Subsidiary except that all
representations and warranties herein with respect to Merger Sub as of the date
of this Agreement shall be deemed representations and warranties made with
respect to such other Subsidiary as of the date of such designation.
SECTION 8.4 Validity. Whenever possible, each provision or portion
of any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable Law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable Law or rule in any jurisdiction such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
SECTION 8.5 Notices. All notices, requests, claims, demands and
other communications hereunder shall be given (and shall be deemed to have been
duly received if given) by hand delivery or overnight courier in writing or by
facsimile transmission with confirmation of receipt of a legible copy, as
follows:
(a) if to Parent or Merger Sub:
Pitney Xxxxx Inc.
Xxx Xxxxxxxx Xxxx, XXX 00-00
Xxxxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
with a copy to:
Pitney Xxxxx Inc.
Xxx Xxxxxxxx Xxxx, XXX 00-00
Xxxxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
Attention: Senior Vice President & General Counsel
and a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxx, Esq.
(b) if to the Company:
Group 1 Software, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
Attention: President and Chief Executive Officer
with a copy to:
Cadwalader, Xxxxxxxxxx & Xxxx LLP
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxxx, Esq.
or to such other address as the Person to whom notice is given may have
previously furnished to the others in writing in the mariner set forth above.
SECTION 8.6 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 LAW PRINCIPLES THEREOF.
SECTION 8.7 Jurisdiction. All actions brought, arising out of, or
related to the transactions contemplated hereby shall be brought in the federal
or state courts of the State of Delaware. Each party hereby irrevocably submits
to the exclusive jurisdiction of the federal or state courts of the State of
Delaware in respect of any claim relating to the interpretation and enforcement
of the provisions of this Agreement, and hereby waives, and agrees not to
assert, as a defense in any action, suit or proceeding in which any such claim
is made that it is not subject thereto or that such action, suit or proceeding
may not be brought or is not maintainable in such courts or that the venue
thereof may not be appropriate or that this Agreement may not be enforced in or
by such courts. The parties hereby consent to and grant any such court
jurisdiction over such parties and over the subject matter of any such claim and
agree that mailing of process or other papers in connection with any such
action, suit or proceeding in the manner provided in Section 8.5, or in such
other manner as may be permitted by Law, shall be valid and sufficient thereof.
SECTION 8.8 Waiver of Jury Trial. Each party acknowledges and agrees
that any controversy which may arise under this Agreement is likely to involve
complicated and difficult issues, and therefore each party hereby irrevocably
and unconditionally waives any right such party may have to a trial by jury.
Each party certifies and acknowledges that (i) no Representative 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, (ii) such
party understands and has considered the implications of this waiver, (iii) such
party makes this waiver voluntarily, and (iv) such party has been induced to
enter into this Agreement by, among other things, the mutual waivers, agreements
and certifications in this Section 8.8.
SECTION 8.9 Descriptive Headings. The descriptive headings herein
are inserted for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
SECTION 8.10 Parties in Interest. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to confer upon any other Person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement, except for Section 5.5 (which are intended to be for the benefit of
the individuals referred to therein, and may be enforced by any such
individuals).
SECTION 8.11 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of which,
taken together, shall constitute one and the same agreement.
SECTION 8.12 Further Assurances. Each of the parties shall execute
such documents and perform such further acts (including, without limitation,
obtaining any consents, exemptions, authorizations or other actions by, or
giving any notices to, or making any filings with, any Governmental Entity or
any other Person) as may be reasonably required or desirable to carry out or to
perform the provisions of this Agreement.
SECTION 8.13 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any of the provisions of this
Agreement were not to be performed in accordance with the terms hereof and that
the parties shall be entitled to specific performance of the terms hereof in
addition to any other remedies at law or in equity.
[REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed on its behalf by its officers thereunto duly authorized, all at or
on the day and year first above written.
PITNEY XXXXX INC.
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Executive VP & Group
President--Enterprise Solutions
GERMANIUM ACQUISITION CORPORATION
By: /s/ Leslie Abi-Karam
---------------------------------------
Name: Leslie Abi-Karam
Title: President
GROUP 1 SOFTWARE, INC.
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Executive Officer