Exhibit 2.2
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
DIGITAL INSIGHT CORPORATION,
CALABASAS ACQUISITION CORP.
AND
1VIEW NETWORK CORPORATION
Dated as of April 8, 2000
ARTICLE I
THE MERGER
1.1 The Merger 1
1.2 Effective Time; Closing 2
1.3 Effect of the Merger 2
1.4 Certificate of Incorporation; Bylaws 2
1.5 Directors and Officers 2
1.6 Effect on Capital Stock 2
1.7 Surrender of Certificates 4
1.8 No Further Ownership Rights in Company Stock 5
1.9 Lost, Stolen or Destroyed Certificates 6
1.10 Tax Consequences 6
1.11 Taking of Necessary Action; Further Action 6
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF COMPANY
2.1 Corporate Organization 6
2.2 Capitalization of Company 7
2.3 No Subsidiaries and Equity Investments 7
2.4 Corporate Authority, Etc. 7
2.5 No Violation 8
2.6 Consents and Approvals 8
2.7 Financial Statements; Absence of Undisclosed
Liabilities 8
2.8 Absence of Certain Changes or Events; No Material
Adverse Change 8
2.9 Tax Matters 9
2.10 Title to Property 10
2.11 Compliance with Laws 10
2.12 Litigation 10
2.13 Contracts 10
2.14 Employee Plans: ERISA 11
2.15 Intellectual Property 13
2.16 Restrictions on Business Activities 14
2.17 Brokers and Finders 14
2.18 Environmental Matters 14
2.19 Accounts Receivable 14
2.20 Transactions with Affiliates 15
2.21 Board Approval 15
2.22 Vote Required 15
2.23 California Hearing 15
2.24 Tax Matters 15
2.25 Section 203 of the DGCL Not Applicable 15
2.26 No Implied Representation 15
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
3.1 Organization and Qualification; Subsidiaries 16
3.2 Certificate of Incorporation and Bylaws 16
3.3 Capitalization 16
3.4 Authority Relative to this Agreement 17
3.5 No Conflict; Required Filings and Consents 17
3.6 SEC Filings; Financial Statements 18
3.7 No Undisclosed Liabilities 18
3.8 Absence of Certain Changes or Events 19
3.9 Brokers 19
3.10 Board Approval 19
3.11 Tax Matters 19
3.12 Merger Sub Operations 19
3.13 California Hearing 19
3.14 No Implied Representation 19
ARTICLE IV
CONDUCT PRIOR TO THE EFFECTIVE TIME
4.1 Conduct of Business by Company 19
4.2 Conduct of Business by Parent 21
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 California Hearing 22
5.2 Shareholder Consent 23
5.3 Confidentiality; Access to Information 23
5.4 No Solicitation 23
5.5 Public Disclosure 24
5.6 Commercially Reasonable Efforts; Notification 24
5.7 Third Party Consents 26
5.8 Stock Options 26
5.9 Form S-8 26
5.10 Employees 26
5.11 Affiliates 27
5.12 Stock Restriction Agreement 27
5.13 Existing Bridge Loans 27
ARTICLE VI
CONDITIONS TO THE MERGER
6.1 Conditions to Obligations of Each Party to Effect
the Merger 27
6.2 Additional Conditions to Obligations of Company 28
6.3 Additional Conditions to the Obligations of Parent
and Merger Sub 29
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1 Termination 30
7.2 Notice of Termination; Effect of Termination 31
7.3 Fees and Expenses 31
7.4 Amendment 32
7.5 Extension; Waiver 32
ARTICLE VIII
GENERAL PROVISIONS
8.1 Notices 33
8.2 Interpretation; Definitions 33
8.3 Counterparts 34
8.4 Entire Agreement; Third Party Beneficiaries 34
8.5 Severability 34
8.6 Other Remedies; Specific Performance 34
8.7 Governing Law 35
8.8 Rules of Construction 35
8.9 Assignment 35
INDEX OF EXHIBITS
Exhibit A-1 List of Persons to Sign Shareholder Agreement A-1
Exhibit A-2 Form of Shareholder Agreement A-2
Exhibit B Form of Escrow Agreement B-1
Exhibit C Form of Company Affiliate Agreement C-1
Exhibit D Form of Non-Compete Agreement D-1
Exhibit E Form of Certificate of Incorporation of Surviving
Corporation E-1
Exhibit F Form of Certificate of Merger F-1
Exhibit G-1 List of Individuals to Sign Employment
Agreements G-1
Exhibit G-2 Form of Employment Agreement G-2
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement") is
made and entered into as of April 8, 2000, among Digital Insight
Corporation, a Delaware corporation ("Parent"), Calabasas
Acquisition Corp., a Delaware corporation and a wholly owned
subsidiary of Parent ("Merger Sub"), and 1View Network
Corporation, a Delaware corporation ("Company").
RECITALS
A. Upon the terms and subject to the conditions of
this Agreement and in accordance with the Delaware General
Corporation Law ("DGCL"), Parent and Company intend to enter into
a business combination transaction.
B. The Board of Directors of Company has
(i) determined that the Merger (as defined in Section 1.1) is
consistent with, and in furtherance of, the long-term business
strategy of Company and fair to, and in the best interests of,
Company and its shareholders, (ii) approved this Agreement, the
Merger and the other transactions contemplated by this Agreement
and (iii) determined to recommend that the shareholders of
Company adopt and approve this Agreement and approve the Merger.
C. The Board of Directors of Parent has
(i) determined that the Merger is consistent with, and in
furtherance of, the long-term business strategy of Parent and is
fair to, and in the best interests of, Parent and its
stockholders, and (ii) approved this Agreement, the Merger and
the other transactions contemplated by this Agreement.
D. As a condition and inducement to Parent's
willingness to enter into this Agreement, the shareholders of
Company listed on Exhibit A-1 are entering into shareholder
agreements in the form attached hereto as Exhibit A-2 (the
"Shareholder Agreements").
E. The parties intend, by executing this Agreement,
to adopt a plan of reorganization within the meaning of Section
368 of the Internal Revenue Code of 1986, as amended (the
"Code").
NOW, THEREFORE, in consideration of the covenants,
promises and representations set forth herein, and for other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. At the Effective Time (as defined in Section
1.2) and subject to and upon the terms and conditions of this
Agreement and the applicable provisions of the DGCL, Merger Sub
shall be merged with and into Company (the "Merger"), the
separate corporate existence of Merger Sub shall cease and
Company shall continue as the surviving corporation. Company as
the surviving corporation after the Merger is hereinafter
sometimes referred to as the "Surviving Corporation."
1.2 Effective Time; Closing. Subject to the provisions of this
Agreement, the parties hereto shall cause the Merger to be
consummated by filing a Certificate of Merger in the form
attached hereto as Exhibit F with the Secretary of State of the
State of Delaware in accordance with the relevant provisions of
DGCL (the "Merger Documents") (the time of such filing being the
"Effective Time") as soon as practicable on or after the Closing
Date (as herein defined). The closing of the Merger (the
"Closing") shall take place at the offices of O'Melveny & Xxxxx
LLP, 000 Xxxxx Xxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx, at a time
and date to be specified by the parties, which shall be no later
than the second business day after the satisfaction or waiver of
the conditions set forth in Article VI, or at such other time,
date and location as the parties hereto agree in writing (the
"Closing Date").
1.3 Effect of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in this Agreement and the
applicable provisions of the DGCL.
1.4 Certificate of Incorporation; Bylaws.
(a) At the Effective Time, the Certificate of Incorporation of
the Surviving Corporation shall be amended and restated in the
form attached hereto as Exhibit E.
(b) The Bylaws of Merger Sub, as in effect immediately prior to
the Effective Time, shall be, at the Effective Time, the Bylaws
of the Surviving Corporation until thereafter amended.
1.5 Directors and Officers. The initial directors of the
Surviving Corporation shall be the directors of Merger Sub
immediately prior to the Effective Time, until their respective
successors are duly elected or appointed and qualified. The
initial officers of the Surviving Corporation shall be the
officers of Merger Sub immediately prior to the Effective Time,
until their respective successors are duly appointed.
1.6 Effect on Capital Stock. Subject to the terms and
conditions of this Agreement, at the Effective Time, by virtue of
the Merger and without any action on the part of Merger Sub,
Company or the holders of any of the following securities, the
following shall occur:
(a) Conversion of Company Stock. Each share of the Company's
Common Stock, $.001 par value (the "Company Stock"), issued and
outstanding immediately prior to the Effective Time, other than
Dissenting Shares (as defined in Section 1.6(f)), will be
canceled and extinguished and automatically converted (subject to
Sections 1.6(f) and (g)) and upon surrender of the certificate
representing such share of Company Stock in the manner provided
in Section 1.7 (or in the case of a lost, stolen or destroyed
certificate, upon delivery of an affidavit (and indemnity, if
required, pursuant to Section 1.9), into the right to receive (i)
cash equal to $5,000,000 divided by the total number of shares of
Company Stock outstanding immediately prior to the Effective
Time, and (ii) shares of the Common Stock, $0.001 par value per
share, of Parent (the "Parent Common Stock") equal to 1,100,000
shares (less the Holdback Shares (as defined in Section 1.6(b))
divided by the total number of Fully Diluted Shares (as defined
below) (the "Stock Exchange Ratio"). The total number of "Fully
Diluted Shares" shall be the sum of all shares of Company Stock
outstanding immediately prior to the Effective Time plus the
number of shares of Company Stock then subject to outstanding
options, warrants, subscriptions
or securities convertible into Company Stock. If at the
Effective Time the value of Parent Common Stock has decreased
to an extent that the tax opinion required by Section 6.1(d)
cannot be given, the amount of cash to be received by the
shareholders of Company will be reduced to an amount such that
the tax opinion required by Section 6.1(d) can be given, and
the Stock Exchange Ratio will be recalculated by
adding to the 1,100,000 shares referred to in clause (ii) above a
number of shares of Parent Common Stock equal to the amount of
the reduction in cash divided by $54.55.
The Stock Exchange Ratio with respect to the Parent Common
Stock shall be adjusted to reflect fully the effect of any stock
split, stock dividend (including any dividend or distribution of
stock convertible into Parent Common Stock), reorganization,
recapitalization or other similar change with respect to Parent
Common Stock after the date hereof and prior to the Effective
Time.
(b) Escrow Agreement. Parent shall establish and maintain an
escrow (the "Escrow Account") comprised of shares of Parent
Common Stock equal to 10% of the shares of Parent Common Stock
issued in exchange for Company Stock outstanding immediately
prior to the Effective Time (the "Holdback Shares"), and shall
designate and appoint U.S. Trust Company of California or such
other third party escrow agent that is mutually and reasonably
acceptable to Parent and the Shareholders' Agent (as defined in
the Shareholders Agreement) in connection therewith (the "Escrow
Agent") to serve in accordance with the Escrow Agreement attached
as Exhibit B hereto (the "Escrow Agreement") to be entered into
among Parent, the Escrow Agent and the Shareholders' Agent at
Closing. In the absence of any change in tax treatment under the
Code or other applicable tax law, any disbursements of Holdback
Shares to Parent or any other indemnified party in satisfaction
of the indemnification obligations of the former shareholders of
Company pursuant to Section 2(a)(i) of the Shareholder Agreement
shall be treated as a reduction of the aggregate purchase price
under this Agreement.
(c) Cancellation of Parent-Owned Stock. Each share of Company
Stock held by Company or owned by Merger Sub, Parent or any
direct or indirect wholly owned subsidiary of Company or of
Parent immediately prior to the Effective Time shall be canceled
and extinguished without any conversion thereof.
(d) Stock Options. At the Effective Time, all options to
purchase Company Stock then outstanding under Company's 1999
Stock Plan, as amended (the "Company Option Plan") shall be
assumed by Parent in accordance with Section 5.8 hereof.
(e) Capital Stock of Merger Sub. Each share of Common Stock,
$0.01 par value per share, of Merger Sub (the "Merger Sub Common
Stock") issued and outstanding immediately prior to the Effective
Time shall be converted into one validly issued, fully paid and
nonassessable share of Common Stock, $0.01 par value per share,
of the Surviving Corporation. Each certificate evidencing
ownership of shares of Merger Sub Common Stock shall evidence
ownership of such shares of capital stock of the Surviving
Corporation.
(f) Dissenters' Rights. Notwithstanding anything in this
Agreement to the contrary, shares of Company Stock outstanding
immediately prior to the Effective Time and constituting
"dissenting shares" (as defined in Section 1300 of the California
General
Corporation Law (the "CGCL") ("Dissenting Shares"), shall
not be converted into the right to receive Parent Common Stock,
as provided in Section 1.6(a) hereof, unless and until such
holder fails to perfect or effectively withdraws or otherwise
loses his or her right to appraisal and payment under the CGCL.
If, after the Effective Time, any such holder fails to perfect or
effectively withdraws or loses his or her right to appraisal,
such Dissenting Shares thereupon shall be treated as if they had
been converted as of the Effective Time into the right to receive
Parent Common Stock to which such holder is entitled, without
interest thereon. Company shall give Parent (i) prompt written
notice of any demands received by Company for appraisal of any
shares of Company Stock, attempted withdrawals of such demands
and any other instruments served, pursuant to applicable law
received by Company relating to dissenters' rights and (ii) the
opportunity, after consultation with Company, to direct all
negotiations with respect to dissenters under the CGCL. Company
shall not, without the prior written consent of Parent (unless
such payment is pursuant to a court order in which event Company
shall give Parent notice of any such court order or request
therefor as soon as practicable), which consent shall not be
unreasonably withheld or delayed, voluntarily make any payment
with respect to Dissenting Shares, offer to settle or settle any
such demands or approve any withdrawal of such demands.
(g) Fractional Shares. No fraction of a share of Parent
Common Stock will be issued by virtue of the Merger, but in lieu
thereof each holder of shares of Company Stock who would otherwise be
entitled to a fraction of a share of Parent Common Stock (after
aggregating all fractional shares of Parent Common Stock that
otherwise would be received by such holder) shall, upon surrender
of such holder's Certificate(s) (as defined in Section 1.7(b))
receive from Parent an amount of cash (rounded to the nearest
whole cent), without interest, equal to the product of (i) such
fraction, multiplied by (ii) the average closing price of Parent
Common Stock for the ten trading days immediately preceding the
last full trading day prior to the Effective Time, as reported on
the Nasdaq National Market System ("Nasdaq").
1.7 Surrender of Certificates.
(a) Exchange Agent. Parent shall act as the exchange agent
in the Merger.
(b) Exchange Procedures. As soon as practicable after the
Effective Time, but in no event later than ten days after the
Effective Time, Parent shall mail to each holder of record (as of
the Effective Time) of a certificate or certificates (the
"Certificates"), which immediately prior to the Effective Time
represented outstanding shares of Company Stock whose shares were
converted into the right to receive cash and shares of Parent
Common Stock pursuant to Section 1.6, cash in lieu of any
fractional shares pursuant to Section 1.6(g) and any dividends or
other distributions pursuant to Section 1.7(c), (i) a letter of
transmittal in customary form (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates
shall pass, only upon delivery of the Certificates to Parent and
shall contain such other provisions as Parent may reasonably
specify) and (ii) instructions for use in effecting the surrender
of the Certificates in exchange for certificates representing
shares of Parent Common Stock, cash in lieu of any fractional
shares pursuant to Section 1.6(g) and any dividends or other
distributions pursuant to Section 1.7(c). Upon surrender of the
Certificates for cancellation to Parent or to such other agent or
agents as may be appointed by Parent, together with such letter
of transmittal, duly completed and validly executed in accordance
with the instructions thereto, the holders of such Certificates
shall be entitled to receive in exchange therefor cash and
certificates representing the
number of whole shares of Parent Common Stock into which their
shares of Company Stock were converted at the Effective Time,
payment in lieu of fractional shares which such holders have
the right to receive pursuant to Section 1.6(g) and any dividends or
distributions payable pursuant to Section 1.7(c), and the Certificates
so surrendered shall forthwith be canceled. Until so surrendered,
outstanding Certificates will be deemed from and after the Effective
Time, for all corporate purposes, subject to Section 1.7(c) as to the
payment of dividends, to evidence only the right to receive such
amount of cash and ownership of the number of full shares of
Parent Common Stock into which such shares of Company Stock shall
have been so converted and the right to receive an amount in cash
in lieu of the issuance of any fractional shares in accordance
with Section 1.6(g) and any dividends or distributions payable
pursuant to Section 1.7(c).
(c) Distributions with Respect to Unexchanged Shares. No
dividends or other distributions declared or made after the date
of this Agreement with respect to Parent Common Stock with a
record date after the Effective Time will be paid to the holders
of any unsurrendered Certificates with respect to the shares of
Parent Common Stock represented thereby until the holders of
record of such Certificates shall surrender such Certificates.
Subject to applicable law, following surrender of any such
Certificates, Parent shall deliver to the record holders thereof,
without interest, certificates representing whole shares of
Parent Common Stock issued in exchange therefor along with
payment in lieu of fractional shares pursuant to Section 1.6(h)
hereof and the amount of any such dividends or other
distributions with a record date after the Effective Time payable
with respect to such whole shares of Parent Common Stock.
(d) Transfers of Ownership. If certificates representing
shares of Parent Common Stock are to be issued in a name other than that
in which the Certificates surrendered in exchange therefor are
registered, it will be a condition of the issuance thereof that
the Certificates so surrendered will be properly endorsed and
otherwise in proper form for transfer and that the persons
requesting such exchange will have paid to Parent or any agent
designated by it any transfer or other taxes required by reason
of the issuance of certificates representing shares of Parent
Common Stock in any name other than that of the registered holder
of the Certificates surrendered, or established to the
satisfaction of Parent or any agent designated by it that such
tax has been paid or is not payable.
(e) No Liability. Notwithstanding anything to the contrary in
this Section 1.7, neither Parent, the Surviving Corporation nor
any party hereto shall be liable to a holder of shares of Parent
Common Stock or Company Stock for any amount properly paid to a
public official pursuant to any applicable abandoned property,
escheat or similar law.
1.8 No Further Ownership Rights in Company Stock. All shares of
Parent Common Stock issued in accordance with the terms hereof
(together with any cash paid in respect thereof pursuant to
Sections 1.6(a), 1.6(g) and 1.7(c)) shall be deemed to have been
issued in full satisfaction of all rights pertaining to such
shares of Company Stock, and there shall be no further
registration of transfers on the records of the Surviving
Corporation of shares of Company Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective
Time, Certificates are presented to the Surviving Corporation for
any reason, they shall be canceled and exchanged as provided in
this Article I.
1.9 Lost, Stolen or Destroyed Certificates. In the event that
any Certificates shall have been lost, stolen or destroyed,
Parent shall cause the transfer agent for Parent Common Stock to
issue in exchange for such lost, stolen or destroyed
Certificates, upon the making of an affidavit of that fact by the
holder thereof, cash and certificates representing the shares of
Parent Common Stock into which the shares of Company Stock
represented by such Certificates were converted pursuant to
Section 1.6, cash for fractional shares, if any, as may be
required pursuant to Section 1.6(g) and any dividends or
distributions payable pursuant to Section 1.7(c); provided,
however, that Parent may, in its discretion and as a condition
precedent to the issuance of such certificates representing
shares of Parent Common Stock, cash and other distributions,
require the owner of such lost, stolen or destroyed Certificates
to deliver an indemnity agreement reasonably satisfactory in form
and amount to Company as indemnity against any claim that may be
made against Parent or the Surviving Corporation with respect to
the Certificates alleged to have been lost, stolen or destroyed.
1.10 Tax Consequences. It is intended by the parties hereto that
the Merger shall constitute a reorganization within the meaning
of Section 368 of the Code. The parties hereto adopt this
Agreement as a "plan of reorganization" within the meaning of
Sections 1.368-2(g) and 1.368-3(a) of the United States Income
Tax Regulations. No party shall take a position on any tax return
or reports inconsistent with this Section 1.10, and each party
shall use its commercially reasonable efforts to maintain such
reporting in the context of an audit. Each party shall give the
other parties prompt notice of any challenges or investigations
undertaken by any taxing agency in connection with such reporting
and shall keep such other parties fully informed of all aspects
of such ongoing challenge or investigation.
1.11 Taking of Necessary Action; Further Action. If, at any time
after the Effective Time, any further action is necessary or
desirable to carry out the purposes of this Agreement and to vest
the Surviving Corporation with full right, title and possession
to all assets, property, rights, privileges, powers and
franchises of Company and Merger Sub, the current officers and
directors of Company and Merger Sub will take all such lawful and
necessary action.
ARTICLE X
REPRESENTATIONS AND WARRANTIES OF COMPANY
Except as otherwise disclosed in the Company disclosure
schedule attached hereto (the "Company Schedule"), Company hereby
represents and warrants to Parent and Merger Sub as follows as of
the date hereof:
2.1 Corporate Organization. Company is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Delaware. Company has furnished to Parent a
complete and correct copy of its Certificate of Incorporation and
By-Laws, as amended to the date hereof (the "Company Charter
Documents"). Company has all requisite corporate power and
authority to own or lease its properties and assets and to
conduct its business as now conducted. Company is qualified to
do business as a foreign corporation and is in good standing in
each jurisdiction where the character of the properties owned or
leased by it or the nature of the business conducted by it makes
such qualification necessary, except where the failure to do so
would not have a Material Adverse Effect on Company. As used in
this Agreement, the phrase "Material Adverse Effect on Company"
means (i) as to matters which can
reasonably be quantified in economic terms, any effect which
has resulted in or would reasonably be expected to result in,
with respect to Company, a diminution or decrease in the value
of properties or assets, an increase in liabilities or
obligations (whether accrued, contingent or otherwise), an
adverse change in the business or financial condition, or
any combination thereof involving, individually or in the
aggregate, with respect to the applicable representation
or warranty, more than $150,000, (ii) as to matters which
cannot reasonably be quantified in economic terms,
a material adverse effect on the condition (financial or
otherwise), business, assets, liabilities or results of
operations of Company, or (iii) a material adverse effect on the
ability of Company to consummate the transactions contemplated by
this Agreement; provided, however, that in no event shall any of
the following be deemed, in and of itself, to constitute a
Material Adverse Effect on Company: (i) a change that results
from conditions generally affecting the U.S. economy or the
industry in which Company operates (including laws and
regulations applicable to such industry), (ii) a change that
results from the announcement or pendency of the transactions
contemplated hereby or (iii) a change that results from the
taking of any action required by this Agreement.
2.2 Capitalization of Company. The authorized capital stock of
Company consists of 5,000,000 shares of Company Common Stock. As
of the date hereof, 3,124,041 shares of Company Stock are issued
and outstanding, 1,294,292 shares of Company Stock are reserved
for issuance upon the exercise of outstanding options under the
Company Option Plan, and 505,708 shares of Company Stock are
available for future grants under the Company Option Plan. All
of the outstanding shares of Company Stock have been, and all of
the shares of Company Common Stock to be outstanding as of the
Closing Date will be, duly authorized and validly issued, fully
paid and non-assessable and owned of record and beneficially as
set forth in Section 2.2 of the Company Schedule, free and clear
of any liens, claims, charges, security interests, options or
other legal or equitable encumbrances. Except as set forth in
Section 2.2 of the Company Schedule, there are no outstanding
options, warrants, agreements, conversion rights, preemptive
rights or other rights to subscribe for, purchase or otherwise
acquire any Company Stock or any unissued or treasury shares of
the capital stock of Company which have been issued, granted or
entered into by Company. All outstanding shares of Company Stock
and all outstanding options granted under the Company Stock Plan
have been issued and granted in all material respects in
compliance with applicable securities law and other requirements
of law.
2.3 No Subsidiaries and Equity Investments. Company has no
subsidiaries nor does Company have, or have the right to acquire,
any equity interest or investment in any other entity.
2.4 Corporate Authority, Etc. Company has the corporate power
and authority to enter into this Agreement and to carry out its
obligations hereunder, subject to obtaining the approval of the
Merger by its stockholders. The execution and delivery of this
Agreement and the performance of Company's obligations hereunder
have been duly authorized by the Board of Directors of Company,
and no other corporate proceedings on the part of Company are
necessary to authorize such execution, delivery and performance,
other than the approval of the Merger by Company's its
stockholders in accordance with the DGCL. This Agreement has
been duly executed and delivered by Company and, assuming the due
authorization, execution and delivery hereof by Parent and Merger
Sub, is a valid and legally binding obligation of Company,
enforceable against Company in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization,
receivership, moratorium or other laws relating to or affecting
the
rights and remedies of creditors generally and to general
equitable principles (regardless of whether at law or in equity).
2.5 No Violation. Subject to receipt of the consents, waivers,
authorizations and approvals or the making of the declarations or
filings referred to in Section 2.6 hereof, the execution,
delivery and performance by Company of this Agreement will not
(a) violate any provision of any statute, rule or regulation
applicable to Company or any order, judgment or decree of any
court, governmental or regulatory authority, or arbitrator to
which Company is subject, (b) violate the Company Charter
Documents, (c) violate, conflict with or constitute (or, with due
notice or lapse of time or both, result in) a default under, or
result in the acceleration of or entitle any party to accelerate
(whether after the giving of notice or lapse of time or both) any
obligation under, any provision of any material contract, lease,
loan agreement, mortgage, security agreement, trust indenture,
license or other agreement or instrument to which Company is a
party or by which it is bound, or (d) result in the creation or
imposition of any lien, charge or encumbrance upon or security
interest in any of the properties or assets of Company, that in
the case of clauses (a), (c) or (d) would have a Material Adverse
Effect on Company or prevent the consummation of the Merger.
2.6 Consents and Approvals. Except for the applicable
requirements of federal and state securities laws and the filing
of the Merger Documents as required by the DGCL, no consent,
waiver, authorization or approval of any court, administrative
agency, commission, governmental or regulatory authority (a
"Governmental Entity"), or of any other person or entity, and no
declaration to or filing with any such Governmental Entity, is
required in connection with the execution and delivery of this
Agreement by Company or the performance by Company of its
obligations hereunder, except for those as to which the failure
to make, file, give or obtain would not have a Material Adverse
Effect on Company or prevent the consummation of the Merger.
2.7 Financial Statements; Absence of Undisclosed Liabilities.
Section 2.7 of the Company Schedule sets forth the unaudited
balance sheet of Company as of December 31, 1999, the last day of
Company's most recent fiscal year, together with the related
profit and loss statement for such fiscal year (the "Financial
Statements"). The Financial Statements are complete in all
material respects, and present the financial position and results
of operations of Company as of December 31, 1999 and for the
period then ended in accordance with generally accepted
accounting principles, and comply as to form in all material
respects with applicable accounting requirements, except that the
Financial Statements do not include notes. Except (a) as
reflected, reserved against or otherwise disclosed in the
Financial Statements, (b) liabilities incurred since December 31,
1999 in the ordinary course of business, and (c) liabilities
disclosed in Section 2.7 of the Company Schedule, Company has no
indebtedness or liability that would, individually or in the
aggregate, exceed $150,000.
2.8 Absence of Certain Changes or Events; No Material Adverse
Change. Since December 31, 1999, Company has not taken any
action of a type referred to in Section 4.1 of this Agreement
that would have required the consent of Parent if such action
were to have been taken during the period between the date hereof
and the Closing Date, and there has been no Material Adverse
Effect on Company.
2.9 Tax Matters.
(a) For purposes of this Agreement, "Tax" or "Taxes" shall
include any and all federal, state, county, local, foreign and
other taxes, assessments and other governmental charges,
including, without limitation, income, gross receipts, capital
stock, franchise, profits, employee and payroll related,
withholding, foreign withholding, social security, unemployment,
disability, real property, personal property, stamp, excise,
occupation, sales, use, transfer, value added, alternative
minimum or estimated taxes, including any interest, penalties or
additions to tax in respect of the foregoing.
(b) (i) All Tax declarations, reports and returns required to be
filed with respect to Company have been duly and timely filed
(taking into account any valid extensions of time); (ii) such Tax
declarations, reports and returns are complete and correct in all
material respects; (iii) all Taxes shown on such declarations,
reports or returns and on assessments received with respect
thereto have been paid in full; and (iv) there are no material
unresolved claims for Taxes with respect to which Company is or
may be liable, except as may have been provided for in a reserve
on the Financial Statements.
(c) No deficiencies for any Taxes for which Company is or may be
liable have been asserted or assessed or, to the knowledge of
Company, proposed (and are currently pending).
(d) No waivers of the time to assess any Taxes for which Company
is or may be liable have been given or requested.
(e) Company is not a party to any pending action or proceeding
before any court or any other governmental or regulatory
authority for the assessment or collection of any Taxes.
(f) There are no liens with respect to Taxes (except for liens
with respect to property taxes not yet due) upon any of the
properties or assets of Company.
(g) Company as of the Effective Time will have withheld with
respect to its employees all federal and state income Taxes,
Taxes pursuant to the Federal Insurance Contribution Act, Taxes
pursuant to the Federal Unemployment Tax Act and other Taxes
required to be withheld, except such Taxes which are not material
to Company.
(h) There is no contract, agreement, plan or arrangement to
which Company is a party as of the date of this Agreement,
including but not limited to the provisions of this Agreement,
covering any employee or former employee of Company that,
individually or collectively, would reasonably be expected to
give rise to the payment of any amount that would not be
deductible pursuant to Sections 280G, 404 or 162(m) of the Code.
There is no contract, agreement, plan or arrangement to which
Company is a party or by which it is bound to compensate any
individual for excise taxes paid pursuant to Section 4999 of the
Code.
(i) Company has not filed any consent agreement under Section
341(f) of the Code or agreed to have Section 341(f)(2) of the
Code apply to any disposition of a subsection (f) asset (as
defined in Section 341(f)(4) of the Code) owned by Company.
(j) Company is not party to nor has any obligation under any tax-
sharing, tax indemnity or tax allocation agreement or
arrangement.
(k) Company has not distributed the stock of any corporation in
a transaction satisfying the requirements of Section 355 of the
Code. No Company Stock has been distributed in a transaction
satisfying the requirements of Section 355 of the Code.
2.10 Title to Property. Company does not own any real
property. Except as set forth in Schedule 2.10 of the Company
Schedule, Company has good title to all of its material
properties and assets, free and clear of all liens, charges and
encumbrances except liens reflected in the Financial Statements,
or which have arisen in the ordinary course of business since the
date of the Financial Statements, liens for taxes not yet due and
payable and such liens or other imperfections of title which
would not, individually or in the aggregate, have a Material
Adverse Effect on Company. All leases pursuant to which Company
leases from others material real or personal property are in full
force and effect, and Company is not in default under any of such
leases nor is there any event which, with notice or lapse of
time, or both, would constitute a default by Company under any of
such leases except for any such default as would not have a
Material Adverse Effect on Company.
2.11 Compliance with Laws. The business and operations of
Company are in compliance with all laws, regulations, rules,
judgments, orders and decrees applicable thereto, except where
the failure so to comply would not have a Material Adverse Effect
on Company.
2.12 Litigation. There are no actions, suits, proceedings
or investigations pending or, to the knowledge of Company,
threatened before any court, governmental or regulatory authority
or arbitrator, against Company which would reasonably be expected
to interfere with the consummation of the Merger or to have a
Material Adverse Effect on Company. Neither Company nor any of
its assets or properties is subject to any order, judgment or
decree of any court, governmental or regulatory authority or
arbitrator which would have a Material Adverse Effect on Company.
2.13 Contracts. Except as set forth in Section 2.13 of the
Company Schedule Company is not a party to or bound by:
(a) any employment or consulting agreement, contract or
commitment with any officer, director or employee, other than
those that are terminable by Company on no more than thirty (30)
days' notice without liability or financial obligation to
Company;
(b) any agreement or plan, including, without limitation, any
stock option plan, stock appreciation right plan or stock
purchase plan, any of the benefits of which will be increased, or
the vesting of benefits of which will be accelerated, by the
occurrence of any of the transactions contemplated by this
Agreement or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated
by this Agreement;
(c) any agreement of indemnification or any guaranty other than
any agreement of indemnification entered into in connection with
the sale or license of software products in the ordinary course
of business;
(d) any agreement, contract or commitment currently in force
relating to the disposition or acquisition by Company after the
date of this Agreement of a material amount of assets not in the
ordinary course of business or pursuant to which Company has any
material ownership interest in any corporation, partnership,
joint venture or other business enterprise;
(e) any mortgages, indentures, guarantees, loans or credit
agreements, security agreements or other agreements or
instruments relating to the borrowing of money or extension of
credit;
(f) any settlement agreement entered into within five (5) years
prior to the date of this Agreement;
(g) any contracts or agreements that limit or restrict Company,
or to Company's knowledge, any of its officers or key employees,
from engaging in any business and any contracts or agreements
that limit or restrict anyone other than Company's employees or
consultants from competing with Company;
(h) any contract, agreement or commitment requiring Company to
register the resale of its capital stock or securities under
federal or state securities laws;
(i) any powers of attorney or comparable delegations of
authority granted by Company; or
(j) any other agreement, contract or commitment that has a value
of $25,000 or more individually.
Neither Company, nor to Company's knowledge any other
party to a Company Contract (as defined below), is in breach,
violation or default under, and Company has not received written
notice that it has breached, violated or defaulted under, any of
the material terms or conditions of any of the agreements,
contracts or commitments to which Company is a party or by which
it is bound that are required to be disclosed in the Company
Schedule (any such agreement, contract or commitment, a "Company
Contract") in such a manner as would permit any other party to
cancel or terminate any such Company Contract, or would permit
any other party to seek material damages or other remedies (for
any or all of such breaches, violations or defaults, in the
aggregate).
2.14 Employee Plans: ERISA.
(a) Except as set forth in Section 2.14 of the Company Schedule,
Company is not a party to any employment agreement.
(b) Company is not a party to any collective bargaining
agreement.
(c) Set forth in Section 2.14 of the Company Schedule is a list
of (i) all employee benefit plans (as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), and (ii) all profit sharing, stock bonus, pension,
401(k), ESOP, savings, medical, dental, disability, life or
accident insurance, bonus, incentive, stock option, deferred
compensation and other similar compensation or employee benefit
plans, funds,
programs or arrangements, which are maintained for
the benefit of, or relate to any or all employees of Company (the
plans referred to in clauses (i) and (ii) being collectively
referred to as the "Plans"). A complete and correct copy, as of
the date hereof, of each Plan has been furnished to Parent.
(d) None of the Plans is a multiemployer plan within the meaning
of Section 4001 of ERISA.
(e) Each of the Plans is in compliance in all material respects
with the requirements of all applicable statutes, orders and
governmental rules and regulations currently in effect,
including, but not limited to, the Code and ERISA.
(f) There are no audits, inquiries or proceedings pending or, to
the knowledge of Company, threatened by the Internal Revenue
Service (the "IRS") or Department of Labor (the "DOL") with
respect to any Plans. All contributions, reserves or premium
payments required to be made or accrued as of the date hereof to
the Plans have been timely made or accrued. Any Plan intended to
be qualified under Section 401(a) of the Code and each trust
intended to qualify under Section 501(a) of the Code still has a
remaining period of time under applicable Treasury Regulations or
IRS pronouncements in which to apply for such letter and to make
any amendment necessary to obtain such a favorable determination.
Company does not have any commitment to establish any new Plan or
to modify any Plan (except to the extent required by law or to
conform any such Plan to the requirements of any applicable law).
Each Plan can be amended, terminated or otherwise discontinued
after the Effective Time in accordance with its terms.
(g) Neither Company nor any of its Affiliates has at any time
ever maintained, established, sponsored, participated in, or
contributed to any plan subject to Title IV of ERISA or Section
412 of the Code and at no time has Company contributed to or been
requested to contribute to any "multiemployer plan," as such term
is defined in ERISA or to any plan described in Section 413(c) of
the Code. Neither Company nor any officer or director of Company
or any of its subsidiaries is subject to any material liability
or penalty under Sections 4975 through 4980B of the Code or Title
I of ERISA. No "prohibited transaction," within the meaning of
Section 4975 of the Code or Sections 406 and 407 of ERISA, not
otherwise exempt under Section 408 of ERISA, has occurred with
respect to any Plan.
(h) None of the Plans promises or provides medical or other
welfare benefits to any former employee of Company except as
required by COBRA or other applicable law or by the terms of a
written agreement with such former employee, and Company has not
represented, promised or contracted (whether in oral or written
form) to provide such retiree benefits to any employee, former
employee, director, consultant or other person, except to the
extent required by statute.
(i) Company is not bound by or subject to (and none of its
respective assets or properties is bound by or subject to) any
arrangement with any labor union. No employee of Company is
represented by any labor union or covered by any collective
bargaining agreement and, to the knowledge of Company, no
campaign to establish such representation is in progress. There
is no pending or, to the knowledge of Company, threatened labor
dispute involving
Company and any group of its employees nor has
Company experienced any labor interruptions over the past three
(3) years. Company is in compliance in all material respects
with all applicable material foreign, federal, state and local
laws, rules and regulations respecting employment, employment
practices, terms and conditions of employment and wages and
hours.
(j) Except as provided in the Company Stock Plan, neither the
execution and delivery of this Agreement nor the consummation of
the transactions contemplated hereby will (i) result in any
payment (including severance, unemployment compensation, golden
parachute, bonus or otherwise) becoming due to any shareholder,
director or employee of Company under any Plan or otherwise, (ii)
materially increase any benefits otherwise payable under any
Plan, or (iii) result in the acceleration of the time of payment
or vesting of any such benefits.
2.15 Intellectual Property.
(a) Except as set forth in Section 2.15 of the Company
Schedule, Company owns, or is licensed or otherwise possesses legally
enforceable rights to use, all patents, trademarks, trade names,
service marks, domain names, copyrights, and any applications
therefor, maskworks, net lists, schematics, technology, know-how,
trade secrets, algorithms, processes, and computer software
programs or applications ("Intellectual Property") that are used
in the business of Company as currently conducted, other than
such Intellectual Property the loss of use of which would not
have a Material Adverse Effect on Company.
(b) Section 2.15 of the Company Schedule lists (i) all material
patents and patent applications, registered trademarks, trade
names and service marks, registered copyrights, and maskworks,
included in the Intellectual Property, including the
jurisdictions in which each such Intellectual Property right has
been issued or registered or in which any application for such
issuance and registration has been filed, and (ii) all material
licenses and other agreements as to which Company is a party and
pursuant to which any person is authorized to use any
Intellectual Property of Company or Company is authorized to use
any third party patents, trademarks or copyrights, including
software ("Third Party Intellectual Property Rights") which are
incorporated in, are, or form a part of any Company product that
is material to its business, except for commercially available
software used by Company in the ordinary course of business.
(c) To the knowledge of Company, there is no unauthorized use,
disclosure, infringement or misappropriation of any Intellectual
Property rights of Company, or any Intellectual Property right of
any third party to the extent licensed by or through Company, by
any third party.
(d) Company is not in breach of any license or other agreement
relating to the Company's Intellectual Property or Third Party
Intellectual Property Rights, except for such breaches which
would not, individually or in the aggregate, have a Material
Adverse Effect on Company.
(e) Company (i) has not been party to any suit, action or
proceeding which involves a claim of infringement of any patents,
trademarks, service marks, copyrights or violation of any trade
secret or other proprietary right of any third party; or (ii) has
not brought any action, suit or proceeding for infringement of
Intellectual Property or breach of any license
agreement involving Intellectual Property against any third party.
To the knowledge of Company, the design, development, distribution,
marketing, licensing or sale of Company's products or services
does not infringe on any patent, trademark, service xxxx or
copyright of any third party.
(f) Company has secured valid written assignments or work for
hire agreements from all consultants and employees who
contributed to the creation and development of Intellectual
Property of the rights to such contributions that Company does
not already own by operation of law, except such assignments or
work for hire agreements of which the failure to obtain would
not, individually or in the aggregate, have a Material Adverse
Effect on Company.
(g) Company has taken reasonable steps to protect Company's
rights in its confidential information and trade secrets that it
wishes to protect.
2.16 Restrictions on Business Activities. There is no
agreement, judgment, injunction, order or decree binding upon
Company which has or could reasonably be expected to have the
effect of prohibiting or materially impairing the conduct of
business by Company as presently conducted.
2.17 Brokers and Finders. Company has not engaged any
broker, finder or investment banker in connection with this
Agreement, except Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation.
2.18 Environmental Matters. Company (i) has obtained all
applicable permits, licenses, and other authorizations that are
required under Environmental Laws (as defined below) the absence
of which is reasonably likely to have a Material Adverse Effect
on Company; and (ii) is in compliance in all material respects
with all material terms and conditions of such required permits,
licenses and authorizations, and also is in compliance in all
material respects with all Environmental Laws. "Environmental
Laws" means all Federal, state, local and foreign laws and
regulations relating to pollution of the environment (including
ambient air, surface water, ground water, land surface or
subsurface strata) or the protection of human health and worker
safety, including, without limitation, laws and regulations
relating to emissions, discharges, releases or threatened
releases of Hazardous Materials (as defined below), or otherwise
relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous
Materials. "Hazardous Materials" means chemicals, pollutants,
contaminants, wastes, toxic substances, radioactive and
biological materials, asbestos-containing materials, hazardous
substances, petroleum and petroleum products or any fraction
thereof, excluding, however, Hazardous Materials contained in
products typically used for office and janitorial purposes
properly and safely maintained in accordance with Environmental
Laws.
2.19 Accounts Receivable. All accounts receivable of
Company (i) are valid, existing and collectible in a manner
consistent with Company's past practice without resort to legal
proceedings or collection agencies (net of an allowance for
doubtful accounts not to exceed $50,000 in the aggregate), (ii)
represent monies due in the ordinary course of business and (iii)
are not subject to any refunds or adjustments or any defenses,
contractual rights of set-off, assignment, contractual
restrictions, security interests or other encumbrances.
2.20 Transactions with Affiliates. Except as set forth in
Section 2.20 of the Company Schedule, no director, officer or
other Affiliate or "associate" (as such term is defined in Rule
12b-2 under the Securities Exchange Act of 1934 (the "Exchange
Act")) of Company or, to Company's knowledge, any person with
whom any such director, officer or other Affiliate or associate
has any direct or indirect relation by blood, marriage or
adoption, or, to Company's knowledge, any entity in which any
such director, officer or other Affiliate or associate, owns any
beneficial interest (other than a publicly held corporation whose
stock is traded on a national securities exchange or in the over-
the-counter market and less than 1% of the stock of which is
beneficially owned by all such persons) has any interest in (i)
any contract, arrangement or understanding with Company, or
relating to the business or operations of Company, (ii) any loan,
arrangement, understanding, agreement or contract for or relating
to indebtedness of Company, or (iii) any property (real, personal
or mixed), tangible or intangible, used or currently intended to
be used in, the business or operations of Company.
2.21 Board Approval. The Board of Directors of Company has,
as of the date of this Agreement, unanimously (i) approved this
Agreement and has approved the Merger and the other transactions
contemplated hereby, (ii) determined that the Merger is
consistent with and in furtherance of the long-term business
strategy of Company and fair to, and in the best interests of,
Company and its shareholders and (iii) determined to recommend
that the shareholders of Company adopt and approve this Agreement
and approve the Merger.
2.22 Vote Required. The affirmative vote of a majority of
the votes that holders of the outstanding shares of Company Stock
are entitled to vote with respect to the Merger is the only vote
of the holders of any class or series of Company's capital stock
necessary to approve this Agreement and the transactions
contemplated hereby.
2.23 California Hearing. All of the information supplied or
to be supplied by Company in connection with the Permit,
California Hearing or the Registration Statement (each as defined
in Section 5.1), will be true, correct and complete in all
material respects.
2.24 Tax Matters. Company is not aware of any agreement,
plan or other circumstance that would prevent the Merger from
constituting a reorganization under Section 368 of the Code.
2.25 Section 203 of the DGCL Not Applicable. The Board of
Directors of Company has approved the Merger and the transactions
contemplated by this Agreement, and such approval is sufficient
so that the restrictions relating to "business combinations"
contained in Section 203 of the DGCL will not apply to the
execution, delivery or performance of this Agreement or the
consummation of the Merger or the other transactions contemplated
by this Agreement.
2.26 No Implied Representation. Notwithstanding anything
else contained in this Article II or any other provision of this
Agreement, it is the explicit intent of each party hereto that
Company is making no representation or warranty whatsoever,
express or implied, beyond those expressly given in this
Agreement, including, but not limited to, any implied warranty or
representation as to condition, merchantability, suitability or
fitness for a particular purpose as to any of the properties or
assets of the business conducted by Company. It is understood
that any
cost estimates, projections or other predictions
contained or referred to in materials that have been or shall
hereafter be provided to Parent, Merger Sub or any of their
affiliates, agents or representatives, other than contained or
referred to in the Company Schedule or any certificate delivered
pursuant to this Agreement, are not and shall not be deemed to be
representations or warranties of Company.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub jointly and severally represent
and warrant to Company, subject to such exceptions as are
specifically disclosed in writing in the disclosure letter and
referencing a specific representation supplied by Parent or
Merger Sub to Company dated as of the date hereof and certified
by a duly authorized officer of Parent (the "Parent Schedule"),
as follows:
3.1 Organization and Qualification; Subsidiaries. Each of
Parent and Merger Sub is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction
of its incorporation and has the requisite corporate power and
authority to own, lease and operate its assets and properties and
to carry on its business as it is now being conducted. Each of
Parent and Merger Sub is qualified as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the
character of the properties owned or leased by it or the nature
of its activities makes such qualification necessary, except for
such failures to be so would not have a Material Adverse Effect
on Parent. As used in this Agreement, the phrase "Material
Adverse Effect on Parent" means a material adverse effect on the
condition (financial or otherwise), business, assets, liabilities
or results of operations of Parent and its subsidiaries
considered as a whole, or a material adverse effect on the
ability of Parent to consummate the transactions contemplated by
this Agreement; provided, however, that in no event shall any of
the following be deemed, in and of itself, to constitute a
Material Adverse Effect on Parent: (i) a change that results
from conditions generally affecting the U.S. economy, or the
industry in which parent operates (including laws and regulations
applicable to such industry), (ii) a change that results from the
announcement or pendency of the transactions contemplated hereby,
(iii) a change that results from the taking of any action
required by this Agreement, or (iv) a reduction in the stock
price of Parent Common Stock.
3.2 Certificate of Incorporation and Bylaws. Parent has
previously furnished to Company complete and correct copies of
its Certificate of Incorporation and Bylaws as amended to date
(together, the "Parent Charter Documents").
3.3 Capitalization. The authorized capital stock of Parent
consists of (i) 100,000,000 shares of Parent Common Stock, and
(ii) 5,000,000 shares of Preferred Stock, $0.001 par value per
share ("Parent Preferred Stock"). At the close of business on
March 15, 2000, (i) 23,029,251 shares of Parent Common Stock were
issued and outstanding, (ii) no shares of Parent Common Stock
were held in treasury by Parent or by subsidiaries of Parent,
(iii) 300,000 shares of Parent Common Stock were reserved for
future issuance pursuant to Parent's employee stock purchase
plan, (iv) 3,167,793 shares of Parent Common Stock were reserved
for issuance upon the exercise of outstanding options ("Parent
Options") to purchase Parent Common Stock and (v) 51,041 shares
of Parent Common Stock were reserved for future issue upon the
exercise of outstanding warrants to purchase Parent Common Stock.
As of the date hereof, no shares of
Parent Preferred Stock were issued or outstanding. The
authorized capital stock of Merger Sub consists of 1,000 shares
of common stock, par value $0.01 per share, all of which, as
of the date hereof, are issued and outstanding and held of
record by Parent. All of the outstanding shares of Parent's
and Merger Sub's respective capital stock have
been duly authorized and validly issued and are fully paid and
nonassessable. All shares of Parent Common Stock subject to
issuance as aforesaid, upon issuance on the terms and conditions
specified in the instruments pursuant to which they are issuable,
shall, and the shares of Parent Common Stock to be issued
pursuant to the Merger will be, duly authorized, validly issued,
fully paid and nonassessable. All outstanding shares of Parent
Common Stock, all outstanding Parent Stock Options, and all
outstanding shares of capital stock of Merger Sub have been
issued and granted in all material respects in compliance with
applicable securities laws and other requirements of law.
3.4 Authority Relative to this Agreement. Each of Parent and
Merger Sub has the corporate power and authority to execute and
deliver this Agreement, and to perform its obligations hereunder
and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by Parent and Merger Sub
and the consummation by Parent and Merger Sub of the transactions
contemplated hereby have been duly and validly authorized by all
necessary corporate action on the part of Parent and Merger Sub,
and no other corporate proceedings on the part of Parent or
Merger Sub are necessary to authorize this Agreement, or to
consummate the transactions so contemplated, subject only to the
filing of the Merger Documents pursuant to DGCL and approval of
the issuance of Parent Common Stock at the California Hearing (or
alternatively the registration of the Parent Common Stock under
the Securities Act of 1933 (the "Securities Act")). This
Agreement has been duly and validly executed and delivered by
Parent and Merger Sub and, assuming the due authorization,
execution and delivery by Company, constitutes a legal and
binding obligation of Parent and Merger Sub, enforceable against
Parent and Merger Sub in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other laws affecting creditors'
rights generally, or by general equitable principles (regardless
of whether enforcement is sought in a proceeding at law or in
equity).
3.5 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Parent and
Merger Sub do not, and the performance of this Agreement by
Parent and Merger Sub shall not, (i) conflict with or violate the
Parent Charter Documents, Bylaws or equivalent organizational
documents of Merger Sub, (ii) subject to compliance with the
requirements set forth in Section 3.5(b) below, conflict with or
violate any law, rule, regulation, order, judgment or decree
applicable to Parent or any of its subsidiaries or by which it or
their respective properties are bound or affected, or (iii)
result in any breach of or constitute a default (or an event that
with notice or lapse of time or both would become a default)
under, or impair Parent's or any such subsidiary's rights or
alter the rights or obligations of any third party under, or give
to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or
encumbrance on any of the properties or assets of Parent or any
of its subsidiaries pursuant to, any material note, bond,
mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Parent or
any of its subsidiaries is a party or by which Parent or any of
its subsidiaries or its or any of their respective properties are
bound or affected, except to the extent such conflict, violation,
breach, default, impairment or other effect could not in the
case of clauses (ii) or (iii) individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on
Parent.
(b) The execution and delivery of this Agreement by Parent and
Merger Sub do not, and the performance of this Agreement by
Parent and Merger Sub shall not, require any consent, approval,
authorization or permit of, or filing with or notification to,
any Governmental Entity except (i) for applicable requirements,
if any, of the Securities Act, the Securities Exchange Act of
1934 (the "Exchange Act"), state securities and Blue Sky laws,
the rules and regulations of Nasdaq, and the filing of the Merger
Documents as required by the DGCL and (ii) where the failure to
obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, (x) would not prevent
consummation of the Merger or otherwise prevent Parent or Merger
Sub from performing their respective obligations under this
Agreement or (y) could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on
Parent.
3.6 SEC Filings; Financial Statements.
(a) Parent has made available to Company a correct and complete
copy of each report, schedule, registration statement and
definitive proxy statement filed by Parent with the Securities
and Exchange Commission (the "SEC") on or after October 1, 1999
(the "Parent SEC Reports"), which are all the forms, reports and
documents required to be filed by Parent with the SEC since
October 1, 1999. The Parent SEC Reports (i) were prepared in
accordance with the requirements of the Securities Act or the
Exchange Act, as the case may be, and (ii) did not at the time
they were filed (or if amended or superseded by a filing prior to
the date of this Agreement, then on the date of such filing)
contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading. None
of Parent's subsidiaries is required to file any reports or other
documents with the SEC.
(b) Each set of financial statements (including, in each case,
any related notes thereto) contained in the Parent SEC Reports
was prepared in accordance with GAAP applied on a consistent
basis throughout the periods involved (except as may be indicated
in the notes thereto or, in the case of unaudited statements, do
not contain footnotes as permitted by Form 10-Q of the Exchange
Act) and each fairly presents the consolidated financial position
of Parent and its subsidiaries at the respective dates thereof
and the consolidated results of its operations and cash flows for
the periods indicated, except that the unaudited interim
financial statements were or are subject to normal year-end
adjustments which were not or are not expected to be material in
amount.
(c) Parent has made available to Company a complete and correct
copy of any amendments or modifications, which have not yet been
filed with the SEC but which are required to be filed, to
agreements, documents or other instruments which previously had
been filed by Parent with the SEC pursuant to the Securities Act
or the Exchange Act.
3.7 No Undisclosed Liabilities. Neither Parent nor Merger Sub
has any liabilities except (i) liabilities reflected, reserved
against or otherwise disclosed in the Parent SEC Reports,
(ii) liabilities incurred since December 31, 1999 in the ordinary
course of business, (iii) liabilities
that individually or in the aggregate do not exceed $100,000, and
(iv) liabilities identified in Section 3.7 of the Parent Schedule.
3.8 Absence of Certain Changes or Events. Except as set forth
in Section 3.8 of the Parent Schedule, since December 31, 1999,
there has not been: (i) any Material Adverse Effect on Parent,
(ii) any declaration, setting aside or payment of any dividend
on, or other distribution (whether in cash, stock or property) in
respect of, any of Parent's capital stock, or any purchase,
redemption or other acquisition by Parent of any of Parent's
capital stock or any other securities of Parent, (iii) any split,
combination or reclassification of any of Parent's capital stock,
(iv) any material change by Parent in its accounting methods,
principles or practices, except as required by concurrent changes
in GAAP, or (v) any revaluation by Parent of any of its assets,
including, without limitation, writing down the value of
capitalized inventory or writing off notes or accounts receivable
or any sale of assets of Parent other than in the ordinary course
of business.
3.9 Brokers. Except for Chase H&Q, a Division of Chase
Securities, Inc., Parent has not engaged any broker, finder or
investment banker in connection with this Agreement
3.10 Board Approval. The Board of Directors of each of
Parent and Merger Sub has, as of the date of this Agreement,
unanimously (i) determined that the Merger is consistent with and
in furtherance of the long-term business strategy of Parent and
is fair to, and in the best interests of, Parent and its
stockholders, and (ii) approved this Agreement, the Merger and
the other transactions contemplated by this Agreement.
3.11 Tax Matters. Parent is not aware of any agreement,
plan or other circumstance that would prevent the Merger from
constituting a reorganization under Section 368 of the Code.
3.12 Merger Sub Operations. Merger Sub was formed solely
for the purpose of engaging in the transactions contemplated
hereby and has not (a) engaged in any business activities, (b)
conducted any operations other than in connection with the
transactions contemplated hereby or (c) incurred any liabilities
other than in connection with the transactions contemplated
hereby.
3.13 California Hearing. All of the information supplied or
to be supplied by Parent in connection with the Permit,
California Hearing or the Registration Statement will be true,
correct and complete in all material respects.
3.14 No Implied Representation. Notwithstanding anything
else contained in this Article III or any other provision of this
Agreement, it is the explicit intent of each party hereto that
Parent and Merger Sub are making no representation or warranty
whatsoever, express or implied, beyond those expressly given in
this Agreement.
ARTICLE IV
CONDUCT PRIOR TO THE EFFECTIVE TIME
4.1 Conduct of Business by Company. During the period from the
date of this Agreement and continuing until the earlier of the
termination of this Agreement pursuant to its terms or the
Effective Time, Company shall, except to the extent that Parent
shall otherwise consent in writing, carry on its business, in the
ordinary course in all material respects, and in
compliance in all material respects with all applicable laws
and regulations, pay its debts and Taxes when due subject to
good faith disputes over such debts or taxes, pay or
perform other material obligations when due, and use its
commercially reasonable efforts consistent with past practices
and policies to (i) preserve intact its present business
organization, (ii) keep available the services of its present
officers and employees and (iii) preserve its relationships
with customers, suppliers, distributors, licensors, licensees,
and others with which it has business dealings.
In addition, except as expressly permitted by the terms
of this Agreement, without the prior written consent of Parent,
during the period from the date of this Agreement and continuing
until the earlier of the termination of this Agreement pursuant
to its terms or the Effective Time, Company shall not do any of
the following:
(a) Waive any stock repurchase rights, accelerate, amend or
change the period of exercisability of options or reprice options
granted under any employee, consultant, director or other stock
plans or authorize cash payments in exchange for any options
granted under any of such plans;
(b) Grant any severance or termination pay to any officer or
employee except pursuant to written agreements outstanding on the
date hereof and as previously disclosed in writing to Parent, or
adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise
extend, amend or modify any rights to the Company's Intellectual
Property other than in the ordinary course of business consistent
with past practice, or enter into grants to transfer or license
to any person future patent rights other than in the ordinary
course of business consistent with past practices, provided that
in no event shall Company license on an exclusive basis or sell
any of its Intellectual Property;
(d) Declare, set aside or pay any dividends on or make any other
distributions (whether in cash, stock, equity securities or
property) in respect of any capital stock or split, combine or
reclassify any capital stock or issue or authorize the issuance
of any other securities in respect of, in lieu of or in
substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or
indirectly, any shares of capital stock of Company;
(f) Issue, deliver, sell, authorize, pledge or otherwise
encumber or propose any of the foregoing with respect to, any
shares of capital stock or any securities convertible into shares
of capital stock, or subscriptions, rights, warrants or options
to acquire any shares of capital stock or any securities
convertible into shares of capital stock, or enter into other
agreements or commitments of any character obligating it to issue
any such shares or convertible securities, other than the
issuance delivery and/or sale of (i) shares of Company Stock
pursuant to the exercise of stock options outstanding as of the
date of this Agreement and (ii) shares of Company Stock issuable
upon conversion of the bridge loans as contemplated by Section
5.14;
(g) Cause, permit or propose any amendments to the Company
Charter Documents;
(h) Acquire or agree to acquire by merging or consolidating
with, or by purchasing any equity interest in or a portion of the
assets of, or by any other manner, any business or any
corporation, partnership, association or other business
organization or division thereof, or otherwise acquire or agree
to acquire any assets or enter outside the ordinary course of
Company's business consistent with past practice into any joint
ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose
of any of Company's properties or assets other than in the ordinary
course of business consistent with past practice;
(j) Incur any indebtedness for borrowed money or guarantee any
such indebtedness of another person, issue or sell any debt
securities or options, warrants, calls or other rights to acquire
any debt securities of Company, enter into any "keep well" or
other agreement to maintain any financial statement condition or
enter into any arrangement having the economic effect of any of
the foregoing;
(k) Adopt or amend any employee benefit plan, policy or
arrangement, any employee stock purchase or employee stock option
plan, or enter into any employment contract or collective
bargaining agreement, pay any special bonus or special
remuneration to any director or employee, or increase the
salaries or wage rates or fringe benefits (including rights to
severance or indemnification) of its directors, officers,
employees or consultants;
(l) Make any individual or series of related payments outside of
the ordinary course of business in excess of $25,000;
(m) Revalue any of its assets or, except as required by GAAP,
make any change in accounting methods, principles or practices;
(n) Incur or enter into any agreement, contract or commitment
outside of the ordinary course of business in excess of $25,000
individually;
(o) Make any Tax election that, individually or in the
aggregate, is reasonably likely to adversely affect in any
material respect the Tax liability or Tax attributes of Company
or settle or compromise any material income Tax liability;
(p) Engage in any action that would cause the Merger to fail to
qualify as a "reorganization" under Section 368(a) of the Code,
whether or not otherwise permitted by this Article IV; or
(q) Agree in writing or otherwise to take any of the actions
described in Section 4.1 (a) through (p) above.
4.2 Conduct of Business by Parent. During the period from the
date of this Agreement and continuing until the earlier of the
termination of this Agreement pursuant to its terms or the
Effective Time, Parent and Merger Sub shall carry on its business
in the ordinary course in all material respects and in compliance
in all material respects with all applicable laws and regulations
and shall not engage in any action that would cause the Merger to
fail to qualify
as a "reorganization" under Section 368(a) of the
Code, whether or not otherwise permitted by the provisions of
this Article IV.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 California Hearing.
(a) Parent, Company and Merger Sub will promptly take all
necessary steps, including cooperating fully with each other in
terms of providing information and reviewing documents, to
(i) apply for and obtain a permit (the "Permit") issued by the
California Commissioner of Corporations (the "Commissioner")
pursuant to Section 25142 of the CGCL approving the terms and
conditions, and the fairness of the terms and conditions, of the
issuance of the Parent Common Stock pursuant to this Agreement,
(ii) respond promptly to any comments from the Commissioner,
(iii) participate in the hearing to be held by the Commissioner
in connection with the application for the Permit (the
"California Hearing"), and (iv) otherwise use their commercially
reasonable efforts to obtain the Permit as soon as possible.
Each party hereto will provide each other party all information
reasonably required in connection with the Permit. Each party
hereto will use all commercially reasonable efforts to cause the
issuance of the Permit as soon as practicable. Each party hereto
will notify the others promptly if it receives any comments from
the Commissioner or its staff, or it receives any request by the
Commissioner or its staff or any other government officials for
amendments or supplements to the Permit or any other filing or
for additional information. Each party hereto will supply the
others with copies of all correspondence between it or any of its
representatives, on the one hand, and the Commissioner, or its
staff or any other government officials, on the other hand, with
respect to the Permit or other filing. Whenever any event occurs
that is required to be included in an amendment or supplement to
the Permit or any other filing, each party hereto will promptly
inform the other parties of that occurrence and cooperate in
filing with the Commissioner or its staff or any other government
officials, and/or mailing to the shareholders of Company, the
amendment or supplement.
(b) If the Commissioner refuses to hold the California Hearing
or issue the Permit (a "Commissioner Refusal"), as promptly as
practicable after the Commissioner Refusal, Parent shall prepare
and file with the SEC a registration statement of Parent on Form
S-4 (as it may be amended, the "Registration Statement") under
the Securities Act to register the issuance of the shares of
Parent Common Stock to be issued in connection with the Merger.
Each of the parties hereto shall use all reasonable efforts to
cause the Registration Statement to become effective as promptly
as practicable. Company shall provide promptly to Parent such
information concerning its business and financial statements and
affairs, as, in the reasonable judgment of Parent or its counsel,
may be required or appropriate for inclusion in the Registration
Statement, or in any amendments or supplements thereto, and to
cause its counsel and auditors to cooperate with parent's counsel
and auditors in the preparation of the Registration Statement.
Each of Company and Parent will respond to any comments of the
SEC, and will use its respective reasonable efforts to have the
Registration Statement declared effective under the Securities
Act as promptly as practicable after such filing. Each of
Company and Parent will prepare and file any filings required to
be filed by it under the Exchange Act, the
Securities Act, or other federal, foreign or Blue Sky or related
laws relating to the Merger and the transactions contemplated by
this Agreement.
5.2 Shareholder Consent. Company shall take all action
necessary in accordance with applicable law and the Company
Charter Documents to obtain from the holders of a majority of the
outstanding shares of the Company Stock their adoption and
approval of this Agreement and their approval of the Merger and
shall take all other action necessary or advisable to secure the
consent of shareholders as required by the DGCL.
5.3 Confidentiality; Access to Information.
(a) The parties acknowledge that Company and Parent have
previously executed a mutual nondisclosure agreement, dated as of
January 13, 2000 (as amended, the "Confidentiality Agreement"),
which Confidentiality Agreement will continue in full force and
effect in accordance with its terms.
(b) Each of Company and Parent will afford the other and the
other's accountants, counsel and other representatives reasonable
access during normal business hours and upon reasonable notice to
its properties, books, records and personnel during the period
prior to the Effective Time to obtain all information concerning
its business as such other party may reasonably request; provided
that such access may be denied to the extent necessary to prevent
a breach of any agreement to which Company or Parent is a party,
to prevent a violation of law or to preserve attorney-client or
work product privileges with respect to pending legal
proceedings. Any investigation shall be conducted in such a
manner as to minimize the interference with the operation of
their respective business. No information or knowledge obtained
in any investigation pursuant to this Section 5.3 will affect or
be deemed to modify any representation or warranty contained
herein or the conditions to the obligations of the parties to
consummate the Merger.
(c) No party or its representatives shall contact any of the
employees, customers, licensors, licensees or strategic partners
of, or other having business dealings with, the other party in
connection with the transactions contemplated by this Agreement
without the prior written authorization of the other party.
5.4 No Solicitation. From and after the date of this Agreement
until the Effective Time or termination of this Agreement
pursuant to Article VII, Company will not, nor will it authorize
or permit any of its officers, directors, affiliates or employees
or any investment banker, attorney or other advisor or
representative retained by any of them to, directly or
indirectly, (i) solicit, initiate, encourage or induce the
making, submission or announcement of any Acquisition Proposal
(as defined below), (ii) participate in any discussions or
negotiations regarding, or furnish to any person any information
with respect to, or take any other action to facilitate any
inquiries or the making of any proposal that constitutes or may
reasonably be expected to lead to, any Acquisition Proposal,
(iii) engage in discussions with any person with respect to any
Acquisition Proposal, (iv) approve, endorse or recommend any
Acquisition Proposal or (v) enter into any letter of intent or
similar document or any contract, agreement or commitment
contemplating or otherwise relating to any Acquisition
Transaction (as defined below). Without limiting the foregoing,
it is understood that any violation of the restrictions set
forth in this Section 5.4 by any officer or director of Company or any
investment banker or attorney of Company shall be deemed to be a
breach of this Section 5.4 by Company.
For purposes of this Agreement, "Acquisition Proposal"
shall mean any offer or proposal (other than an offer or proposal
by Parent) relating to any Acquisition Transaction. For the
purposes of this Agreement, "Acquisition Transaction" shall mean
any transaction or series of related transactions other than the
transactions contemplated by this Agreement involving: (A) any
acquisition or purchase from Company by any person of voting
securities of Company or any tender offer or exchange offer that
if consummated would result in any person or "group" (as defined
under Section 13(d) of the Exchange Act and the rules and
regulations thereunder) beneficially owning 5% or more of the
total outstanding voting securities of Company or any merger,
consolidation, business combination or similar transaction
involving Company; (B) any sale, lease (other than in the
ordinary course of business), exchange, transfer, license (other
than in the ordinary course of business), acquisition or
disposition of any material portion of the assets of Company; or
(C) any liquidation, dissolution, recapitalization or other
significant corporate reorganization of Company.
In addition to the other obligations of Company set
forth in this Section 5.4, Company as promptly as practicable,
and in any event within 24 hours, shall advise Parent orally and
in writing of any request for information which Company
reasonably believes would lead to an Acquisition Proposal or of
any Acquisition Proposal, or any inquiry with respect to or which
Company reasonably should believe would lead to any Acquisition
Proposal, and, subject to compliance with the terms of any
confidentiality agreement existing on the date of this Agreement,
the material terms and conditions of such request, Acquisition
Proposal or inquiry, and the identity of the person or group
making any such request, Acquisition Proposal or inquiry.
Company will keep Parent informed in all material respects of the
status and details (including material amendments or proposed
amendments) of any such request, Acquisition Proposal or inquiry.
5.5 Public Disclosure. Parent and Company will consult with
each other and agree before issuing any press release or
otherwise making any public statement with respect to the Merger
or this Agreement and will not issue any such press release or
make any such public statement prior to such agreement, except as
may be required by law or any listing agreement with a national
securities exchange, in which case reasonable efforts to consult
with the other party will be made prior to any such release or
public statement.
5.6 Commercially Reasonable Efforts; Notification.
(a) Upon the terms and subject to the conditions, including,
without limitation, Section 5.4, set forth in this Agreement,
each of the parties agrees to use all commercially reasonable
efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, and to assist and cooperate with the other
parties in doing, all things necessary, proper or advisable to
consummate and make effective, in the most expeditious manner
practicable, the Merger and the other transactions contemplated
by this Agreement, including using reasonable efforts to
accomplish the following: (i) the taking of all reasonable acts
necessary to cause the conditions precedent set forth in Article
VI to be satisfied, (ii) the obtaining of all necessary actions
or nonactions, waivers, consents, approvals, orders and
authorizations from
Governmental Entities and the making of all
necessary registrations, declarations and filings (including
registrations, declarations and filings with Governmental
Entities, if any) and the taking of all reasonable steps as may
be necessary to avoid any suit, claim, action, investigation or
proceeding by any Governmental Entity, (iii) the obtaining of all
necessary consents, approvals or waivers from third parties
required as a result of the transactions contemplated by this
Agreement, (iv) the defending of any suits, claims, actions,
investigations or proceedings, whether judicial or
administrative, challenging this Agreement or the consummation of
the transactions contemplated hereby, including seeking to have
any stay or temporary restraining order entered by any court or
other Governmental Entity vacated or reversed and (v) the
execution or delivery of any additional instruments necessary to
consummate the transactions contemplated by, and to fully carry
out the purposes of, this Agreement. In connection with and
without limiting the foregoing, each of Parent and Company and
their respective Boards of Directors shall, if any state takeover
statute or similar statute or regulation is or becomes applicable
to the Merger, this Agreement or any of the transactions
contemplated by this Agreement, use all commercially reasonable
efforts to ensure that the Merger and the other transactions
contemplated by this Agreement may be consummated as promptly as
practicable on the terms contemplated by this Agreement and
otherwise to minimize the effect of such statute or regulation on
the Merger, this Agreement and the transactions contemplated
hereby. Notwithstanding anything herein to the contrary, nothing
in this Agreement shall be deemed to require Parent, Company or
any subsidiary or Affiliate of Parent or Company to agree to any
divestiture by itself or any of its Affiliates of shares of
capital stock or the imposition of any material limitation on the
ability of any of them to conduct their business or to own or
exercise control of such assets, properties and stock.
(b) Company shall give prompt notice to Parent upon becoming
aware that any representation or warranty made by it contained in
this Agreement has become untrue or inaccurate in any material
respect, or of any failure of Company to comply with or satisfy
in any material respect any covenant, condition or agreement to
be complied with or satisfied by it under this Agreement. If any
event, condition, fact or circumstance that is required to be
disclosed pursuant to this Section 5.6(b) requires any change in
the Company Schedule, or if any such event, condition, fact or
circumstance would require such a change assuming the Company
Schedule were dated as of the date of the occurrence, existence
or discovery of such event, condition, fact or circumstance, then
Company shall promptly deliver to Parent an update to the Company
Schedule specifying such change. No such update shall be deemed
to supplement or amend the Company Schedule for the purpose of
determining (i) the accuracy of any of the representations and
warranties made by Company in this Agreement and (ii) whether any
of the conditions set forth in Section 6 have been satisfied;
provided that, although Parent shall have the right to terminate
this Agreement as a result of such change if it would otherwise
be entitled to do so pursuant to Section 7.1, if the Closing
occurs, Parent shall be deemed to have waived any claim for
indemnification under the Shareholder Agreements as a result of
such change.
(c) Parent shall give prompt notice to Company upon becoming
aware that any representation or warranty made by it or Merger
Sub contained in this Agreement has become untrue or inaccurate
in any material respect, or of any failure of Parent or Merger
Sub to comply with or satisfy in any material respect any
covenant, condition or agreement to be complied with or satisfied
by it under this Agreement. If any event, condition, fact or
circumstance that is required to be disclosed pursuant to this
Section 5.6(c) requires any change
in the Parent Schedule, or if any such event, condition, fact
or circumstance would require such a change assuming the
Parent Schedule were dated as of the date of the occurrence,
existence or discovery of such event, condition, fact or
circumstance, then Parent shall promptly
deliver to Company an update to the Parent Schedule specifying
such change. No such update shall be deemed to supplement or
amend the Parent Schedule for the purpose of determining (i) the
accuracy of any of the representations and warranties made by
Parent and Merger Sub in this Agreement and (ii) whether any of
the conditions set forth in Section 6 have been satisfied.
5.7 Third Party Consents. As soon as practicable following the
date hereof, Parent and Company will each use its commercially
reasonable efforts to obtain any consents, waivers and approvals
under any of its or its subsidiaries' respective agreements,
contracts, licenses or leases required to be obtained in
connection with the consummation of the transactions contemplated
hereby.
5.8 Stock Options. At the Effective Time, each outstanding
option to purchase shares of Company Common Stock (each, a
"Company Stock Option") under the Company Option Plan, whether
vested or unvested, shall by virtue of the Merger be assumed by
Parent. Each Company Stock Option so assumed by Parent under
this Agreement will continue to have, and be subject to, the same
terms and conditions of such options immediately prior to the
Effective Time (including, without limitation, any repurchase
rights or vesting provisions and provisions regarding
acceleration of vesting upon certain transactions other than
those contemplated by this Agreement), except that (i) each
Company Stock Option will be or will become exercisable in
accordance with its terms for that number of whole shares of
Parent Common Stock equal to the product (rounded to the nearest
whole number of shares of Parent Common Stock) of the number of
shares of Company Common Stock that were issuable upon exercise
of such Company Stock Option immediately prior to the Effective
Time multiplied by the Stock Exchange Ratio and (ii) the per
share exercise price for the shares of Parent Common Stock
issuable upon exercise of such assumed Company Stock Option will
be equal to the quotient (rounded to the nearest whole cent)
determined by dividing the exercise price per share of Company
Common Stock at which such Company Stock Option was exercisable
immediately prior to the Effective Time by the Stock Exchange
Ratio. Within ten (10) days following the Closing, Parent will
send to each holder of an assumed Company Stock Option a written
notice setting forth (i) the number of shares of Parent Common
Stock subject to such assumed Company Stock Option, and (ii) the
exercise price per share of Parent Common Stock issuable upon
exercise of such assumed Company Stock Option.
5.9 Form S-8. Parent agrees to file a registration statement on
Form S-8 for the shares of Parent Common Stock issuable with
respect to assumed Company Stock Options as soon as is reasonably
practicable, and in any event within 30 days, after the Effective
Time and shall use commercially reasonable efforts to maintain
the effectiveness of such registration statement thereafter for
so long as any such options or other rights remain outstanding.
5.10 Employees. Employees of Company employed by the
Surviving Corporation after the Effective Time will be entitled
to participate in such employee benefit plans provided by the
Surviving Corporation or Parent after the Closing to the extent
and consistent with the terms of such plans. If any employee of
Company becomes a participant in any employee benefit plan of
Parent or one of its subsidiaries, such employee shall, to the
extent permitted by
such plan, be given credit for all service with Company prior
to the Effective Time for purposes of vesting
eligibility and for benefit accrual purposes. Nothing in this
Section 5.10 shall be deemed to constitute an employment contract
between the Surviving Corporation and any individual, or a waiver
of the Surviving Corporation's right to discharge any employee at
any time, with or without cause, subject to the terms of any
employment agreement with such employee.
5.11 Affiliates. Section 5.11 of the Company Schedule sets
forth a list of those persons who may be deemed to be, in
Company's reasonable judgment, affiliates of Company within the
meaning of Rule 145 promulgated under the Securities Act or
Opinion 16 of the Accounting Principles Board and applicable SEC
rules and regulations (each, a "Company Affiliate"). Company
will provide Parent with such information and documents as Parent
reasonably requests for purposes of reviewing such list. Company
will deliver or cause to be delivered to Parent, as promptly as
practicable on or following the date hereof, from each Company
Affiliate an executed affiliate agreement in substantially the
form attached hereto as Exhibit C (the "Company Affiliate
Agreement"), each of which will be in full force and effect as of
the Effective Time.
5.12 Stock Restriction Agreement. The Stock Restriction
Agreement between Company and Xxxx Xxxxx dated as of August 25,
1999 shall be terminated on or before the Closing Date.
5.13 Existing Bridge Loans. Company has entered into
certain Note and Warrant Subscription Agreements and, pursuant
thereto, has sold certain Notes and Warrants (the "Notes and
Warrants") as shown in Section 5.13 of the Company Schedule.
Company has offered to the holders of the Notes and Warrants the
right to convert the Notes and Warrants into Company Stock
immediately prior to the Closing pursuant to the terms of a
Supplement to Subscription Agreement, a copy of which has been
delivered to Parent. Any holder of the Notes and Warrants who
elects to exercise such conversion right shall be required to
execute a Shareholder Agreement as a condition of such
conversion.
ARTICLE VI
CONDITIONS TO THE MERGER
6.1 Conditions to Obligations of Each Party to Effect the
Merger. The respective obligations of each party to this
Agreement to effect the Merger shall be subject to the
satisfaction at or prior to the Closing Date of the following
conditions:
(a) Shareholder Approval. This Agreement shall have been
approved and adopted, and the Merger shall have been duly
approved, by the requisite vote under applicable law, by the
shareholders of Company.
(b) Permit. The Commissioner shall have held the California
Hearing and issued the Permit, and the Permit shall be in full
force and effect or, if a Commissioner Refusal has occurred, the
Registration Statement shall have been filed with and declared
effective by the SEC.
(c) No Order. No Governmental Entity shall have enacted,
issued, promulgated, enforced or entered any statute, rule,
regulation, executive order, decree, injunction or other order
(whether temporary, preliminary or permanent) which is in effect
and which has the effect of making the Merger illegal or
otherwise prohibiting consummation of the Merger.
(d) Tax Opinion. Company shall have received a written opinion
from Xxxxxxxxxxxx Xxxx & Xxxxxxxxx, in form and substance
reasonably satisfactory to Company, to the effect that the Merger
will constitute a reorganization within the meaning of Section
368(a) of the Code and such opinion shall not have been
withdrawn; provided, however, that if such counsel does not
render such opinion, this condition shall nonetheless be deemed
to be satisfied if counsel to Parent renders such opinion. The
parties to this Agreement agree to make such reasonable
representations as requested by such counsel for the purpose of
rendering such opinions.
6.2 Additional Conditions to Obligations of Company. The
obligation of Company to consummate and effect the Merger shall
be subject to the satisfaction at or prior to the Closing Date of
each of the following conditions, any of which may be waived, in
writing, exclusively by Company:
(a) Representations and Warranties. Each representation and
warranty of Parent and Merger Sub contained in this Agreement
(i) shall have been true and correct as of the date of this
Agreement and (ii) shall be true and correct on and as of the
Closing Date with the same force and effect as if made on and as
of the Closing Date except for (A) such failures to be true and
correct that do not in the aggregate constitute a Material
Adverse Effect on Parent and (B) those representations and
warranties which address matters only as of a particular date
(which representations shall have been true and correct as of
such particular date) (it being understood that, for purposes of
determining the accuracy of such representations and warranties,
(i) all "Material Adverse Effect on Parent" qualifications and
other qualifications based on the word "material" or similar
phrases contained in such representations and warranties shall be
disregarded and (ii) any update of, or modification to, Parent
Schedule made or purported to have been made after the date of
this Agreement shall be disregarded). Company shall have
received a certificate with respect to the foregoing signed on
behalf of Parent by an authorized officer of Parent.
(b) Agreements and Covenants. Parent and Merger Sub shall have
performed or complied in all material respects with all
agreements and covenants required by this Agreement to be
performed or complied with by them on or prior to the Closing
Date, and Company shall have received a certificate to such
effect signed on behalf of Parent by an authorized officer of
Parent.
(c) Consents. Parent and Merger Sub shall have obtained all
consents, waivers and approvals required in connection with the
consummation of the transactions contemplated hereby.
(d) Material Adverse Effect. There shall not have been any
Material Adverse Effect on Parent since the date of this
Agreement. Company shall have received a certificate
with respect to the foregoing signed on behalf of Parent by its
President and Chief Financial Officer.
6.3 Additional Conditions to the Obligations of Parent and
Merger Sub. The obligation of Parent and Merger Sub to
consummate and effect the Merger shall be subject to the
satisfaction at or prior to the Closing Date of each of the
following conditions, any of which may be waived, in writing,
exclusively by Parent:
(a) Representations and Warranties. Each representation and
warranty of Company contained in this Agreement (i) shall have
been true and correct as of the date of this Agreement and (ii)
shall be true and correct on and as of the Closing Date with the
same force and effect as if made on and as of the Closing Date,
except for (A) such failures to be true and correct that do not
in the aggregate constitute a Material Adverse Effect on Company
(provided, however, that such Material Adverse Effect on Company
qualifier shall be inapplicable with respect to representations
and warranties contained in Sections 2.2, 2.21, 2.22 and 2.24,
and for purposes of this Section 6.3(a) only, the reference to
$150,000 in clause (i) of the definition of Material Adverse
Effect on Company shall be changed to $3,000,000 and the language
"with respect to the applicable representation or warranty" shall
be deemed deleted) and (B) those representations and warranties
which address matters only as of a particular date (which
representations shall have been true and correct as of such
particular date) (it being understood that, for purposes of
determining the accuracy of such representations and warranties,
(i) all "Material Adverse Effect on Company" qualifications and
other qualifications based on the word "material" or similar
phrases contained in such representations and warranties shall be
disregarded and (ii) any update of or modification to the Company
Schedule made or purported to have been made after the date of
this Agreement shall be disregarded). Parent shall have received
a certificate with respect to the foregoing signed on behalf of
Company by its President.
(b) Agreements and Covenants. Company shall have performed or
complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied
with by it at or prior to the Closing Date, and Parent shall have
received a certificate to such effect signed on behalf of Company
by the President of Company.
(c) Affiliate Agreements. Each of the Company Affiliates shall
have entered into the Company Affiliate Agreement and each of
such agreements will be in full force and effect as of the
Effective Time.
(d) Consents. Company shall have obtained all consents, waivers
and approvals required in connection with the consummation of the
transactions contemplated hereby.
(e) Material Adverse Effect. There shall not have been any
Material Adverse Effect on Company since the date of this
Agreement; provided, however, that for purposes of this
Section 6.3(e) only, the reference to $150,000 in clause (i) of
the definition of Material Adverse Effect on Company shall be
changed to $3,000,000 and the language "with respect to the
applicable representation or warranty" shall be deemed deleted.
Parent shall have received a certificate with respect to the
foregoing signed on behalf of Company by its President.
(f) Dissenters' Rights. Effective demands for payment of
dissenters' rights by shareholders of Company shall not equal or
exceed five percent of the outstanding shares of the Company
Stock.
(g) Non-Compete Agreement. Xxxx Xxxxx shall have executed and
delivered to Parent a Non-Compete Agreement substantially in the
form attached hereto as Exhibit D.
(h) Employment Agreements. The individuals listed on Exhibit
G-1 shall have executed and delivered employment agreements with
the Surviving Corporation substantially in the form set forth in
Exhibit G-2.
(i) Shareholder Agreements. The Shareholder Agreements shall
have been executed and delivered by each of the shareholders of
Company listed on Exhibit A-1 and each of the holders of the
Notes and Warrants who exercise their conversion rights as
provided in Section 5.14, and shall be in full force and effect
as of the Effective Time.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after the
requisite approval of the shareholders of Company:
(a) by mutual written consent duly authorized by the Boards of
Directors of Parent and Company;
(b) by either Company or Parent if the Merger shall not have
been consummated by June 15, 2000 (or, if a Commissioner Refusal
has occurred, then 60 days after the date of such Commissioner
Refusal) for any reason; provided, however, that the right to
terminate this Agreement under this Section 7.1(b) shall not be
available to any party whose action or failure to act has been a
principal cause of or resulted in the failure of the Merger to
occur on or before such date and such action or failure to act
constitutes a breach of this Agreement;
(c) by either Company or Parent if a Governmental Entity shall
have issued an order, decree or ruling or taken any other action,
in any case having the effect of permanently restraining,
enjoining or otherwise prohibiting the Merger, which order,
decree, ruling or other action is final and nonappealable;
(d) by Company, upon a breach of any representation, warranty,
covenant or agreement on the part of Parent or Merger Sub set
forth in this Agreement, or if any representation or warranty of
Parent shall have become untrue, in either case such that the
conditions set forth in Section 6.2(a) or Section 6.2(b) would
not be satisfied as of the time of such breach or as of the time
such representation or warranty shall have become untrue,
provided, that if such inaccuracy in Parent's representations and
warranties or breach by Parent is curable by Parent, then Company
may not terminate this Agreement under this Section 7.1(d) for
thirty (30) days after delivery of written notice from Company to
Parent of such breach, provided Parent continues to exercise best
efforts to cure such breach (it being understood that
Company may not terminate this Agreement pursuant to this
paragraph (d) if such breach by Parent is cured during such
thirty (30)-day period); or
(e) by Parent, upon a breach of any representation, warranty,
covenant or agreement on the part of Company set forth in this
Agreement, or if any representation or warranty of Company shall
have become untrue, in either case such that the conditions set
forth in Section 6.3(a) or Section 6.3(b) would not be satisfied
as of the time of such breach or as of the time such
representation or warranty shall have become untrue, provided,
that if such inaccuracy in Company's representations and
warranties or breach by Company is curable by Company, then
Parent may not terminate this Agreement under this Section 7.1(e)
for thirty (30) days after delivery of written notice from Parent
to Company of such breach, provided Company continues to exercise
best efforts to cure such breach (it being understood that Parent
may not terminate this Agreement pursuant to this paragraph (e)
such breach by Company is cured during such thirty (30)-day
period).
7.2 Notice of Termination; Effect of Termination. Any
termination of this Agreement under Section 7.1 above will be
effective immediately upon the delivery of written notice of the
terminating party to the other parties hereto (or such later time
as may be required by Section 7.1). In the event of the
termination of this Agreement as provided in Section 7.1, this
Agreement shall be of no further force or effect, except (i) as
set forth in this Section 7.2, Section 2.17, Section 3.9, Section
5.3(a), Section 7.3 and Article VIII, each of which shall survive
the termination of this Agreement, and (ii) nothing herein shall
relieve any party from liability for fraud in connection with, or
any willful breach of, this Agreement.
7.3 Fees and Expenses.
(a) General. Except as set forth in this Section 7.3,
all fees and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party
incurring such expenses whether or not the Merger is consummated;
provided, however, that the aggregate expenses paid by Company
(including investment banking and legal fees) shall not exceed
$1,500,000 (or $1,600,000 in the event of a Commissioner
Refusal).
(b) Termination Fee.
(i) In the event that the condition set forth in
Section 6.1(a) is not satisfied, then Company shall, within ten days
after termination of this Agreement, (A) pay to Parent an amount in
cash equal to $3,000,000, and (B) reimburse Parent for Parent's
out-of-pocket expenses, up to a maximum of $500,000, incurred in
connection with this transaction.
(ii) In the event that the Closing does not occur as a
result of the breach of this Agreement by Company, then Company shall,
within ten days after termination of this Agreement, reimburse
Parent for Parent's out-of-pocket expenses, up to a maximum of
$500,000, incurred in connection with this transaction. In
addition, in the event that any of the following events occurs,
then Company shall, within five days after the occurrence of such
event, pay to Parent an amount in cash equal to $3,000,000:
(x) this Agreement is terminated because
Company enters into an agreement or understanding for an
Acquisition Transaction;
(y) Company enters into an agreement or
understanding for an Acquisition Transaction within three months
after termination of this Agreement; or
(z) Company enters into an agreement or
understanding for an Acquisition Transaction within one year
after termination of this Agreement, and the acquiring entity (or
an affiliate of such acquiring entity) has acquired any equity
interest in or loaned money to Company within the three-month
period following termination of this Agreement.
(iii) For purposes of Sections 7.3(b)(ii)(y) and (z) only,
the reference to "5% or more" in clause (A) of the definition of
Acquisition Transaction (in Section 5.4) shall be changed to "a
majority."
(iv) Company shall not in any event be obligated to pay
termination fees under both Section 7.3(b)(i) and
Section 7.3(b)(ii).
(v) In the event that the Closing does not occur as a result of
the breach of this Agreement by Parent or Merger Sub, then Parent
shall, within ten days after termination of this Agreement, pay
to Company an amount in cash equal to $1,500,000.
(vi) Each party hereto acknowledges that the agreements contained
in this Section 7.3(b) are an integral part of the transactions
contemplated by this Agreement, and that, without the agreements
contained in this Section 7.3(b), the other parties hereto would
not enter into this Agreement. The parties acknowledge that
damages resulting from the failure to consummate the Merger as a
result of a breach by a party hereto would be difficult to
determine and the termination fees payable pursuant to
clauses (i), (ii) and (v) above are the parties' best estimate of
such damages.
7.4 Amendment. Subject to applicable law, this Agreement may be
amended by the parties hereto at any time by execution of an
instrument in writing signed on behalf of each of Parent, Merger
Sub and Company.
7.5 Extension; Waiver. At any time prior to the Effective Time,
any party hereto may, to the extent legally allowed, (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 made to such party contained
herein or in any document delivered pursuant hereto and (iii)
waive compliance with any of the agreements or conditions for the
benefit of such party contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on
behalf of such party. Delay in exercising any right under this
Agreement shall not constitute a waiver of such right.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given on the date of
delivery if delivered personally or by commercial delivery
service, or sent via telecopy (receipt confirmed) to the parties
at the following addresses or telecopy numbers (or at such other
address or telecopy numbers for a party as shall be specified by
like notice):
(a) if to Parent or Merger Sub, to:
Digital Insight Corporation
00000 Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: President
Facsimile: (000) 000-0000
with a copy (not constituting notice) to:
O'Melveny & Xxxxx LLP
000 X. Xxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
(b) if to Company, to:
0 Xxxxxx Xxxxxx, 0xx xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxx
Facsimile: (000) 000-0000
with a copy (not constituting notice) to:
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxx Xxxxxx, 0xx xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
8.2 Interpretation; Definitions.
(a) When a reference is made in this Agreement to Exhibits,
such reference shall be to an Exhibit to this Agreement unless
otherwise indicated. When a reference is made in this Agreement
to Sections, such reference shall be to a Section of this
Agreement. Unless otherwise indicated the words "include,"
"includes" and "including" when used herein shall be
deemed in each case to be followed by the words "without
limitation." The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. When
reference is made herein to "the business of" an entity, such
reference shall be deemed to include the business of all direct
and indirect subsidiaries of such entity. Reference to the
subsidiaries of an entity shall be deemed to include all direct
and indirect subsidiaries of such entity.
(b) For purposes of this Agreement:
(i) the term "knowledge" of a party hereto, with
respect to any matter in question, means the actual knowledge
of the executive officers of such party, without any duty of inquiry or
investigation;
(ii) the term "person" shall mean any individual,
corporation (including any non-profit corporation), general partnership,
limited partnership, limited liability partnership, joint
venture, estate, trust, company (including any limited liability
company or joint stock company), firm or other enterprise,
association, organization, entity or Governmental Entity.
8.3 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more
counterparts have been signed by each of the parties and
delivered to the other party, it being understood that all
parties need not sign the same counterpart.
8.4 Entire Agreement; Third Party Beneficiaries. This Agreement
and the documents and instruments and other agreements among the
parties hereto as contemplated by or referred to herein,
including the Company Schedule and Parent Schedule (a) constitute
the entire agreement among the parties with respect to the
subject matter hereof and supersede all prior agreements and
understandings, both written and oral, among the parties with
respect to the subject matter hereof, it being understood that
the Confidentiality Agreement shall continue in full force and
effect until the Closing and shall survive any termination of
this Agreement; and (b) are not intended to confer upon any other
person any rights or remedies hereunder.
8.5 Severability. In the event that any provision of this
Agreement, or the application thereof, becomes or is declared by
a court of competent jurisdiction to be illegal, void or
unenforceable, the remainder of this Agreement will continue in
full force and effect and the application of such provision to
other persons or circumstances will be interpreted so as
reasonably to effect the intent of the parties hereto. The
parties further agree to replace such void or unenforceable
provision of this Agreement with a valid and enforceable
provision that will achieve, to the extent possible, the
economic, business and other purposes of such void or
unenforceable provision.
8.6 Other Remedies; Specific Performance. Except as otherwise
provided herein, any and all remedies herein expressly conferred
upon a party will be deemed cumulative with and not exclusive of
any other remedy conferred hereby, or by law or equity upon such
party, and the exercise by a party of any one remedy will not
preclude the exercise of any other remedy. The parties hereto
agree that irreparable damage would occur in the event that any
of
the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the parties shall be entitled to
seek an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having
jurisdiction, this being in addition to any other remedy to which
they are entitled at law or in equity.
8.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California,
regardless of the laws that might otherwise govern under
applicable principles of conflicts of law thereof.
8.8 Rules of Construction. The parties hereto agree that they
have been represented by counsel during the negotiation and
execution of this Agreement and, therefore, waive the application
of any law, regulation, holding or rule of construction providing
that ambiguities in an agreement or other document will be
construed against the party drafting such agreement or document.
8.9 Assignment. No party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without
the prior written approval of the other parties. Subject to the
preceding sentence, this Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
[The remainder of this page has been intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized respective
officers as of the date first written above.
DIGITAL INSIGHT CORPORATION
By: /s/ Xxxx Xxxxxx
-----------------------------
Xxxx Xxxxxx
President
By: /s/ Xxxxx XxXxxxxxx
-----------------------------
Xxxxx XxXxxxxxx
Chief Financial Officer
CALABASAS ACQUISITION CORP.
By: /s/ Xxxx Xxxxxx
----------------------------
Xxxx Xxxxxx
President
By: /s/ Xxxxx XxXxxxxxx
----------------------------
Xxxxx XxXxxxxxx
Treasurer
1VIEW NETWORK CORPORATION
By: /s/ Xxxx Xxxxx
---------------------------
Xxxx Xxxxx
President
[Signature page to Merger Agreement]
Exhibit A-1
LIST OF PERSONS TO SIGN
SHAREHOLDER AGREEMENT
Xxxx Xxxxx (at time of signing of Agreement and Plan of Merger)
Xxxxxxx Xxxxx (before Closing)
Xxxxx Xxxxxxx (before Closing)
Xxx Xxxxxxxxxxxx (before Closing)
Xxxxx Xxxxxxxx (before Closing)
Exhibit A-2
FORM OF SHAREHOLDER AGREEMENT
THIS SHAREHOLDER AGREEMENT (this "Agreement") is made
and entered into as of ______, 2000, between Digital Insight
Corporation, a Delaware corporation ("Parent"), and the
undersigned, a shareholder (the "Shareholder") of 1View Network
Corporation, a Delaware corporation ("Company").
RECITALS
A. Parent, Calabasas Acquisition Corp. and Company
are entering into an Agreement and Plan of Merger (the "Merger
Agreement") which provides for the merger (the "Merger") of
Calabasas Acquisition Corp. with and into Company.
B. Shareholder is a shareholder of Company and, upon
consummation of the Merger as contemplated by the Merger
Agreement, the shares of Company Stock held by Shareholder will
be converted into cash and shares of the Common Stock of Parent.
C. Certain of the other shareholders of Company are
entering into agreements similar to this Agreement.
D. As an inducement to Parent to enter into the
Merger Agreement and in consideration of the execution of the
Merger Agreement by Parent, Shareholder agrees as set forth
below.
NOW THEREFORE, intending to be legally bound, the
parties hereto agree as follows:
1. Representations of Shareholder. Shareholder
hereby represents and warrants to Parent that Shareholder has
full power and authority to make, enter into and carry out the
terms of this Agreement and this Agreement has been duly executed
and delivered by the Shareholder and constitutes the valid and
binding obligation of Shareholder, enforceable in accordance with
its terms. Shareholder also represents and warrants that
Shareholder has carefully reviewed the Merger Agreement,
especially the representations and warranties of Company
contained in Article II of the Merger Agreement.
2. Indemnification. (a) Provided that the Closing
has occurred, Shareholder will, severally but not jointly,
indemnify and hold harmless Parent and its affiliates, including
the Surviving Corporation, each of their respective officers,
directors, employees and agents and each of the heirs, executors,
successors and assigns of any of the foregoing (collectively, the
"Indemnified Parties") from and against all claims, losses,
liabilities, damages (other than special or unforeseeable
damages) and expenses (net of any tax benefit that such
Indemnified Party (or any affiliate thereof) has actually
received as a result thereof), including, without limitation,
attorneys' fees and costs of investigation and litigation
(collectively, "Damages") arising out of or relating to (i) any
breach of the representations and warranties made by Company in
Article II of the Merger Agreement or in the certificates
delivered by Company pursuant to Sections 6.3(a) and 6.3(e) of
the Merger Agreement, subject however to the provisions of
Section 5.6(b) of the
Merger Agreement, (ii) any breach of the representations and
warranties of Shareholder contained in Section 1 of this
Agreement, or (iii) any payments in excess of $100,000 to
Athena Design, Inc. with respect to the Source Code
License Agreement, dated December 13, 1999, between Athena
Design, Inc. and Company.
(b) Notwithstanding the foregoing, no shareholder of
Company shall be required to pay any amount for Damages with
respect to clause (i) of subsection (a) above of this Agreements
or similar shareholder agreements executed by other shareholders
of Company, unless the aggregate amount otherwise payable by such
shareholders with respect to all claims for indemnification
pursuant to clause (i) of subsection (a) above of this Agreement
or similar shareholder agreements executed by other shareholders
of Company would exceed $500,000 (the "Deductible"), whereupon
only the amount of Damages otherwise payable above the Deductible
shall be payable by such shareholders. The Deductible does not
apply to Damages payable with respect to clauses (ii) or (iii) of
subsection (a) above.
(c) With the exception of claims based upon fraud,
from and after the Closing Date, recourse of the Indemnified
Parties to Shareholder's Holdback Shares pursuant to this
Agreement and the Escrow Agreement shall be the sole and
exclusive remedy of the Indemnified Parties against Shareholder
for Damages with respect to clauses (i) and (iii) of
subsection (a) above. Any claim for indemnification for Damages
hereunder shall be offset or reduced by the amount of any
insurance proceeds received by the Indemnified Parties for such
Damages unless the payment of such insurance proceeds alone
results or is reasonably likely to result in a material
modification of the premium or other material terms of the
applicable insurance policy.
(d) Indemnification with respect to Damages with
respect to clauses (i) and (iii) of subsection (a) above shall
expire on the first anniversary of the Closing Date; provided,
however, that if prior to that date notice of any claim for
Damages has been given by an Indemnified Party as provided
herein, then the right to indemnification with respect thereto
shall remain in effect until such matter shall have been finally
determined and disposed of, and any indemnification due in
respect thereof shall have been paid.
(e) Shareholder shall not have any liability for
Damages which arise solely as a result of (i) actions taken by or
on behalf of, or omissions of, Parent or the Surviving
Corporation after the Closing; (ii) changes in accounting methods
or policies of the Surviving Corporation after the Closing; or
(iii) the passing of, or any change in, after the Closing, any
law or administrative practice of any Governmental Entity in any
such case not actually in force as of the date of this Agreement
(even if retroactive in effect), including any increase in the
tax rates in effect on the date of this Agreement or the
imposition of any tax not in effect on the date of this
Agreement.
(f) Promptly after receipt by an Indemnified Party of
notice of any claim, liability or expense to which the
indemnification obligations hereunder would apply, the
Indemnified Party shall give notice thereof in writing to the
Shareholder, but the omission to so notify the Shareholder
promptly will not relieve the Shareholder from any liability
except to the extent that the Shareholder shall have been
prejudiced as a result of the failure or delay in giving such
notice. Such notice shall state the information then available
regarding the amount and nature of such claim, liability or
expense, including an estimate, if practicable, of the amount of
Damages that have been or may be suffered or incurred by the
Indemnified Party attributable to such claim and the basis of the
Indemnified party's request for indemnification under this
Agreement.
(g) With respect to third party claims, if within 20
days after receiving the notice described in clause (f) above,
the Shareholders' Agent (as defined in Section 4 below) gives
written notice to the Indemnified Parties stating that the former
shareholders of Company (the "Shareholders") dispute and intend
to defend against such claim, liability or expense at their own
cost and expense, then counsel for the defense shall be selected
by the Shareholders' Agent (subject to the consent of the
Indemnified Parties, which consent shall not be unreasonably
withheld) and the Indemnified Parties shall not be required to
make any payment with respect to such claim, liability or expense
as long as the Shareholders' Agent is conducting a good faith and
diligent defense at the expense of the Shareholders; provided,
however, that the assumption of defense of any such matters by
the Shareholders' Agent shall relate solely to the claim,
liability or expense that is subject or potentially subject to
indemnification. The Shareholders' Agent shall have the right,
with the consent of the Indemnified Parties, which consent shall
not be unreasonably withheld, to settle all indemnifiable matters
related to claims by third parties which are susceptible to being
settled, provided the Shareholders' and other indemnifying
parties' obligations to indemnify the Indemnified Parties
therefor will be fully satisfied. The Shareholders' Agent shall
furnish the Indemnified Parties with all documents and
information that the Indemnified Parties shall reasonably request
and shall consult with the Indemnified Parties prior to acting on
major matters, including settlement discussions. Notwithstanding
anything herein stated, each Indemnified Party shall at all times
have the right to fully participate in such defense at its own
expense directly or through counsel; provided, however, if the
named parties to the action or proceeding include both the
indemnifying parties and the Indemnified Parties and
representation of both parties by the same counsel would be
inappropriate under applicable standards of professional conduct,
in the reasonable opinion of the Indemnified Parties, the expense
of one separate counsel for the Indemnified Parties shall be paid
by the Shareholder and other indemnifying parties. If no such
notice of intent to dispute and defend is given, or if such
diligent good faith defense is not being or ceases to be
conducted in the reasonable opinion of the Indemnified Parties,
the Indemnified Parties shall undertake the defense of (with
counsel selected by the Indemnified Parties), and shall have the
right to compromise or settle (exercising reasonable business
judgment), such claim, liability or expense.
3. [THIS VERSION OF SECTION 3 TO BE USED FOR SHAREHOLDERS
OWNING 60,000 OR LESS SHARES OF COMPANY.] Lock-Up Agreement.
Shareholder agrees that Shareholder will not, without the prior
written consent of Parent, offer, sell, contract to sell, pledge
or otherwise dispose of, or enter into any transaction which is
designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise), directly or
indirectly, or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the
meaning of Section 16 of the Securities Exchange Act of 1934, as
amended, with respect to any shares of Parent Common Stock to be
received by Shareholder under the Merger Agreement until the
earlier of 90 days after any underwritten public offering of
Parent Common Stock and 180 days after the Closing.
3. [THIS VERSION OF SECTION 3 TO BE USED FOR
SHAREHOLDERS OWNING MORE THAN 60,000 SHARES OF COMPANY.] Lock-Up
Agreement. Shareholder agrees that Shareholder will not, without
the prior written consent of Parent, offer, sell, contract to
sell, pledge or otherwise dispose of, or enter into any
transaction which is designed to, or might reasonably be expected
to, result in the disposition (whether by actual disposition or
effective economic disposition due to cash settlement or
otherwise), directly or indirectly, or establish or increase a
put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the
Securities Exchange Act of 1934, as amended, with respect to, any
shares of Parent Common Stock to be received by Shareholder under
the Merger Agreement for a period of 180 days after the Closing.
After said 180-day period, 25% of the shares of Parent Common
Stock to be received by Shareholder under the Merger Agreement
and all of the other shares of Parent Common Stock held by
Shareholder will be freed from the restrictions of this Section 3
and an additional 25% of the shares of Parent Common Stock to be
received by Shareholder under the Merger Agreement will be freed
from the restrictions of this Section 3 after nine months after
the Closing. One year after the Closing, all such shares of
Parent Common Stock will be freed from this Section 3.
4. Shareholders' Agent. Shareholder hereby
irrevocably appoints Xxxx Xxxxx as his, her or its agent and as
the agent for purposes of all matters relating to this Agreement
and the Escrow Agreement (the "Shareholders' Agent"), and Xxxx
Xxxxx hereby accepts his appointment as the Shareholders' Agent.
Parent shall be entitled to deal exclusively with the
Shareholders' Agent on all matters relating to this Agreement and
the Escrow Agreement, and shall be entitled to rely conclusively
(without further evidence of any kind whatsoever) on any document
executed or purported to be executed on behalf of Shareholder by
the Shareholders' Agent, and on any other action taken or
purported to be taken on behalf of Shareholder by the
Shareholders' Agent, as fully binding upon Shareholder. If the
Shareholders' Agent shall die, become disabled or otherwise be
unable to fulfill his responsibilities as agent of the
Shareholders, then the former shareholders of Company holding a
majority of the shares of Parent Common Stock issued in the
Merger under Merger Agreement shall, within ten days after such
death or disability, appoint a successor agent and, promptly
thereafter, shall notify Parent of the identity of such
successor. Any such successor shall become the "Shareholders'
Agent" in accordance with this Section 4. The Shareholders'
Agent shall be reimbursed by the Shareholders for his reasonable
out-of-pocket expenses incurred in connection with serving as the
Shareholders' Agent under this Agreement and the Escrow
Agreement. Shareholders' Agent shall not be liable for any act
done or omitted hereunder as Shareholders' Agent while acting in
good faith and in the exercise of reasonable judgment. The
Shareholders on whose behalf Holdback Shares were contributed to
the Escrow Account shall severally indemnify Shareholders' Agent
and hold Shareholders' Agent harmless against any loss, liability
or expense incurred without gross negligence, bad faith or
willful misconduct on the part of Shareholders' Agent and arising
out of or in connection with the acceptance or administration of
Shareholders' Agent's duties hereunder and under the Escrow
Agreement, including the reasonable fees and expenses of any
legal counsel retained by Shareholders' Agent.
5. Miscellaneous.
(a) Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, then
the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
(b) Binding Effect and Assignment. This Agreement and
all of the provisions hereof shall be binding upon and inure to
the benefit of the parties hereto and their respective successors
and permitted assigns, but, except as otherwise specifically
provided herein, neither this Agreement nor any of the rights,
interests or obligations of the parties hereto may be assigned by
either of the parties without prior written consent of the other.
(c) Amendments and Modification. This Agreement may
not be modified, amended, altered or supplemented except upon the
execution and delivery of a written agreement executed by the
parties hereto.
(d) Notices. All notices and other communications
pursuant to this Agreement shall be in writing and shall be
deemed given on the date of delivery if delivered personally or
by a commercial delivery service, or sent via telecopy (receipt
confirmed) to the parties at the following addresses or telecopy
numbers (or such other address or telecopy numbers for a party as
shall be specified by like notice):
If to Parent: Digital Insight Corporation
00000 Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: President
Facsimile: (000) 000-0000
With a copy (not constituting notice) to:
O'Melveny & Xxxxx LLP
000 X. Xxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
If to Shareholder: To the address for notice set forth
on the signature page hereof.
(e) Governing Law. This Agreement shall be governed
by the laws of the State of California, without reference to
rules of conflicts of law.
(f) Entire Agreement. This Agreement contains the
entire understanding of the parties in respect of the subject
matter hereof, and supersedes all prior negotiations and
understandings between the parties with respect to such subject
matter.
(g) Effect of Headings. The section headings are for
convenience only and shall not affect the construction or
interpretation of this Agreement.
(h) Terms. Capitalized terms not otherwise defined
herein shall have the meaning given such terms in the Merger
Agreement.
(i) Counterparts. This Agreement may be executed in
several counterparts, each of which shall be an original, but all
of which together shall constitute one and the same agreement.
[The remainder of this page has been intentionally left blank]
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed on the day and year first above
written.
DIGITAL INSIGHT CORPORATION SHAREHOLDER
By: __________________________ By:__________________________
Signature Signature
Name:__________________________ Name:________________________
Title:__________________________ Title:_______________________
Print Address:
_________________________
_________________________
_________________________
Telephone:
______________________
Fax no.:
________________________
[Signature page to Shareholder Agreement]
Exhibit B
FORM OF ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is entered
into as of ______ __, 2000, by and between Digital Insight
Corporation, a Delaware corporation ("Digital Insight"), Xxxx
Xxxxx (the "Shareholders' Agent"), as agent for the former
shareholders of 1View Network Corporation, a Delaware corporation
("Company"), and ___________________, a
_________________________, as Escrow Agent (the "Escrow Agent").
W I T N E S S E T H
WHEREAS, Digital Insight, Calabasas Acquisition Corp.
and Company, have entered into an Agreement and Plan of Merger,
dated as of April 8, 2000 (the "Merger Agreement"), pursuant to
which Calabasas Acquisition Corp. will be merged with and into
Company and all the capital stock of Company will be converted
into Common Stock, $0.001 par value per share, of Digital Insight
(the "Digital Insight Common Stock"); and
WHEREAS, the Merger Agreement requires that _____
shares of Digital Insight Common Stock (the "Shares") be
deposited in escrow at the Closing (as defined in the Merger
Agreement); and
WHEREAS, Digital Insight desires that the Escrow Agent
hold in escrow the Shares in accordance with the terms and
conditions hereinafter set forth, and the Escrow Agent has agreed
to act as Escrow Agent hereunder, in accordance with the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and
of the mutual covenants and agreements hereinafter set forth, the
parties hereto, intending to be bound legally, agree as follows:
Section 1. Appointment of Escrow Agent. Digital Insight
hereby appoints and designates the Escrow Agent, and the Escrow
Agent hereby agrees, to receive the Shares and to hold and
deliver the Shares as set forth herein.
Section 2. Escrow Deposit.
2.1 Deposit. There is hereby established a separate escrow
account with the Escrow Agent in which Digital Insight,
simultaneously with the execution of this Escrow Agreement, is
depositing with the Escrow Agent the Shares, to be held and
disbursed by the Escrow Agent as hereinafter set forth.
2.2 Receipt. The Escrow Agent hereby acknowledges receipt
of and accepts the Shares in escrow and agrees to hold and keep
same in accordance with the terms and conditions hereof and for
the uses and purposes stated herein.
2.3 Escrow Period. The Escrow shall be in existence
immediately following the Effective Time, as defined in the
Merger Agreement, and shall terminate at 5:00 p.m. (Pacific Time)
on the date which is twelve (12) months after the Effective Time
(the "Escrow Period"); provided, however, that the Escrow Period
shall not terminate with respect to any portion of the Shares,
which in the reasonable judgment of Digital Insight is necessary
to satisfy any then pending and unsatisfied claims specified in
any Officer's Certificate delivered to the Escrow Agent and
Shareholder's Agent prior to the termination of the Escrow Period
with respect to facts and circumstances existing prior to the
termination of such Escrow Period. As soon as all such claims
have been resolved and the Escrow Agent has received notice
thereof from Digital Insight, the Escrow Agent shall deliver to
the persons listed on Annex I to this Agreement (the "Company
Shareholders") that number of Shares determined by multiplying
the total number of Shares then held by Escrow Agent by the
percentage set forth next to the name of each Company Shareholder
on Annex I.
2.4 Ownership. The Company Shareholders shall have all
indicia of ownership of the Shares while they are held in the
escrow account, including, without limitation, the right to vote
the Shares (subject to Section 4.1 hereof) and the obligations to
pay all taxes, assessments, and charges with respect thereto, but
excluding the right to sell, transfer, pledge or hypothecate or
otherwise dispose of any Shares; provided, that any distribution
on or with respect to the Shares and any other shares or
securities into which such Shares may be changed or for which
they may be exchanged pursuant to corporate action of Digital
Insight affecting holders of Digital Insight Common Stock
generally shall be delivered to and held by Escrow Agent in the
escrow account and shall be subject to the provisions herein.
Except as contemplated hereunder, no Shares or any beneficial
interest therein may be pledged, sold, assigned or transferred,
including by operation of law, other than by will or by the laws
of descent or distribution in the event of the death of a Company
Shareholder, by a Company Shareholder or be taken or reached by
any legal or equitable process in satisfaction of any debt or
other liability of such Company Shareholder. Digital Insight
shall treat the Shares as outstanding for accounting purposes.
In addition, within seven (7) days after the Closing, Digital
Insight and the Company Shareholders shall provide Escrow Agent
with executed W-9 forms for tax reporting purposes.
2.5 Distributions. Any cash dividends, dividends payable
in securities or other distributions of any kind (but excluding
any shares of Digital Insight Common Stock received upon a stock
split or stock dividend) shall be promptly distributed by the
Escrow Agent to, and for tax reporting purposes shall be
allocable to, the beneficial holder of the Shares to which such
distribution relates. Any shares of Digital Insight Common Stock
received by the Escrow Agent upon a stock split or stock dividend
made in respect to the Shares shall be added to the escrow
account and become a part thereof.
Section 3. Procedures for Disbursement. The Escrow
Agent shall hold the Shares for the exclusive benefit of Digital
Insight and the Company Shareholders, as provided in this Escrow
Agreement, and shall disburse the Shares only in accordance with
the following terms and conditions:
3(a) Upon receipt by the Escrow Agent at any time on or
before the last day of the Escrow Period of an Officer's
Certificate from Digital Insight, the Escrow Agent shall, subject
to the provision of Section 3(b) hereof, deliver to Digital
Insight the number of Shares
specified in the Officer's Certificate. "Officer's Certificate"
shall mean a certificate signed by any officer of Digital Insight:
(A) stating that Digital Insight has incurred "Damages," as
defined in the form of Shareholder Agreement attached to the
Merger Agreement, for which it is entitled to indemnity (hereinafter
individually, a "Loss" and collectively, "Losses"), (B) specifying
in reasonable detail the individual items of Losses included in
the amount so stated, and (C) the number of Shares to be delivered
to Digital Insight, which shall be equal to the amount of Loss divided
by $54.55.
3(b) At the time of delivery of any Officer's
Certificate to the Escrow Agent, a duplicate copy of such
certificate shall be delivered to the Shareholder's Agent and for
a period of thirty (30) days after such delivery, the Escrow
Agent shall make no delivery to Digital Insight of any portion of
the Shares. After the expiration of such thirty (30) day period,
the Escrow Agent shall make delivery of the number of Shares
requested by Digital Insight in its Officer's Certificate;
provided, however, that no such delivery may be made if the
Shareholder's Agent shall object in a written statement to the
claim made in the Officer's Certificate, and such statement shall
contain specific bases upon which such objection is being made
and shall have been delivered to the Escrow Agent and Digital
Insight prior to the expiration of such thirty (30) day period.
If the Shareholder's Agent only objects in part to the claim made
in the Officer's Certificate, any amounts not objected to will be
paid by the Escrow Agent to Digital Insight.
3(c) If by the termination of the Escrow Period, the
Escrow Agent has not received any written instructions or other
documents specified in Section 3 directing the release of the
Shares, the Escrow Agent shall deliver the Shares to the Company
Shareholders, whereupon the Escrow Agent shall be relieved of any
further obligation pursuant hereto.
3(d) Upon disbursement of the Shares in accordance with
this Section 3, regardless of whether prior to the expiration of
the Escrow Period, the Escrow Agent shall be discharged from all
obligations under this Escrow Agreement and shall have no further
duties or responsibilities in connection herewith.
Section 4. Escrow Agent.
4.1 Duties. The Escrow Agent undertakes only to accept,
hold and disburse the Shares in accordance with the provisions of
this Escrow Agreement. The Escrow Agent shall not be under any
duty to give the Shares any greater degree of care than it gives
its own similar property. With respect to any matter on which
the holders of Digital Insight Common Stock are entitled to vote,
the Escrow Agent shall vote the Shares that it is entitled to
vote as directed in writing by Shareholders' Agent.
4.2 Fees and Expenses. Digital Insight shall pay all of
the Escrow Agent's standard charges for professional services and
its other charges in connection with the Escrow Agent's service
under this Agreement.
4.3 Indemnification. Except with respect to claims based
upon gross negligence or willful misconduct that are successfully
asserted against the Escrow Agent, Digital Insight shall
indemnify and hold harmless the Escrow Agent (and any successor
to the Escrow Agent) from and against any and all costs, losses,
claims, damages, liabilities and expenses (including
reasonable costs of investigation, court costs and attorney's fees and
related other charges) which may be imposed upon or incurred by
the Escrow Agent in connection with its service as Escrow Agent
hereunder, including any litigation arising from this Escrow
Agreement or involving the subject matter hereof.
4.4 Ambiguity or Dispute. If the Escrow Agent is uncertain
as to its duties and rights hereunder, or if any objections are
received with respect to actions proposed to be taken by the
Escrow Agent under Section 3, or in the event of any other
dispute between or conflicting claims by or among Digital Insight
or any Company Shareholders with respect to the Shares, the
Escrow Agent shall be entitled, at its sole option, to refuse to
comply with any demands, claims or instructions and to refrain
from taking any action other than to keep all property held by it
in escrow until the Escrow Agent is directed otherwise in joint
written instructions signed by Digital Insight and the
Shareholders' Agent or by a judgment by a court of competent
jurisdiction, and the Escrow Agent is authorized to deposit the
Shares with, or commence an interpleader action in, any court of
competent jurisdiction, whereupon the Escrow Agent shall be
relieved of any further obligation pursuant hereto. The Escrow
Agent shall not be or become liable in any way for actions taken
in accordance with this Section 4.4.
4.5 Resignation. The Escrow Agent reserves the right to
resign as Escrow Agent at any time, provided ten day's prior
written notice is given to the other parties hereto. Digital
Insight reserves the right to remove the Escrow Agent by written
notice at any time, provided that such notice is given to the
Escrow Agent at least ten days prior to the effectiveness of such
removal.
Section 5. Liabilities of Escrow Agent.
5.1 Limitations on Escrow Agent's Responsibility and
Liability.
5.1(a) The Escrow Agent does not have any interest
in the Shares but is serving as escrow holder only, having only
possession thereof. The Escrow Agent makes no representation as
to the validity, value, genuineness or sufficiency of the Shares.
5.1(b) The Escrow Agent shall be under no duty to
accept instructions from any person other than Digital Insight or
the Shareholder's Agent, and shall only accept such instructions
to the extent and in the manner provided in this Escrow
Agreement.
5.1(c) The Escrow Agent shall be permitted to
consult with counsel of its choice and shall not be liable for
any action taken, suffered, or omitted by it in good faith in
accordance with the advice of such counsel.
5.1(d) The Escrow Agent shall not be liable, except
for its own gross negligence or willful misconduct, and, except
with respect to claims based upon such gross negligence or
willful misconduct that are successfully asserted against the
Escrow Agent, Digital Insight shall indemnify and hold harmless
the Escrow Agent (and any successor to the Escrow Agent) as
provided in Section 4.3.
5.1(e) The Escrow Agent shall not be liable for loss
or damage resulting from any good faith act or forbearance of the
Escrow Agent, any default, error, action or omission of any party
other than the Escrow Agent, any delay that is not caused by the
Escrow Agent, the Escrow Agent's assertion or failure to assert
any cause of action or defense in any judicial or administrative
proceeding, or any loss or damage that arises after the Shares
has been disbursed in accordance with the terms of this Escrow
Agreement.
5.2 Reliance. The Escrow Agent shall be entitled to rely
upon any order, judgment, certification, instruction, notice or
other writing delivered to it in compliance with the provisions
of this Agreement without being required to determine the
authenticity or the correctness of any fact stated therein or the
propriety or validity thereof. The Escrow Agent may act in
reliance upon any instrument comporting with the provisions of
this Agreement or signature believed by it to be genuine, and may
assume that any person purporting to give notice or receipt or
advice or to make any statement or to execute any document in
connection with the provisions hereof has been duly authorized to
do so.
5.3 No Implied Duties; Collateral Agreements. The Escrow
Agent shall not be obligated to perform any duties that are not
expressly set forth in this Escrow Agreement, and no implied
covenants or obligations shall be inferred from this Agreement
against the Escrow Agent.
Section 6. Termination. This Escrow Agreement shall be
terminated on the earlier of (i) the disbursement by the Escrow
Agent of the Shares, or (ii) the termination of the Escrow
Period, except as provided in Section 2.3 above. This Escrow
Agreement shall not be otherwise terminated. The rights of the
Escrow Agent and the obligations of Digital Insight under
Sections 4.2 and 4.3 shall survive notwithstanding termination of
this Agreement or the resignation of the Escrow Agent.
Section 7. Other Provisions.
7.1 Notices. All notices, demands, requests, or other
communications which may be or are required to be given, served,
or sent by any party to any other party pursuant to this
Agreement shall be in writing and shall be deemed given on the
date of delivery if delivered personally or by commercial
delivery service, or sent via telecopy (receipt confirmed) to the
parties at the following addresses or telecopy numbers (or at
such other address or telecopy numbers for a party as shall be
specified by like notice):
To Digital Insight: Digital Insight Corporation
00000 Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: President
Facsimile: (000) 000-0000
With a copy (which shall not constitute
notice) to:
O'Melveny & Xxxxx LLP
000 X. Xxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
To the Escrow Agent: _________________________
_________________________
_________________________
_________________________
Attention: ________________
Facsimile: _____________
To the Shareholders' Agent: Xxxx Xxxxx
000 Xxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
With a copy (which shall not constitute
notice) to:
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
7.2 Benefit and Assignment. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto
and their respective successors and assigns as permitted
hereunder. No person or entity other than the parties hereto is
or shall be entitled to bring any action to enforce any provision
of this Agreement against any of the parties hereto, and the
covenants and agreements set forth in this Agreement shall be
solely for the benefit of, and shall be enforceable only by, the
parties hereto and the Company Shareholders or their respective
successors and assigns as permitted hereunder. No party to this
Agreement may assign this Agreement or any rights hereunder
without the prior written consent of the other parties hereto.
7.3 Entire Agreement; Amendment. This Agreement contains
all the terms agreed upon by the parties with respect to the
escrow arrangement that is the subject matter hereof and
supersedes all prior oral or written agreements, commitments or
understandings with respect to such matters. This Agreement may
be amended only by a written instrument signed by the party
against whom enforcement of any waiver, change, modification,
extension or discharge is sought.
7.4 Additional Actions and Documents. Each of the parties
hereto hereby agrees to take or cause to be taken such further
actions, to execute, deliver and file or cause to be executed,
delivered and filed such further documents and instruments, and
to use best efforts to obtain such consents, as may be necessary
or as may be reasonably requested in order to fully effectuate
the purposes, terms and conditions of this Agreement.
7.5 Headings. The headings of the sections and subsections
of this Agreement are for purposes of reference only and do not
evidence the intentions of the parties.
7.6 Severability. In the event that a court of competent
jurisdiction holds that a particular provision or requirement of
this Agreement is in violation of any applicable law, each such
provision or requirement shall be enforced only to the extent it
is not in violation of such law or is not otherwise
unenforceable, and all other provisions and requirements of this
Agreement shall remain in full force and effect.
7.7 Governing Law. This Agreement shall be governed by,
and construed according to, the laws of California (without
regard to the choice of law provisions thereof).
7.8 Counterparts. To facilitate execution, this Agreement
may be executed in as many counterparts as may be required; and
it shall not be necessary that the signatures of, or on behalf
of, each party, or that the signatures of all persons required to
bind any party, appear on each counterpart; but it shall be
sufficient that the signature of, or on behalf of, each party, or
that the signatures of the persons required to bind any party,
appear on one or more of the counterparts. All counterparts
shall collectively constitute a single agreement. It shall not
be necessary in making proof of this Agreement to produce or
account for more than a number of counterparts containing the
respective signatures of, or on behalf of, all of the parties
hereto.
[The remainder of this page has been intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have executed this
Escrow Agreement as of the date set forth above.
DIGITAL INSIGHT CORPORATION
By: _____________________________
Name:
Title:
[ ],
AS ESCROW AGENT
By: _____________________________
Name:
Title: Authorized Officer
XXXX XXXXX,
AS SHAREHOLDERS' AGENT
___________________________________
Annex I
COMPANY SHAREHOLDERS
Name Address Percentage
Exhibit C
FORM OF COMPANY AFFILIATE AGREEMENT
THIS COMPANY AFFILIATE AGREEMENT (this "Agreement") is
made and entered into as of _____________, 2000, by and between
Digital Insight Corporation, a Delaware corporation ("Parent"),
and the undersigned shareholder who may be deemed an affiliate
("Affiliate") of 1View Network Corporation, a Delaware
corporation ("Company"). Capitalized terms used but not
otherwise defined herein shall have the meanings ascribed to them
in the Merger Agreement (as defined below).
RECITALS
A. Company, Merger Sub (as defined below) and Parent
have entered into an Agreement and Plan of Merger (the "Merger
Agreement"), dated as of April 8, 2000, which provides for the
merger (the "Merger") of a wholly owned subsidiary of Parent
("Merger Sub") with and into Company. Pursuant to the Merger,
all outstanding capital stock of Company (the "Company Stock")
shall be converted into the right to receive common stock of
Parent;
B. Affiliate has been advised that Affiliate may be
deemed to be an "affiliate" of Company, as that term is used for
purposes of Rule 145 of the rules and regulations of the
Securities and Exchange Commission (the "SEC") and of Opinion 16
of the Accounting Principles Board and applicable SEC rules and
regulations.
C. The execution and delivery of this Agreement by
Affiliate is a material inducement to Parent to enter into the
Merger Agreement.
NOW, THEREFORE, intending to be legally bound, the
parties hereto agree as follows:
1. Acknowledgments by Affiliate. Affiliate
acknowledges and understands that the representations, warranties
and covenants by Affiliate set forth herein shall be relied upon
by Parent, Company and their respective affiliates, counsel and
accounting firms, and that substantial losses and damages may be
incurred by these persons if Affiliate's representations,
warranties or covenants are breached. Affiliate has carefully
read this Agreement and the Merger Agreement.
2. Beneficial Ownership of Company Stock. The
Affiliate is the sole record and beneficial owner of the number
of shares of Company Stock set forth below its name on the
signature page hereto (the "Shares"). The Shares are not subject
to any claim, lien, pledge, charge, security interest or other
encumbrance or to any rights of first refusal of any kind, other
than any claim, lien, charge, security interest or other
encumbrance or right of first refusal in favor of Company. There
are no options, warrants, calls, rights, commitments or
agreements of any character, written or oral, to which the
Affiliate is party or by which it is bound obligating the
Affiliate to issue, deliver, sell, repurchase or redeem, or cause
to be issued, delivered, sold, repurchased or redeemed, any
Shares or obligating the Affiliate to grant or enter into any
such option, warrant, call, right, commitment or agreement. The
Affiliate has the sole right to transfer such Shares. The Shares
constitute all shares of Company Stock owned, beneficially or of
record, by the Affiliate. The Shares are not subject to
preemptive rights created by any agreement to which the Affiliate
is party. The Affiliate has not engaged in any sale or other
transfer of the Shares in contemplation of the Merger. All
shares of Company Stock and common stock of Parent ("Parent
Common Stock") acquired by Affiliate subsequent to the date
hereof (including shares of Parent Common Stock acquired in the
Merger) shall be subject to the provisions of this Agreement as
if held by Affiliate as of the date hereof.
3. Compliance with Rule 145 and the Securities Act.
(a) Affiliate has been advised that (i) the resale of
shares of Parent Common Stock acquired by Affiliate in connection
with the Merger will be subject to restrictions set forth in Rule
145 under the Securities Act of 1933, as amended (the "Securities
Act"), and (ii) Affiliate may be deemed to be an affiliate of
Company. Affiliate accordingly agrees not to sell, transfer or
otherwise dispose of any Parent Common Stock issued to Affiliate
in the Merger unless (i) such sale, transfer or other disposition
is made in conformity with the requirements of Rule 145(d)
promulgated under the Securities Act, or (ii) such sale, transfer
or other disposition is made pursuant to an effective
registration statement under the Securities Act or an appropriate
exemption from registration, or (iii) Affiliate delivers to
Parent a written opinion of counsel, reasonably acceptable to
Parent in form and substance, that such sale, transfer or other
disposition is otherwise exempt from registration under the
Securities Act.
(b) Parent shall give stop transfer instructions to
its transfer agent with respect to any Parent Common Stock
received by Affiliate pursuant to the Merger and there shall be
placed on the certificates representing such Parent Common Stock,
or any substitutions therefor, a legend stating in substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY ONLY BE
TRANSFERRED IN CONFORMITY WITH RULE 145(d) OR PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR IN ACCORDANCE WITH A WRITTEN OPINION OF
COUNSEL, REASONABLY ACCEPTABLE TO THE ISSUER IN FORM AND
SUBSTANCE, THAT SUCH TRANSFER IS EXEMPT FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED."
The legend set forth above shall be removed (by delivery of a
substitute certificate without such legend) and Parent shall so
instruct its transfer agent, if Affiliate delivers to Parent
(i) satisfactory written evidence that the shares have been sold
in compliance with Rule 145 (in which case, the substitute
certificate shall be issued in the name of the transferee) and,
if less than all shares represented by a certificate have been
thus sold, a substituted certificate representing the unsold
balance shall be issued), or (ii) an opinion of counsel, in form
and substance reasonably satisfactory to Parent, to the effect
that public sale of the shares by the holder thereof either (a)
is no longer subject to Rule 145 or (b) may be made currently in
accordance with Rule 145(d)(3).
4. Termination. This Agreement shall be terminated
and shall be of no further force and effect in the event of the
termination of the Merger Agreement pursuant to Article VII of
the Merger Agreement.
5. Miscellaneous.
(a) Waiver; Severability. No waiver by any party
hereto of any condition or of any breach of any provision of this
Agreement shall be effective unless in writing and signed by each
party hereto. In the event that any provision of this Agreement,
or the application of any such provision to any person, entity or
set of circumstances, shall be determined to be invalid,
unlawful, void or unenforceable to any extent, the remainder of
this Agreement, and the application of such provision to persons,
entities or circumstances other than those as to which it is
determined to be invalid, unlawful, void or unenforceable, shall
not be impaired or otherwise affected and shall continue to be
valid and enforceable to the fullest extent permitted by law.
(b) Binding Effect and Assignment. This Agreement and
all of the provisions hereof shall be binding upon and inure to
the benefit of the parties hereto and their respective successors
and permitted assigns, but, except as otherwise specifically
provided herein, neither this Agreement nor any of the rights,
interests or obligations of the parties hereto may be assigned by
either of the parties without prior written consent of the other
party hereto.
(c) Amendments and Modification. This Agreement may
not be modified, amended, altered or supplemented except upon the
execution and delivery of a written agreement executed by the
parties hereto.
(d) Injunctive Relief. Each of the parties
acknowledge that (i) the covenants and the restrictions contained
in this Agreement are necessary, fundamental, and required for
the protection of Parent and Company and to preserve for Parent
the benefits of the Merger; (ii) such covenants relate to matters
which are of a special, unique, and extraordinary character that
gives each of such covenants a special, unique, and extraordinary
value; and (iii) a breach of any such covenants or any other
provision of this Agreement shall result in irreparable harm and
damages to Parent and Company which cannot be adequately
compensated by a monetary award. Accordingly, it is expressly
agreed that in addition to all other remedies available at law or
in equity, Parent and Company shall be entitled to the immediate
remedy of a temporary restraining order, preliminary injunction,
or such other form of injunctive or equitable relief as may be
used by any court of competent jurisdiction to restrain or enjoin
any of the parties hereto from breaching any such covenant or
provision or to specifically enforce the provisions hereof.
(e) Governing Law. This Agreement shall be governed
by and construed, interpreted and enforced in accordance with the
internal laws of the State of California without giving effect to
any choice or conflict of law provision.
(f) Entire Agreement. This Agreement, the Merger
Agreement and any other agreements referred to in the Merger
Agreement set forth the entire understanding of Affiliate and
Parent relating to the subject matter hereof and thereof and
supersede all prior agreements and understandings between
Affiliate and Parent relating to the subject matter hereof and
thereof.
(g) Attorneys' Fees. In the event of any legal
actions or proceeding to enforce or interpret the provisions
hereof, the prevailing party shall be entitled to reasonable
attorneys' fees, whether or not the proceeding results in a final
judgment.
(h) Further Assurances. Affiliate shall execute
and/or cause to be delivered to Parent such instruments and other
documents and shall take such other actions as Parent may
reasonably request to effectuate the intent and purposes of this
Agreement.
(i) Third Party Reliance. Counsel to and independent
auditors for Parent and Company shall be entitled to rely upon
this Affiliate Agreement.
(j) Survival. The representations, warranties,
covenants and other provisions contained in this Agreement shall
survive the Merger.
(k) Notices. All notices and other communications
pursuant to this Agreement shall be in writing and deemed to be
sufficient if contained in a written instrument and shall be
deemed given on the date of delivery if delivered personally or
by commercial delivery service, or sent via telecopy (receipt
confirmed) to the parties at the following address (or at such
other address for a party as shall be specified by like notice):
If to Parent: Digital Insight Corporation
00000 Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: President
Facsimile: (000) 000-0000
With a copy to:
O'Melveny & Xxxxx LLP
000 X. Xxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
If to Affiliate: To the address for notice set forth on the
signature page hereof.
(l) Counterparts. This Agreement shall be executed in
one or more counterparts, each of which shall be deemed an
original, and all of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties have caused this
Affiliate Agreement to be duly executed on the day and year first
above written.
DIGITAL INSIGHT CORPORATION AFFILIATE
By:___________________________ By: __________________________
Name:_________________________ Affiliate's Address for Notice:
Title:________________________ ______________________________
______________________________
______________________________
Shares beneficially owned:
____________ shares of the
Company Stock
____________ shares of the
Company Stock
issuable upon
exercise of
outstanding options
____________ shares of
Parent Common Stock
[Signature Page to Affiliate Agreement]
Exhibit D
FORM OF NON-COMPETE AGREEMENT
THIS NON-COMPETE AGREEMENT (this "Agreement") is made
and entered into as of _______________, 2000, among 1View Network
Corporation, a Delaware corporation ("Company"), Digital Insight
Corporation ("Parent"), a Delaware corporation and holder of all
of the issued and outstanding shares of Company, and the
undersigned ("Shareholder"). Reference is made to that certain
Agreement and Plan of Merger, dated as of April 8, 2000 (the
"Merger Agreement"), by and among Parent, Company and Calabasas
Acquisition Corp., a Delaware corporation and wholly-owned
subsidiary of Parent ("Merger Sub"), which provides for
(a) Merger Sub to be merged with and into Company, with Company
continuing as the surviving corporation (the "Surviving
Corporation"); and (b) all of the outstanding capital stock of
Company to be converted into cash and shares of Parent's capital
stock. Capitalized terms used in this Agreement and not defined
herein shall have the meanings ascribed to them in the Merger
Agreement.
W I T N E S S E T H
WHEREAS, on the date hereof, as a result of the
consummation of the transactions described in the Merger
Agreement, Parent owns all of the issued and outstanding shares
of capital stock of Surviving Corporation;
WHEREAS, Parent and Surviving Corporation are engaged
in, among other things, the business of providing internet
enabled xxxx presentment and payment services and aggregation of
financial data (the "Business");
WHEREAS, Shareholder has considerable experience and
knowledge with respect to the operation of the Business and knows
or has access to confidential information and/or trade secrets
associated with the operation of the Business that are
competitively valuable;
WHEREAS, if Parent and Surviving Corporation are to
receive the full value of the transactions consummated pursuant
to the Merger Agreement, Parent and Surviving Corporation must
have full and enforceable assurances from Shareholder that
Shareholder will preserve and protect, and will not use, the
aforementioned confidential information and trade secrets.
Without such assurances, Parent and Company would not have agreed
to the transactions described in the Merger Agreement; and
WHEREAS, if Parent and Surviving Corporation are to
receive the full value of the transactions consummated pursuant
to the Merger Agreement, they must have the agreement of
Shareholder that, following the Closing, Shareholder will not
compete with the Business of Parent and Surviving Corporation.
Without such an agreement, Parent and Company would not have
agreed to the transactions described in the Merger Agreement.
NOW, THEREFORE, in consideration of the mutual promises
and covenants set forth herein, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as
follows:
Section 1. Non-Competition. In view of the fact that any
activity of Shareholder in violation of the terms hereof would
deprive Parent, Surviving Corporation and their affiliates (as
defined below) of the benefit of the bargain under the Merger
Agreement, as a material inducement to and a condition precedent
of Parent's obligations thereunder, and to preserve the goodwill
associated with Surviving Corporation's business, Shareholder
hereby agrees to the following restrictions on his activities:
Shareholder hereby agrees that during the period
commencing on the date hereof and ending 18 months after the date
hereof, he will not, without the express written consent of
Parent, directly or indirectly, anywhere in the United States,
engage in any activity which is, or participate or invest in,
provide or facilitate the provision of financing to, or assist
(whether as owner, part-owner, shareholder, partner, director,
officer, trustee, employee, agent or consultant, or in any other
capacity), any business, organization or person (as defined
below) other than Parent or Surviving Corporation (or any
affiliate of Parent or Surviving Corporation), whose business,
activities, products or services are competitive with the
Business conducted by Parent or Company (or any affiliate of
Parent or Company) as of the date hereof. Without implied
limitation, the foregoing covenant shall include soliciting, for
or on behalf of Shareholder or any such competitor, any client of
Surviving Corporation, and diverting to any person any client or
business opportunity of Surviving Corporation. The parties
intend that the covenant contained in the preceding portion of
this paragraph shall be construed as a series of separate
covenants, one for each of the separate geographical areas to
which this Agreement applies. Except for the geographic
coverage, the terms of each such covenant shall be deemed
identical to the terms of the covenant described above.
Shareholder hereby agrees that during the period
commencing on the date hereof and ending 18 months after the date
hereof, he will not, without the express written consent of
Parent, directly or indirectly, anywhere in the United States,
solicit for employment, for or on behalf of himself or any such
competitor, any officer or employee of Surviving Corporation, or
encourage, for or on behalf of himself or any such competitor,
any such officer or employee to terminate his or her relationship
or employment with Surviving Corporation.
Notwithstanding anything herein to the contrary,
Shareholder may retain, but not increase, his ownership interest
in Just In Time Solutions, Inc. and make passive investments in
any enterprise, the shares of which are publicly traded, if such
investment constitutes less than five (5) percent of the equity
of such enterprise, and Shareholder may purchase shares of
Parent's common stock without limitation hereunder.
As of the date of this Agreement, Shareholder has no
business interests in or relating to the Business whatsoever
other than his interest in Company, and other than his interest
as a shareholder of Just In Time Solutions, Inc. and interests in
public companies of less than five (5) percent.
For purposes of this Agreement, the term "person" shall
mean an individual, a corporation, an association, a partnership,
a limited liability company, an estate, a trust, and any other
entity or organization, and any reference to an "affiliate" of a
person shall be deemed to include any person controlling,
controlled by or under common control with such person.
Section 2. Scope of Agreement. The parties acknowledge that
the time, scope, geographic area and other provisions of this
Agreement have been specifically negotiated by sophisticated
commercial parties and agree that (a) all such provisions are
reasonable under the circumstances of the transactions
contemplated by the Merger Agreement, (b) all such provisions are
given as an integral and essential part of the transactions
contemplated by the Merger Agreement, and (c) but for the
covenants of Shareholder contained in this Agreement, the other
parties hereto would not have entered into or consummated the
transactions contemplated by the Merger Agreement. Shareholder
has independently consulted with his counsel and has been advised
in all respects concerning the reasonableness and propriety of
the covenants contained herein, with specific regard to the
Business to be conducted by Parent, Surviving Corporation and
their affiliates.
Section 3. Certain Remedies; Severability. It is
specifically understood and agreed that any breach of the
provisions of this Agreement by Shareholder will result in
irreparable injury to the other parties hereto, that the remedy
at law alone will be an inadequate remedy for such breach and
that, in addition to any other remedy they may have, Parent and
Surviving Corporation shall be entitled to enforce the specific
performance of this Agreement by Shareholder through both
temporary and permanent injunctive relief without the necessity
of proving actual damages, but without limitation of their right
to damages and any and all other remedies available to them, it
being understood that injunctive relief is in addition to, and
not in lieu of, such other remedies. In the event that any
covenant contained in this Agreement shall be determined by any
court of competent jurisdiction to be unenforceable by reason of
its extending for too great a period of time or over too great a
geographical area or by reason of its being too extensive in any
other respect, it shall be interpreted to extend only over the
maximum period of time for which it may be enforceable and/or
over the maximum geographical area as to which it may be
enforceable and/or to the maximum extent in all other respects as
to which it may be enforceable, all as determined by such court
in such action. The existence of any claim or cause of action
which Shareholder may have against Parent, Surviving Corporation
or any of their affiliates shall not constitute a defense or bar
to the enforcement of any of the provisions of this Agreement.
Section 4. Jurisdiction. The parties hereby irrevocably
submit to the non-exclusive jurisdiction of the courts of the
State of California to construe and enforce the covenants
contained in this Agreement. In the event that the courts of any
state shall hold such covenants unenforceable (in whole or in
part) by reason of the breadth of such scope or otherwise, it is
the intention of the parties hereto that such determination shall
not bar or in any way affect the right of Parent, Surviving
Corporation or any of their affiliates to the relief provided for
herein in the courts of any other state within the geographic
scope of such covenants, as to breaches of such covenants in such
other respective states, the above covenants as they relate to
each state being, for this purpose, severable into diverse and
independent covenants.
Section 5. Notices. All notices, requests, demands and other
communications hereunder shall be deemed to have been given on
the date of delivery if delivered personally or by commercial
delivery service, or sent via telecopy (receipt confirmed) to the
parties at the following addresses or telecopy numbers (or such
other address or telecopy numbers for a party as shall be
specified by like notice):
To Parent Digital Insight Corporation
or Surviving 00000 Xxxxxx Xxxx
Corporation: Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: President
Facsimile: (000) 000-0000
with a copy (not constituting notice) to:
O'Melveny & Xxxxx LLP
000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
To Shareholder: Xxxx Xxxxx
000 Xxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
with a copy (not constituting notice) to:
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
Section 6. Miscellaneous. This Agreement shall be governed
by and construed under the laws of the State of California, and
shall not be modified or discharged in whole or in part except by
an agreement in writing signed by Employee and the other parties
hereto. The prevailing party in any controversy hereunder shall
be entitled to reasonable attorneys' fees and expenses. The
failure of any of the parties to require the performance of a
term or obligation or to exercise any right under this Agreement
or the waiver of any breach hereunder shall not prevent
subsequent enforcement of such term or obligation or exercise of
such right or the enforcement at any time of any other right
hereunder or be deemed a waiver of any subsequent breach of the
provision so breached, or of any other breach hereunder. This
Agreement shall inure to the benefit of, and be binding upon,
successors of Parent and Company by way of merger, consolidation
or transfer of substantially all the assets of Parent or Company
as applicable, and may not be assigned by Employee. This
Agreement supersedes all prior understandings and agreements
between the parties relating to the subject matter hereof.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.
1VIEW NETWORK CORPORATION
By: ______________________________
Name:
Title:
DIGITAL INSIGHT CORPORATION
By: ______________________________
Name:
Title:
SHAREHOLDER
_______________________________
Xxxx Xxxxx
[Signature page to Non-Compete Agreement]
Exhibit E
FORM OF CERTIFICATE
OF INCORPORATION OF
SURVIVING CORPORATION
Name
One: The name of the corporation is 1View Network
Corporation (hereinafter called the "Corporation").
Address
Two: The address of the Corporation's registered
office in the State of Delaware is 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, XX 00000, County of New Castle. The name of its
registered agent at such address is The Corporation Trust
Company.
Purpose
Three: The purpose of the Corporation is to engage in
any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
Authorized Shares
Four: The total number of shares which the Corporation
shall have authority to issue is one thousand (1,000) shares, all
of which shall be shares of Common Stock with a par value of
$0.01 per share.
Director Power
Five: The directors shall have the power to adopt,
amend or repeal Bylaws, except as may otherwise be provided in
the Bylaws.
Director Liability
Six: The personal liability of the directors of the
Corporation is hereby eliminated to the fullest extent permitted
by Section 102(b)(7) of the General Corporation Law of the State
of Delaware, as the same may be amended or supplemented.
Corporation Rights
Seven: The Corporation reserves the right to amend or
repeal any provisions contained in this Certificate of
Incorporation from time to time and at any time in the manner now
or hereafter prescribed by the laws of the State of Delaware, and
all rights conferred upon stockholders and directors are granted
subject to such reservation.
Exhibit F
FORM OF CERTIFICATE OF MERGER
CERTIFICATE OF MERGER
OF
CALABASAS ACQUISITION CORP.
INTO
1VIEW NETWORK CORPORATION
The undersigned corporation, organized and existing
under and by virtue of the General Corporation Law of the State
of Delaware, DOES HEREBY CERTIFY:
FIRST: That the name and state of incorporation of
each of the constituent corporations of the merger are as
follows:
Name State of Incorporation
Calabasas Acquisition Corp. Delaware
1View Network Corporation Delaware
SECOND: That an Agreement and Plan of Merger between
the parties to the merger has been approved, adopted, certified,
executed and acknowledged by each of the constituent corporations
in accordance with the requirements of Section 251 of the General
Corporations Law of the State of Delaware.
THIRD: That the name of the surviving corporation of
the merger is 1View Network Corporation.
FOURTH: That the Certificate of Incorporation of 1View
Network Corporation, a Delaware corporation, the surviving
corporation, shall, upon consummation of the merger, be amended
and restated in its entirety as set forth on Appendix A attached
to this Certificate of Merger.
FIFTH: That the executed Agreement and Plan of Merger
is on file at the principal place of business of the surviving
corporation. The address of the principal place of business of
the surviving corporation is 00000 Xxxxxx Xxxx, Xxxxxxxxx,
Xxxxxxxxxx 00000.
SIXTH: That a copy of the Agreement and Plan of Merger
will be furnished by the surviving corporation, on request and
without cost, to any stockholder of either of the constituent
corporations.
[The remainder of this page has been intentionally left blank]
IN WITNESS WHEREOF, 1View Network Corporation has
caused this Certificate of Merger to be executed by its duly
authorized officer this ______ day of _________________, 2000.
1VIEW NETWORK CORPORATION
By: _____________________________
Name:
Title:
Exhibit G-1
LIST OF INDIDIVUALS TO SIGN
EMPLOYMENT AGREEMENTS
Xxxx Xxxxx
Xxxxx Xxxxxxx
Xxxx Xxxx
Xxxx Xxxxxxxx
Xxxxx Xxxx
Exhibit G-2
FORM OF EMPLOYMENT AGREEMENT
This Agreement is entered into as of ____________, (the
"Effective Date") by and between Digital Insight Corporation
(the "Company") and ____________________ (the "Executive").
1. Duties and Scope of Employment.
(a) Positions and Duties. As of the Effective Date,
Executive will serve as ______________________ of the Company.
Executive will render such business and professional services in
the performance of his duties, consistent with Executive's
position within the Company and the Bylaws of the Company, as
shall reasonably be assigned to him by ______________________.
The period of Executive's employment under this Agreement is
referred to herein as the "Employment Term."
(b) Obligations. During the Employment Term,
Executive will perform his duties faithfully and to the best of
his ability and will devote substantially all of his full
business efforts and time to the Company. For the duration of
the Employment Term, Executive agrees not to actively engage in
any other employment, occupation or consulting activity for any
direct or indirect remuneration without the prior approval of the
Executive Vice President, New Ventures of the Company, such
approval not to be unreasonably withheld; provided, however, that
service on Boards of Directors and service on behalf of
charitable, trade, and non-profit organizations shall not
constitute a breach of this Section 1(b).
2. Term. Subject to the other terms and conditions of
this Agreement, Executive's employment by the Company shall be
for a term of __ months commencing on the date hereof (the
"Term"). If Executive's employment continues beyond the Term,
such employment shall be terminable at will. The effective date
of the termination of Executive's employment with the Company,
regardless of the reason therefor, is referred to in this
Agreement as the "Date of Termination."
3. Compensation.
(a) Base Salary. During the Employment Term, the
Company will pay Executive as compensation for his services a
minimum base salary at the annualized rate of $__________ (the
"Base Salary"). The Base Salary will be paid periodically in
accordance with the Company's normal payroll practices and be
subject to the usual, required withholding.
(b) Stock Options. As of the Effective Date,
Executive will be eligible to receive management stock option
grants consistent with option grants granted to other top
executives in the Company. Such option grants will be subject to
the terms, definitions, and provisions of the Company's Stock
Plan (the "Option Plan"), which document is incorporated herein
by reference.
4. Employee Benefits. During the Employment Term,
Executive will be entitled to participate in the directors and
officers, health and other insurance and other employee benefit
plans and programs currently and hereafter maintained by the
Company of general applicability to other senior executives of
the Company, including, without limitation, the Company's bonus
plans and group medical, dental, vision, disability, life
insurance, and flexible-spending account plans and the Company's
PDO program; and shall be entitled to at least four (4) weeks of
vacation per year. The Company reserves the right to cancel or
change the benefit plans and programs it offers to its employees
generally at any time.
5. Expenses. The Company will reimburse Executive for
reasonable travel, entertainment or other expenses incurred by
Executive in the furtherance of or in connection with the
performance of Executive's duties hereunder, in accordance with
the Company's expense reimbursement policy as in effect from time
to time.
6. Severance.
(a) Involuntary Termination. If Executive's
employment with the Company terminates for "Good Reason" (as
defined herein) or other than for "Cause" (as defined herein),
and Executive signs and does not revoke a standard release of
claims with the Company relating to this agreement (with such
relief excepting matters relating to Executive's indemnification
with the Company), then, subject to Section 9, Executive shall be
entitled to receive continuing payments of Executive's Base
Salary as in effect as of the date of such termination, less
applicable withholding taxes, payable in accordance with the
Company's standard payroll practices, for the remainder of the
Term. In such event, the Company shall reimburse Employee for
the same level of health coverage and benefits as in effect for
Employee on the day immediately preceding the day of Employee's
termination of employment; provided, however, that if
(i) Employee is a qualified beneficiary, as defined in
Section 4980B(g)(1) of the Internal Revenue Code of 1986, as
amended; and (ii) Employee elects continuation coverage pursuant
to the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended ("COBRA"), within the time period prescribed pursuant to
COBRA, then the Company shall reimburse Employee for continuation
coverage until the earlier of (A) twelve (12) months from the
date of Employee's termination from the Company or (B) the date
that Employee and his dependents become covered under another
employer's group health, dental and vision plans that provide
Employee and his dependents with comparable benefits and levels
of coverage.
(b) Voluntary Termination; Termination for Cause. If
Executive's employment with the Company terminates voluntarily by
Executive or for Cause by the Company at any time, then (i) all
future vesting of any options granted hereunder will terminate
immediately and all payments of compensation by the Company to
Executive hereunder will terminate immediately (except as to
amounts already earned) and (ii) Executive will only be eligible
for severance benefits in accordance with the Company's
established policies as then in effect.
(c) Death and Disability. In the event Executive
shall be unable to perform his duties hereunder by virtue of
illness or physical or mental incapacity or disability (from any
cause or causes whatsoever) in substantially the manner and to
the extent required hereunder prior to the commencement of such
disability (all such causes being herein referred to as
"disability") and Executive shall fail to perform such duties for
periods aggregating 60 days, whether or not continuous, in any
continuous period of 120 days, the Company shall have the right
to terminate Executive's employment hereunder at the end of any
calendar year.
7. Definitions.
(a) Cause. For purposes of this Agreement, "Cause" is
defined as (i) Executive's conviction of, or plea of nolo
contendere to, a felony, or (ii) Executive's gross misconduct, or
Executive's continued substantial violations of his employment
duties after Executive has received a written demand for
performance from the Company approved by the Board which
specifically sets forth the factual basis for the Company's
belief that Executive has not substantially performed his duties.
Executive may not be terminated for Cause without (i) notice to
Executive setting forth the reasons for the Company's intention
to terminate for Cause, and (ii) opportunity for Executive to
cure such actions within ten (10) business days following the
Company's delivery to Executive of a written explanation
specifying the basis of the Board's beliefs with respect to such
Cause events. Termination for death or disability shall also be
termination for "Cause" only if the Company complies with the
provisions of Section 5(c).
(b) Good Reason. For purposes of this Agreement,
"Good Reason" is defined as (i) without Executive's express
written consent, a significant reduction of Executive's duties,
position or responsibilities relative to Executive's duties,
position or responsibilities in effect immediately prior to such
reduction, (ii) without Executive's express written consent, a
reduction by the Company of Executive's base salary as in effect
immediately prior to such reduction; (iii) without Executive's
express written consent, the relocation of Executive to a
facility or a location more than fifty (50) miles from his
current location; or (iv) any breach by Company of a material
provision of this Agreement that is not cured within ten (10)
business days after written notice by Executive to the Company
setting forth such alleged breach.
8. Confidential Information. Executive agrees to enter
into the Company's standard Confidential Information and
Invention Assignment Agreement (the "Confidential Information
Agreement") upon commencing employment hereunder.
9. Assignment. This Agreement will be binding upon and
inure to the benefit of (a) the heirs, executors and legal
representatives of Executive upon Executive's death and (b) any
successor of the Company. Any such successor of the Company will
be deemed substituted for the Company under the terms of this
Agreement for all purposes. For this purpose, "successor" means
any person, firm, corporation or other business entity which at
any time, whether by purchase, merger or otherwise, directly or
indirectly acquires all or substantially all of the assets or
business of the Company. None of the rights of Executive to
receive any form of compensation payable pursuant to this
Agreement may be assigned or transferred except by will or the
laws of descent and distribution. Any other attempted
assignment, transfer, conveyance or other disposition of
Executive's right to compensation or other benefits will be null
and void.
10. Notices. All notices, requests, demands and other
communications called for hereunder shall be in writing and shall
be deemed given on the date of delivery if delivered personally,
sent by a commercial overnight service or sent via telecopy
(receipt confirmed), to
the parties or their successors at the following addresses, or
at such other addresses as the parties may later designate in writing:
If to the Company: Digital Insight Corporation
00000 Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: President
Facsimile: (000) 000-0000
with a copy (not constituting notice) to:
O'Melveny & Xxxxx LLP
000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
If to Executive: at the last residential address known by the
Company.
11. Severability. In the event that any provision hereof
becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement will continue in
full force and effect without said provision.
12. Integration. This Agreement, together with the Option
Plan and the Confidential Information Agreement represents the
entire agreement and understanding between the parties as to the
subject matter herein and supersedes all prior or contemporaneous
agreements whether written or oral. No waiver, alteration, or
modification of any of the provisions of this Agreement will be
binding unless in writing and signed by duly authorized
representatives of the parties hereto.
13. Tax Withholding. All payments made pursuant to this
Agreement will be subject to withholding of applicable taxes.
14. Governing Law. This Agreement will be governed by the
laws of the State of California (with the exception of its
conflict of laws provisions).
15. Acknowledgment. Executive acknowledges that he has had
the opportunity to discuss this matter with and obtain advice
from his private attorney, has had sufficient time to, and has
carefully read and fully understands all the provisions of this
Agreement, and is knowingly and voluntarily entering into this
Agreement.
[The remainder of this page has been intentionally left blank]
IN WITNESS WHEREOF, each of the parties has executed
this Agreement, in the case of the Company by its duly authorized
officers, as of the day and year first above written.
DIGITAL INSIGHT CORPORATION
By: ____________________________ Date:____________________
Name:
Title:
EXECUTIVE
_____________________________ Date:____________________
[Signature page to Employment Agreement]
